Milwaukee Gets $2.5 Million In JUUL Settlement

A female vapes with her JUUL e-cigarette. Photo by Sarah Johnson, CC BY 2.0 via Wikimedia Commons

The City of Milwaukee will receive $2.47 million in a settlement with electronic cigarette maker JUUL Labs as part of a $1.2 billion settlement to resolve more than 5,000 lawsuits.

The company introduced an e-cigarette in 2015 that was touted as safer than smoking traditional cigarettes and quickly became a market leader, in part due to its flavored tobacco and alleged deceptive marketing tactics that targeted teenagers. The company’s practices resulted in several lawsuits and scrutiny from the U.S. Food and Drug Administration (FDA). In 2019, JUUL suspended its advertising and discontinued many of its fruity flavors. In September 2022, Wisconsin was one of 33 states and territories to reach a $438.5 million settlement with the company and is expected to receive more than $14.4 million over six to 10 years.

The City of Milwaukee will use its proceeds to fund anti-smoking efforts by the Milwaukee Health Department. Under the settlement’s terms, the first payment will cover 50% of the city’s payout, with a series of smaller payments to follow.

“It has had really detrimental long-term impacts,” said Alderman Michael Murphy on Tuesday of the company’s practices. He said the product often has four times the nicotine of traditional cigarettes.

Murphy said he was working with Alderwoman Milele A. Coggs on devising a strategy on how the settlement proceeds would be spent on mitigation.

“It is my intent we will target those resources in our city where much of the marketing dollars were being spent by JUUL Labs,” said the alderman to his council colleagues. The council voted unanimously to accept the settlement. It voted unanimously earlier this month to institute a moratorium on new e-cigarette stores while city officials work on a regulatory framework.

The city sued JUUL in Dec. 2020 and its case was consolidated with 10,000 other plaintiffs in the U.S. District of Northern California. Murphy thanked the City Attorney’s Office for being willing to pursue the case. The city argued JUUL caused a public health crisis by increasing youth e-cigarette usage.

“These settlements represent a major step toward strengthening Juul Labs’ operations and securing the company’s path forward,” said the company in announcing the global settlement in December 2022. San Francisco-based JUUL was once valued at more than $38 billion, but major investor Altria has written down its investment to only 5% of its original value. The FDA is pursuing a ban on the sale of its products in the U.S.

In October 2020, Murphy sponsored the hiring of outside attorney Keller Rohrback to pursue the case. The firm was already representing several governmental entities and was a co-lead counsel in the larger case. MWH Law Group was also hired to support the city, with both firms paid on a contingent basis. The proposal was backed by City Attorney Tearman Spencer.

The Wisconsin Department of Health Services reported that e-cigarette usage in high school students rose from 8% of students to 20% from 2014 to 2018, reversing a two-decade decline in youth tobacco use.

Ald. Mark Borkowski also sponsored accepting the settlement proceeds.