Juul Labs Inc. won preliminary approval of a settlement aimed at resolving thousands of lawsuits targeting the e-cigarette maker as a major cause of a US youth-vaping epidemic.
U.S. District Judge William Orrick said on Friday the deal to settle almost 10,000 lawsuits filed by local governments across the US seemed to be “fair and reasonable.” He still must give final approval to the accord. The specific terms of the deal weren’t released at the hearing, but Bloomberg News reported in December the settlement was valued at at least $1.2 billion.
The deal aims to resolve all personal-injury, class-action and school-district claims against Juul gathered before Orrick in San Francisco for pre-trial information exchanges and test trials. Lawyers in the case said they expect to return to the judge in July seeking final approval.
Arik Ben-Zvi, a Juul spokesman, didn’t immediately return an email for comment Friday on the settlement’s preliminary approval.
The proposed settlement comes as the embattled e-cigarette maker likely staved off bankruptcy late last year with a cash infusion from long-time investors and by laying off hundreds of workers to cut costs. That new funding was needed as sales of its products fell more than 20% last year.
Juul faced a wave of suits accusing it of failing to warn consumers about the risks of vaping and illegally marketing the nicotine-delivery devices to minors. School districts across the US have sued the firm — once backed by tobacco company Altria Group — for creating a so-called public nuisance by targeting children in their marketing efforts. District officials complain vaping is disrupting classes and causing other discipline problems.
Altria paid $12.8 billion for a 35% stake in the e-cigarette company and has since written down the value of that investment to $1.5 billion. More than 60 deaths and 2,700 hospitalizations have been tied to vaping-related lung injuries, according to the CDC.
The push to get the $1.2 billion deal approved comes as states are finalizing a separate $439 million settlement over the e-cigarette manufacturer’s marketing and sales practices, especially those targeting children. Juul agreed in September to accept strict limits on its marketing campaigns as part of the accord.
The case is In re: Juul Labs Inc. Marketing, Sales Practices & Products Liability Litigation, 19-md-02913, U.S. District Court, Northern District of California (San Francisco)
