Juul Labs, an e-cigarette manufacturer, has reached a settlement that it would pay $1.2 billion to dismiss about 10,000 lawsuits that accuse it of being a significant contributor to an epidemic of underage vaping in the US.

This information is based on Bloomberg's anonymous sources with knowledge of the situation.

Case Progress

Earlier last week, it was stated that negotiations were progressing toward a potential agreement, but no financial details were provided. 

People familiar with the matter say the deal is meant to settle all individual damage claims, class action lawsuits, and school district claims against Juul in front of a California court for pretrial discovery.

As a result of a capital influx from long-time investors and the layoffs of hundreds of staff, the struggling e-cigarette maker likely avoided bankruptcy last month, prompting the proposed settlement. 

The firm announced that the extra funding would be used to pay for the settlement.

The multi-district litigation (MDL) action pending before US District Judge William Orrick in San Francisco since 2019 might be settled if enough affected plaintiffs and school districts agree to the terms of the settlement. 

Apparently, the arrangement cannot go forward without Orrick's permission.

Involved Parties

A press release was previously issued by San Francisco-based law firm Lieff Cabraser, which is representing the plaintiffs in the Juul settlements. It reported that the number of personal injury cases, government entity cases, and tribal cases that have been settled are over 8,500, 1,400, and 32, respectively.

Insiders claimed the specifics of the deal, including who would be involved, are still being sorted out. 

For example, according to a boilerplate letter given by the plaintiffs' attorneys directing the action in February, those who have filed claims for personal injury would find out in March or April how much they are likely to collect.

In the letter, the gross value of most claims in the settlement program is projected to be much greater than $1,000. That is before lawyers' fees, charges, and any liens are deducted.

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(Photo : Spencer Platt/Getty Images)
NEW YORK, NEW YORK - NOVEMBER 19: State Attorney General Letitia James announces a lawsuit against e-cigarette giant Juul on November 19, 2019 in New York City. James said that the suit against Juul, the nation’s most popular e-cigarette brand, is for allegedly engaging in deceptive marketing and sales tactics that were primarily aimed at youth. Department of Health experts are currently examining 182 reported cases statewide that are related to severe pulmonary illnesses thought to be from e-cigarettes.

Alleged Marketing to Minors

Juul was sued for failing to warn about vaping hazards and unlawfully marketing to minors. 

School districts around the US have sued the corporation for creating a public nuisance by targeting youngsters. 

Vaping disrupts lessons, district officials claimed.

Reports indicate that San Francisco (SF) Unified School District officials were extremely satisfied with the deal. In 2019, 16% of San Francisco high schoolers reported using vapes, compared to 7.1% in 2017.

The Center for Disease Control and Prevention (CDC) reports that pulmonary injuries caused by e-cigarette use have resulted in more than 60 fatalities and over 2,700 hospitalizations.

In addition to the $1.2 billion settlement, states are negotiating a $439 million settlement with the e-cigarette company for its marketing and sales activities, including its targeting of youngsters. 

In September, Juul entered into an agreement that placed stringent restrictions on the company's advertising efforts.

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