Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 1 of 212

UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
Howard County, Maryland
3450 Court House Drive
Ellicott City, MD 21043,
Plaintiff,
vs.
JUUL LABS, INC. F/K/A PAX LABS, INC.
560 20th Street
San Francisco, CA 94107
and
EONSMOKE, LLC
1500 Main Avenue
Clifton, NJ 07011
and
ALTRIA GROUP, INC.
6601 West Broad Street
Richmond, VA 23230
and
ALTRIA CLIENT SERVICES, LLC
CT Corporation System
28 Liberty Street
New York, NY 10005
and
ALTRIA GROUP DISTRIBUTION
COMPANY
CT Corporation System
28 Liberty Street
New York, NY 10005
and

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No.
REDACTED
DEMAND FOR JURY TRIAL

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NU MARK LLC
CT Corporation System
4701 Cox Road, Suite 285
Glen Allen, VA 23060
and
NU MARK INNOVATIONS, LTD.
203 Hamelacha
Beit Shemesh 9905500
Israel,
Defendants.

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COMPLAINT

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TABLE OF CONTENTS
Page
I.

INTRODUCTION ...............................................................................................................1

II.

JURISDICTION AND VENUE ..........................................................................................6

III.

PARTIES .............................................................................................................................6

IV.

ALLEGATIONS OF FACT ................................................................................................9
A.

B.

JUUL: Runaway Commercial Success and Public Health Disaster ........................9
1.

Redesigning “the most successful consumer product of all time” ...............9

2.

Following Big Tobacco’s Footsteps: Nicotine Salts ..................................15

3.

JLI Designed JUUL Products to Contain and Deliver as Much
Nicotine as Possible ...................................................................................22

Following Big Tobacco’s Playbook, JLI Launched JUUL with a Blatantly
Youth-Oriented Campaign .....................................................................................26
1.

JLI Learned from Big Tobacco the Importance of Hooking Kids .............26

2.

JLI’s Advertising Strategy Was
to
Capture Young Nonsmokers, Not Adult Smokers .....................................31

3.

JLI’s “Vaporized” Campaign Was Intentionally Youth-Focused .............35

4.

JLI Hosted Parties and Pop-Up “JUUL Lounges” to Create a
Youthful Brand and Gave Away Free Samples to Get Youth
Hooked .......................................................................................................44

5.

By Using Viral Advertising, JLI Ensured that Its Advertising
Campaigns Would Reach Youth and Outlast JLI’s Own Efforts ..............48

C.

JLI and Its Officers and Directors Knew JLI’s Aggressively YouthOriented Advertising Was Hooking Kids but Continued It Anyway ....................58

D.

JLI’s Early Labeling and Advertising for JUUL Products Omitted the Fact
that JUUL Products Contain Nicotine ...................................................................63

E.

In Another Page from Big Tobacco’s Playbook, JLI Used Flavors to Hook
Kids ........................................................................................................................65
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V.

F.

JLI Also Used JUUL’s Discreet and Tech-Inspired Design to Attract a
New Generation of Youth to Nicotine ...................................................................75

G.

Eonsmoke, Riding on JLI’s Coattails, Promoted JUUL and Its Own
“JUUL-Compatible” Products ...............................................................................79

H.

The Proliferation of “JUULalikes” and Next-Generation Products
Targeting Youth .....................................................................................................93

I.

JLI and Altria Join Forces to Protect JUUL’s Market Domination .....................101
1.

Before Conspiring with JLI, Altria Tried to Corner the Youth ECigarette Market ......................................................................................101

2.

JLI and Altria Decide to Work Together to Expand JUUL’s Reach
and Cover-Up JLI’s Youth Marketing .....................................................107

3.

Following JLI’s Journey Closely: Formation of the Youth
Marketing Cover-Up Enterprise ..............................................................111

4.

Late 2017-August 2018: Early Coordination of Altria with the
Youth Marketing Cover-Up Enterprise ...................................................114

5.

September - December 2018: Further Coordination of the Youth
Marketing Cover-Up Enterprise ..............................................................126

6.

Publicly Announcing the Ties Between the Youth Marketing
Cover-Up Enterprise Defendants .............................................................133

J.

The Cost of JUUL’s Success ...............................................................................152

K.

Vaping in Schools ................................................................................................163

L.

Impact of the Youth Vaping Crisis on Howard County ......................................172

M.

No Federal Agency Action, Including by the FDA, Can Provide the Relief
Plaintiff Seeks Here .............................................................................................180

CAUSES OF ACTION ....................................................................................................180
COUNT I Violations of Maryland Public Nuisance Law ................................................180
COUNT II Violations of the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. §1961 et seq. ......................................................................186
A.

Description of Defendants’ Youth Marketing Cover-Up Enterprise ...................187

B.

The Enterprise Sought to Fraudulently Deny Having Marketed to Youth in
Maintaining and Expanding JUUL’s Youth Market Share..................................188
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C.

Predicate Acts: Mail and Wire Fraud...................................................................190

D.

Plaintiff Has Been Damaged by the Youth Marketing Cover-Up Enterprise
Defendants’ RICO Violations ..............................................................................204

VI.

PRAYER FOR RELIEF ..................................................................................................206

VII.

JURY TRIAL DEMANDED ...........................................................................................206

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I.

INTRODUCTION
1.

One of the great public health success stories over the past decade has been a

reduction in youth tobacco use and nicotine addiction. Youth smoking rates plummeted from 28%
in 2000 to 7.6% in 2017. 1 This success has been the result of years of litigation and strict
regulation. It is also due to a powerful public health message that Big Tobacco can no longer
dispute or contradict: smoking kills.
2.

This incredible progress towards eliminating youth use of tobacco products has now

largely been reversed due to e-cigarettes and vaping. Between 2017 and 2018, e-cigarette use
increased 78% among high school students nationwide, from 11.7% of high school students in
2017 to 20.8% of high schoolers in 2018. 2 Among middle school students, e-cigarette use
increased 48% between 2017 and 2018. 3 The increase in youth nicotine vaping from 2017 to 2018
was the largest of any substance tracked by the national Monitoring the Future surveys over the
past 44 years. 4
3.

Youth vaping rates continued to climb from 2018 to 2019, such that vaping

prevalence more than doubled among each grade level surveyed – 8th, 10th, and 12th graders – in

1

Meredith Berkman, Testimony of Meredith Berkman, Parents Against Vaping E-cigarettes,
U.S.
House
Committee
on
Oversight
&
Reform
(July
24,
2019),
https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2019.07.24%20BerkmanPAVe%20Testimony.pdf.
2

Jerome Adams, Surgeon General’s Advisory on E-cigarette Use Among Youth, CDC (Dec.
2018),
https://e-cigarettes.surgeongeneral.gov/documents/surgeon-generals-advisory-on-ecigarette-use-among-youth-2018.pdf.
3

2018 NYTS Data: A startling rise in youth e-cigarette use, FDA (Feb. 2, 2019),
https://www.fda.gov/tobacco-products/youth-and-tobacco/2018-nyts-data-startling-rise-youth-ecigarette-use.
4

Richard Miech, Ph.D. et al., Trends in Adolescent Vaping, 2017-2019, 381 New Eng. J. Med.
1490-91 (Oct. 10, 2019), https://www.nejm.org/doi/full/10.1056/NEJMc1910739.
-1-

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 7 of 212

the past two years. 5 In 2019, more than 5 million middle and high school students reported current
use of e-cigarettes, including more than one in every four high schoolers. 6
4.

Consistent with these national numbers, youth in Howard County, Maryland

(“Howard County” or “Plaintiff”) are vaping at high rates – rates which continue to climb.
5.

According to the Centers for Disease Control and Prevention (“CDC”) Director

Robert Redfield, “[t]he skyrocketing growth of young people’s e-cigarette use over the past year
threatens to erase progress made in reducing tobacco use. It’s putting a new generation at risk for
nicotine addiction.” 7 Former U.S. Food and Drug Administration (“FDA”) Commissioner Scott
Gottlieb described the federal statistics as “astonishing,” and both the FDA and the U.S. Surgeon
General (“Surgeon General”) have characterized youth vaping as an “epidemic.” 8 The Secretary
of the U.S. Department of Health and Human Services (“HHS”) declared that “[w]e have never
seen use of any substance by America’s young people rise as rapidly as e-cigarette use [is rising].” 9

5

Id.

6

Youth Tobacco Use: Results from the National Youth Tobacco Survey (“National Youth
Tobacco Survey”), FDA (Nov. 6, 2019), https://www.fda.gov/tobacco-products/youth-andtobacco/youth-tobacco-use-results-national-youth-tobacco-survey#1.
7

Amir Vera, Texas governor signs law increasing the age to buy tobacco products to 21, CNN
(June
8,
2019),
https://www-m.cnn.com/2019/06/08/health/texas-new-tobaccolaw/index.html#:~:targetText=Supporters%20say%20increasing%20the%20minimum,go%20int
o%20effect%20September%201.?r=https%3A%2F%2Fwww.google.com%2F.
8

Angelica LaVito, FDA chief Gottlieb threatens to pull e-cigarettes off market if ‘astonishing’
surge in teen use doesn’t slow, CNBC (Nov. 16, 2018), https://www.cnbc.com/2018/11/16/fdachief-gottlieb-threatens-to-pull-e-cigarettes-off-market.html; Jayne O’Donnell, FDA declares
youth vaping an epidemic, announces investigation, new enforcement, USA Today (Sept. 12,
2018),
https://www.usatoday.com/story/news/politics/2018/09/12/fda-scott-gottlieb-youthvaping-e-cigarettes-epidemic-enforcement/1266923002/.
9

Jan Hoffman, Study Shows Big Rise in Teen Vaping This Year, N.Y. Times (Dec. 17, 2018),
https://www.nytimes.com/2018/12/17/health/ecigarettes-teens-nicotine-.html; Rajiv Bahl, Teen
Use of Flavored Tobacco was Down, But E-Cigarettes Are Bringing It Back Up, Healthline (Jan.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 8 of 212

6.

A major cause of this epidemic is Defendant JUUL Labs, Inc. (“JLI”), the maker

of the JUUL e-cigarette. JLI entered the e-cigarette market in 2015 and, by 2019, controlled over
70% of it. 10 Over one million JUUL e-cigarettes were sold between 2015 and 2017. 11 In 2017,
JLI’s e-cigarette products had generated over $224 million in retail sales, a 621% year-over-year
increase. 12 By June 2018, sales had skyrocketed another 783%, reaching $942.6 million. 13 The
e-cigarette category as a whole grew 97% to $1.96 billion in the same period, largely based on
JLI’s market success. 14 JLI’s rise to having the dominant products on the e-cigarette market was
so rapid, and so complete, that the act of vaping is now often referred to as “juuling.”
7.

As JUUL’s popularity skyrocketed Defendant Eonsmoke, LLC (“Eonsmoke”)

explicitly traded on JUUL’s market share, promoting its own products as “JUUL compatible,”
initiating a successful “Doit4juul” social media campaign, and offering its JUUL-compatible pods
in flavors including “Sour Gummy,” “Pineapple Crush,” and “Pink Lemonade.” 15 Other copycats

9, 2019), https://www.healthline.com/health-news/flavored-tobacco-use-rising-again-amongteens#An-unhealthy-habit.
10

Richard Craver, Juul ends 2018 with 76 percent market share, Winston-Salem J. (Jan. 8, 2019),
https://www.journalnow.com/business/juul-ends-with-percent-market-share/article_6f50f42719ec-50be-8b0c-d3df18d08759.html.
11

Melia Robinson, How a startup behind the ‘iPhone of vaporizers’ reinvented the e-cigarette
and generated $224 million in sales in a year, Bus. Insider (Nov. 21, 2017),
https://www.businessinsider.com/juul-e-cigarette-one-million-units-sold-2017-11/.
12

Id.

13

Angelica LaVito, Popular e-cigarette Juul’s sales have surged almost 800 percent over the
past year, CNBC Health & Sci. (Sept. 11, 2018), https://www.cnbc.com/2018/07/02/juul-ecigarette-sales-have-surged-over-the-past-year.html.
14
15

Id.

Letter from Ann Simoneau, J.D., Director FDA Center for Tobacco Products’ Office of
Compliance and Enforcement, to Kelly L. Zeller, General Manager, Eonsmoke, LLC (“Eonsmoke,
-3-

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 9 of 212

also hurried to mimic JUUL’s potent nicotine formulation and youth-oriented design – building
on the illicit youth e-cigarette market JLI created.
8.

By September 2018, youth vaping rates were spiraling out of control, and the FDA

sent warning letters to Defendants JLI 16 and Altria Client Services Inc. 17 regarding the alarmingly
high rates of youth using their products. 18 In October 2018, the FDA raided JLI’s headquarters
and seized more than one thousand documents relating to JLI’s sales and marketing practices. By
the end of 2019, the FDA, the Federal Trade Commission, and the U.S. House of Representatives
Committee on Oversight and Reform had all commenced investigations into JLI’s role in the youth
vaping epidemic and whether JLI’s marketing practices purposefully targeted youth. Multiple
state attorneys general have now also opened investigations into or filed suit against JLI.
9.

As the pressure on JLI intensified, Altria 19 – maker of Marlboro cigarettes, parent

company of Philip Morris USA, and one of the largest tobacco companies in the world – stepped
in to publicly support JLI. While Altria first began having “confidential discussions” beginning

LLC Warning Letter”) (Oct. 24, 2019), https://www.fda.gov/inspections-complianceenforcement-and-criminal-investigations/warning-letters/eonsmoke-llc-592097-10242019.
16

Letter from Scott Gottlieb, M.D., FDA Commissioner, to Kevin Burns, JUUL Labs, Inc. (Sept.
12, 2018), https://www.fda.gov/media/119669/download.
17

Letter from Scott Gottlieb, M.D., FDA Commissioner, to Howard A. Willard III, Altria Group,
Inc. (Sept. 12, 2018), https://www.fda.gov/media/119666/download.
18

Letter from Scott Gottlieb, M.D., FDA Commissioner, to Kevin Burns, JUUL Labs, Inc. (Sept.
12, 2018), https://www.fda.gov/media/119669/download.
19

Altria Group, Inc. and its subsidiaries Altria Client Services Inc., Altria Group Distribution
Company, and Nu Mark, LLC, and Nu Mark Innovations, Ltd. (collectively “Altria” or “Altria
Defendants”).
-4-

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in the spring of 2017, 20 Altria did not make its relationship with JLI public until December 20,
2018, when Altria announced a $12.8 billion equity investment in JLI, giving it a 35% stake in
JLI.

Just several weeks prior to this announcement, Altria had seemingly criticized JLI’s

marketing practices in a letter to the FDA and declared that “pod-based products significantly
contribute to the rise in youth use of e-vapor products.” Altria removed its own pod-based products
– the MarkTen Elite and Apex by MarkTen, from the market – only to commit its substantial
resources, regulatory knowledge, and lobbying muscle to protecting and expanding JUUL’s
market share, which, as Altria and JLI both know, relies heavily on youth.
10.

Attempting to revise history and cover-up JLI’s misconduct, JLI and Altria are now

describing their collaboration as a “harm reduction opportunity,” and insist JLI never marketed to
youth. These assertions fall flat against the facts, as detailed below. Altria has described the JUUL
e-cigarette as “compelling” and “a terrific product.” In fact, Defendant JLI’s JUUL e-cigarette has
compelled a generation of youth, who were never cigarette smokers, into nicotine addiction and
forced local governments to spend significant amounts of time and resources combatting the youth
vaping crisis sweeping their communities. JLI and Altria are now working together to deny that
JLI’s products are marketed to and designed for youth and nonsmokers while maintaining JUUL’s
market dominance – which would not be possible if the customer base were in fact only adult
smokers seeking to quit.
11.

Plaintiff Howard County, Maryland brings this action against Defendants JUUL

Labs, Inc.; Eonsmoke, LLC; Altria Group, Inc. and its subsidiaries Altria Client Services Inc.,
Altria Group Distribution Company, and Nu Mark, LLC, and Nu Mark Innovations, Ltd
20

Letter from Howard A. Willard III, Altria Group, Inc. to Senator Richard J. Durbin at 3 (Oct.
14, 2019), https://www.altria.com/-/media/Project/Altria/Altria/about-altria/federal-regulation-oftobacco/regulatory-filings/documents/Altria-Response-to-October-1-2019-Senate-Letter.pdf.
-5-

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 11 of 212

(collectively, “Altria” or “Altria Defendants”), for damages and injunctive relief, including
abatement of the public health crisis caused by Defendants’ wrongful conduct.
II.

JURISDICTION AND VENUE
12.

This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.

§1331 because Plaintiff’s racketeering claim arises under the laws of the United States, 18 U.S.C.
§1961 et seq., and pursuant to 28 U.S.C. §1332(a) because: (i) the amount in controversy exceeds
$75,000, exclusive of interests and costs, and (ii) the plaintiff and defendants are citizens of
different states. This Court has supplemental jurisdiction over the state law claims pursuant to 28
U.S.C. §1367.
13.

The Court has personal jurisdiction over Defendants because they do business in

the District of Maryland and have sufficient minimum contacts with this District. Defendants
intentionally avail themselves of the markets in this State through the promotion, marketing, and
sale of the products at issue in this lawsuit, and by retaining the profits and proceeds from these
activities, to render the exercise of jurisdiction by this Court permissible under Maryland law,
including Md. Code Ann., Cts. & Jud. Proc. §§6-101 and 6-103, and the U.S. Constitution.
14.

Venue is proper in the District of Maryland pursuant to 28 U.S.C. §1391 (b)(2) and

(3) because a substantial part of the events or omissions giving rise to the claims at issue in this
Complaint arose in this District and Defendants are subject to the Court’s personal jurisdiction
with respect to this action.
III.

PARTIES

Plaintiff
15.

Plaintiff Howard County, Maryland (“Plaintiff” or “Howard County”), is a

Maryland County organized and existing under the laws of the State of Maryland.

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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 12 of 212

JUUL Labs, Inc.
16.

Defendant JUUL Labs, Inc. (“JLI”) is a Delaware corporation, having its principal

place of business in San Francisco, California. JLI was incorporated in Delaware on March 12,
2007 (file no. 4315504) under the name Ploom, Inc. (“Ploom”). In February 2015, Ploom changed
its name to PAX Labs, Inc. In April 2017, PAX Labs, Inc. formed a new corporation under the
name PAX Labs (Deux), Inc., incorporated in Delaware on April 21, 2017 (file no. 6387684). On
June 30, 2017, PAX Labs, Inc. was renamed JUUL Labs, Inc., and PAX Labs (Deux), Inc. was
given the name PAX Labs, Inc.
17.

JLI manufactures, designs, sells, markets, promotes and distributes JUUL e-

cigarettes, JUULpods and accessories (collectively, “JUUL products”). From JUUL’s launch in
2015 until June 2017, JLI manufactured, designed, sold, marketed, promoted, and distributed
JUUL products under the name PAX Labs, Inc.
18.

JUUL Labs, Inc., formerly known as PAX Labs, Inc., formerly known as Ploom,

Inc., is referred to herein as “JLI.”
Eonsmoke
19.

Defendant Eonsmoke, LLC (“Eonsmoke”) is a New Jersey limited liability

company with its principal place of business in Clifton, New Jersey. Eonsmoke markets and sells
“Juul Compatible” Eonsmoke and Eonsmoke v2.0 electronic vapor devices and flavor pods, as
well as 4X pods and disposable vape products such as Eon St!Ks.
Altria Defendants
20.

Defendant Altria Group, Inc. is a Virginia corporation, having its principal place of

business in Richmond, Virginia. Altria is one of the world’s largest producers and marketers of
tobacco products. On December 20, 2018, Altria purchased a 35% stake in JLI.

-7-

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 13 of 212

21.

Defendant Altria Client Services, LLC is a New York corporation and wholly

owned subsidiary of Altria Group, Inc. with its principal place of business in Henrico County,
Virginia. Altria Client Services Inc. provides Altria Group, Inc. and its companies with services
in many areas including digital marketing, packaging design & innovation, product development,
and safety, health, and environmental affairs. Pursuant to Altria’s relationship with JLI, Altria
Client Services assists JLI in the sale, marketing, promotion and distribution of JUUL products.21
Such services include database support, direct marketing support, and premarket product
application support. 22 On September 25, 2019, the former senior vice president and chief growth
officer of Altria Client Services Inc., K.C. Crosthwaite, became the new chief executive officer
of JLI.
22.

Defendant Altria Group Distribution Company is a Virginia corporation and wholly

owned subsidiary of Altria Group, Inc. with its principal place of business in Henrico County,
Virginia.

Altria Group Distribution Company provides sales, distribution and consumer

engagement services to Altria’s tobacco companies. Altria Group Distribution Company

Altria Group
Distribution Company

21

Altria Group, Inc., Relationship Agreement by and among JUUL Labs, Inc., Altria Group, Inc.,
and
Altria
Enterprises
LLC
(Form
8-K),
Ex.
99.1
(Dec.
20,
2018),
https://www.sec.gov/Archives/edgar/data/764180/000119312518353970/d660871dex991.htm.
22

Altria Group, Inc., Relationship Agreement by and among JUUL Labs, Inc., Altria Group, Inc.,
and
Altria
Enterprises
LLC
(Form
8-K),
Ex.
2.2
(Dec.
20,
2018),
https://www.sec.gov/Archives/edgar/data/764180/000119312518353970/d660871dex22.htm.
-8-

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 14 of 212

23.

Defendant Nu Mark LLC is a Virginia corporation and wholly owned subsidiary of

Altria Group, Inc., with its principal place of business in Richmond, Virginia. Nu Mark LLC was
engaged in the manufacture and sale of Altria’s electronic vapor products. Shortly before Altria
purchased a 35% stake in JLI in December 2018, Altria Group, Inc. announced that Nu Mark
would be discontinuing the production and sale of all e-vapor products.
24.

Defendant Nu Mark Innovations, Ltd. is a subsidiary of Nu Mark LLC located in

Beit Shemesh, Israel. Nu Mark Innovations, Ltd. provides digital marketing and customer care
services for Nu Mark LLC and Altria’s e-vapor brands, as well as product and technology
development services.
25.

Collectively, Altria Group, Inc. and its subsidiaries named above will be referred

to herein as “Altria” or “Altria Defendants.”
IV.

ALLEGATIONS OF FACT
A.

JUUL: Runaway Commercial Success and Public Health Disaster
1.

26.

Redesigning “the most successful consumer product of all
time”

JLI was founded by Adam Bowen and James Monsees. JLI’s beginnings can be

traced to the pair’s collaboration on a product design master’s thesis when they were graduate
students at Stanford University in 2004 – Monsees completing a Master of Fine Arts in Product
Design, and Bowen a Master of Science in Mechanical Engineering in Product Design. 23 Their
proposed product? A better cigarette.

23

Allison
Keeley,
Vice
Made
Nice?,
https://stanfordmag.org/contents/vice-made-nice.
-9-

Stan.

Mag.

(July/Aug.

2012),

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 15 of 212

27.

Monsees has described the cigarette as “the most successful consumer product of

all time . . . an amazing product.” 24 But years of anti-smoking campaigns, including work by local
government public health departments and school-based anti-tobacco programs, have successfully
de-normalized cigarette smoking.

As part of their thesis research, Monsees and Bowen

interviewed smokers who talked about feeling self-conscious of the signs of smoking, for example,
coming back into a room after a smoke break and smelling like smoke, or having their hands smell
like cigarettes even after washing them multiple times. 25 When Monsees and Bowen presented
their thesis and product design to their classmates, they included a clip from a South Park episode
showing the characters assembled at the Museum of Tolerance and shaming a smoker. 26 Their
goal was to design a cigarette without the stigma and self-consciousness smokers experienced – as

24

Gabriel Montoya, Pax Labs: Origins with James Monsees, Soc. Underground (Jan. 2015),
https://socialunderground.com/2015/01/pax-ploom-origins-future-james-monsees/.
25

Jordan Crook, This is the Stanford thesis presentation that launched Juul, Tech Crunch (Feb.
27,
2019),
https://techcrunch.com/2019/02/27/this-is-the-stanford-thesis-presentation-thatlaunched-juul/.
26

Id.; Adam and James’ Thesis Presentation, JUUL (Feb.
https://www.youtube.com/watch?v=ZBDLqWCjsMM&has_verified=1, at 4:04.
- 10 -

27,

2019),

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 16 of 212

Monsees described it, to “deliver[] solutions that refresh the magic and luxury of the tobacco
category” and recreate the lost “ritual and elegance that smoking once exemplified.” 27
28.

Essentially, Monsees and Bowen saw a market opportunity in a generation of

consumers brought up on anti-smoking norms. In Monsees’ words, they wanted to redesign the
cigarette “to meet the needs of people who want to enjoy tobacco but don’t self-identify with – or
don’t necessarily want to be associated with – cigarettes.” 28 Monsees saw “a huge opportunity for
products that speak directly to those consumers who aren’t perfectly aligned with traditional
tobacco products.” 29
29.

At one point during their thesis presentation, Monsees states, “The cigarette is

actually a carefully engineered product for nicotine delivery and addiction.” 30 This description
applies just as well to the product he and Bowen would launch a decade later: JUUL.
30.

The outcome of Monsees and Bowen’s thesis project was a “heat-not-burn”

e-cigarette, which uses loose-leaf tobacco. The device heated tobacco contained in pods to a
constant temperature, vaporizing nicotine and flavor without burning the materials or producing
smoke.
31.

After graduation, Bowen and Monsees worked on bringing their thesis project to

the market, incorporating under the name Ploom in 2007. In those early years, they spent a lot of
time talking about what Bowen called “the kind of typical thoughts of evil Big Tobacco companies

27

Start Your Own Revolution: An Interview with James Monsees, onboardly (Apr. 30, 2014),
https://web.archive.org/web/20161108110231/http://onboardly.com/entrepreneur-interviews/aninterview-with-james-monsees/ (last visited Mar. 27, 2020).

28

Id.

29

Id.

30

See Crook, supra note 25.
- 11 -

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like coming down and squashing you.” 31 But ultimately, that “was not really an issue.” 32 In fact,
not only did Big Tobacco not squash them, but the opposite occurred. Although Bowen and
Monsees characterized their products as aimed toward consumers not aligned with traditional
tobacco products, they themselves have aligned with Big Tobacco on at least two occasions: first,
with Japan Tobacco International (“JTI”) and then with Altria.
32.

In 2010, JLI (then called Ploom) launched its e-cigarette as the ModelOne, using

pods of loose-leaf tobacco heated by butane. It did not catch on. JLI only sold a few thousand of
them. By then a company with a dozen employees, JLI was faltering, in need of money,
technological expertise, and marketing savvy. 33
Help came from JTI, a division of Japan Tobacco Inc., the fourth-largest tobacco

33.

company in the world. In December 2011, JTI and JLI entered into a strategic agreement, which
gave JTI a minority stake in JLI and made it a strategic partner. According to internal documents,

34

In a statement regarding the agreement, Monsees said, “We are very pleased to

partner with JTI as their deep expertise, global distribution networks and capital resources will
enable us to enter our next phase of growth and capitalize on global expansion opportunities.”35

31

Keeley, supra note 23.

32

Id.

33

David H. Freedman, How Do You Sell a Product When You Can’t Really Say What It Does?,
Inc.com (May 2014), https://www.inc.com/magazine/201405/david-freedman/james-monseesploom-ecigarette-company-marketing-dilemma.html.
34

INREJUUL_00371423 (

).

35

Innovative Partnership for Ploom and Japan Tobacco International JTI to Take Minority
Share in Ploom, Japan Tobacco Int’l (Dec. 8, 2011), https://www.jti.com/sites/default/files/pressreleases/documents/2011/innovative-partnership-for-ploom-and-japan-tobacco-international.pdf.
- 12 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 18 of 212

As Bowen explained in an interview, “We were still doing a lot of our own internal product
development, but now we had access to floors of scientists at JTI.”
34.

In 2012, JLI (still known as Ploom) unveiled the PAX, a loose-leaf vaporizer that

did not use pods, but which was much more successful. The following year, JLI combined
elements of the PAX with the pod system as the ModelTwo.

Although consumers were

enthusiastic about both the PAX and the ModelTwo, the products were limited to a small, highend market. The PAX, for example, retailed for $250 when it was first marketed. But, as one of
JLI’s investors remarked in 2014, “The company is going to invade the bigger, lower-end market
now dominated by e-cigarettes.” 36 He explained that JLI had “lots of products in the works” and
that “[w]e know we need something cheaper than Pax to go after the mass market. There are still
huge opportunities out there.” 37
35.

In February 2015, JLI and JTI ended their relationship, with JLI buying back JTI’s

minority stake in the business. JTI acquired the ModelTwo and pods product line, as well as the
Ploom name, while JLI kept its open-system PAX vaporizer and changed its name to PAX Labs
Inc.

Monsees characterized the partnership as having “afforded both parties many mutual

benefits,” but said that the new arrangement would “fuel continued growth” and that JLI intended
“rapid rollouts of new products.” 38

36

Freedman, supra note 33.

37

Id.

38

JTI to Acquire Ploom Product Line, Convenience Store News (Feb. 16, 2015),
https://csnews.com/jti-acquire-ploom-product-line#close-olyticsmodal.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 19 of 212

36.

JLI made good on its promise of new products and invading the bigger, lower-end

market in e-cigarettes. As discussed further below, JLI launched JUUL products in June 2015 with
a well-publicized launch party in New York City and a viral social media marketing campaign.
37.

In 2017, as JUUL became more and more popular, JLI changed its name from PAX

to JUUL Labs, Inc.
38.

By the close of 2017, according to Nielsen data, JLI had surpassed its competitors

in capturing 32.9% of the e-cigarette market, with British American Tobacco at 27.4% and Altria
at 15.2%. 39 The total e-cigarette market expanded 40% to $1.16 billion. 40
39.

In 2018, JLI’s gross profit margins were 70% 41 and it represented 76.1% of the

national e-cigarette market. 42 In a complaint it filed in November 2018 against 24 vape companies
for alleged patent infringement, JLI asserted that it was “now responsible for over 95% of the
growth in the ENDS pod refill market in the United States” and included the following chart: 43

39

Ari Levy, E-cigarette maker Juul is raising $150 million after spinning out of vaping company,
CNBC (Dec. 20, 2017), https://www.cnbc.com/2017/12/19/juul-labs-raising-150-million-in-debtafter-spinning-out-of-pax.html.
40

Id.

41

Dan Primack, Scoop: The Numbers Behind Juul’s Investor Appeal, Axios (July 2, 2018),
https://www.axios.com/numbers-juul-investor-appeal-vaping-22c0a2f9-beb1-4a48-acee5da64e3e2f82.html.
42

Robert K. Jackler et al., JUUL Advertising Over Its First Three Years on the Market 2, Stanford
Research
into
the
Impact
of
Tobacco
Advertising.
(2019),
http://tobacco.stanford.edu/tobacco_main/publications/JUUL_Marketing_Stanford.pdf.
43

Verified Complaint Under Section 337 of the Tariff Act of 1930 at 6, In the Matter of Certain
Cartridges for Elec. Nicotine Delivery Sys. & Components Thereof, Investigation No. 337-TA1141 (USITC Nov. 19, 2018).
- 14 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 20 of 212

40.

JLI shattered previous records for reaching decacorn status, reaching valuation of

over $10 billion in a matter of months – four times faster than Facebook. 44 This all came just three
years after its product launch.
2.
41.

Following Big Tobacco’s Footsteps: Nicotine Salts

JLI’s staggering commercial success did not come from a blank slate. Under the

Master Settlement Agreement between Big Tobacco and the States, the public has access to
hundreds of thousands of Big Tobacco’s internal documents. In creating JUUL, Monsees and
Bowen carefully studied the marketing strategies, advertisements, and product design of Big
Tobacco. As Monsees candidly acknowledged, the internal tobacco documents “became a very
intriguing space for us to investigate because we had so much information that you wouldn’t
normally be able to get in most industries. And we were able to catch-up, right, to a huge, huge

44

Zack Guzman, Juul Surpasses Facebook As Fastest Startup to Reach Decacorn Status, Yahoo!
Fin. (Oct. 9, 2018), https://finance.yahoo.com/news/juul-surpasses-facebook-fastest-startupreach-decacorn-status-153728892.html.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 21 of 212

industry in no time. And then we started building prototypes.” 45 JLI researched how cigarette
companies engineered their products and chemically manipulated nicotine to maximize delivery:
“We started looking at patent literature. We are pretty fluent in ‘Patentese.’ And we were able to
deduce what had happened historically in the tobacco industry.” 46
42.

JLI built on Big Tobacco’s research to formulate its nicotine solution in a manner

that would be appealing to youth and nonsmokers. JLI was well aware from the historical cigarette
industry documents that the future of any nicotine-delivery business depends on ensnaring
customers before they age beyond the window of opportunity. Big Tobacco designed products
specifically to make it easier for teens to initiate smoking. In a 1973 internal memo Dr. Claude
Teague of R.J. Reynolds Tobacco Company (“R.J. Reynolds”) observed, “Realistically, if our
Company is to survive and prosper, over the long term, we must get our share of the youth market.
In my opinion this will require new brands tailored to the youth market.” 47 Dr. Teague noted that
“‘learning’ smokers” have a low tolerance for throat irritation so the smoke should be “as bland as
possible,” i.e., not harsh; and he specifically recommended an acidic smoke “by holding pH down,
probably below 6.” 48 As described below, JLI heeded Dr. Teague’s advice.
43.

Monsees, Bowen, and JLI’s employees reviewed documents in the Big Tobacco

archive that included information on how to manipulate nicotine pH to maximize nicotine delivery
in a vapor while minimizing the throat irritation or “throat hit” that may potentially deter new

45

Montoya, supra note 24.

46

Crook, supra note 25.

47

Claude E. Teague, Jr., Research Planning Memorandum on Some Thoughts About New Brands
of Cigarettes for the Youth Market at 1, U.C.S.F. Truth Tobacco Indus. Documents (Feb. 2, 1973),
https://www.industrydocuments.ucsf.edu/tobacco/docs/#id=lhvl0146.
48

Id. at 4.
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smokers. Chenyue Xing, a chemist who worked for JLI (then called PAX Labs) and helped patent
its liquid-nicotine formula, told Reuters that she recalled reviewing tobacco company records and
research. “We had consultants who were veterans of the big tobacco companies,” she said, “We
learned all the history.” 49
44.

As Monsees noted in a 2015 interview with WIRED magazine, “The people who

understood the science and were listed on previous patents from tobacco companies aren’t at those
companies anymore. If you go to Altria’s R&D facility, it’s empty.” 50 Instead, some of those
people were advising JLI and helping to develop JUUL.
45.

As Dr. Teague’s memo described, the solution that R.J. Reynolds scientists devised

in the 1970s for reducing nicotine’s harshness to make it easier for “‘learning’ smokers” to start
and continue smoking was to combine the high-pH nicotine with a low-pH acid. The result was a
neutralized compound referred to as nicotine salt. In a 1973 R.J. Reynolds memorandum, R.J.
Reynolds highlighted that this chemical manipulation of the nicotine content was expected to give
its cigarettes an “additional nicotine ‘kick’” that would be more appealing and addictive. 51 A
young R.J. Reynolds chemist, Thomas Perfetti, synthesized thirty different nicotine salt
combinations, tested the salts’ ability to dissolve into a liquid, and heated them in pursuit of the

49

Chris Kirkham, Juul disregarded early evidence it was hooking teens, Reuters (Nov. 5, 2019),
https://www.reuters.com/investigates/special-report/juul-ecigarette/.
50

David Pierce, This Might Just Be the First Great E-Cig, WIRED (Apr. 21, 2015),
www.wired.com/2015/04/pax-juul-ecig/.
51

Frank G. Colby, Cigarette Concept to Assure RJR a Larger Segment of the Youth Market at 1,
U.C.S.F.
Truth
Tobacco
Industry
Indus.
Documents
(Dec.
4,
1973),
https://www.industrydocuments.ucsf.edu/tobacco/docs/#id=mzfx0091.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 23 of 212

“maximum release of nicotine.” 52 Perfetti published his results in a 1979 memo stamped
“CONFIDENTIAL,” which was found among the documents that the FDA obtained from JLI in
2018. Relying on cigarette industry research like this,

, JLI

developed a cartridge-based e-cigarette using nicotine salts. As described herein, JLI’s use of
nicotine salts, pioneered by major combustible Big Tobacco companies, was a critical tool for
addicting non-smokers, including youth.
46.

The “nicotine salt” formulation that JLI popularized follows this same approach.

JLI added benzoic acid to its nicotine liquid, creating a nicotine salt called nicotine benzoate. This
both reduced the nicotine’s harshness and delivered it more directly to the user’s lungs and brain. 53
The freebase nicotine in earlier e-cigarettes was partly absorbed in the user’s mouth and throat,
resulting in a much slower absorption by the body.
47.

JLI’s use of nicotine benzoate affects the palatability of nicotine inhalation by

reducing the “throat hit” that users experience when vaping. According to Ari Atkins, one of the
inventors of JUUL, “[i]n the tobacco plant, there are these organic acids that naturally occur. And
they help stabilize the nicotine in such a way that makes it . . . I’ve got to choose my words
carefully here: Appropriate for inhalation.” 54
48.

Because cigarette smokers are already accustomed to a certain level of harshness

and throat hit, developing a product with reduced harshness and minimal “throat hit” is only a
critical concern if the goal is to appeal to first-time smokers. The tobacco industry has long

52

Thomas A. Perfetti, Smoking Satisfaction and Tar/Nicotine Control (Dec. 7, 1978), https://catimes.brightspotcdn.com/3a/12/a5ec27874843a56e26b4ecdfd221/nicotine-saltsinvestigation.pdf.
53

Kirkham, supra note 49.

54

Pierce, supra note 50.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 24 of 212

recognized this; a published study of industry documents concluded that “product design changes
which make cigarettes more palatable, easier to smoke, or more addictive are also likely to
encourage greater uptake of smoking.” 55 In the vaping context, reducing the harshness of nicotine
also allows more frequent vaping, for longer periods of time, and masks the amount of nicotine
being delivered.
49.

Building on Big Tobacco’s research, JLI intentionally designed its product to

minimize “throat hit” and maximize “buzz.”

50.

56

“Employees tested new liquid-nicotine formulations on themselves or on
strangers taking smoke breaks on the street. Sometimes, the mix packed too much punch – enough
nicotine to make some testers’ hands shake or send them to the bathroom to vomit . . . .” 57

55

David A. Kessler, Juul Says It Doesn’t Target Kids, But Its E-Cigarettes Pull Them In, N.Y.
Times (July 31, 2019), https://www.nytimes.com/2019/07/31/opinion/juul-kids.html.
56

INREJUUL_00002903.

57

Kirkham, supra note 49.
- 19 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 25 of 212

51.

58

52.

53.

A later study by Anna K. Duell et al., explains why JUUL delivered a strong “buzz”

but so little throat hit. The Duell Study determined that the fraction of free-base nicotine in JLI’s
“Fruit Medley” flavor was 0.05 and was 0.07 in the “Crème Brulee” flavor. 59 For comparison,
“Zen” brand e-liquid has a free-base fraction of 0.84. 60 The Duell Study’s authors found that the

58

INREJUUL_00002903.

59

87 U.S. Patent No. 9,215, 895; Anna K. Duell et al., Free-Base Nicotine Determination in
Electronic Cigarette Liquids by H NMR Spectroscopy (“Duell Study”), 31 Chem. Res. Toxicol.
431,
432
(Fig.
3)
(May
18,
2018),
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6008736/pdf/tx8b00097.pdf.

60

Id. at 432.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 26 of 212

low free-base fraction in JUUL aerosols resulted in a “decrease in the perceived harshness of the
aerosol to the user and thus a greater abuse liability.” 61
54.

Dramatically reducing the throat hit is not necessary for a product that is aimed at

smokers, who are accustomed to the harshness of cigarette smoke, but it very effectively appeals
to nonsmokers, especially youth. The Duell Study concluded that JLI’s use of nicotine salts “may
well contribute to the current use prevalence of JUUL products among youth.” 62
55.

Reducing the harshness of nicotine also allows more frequent use of e-cigarettes,

for longer periods of time, and masks the amount of nicotine being delivered. By removing the
physiological drawbacks of inhaling traditional free-base nicotine, JLI’s technology removes the
principal barrier to nicotine consumption and addiction. The Duell Study further concluded that
JLI’s creation of a non-irritating vapor that delivers unprecedented amounts of nicotine is
“particularly problematic for public health.” 63
56.

JLI contemplated features that would automatically disable the device after nicotine

delivery exceeded a certain threshold; according to Xing, one idea was to disable the device for 30
minutes or more following a certain number of puffs. 64 But in the end JLI launched its product
without any such features.

61

Id. at 431-34.

62

Id. at 433

63

Id. at 431.

64

Kirkham, supra note 49.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 27 of 212

3.
57.

JLI Designed JUUL Products to Contain and Deliver as Much
Nicotine as Possible

JLI claims that each JUULpod is the equivalent of a pack of cigarettes and contains

up to 59 mg per ml of nicotine – an alarming amount that is roughly three times the concentration
of nicotine that can be sold to consumers in the European Union. Compared to the average ecigarette, JUULpods deliver roughly twice as much nicotine at nearly three times the speed. 65

66

And,

while only approximately 10% of the nicotine in a cigarette is delivered to the user, 67 JUUL ecigarettes, on the other hand, have been found to deliver at least 82% of the nicotine contained in
a JUULpod to the user. 68
69

58.

JLI knew that it had designed a highly addictive product that would appeal to youth

much more than adult smokers.

65

How Much Nicotine is In Juul?, Truth Initiative (Feb. 26, 2019),
https://truthinitiative.org/research-resources/emerging-tobacco-products/how-much-nicotinejuul.
66

INREJUUL_00279931 (emphasis added).

67

Lynn T. Kozlowski & Janine L. Pilliteri, Compensation for Nicotine by Smokers of Lower Yield
Cigarettes,
7
Smoking
and
Tobacco
Control
Monograph
161, 164
(1983), https://cancercontrol.cancer.gov/brp/tcrb/monographs/7/m7_12.pdf.
68

Samantha M. Reilly et al., Free Radical, Carbonyl, and Nicotine Levels Produced by JUUL
Electronic Cigarettes, 21 Nicotine Tobacco Research 1274 (Aug. 19, 2019),
https://www.ncbi.nlm.nih.gov/pubmed/30346584 (about 82%, for averages of 164 μg per puff).
69

See, e.g., INREJUUL_00023597 (
).
- 22 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 28 of 212

70

71

59.

72

60.
73

70

JLI00365905.

71

Id. (emphasis added).

72

JLI00365709.

73

JLI00365176.
- 23 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 29 of 212

74

75

61.

77

62.

63.

(JLI markets 1.7% nicotine JUULpods in countries such as the UK and Israel.)
Instead, JLI’s sales force emphasized the addictiveness of its formulation to persuade retailers to
give the new product shelf space. Vincent Latronica, head of East Coast sales and distribution for
JLI (then called PAX Labs) from 2014 until early 2016, told Reuters that he used a chart showing

74

INREJUUL_00058345.

75

Id.

76

JLI00364678.

77

JLI00364487.
- 24 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 30 of 212

JUUL’s rapid delivery of nicotine to the bloodstream as a way to convince store owners that they
would have repeat business and not be left with unsold inventory, and this became a central selling
point for the new JLI product. 78 JLI’s sales team was, in Latronica’s words, “relentless.” 79
64.

For

example,
He wrote:

78

Kirkham, supra note 49.

79

Id.
- 25 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 31 of 212

80

65.

Another example came just days later. On

81

66.

Instead of taking steps to reduce the addictive nature of its products and to stop its

advertising to youth, JLI doubled down.

82

B.

Following Big Tobacco’s Playbook, JLI Launched JUUL with a
Blatantly Youth-Oriented Campaign
1.

67.

JLI Learned from Big Tobacco the Importance of Hooking
Kids

JLI also looked to Big Tobacco for other marketing strategies, including

advertisements designed to lure non-smoking youth.
68.
83

addition,

80

INREJUUL_00264888-890.

81

INREJUUL_00230416.

82

INREJUUL_00228928-930.

83

INREJUUL_00371447.
- 26 -

In

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 32 of 212

84

69.

As discussed above, Monsees and Bowen were also able to take advantage of an

extensive online tobacco advertising research database maintained by Stanford Research into the
Impact of Tobacco Advertising (“SRITA”), an inter-disciplinary research group devoted to
researching the promotional activities of the tobacco industry.

SRITA’s database contains

approximately 50,000 original tobacco advertisements. According to Monsees, JLI’s advertising
was informed by traditional tobacco advertisements, and SRITA in particular had been very useful
to JLI. 85
70.

It is no secret that a good portion of the Big Tobacco playbook involved targeting

youth. Beginning in the 1950s, Philip Morris – now JLI’s corporate affiliate – intentionally
marketed cigarettes to young people under the age of 21 to recruit “replacement smokers” to ensure
the economic future of the tobacco industry. 86 Philip Morris knew that youth smoking was
essential to the tobacco industry’s success and longevity, as one of its internal documents makes
clear: “It is important to know as much as possible about teenage smoking patterns and attitudes.
Today’s teenager is tomorrow’s potential regular customer, and the overwhelming majority of
smokers first begin to smoke while still in their teens.” 87 In August 1953, Elmo Roper &

84

INREJUUL_00371458-459.

85

Jackler et al., supra note 42, at 27.

86

Amended Final Opinion at 972, U.S. v. Philip Morris, No. 99- 2496 (D.D.C. Aug. 17, 2006),
ECF No. 5750.
87

Tobacco Company Quotes on Marketing to Kids, Campaign for Tobacco-Free Kids (May 14,
2001), https://www.tobaccofreekids.org/assets/factsheets/0114.pdf.
- 27 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 33 of 212

Associates on Philip Morris’ behalf, conducted a study that examined the smoking habits of a
“cross section of men and women 15 years of age and over.” 88 The study noted that Philip Morris
had “very great strength among young people-particularly under 20.” 89 In 1975, Philip Morris
recognized that “Marlboro’s phenomenal growth rate in the past has been attributable in large part
to our high market penetration among young smokers . . .15 to 19 years old . . . my own data,
which includes younger teenagers, shows even higher Marlboro market penetration among 15-17year-olds.” 90 Similarly, an internal Philip Morris document reported that “[t]he success of
Marlboro Red during its most rapid growth period was because it became the brand of choice
among teenagers who then stuck with it as they grew older.” 91 This was no accident. Philip Morris
designed its marketing campaigns to appeal to youth because they recognized that “[t]oday’s
teenager is tomorrow’s potential regular customer, and the overwhelming majority of smokers first
begin to smoke while still in their teens.” 92 This marketing worked, and Marlboro cigarettes
became the most popular brand with youth. In 2016, 48.7% of high school current cigarette
smokers and 38.3% of middle school current cigarette smokers reported using Marlboro
cigarettes. 93

88

U.S. v. Philip Morris USA, Inc. (“Philip Morris”), 449 F. Supp. 2d 1, 580 (D.D.C. 2006) (citing
Burns W. Roper, A Study of People’s Cigarette Smoking Habits and Attitudes, N.Y Roper (1953)).
89

Id.

90

Philip Morris and Targeting Kids, Campaign for Tobacco-Free Kids (Oct. 8, 1999),
https://www.tobaccofreekids.org/assets/content/what_we_do/industry_watch/doubletalk/philipm
orris.pdf.
91

Id.

92

Tobacco Company Quotes on Marketing to Kids, supra note 94.

93

Siobhan N. Perks et al., Cigarette Brand Preference and Pro-Tobacco Advertising Among
Middle and High School Students – United States, 2012- 2016, CDC Morbidity & Mortality Wkly.
- 28 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 34 of 212

71.

Tobacco companies have focused on the 14 to 24-year-old age group because

young smokers have been the critical factor in the growth of their business. As the Vice-President
of Marketing at R.J. Reynolds explained in 1974, the “young adult . . . market . . . represent[s]
tomorrow’s cigarette business. As this 14-24 age group matures, they will account for a key share
of the total cigarette volume – for at least the next 25 years.” 94 In 1978, Lorillard’s Director of
Sales in the Midwest told the president of the company that “the base of our business is the high
school student.” 95
72.

According to the Surgeon General, “[n]early 9 out of 10 smokers start smoking by

age 18, and more than 80% of underage smokers choose brands from among the top three most
heavily advertised.” 96The overwhelming consensus from public health authorities, independent
studies, and credible expert witnesses is that “marketing is a substantial contributing factor to youth
smoking initiation.” 97
73.

For decades, cigarette companies spun smoking as signifier of adulthood. This

turned smoking into a way for teenagers to project independence and enhance their image among

Rep.
[MMWR]
(Feb.
2,
https://www.cdc.gov/mmwr/volumes/67/wr/mm6704a3.htm?s_cid=mm6704a3_w.

2018),

94

C.A. Tucker, Marketing Plans Presentation to RJRI B of D at 2, U.C.S.F. Truth Tobacco Indus.
Documents
(Sept.
30,
1974),
https://www.industrydocumentslibrary.ucsf.edu/tobacco/docs/#id=ypmw0091.
95

Internal Memo from T.L. Achey (Lorillard Tobacco Company) to Curtis Judge, Product
Information (Aug. 1978); see also Philip Morris, 449 F. Supp. 2d at 596.
96

Preventing Tobacco Use Among Youths, Surgeon General Fact Sheet, U.S. Dep’t Health &
Human
Servs.
(June
6,
2017),
https://www.hhs.gov/surgeongeneral/reports-andpublications/tobacco/preventing-youth-tobacco-use-factsheet/index.html.
97

Philip Morris, 449 F. Supp. 2d at 570.
- 29 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 35 of 212

their peers. 98

R.J. Reynolds’s now-infamous Joe Camel “ambassador of Cool” advertising

campaign, which ran from 1988 through 1997, exemplifies the importance the tobacco industry
placed on hooking young smokers early: 99

74.

Big Tobacco, of course, is now prohibited from employing youth-oriented

marketing strategies to sell traditional cigarettes by virtue of the Master Settlement Agreement and
subsequent regulations. For example, combustible cigarette companies may not:

98

Id. at 576 (“the ubiquity of Defendants’ marketing increases young peoples’ perceptions of the
prevalence of smoking (‘everyone is doing it’), normalizes smoking, and connects positive
imagery (sex appeal, popularity, peer approval, success, and independence) with smoking, all of
which work together to encourage youth smoking initiation and continued consumption”); see also
id. at 617-19.
99

Joe Camel: Character of the Year Advertisement, Stan. U. Res. into the Impact of Tobacco
Advert.
(1990),
http://tobacco.stanford.edu/tobacco_main/images.php?token2=fm_st138.php&token1=fm_img40
72.php&theme_file=fm_mt015.php&theme_name=Targeting%20Teens&subtheme_name=Joe%
20Camel.
- 30 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 36 of 212

(a)

use outdoor advertising such as billboards;

(b)

sponsor events;

(c)

give free samples;

(d)

pay any person to “use, display, make reference to or use as a prop any

Tobacco Product, Tobacco Product package . . . in any ‘Media;’”
(e)

pay any third party to conduct any activity which the tobacco manufacturer

is prohibited from doing; or
(f)
75.

sell “flavored” cigarettes.

All of these above activities were prohibited precisely because of their effectiveness

at appealing to youth. But nothing prevented JLI from using these same strategies to market ecigarettes.
76.

As described below, all of these activities figured prominently in the marketing

campaign for JUUL products.
2.
77.

JLI’s Advertising Strategy Was
to Capture Young Nonsmokers, Not Adult Smokers

Contrary to JLI’s and Altria’s recent statements that JUUL was only ever marketed

to adult smokers, JLI’s internal documents show that, from the outset, JLI’s target demographic
was nonsmoking
78.

Consistent with Monsees’ position that he has no “qualms” with marketing to

people that were not yet addicted to nicotine, 100

100

Freedman, supra note 33.
- 31 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 37 of 212

101

In

102

79.

JLI’s strategy to cultivate an aura of “cool” around its nicotine-delivery device is,

of course, not new. Decades before, Dr. Teague from R.J. Reynolds observed that “pre-smokers”
face “psychological pressure” to smoke if their peers are doing so, “a new brand aimed at a young
smoker must somehow be the ‘in’ brand and its promotion should emphasize togetherness,
belonging and group acceptance, while at the same time emphasizing ‘doing one’s own thing.’”103
Struggling to define their own identities, teenagers are particularly vulnerable to image-heavy
advertisements that psychologically cue them on the “right” way to look and behave amongst
peers. 104 Advertisements that map onto adolescent aspirations and vulnerabilities drive adolescent
tobacco product initiation. 105
80.

JLI followed this playbook to the letter.

101

INREJUUL_00441209

102

INREJUUL_00057291 et seq. (emphasis added).

103

Teague, supra note 47.

104

Philip Morris, 449 F. Supp. 2d at 578.

105

Id. at 570, 590.
- 32 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 38 of 212

106

107

“Image managers” with a

desire for both “originality” and “acceptance” fairly describes most adolescents – but has little
relevance to existing smokers wishing to quit their cigarette habit.
81.
108

109

82.

Other internal documents emphasize the theme of making JUUL trendy and cool.

110

111

112

106

INREJUUL_00057298-487.

107

Id.

108

Id.

109

INREJUUL_00277080-104.

110

INREJUUL_00057289.

111

INREJUUL_00057293.

112

Id.

For example,

- 33 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 39 of 212

113

114

115

83.

This focus on

continued up to and after launch.

116

117

118

119

120

113

Id.

114

Id.

115

INREJUUL 00441325-326.

116

JLI00218598.

117

JLI00206206.

118

JLI00222528.

119

JLI00461564.

120

JLI00235965.
- 34 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 40 of 212

84.

In addition, JLI identified

121

3.
85.

JLI’s “Vaporized” Campaign Was Intentionally YouthFocused

As noted above, JLI’s first major marketing hire was Cult Collective. JLI engaged

the Calgary-based advertising agency in 2014 to complete a “diagnostic” evaluation of the JLI
brand and to make recommendations regarding the best advertising strategy to market the JUUL
e-cigarette.
86.

Cult Collective recommended that JLI position its e-cigarette technology as the

focus of its advertisements, emphasizing JUUL as an alternative option for existing smokers. Cult
Collective presented JLI with exemplar advertisements that used images of a boom box and a joy
stick, juxtaposed against the JUUL e-cigarette, with the tag line: “Everything changes, eventually.
JUUL   The evoluution of smoking   Finally, a truly satisfying alternative.” 122

121

INREJUUL_00161703-715.

122

Complaint ¶41, Commonwealth of Massachusetts v. JUUL Labs, Inc., No. 2084CV00402
(Mass. Super. Ct. Feb. 12, 2020), https://www.mass.gov/doc/juul-complaint/download (emphasis
added).
- 35 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 41 of 212

87.

This campaign expressly invokes combustible cigarettes and positions JUUL as a

technological upgrade for the modern smoker.
88.

But JLI rejected Cult Collective’s suggestion, instead choosing to run a campaign

that experts would later describe as “patently youth oriented.” 123
89.

JLI’s 2015 ad campaign, called “Vaporized,” was designed to create a “cult-like

following” for JUUL products. 124 The Vaporized campaign’s imagery featured a vivid color
scheme and models in their twenties in poses that researchers noted are evocative of behaviors
more characteristic of underage teens than mature adults. 125 Researchers from the SRITA found

123

Robert K. Jackler, The Role of the Company in the Juul Teen Epidemic, Testimony of Robert
Jackler before the House Subcommittee on Economic and Consumer Policy (“Jackler Testimony”)
at
2
(July
24,
2019),
https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2019.07.24%20Jackler%20
Testimony.pdf.
124

Id. at 4.

125

Jackler et al., supra note 42, at 1.
- 36 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 42 of 212

it “clear” that this imagery resonated with underage teens who aspire to emulate trendsetting young
adults. 126

126

Id. at 7.
- 37 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 43 of 212

90.

JLI recognized that the models in these advertisements looked young and were

likely to appeal to youth, but it launched the campaign anyway.

127

128

129

“Monsees,

who was CEO at the time, personally reviewed images from the billboard photo shoot while it was
in session.” 130 A senior manager later told The New York Times that “he and others in the company
were well aware” that the marketing campaign “could appeal to” teenagers. 131
91.

JLI knew these images would be successful with a youth market because it

intentionally crafted them to mimic specific ads that Big Tobacco had used to target teens. In fact,
many JUUL ads were nearly identical to old cigarette ads that were designed to get teens to smoke.

127

INREJUUL_00371285.

128

INREJUUL_00371314.

129

INREJUUL_00174387.

130

Ainsley Harris, How Juul, founded on a life-saving mission, became the most embattled startup
of 2018: E-cigarette startup Juul Labs is valued at more than $16 billion. It’s also hooking teens
on nicotine and drawing scrutiny from the FDA. Can the company innovate its way out of a crisis
it helped create?, Fast Co. (Nov. 19, 2018), https://www.fastcompany.com/90262821/how-juulfounded-on-a-life-saving-mission-became-the-most-embattled-startup-of-2018.

131

Matt Richtel & Sheila Kaplan, Did Juul Lure Teenagers and Get ‘Customers for Life’?, N.Y.
Times (Aug. 27, 2018), https://www.nytimes.com/2018/08/27/science/juul-vaping-teenmarketing.html.
- 38 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 44 of 212

132

133

92.

JLI’s officers and directors were well aware that JLI’s branding of JUUL products

was oriented toward youth and duplicated earlier efforts by the cigarette industry to hook children
on nicotine. JLI’s officers and directors directed and approved JLI’s branding of JUUL products
to be oriented toward youth. JLI’s officers and directors

132

Virginia Slims vs Juul Advertisement, Stan. U. Res. into the Impact of Tobacco Advert. (2015),
http://tobacco.stanford.edu/tobacco_main/imagescomp.php?token2=fm_tn_st328.php&token1=fm_tn_img10799.php&theme_file=fm_tn_mt035.
php&theme_name=Cigs%20vs.%20eCigs&subtheme_name=Cigs%20vs%20eCigs%20JUUL.

133

Julia Belluz, The Vape Company Juul Said It Doesn’t Target Teens. Its Early Ads Tell a
Different Story, Vox (Jan. 25, 2019), https://www.vox.com/2019/1/25/18194953/vape-juul-ecigarette-marketing.
- 39 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 45 of 212

134

93.

JLI’s officers and directors

135

136

137

138

134

Examining JLI’s Role in the Youth Nicotine Epidemic: Part II: Hearing Before the
Subcommittee on Economic and Consumer Policy of the Committee on Oversight and Reform,
House of Representatives, 116th Cong. 70 (2019) (statement of Monsees, CPO, JLI).

135

JLI00206239.

136

JLI00214617.

137

Id.

138

Id.
- 40 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 46 of 212

139

140

94.

This recognition notwithstanding, JLI’s officers and directors pressed on with JLI’s

youth-oriented campaign. Some of JLI’s leaders, such as Board member Hoyoung Huh, opposed
any actions to curb youth sales. Youth sales were a large potential source of revenue. 141 As one
manager explained, perhaps “people internally had an issue” with sales of JUUL to teenagers,
“[b]ut a lot of people had no problem with 500 percent year-over-year growth.” 142 And JLI’s
leaders understood that the youth who were hooked on nicotine were the most likely to become
lifelong customers and thus were the most profitable segment to target. 143
95.

So in June 2015, JLI launched the “Vaporized” advertising campaign, 144 with
145

JLI aggressively sought

high-visibility spaces with youth appeal. For example, Vaporized ads occupied the front spread

139

Id.

140

Id. (emphasis added).

141

Kirkham, supra note 49.

142

Id.

143

Id.

144

Declan Harty, JUUL Hopes to Reinvent E-Cigarette Ads with ‘Vaporized Campaign’, AdAge
(June 23, 2015), https://adage.com/article/cmo-strategy/juul-hopes-reinvent-e-cigarette-adscampaign/299142/.

145

INREJUUL_00057291-295.
- 41 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 47 of 212

of the July 2015 issue of VICE Magazine, which bills itself as the “#1 youth media brand” in the
world, and a twelve-unit billboard display in New York City’s Times Square. 146

147

96.

JLI’s advertisements were also placed on websites attractive to children,

adolescents in middle school and high school, and underage college students.

These

advertisements, which included the images of models from the Vaporized campaign, began
appearing on websites as early as June 2015. The websites included: nickjr.com (the website for
a children’s television network run by Nickelodeon Group); cartoonnetwork.com (Cartoon
Network’s website); allfreekidscrafts.com; hellokids.com; and kidsgameheroes.com. In addition,
JLI purchased banner advertisements on websites providing games targeted to younger girls, 148

146

Kathleen Chaykowski, The Disturbing Focus of Juul’s Early Marketing Campaigns, Forbes
(Nov. 16, 2018), https://www.forbes.com/sites/kathleenchaykowski/2018/11/16/the-disturbingfocus-of-juuls-early-marketing-campaigns/#3da1e11b14f9; see also Harty, supra note 144.
147

http://tobacco.stanford.edu/tobacco_web/images/pod/juul/timesquare/large/times_17.gif; see
also Erin Brodwin, Silicon Valley e-cig startup Juul ‘threw a really great party’ to launch its
devices, which experts say deliberately targeted youth, Bus. Insider (Sept. 4, 2018),
https://www.businessinsider.com/juul-e-cig-startup-marketing-appealed-to-teens-2018-7.
148

The sites included dailydressupgames.com,
games2girls.com, girlgames.com, and girlsgogames.com.
- 42 -

didigames.com,

forhergames.com,

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 48 of 212

educational websites for middle school and high school students, 149 and other teen-targeted
websites. 150
97.

JLI knew these websites targeted children.

151

Nevertheless, JLI continued to push its campaign on websites

with young demographics.
98.

As discussed further below, JLI also promoted the Vaporized campaign on

Facebook, Instagram, and Twitter. JLI could have employed age-gating on its social media
accounts to prevent underage consumers from viewing its Vaporized advertisements, but chose
not to do so.
99.

The Vaporized campaign included the largest e-cigarette smartphone campaign of

2015, which accounted for 74% of all such smartphone advertising that year. 152
100.
153

149

E.g., coolmath-games.com. JLI also purchased advertisements on basic-mathematics.com,
coolmath.com, math-aids.com, mathplayground.com, mathway.com, onlinemathlearning.com,
and purplemath.com.

150

E.g., teen.com, seventeen.com, justjaredjr.com, and hireteen.com. JUUL purchased
advertisements on websites for high school students hoping to attend college such as
collegeconfidential.com and collegeview.com.

151

INREJUUL_00082179-185 (emphasis added).

152

Jackler et al., supra note 42, at 19.

153

INREJUUL_00093933-934
- 43 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 49 of 212

4.

101.

JLI Hosted Parties and Pop-Up “JUUL Lounges” to Create a
Youthful Brand and Gave Away Free Samples to Get Youth
Hooked

In addition to print media, JLI utilized events, promotional models, and free

samples to market JUUL products. Over the first year after JLI launched its ad campaign in June
2015, it held a series of at least twenty-five highly stylized parties, typically with rock music
entertainment, in cities across the United States. 154

102.

154

Photographs from these events confirm that they drew a youthful crowd.

Jackler et al., supra note 42, at 4.
- 44 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 50 of 212

103.

At these launch parties, thousands of young people were given free JUUL devices

and nicotine-filled JUULpods (appropriately named “JUUL starter kits”), and JLI posted photos
of various young people enthusiastically puffing on JUULs across JLI’s social media channels. 155
104.

In addition, JLI gave away samples at music events without age restrictions,

including Outside Lands in San Francisco’s Golden Gate Park, and other events aimed a youthful
audience, such as the annual Cinespia “Movies All Night Slumber Party” in Los Angeles. These
events, in addition to providing youthful crowds for handing out samples, were opportunities for
JLI to cultivate its brand image as youthful, hip, and trendy – but had nothing to do with smoking
cessation. For example, on August 7, 2015, JLI tweeted, “Need tix for @cinespia 8/15? We got
you. Follow us and tweet #JUULallnight and our faves will get a pair of tix!” 156
105.

As part of the Vaporized campaign, JLI also emulated trendy pop-up restaurants

and stores by using a shipping container “pop-up JUUL bar” at festivals and events in the Los
Angeles and New York City metro areas. The firm BeCore designed and created the container for
JLI, and managed it as a mobile JUUL product sampling lounge. BeCore reported that, on average,
it “exceeded the sampling goals set by JUUL for each location (average number of samples/event
distributed equals 5,000+.” 157

155

Jackler et al., supra note 42, at 4; Chaykowski, supra note 146.

156

JUUL
Labs,
Inc.
(@JUULvapor),
Twitter
(Aug.
7,
http://tobacco.stanford.edu/tobacco_web/images/pod/juul/twitter/large/twitter_18.jpg.

157

Jackler et al., supra note 42, at 9.
- 45 -

2015),

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 51 of 212

158

106.

JLI also held sampling events in stores.
159

107.

Documents obtained by the New York Attorney General show that JLI recruited

young “brand ambassadors” to staff its events and required a dress code that included skinny jeans,
high-top sneakers or booties, and an iPhone in a JUUL-branded case. 160

158

Harty, supra note 144.

159

INREJUUL_00160394.

160

Jake Offenhartz, Juul Hooked Teens Through Sick Parties and Hip Ambassadors, NY AG Says,
Gothamist (Nov. 19, 2019), https://gothamist.com/news/juul-hooked-teens-through-sick-partiesand-hip-ambassadors-ny-ag-says; Chaykowski, supra note 146.
- 46 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 52 of 212

108.

JLI engaged PUSH Agency, LLC (“PUSH”), a promotional model and event

staffing agency, to provide models and brand ambassadors to hand out coupons in trendy areas of
New York City popular with young people. In a September 2017 email between PUSH and JLI,
for example, PUSH offered suggestions “for the nightlife shifts” of “places that are popular for
nightlife” that “would be great to hit,” including the Marquee nightclub in Chelsea, Provocateur,
and Le Bain, a penthouse discotheque. 161
109.

Though JLI publicly acknowledged in October 2017 that it is unlawful to distribute

free samples of its products at live events, 162 it continued to reach out to new users by offering
samples, sometimes at $1 “demo events.” Like so many of JLI’s initiatives, promotions of this
kind are prohibited for cigarette companies by the Master Settlement Agreement.
110.

The effect – and purpose – of JLI’s Vaporized giveaways was to flood major cities

with JUUL products that would hook thousands of new users, and to generate buzz for the brand

161

INREJUUL_00158794-803.

162

See
Nik
Davis
(@bigbabynik),
Twitter
(Nov.
17,
2017
1:11
PM),
https://twitter.com/JLIvapor/status/931630885887266816; see also Jackler Testimony, supra note
123, at 27.
- 47 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 53 of 212

among urban trendsetters who would then spread JLI’s message to their friends via word of mouth
and social media.
5.

111.

By Using Viral Advertising, JLI Ensured that Its Advertising
Campaigns Would Reach Youth and Outlast JLI’s Own
Efforts

JLI not only used Big Tobacco’s advertising imagery and giveaways in a manner

that reached youth, but also coupled traditional advertisements with an aggressive social media
marketing campaign. Through the use of social media, JLI has been able to operate an even more
pervasive, insidious, and successful viral marketing campaign than its predecessors in the tobacco
industry.
163

112.

JLI was particularly active on Instagram, which is the most popular social media

site among teens. 164 JLI cultivated hashtags, allowing it to blend JUUL products’ ads in with a
wide range of user content, increasing exposure while concealing the commercial nature of the
content. 165 JLI then used hashtags to reinforce the themes it crafted in the JUUL products’ design,
like #style, #technology, #smart, and #gadget.

163

INREJUUL_00349541.

164

Jackler et al., supra note 42.

165

Id. at 23.
- 48 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 54 of 212

166

113.

JLI’s hashtags attracted an enormous community of youthful posts on a wide array

of subjects. According to Dr. Jackler, #Juul contains literally thousands of juvenile postings, and
numerous Instagram hashtags contain the JUUL brand name. 167
114.

A key feature of JLI’s viral marketing campaign was inviting user-generated

content. This strategy revolves around prompting social media followers to provide their own
JUUL-related content – posting selfies in their favorite places to use JUUL products, for example.
The response provided by a user is then typically distributed by the social media platform
employed into the user’s personal network. In this way, brands can infiltrate online communities
with personalized content that promotes their products, such as a picture of a friend using a JUUL
e-cigarette at the beach.

166

INREJUUL_00093294.

167

Jackler Testimony, supra note 123, at 10.
- 49 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 55 of 212

115.

Just as JLI intended, JUUL users began taking photos of themselves using JUUL

devices and putting them on social media with the hashtag #juul. They were creating JLI content
that looked and felt like real JLI ads: featuring young people having fun and using JUUL. JLI’s
flavor-based hashtag campaigns #MangoMonday and #coolmint generated hundreds of thousands
of user-generated posts. Within a few months of JLI’s commercial release of JUUL in June 2015,
a former JLI executive reportedly told The New York Times that JLI “quickly realized that
teenagers were, in fact, using [JUULs] because they posted images of themselves vaping JUULs
on social media.” 168 Some JLI executives sought to take advantage of this to build the JLI brand.
For example,

169

170

116.

JLI also sought to work with high profile “influencers” that appeal to youth. JLI

used these

171

Influencers are prized sources of brand promotion on social media

networks.

168

Richtel, supra note 131.

169

JLI00382271.

170

JLI00382271.

171

See INREJUUL_00091138

- 50 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 56 of 212

117.

Documents obtained pursuant to a Congressional investigation show that in July

2015, JLI’s contract with Grit was for services that included “Influencer Relations,” in which Grit
agreed to provide two “Social Buzzmakers” for six events within a four-week period, with each
Social Buzzmaker having a minimum of 30,000 followers and be active on at least two social
media channels, such as Instagram, Twitter, or Facebook. The contract provided that JLI would
determine or approve the timing of the Buzzmakers’ posts. In addition, JLI engaged Grit to
“develop influencer engagement efforts to establish a network of creatives to leverage as loyalists
for Juul/Pax brand activations.” 172
118.

173

Like its Vaporized campaign,

In keeping with this strategy, JLI targeted influencers who were young and popular

with adolescents. One influencer JLI targeted was Tavi Gevinson, who was nineteen years old in
the summer of 2015. The year before, Rolling Stone magazine described Gevinson as “possibly
the most influential 18-year-old in America.” 174

172

Kenrick Cai, Juul Funded High Schools, Recruited Social Media Influencers To Reach Youth,
House
Panel
Charges,
Forbes
(July
25,
2019),
https://www.forbes.com/sites/kenrickcai/2019/07/25/juul-high-schools-influencers-reach-youthhouse-investigation/#57735a4a33e2. See JLI-HOR-00042050.

173

INREJUUL_00057293.

174

Alex Morris, Tavi Gevinson: A Power Teen’s New Direction, Rolling Stone (Aug. 14, 2014),
https://www.rollingstone.com/culture/culture-features/tavi-gevinson-a-power-teens-newdirection-232286/.
- 51 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 57 of 212

119.

JLI contracted with Grit to enlist influencers by sending them free JUUL

e-cigarettes. Grit provided free JUUL products to Luka Sabbat, known as the “the Internet’s
Coolest Teenager,” 175 who was 17 years old during the summer of 2015.
120.

176

121.

JLI paid these social media influencers to post photos of themselves with JUUL

devices and to use the hashtags that it was cultivating. 177 One such influencer was Christina Zayas,
whom JLI paid $1,000 for just one blog post and one Instagram post in the fall of 2017.

175

Alexis Barnett, Who Is Luka Sabbat? Meet the Internet’s Coolest Teenager, Complex (Aug.
17, 2015), https://www.complex.com/style/luka-sabbat-interview-on-youth-kanye-west-andfashion.
176

See, INREJUUL_00091141

177

Jackler et al., supra note 42, at 19-21.
- 52 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 58 of 212

178

122.

JLI encouraged its distributors, wholesalers, and other resellers – either explicitly

or implicitly – to hire affiliates and influencers to promote JLI’s brand and JUUL products. Even
if not paid directly by JLI, these influencers profited from the promotion of JUUL products either
because they were paid by JUUL resellers, JUUL accessory sellers, or sellers of JUUL-compatible
products.
123.

For example, one YouTube user Donnysmokes (Donny Karle, age twenty-one)

created a JUUL promotional video in 2017 that garnered roughly 52,000 views, many of which
were from users under the age of eighteen. 179 Since that time, Karle has made a series of videos,
including videos: “How to hide your JUUL from your parents” and “How to HIDE & HIT Your
JUUL at SCHOOL WITHOUT Getting CAUGHT”. 180

178

Karle has admitted to earning

Michael Nedelman et al., #Juul: How social media hyped nicotine for a new generation, CNN
Health (Dec.
19, 2018), https://www.cnn.com/2018/12/17/health/juul-social-mediainfluencers/index.html.
179

Jackler Testimony, supra note 123.

180

Id.
- 53 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 59 of 212

approximately $1,200 a month from unspecified sources simply from posting videos of himself
consuming e-cigarettes, especially of JUUL products online. 181

124.

Karle also created a YouTube sensation called the JUUL Challenge, which is a play

on the viral “Ice Bucket Challenge.” In the JUUL Challenge, the goal is to suck down as much
nicotine as possible within a predetermined amount of time. The JUUL Challenge, which
promotes nicotine abuse and adolescent use of JUUL products, went viral like the Ice Bucket
Challenge it mimicked. Soon, youth across the country were posting their own JUUL Challenge
videos, a practice that continues to this day on YouTube, Instagram, Snapchat, and other social
media platforms. In one recent JUUL Challenge on YouTube, which has received nearly 500,000
views, the two teenagers filming themselves discuss the hundreds of thousands of views their prior
JUUL Challenge received and comment upon the “virality” of their JUUL Challenge content. 182

181

Allie Conti, This 21-year-old is Making Thousands a Month Vaping on YouTube, VICE (Feb.
5, 2018), https://www.vice.com/en_us/article/8xvjmk/this-21-year-old-is-making-thousands-amonth¬vaping-on-youtube.
182

Nate420, JUUL Challenge (Apr. 22, 2018), https://youtu.be/gnM8hqW_2oo (last visited Mar.
30, 2020).
- 54 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 60 of 212

125.

JLI was aware of Karle’s videos and his young followers.
183

And

, it did not attempt to

remove his JUUL-related content until 2018, and by then JLI’s efforts were too little, too late.
184

JLI knowingly sought and

accepted the benefits of viral marketing and user-generated content.

185

126.

JLI recruited “affiliates” to help its viral marketing campaign.

186

JLI’s affiliates promoted JUUL products on social media

platforms including YouTube, Instagram, Facebook, Snapchat, and Twitter and routinely failed to
disclose that they were being paid to promote JUUL products. JLI’s “affiliate program” recruited
those who authored favorable reviews of its products by providing such reviewers with a 20%
discount of purchases of JUUL products. 187 It even recruited JUUL users to act as part of their
marketing team by asking users to “refer a friend and get a discount.” 188

183

INREJUUL_00199348

184

INREJUUL_00349541.

185

Karle000009 (undated Twitter direct messages exchange).

186

INREJUUL_00113437-441.

187

Jackler Testimony, supra note 123, at 9-10.

188

Id. at 9.
- 55 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 61 of 212

127.

Between 2015 and 2017, JUUL-related posts on Twitter increased quadratically,

which is the exact result to be expected from an effective viral marketing campaign. 189 JLI’s
growth on Instagram was likely even more rapid.
128.

A 2018 study of JLI’s sales and presence on social media platforms found that JLI

grew nearly 700%, yet spent “no recorded money” in the first half of 2017 on major advertising
channels, and spent only $20,000 on business-to-business advertising. 190 Despite JLI’s apparently
minimal advertising spend in 2017, the study found a significant increase in JUUL-related tweets
in 2017. 191
129.

On Instagram, the study found seven JUUL-related accounts, including @doit4juul

and @JUULgirls, which accounted for 4,230 total JUUL-related posts and had more than 270,000
followers. 192
130.

The lead author of the study concluded that JLI was “taking advantage” of the reach

and accessibility of multiple social media platforms to “target the youth and young adults . . .
because there are no restrictions,” on social media advertising. 193

189

See Brittany Emelle et al., Mobile Marketing of Electronic Cigarettes in the U.S., Truth
Initiative (May 22, 2017), https://www.slideshare.net/YTHorg/mobile-marketing-of-electroniccigarettes.
190

Jidong Huang et al., Vaping versus JUULing: how the extraordinary growth and marketing of
JUUL transformed the US retail e-cigarette market, 28 Tobacco Control 146-52 (May 31, 2018),
https://tobaccocontrol.bmj.com/content/tobaccocontrol/28/2/146.full.pdf.

191

Id.

192

Id.

193

Laura Kelley, JUUL Sales Among Young People Fueled by Social Media, Says Study, Wash.
Times (June 4, 2018), https://www.washingtontimes.com/news/2018/jun/4/juul-sales-amongyoung-people-fueled-by-social-med/.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 62 of 212

131.

A large number of JLI’s social media posts reached youth. The Surgeon General

found that JLI’s Twitter account was being followed by adolescents, and that 25% of those retweeting official JLI tweets were under eighteen years old. 194 Another study found that as many
as half of JLI’s Twitter followers were thirteen to seventeen years old. 195
132.

A study characterizing JLI’s JUUL-related Instagram posts between March and

May 2018 found that among nearly 15,000 relevant posts from over 5,000 unique Instagram
accounts, more than half were related to youth or youth lifestyle. 196
133.

By April 2018, searching “JUUL” on YouTube yielded 137,000 videos with forty-

three videos having over 100,000 views. 197 Of these, a huge number were plainly related to
underage use, including: 1,730 videos on “hiding JUUL in school,” 789 on “JUUL in school
bathroom,” 992 on “hiding JUUL at home,” and 241 on “hiding JUUL in Sharpie.” 198
134.

In 2018, JLI was internally collecting hundreds of social media posts – directed at

JLI – informing it of JUUL’s wild popularity with young people and in many cases requesting that
JLI do something to stop it. 199

194

Adams, supra note 2.

195

Steven Reinberg, Study: Half of Juul’s Twitter followers are teens, young adults, United Press
Int’l (May 20, 2019), https://www.upi.com/Health_News/2019/05/20/Study-Half-of-JuulsTwitter-followers-are-teens-young-adults/1981558384957/.
196

Lauren Czaplicki et al., Characterizing JUUL-related posts on Instagram, Tobacco Control
054824 (Aug. 1, 2019), https://tobaccocontrol.bmj.com/content/early/2019/07/30/tobaccocontrol2018-054824.
197

Divya Ramamurthi et al., JUUL and Other Stealth Vaporizers: Hiding the Habit from Parents
and
Teachers,
28
Tobacco
Control
610-16
(Sept.
15,
2018),
https://tobaccocontrol.bmj.com/content/tobaccocontrol/28/6/610.full.pdf.

198

Id.

199

Complaint at 60, People v. JUUL, et al. CRT REPORTER, (Super. Ct. of Cal. 2019).
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 63 of 212

135.

But even after JLI halted its own social media posts in November 2018, viral peer-

to-peer promotion among teens insured continued corporate and product visibility among youth. 200
In fact, community posts about JUUL products increased after JLI itself quit social media in the
fall of 2018. Prior to November 2018, over a quarter of a million posts appeared. In the eight
months after JLI halted its promotional postings, the rate of community postings increased
significantly, resulting in the number of posts doubling to over half a million. 201
136.

If JLI was concerned that other social media accounts were using its trademark in

posts directed to underage audiences, JLI could have stepped in and attempted to stop the use of
the word “JUUL,” including the use of all the hashtags that contain the word “JUUL.” JLI could
have sought to shut down infringing accounts such as @doit4juul and @JUULgirls. JLI did not
act promptly to do so.

Instead, JLI repeatedly thanked and encouraged the owner of the

@JUULnation Instagram account for his posting of youth-oriented JUUL content on Instagram.
C.

JLI and Its Officers and Directors Knew JLI’s Aggressively YouthOriented Advertising Was Hooking Kids but Continued It Anyway

137.

JLI was well aware from the beginning that its products would appeal to youth.

202

200
201
202

INREJUUL_00056077 [Confidential].
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 64 of 212

138.

But JLI’s officers and directors at this point were taking actions that went beyond

the regular and legitimate business operations of JLI in order to market JUUL products to youth.
At the same time

203

139.

Within weeks of JUUL’s launch, on June 23, 2015, an article in AdAge regarding

the Vaporized campaign highlighted the concerns about the youth focus of the campaign: “John
Schachter, director of state communications for Campaign for Tobacco-Free Kids, expressed
concern about the Juul campaign because of the youth of the men and women depicted in the
campaign, especially when adjoined with the design.” 204 Reacting to the article that evening, JLI
Marketing Manager Sarah Richardson commented,
205

140.

A former JLI manager, who spoke to The New York Times on the condition that his

name not be used, said that within months of JUUL’s 2015 introduction, it became evident that
teenagers were either buying JUUL products online or finding other individuals who made the
purchases for them. Some people bought more JUUL kits on JLI’s website than they could
individually use – sometimes ten or more devices at a time. “First, they just knew it was being

203

Id.

204

Harty, supra note 144.

205

INREJUUL_00278533 (emphasis added).
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 65 of 212

bought for resale,” said the former senior manager, who was briefed on JLI’s business strategy.
“Then, when they saw the social media, in fall and winter of 2015, they suspected it was teens.”206
141.

207

142.

208

But JLI did not run this campaign

then and in fact did not begin focusing its advertising on switching from combustible cigarettes
until 2018. 209
143.

JLI’s officers and directors, and in particular Huh, wanted to continue their

fraudulent marketing, knowing that these ads were also targeted to youth, “argu[ing] that the
company couldn’t be blamed for youth nicotine addiction.” 210
144.

JLI’s officers and directors had the authority to direct the marketing to JLI and

approved JLI’s youth marketing strategy despite their knowledge that the marketing campaigns
appealed to youth.

206

Richtel, supra note 131.

207

INREJUUL_00339938 (emphasis added).

208

JLI00214617.

209

Jackler et al., supra note 42, at 16.

210

Kirkham, supra note 49.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 66 of 212

145.

In October 2015, Monsees stepped down from his role as CEO of JLI (to become

Chief Product Officer) and, in his stead, Pritzker, Huh, and Valani formed an Executive Committee
of the JLI Board of Directors that would take charge of fraudulently marketing JUUL products,
including to youth. Prior to the installation of Tyler Goldman as JLI’s new CEO in August 2016,
Defendants Pritzker, Huh, and Valani used their newly formed Executive Committee to expand
the number of addicted e-cigarette users through fraudulent advertising and representations to the
public. They cleaned house at JLI by “dismiss[ing] other senior leaders and effectively tak[ing]
over the company.” 211
212

146.
213

214

Also,

Additionally,

211

Julie Creswell & Sheila Kaplan, How Juul Hooked a Generation on Nicotine, N.Y. Times
(Nov. 24, 2019), https://www.nytimes.com/2019/11/23/health/juul-vaping-crisis.html.
212

See INREJUUL_00278406 et seq.

; INREJUUL_00278410 et seq.

213

See INREJUUL_00278404 et seq.

; INREJUUL_00278402 et seq.

214

INREJUUL_00278405
- 61 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 67 of 212

147.

Similarly,

216

148.
217

By March 2016, however, JLI employees internally

recognized that JLI’s efforts to market to children were too obvious.

218

219

220

215

Id.

216

INREJUUL_00061856.

217

INREJUUL_00278359.

218

INREJUUL_00178377.

219

INREJUUL_00061469.

220

INREJUUL_00178379.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 68 of 212

221

222

Around this time, JLI reoriented

its JUUL advertising from the explicitly youth-oriented Vaporized campaign to a more subtle
approach to appeal to youth.

The advertising’s key themes continued to include

pleasure/relaxation, socialization/romance, and flavors 223 – all of which still appeal to youth, as
was made clear in the Big Tobacco litigation.
149.

It is clear that JLI, like Philip Morris and other Big Tobacco companies before it,

targeted youth as a key business demographic. Unsurprisingly, JLI’s efforts to follow these pages
of Big Tobacco’s playbook has yielded results: a recent study found that 15 to 17-year-olds are
sixteen times more likely to use JUUL products than 25 to 34-year-olds. 224
D.

JLI’s Early Labeling and Advertising for JUUL Products Omitted the
Fact that JUUL Products Contain Nicotine

150.

JLI also did not effectively inform users that JUUL products contain nicotine.

Despite making numerous revisions to JUUL products’ packaging since 2015, JLI did not add
nicotine warnings until forced to do so in August 2018. The original JUUL product labels included
a California Proposition 65 warning indicating that the product contains a substance known to
cause cancer, and a warning to keep JUULpods away from children and pets, but contained no

221

INREJUUL_00178384.

222

INREJUUL_00061274.

223

Jackler et al., supra note 42, at 9.

224

D.M. Vallone et al., Prevalence and correlates of Juul use among a national sample of youth
and
young
adults,
28
Tobacco
Control
603-09
(Oct.
29,
2018),
http://dx.doi.org/10.1136/tobaccocontrol-2018-054693.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 69 of 212

warnings specifically about the known effects, or unknown long-term effects, of nicotine or
consuming e-cigarettes/inhaling nicotine salts.
151.

Moreover, many of JUUL’s advertisements, particularly prior to November 2017,

also did not mention that JUUL contained nicotine. In the first year after its launch, not one of
JLI’s 171 promotional emails said anything about the nicotine content in JUUL products. 225 For
example, in a July 11, 2015 email, JLI advertised its promotional events with the text, “Music, Art,
& JUUL. What could be better? Stop by and be gifted a free starter kit.” 226 This email did not
mention that JUULpods contain nicotine, nor did it say that JUUL or the free starter kits were only
for adults.
152.

Compounding these omissions, JLI’s marketing strategy for JUUL was so

successful in embedding its products into pop culture that it entered the vernacular as a verb. The
term “juuling” also erases the connection to terms like “smoking” or “e-cigarette,” which could
alert users to the true nature of the activity.
153.

As a result of these omissions, many youth were unaware that JUUL products

contained nicotine at all, let alone a high dose of it. One recent survey of youth and young adults
ages fifteen to twenty-four found that 63% of JUUL users did not know that JUULpods always
contain nicotine. 227

225

Jackler et al., supra note 42, at 25.

226

Check out our JUUL events this Summer, JUUL (hello@juulvapor.com) (July 11, 2015),
http://tobacco.stanford.edu/tobacco_web/images/pod/juul/email/large/email_2.jpg.
227

Willett, supra note 62.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 70 of 212

E.

In Another Page from Big Tobacco’s Playbook, JLI Used Flavors to
Hook Kids

154.

JUULpods sold in fruity or sweet flavors made the product even more attractive to

adolescents. Tobacco companies have known for decades that flavored products are key to
nicotine adoption by youth. A 1972 Brown & Williamson memorandum: Youth Cigarette – New
Concepts, specifically noted the “well known fact that teenagers like sweet products.” 228 A 1979
Lorillard memorandum concluded that younger customers would be “attracted to products with
‘less tobacco taste,’” and even proposed borrowing data from the “Life Savers” candy company to
determine which flavors enjoyed the widest appeal among youth. 229
155.

Altria’s subsidiary U.S. Smokeless Tobacco Company (formerly called United

States Tobacco Company) described the initiation of new customers through flavored products as
“the graduation theory”:
New users of smokeless tobacco – attracted to the product for a variety of reasons
– are most likely to begin with products that are milder tasting, more flavored,
and/or easier to control in the mouth. After a period of time, there is a natural
progression of product switching to brands that are more full-bodied, less flavored,
have more concentrated ‘tobacco taste’ than the entry brand.” 230 A sales manager
who worked at U.S. Tobacco in the 1980s told the Wall Street Journal that “They

228

Marketing Innovations, Inc., Brown & Williamson Tobacco Corp. Project Report: Youth
Cigarette—New Concepts, U.C.S.F. Truth Tobacco Industry Documents (Sept. 1972),
https://www.industrydocuments.ucsf.edu/tobacco/docs/#id=hzpd0040.

229

Flavored
Tobacco
FAQs,
Students
Working
Against
Tobacco,
http://swatflorida.com/uploads/fightresource/Flavored%20Tobacco%20Industry%20Quotes%20
and%20Facts.pdf(citing Sedgefield Idea Sessions 790606-790607 (June 8, 1979), Bates No.
81513681/3691) (last visited Mar. 27. 2020).

230

G.N. Connolly, The marketing of nicotine addiction by one oral snuff manufacturer, 4 Tobacco
Control
73-79
(1995),
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1759392/pdf/v004p00073.pdf.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 71 of 212

talked about graduation all the time – in sales meetings, memos and manuals for
the college program. It was a mantra. 231
156.

According to 2004 data, 17-year-old smokers were more than three times as likely

as those over 25 to smoke flavored cigarettes and viewed flavored cigarettes as safer. 232 For this
reason, in 2009 the FDA banned flavored cigarettes pursuant to its new authority under the Family
Smoking Prevention and Tobacco Control Act of 2009. In announcing the ban, former FDA
Commissioner Dr. Margaret Hamburg declared that “flavored cigarettes are a gateway for many
children and young adults to become regular smokers.” 233 A 2017 study of the cigarette flavor
ban found that the ban was effective in lowering both the number of smokers and the amount
smoked by smokers, though it was associated with an increased use of menthol cigarettes (the only
flavor still available). 234
157.

The use of flavors is just as problematic with e-cigarettes. According to the

Surgeon General, 85% of adolescents who use e-cigarettes use flavored varieties. 235 Studies also

231

Alix Freedman, Juiced Up: How a Tobacco Giant Doctors Snuff Brands to Boost Their ‘Kick,’
Wall St. J. (Oct. 26, 1994).
232

Gardiner Harris, Flavors Banned From Cigarettes to Deter Youth, N.Y. Times (Sept. 22,
2009), https://www.nytimes.com/2009/09/23/health/policy/23fda.html.

233

Id.

234

Charles J. Courtemanche et al., Influence of the Flavored Cigarette Ban on Adolescent
Tobacco Use, Am. J. of Preventive Med. 52(5):e139 - e146 (May 2017),
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5401634/pdf/nihms842675.pdf; M.B. Harrell et
al., Flavored e-cigarette use: Characterizing youth, young adult, and adult users, 5 Prev. Med
(Nov.
11,
2016),
Rep.
33–40
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5121224/pdf/main.pdf.
235

E-Cigarette Use Among Youth and Young Adults, U.S. Dept. of Health & Human Servs.
(2016), https://www.ctclearinghouse.org/Customer-Content/www/topics/2444-E-Cigarette-UseAmong-Youth-And-Young-Adults.pdf (last visited Mar. 27, 2020).
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 72 of 212

show that flavors motivate e-cigarette initiation among youth, 236 and that youth are much more
likely to use flavored tobacco products than adults are. 237 Flavored e-cigarettes play a large role
in the youth vaping epidemic. As mentioned above, flavors motivate e-cigarette initiation among
youth and youth are much more likely to use flavored tobacco products than adults. 238 According
to the FDA, 96% of 12- to 17-year-olds who recently begun using e-cigarettes reported using a
flavored e-cigarette the first time they tried the product. 239 Flavors work to attract youth. A survey
of teenagers between the ages of 13 to 17 years old from 2014-2015 showed that this age group
was six times more interested in trying e-cigarettes in fruity flavors than they were in trying ecigarettes with only tobacco flavor. 240
158.

Research confirms that flavored products – no matter what the tobacco product –

appeal to youth and young adults. According to the 2012 Surgeon General Report, “Much of the
growing popularity of small cigars and smokeless tobacco is among younger adult consumers
(aged <30 years) and appears to be linked to the marketing of flavored tobacco products that, like

236

Karl Paul, Flavored Vapes Lure Teens Into Smoking and Nicotine Addiction, Study Shows,
MarketWatch (Feb. 26, 2019), https://www.marketwatch.com/story/flavored-vapes-lure-teensinto-smoking-and-nicotine-addiction-study-shows-2019-02-25.
237

A.C. Villanti et al., Flavored Tobacco Product Use in Youth and Adults: Findings From the
First Wave of the PATH Study, 53 Am. J. of Preventative Med. 139 (2017),
https://www.ncbi.nlm.nih.gov/pubmed/28318902.
238

See E-Cigarette Use Among Youth and Young Adults, supra note 237; Paul, supra note 238;
Villanti, supra note 239.
239

Modifications to Compliance Policy for Certain Deemed Tobacco Products, FDA (Mar. 2019),
https://www.fda.gov/media/121384/download.

240

J.K. Pepper et al., Adolescents’ interest in trying flavored e-cigarettes, 25 Tobacco Control
ii62 (Sept. 15, 2016), https://tobaccocontrol.bmj.com/content/25/Suppl_2/ii62.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 73 of 212

cigarettes, might be expected to be attractive to youth.” 241 A study published in JAMA in 2015
found that approximately 80% of those between the ages of twelve and seventeen who had ever
used a tobacco product initiated tobacco use with a flavored product, and that for each tobacco
product, at least two thirds of youth reported using these products “because they come in flavors I
like.” 242 Research also shows that when youth see advertisements for flavored e-cigarettes, they
believe the advertisements and products are intended for them. 243 A significant majority of underage users choose flavored e-cigarette products. 244
159.

Both mint and menthol flavors have been successfully used to make tobacco

products more palatable to youth. Among youth smokeless tobacco users, for example, mint and

241

Preventing Tobacco Use Among Youth and Adults, A Report of the Surgeon General (“2012
Surgeon General Report”) at 539, U.S. Dep’t Health & Human Servs. (2012),
https://www.ncbi.nlm.nih.gov/books/NBK99237/pdf/Bookshelf_NBK99237.pdf.
242

Bridget K. Ambrose et al., Flavored Tobacco Product Use Among US Youth Aged 12-17 Years,
2013-2014,
314
JAMA
1871
at
1872,
1873
(2015),
https://jamanetwork.com/journals/jama/fullarticle/2464690.
243

D.C. Petrescu et al., What is the Impact of E-Cigarette Adverts on Children’s Perceptions of
Tobacco Smoking? An Experimental Study, 26 Tobacco Control 421 (2016); Julia C. Chen-Sankey
et al., Perceived Ease of Flavored E-Cigarette Use and E-Cigarette Use Progression Among Youth
Never
Tobacco
Users,
14
PLOS
ONE
1
(2019),
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0212353.
244

Karen A. Cullen et al., E-cigarette Use Among Youth in the United States, 2019, 322 JAMA,
2095 (2019), https://tinyurl.com/y3g75gmg (“Among current exclusive e-cigarette users, an
estimated 72.2% . . . of high school students and 59.2% . . . of middle school students used flavored
e-cigarettes. . . .”).
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 74 of 212

menthol are the most popular flavors. 245 And a recent study found that among high school JUUL
users, mint is the most popular flavor. 246
160.

The role of mint and menthol flavors in facilitating youth tobacco use is well

documented, as Dr. Jonathan Winickoff, a professor of pediatrics at Harvard Medical School and
the Director of Pediatric Research in the Tobacco Research and Treatment Center, testified before
Congress:
[It is] completely false to suggest that mint is not an attractive flavor to children.
From candy canes to toothpaste, children are introduced to mint flavor from a
young age. Not only do children enjoy mint, but it has special properties that make
it an especially dangerous flavor for tobacco. Menthol’s anesthetic properties cool
the throat, mask the harshness of nicotine, and make it easier for children to start
using and continue using tobacco products. The impact of mint and menthol flavors
on increasing youth tobacco addiction is well documented. 247
161.

Robin Koval, CEO and president of Truth Initiative, echoed Dr. Winickoff’s

testimony, stating that mint and menthol are among the most popular flavors for youth and that
“[w]e also know, as does the tobacco industry, that menthol has been and continues to be the starter
flavor of choice for young cigarette users.” 248 According to the FDA, “younger populations have
the highest rate of smoking menthol cigarettes” and “menthol in cigarettes is likely associated with

245

246

247

Jonathan Winickoff, Testimony of Jonathan Winickoff before the U.S. House of
Representatives Committee on Oversight and Reform Subcommittee on Economic and Consumer
Policy (“Winickoff Testimony”) at 3, U.S. House Committee on Oversight & Reform (July 24,
2019),
https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2019.07.24%20Winickoff
%20AAP%20Testimony.pdf.

248

Id.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 75 of 212

increased initiation and progression to regular [] cigarette smoking.” 249 Menthol cigarettes are
also more addictive than regular cigarettes. 250
162.

In June 2015, JUUL came to market in four flavors including Tabaac (later renamed

Tobacco), Fruut (later renamed Fruit Medley), Bruulé (later renamed Crème Brulee), and Miint
(later renamed Mint).

163.

JUUL later offered other kid-friendly flavors, including Cool Cucumber and

Mango.

249

Preliminary Scientific Evaluation of the Possible Public Health Effects of Menthol Versus
Nonmenthol Cigarettes at 5, FDA, https://www.fda.gov/media/86497/download (last visited Mar.
28, 2020).

250

Id. at 6.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 76 of 212

164.

JUUL also offered limited edition flavors, including Coco Miint, a mint chocolate

flavor.

165.
251

Instead of taking corrective action or withdrawing the kid-friendly

flavors, JLI capitalized on their popularity with kids and continued to promote JUUL’s flavors. In
a social media post from August 2017, for example, JLI tweeted “Beat The August Heat with Cool

251

See INREJLI_00265068

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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 77 of 212

Mint” and “Crisp peppermint flavor with a pleasant aftertaste.” 252 In another August 2017 tweet,
JLI compared JUUL to dessert: “Do you brulée? RT [re-tweet] if you enjoy dessert without the
spoon with our Creme Brulee #JUULpods.” 253

166.

The flavors pose dangers beyond luring young people into trying nicotine. Studies

now show these sweet and fruity flavors present distinct additional health hazards. Researchers
have found that some of the chemicals JLI uses for flavor and perfume – particularly in the Crème
Brulee flavor – contain relatively high levels of acetals. 254 Acetals are airway-irritating chemicals

252

JUUL
Labs,
Inc.
(@JUULvapor),
Twitter
(Aug.
4,
http://tobacco.stanford.edu/tobacco_web/images/pod/juul/twitter/large/twitter_39.jpg.

253

2017),

Chaykowski, supra note 146.

254

Susie Neilson, Irritating Compounds Can Show Up in ‘Vape Juice’, NPR (July 30, 2019),
https://www.npr.org/sections/health-shots/2019/07/30/746238009/irritating-compoundsdiscovered-in-vape-juice.
- 72 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 78 of 212

that may cause lung damage. 255 Dr. Robert Jackler reported that test results have shown that JLI’s
sweet and fruity flavors “contribute[] to the increasing body of evidence documenting
toxicological effects of e-cig vapor.” 256
167.

JLI also engaged market research consultants to study youth flavor preferences, and

this research provided additional confirmation that JLI’s flavors appealed to youth.

257

168.

Under the
258

259

260

255

Id.

256

Id.

257

INREJUUL_00053206.

258

INREJUUL_00121627

259

Id.

260

INREJUUL_00035325.

; INREJUUL_00124965

- 73 -

.

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 79 of 212

169.

261

262

170.

263

171.

172.

A 2018 survey of adolescents and young adults in California found that 74% of

those surveyed indicated that their first use of a JUUL was of a flavored JUULpod. 264
173.

In January 2020, the FDA banned flavored e-cigarette pods, other than “Tobacco”

and “Menthol” flavors, in response to “epidemic levels of youth use of e-cigarettes” because these
products are “so appealing” to children.” 265 But the damage to Plaintiff and Plaintiff’s community
had already been done, and as discussed below, copycat companies exploited loopholes in the ban
to continue supplying flavored nicotine products to youth.

261

INREJUUL_00124965.

262

Id.

263

INREJUUL_00035325.

264

Karma McKelvey et al., Adolescents and Young Adults Use in Perceptions of Pod-based
Electronic
Cigarettes.
1
JAMA
Network
Open
e183535
(2018),
https://
doi:10.1001/jamanetworkopen.2018.3535.

265

U.S. Food & Drug Administration, FDA finalizes enforcement policy on unauthorized flavored
cartridge-based e-cigarettes that appeal to children, including fruit and mint (Jan. 2, 2020)
https://www.fda.gov/news-events/press-announcements/fda-finalizes-enforcement-policyunauthorized-flavored-cartridge-based-e-cigarettes-appeal-children.
- 74 -

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F.

JLI Also Used JUUL’s Discreet and Tech-Inspired Design to Attract a
New Generation of Youth to Nicotine

174.

The design of JUUL is also acutely attractive to youth. Unlike most of its

predecessors, JUUL looks nothing like a cigarette. Instead of mimicking a cigarette, the product
that adult smokers are used to using, JUUL is sleek and linear and seems like the latest tech
invention. JLI co-founder Bowen drew on his experience as a design engineer at Apple Inc.
(“Apple”) to make JUUL’s design mimic technology children were already familiar with, like
Apple’s iPhone. 266 This made JUUL look “more like a cool gadget and less like a drug delivery
device. This wasn’t smoking or vaping, this was juuling.” 267 The evocation of technology makes
JUUL familiar and desirable to the younger tech-savvy generation, particularly teenagers.
According to a nineteen-year-old interviewed for the Vox series By Design, “our grandmas have
iPhones now, normal kids have JUULs now. Because it looks so modern, we kind of trust modern
stuff a little bit more so we’re like, we can use it, we’re not going to have any trouble with it
because you can trust it.” 268 A 16-year-old agreed, explaining that “the tech aspect definitely helps
people get introduced to it and then once they’re introduced to it, they’re staying, because they are
conditioned to like all these different products. And then this is another product. And it’s just
another product. Until you’re addicted to nicotine.” 269
175.

JUUL is small and discrete. Fully assembled, the device is just over 9.5 cm in

length and 1.5 cm wide. JUUL resembles a memory stick and can be charged in a computer’s

266

How JUUL made nicotine go viral, Vox
https://www.youtube.com/watch?v=AFOpoKBUyok.
267

Id.

268

Id.

269

Id.
- 75 -

–

By

Design (Aug.

10,

2018),

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 81 of 212

USB drive. This design allows the device to be concealed in plain sight, camouflaged as a thumbdrive, for use in public spaces, like schools and even charged in school computers. JLI has been
so successful in emulating technology that its small, rectangular devices are often mistaken for –
or passed off as – flash drives. According to one high school senior, “that’s what people tell the
teachers a lot, too, if you charge it in class, they’ll just say it’s my flash drive.” 270 And unlike the
distinct smell and odor emitted from combustible cigarettes, JUUL emits a reduced aerosol with a
nearly undetectable scent. And unlike other e-cigarettes, JUUL does not produce large plumes of
smoke. Instead, the vapor cloud is very small and dissipates very quickly, allowing for concealed
use. As a result, young users can, and do, use JUUL – in class or at home – without detection.

270

Juuling at School, KOMO News (2019), https://komonews.com/news/healthworks/dangerousteen-trend-juuling-at-school.
- 76 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 82 of 212

176.

The ability to conceal a JUUL is part of the appeal for adolescents. The devices

are small and slim, so they fit easily in a closed hand or a pocket. The ease and simplicity of use
– there is nothing to light or unwrap, not even an on-off switch – also make it possible to covertly
use a JUUL behind a turned back, which has become a trend in many schools. As a police officer
told reporters, JUUL use is “incredibly prevalent in schools,” including both high schools and
middle schools, and that it is hard to catch kids in the act of vaping because JUUL does not produce
a big vapor cloud. As the officer explained, students will “just take a little hit or puff off them and
then can hold the vapor in their mouth for a little while . . . There’s minimal vapor. They’ll also
just blow into their sleeve or into their hoodie.” 271 Finding new ways to hide the ever-concealable
JUUL has spawned products designed just for that purpose, such as apparel that allows the wearer
to use the device while it is concealed in the drawstring of a hoodie or the strap of a backpack. 272
177.

JLI also designed JUUL with features reminiscent of youth-oriented tech culture

and gaming, like “secret” features users can unlock, such as making the indicator light flash

271

Id.

272

Evie Blad, ‘Juuling’ and Teenagers: 3 Things Principals and Teachers Need to Know, Educ.
Wk. (Jul. 18, 2018), https://www.edweek.org/ew/articles/2018/07/18/juuling-and-teenagers-3things-principals-and.html.
- 77 -

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rainbow colors in “party mode.” “Party mode” is activated by the user waving the JUUL device
back and forth until the white LED light starts flashing multiple colors, so that the rainbow colors
are visible while the person inhales from the JUUL device. “Party mode” can also be permanently
activated by the user quickly and firmly slapping a JUUL against the palm of the hand, until the
LED light starts flashing multiple colors permanently. JUUL party mode on is described by users
to be “like an Easter egg in a video game” and allows for “some cool tricks that are going to drive
[] friends crazy.” 273 This feature made it even more appealing and “cool” to young users.

178.

According to Dr. David Kessler, a former Commissioner of the FDA and current

Professor of pediatrics at the University of California, San Francisco, JUUL’s “fundamental design
appears to ease young people into using these e-cigarettes and ultimately, addiction.” 274 Dr.
Kessler emphasized the reduced harshness of JUUL’s nicotine salt formulation, the high nicotine

273

Jon Hos, Getting Your Juul Into Party Mode, Vape Drive (July 12, 2018),
https://vapedrive.com/getting-your-juul-into-party-mode.

274

Kessler, supra note 55.
- 78 -

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content, discreet vapor cloud, and use of flavors as design features that appeal to youth. 275 On
April 24, 2018, the FDA sent JLI a letter, based on the FDA’s concern “about the popularity of
JUUL products among youth” and stated that this popularity may be related to “the product
design.” 276 As a result, the FDA requested documents related to product design, including its
“shape or form,” “nicotine salt formulation” and “nicotine concentration/content,” “flavors,” and
“features such as: appearance, or lack thereof, or plume . . . [and] USB port rechargeability.”
G.

Eonsmoke, Riding on JLI’s Coattails, Promoted JUUL and Its Own
“JUUL-Compatible” Products

179.

Defendant Eonsmoke took notice of JLI’s successful marketing to youth and saw it

as an opportunity to profit, directly using the JUUL name to reach JLI’s young customers.
180.

Eonsmoke designs, markets, and distributes e-cigarettes and accessories.

Eonsmoke makes its own electronic vaping device that resembles JUUL. Eonsmoke also makes
both closed-system pods, like those sold by JLI, and open-system pods that can be filled by the
user. Both Eonsmoke’s device and its pods are advertised as JUUL-compatible, meaning that
users can use Eonsmoke’s device to vape JUULpods and they can also use a JUUL to vape
Eonsmoke’s pods. 277

275

Id.

276

Letter from Matthew R. Holman, Director of the Office of Science at the Center for Tobacco
Products, to Ziad Rouag, Vice President of Regulatory & Clinical Affairs, JUUL Labs, Inc. (Apr.
24, 2018), https://www.fda.gov/media/112339/download.

277

Eonsmoke
Vapes,
Tumblr
(June
4,
2018),
https://eonsmoke.tumblr.com/post/174567212961/mango-pods-6-tastes-like-a-sweet-and-crisp
(showing Eonsmoke mango pods compatible with JUUL, captioned by Eonsmoke as “Mango Pods
6%. Tastes like a sweet and crisp Mango! Follow @Eonsmoke); Eonsmoke Vapes, Tumblr (June
18th, 2018), https://eonsmoke.tumblr.com/post/175012943246/blueberry-6-restocked-on-thesites-grab-yours (showing Eonsmoke blueberry pods compatible with JUUL; captioned by
Eonsmoke as “Blueberry 6% restocked on the sites! Grab yours today while supplies last! Follow
@Eonsmoke”).
- 79 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 85 of 212

181.

Below is an image of the Eonsmoke device: 278

182.

Eonsmoke’s devices, like JUUL, are designed to resemble flash drives. Eonsmoke

explicitly capitalized on this confusing design by advertising that users of its products could lie to
their parents and pretend the product was a flash drive. In the post pictured below, posted on
Eonsmoke’s Instagram page, the company shared a photograph of its device with the caption

278

Post by Instagram user “eonsmoke” on August 11, 2018.
- 80 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 86 of 212

“Mom! It’s a USB drive!! #eonsmoke.” 279 On this post, one user comments “I told my dad that
about my old juul and he actually fell for it lol.” 280

183.

Although the official “eonsmoke” Instagram account is now deleted, on Tumblr,

another social media platform, an account called “Eonsmoke Vapes” contains links and images of
Instagram posts that appear to have been originally posted by Eonsmoke. Each linked Instagram
post is now deleted. This Tumblr user holds itself out as Eonsmoke’s official page. 281 These posts
show Eonsmoke frequently used, as a marketing tool, the tendency to confuse its product with a
flash drive: 282

279
280

Id.

281

The “Eonsmoke Vapes” Tumblr page uses Eonsmoke’s logo and the page’s bio says “Buy
Eonsmoke e juices at an incredibly [sic] price. Also check out our Juul compatible e-cig pods in
six flavors available now! Visit https://www.enosmoke.com”. Eonsmoke Vapes, Tumblr,
https://eonsmoke.tumblr.com/ (last visited Mar. 29, 2020).
282

Eonsmoke
Vapes,
Tumblr
(June
26,
2018),
https://eonsmoke.tumblr.com/post/175286181941/2018-we-smoking-purple-flash-driveseonsmoke (showing purple vape; captioned by Eonsmoke as “‘2018 we smoking purple flash
- 81 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 87 of 212

184.

The resemblance between a vaping device and a flash drive would be meaningless

if one was selling a smoking cessation device to chain smokers. But Eonsmoke was seeking to tap
into the youth social media network JLI created by marketing to users of JUUL. Eonsmoke
advertised its product as JUUL-compatible and used hashtags to connect itself to JUUL, including
“#juulcompatible,” “#juulgang,” “#juul,” “#doit4juul,” and “#juulnation,” among others. 283
Similarly, in a post on the “Eonsmoke Vapes” Tumblr, Eonsmoke’s device and blueberry pods are
marketed as “sexy” and tagged with “#juul,” “#juulgang,” “#juulnation,” and “#doit4juul,” among

drives’@eonsmoke”);
Eonsmoke
Vapes,
Tumblr
(Apr.
16,
2018),
https://eonsmoke.tumblr.com/post/172997769276/red-devices-now-restocked-and-available-on
(showing red vape next to soda can with text “Smoke flashdrives all 2018”); captioned by
Eonsmoke as “Red devices now restocked and available on Eonsmoke.com! Vape Eon!
@eonsmoke”.
283

Eonsmoke has been so aggressive in copying JUUL and targeting JUUL users that JLI sued
Eonsmoke for patent infringement. See Verified Complaint, JUUL Labs, Inc. v. Eonsmoke et al.,
No. 19- 08405 (D.N.J. Mar. 12, 2019).
- 82 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 88 of 212

other tags. Eonsmoke also told users to “[f]ollow” them for sales and giveaways as in the post
shown here from 2018, even though the FDA made it clear in October 2017 that e-cigarette
products are included in its ban on free samples of tobacco products: 284

284

Eonsmoke
Vapes,
Tumblr
(Feb.
13,
2018),
https://eonsmoke.tumblr.com/post/170841792591/so-sexy-what-do-you-guys-think-follow
(showing red vape and Eonsmoke blueberry pods, captioned by Eonsmoke “So sexy! What do you
guys think? Follow @eonsmoke for sales and giveaways! #juul #juulgang #juulnation #juulcentral
#doit4juul #doit4state #kangertech #kanger #aspirebreeze #aspirebreezekit #xfire #xfirevape
#bovaping #bovape #bovapingus #smokeshop #vapeshop #vapor #vaporshop #smoktech #sourin
#sourinair #sourindrop #bouldervape #mrsalte”); see also Eonsmoke Vapes, Tumblr (Feb. 10,
2018), https://eonsmoke.tumblr.com/post/170724357236/we-are-doing-a-quick-weekend-juicegiveaway-of-our (showing different flavor vape juice with text “Eonsmoke 60mg Juice Giveaway
Tag a Friend Now!!”, captioned by Eonsmoke “We are doing a quick weekend Juice giveaway of
our made in USA 60mg salt nicotine vape juice!!! Giveaway ends Sunday 11:59 EST February
11th. The rules: 1. Follow @Eonsmoke 2. Tag a friend who vapes! More friends you tag the better
your chances of winning!!! We will give away 4 bottles of 30ml juice!!!!!!!!!!!”); see also
Eonsmoke
Vapes,
Tumblr
(Feb.
10,
2018),
https://eonsmoke.tumblr.com/post/170725145496/you-probably-know-the-rules-by-now-we-are
(showing three vape devices with text “Gonna giveaway some devices too!!!!!!! Follow
@eonsmoke and tag a friend! Free devices giveaway!!!”, captioned by Eonsmoke “You probably
know the rules by now…. we are feeling pretty generous! Hope you guys win something!!!!
#eonsmoke #vapegiveaway #vapegiveaways #pods #podsgiveaways #vapegiveaways
#vapegiveaway #podsgiveaways #eonsmoke #pods”).
- 83 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 89 of 212

185.

Eonsmoke’s “Doit4juul” account on Instagram was the most-followed JUUL

account on Instagram, with over 81,000 followers as of February 2018. 285 On YouTube, one of
the “Doit4juul” videos had nearly 192,000 views as of March 2018. 286 The “Doit4juul” campaign
called on followers to share pictures or videos of themselves using JUUL.
186.

In addition to driving social media posts about JUUL and vaping, Eonsmoke

targeted the youth market by selling its pods and nicotine salts in fruity and candy flavors such as
“Sour Gummy Worms,” “Gummy Bear,” “Donut Cream,” “Pineapple Crush,” “Cotton Candy”
and more: 287

285

Huang et al., supra note 190.

286

Id.

287

Eonsmoke
Vapes,
Tumblr
(June
12,
2018),
https://eonsmoke.tumblr.com/post/174824533561/sour-gummies-60mg-restocked-today-online- 84 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 90 of 212

187.

When JLI was pressured to stop selling certain flavors in stores, Eonsmoke was

more than happy to fill the role. In 2018, Eonsmoke generated an estimated $5.3 million in
revenue. 288 In 2019, after JLI stopped selling flavors like Mango in stores, Eonsmoke’s business
soared, with an estimated $43.6 million in tracked sales as of mid-July 2019. 289 According to a
16-year-old interviewed by The New York Times, Eonsmoke’s wide range of flavors is a big draw

and (showing Sour Gummy Worm salt nicotine vape juice, captioned by Eonsmoke “Sour
Gummies 60mg restocked today online and through our vendors! Follow @Eonsmoke). for more
stock, vape developments, and new flavors”; see also Eonsmoke Vapes, Tumblr (July 1, 2018),
https://eonsmoke.tumblr.com/post/175446333176/cop-one-of-our-world-class-salt-nicotinejuices-in (showing Gummy Bear salt nicotine vape juice, captioned by Eonsmoke “Cop one of our
world class salt nicotine juices in 60mg. #eonsmoke @eonsmoke”); see also Eonsmoke Vapes,
Tumblr (June 27, 2018), https://eonsmoke.tumblr.com/post/175313662276/our-salt-nic-familyof-products-try-one-today-to (showing salt nicotine vape juices, captioned by Eonsmoke “Our Salt
Nic family of products! Try one today to see what all the hype is about. Follow @Eonsmoke”).
288

Sheila Kaplan, ‘Juul-alikes’ Are Filling Shelves with Sweet, Teen-Friendly Nicotine Flavors,
N.Y. Times (Aug. 13, 2019), https://www.nytimes.com/2019/08/13/health/juul-flavorsnicotine.html.
289

Id.
- 85 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 91 of 212

for minors: “A lot of my friends use the blueberry . . . People use the mango because it’s somewhat
similar to the Juul mango.” 290
188.

Eonsmoke followed in JLI’s footsteps by advertising these flavors to youth using

the apps and websites where minors often spend time, including Instagram, Tumblr, Snapchat,
YouTube, and Reddit. 291
189.

For example, on the social media platform Reddit, user “Eonjuulcompatiblepod”

holds itself out as a “Eonsmoke.com Juul Compatible Pods Official Representative” and claims
that “Eonsmoke.com is the 2nd largest pod company in the USA and the top 5 in Salt Nicotine
Bottled eLiquid. Our pods are Juul compatible so you don’t have to buy another device. 7 flavors
including blueberry, watermelon and strawberry.” 292 Eonsmoke used Reddit to try to recruit JUUL
users. For example, Eonsmoke commented that its products are not only compatible with JUUL
but also cheap, a crucial factor for youth who often do not have much money: “Our pods are
compatible with the juul device and our devices are compatible with juul pods and we just lowered
the retail to 20$ online after coupon.” 293 In addition, when Reddit users were discussing additional
JUUL flavors that they would like to try, including watermelon flavor, Eonsmoke was ready with

290

Id.

291

Eonsmoke Vapes, Instagram (Feb. 3, 2018), (captioned by Eonsmoke “The official vaping
brand of Snapchat :) #snapchat #eonsmoke #eonpods #juul #juulgang #phix #phixvapor”).

292

Eonsmoke
(@Eonjuulcompatiblepod),
https://www.reddit.com/user/Eonjuulcompatiblepod (last visited Mar. 29, 2020).
293

Reddit,

Eonsmoke (@Eonjuulcompatiblepod), Comment to @u/981ti, Reddit (May 21, 2018, 8:43
PM),
https://www.reddit.com/r/juul/comments/8k5wfa/are_there_any_other_devices_that_fit_juul_po
ds/dzeu9sj/?context=3.
- 86 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 92 of 212

its pitch: “We make watermelon. Step over to the dark side!” 294 In a comment on social media
platform Reddit, Eonsmoke also advertised that compared to JUUL, “[o]ur throat hit is smoother,
buzz is the same.” Eonsmoke also advertised its new “disposable pod system which is 1.3ml and
7% salt nic for 8$ you get the battery plus one large pod that lasts like 2 juul pods.” 295
190.

Eonsmoke’s social media posts, like its products, are designed to appeal to youth.

For example, Eonsmoke advertises its product as an accompaniment to candy and posts images
popular with youth in the forms of “memes”: 296

294

Eonsmoke (@Eonjuulcompatiblepod), Comment to @u/12gwar18, Reddit (May 21, 2018,
8:26
PM),
https://www.reddit.com/r/juul/comments/8kpdun/what_flavors_do_you_guys_wanna_see_next_f
rom_juul/.
295

Eonsmoke (@Eonjuulcompatiblepod), Comment to @u/richard_bag_DIK, Reddit (Oct. 23,
2018
3:40
PM),
https://www.reddit.com/r/juul/comments/9qrxxr/3rd_party_pods/e8bqkbb/?context=3.
296

Eonsmoke (@eonsmoke), Instagram (May 1, 2018) (showing an Eonsmoke device next to a
bag of M&M candies and captioned by Eonsmoke “Can you name a better combo?”); see also
Eonsmoke (@eonsmoke), Instagram (Feb. 25, 2018) (showing a meme featuring a character from
the animated show “The Simpsons”).
- 87 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 93 of 212

191.

Eonsmoke’s social media also explicitly encouraged users to associate their

products with movies and toys popular with children, such as Toy Story, and with school
supplies: 297

192.

Like JLI, Eonsmoke advertises that “[e]ach flavored cartridge is the equivalent of

up to a pack of traditional cigarettes.” 298 But Eonsmoke emphasized that its products contain even
more nicotine than JUUL. For example, EonSmoke sells its 4x Pods in “Blue Raspberry Flavor

297

Eonsmoke
Vapes,
Tumblr
(Mar.
19,
2018),
https://eonsmoke.tumblr.com/post/172051155991/wow-i-love-this-follow-eonsmoke-for-salesand (showing Eonsmoke device with Woody from the animated film “Toy Story” and blueberry
vape pods, captioned by Eonsmoke as “Wow I love this! Follow @Eonsmoke for sales and
giveaways”);
see
also
Eonsmoke
Vapes,
Tumblr
(Feb.
16,
2018),
https://eonsmoke.tumblr.com/post/170965631311/the-cotton-candy-60mg-eonsmoke (showing
Eonsmoke devices and nicotine salt vape juice on a desk, captioned by Eonsmoke as “The Cotton
Candy 60mg! #eonsmoke”); see also Eonsmoke Vapes, Tumblr (Feb. 4, 2018),
https://eonsmoke.tumblr.com/post/170502488296/some-day-time-vibes-krissixx710
(showing
Eonsmoke devices and flavor pods on a leopard print backpack, captioned by Eonsmoke as “Some
Day Time Vibes @krissixx710”).
298

Eonsmoke
About
Us,
EonSmoke,
LLC
(Oct.
9,
2019),
https://web.archive.org/web/20191009033001/https://www.eonsmoke.com/about-us/ (last visited
Mar. 28, 2020).
- 88 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 94 of 212

JUUL Compatible 6.8% Salt Nic Pods.” 299 Eonsmoke also used social media and memes to
highlight this “advantage” of their product over JUUL.
193.

In another example, on one post, Eonsmoke advertised that its “Watermelon 6%

Pods” were “Juul compatible with more juice and more nicotine inside every pod!” 300 Eonsmoke
highlighted this difference in several of its social media posts: 301

299

Eonsmoke
Product,
EonSmoke,
LLC
(Oct.
9,
2019),
https://web.archive.org/web/20191009085755/https://www.eonsmoke.com/product/4x-blueraspberry-flavor-juul-compatible-6-8-salt-nic-pods/ (last visited Mar. 28, 2020) (“Flavor profile:
Your favorite snack and ejuice flavor now in pod form. Both sweet and sour at the same time,
makes sour gummy one of the fan favorites. Blue Raspberry 4x pods just hit that sweet spot of
flavor.”).
300

Eonsmoke
Vapes,
Tumblr
(June
26,
2018),
https://eonsmoke.tumblr.com/post/175281868841/try-some-watermelon-6-pods-all-juulcompatible (showing watermelon vape pods and sunglasses, captioned by Eonsmoke as “Try some
Watermelon 6% Pods! All Juul compatible with more juice and more nicotine inside every pod!
Follow @Eonsmoke”).

301

Eonsmoke
Vapes,
Tumblr
(Apr.
18,
2018),
https://eonsmoke.tumblr.com/post/173080730801/comment-eon-below-for-a-follow-back-follow
(showing person getting hit in the face with a book with text “When people say 6% nic is the same
as 5% nic”, captioned by Eonsmoke as “Comment Eon below for a follow back! Follow
@Eonsmoke”);
see
also
Eonsmoke
Vapes,
Tumblr
(May
20,
2018),
https://eonsmoke.tumblr.com/post/174088090966/warning-pineapple-pods-contain-nicotine-andso (showing pineapple crush vape pods, captioned by Eonsmoke as “WARNING: PINEAPPLE
PODS CONTAIN NICOTINE AND SO MUCH FLAVOR IT MAY CAUSE YOU TO DROP
ALL OTHER TYPES OF BRANDS FOR PODS. NICOTINE IS AN ADDICTIVE CHEMICAL.
Follow @Eonsmoke”).
- 89 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 95 of 212

194.

This tactic is clearly effective on the youth market. As one 16-year-old boy

reported “Some of my friends use Eon pods because they have a higher nicotine percentage,
because they want a bigger head rush.” 302
195.

But Eonsmoke also mimized its references to nicotine while advertising on social

media when it believed it was in its marketing interests to do so. Eonsmoke was more than happy

302

Kaplan, supra note 288.
- 90 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 96 of 212

to use nicotine as a youth marketing gimmick, but it failed to warn its customers about the dangers
of nicotine.
196.

Like JLI, Eonsmoke also used “influencers” to advertise its products. Eonsmoke’s

influencers include: Mia Khalifa, an Instagram influencer with 17.9 million followers who
frequently posts suggestive or provocative photos and has a large youth audience; Stevie Emerson,
who got 6.9 million views of his YouTube video titled, “Dude, Where’s my JUUL?” and frequently
referred to vapor from e-cigarettes as “water vapor;” and Donny Karle who, as discussed above,
is better known to youth by his handle “DonnySmokes.” As a twenty-one-year-old, Karle was
getting about three million views each month reviewing vapor products on YouTube, which began
in 2017 when he posted a “unboxing” video of his newly purchased JUUL. 303 Karle’s videos were
plainly aimed at youth; as mentioned above, one was titled, “How to HIDE & HIT Your JUUL at
SCHOOL WITHOUT Getting CAUGHT.” 304 Eonsmoke’s CEO Michael Tolmach told VICE that
the company paid Karle $1,000 for each review of its products. 305
197.

As of the fall of 2019, Eonsmoke’s products were sold side by side with JUUL and

the best-selling cigarette brand in the United States, Marlboro, a product of Philip Morris USA and
its parent company, Defendant Altria: 306

303

Conti, supra note 181.

304

Id.

305

Id.

306

Eonsmoke
Vapes,
Tumblr
(July
14,
2018),
https://eonsmoke.tumblr.com/post/175887887396/this-is-how-the-top-shelf-of-the-cigarette-shelf
(showing Juuls being sold alongside cigarettes, captioned by Eonsmoke as “This is how the Top
shelf of the cigarette shelf looks now! Switch from cigarettes to Eon 6% pods now! #eonsmoke
#juul.”; see also Hannah Smothers, JUUL’s ‘Banned’ Flavors Are Still Absolutely Available in
New York City, VICE (Nov. 4, 2019), https://www.vice.com/en_us/article/xwepnj/juul-pod- 91 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 97 of 212

198.

Eonsmoke’s conduct did not go unnoticed. On October 24, 2019, the FDA issued

a Warning Letter to Eonsmoke, stating that it was selling 96 e-cigarette products without a
marketing authorization order. 307 The FDA also criticized Eonsmoke for omitting nicotine
warnings in its influencer posts and for making unlawful affirmative statements minimizing the
risks of vaping. Although Eonsmoke is not authorized to claim that its products are safer than
cigarettes, its website boasted that “Eonsmoke electronic cigarettes provide you with a premium
vaping experience without the thousands of harmful chemicals and additives often found in
tobacco cigarettes.” 308
199.

Eonsmoke has been sued by multiple state Attorneys General, including from

Arizona, Massachusetts, and North Carolina. On February 20, 2020, the Arizona Attorney General

banned-flavors-still-available-in-new-york-city (showing JUUL products side by side with
Eonsmoke products in stores in New York City in mid-October 2019).
307

Eonsmoke, LLC Warning Letter, supra note 15.

308

Id.
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was granted a preliminary injunction prohibiting the advertising, marketing, distribution, and sale
of all 96 Eonsmoke products that the FDA identified as being sold without authorization in its
October 2019 Warning Letter. 309
H.

The Proliferation of “JUULalikes” and Next-Generation Products
Targeting Youth

200.

Eonsmoke was not the only company to follow JLI’s lead. As JUUL sales

skyrocketed in 2017 and 2018, everyone from tobacco industry giants to vape start-ups launched
their own products with the key elements of JUUL’s design: flavor pods, nicotine salts, and a techlike appearance.
201.

Imperial Brands and Reynolds American, both of which already marketed e-

cigarettes, launched “JUULalike” versions of their products in 2018. As Alison Cooper, the CEO
of Imperial Brands, put it, “The type of experience JUUL delivered was definitely a step
forward.” 310 In February 2018, Imperial Brands launched a new pod-based device called “myblu,”
noting in its press release that “[p]od-based devices are the fastest growing segment of the e-vapour
category in the USA.” 311 Imperial Brands offered myblu pods in eleven flavors, including Polar

309

Attorney General Mark Brnovich Obtains Injection Against Vaping Company Eonsmoke, Off.
Att’y Gen. State of Ariz. (Feb. 20, 2020), https://www.azag.gov/press-release/attorney-generalmark-brnovich-obtains-injunction-against-vaping-company-eonsmoke.
310

Steve Birr, The Makers of Blu E-Cigarettes Are Taking On JUUL With A New Vape Device,
Daily Caller (July 5, 2018), https://dailycaller.com/2018/07/05/blu-e-cigarette-juul-vape/.

311

Imperial Brands launches new vaping product in USA, Imperial Brands (Feb. 1, 2018),
https://www.imperialbrandsplc.com/media/key-announcements/2018/imperial-brands-launchesnew-vaping-product-in-usa.html.
- 93 -

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Mint, Mango Apricot, and Green Apple. 312 In July 2018, Imperial Brands introduced a line of
flavor pods called myblu INTENSE, using a nicotine salt formulation, with 4% nicotine strength. 313
202.

The launch of Imperial Brands’ myblu as a “JUULalike” product concerned Vince

Willmore, Vice President of Communications for the Campaign for Tobacco-Free Kids.
According to Willmore, “Juul is our biggest concern right as it is being widely used by kids across
the country . . . [b]ut we are also concerned that the introduction of a growing number of Juul-like
products could make the problem even worse.” 314

Willmore is not the only one worried.

Then-FDA Commissioner Gottlieb expressed concern about products like myblu, stating that such
products “closely resemble a USB flash drive, have high levels of nicotine and emissions that are
hard to see. These characteristics may facilitate youth use, by making the products more attractive
to children and teens.” 315

312

blue Launches myblu E-Vapor Device, CSD Staff (Feb.
https://cstoredecisions.com/2018/02/21/blu-launches-myblu-e-vapor-device/.

21,

2018),

313

Rachel Becker, Juul’s Nicotine Salts Are Dominating the Market – And Other Companies Want
In, The Verge (Nov. 21, 2018), https://www.theverge.com/2018/11/21/18105969/juul-vapingnicotine-salts-electronic-cigarettes-myblu-vuse-markten; Angelica LaVito, Juul’s momentum
slips as NJOY woos customers with dollar e-cigarettes, CNBC (Aug. 20, 2019),
https://www.cnbc.com/2019/08/20/juuls-momentum-slips-as-njoy-woos-customers-with-dollare-cigarettes.html.

314

Ben Tobin, FDA targets e-cigarettes like Juul as teachers fear ‘epidemic’ use by students,
USA Today (Aug. 16, 2018), https://www.usatoday.com/story/money/2018/08/16/juul-labs-backschool-teachers-e-cigarettes/917531002/.
315

Scott Gottlieb, Statement from FDA Commissioner Scott Gottlieb, M.D., on new enforcement
actions and a Youth Tobacco Prevention Plan to stop youth use of, and access to, JUUL and other
e-cigarettes,
FDA
(Apr.
23,
2018),
https://www.fda.gov/news-events/pressannouncements/statement-fda-commissioner-scott-gottlieb-md-new-enforcement-actions-andyouth-tobaccoprevention?utm_campaign=04242018_Statement_Youth%20Tobacco%20Prevention&utm_medi
um=email&utm_source=Eloqua.
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203.

According to British American Tobacco, parent company of Reynolds American,

it had used nicotine salts in its Vuse e-liquid in the U.S. since 2012, “[s]o to be clear – not in
response to Juul,” according to a spokesperson. But in August 2018, R.J. Reynolds Vapor Co.
launched the Vuse Alto, with pre-filled pods available in 5% nicotine strength, compared to the
3% nicotine in Vuse Vibe cartridges and 1.5% nicotine in the Vuse Ciro. “Juul has achieved
tremendous progress over the last 18 months,” Reynolds American CEO Ricardo Oberlander told
reporters, adding that he sees JUUL as “showing the great potential for growth” in the e-cigarette
industry. 316 Seeking some of the social media marketing success that propelled JLI’s growth,
Reynolds American began marketing Vuse e-cigarettes on Twitter and Instagram in May 2019. 317
204.

Also in 2018, as discussed further below, Altria launched its pod-based products,

the MarkTen Elite and the Apex by Markten.
205.

Researchers from SRITA called it “a nicotine arms race,” writing that “JUUL’s

success in the e-cigarette marketplace has spurred a variety of new pod-based products with
exceptionally high nicotine.” 318 “As of September 2018,” the researchers wrote, “there were at

316

Richard Craver, Reynolds Vapor prepares national launch of new e-cig rival to JUUL,
Winston-Salem J. (July 17, 2018), https://www.journalnow.com/business/reynolds-vaporprepares-national-launch-of-new-e-cig-rival/article_7ba10442-d438-575e-af23794173089a8a.html.
317

Jennifer Maloney, Reynolds, With an Eye on Juul, Wades into Social Media, Wall Street J.
(May 15, 2019), https://www.wsj.com/articles/reynolds-with-an-eye-on-juul-wades-into-socialmedia-11557921721.

318

Robert K. Jackler & Divya Ramamurthi, Nicotine arms race: JUUL and the high-nicotine
product
market.
28
Tobacco
Control
623-28
(2019),
https://tobaccocontrol.bmj.com/content/28/6/623.
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least 39 JUUL knock off devices on the market” – none of which were sold prior to the introduction
of JUUL. 319 These new devices followed JLI’s example of high nicotine and discrete design:
The vast majority of these emulate, and sometimes exceed, JUUL’s exceptionally
high nicotine levels. Like JUUL, they are also inconspicuous, small enough to
easily fit in a pocket or purse, and their purpose as a nicotine delivery system may
not be obvious to many casual observers, including parents and teachers. 320
206.

In addition to the 39 “JUULalike” devices, the researchers identified 14 brands

marketing 15 JUUL-compatible pods, and 71 American e-liquid brands selling nicotine salt eliquids with 5% or greater nicotine strength. 321 All but one vendor of the JUUL-compatible pods
offered mango flavor. 322
207.

The rapid proliferation of vape products in JUUL’s wake and the speed with which

the vape market evolves make it difficult to enact effective legislative and regulatory measures.
When the FDA finalized its policy restricting flavored pods and “cartridge-based products” in
January 2020, vape products sprung up in the regulatory loopholes almost immediately.
208.

The FDA’s enforcement policy took effect on February 6, 2020, and covered:

•

Any flavored, cartridge-based ENDS [Electronic Nicotine Delivery System]
product (other than a tobacco- or menthol-flavored ENDS product);

•

All other ENDS products for which the manufacturer has failed to take (or
is failing to take) adequate measures to prevent minors’ access; [and]

•

Any ENDS product that is targeted to minors or likely to promote use of
ENDS by minors. 323

319

Id.

320

Id.

321

Id. at 2.

322

Id.

323

U.S. Food & Drug Administration, supra note 265.
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209.

In effect, this was a ban on flavored e-cigarette pods, other than tobacco and

menthol flavors. But both flavored nicotine liquid designed for refillable vape devices and
disposable vape products were allowed to remain on the market. 324
210.

In announcing the ban, the Secretary of HHS recognized, “The United States has

never seen an epidemic of substance use arise as quickly as our current epidemic of youth use of
e-cigarettes.” 325 FDA Commissioner Stephen Hahn, M.D. added, “As we work to combat the
troubling epidemic of youth e-cigarette use, the enforcement policy we’re issuing today confirms
our commitment to dramatically limit children’s access to certain flavored e-cigarette products we
know are so appealing to them – so-called cartridge-based products that are both easy to use and
easily concealable.” 326
211.

Enterprising companies recognized loopholes in a policy aimed only at cartridge-

based products and the opportunity to fill the demand for fruit-flavored nicotine created by JLI.
Disposable vape devices, not covered by the FDA’s ban, have become increasingly popular with
youth, building on the public health crisis Defendant JLI helped create. The use of disposable
vape devices is now “rampant” in schools. 327 These products are typically cheaper than JUULpods
and are offered in increasingly more flavors. 328 One high school junior told The New York Times

324

Abby Goodnough et al., With Partial Flavor Ban, Trump Splits the Difference on Vaping¸ N.Y.
Times, (Jan. 2, 2020), https://www.nytimes.com/2020/01/02/health/flavor-ban-e-cigarettes.html;
Sheila Kaplan, Teens Find a Big Loophole in the New Flavored Vaping Ban, N.Y. Times, (Jan.
31, 2020), https://www.nytimes.com/2020/01/31/health/vaping-flavors-disposable.html.

325

Id.

326

Id.

327

Kaplan, supra note 324.

328

Id.
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that she started vaping mint and other flavored JUULs when she was in tenth grade. 329 She now
vapes using disposable “Puff Bars” because “[t]hey have flavors like the Juul flavors. It’s basically
like smoking a Juul.” 330 Other high school students confirmed the popularity of Puff Bars, saying
they “saw them everywhere” and “[t]hat’s what everyone was talking about.” 331
212.

Defendant Eonsmoke also sells disposable vape devices called Eon St!Ks, in a wide

variety of youth-friendly flavors, such as Blue Raspberry, Mango, Pink Lemonade, Lush Ice, and
Berry Gelato. 332 Not only do Eonsmoke’s products come in kid-friendly flavors, they are sold in
strengths of 6.8% nicotine, even stronger than JUUL’s advertised 5% nicotine. 333

329

Id.

330

Id.

331

Angeline Jane Bernabe et al., Loophole in vaping ban has teens turning to disposable ecigarettes,
Good
Morning
Am.,
(Mar.
4,
2020),
https://www.goodmorningamerica.com/wellness/story/loophole-vaping-ban-teens-turningdisposable-cigarettes-69376300.

332

Id. (listing Eonsmoke’s St!K disposable vape flavors as Blue Raspberry, Watermelon,
Strawberry, Mango, Pineapple, Green Apple, Citrus, Cucumber, Peach, Pink Lemonade, Lush Ice,
Strawberry Banana, Cubano, Kiwi Strawberry, Pomegranate, and Berry Gelato).

333

Id.
- 98 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 104 of 212

334

213.

Eonsmoke also provides the flavoring for another disposable vape device called

fruyt. 335 Eonsmoke St!Ks and Puff Bars have been sold side by side in stores. 336

334

St!K
Disposables
6.8%
Nicotine
3
Pack,
https://www.eonsmoke.com/product/__trashed-3/ (last visited Mar. 28, 2020).

335

Eonsmoke.com,

Cristine Delnevo et al., Rapid profileration of illegal pod-mod disposable e-cigarettes,
Tobacco
Control
055485
(Jan.
6,
2020),
https://tobaccocontrol.bmj.com/content/early/2020/01/30/tobaccocontrol-2019-055485.full.
336

Kaplan, supra note 324.
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214.

As a Professor at Rutgers Center for Tobacco Studies stated, “[t]hese disposable,

completely self-contained e-cigarettes like Puff Bar and others share all of the characteristics that
made Juul a problem.” 337 In online discussions of these disposable vape products, including Eon
St!K, users focused on “tasting similar to JUUL flavours, lasting longer than a JUUL pod and
having a good ‘hit’ like a JUUL . . . [and] posted images highlight the similar physical dimensions
to JUUL.” 338 Researchers evaluating the rise of these products noted that “these products are
similar to JUUL – the brand driving high rates of youth vaping – in form and function.” 339
Disposable vape devices like Defendant Eonsmoke’s are “nearly identical in size” to JUUL and
“also contain nicotine salts,” but also offer even more flavors, even higher nicotine concentrations,
colorful marketing, and low pricing. 340 Researchers also noted that “as a ‘single use product’,
disposable [vape devices] further contribute to plastic waste and microplastic pollution, which is
a growing health concern.”

341

This waste is a problem for Plaintiff as well as other local

governments, municipalities, schools, and counties, as discussed below.
215.

In response to increasing pressure, the founder and CEO of the company behind

Puff Bar, Cool Clouds, announced that the company has “ceased all distribution” of Puff Bar
products in the U.S. and stopped licensing to “prevent third parties from distributing in the U.S.” 342

337

Id.

338

Delnevo, supra note 335.

339

Id.

340

Id.

341

Id.

342

Sophie Alexander & Angelica LaVito, Upstart L.A. company pulls back Puff Bar single-use
vaping
product
after
outcry,
L.A.
Times
(Feb.
20,
2020),
https://www.latimes.com/business/story/2020-02-20/vaping-loophole.
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Defendant Eonsmoke’s disposable vape devices, on the other hand, are still available. Moreover,
for every company selling candy-flavored vape products that exits the market, more materialize to
take its place, driven by the knowledge that there is a large market of nicotine-addicted youth eager
for their products.
216.

The rise in disposable products as a means to evade bans on flavored e-cigarettes

demonstrates why partial regulatory measures – banning flavor pods but not all flavored tobacco
products, for example – are not sufficient to halt the spread of youth vaping. 343
I.

JLI and Altria Join Forces to Protect JUUL’s Market Domination
1.

217.

Before Conspiring with JLI, Altria Tried to Corner the Youth
E-Cigarette Market

Altria’s first e-cigarette was a cigarette-lookalike, or “cigalike,” style of e-cigarette,

sold under the brand MarkTen. Following a phased roll-out of MarkTen in Indiana and Arizona
in late 2013, Altria launched the MarkTen nationwide in 2014 with an aggressive marketing
campaign, eclipsing the advertising expenditures for the market leader at that time, blu ecigarettes. 344

343

Press Release: Raising the Tobacco Age to 21 Won’t Stop the Youth E-Cigarette Epidemic and
Is Not a Substitute for Eliminating the Flavored Products that Lure Kids, Tobacco Free Kids, (Dec.
16, 2019) https://www.tobaccofreekids.org/press-releases/2019_12_16_tobacco21_flavor.

344

Jennifer Cantrell et al., Rapid increase in e-cigarette advertising spending as Altria’s MarkTen
enters
the
marketplace,
25
Tobacco
Control
e16-18
(2015),
http://dx.doi.org/10.1136/tobaccocontrol-2015-052532.
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218.

E-cigarette advertising spending for 2014 totaled $88.1 million, a 52% increase

from 2013. 345 Of the $88.1 million spent in 2014, nearly 40% of that was Altria’s MarkTen
campaign, at $35 million. 346 More than eighteen million middle school and high school children
were exposed to e-cigarette advertisements in 2014. 347 Approximately one in two middle school
and high school age children saw advertisements for e-cigarettes in retail stores and almost two in
five saw advertisements for e-cigarettes online. 348

345

Id.

346

Id.

347

Carley Thompson, How JUUL cornered the youth tobacco market and what you should know,
King Cty. Pub. Health Insider (Aug. 6, 2018), https://publichealthinsider.com/2018/08/06/howjuul-cornered-the-youth-tobacco-market-and-what-you-should-know/.
348

Id.
- 102 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 108 of 212

219.

At the time, the president of the Campaign for Tobacco-Free Kids said that

companies like Altria were using “exactly the same themes we saw work with kids in the U.S. for
decades with cigarettes.” 349
220.

Although free samples of tobacco products are prohibited under the terms of the

Tobacco Master Settlement Agreement, as well as FDA regulations issued in 2010, Altria
exploited the grey area in the regulation of e-cigarettes and distributed coupons for free sample
nicotine cartridges as part of its MarkTen launch. (The FDA has since issued finalized guidance
clarifying the scope of the ban on distributing free samples or coupons to generally include ecigarettes or components. 350)

349

Matt Richtel, A Bolder Effort by Big Tobacco on E-Cigarettes, N.Y. Times (June 17, 2017),
https://www.nytimes.com/2014/06/17/business/a-bolder-effort-by-big-tobacco-on-ecigarettes.html..
350

The Prohibition of Distributing Free Samples of Tobacco Products: Guidance for Industry,
FDA (Oct. 2017), https://www.fda.gov/media/119231/download.
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221.

Altria utilized its extensive distribution network, reaching 60,000 stores in a

month. 351 For instance, in Arizona, Altria’s distribution network allowed MarkTen to achieve a
48% e-cigarette market share in just seven weeks after launch, according to then-CEO Marty
Barrington’s statements on an earnings call. 352 Altria was clear in its intent to dominate the ecigarette market as it has the traditional cigarette one: “We are the market leader today and we will
continue to be,” Barrington told investors at the time of MarkTen’s launch. 353
222.

Altria also began acquiring small companies in the vaping industry, starting in 2014

with Green Smoke, Inc., whose e-cigarettes were also the “cigalike” style, and were sold in flavors
including “Vanilla Dreams” and “Smooth Chocolate.” 354 In 2016, Altria acquired a vape product
called Cync, from Vape Forward. 355 Cync is a small vapor device that uses prefilled pods, similar
to JUUL.
223.

In 2016, Altria launched a pod-based, “closed-tank” e-cigarette like JUUL, which

it branded as the MarkTen Elite: “a pod-based product with a premium, sleek battery design” and

351

Melissa Kress, MarkTen National Rollout Hits 60,000 Stores, Convenience Store News (July
22, 2014), https://csnews.com/markten-national-rollout-hits-60000-stores.

352

Mike Esterl, Altria To Launch MarkTen E-Cigarette Nationally, Wall St. J. (Feb. 19, 2014),
https://www.wsj.com/articles/altria-to-launch-markten-e-cigarette-nationally-1392832378.

353

Kress, supra note 351.

354

Esterl, supra note 352; Senator Richard J. Durbin et al., Gateway to Addiction? A Survey of
Popular Electronic Cigarette Manufacturers and Targeted Marketing to Youth at 12 (Apr. 14,
2014),
https://www.durbin.senate.gov/imo/media/doc/Report%20-%20ECigarettes%20with%20Cover.pdf.
355

Remarks by Jody Begley, 2017 Altria Investor Day (Nov. 2, 2017), http://media.corporateir.net/media_files/IROL/80/80855/2017InvestorDay/Remarks_and_Reconciliations.pdf.
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having the “convenience of prefilled, magnetic click pods.” 356 Altria told investors that the product
“offers a variety of flavorful liquids in a modern, discrete device format.” 357 After its nationwide
launch, former Altria CEO, Marty Barrington, boasted that the Elite’s pods held more than twice
as much liquid as JUUL’s. 358

224.

Altria quickly followed with another pod-based product, the Apex by MarkTen.

356

Angel Abcede, Altria Introducing Closed Vapor System, CSP Daily News (Feb. 27, 2018),
https://www.cspdailynews.com/tobacco/altria-introducing-closed-vapor-system#page=0.

357

Remarks by Jody Begley, supra note 355, at 18.

358

Altria Group, Inc., Current Report (Form 8-K), Ex. 99.2 (Feb. 21, 2018),
https://www.sec.gov/Archives/edgar/data/764180/000076418018000020/exhibit9922018cagnyremarks.htm (remarks by Barrington and other members of Altria’s senior management
team).
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225.

As mentioned above, Altria marketed its e-cigarettes in flavors that would appeal

to youth. For example, the MarkTen Elite came in “Strawberry Brulee,” “Glacier Mint,” “Apple
Cider,” and “Hazelnut Cream”: 359

226.

In February 2017, Altria told investors at the 2017 Consumer Analyst Group of

New York (CAGNY) Conference that over the past year, “Nu Mark LLC (Nu Mark) made

359

Examples New Ecigs Post Juul at 13, Campaign for Tobacco-Free Kids, (July 18, 2018),
https://www.tobaccofreekids.org/assets/images/content/2018_07_18_New_Ecigs_Post_Juul.pdf.
- 106 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 112 of 212

excellent progress toward its long-term aspiration of becoming a leader in e-vapor.” 360 In his
remarks, Willard said, “Nu Mark, our e-vapor company, had a very strong year. It made excellent
progress toward establishing MarkTen as a leading brand in the category, continued to improve its
supply chain, and took the necessary steps to comply with the deeming regulations.” 361 He noted,
however, that the estimated “total 2016 e-vapor consumer spending was roughly flat compared to
the prior year at approximately $2.5 billion.” 362
227.

Despite its best efforts, in 2017, Altria’s MarkTen e-cigarettes had a market share

of only 13.7%, well behind JLI’s growing market share of 40%. 363 Thus, despite its public
statements to the contrary, Altria knew that it would not achieve its goal of dominating the ecigarette market through its own products.
2.
228.

JLI and Altria Decide to Work Together to Expand JUUL’s
Reach and Cover-Up JLI’s Youth Marketing

As set forth above, Big Tobacco has long known the importance of targeting youth

and addicting them to nicotine. Profitable growth requires a pipeline of “replacement smokers” or
e-cigarette users. JLI was wildly successful at expanding that pipeline, hooking youth who had
never smoked cigarettes – and who, having grown up in the decades of anti-smoking efforts

360

Altria Group, Inc., Current Report (Form 8-K), Ex. 99.2 at 1 (Feb. 22, 2017),
https://www.sec.gov/Archives/edgar/data/764180/000076418017000020/exhibit9912017cagnyremarks.htm (remarks by Barrington and other members of Altria’s senior management
team).

361

Id. at 9.

362

Id. At 10.

363

Richard Craver, Vuse falls further behind Juul on e-cig sales, Winston-Salem J. (Dec. 14,
2017),
https://www.journalnow.com/business/vuse-falls-further-behind-juul-on-e-cigsales/article_ed14c6bc-5421-5806-9d32-bba0e8f86571.html.
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following the Master Settlement Agreement between Big Tobacco and the States, never intended
to try cigarettes. JLI’s customers largely represented the generation that Altria could not reach.
229.

While still popular overseas, cigarette use has been declining in the United States

in the last decade, 364 especially with youth. Altria estimates that the cigarette industry declined by
4% in 2017 and by 4.5% in 2018, and it predicted a continued 4% to 5% decline in the average
annual U.S. cigarette industry volume for 2019 through 2023. 365 Altria later adjusted the estimated
rate of decline to 4% to 6%, to reflect efforts to increase the legal age for cigarette smoking to
21. 366
230.

As described above, Altria marketed its own e-cigarettes, testing different versions

of the MarkTen e-cigarette and acquiring products such as the GreenSmoke cigalike and the Cync
vape device. But JLI, a younger, tech-oriented, social-media-savvy company, was far better at
targeting youth and making its product “cool” than Altria and other Big Tobacco companies were.
231.

Both JLI and Altria knew that JUUL’s meteoric growth came from young,

nonsmoking customers. As described below, Altria told the FDA as much in an October 25, 2018
letter responding to the FDA’s request for a plan of action to address youth e-cigarette use. Altria
informed the FDA that it was exiting the market for pod-based e-cigarettes, on the grounds that

364

Current Cigarette Smoking Among Adults In the United States, CDC,
https://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/index.htm (last
visited
February
10,
2020);
Youth
and
Tobacco
Use,
CDC,
https://www.cdc.gov/tobacco/data_statistics/fact_sheets/youth_data/tobacco_use/index.htm (last
visited February 10, 2020).

365

Altria’s Fourth-Quarter 2018 Earnings Conference Call, Altria (Jan. 31, 2019),
http://investor.altria.com/Cache/1001247877.PDF?O=PDF&T=&Y=&D=&FID=1001247877&ii
d=4087349.
366

Altria Shares Slide as Cigarette Sales Continue to Decline, Tobacco Bus. (July 31, 2019),
https://tobaccobusiness.com/altria-shares-slide-as-cigarette-sales-continue-to-decline/.
- 108 -

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these products contributed to the youth vaping epidemic. Altria even displayed this letter to the
public by posting it on its website, purporting to disclaim the very marketing and advertising tactics
JLI relied on. But by this time, Altria and JLI had already been collaborating for approximately
one year, and just seven weeks later, Altria would publicly announce its $12.8 billion investment
in JLI.
232.

Altria wanted JUUL’s profits and new customer base. JLI, facing a public outcry,

needed Altria’s help to navigate the storm that it created. The solution was a well-orchestrated
cover-up with JLI dramatically changing its tune to promote itself as a company focused on “harm
reduction,” purportedly providing existing adult smokers with a way to “Make the Switch” from
combustible cigarettes to JUUL.
233.

For that reason and others, Defendants JLI and Altria formed an association-in-fact

enterprise (“the Youth Marketing Cover-Up Enterprise”) to protect and expand the market for
JUUL through fraudulent means, including disseminating false statements denying JLI’s efforts to
target youth with nicotine products and characterizing JUUL as a cessation device that was never
intended for, or marketed to, youth. All the while, JLI and Altria understood that maintaining and
expanding JUUL’s market share meant maintaining and expanding a customer base predominantly
made of youth users.
234.

Altria was prepared for this deception. Altria, and the rest of Big Tobacco, has a

long history of targeting youth with nicotine products and then lying about it. In fact, this type of
cover-up of youth marketing formed one of the bases for the U.S. Department of Justice’s (“DOJ”)
1999 RICO lawsuit alleging that Big Tobacco engaged in a conspiracy to deceive the public about
the health effects of smoking and about their marketing to youth. In 2006, in a 1,683-page opinion,
Judge Kessler upheld the DOJ’s RICO claim against Altria and the other Big Tobacco companies.

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Judge Kessler found that Big Tobacco, including Altria and its subsidiary Philip Morris USA,
committed predicate racketeering acts by falsely claiming that “they do not market to youth, that
their marketing is only aimed at adult smokers, and that their marketing has no impact on youth
smoking.” Philip Morris, 449 F. Supp. 2d at 862. For example, Philip Morris 367 and its coconspirators caused to be transmitted a false claim that the cigarette industry “feel[s] very strongly
that cigarette smoking is an adult custom that one should not even consider until they’ve reached
the age of maturity,” which it claimed was age twenty-one. Id. at 678-79. Similarly, the court
found that Philip Morris’s published marketing policies, claiming that “[a]ll of our brand
advertising and promotions are intended for adults who choose to smoke” were false. Id. at 683.
The court also found that Altria made false statements in support of the Enterprise at a 2000 Philip
Morris shareholders meeting when the Altria Board of Directors denied that Philip Morris
marketed to youth:
[Philip Morris] has programs and policies in place, and are subject to legal
restrictions, that help ensure that marketing and advertising activities be directed
only to adults that choose to smoke . . . Philip Morris U.S.A. has a long-standing
commitment to direct its advertising only at adults who choose to smoke [and]
complies with an industry code and company policy that help ensure that its
marketing efforts are directed only to adults who choose to smoke.
Id. at 683. Judge Kessler concluded that “[t]hese public statements are false and misleading and
have been made to further the Enterprise’s overall objective of maximizing Defendants’ profits
from the sale of cigarettes.” Id. at 862. As Judge Kessler explained, these “Defendants’ efforts to
target youth [we]re based on a recognition that the youth market is critical to the growth of their
industry; their denials of those efforts [we]re based on the recognition that the public considers
pursuit of the youth market to be ethically unacceptable.” Id. at 863.

367

Judge Kessler found that Altria “effectively and actively control[ed] the activities of all of its
subsidiaries, including Defendant Philip Morris USA Inc.” Id. at 204 n.12.
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235.

The Youth Marketing Cover-Up Enterprise’s attempted cover-up of JLI’s youth

marketing is more of the same. As part of the fraudulent Enterprise, JLI and Altria made false
statements to the public and to regulators about actions they were purportedly taking to address
rampant youth vaping, including removing certain JUULpod flavors from the market while
continuing to promote Mint JUULpods with the knowledge that Mint was a preferred flavor with
youth, with the intent that parents, policymakers, and regulators would rely on such false
statements in a way that would allow JLI to keep selling JUUL products.
236.

The Youth Marketing Cover-Up Enterprise is an ongoing and continuing

organization with a common purpose of covering up JLI’s youth focus and fraudulently
maintaining and expanding JUUL’s massive and ill-gotten market share.
3.
237.

Following JLI’s Journey Closely: Formation of the Youth
Marketing Cover-Up Enterprise

Defendants Altria and JLI formed the Youth Marketing Cover-Up Enterprise by at

least late 2017 or early 2018.
238.

From JLI’s beginnings, Altria, a pioneer in addicting youth to nicotine, “followed

Juul’s journey rather closely.” 368
239.

According to Altria’s current CEO, Howard A. Willard III, Altria first contacted

JLI about a commercial relationship in early 2017, with “confidential discussions” beginning in

368

Altria Group, Inc., Current Report (Form 8-K), Ex. 99.1 at 4 (Feb. 20, 2019),
https://www.sec.gov/Archives/edgar/data/764180/000076418019000018/exhibit9912019cagnyremarks.htm (Remarks by Willard and other members Altria’s senior management
team).
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the spring of 2017. 369 JLI and Altria’s “confidential discussions” occurred “over a period of
approximately 18 months.” 370
240.

In November 2017, Altria announced a minority investment in Avail Vapor, LLC

(“Avail”), one of the largest vape store chains in the U.S., which also produces and sells its own
branded e-liquids for refillable “open-tank” devices. 371 Altria’s comments to investors highlighted
that the investment allowed Altria access to Avail’s “extensive data around adult vaper purchasing
patterns,” and “full-service analytical science laboratory,” located in Altria’s hometown of
Richmond, Virginia. 372
241.

On information and belief, the “confidential discussions” between JLI and Altria

intensified in late 2017 and early 2018, and the companies began to lay the groundwork for Altria
to support the Youth Marketing Cover-Up Enterprise. Altria has acknowledged that it was
monitoring JUUL sales data “in late 2017 and early 2018.” 373 At that time, JUUL was dominating
the e-cigarette market. By November 2017, JLI had sold one million units of its blockbuster

369

Willard Letter to Senator Durbin, supra note 20, at 3.

370

Id.

371

Rich Duprey, Is Altria Trying to Corner the E-Cig Market?, The Motley Fool (Jan. 7, 2018),
https://www.fool.com/investing/2018/01/07/is-altria-trying-to-corner-the-e-cig-market.aspx;
Lauren Thomas, Altria shares plunge after FDA releases road map to curb tobacco-related deaths,
CNBC (July 28, 2017), https://www.cnbc.com/2017/07/28/altria-shares-fall-after-fda-releasesroadmap-to-curb-tobacco-related-deaths-.html.
372

Altria Group, Inc., Current Report (Form 8-K), Ex. 99.1 at 19 (Nov. 2, 2017),
https://www.sec.gov/Archives/edgar/data/764180/000076418017000131/exhibit9912017investorday.htm.

373

Willard Letter to Senator Durbin, supra note 20, at 6 (emphasis added).
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product, with a 621% growth in year-to-year sales and capturing 32% of e-cigarette sales tracked
by Nielsen. 374
242.

Altria recognized that JLI had, against the backdrop of steadily declining cigarette

sales, created the perfect product to addict a new generation to nicotine. But to keep the product
from disappearing off the shelves as quickly as it had arrived, JLI would need a more sophisticated
approach to marketing and to navigating the storm of regulatory and congressional scrutiny on the
horizon. In short, JLI needed Altria’s experience, and Altria needed access to JLI’s best-selling ecigarette and its youth market.
243.

While following JLI’s journey closely and engaging in “confidential discussions,”

Altria had tested variations on the MarkTen that shared features of JUUL, such as the MarkTen
Bold, with a nicotine salt formulation and 4% nicotine by weight, and the MarkTen Elite, “a small
pod-based product that offers a variety of flavorful liquids in a modern, discrete device format.”375
But as noted above, sales of Altria’s own e-cigarettes trailed behind both JUUL and British
American Tobacco’s Vuse.
244.

Altria wanted JLI’s market dominance and young customer base. JLI, in the

crosshairs of a public and regulatory outcry, needed Altria’s experience placating the public and
its influence in Washington. Together, by lying about JLI’s efforts to addict youth to nicotine and
fraudulently misrepresenting the nature of JUUL, JLI and Altria could protect, maintain, and
expand JLI’s massive and ill-gotten youth market share.

374

Melia Robinson, How a startup behind the ‘iPhone of vaporizers’ reinvented the e-cigarette
and generated $224 million in sales in a year, Bus. Insider (Nov. 21, 2017),
https://www.businessinsider.com/juul-e-cigarette-one-million-units-sold-2017-11.

375

Remarks by Jody Begley, supra note 355.
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4.
245.

Late 2017-August 2018: Early Coordination of Altria with the
Youth Marketing Cover-Up Enterprise

As the sales of JUUL continued to mushroom, it was readily apparent, and widely

reported, that the rapid growth in sales was due to the surging popularity of “juuling” among
teenagers. By March 2018, multiple national news outlets, including National Public Radio, USA
Today, and Business Insider reported youth were using JUUL with alarming frequency, posting
about “juuling” in school restrooms, on social media, and bragging about being able to use the
device in the classroom due to JUUL’s discreet design.
246.

One of the priorities for the Youth Marketing Cover-Up Enterprise was therefore

to control the messaging and narrative around youth vaping. Faced with an urgent, growing public
health crisis, national media attention, and the ire of the public, the FDA and members of Congress,
the Youth Marketing Cover-Up Enterprise realized that given the increasing public and regulatory
scrutiny of JLI’s marketing tactics, a dis-information campaign was urgently needed to protect its
bottom line, and it turned to a sophisticated and savvy third party for assistance. By at least April
2018, both JLI and Altria were working with the global public strategy firm Mercury LLC
(“Mercury”), which is part of Omnicom Group, Inc. (“Omnicom”), one of the “Big Four”
advertising holding companies dominating marketing and communications worldwide since the
1990s, second only to WPP plc. 376
247.

Mercury filed a lobbying registration on behalf of Defendant Altria Client Services

LLC, effective April 1, 2018, identifying “tobacco product regulations” as the specific issue; two

376

See HISTORY’s Moments in Media: The Birth of the Big 4 Holding Companies, MediaVillage
(Jan. 13, 2020), https://www.mediavillage.com/article/historys-moments-in-media-the-birth-ofthe-big-4-holding-companies/; Nathalie Tadena & Joshua Jamerson, Omnicom Posts Strong Sales
Growth Advertising Giant’s Second-Quarter Earnings Rise 12%, Wall S. J. (July 22, 2014),
https://www.wsj.com/articles/omnicom-sees-earnings-revenue-growth-top-expectations1406028567.
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of Mercury’s managing directors, Stephen Aaron and Al Simpson, handle the Altria account.377
Aaron, who was the federal liaison for the National Rifle Association for nearly a decade, describes
his role as “ help[ing] clients nuance complex issues to deliver effective messages amid intense
national debates to move the public in support of client agendas.” 378 Big Tobacco spin tactics are
familiar territory for Mercury: another Mercury client is the Foundation for a Smoke-Free World
(“Foundation”), an organization established and solely funded by Philip Morris International that
claims to be an independent scientific body. 379 The World Health Organization strongly rejected
partnering with the Foundation and urged others to do the same, 380 while other global health
organizations pointed out that “[w]hile PMI and its grantee claim a commitment to reducing harm;
reports show that PMIs cigarettes continue to be heavily marketed in ways that attract children and
undermine public health policy.” 381 Working with JLI and Altria, Mercury has promoted a similar
“harm reduction” message as a central feature of the Youth Marketing Cover-Up Enterprise’s disinformation campaign.

377

Kevin McCauley, Altria Taps Mercury For Tobacco Regulation Work (June 4, 2018),
https://www.odwyerpr.com/story/public/10754/2018-06-04/altria-taps-mercury-for-tobaccoregulation-work.html.
378

Stephen
Aaron,
Managing
Director,
Mercury
http://www.mercuryllc.com/experts/stephen-aaron/ (last visited Mar. 28, 2020).

LLC,

379

Tess Legg et al., The Philip Morris-funded Foundation for a Smoke-Free World: tax return
sheds light on funding activities, Vol. 393 Lancet No. 10190 at 2469-2562 (June 22, 2019),
https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(19)31347-9/fulltext.
380

WHO Statement on Philip Morris funded Foundation for a Smoke-Free World, WHO (Sept.
28, 2017), https://www.who.int/news-room/detail/28-09-2017-who-statement-on-philip-morrisfunded-foundation-for-a-smoke-free-world.
381

Open Letter to Urge WHO Executive Board to Reject Foundation for a Smoke Free World
(FSFW), GGTC (Jan. 28, 2019), https://ggtc.world/2019/01/28/an-open-letter-to-urge-whoexecutive-board-to-reject-fsfw/.
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248.

382

383

382

INREJUUL_00262168; see also Kate Zernike, ‘I Can’t Stop’: Schools Struggle With Vaping
Explosion, N.Y. Times (Apr. 2, 2018), https://www.nytimes.com/2018/04/02/health/vapingecigarettes-addiction-teen.html.
383

INREJUUL_00262168.
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249.

384

250.

On April 18, 2018, a group of eleven United States Senators sent JLI a letter

declaring that JUUL and JUULpods “are undermining our nation’s efforts to reduce tobacco use

384

INREJUUL_00262226-227.
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among youth and putting an entire new generation of children at risk of nicotine addiction and
other health consequences.” 385
251.

Less than a week later, on April 23, 2018, then-FDA Commissioner Gottlieb

announced a crackdown on retailers to limit youth access to e-cigarettes and enforcement actions
against JLI in particular. 386 On April 24, 2018, the FDA sent JLI a request for documents “relating
to marketing practices and research on marketing, effects of product design, public health impact,
and adverse experiences and complaints related to JUUL.” 387 The FDA stated clearly that it was
requesting these documents because of evidence of widespread youth use, including media
reporting about middle school and high school student use of JUUL on school property and social
media evidence of youth use. “Widespread reports of youth use of JUUL products are of great
public health concern,” the FDA warned. 388
252.

JLI, with the help of its “campaign manager” Mercury and Altria guiding its

campaign, was ready with a response. The next day, on April 25, 2018, JLI issued a press release,
pledging its support of efforts to raise the minimum age to purchase tobacco products to twentyone and “an initial investment of $30 million over the next three years dedicated to independent
research, youth and parent education, and community engagement efforts.” 389

385

Letter from Senator Richard J. Durbin et al. to Kevin Burns, JUUL Labs, Inc. (Apr. 18, 2018),
https://www.durbin.senate.gov/imo/media/doc/JUUL%20Letter%20-%20S%20IGNED.pdf.

386

Gottlieb, supra note 315.

387

Letter from Matthew Holman, M.D., FDA to Ziad Rouag, JUUL Labs, Inc. (Apr. 24, 2018),
https://www.fda.gov/media/112339/download.

388

Id.

389

JUUL Labs, Inc., JUUL Labs Announces Comprehensive Strategy to Combat Underage Use,
MarketWatch (Apr. 25, 2018), https://www.marketwatch.com/press-release/juul-labs-announcescomprehensive-strategy-to-combat-underage-use-2018-04-25.
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253.

As part of its “independent research,” in 2018, JLI, with the approval and

knowledge of JLI’s officers and directors, engaged McKinsey & Company to survey teenagers
regarding their e-cigarette flavor preferences, among other things, and engaged DB Research to
conduct a focus group with teenagers in Maryland. As discussed above, this research confirmed
the popularity of Mint JUULpods with teens. Similarly, the Altria Defendants knew from decades
of experience selling a variety of tobacco products – and the development of its “graduation
theory” – that both mint and menthol were popular with youth, as discussed above. Despite this
knowledge, JLI and Altria kept Mint and Menthol JUULpods on the shelves even when ostensibly
removing youth-friendly flavors from retail stores in November 2018, as discussed further below.
254.

JLI’s officers and
directors,

255.

Instead, with that knowledge and with no genuine interest in youth prevention, and

as detailed below, JLI, JLI’s officers and directors, and Altria committed to work to preserve Mint
as a flavor for as long as possible. Indeed, to further this goal, Pritzker and Valani poured additional
money into JLI a mere two months later as part of a $600 million funding round, allowing the
Youth Marketing Cover-Up Enterprise to continue the work of maintaining and expanding JUUL’s
youth market-share while denying that JLI marketed to youth in order to avoid public outcry. 390

390

JUUL Raises $650M Of Its $1.25B Mega-Round, crunchbase (July 10, 2018),
https://news.crunchbase.com/news/juul-raises-650m-of-its-1-25b-mega-round/.
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256.

391

392

257.

393

394

Put another way, JUUL’s continued market growth

required Altria and JLI to convince the public and regulators that contrary to the facts, JLI had
nothing to do with youth vaping.
258.

On August 2, 2018, JLI met with the FDA to discuss a proposed youth-behavioral

study on the prevalence of use, perceptions of use, and intentions to use JUUL and other tobacco
products among adolescents aged thirteen and seventeen (the “Youth Prevalence study”). 395 As
with other steps taken by the Youth Marketing Cover-Up Enterprise during this time, the Youth

391

INREJUUL_00258827-828.

392

Id.; see also Start-up e-cigarette brand aims to “improve smokers’ lives”, 362 BMJ k2930
(2018), https://www.bmj.com/content/362/bmj.k2930.

393

INREJUUL_00258827-828.

394

Id.

395

Letter from Joanna Engelke, JUUL Labs, Inc., to David Portnoy, Ph.D., M.P.H., FDA Center
for Tobacco Products (Nov. 5, 2018).
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Prevalence study was a distraction and delay tactic, meant to give the public and regulators the
impression that JLI was actively addressing the youth vaping epidemic. In fact, as discussed further
below, the Youth Prevalence study was a sham, and JLI would provide “results” to the FDA in
November 2018 that were directly contradicted by its own internal data.
259.

397

The brand campaign that Omnicom ultimately created for the

Youth Marketing Cover-Up Enterprise was the “Make the Switch” campaign, which revolved
around television ads featuring former smokers aged thirty-seven to fifty-four, each discussing
“how JUUL helped them quit smoking.” 398
260.

A striking departure from JLI’s earlier advertising campaigns and launch parties,

the “Make the Switch” campaign was the backdrop for the fraudulent statements disseminated by
the Youth Marketing Cover-Up Enterprise in order to protect, maintain, and expand the
tremendous market share gained by hooking kids on nicotine: that JUUL was only ever intended
as an alternative to smoking for existing adult smokers and JLI’s marketing was never aimed at
youth. According to JLI’s Vice President of Marketing, the “Make the Switch” campaign was “an

396

See INREJUUL_00066530-539

397

INREJUUL_00074841-844.

398

Angelica LaVito, Juul combats criticism with new TV ad campaign featuring adult smokers
who
quit
after
switching
to
e-cigarettes,
CNBC
(Jan.
8,
2019),
https://www.cnbc.com/2019/01/07/juul-highlights-smokers-switching-to-e-cigarettes-in-adcampaign.html.
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honest, straight down the middle of the fairway, very clear communication about what we’re trying
to do as a company.” 399
261.

These statements, however, are belied by evidence of JLI’s early marketing

campaigns and statements such as the admission by one of JLI’s engineers that “[w]e don’t think
a lot about addiction here because we’re not trying to design a cessation product at all . . . anything
about health is not on our mind.” 400 As described elsewhere herein, JLI and its officers and
directors directly targeted underage nonsmokers. JLI and the Altria Defendants were well aware
that such users made up a significant percentage of JLI’s customer base in 2018 – in fact, they
counted on this customer base to grow and preserve JUUL’s market share – and that the statements
they disseminated regarding “Make the Switch” from smoking being JLI’s mission from the start
were fraudulent.
262.

The fraudulent nature of the “Make the Switch” campaign can literally be seen by

comparing the campaign’s advertisements to JLI’s initial advertising, as demonstrated below. The
fact that these advertisements are for the same product almost defies belief.

399

Id.

400

Nitasha Tiku, Startup Behind the Lambo of Vaporizers Just Launched an Intelligent eCigarette, The Verge (Apr. 21, 2015), https://www.theverge.com/2015/4/21/8458629/pax-labs-ecigarette-juul.
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263.

Indeed, JLI and Altria knew that the JUUL device was the opposite of a “tool[] to

reduce or eliminate” nicotine consumption, given JUULpods’ high nicotine content, as well as the
delivery of nicotine to the user. According to the National Institutes of Health, the “amount and
speed of nicotine delivery . . . plays a critical role in the potential for abuse of tobacco products.” 401
JLI designed its product to provide the largest amount of nicotine in the fastest way possible. As

401

CDC et al., Nicotine Addiction: Past and Present, How Tobacco Smoke Causes Disease, The
Biology and Behavioral Basis for Smoking-Attributable Disease: A Report of the Surgeon General
(2010), https://www.ncbi.nlm.nih.gov/books/NBK53018/#ch4.s92.
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JLI itself advertises, JUUL delivers nicotine to the bloodstream as much as 2.7 times faster than
other e-cigarettes. And, because of JLI’s unique formula of nicotine salts and organic acids, as
described above, vaping a JUUL delivers a vapor that is extremely potent in terms of nicotine
content but also considerably smoother than cigarettes or even other e-cigarettes. At some point
during the coordination between JLI and Altria, but no later than the due-diligence period for
Altria’s investment in JLI, JLI (through its employees) provided Altria with a copy of
, described above. 402 Therefore, both JLI and Altria also knew
. If “harm reduction”
and switching from cigarettes were the true goals, there would be no need for the highly potent 5%
nicotine formulation.
264.

Far from being a product used by adults to quit smoking, JUUL has been an

initiation product for nonsmokers, particularly and predominantly youth. Researchers found that
in 2018, only 7.9% of American adults had ever used USB-shaped vape devices, like JUUL, and
only 2% of adults currently used them. 403 And as mentioned above, youth were 16 times more
likely to use the USB-shaped JUUL than adults. 404
265.

Thus, JLI and Altria committed predicate acts of wire fraud when they caused the

“Make the Switch” campaign to air on television with the fraudulent intent of deceiving the public,
Congress, and regulators into believing that JLI is and had been focused solely on targeting adult
smokers.

402

INREJUUL_00244200.

403

Kristy L Marynak et al., Use and reasons for use of electronic vapour products shaped like
USB flash drivers among a national sample of adults, 28 Tobacco Control 685 (Nov. 2019),
https://tobaccocontrol.bmj.com/content/28/6/685.
404

Vallone et al., supra note 224.
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266.

Another key aspect of the Youth Marketing Cover-Up Enterprise’s early

coordination was Altria’s acquisition of shelf space that it would later provide to JLI in order to
sustain the exponential growth of underage users of JUUL products. By acquiring shelf space in
furtherance of the Youth Marketing Cover-Up Enterprise, Altria took steps to ensure that JUUL
products would receive prominent placement alongside a top-rated brand of combustible
cigarettes, namely, Altria’s Marlboro brand—the best-selling cigarette overall and by far the most
popular brand among youth, as described above. 405
267.

In 2018, Altria spent approximately $100 million to secure shelf space at retailers

for e-vapor products – purportedly for the MarkTen e-cigarette that it stopped manufacturing in
2018, although sales data suggests this was not the true reason for purchasing the shelf space:
Altria’s short-lived 2018 launch of its pod-based MarkTen Elite put that product in only 25,000
stores, 406 whereas its 2014 launch of the original MarkTen saw the MarkTen reaching 60,000
stores in the first month in the western United States alone. 407 Altria’s payments for shelf space
were a mixture of “cash and display fixtures in exchange for a commitment that its e-cigarettes
would occupy prime shelf space for at least two years.” 408 But Altria had no need for two years
of prominent shelf space while it was engaged in discussions with JLI, was actively scaling back
sales of the original MarkTen, and had no true plans for a wide launch of the MarkTen Elite.

405

See 2012 Surgeon General Report, supra note 241, at 164; see also Perks, supra note 93.

406

Sheila Kaplan, Altria to Stop Selling Some E-Cigarette Brands That Appeal to Youths, N.Y.
Times
(Oct.
25,
2018),
https://www.nytimes.com/2018/10/25/health/altria-vapingecigarettes.html.
407

Kress, supra at 351.

408

Jennifer Maloney & John McKinnon, Altria-Juul Deal Is Stuck in Antitrust Review, Wall St.
J. (Jan. 17, 2020), https://www.wsj.com/articles/altria-juul-deal-is-stuck-in-antitrust-review11579257002.
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Instead, when Altria later announced its $12.8 billion investment in JLI, part of the agreement was
that Altria would provide JLI with this premium shelf space. 409
268.

Altria’s purchase of shelf space in 2018 indicates that Altria and JLI were

coordinating on the activities of the Youth Marketing Cover-Up Enterprise even before Altria
announced its investment in JLI and demonstrates Altria’s commitment to maintaining and
expanding JUUL’s market, including its youth market. The Youth Marketing Cover-Up Enterprise
thus ensured that JUUL products are placed where kids are most likely to see them and buy them:
in retail establishments, next to the most popular cigarette brand for underage users, Marlboro. 410
5.
269.

September - December 2018: Further Coordination of the
Youth Marketing Cover-Up Enterprise

Throughout 2018, as public and government scrutiny of JLI’s practices intensified,

JUUL’s market share continued to climb. In the fall of 2018, with pressure mounting, JLI and
Altria stepped up the fraudulent practices of the Enterprise in response. Altria and JLI’s responses
to such scrutiny reflect a coordinated, successful effort to mislead the public, including Plaintiff,
and regulators. In reliance on JLI and Altria’s fraudulent statements and actions, JUUL remained
on the market without an overwhelming public outcry and enjoyed massive commercial success
in Plaintiff’s community.
270.

On September 25, 2018, then-FDA Commissioner Gottlieb called youth vaping an

“epidemic” and sent letters to JLI and Altria demanding each company’s plan to reduce youth use,

409

Id.

410

Laura Bach, Where Do Youth Get Their E-Cigarettes?, Campaign for Tobacco Free Kids (Dec.
3, 2019), https://www.tobaccofreekids.org/assets/factsheets/0403.pdf.
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requesting a “detailed plan, including specific timeframes, to address and mitigate widespread use
by minors.” 411
271.

On October 2, 2018, the FDA raided JLI’s headquarters and seized more than one

thousand documents related to JLI’s sales and marketing practices. 412
272.

On October 16, 2018, JLI presented its “Action Plan” to the FDA in response to

then-FDA Commissioner Gottlieb’s September 25, 2018 letter. JLI professed to “share a common
goal – preventing youth from initiating on nicotine.” 413 As part of this plan, JLI stated that it would
be “stopping flavored JUUL pod sales to all 90,000+ retail stores.” 414 As discussed below, JLI
also presented this Action Plan to the public a month later.
273.

On October 25, 2018, Altria submitted a letter in response to the FDA’s call to

combat the youth vaping epidemic, which it published to the public on its website. 415 Altria
claimed to have “serious concerns” about youth access to e-vapor products and admitted that the
use of e-cigarettes by youth had risen to “epidemic levels.” 416 Altria agreed to remove its pod-

411

Letters to Manufacturers Regarding Plans to Address Youth Access and Use, FDA (Sept. 12,
2018),
https://www.fda.gov/tobacco-products/rules-regulations-and-guidance/ctp-lettersindustry#youth-access (Letters were also sent to Reynolds American, Fontem Ventures, and JTI).

412

Laurie McGinley, FDA Seizes Juul E-Cigarette Documents in Surprise Inspection of
Headquarters,
Wash.
Post
(Oct.
2,
2018),
https://www.washingtonpost.com/health/2018/10/02/fda-seizes-juul-ecigarettedocumentssurprise-inspection-headquarters/.
413

FDA Presentation at 2, JUUL Labs, Inc. (Oct. 16, 2018); see also INREJUUL_00182989.

414

Id.

415

Letter from Howard A. Willard III, Altria Group, Inc., to Scott Gottlieb, M.D., FDA
Commissioner (Oct. 25, 2018), https://www.altria.com/-/media/Project/Altria/Altria/aboutaltria/federal-regulation-of-tobacco/regulatory-filings/documents/Altria-Response-to-FDA-Evapor-October-25-2018.pdf.
416

Id. at 1.
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based e-cigarettes from the market and stop selling any flavored traditional e-cigarettes other than
tobacco, menthol, and mint. 417 It acknowledged that “[b]ased on the publicly available information
from FDA and others, we believe pod-based products significantly contribute to the rise in youth
use of e-vapor products.” 418 “Although we do not believe we have a current issue with youth
access to or use of our pod-based products, we do not want to risk contributing to the issue.”419
Altria’s letter went on to disclaim a number of practices that it associated with marketing to youth
– strategies that were key components of JLI’s marketing strategy. Altria specifically identified
the use of flavors that go beyond traditional tobacco flavors, digitally advertising on websites with
a large percentage of youth visitors, using social media to promote the brand, allowing online
purchases and promotional sign-ups without age verification, advertising e-cigarettes on
billboards, advertising with models who appear to be under twenty-five-years old, distributing
branded merchandise, and paying celebrities or other third parties to market or use a particular
brand’s e-cigarette. Altria also claimed to support “banning vaping in schools” in order to reduce
“social access.” 420 Altria ended the letter by committing to “reverse the current use trend among
youth.” 421
274.

On a public earnings conference call that same day, Altria repeated many of these

statements, describing its decision to remove its pod-based products from the market as one
intended to address the dramatic increase in youth e-cigarette use – while knowing that it was only

417

Id. at 2.

418

Id. at 2.

419

Id.

420

Id. at 3.

421

Id. at 5.
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weeks away from publicly announcing a $12.8 billion investment in JLI, the company that ignited
the youth vaping crisis:
In September, the FDA asked several companies, including Altria, to provide plans
to address underage use of e-vapor products. We welcomed FDA’s action and we
agreed that the reported rise in underage use of e-vapor products is alarming and
immediate action should be taken. 422
275.

Throughout the call, Willard repeatedly emphasized that Altria’s withdrawal of its

own pod-based products was intended to address youth use: “[W]e really feel like in light of this
dramatic increase in youth usage, withdrawing those products until the PMTA is filed is one path
forward.” 423 He later said, “And frankly, the actions we took were the actions that we thought we
could take that would have the biggest impact on addressing the increased use of e-vapor products
by youth . . . we wanted to make a significant contribution to addressing the issue.” 424
276.

Willard stated that Altria had concluded that “pod-based products and flavored

products” were behind the increase in youth use of e-cigarettes:
[A]s we looked at the data that is available in some of the remarks from the FDA,
I think we concluded that the driver of the recent increase we think is pod-based
products and flavored products and so we thought that the two actions that we took
addressed the drivers of the increased youth usage here in the short run. 425
277.

Without saying anything about the massive investment it was about to make in JLI’s

pod-based products, Willard declared that Altria was removing its pod-based products from the

422

Altria Group Inc. (MO) Q3 2018 Earnings Conference Call Transcript, The Motley Fool (Sept.
30, 2018), https://www.fool.com/earnings/call-transcripts/2018/10/25/altria-group-inc-mo-q32018-earnings-conference-ca.aspx (emphasis added) (Willard’s comments).
423

Id.

424

Id.

425

Id. (emphasis added).
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market to address youth use, and it would discontinue its cig-a-like flavors other than mint,
menthol, and tobacco:
First, Nu Mark will remove from the market MarkTen Elite and Apex by MarkTen
pod-based products until these products receive a market order from the FDA or
the youth issue is otherwise addressed. Second, for our remaining MarkTen and
Green Smoke cig-a-like products, Nu Mark will sell only tobacco, menthol and
mint varieties. Nu Mark will discontinue the sale of all other flavor variants of our
cig-a-like products until these products receive a market order from the FDA or the
youth issue is otherwise addressed. Although we don’t believe we have a current
issue with youth access or use of our e-vapor products, we are taking this action,
because we don’t want to risk contributing to the issue. 426
278.

Although Altria grouped mint and menthol flavors in the same category as tobacco

flavor, it knew from decades of selling tobacco products with these flavors that mint and menthol
are popular with youth, no matter what tobacco product, as discussed above.
279.

On November 5, 2018, JLI transmitted the results of its Youth Prevalence study to

the FDA. 427 Remarkably, JLI’s study concluded that only 1.5% of youth had ever used JUUL,
and that only 0.8% of youth had used JUUL in the last thirty days. 428 And in contrast to the survey
and focus group conducted by McKinsey and DB Research, respectively, JLI’s Youth Prevalence
study suggested that Mango was four times as popular as Mint. Specifically, the Youth Prevalence
study found that 47% of youth who reported vaping using JUUL in the last thirty days used Mango
most often, with only about 12% reporting the same for Mint. 429

426

Id. (emphasis added).

427

Engelke Letter to David Portnoy, supra note 395.

428

Id.

429

Id. at 3.
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280.

On November 13, 2018, JLI presented its “Action Plan” to the public, largely

identical to what JLI had presented to the FDA in October 2018. 430 JLI announced its intent to
stop selling certain flavors in brick-and-mortar stores, restrict purchases of those flavors on the
JUUL website to adults age twenty-one and over, and shut down its social media accounts. 431 The
flavors that would be available only through JUUL.com were “Mango, Fruit, Creme, and
Cucumber.” 432 Through both JLI’s October 2018 presentation to the FDA and JLI’s Action Plan
shared with the public in November 2018, the Youth Marketing Cover-Up Enterprise fraudulently
characterized Mint as a “tobacco and menthol-based product,” as opposed to a “flavored product,”
suggesting that it was a product for adult smokers. JLI included a version of the below image in
in both the public-facing Action Plan and JLI’s presentation to the FDA. 433

430

JUUL Labs Action Plan (“JLI November Action Plan”), JUUL Labs, Inc. (Nov. 13, 2018),
https://newsroom.juul.com/juul-labs-action-plan/ (JLI did not include in its November Action Plan
to the public a proposal for Bluetooth or WiFi equipped devices that was included in JLI’s October
2018 Action Plan to the FDA.); see also

431

JLI November Action Plan, supra note 430.

432

Id.

433

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281.

But JLI and Altria knew that non-smoking youth liked Mint as much as any flavor.

As JLI’s internal documents confirm, Mint’s success was
434

435

was

JLI knew there

and
436

As alleged in a whistleblower

complaint, JLI’s then-CEO told his employees that “You need to have an IQ of 5 to know that
when customers don’t find mango they buy mint.” 437

434

INREJUUL_00265069.

435

INREJUUL_00079307-409, at 395.

436

Id.

437

Angelica LaVito, Former Juul executive sues over retaliation, claims company knowingly sold
tainted nicotine pods, CNBC (Oct. 30, 2019), https://www.cnbc.com/2019/10/30/former-juulexecutive-sues-over-retaliation-claims-company-knowingly-sold-tainted-pods.html;
Sheila
Kaplan & Jan Hoffman, Juul Knowingly Sold Tainted Nicotine Pods, Former Executive Say, N.Y.
Times
(Nov.
20,
2019),
https://www.nytimes.com/2019/10/30/health/juul-podscontaminated.html (emphasis added).
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282.

As predicted, JLI’s sale of Mint pods rose from one third of its sales in September

2018 to approximately two thirds in February 2019. JLI’s 2019 revenues were estimated to be
between $2.36 billion and $3.4 billion, and Mint pods accounted for approximately 75% of JLI’s
total 2019 sales.
283.

Seeing that the Youth Marketing and Cover-Up’s scheme was successful, on

December 7, 2018, Altria discontinued the production and distribution of all MarkTen and Green
Smoke vapor products. “We remain committed to being the leader in providing adult smokers
innovative alternative products that reduce risk, including e-vapor,” Willard explained in a
statement to the press. 438 “We do not see a path to leadership with these particular products and
believe that now is the time to refocus our resources.” 439
6.
284.

Publicly Announcing the Ties Between the Youth Marketing
Cover-Up Enterprise Defendants

On December 20, 2018, Altria and JLI publicly announced the collaboration that

had been taking place, on information and belief, since late 2017. In the largest equity investment
in United States history, Altria invested $12.8 billion in JLI. 440 The announcement came less than
two months after Altria told the FDA that it “believe[s] that pod-based products significantly

438

Altria Shifts Gears on Innovative Products Platform, Convenience Stores News (Dec. 7, 2018),
https://csnews.com/altria-shifts-gears-innovative-products-platform.

439

Id.

440

Altria Makes $12.8 Billion Minority Investment in JUUL to Accelerate Harm Reduction and
Drive Growth (“Altria Minority Investment”), Bus. Wire (Dec. 20, 2018),
https://www.businesswire.com/news/home/20181220005318/en/Altria-12.8-Billion-MinorityInvestment-JUUL-Accelerate.
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contribute to the rise in youth use of e-vapor products” and that it accordingly would be removing
its pod-based products from the market. 441
285.

In making this decision to place profits over public health, Altria considered that

the e-cigarette industry would see significant year-over-year growth in the near term, and that
“JUUL continu[es] to be a growth driver for the e-vapor category.” 442 And although Altria claimed
its investment had an altruistic motive – ”we believed the transaction would give Altria an
unprecedented opportunity to share our experience in underage tobacco prevention with JUUL to
help address youth usage” – in reality, Altria has provided no underage / youth prevention services
to JLI. 443
286.

Altria admitted that minors were using JUUL products and that “underage use of e-

cigarette product is a problem.” 444 But Altria would not have made such a sizable investment if it
did not intend to grow JUUL’s already enormous market even more. In fact, Altria said as much
when announcing its infusion of cash, explaining that its investment in JLI “enhances future
growth prospects” and committing to applying “its logistics and distribution experience to help
JUUL expand its reach and efficiency.” 445 According to Willard, Altria was “excited to support
JUUL’s highly-talented team and offer [Altria’s] best-in-class services to build on their
tremendous success.” 446

441

Willard Letter to Gottlieb, supra note 415.

442

Willard Letter to Senator Durbin, supra note 20, at 10-11.

443

Id. at 5.

444

Id.

445

Altria Minority Investment, supra note 440.

446

Id.
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287.

This arrangement was profitable for both companies, as well as for Defendants

Monsees, Bowen, Prtizker, Huh, and Valani. JLI’s employees received $2 billion in bonuses,
which, split among the JLI’s 1,500 employees, was approximately $1.3 million per employee; 447
Altria received millions of loyal youth customers; and Defendants Monsees, Bowen, Pritzker, Huh,
and Valani received untold sums of money and saw the value of their shares in JLI skyrocket,
allowing them to cash out via a special dividend and bonus, as well as through stock sales that
were not available to other JLI minority shareholders. 448 In deciding to make a huge investment
in JLI, Altria took into account that the e-cigarette industry would see significant year-over-year
growth in the near term, and that “JUUL continu[es] to be a growth driver for the e-vapor
category.” 449
288.

Since the deal was inked in December 2018, Altria’s actions have clearly helped

JUUL maintain, if not expand, its market share – a market share that, based on Altria’s own
October 25, 2018 letter to the FDA, it believes was gained by employing marketing and advertising
practices that contributed to youth vaping. Altria’s Second Quarter 2019 Earnings Call reported
that JUUL continued to grow in the first half of 2019, from a 33% category share in 2018 to 48%

447

Olivia Zaleski, Juul Employees to Get $2 Billion Bonus in Altria Deal, Bloomberg (Dec. 20,
2018),
https://www.bloomberg.com/news/articles/2018-12-20/juul-employees-said-to-get-2billion-bonus-in-altria-deal.
448

Tiffany Kary, JUUL Founders Sued for Self-Dealing Over Altria’s $12.8 Billion, Bloomberg
(Jan. 13, 2020), https://www.bloomberg.com/news/articles/2020-01-13/juul-founders-sued-forself-dealing-over-altria-s-12-8-billion.
449

Willard Letter to Senator Durbin, supra note 20.
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by the second quarter 2019. JLI’s expected revenue for 2019 was $3.4 billion, nearly triple what
it was in 2018. 450
289.

On a December 20, 2018 call, Altria emphasized the profit opportunity from its

investment, while simultaneously characterizing it as an opportunity for harm reduction and
reducing youth e-cigarette use. Willard made the following statements:
It’s important to both Juul and us that they continue to operate with the
entrepreneurial passion that has made them so successful;
Let’s imagine the combination of Juul’s leading market position, brand equity and
deep innovation pipeline with our strong retail presence, our ability to connect
directly with adult smokers on our company’s databases while avoiding unintended
audiences, our leading sales organization which covers approximately 230,000
stores, and our deep regulatory affairs expertise;
We believe the investment in Juul represents the fastest and most sustainable
opportunity to generate the most significant income in the e-vapor category. The
geo-economics today are attractive and we expect our strong distribution
infrastructure to help accelerate their financial performance;
We have long said that providing adult smokers with superior, satisfying products
with the potential to reduce harm is the best way to achieve tobacco harm reduction.
Through Juul, we are making the biggest investment in our history toward that goal;
Altria and Juul are committed to preventing kids from using any tobacco products.
As recent studies have made clear, youth vaping is a serious problem which both
Altria and Juul are committed to solve; and
Together Juul and Altria will work to prevent youth usage through their announced
initiatives, further technological developments, and increased advocacy for raising
the minimum age of purchase for all tobacco products to 21. 451
290.

Willard went so far as to characterize Altria’s investment in JLI as the culmination

of decades of pursuit of harm reduction for the sake of smokers’ health and wellbeing:
450

Olivia Zaleski & Ellen Huet, Juul Expects Skyrocketing Sales of $3.4 Billion, Despite Flavored
Vape Restrictions, Bloomberg (Feb. 22, 2019), https://www.bloomberg.com/news/articles/201902-22/juul-expects-skyrocketing-sales-of-3-4-billion-despite-flavored-vape-ban.
451

Melissa Kress, Altria Takes ‘Significant Action’ to Prepare for Its Future, Convenience Store
News (Dec. 21, 2018), https://csnews.com/altria-takes-significant-action-prepare-its-future.
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Almost my entire career, we have believed that our business would be better in the
long term if we could offer harm reduced products that would represent attractive
alternatives to our adult cigarette smokers to switch. And we have invested billions
of dollars in it and lots of effort. And ultimately until December this year, we really
didn’t have the product portfolio to fully achieve our harm reduction aspiration.
And the opportunity to invest in JUUL, I think, really makes that harm reduction
aspiration a reality. 452
291.

During Altria’s January 31, 2019 Earnings Call, Altria explained its investment in

JLI in more detail:
Through JUUL, we have found a unique opportunity to not only participate
meaningfully in the e-vapor category but to also support and even accelerate
transition to noncombustible alternative products by adult smokers. The JUUL
investment provides Altria with a significant stake in the largest and fastestgrowing e-vapor company with a highly talented management team, successful
end-market products, a strong innovation pipeline and significant international
opportunity. When you add to JUUL’s already substantial capabilities, our
underage tobacco prevention expertise and ability to directly connect with adult
smokers, we see a compelling future with long-term benefits for both adult tobacco
consumers and our shareholders. We are excited about JUUL’s domestic growth
and international prospects and their potential impact on our investment;
JUUL’s 2018 growth was quite remarkable. JUUL had net revenues in excess of
$1 billion in 2018, up from approximately $200 million in 2017. JUUL
overwhelmingly reaccelerated the U.S. e-vapor category growth rate, growing
JUUL’s volume by nearly 600% to over 450 million refill kit pods;
We estimate JUUL represents over 30% of the overall e-vapor category across open
and close systems and all trade classes. After e-vapor growth plateaued from 2015
to 2017, rapid growth was reignited in 2018, and we expect U.S. e-vapor volume
to grow at a compounded annual rate of 15% to 20% through 2023. As a reminder,
Altria’s share of JUUL’s international e-vapor income would be 100% incremental
to Altria; and
We believe the global e-vapor and heat-not-burn segments, with estimated sales of
roughly $23 billion in 2018, have substantial room to grow. JUUL currently
operates in eight countries with plans for additional expansion this year. We expect

452

Id.
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the JUUL product features that have driven JUUL’s success in switching adult
smokers in the U.S. to strongly appeal to international adult cigarette smokers. 453
292.

But as the president of the Campaign for Tobacco-Free Kids observed upon

announcement of the deal, “Altria has no interest in seriously reducing the number of people who
smoke cigarettes.” 454
293.

Instead, Willard continued to emphasize that Altria expects to reap the benefits of

JLI’s expansion to international markets: “Ultimately, we expect the international revenue and
income opportunity to end up being as large as or larger than the U.S. opportunity. Our 35%
investment was based on a deep strategic, operational and financial analysis of JUUL and the
marketplace.” 455
294.

As Willard emphasized, Altria expected continued growth even in the U.S., with “a

U.S. e-vapor category that grows volume between 15% to 20% annually” and “JUUL continuing
to be the primary growth driver for the e-vapor category” – statements which are inconsistent with
the idea of eliminating the underage and youth non-smoker sales that had driven JUUL to its
position of dominance:
Clearly, we look at this opportunity over the long term, but for context, let us
provide a view five years out. Some of our independently developed key
assumptions over the next five years that informed that analysis include: a U.S. evapor category that grows volume between 15% to 20% annually; JUUL
continuing to be the primary growth driver for the e-vapor category; attractive
JUUL operating margins that achieve current cigarette-like margins due to the
benefits of increasing scale and automation in the supply chain; international
453

Altria Group (MO) Q4 2018 Earnings Conference Call Transcript, The Motley Fool (Dec. 31,
2018),
https://www.fool.com/earnings/call-transcripts/2019/02/01/altria-group-mo-q4-2018earnings-conference-call-t.aspx.
454

Sheila Kaplan & Matt Richtel, Juul Closes Deal with Tobacco Giant Altria, N.Y. Times (Dec.
20, 2018), https://www.nytimes.com/2018/12/20/health/juul-reaches-deal-with-tobacco-giantaltria.html.

455

Altria Q4 2018 Earnings Conference Call Transcript, supra note 453.
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revenues that equal domestic revenues by 2023; and international margins that
approach current international cigarette margins. Under our assumptions, our
investment in JUUL would generate an after-tax return exceeding our weighted
average cost of capital in 2023.
Additionally, with five-year e-vapor category volume growth in the range of 15%
to 20% annually, we would expect the U.S. cigarette category volume decline rate
to be consistent with the decline rate estimate of 4% to 5%. I’ll remind you that
in 2018 with e-vapor category volume growth of 35%, the cigarette category
decline rate was 4.5%, including half of a percent headwind from gas prices.
Combined with the earnings and cash generation engine of our core tobacco
business, we believe this investment in JUUL will support consistent returns over
the long term by providing Altria with a significant stake in the fastest-growing -in the fast-growing e-vapor category.
And I think we agree with the other JUUL investors that its growth prospects are
so strong that now is the time to invest in—and ultimately driving top-line
growth.456
295.

Later in the call, Willard repeatedly referred to JUUL’s growth as “dramatic”:

I have to point out that JUUL’s growth and success in the U.S. market last year
was unique and first of its kind compared to other tobacco product successes both
in the U.S. and overseas. I mean, the growth rate was dramatic, it represented
the entire growth of e-vapor for the year, and it dramatically reaccelerated the
growth of e-vapor. 457
296.

Such “dramatic” growth was, as Altria well knew, due to the product’s viral

popularity among teens. Willard briefly acknowledged the youth vaping crisis, stating, “Briefly
touching on the regulatory environment, the FDA and many others are concerned about an
epidemic of youth e-vapor usage. We share those concerns. This is an issue that we and others in
the industry must continue to address aggressively and promptly. 458

456

Id. (emphasis added).

457

Id. (emphasis added).

458

Id.
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297.

In response to questions from an analyst at Morgan Stanley, Willard said that even

if there is “a slowdown in growth in the next year or two” due to regulatory actions aimed at
reducing youth use, Altria expects overall growth in JUUL sales over the next five years:
I think with regard to the midterm forecast, one of the reasons why we selected a
five-year period to estimate the growth rate of the e-vapor category and JUUL is a
significant driver of that growth is, I think, there is a bit of uncertainty as to whether
or not there’ll be a slowdown in growth in the next year or two as the industry works
together with the FDA to drive down youth usage. And so I think that is to be
determined. But I think even taking into account the fact that there could be some
impact in the short run, I think we’re confident in the long-term growth rate that we
forecasted. 459
298.

Two different analysts on the call quizzed Altria about the math behind its

projections – how was it that Altria projected 15% to 20% growth in the U.S. e-vapor category,
with JUUL as the primary driver of growth in the category, while the cigarette market decline was
only predicted to be 4% to 5% annually, and JUUL’s supposed customer base was primarily
smokers making the switch from cigarettes to vaping? Specifically, an analyst from Citi asked
Altria about the slide shown below, representing JUUL’s growth relative to the growth of the evapor category as a whole:
So if I take what you’ve said about the impact basically with growth of JUUL—
this is Slide 8, and equate that to cigarettes, it looks like the JUUL has grown about
0.4 billion units, which equates essentially to a 4% market share growth, and that’s
true for the whole e-cigarettes or e-vapor category. And yet you’ve also said that
the impact of the growth of e-vapor on cigarettes is about 1.3%, 1.4%. So is there
a right way of thinking about it, where basically two-thirds of vapor growth is
incremental? Is that how we should think about it? And, I guess, if that is the right
way of thinking about it, where is that increment coming from? Do you think it’s
mostly coming from people in their 20s or what? 460

459

Id.

460

Id. (emphasis added).
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461

299.

Willard did not offer a full explanation but responded by saying the increase in the

vapor growth category was coming in part from smokeless tobacco users and cigar smokers. 462
Given the forecasted dramatic growth in vaping and the relatively modest consumer base for
smokeless tobacco and cigar smokers, this explanation is unconvincing at best.
300.

While JLI and Altria remain distinct corporate entities, following its equity

investment in JLI, Altria publicly acknowledged at least some of the systemic links between Altria
and JLI, including contractual relationships, financial ties, and continuing coordination of
activities. Altria provides services to JLI in furtherance of the Youth Marketing Cover-Up
Enterprise, in the areas of “direct marketing; sales, distribution and fixture services; and regulatory

461

Altria’s Fourth-Quarter 2018 Earnings Conference Call, Altria Client Services (Jan. 31,
2019),
http://investor.altria.com/Cache/IRCache/3ec9cf77-9d83-04fe-1ea21e2b8437afa5.PDF?O=PDF&T=&Y=&D=&FID=3ec9cf77-9d83-04fe-1ea21e2b8437afa5&iid=4087349.
462

Altria Q4 2018 Earnings Conference Call Transcript, supra note 453.
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affairs.” 463 These services included “[p]roviding regulatory affairs consulting and related services
to Juul as it prepares its PMTA application.” 464
301.
: 465

302.

JLI and Altria also agreed to cross-market JUUL with Marlboro cigarettes. For

example, Altria offered coupons for JUUL starter kits inside packs of Marlboro cigarettes. 466

463

Id. at 11.

464

Id. at 13.

465

INREJUUL_00351632.

466

JLI00920030
;
Points
for
us!,
Reddit
(Sept.
16,
2019),
https://www.reddit.com/r/juul/comments/d50jku/points_for_us/ (depicting an image of a
Marlboro carton with a JUUL starter kit coupon inside that a member of the public purchased).
- 142 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 148 of 212

303.

These coupons, however, were more for show than anything else. In response to

analyst questions about the JUUL coupons in Marlboro packs, Willard explained that Altria did
not actually expect these coupons to cut into Marlboro sales, for two reasons. First, he said that
cigarette smokers were already aware of JUUL:
So I think with regard to your question about putting JUUL inserts on our cigarette
packs . . . theoretically, I guess, it could result in a bit more volume coming out
of Marlboro. But I think that that is unlikely to be the case. And I say that for
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really two reasons. I think there’s already very high awareness among all cigarette
-- adult cigarette smokers and, frankly, all Marlboro smokers about the availability
of JUUL. So I think that a lot of that awareness has already been established. I
wouldn’t expect a big incremental uptick from those onserts. 467
304.

The second reason Willard gave is that JUUL is popular with younger customers,

although he was careful to reference that group as 21- to 29-year-olds:
And then secondly, I would point out that I think JUUL tends to get more of its
growth from the 21- to 29-year-old cigarette smoker than it does from the 30-plus
cigarette smoker. And if you think about it, I think, as we’ve communicated in the
past, Marlboro’s share of those 21- to 29-year-old smokers is about equal to its
overall share. But there are several other cigarette brands that are overdeveloped
among 21- to 29-year olds, such as Newport, Camel or Natural American Spirit
that, frankly, might actually give up more volume on a relative basis than
Marlboro. 468
305.

By including JUUL coupons in Marlboro packs, the Enterprise creates the

impression of marketing JUUL to existing smokers, to “Make the Switch.” But neither Altria nor
JLI expect a significant migration of Marlboro customers to JUUL. As Altria and JLI know, and
as reflected by the analysts’ inquiries about the growth of the e-vapor category compared to the
decline in the cigarette category, JUUL sales depend on nonsmokers.
306.

Altria also, through its provision of “services,” actively sought to assist JLI in

staving off regulation and keeping its products on the market and available to kids and the public
at large and allow it to remain accessible in Plaintiff’s community. Altria is and was working to
actively help run the Youth Marketing Cover-Up Enterprise’s operations and expand sales of JULL
products. Altria’s investment brings legal and regulatory benefits to JLI, by helping to navigate
the regulatory waters and FDA pressure while continuing to deceive the public about JLI’s youth
marketing.

467

Altria Q4 2018 Earnings Conference Call Transcript, supra note 453 (emphasis added).

468

Id. (emphasis added).
- 144 -

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307.

From its decades of experience dealing with regulators, Altria knows the critical

importance of influence in Washington. Altria “has a potent lobbying network in Washington
[D.C.] and around the country,” 469 and a significant priority for the Enterprise is expanding JLI’s
connections to Washington insiders. In September 2018, for example, Andrew Perraut joined JLI
as the Deputy Director of Public Policy; Perraut was previously a policy analyst for the White
House Office of Information and Regulatory Affairs (“OIRA”) and the lead for all regulatory
issues for tobacco for six years. In fact, Perraut participated in the redrafting of the FDA’s
proposed deeming regulations regarding e-cigarettes before the proposed rule was published in
2014. But by the time the tobacco industry was meeting with the agency in 2015, Perraut was on
the other side of the table, representing an organization called Cigar Rights of America, along with
others, to lobby against restrictions. As Perraut explained in an interview, this agency review
period is not a well-publicized opportunity for influence: “The OIRA process is very intentionally
a little bit under the radar. “Parties are generally fairly informed on how to submit their comments
[to the FDA]; folks are much less informed about how to engage during the White House review.”
308.

Altria’s lobbying prowess in the area of e-cigarettes was on display in the context

of the FDA’s deeming rule. First, notwithstanding Altria’s professed concern about flavors
attracting youth customers, Altria submitted comments in August 2014 in response to the proposed
rule opposing the regulation of flavors. Altria asserted that restrictions could result in more illicit
sales, and that adults also liked fruity and sweet e-cigarette flavors. Then, in April 2015, Altria
distributed draft legislation on Capitol Hill that would eliminate the new requirement that most ecigarettes already on sale in the United States be evaluated retroactively to determine if they are
469

Shelia Kaplan, In Washington, Juul Vows to Curb Youth Vaping. Its Lobbying in States Runs
Counter
to
That
Pledge.,
N.Y.
Times
(Apr.
28,
2019),
https://www.nytimes.com/2019/04/28/health/juul-lobbying-statesecigarettes.html.
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 151 of 212

“appropriate for the protection of public health.” Altria delivered its proposal, “F.D.A. Deeming
Clarification Act of 2015,” to Representative Tom Cole of Oklahoma, who introduced the bill two
weeks later using Altria’s draft verbatim. Seventy other representatives signed on to Altria’s
legislation.
309.

Altria brings this lobbying muscle to the Youth Marketing Cover-Up Enterprise.

While an Altria spokesman has denied that there was any contractual services agreement for
lobbying between JLI and Altria, he admitted that he did not know what informal advice and
conversations Altria has had with JLI about lobbying and efforts. Vince Willmore, a spokesman
for the Campaign for Tobacco-Free Kids, which has been involved in many state lobbying battles,
said, “It’s hard to say where Altria ends and Juul begins.” 470 Since JLI and Altria joined forces,
JLI’s spending on lobbying has risen significantly. JLI spent $4.28 million on lobbying in 2019,
compared to $1.64 million in 2018. 471 Successful lobbying efforts directly further Altria and JLI’s
goal of deceiving the public by preventing regulators from drawing public attention to JLI’s prior
youth marketing.
310.

In addition, Altria’s arrangement with JLI gives JLI greater access to retail

opportunities. JUUL products have been in 90,000 US retail outlets, while Altria reaches 230,000
US outlets. Altria also brought its logistics and distribution experience (although, after increasing
public scrutiny, Altria announced on January 30, 2020 that it would limit its support to regulatory

470

Id.

471

Center
for
Responsive
Politics,
Client
Profile:
JUUL
Labs,
https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=D000070920
(last visited Mar. 28, 2020).
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efforts beginning in March 2020 472). And importantly, as noted above, Altria gives JLI access to
shelf space that it had obtained under fraudulent pretenses. This is not just any shelf space; it is
space near Altria’s products and retail displays. The arrangement allows JUUL to receive
prominent placement alongside a top-rated brand of combustible cigarettes among youth.
311.

Beyond the services Altria provides for the Youth Marketing Cover-Up Enterprise,

Altria and JLI share leadership. Altria’s investment allows it to appoint one-third of JLI’s Board.
In addition, in October 2019, JLI’s CEO resigned to be replaced by another career Altria executive,
K.C. Crosthwaite. The key employees with JLI – including Defendants Bowen, Monsees, Prtizer,
Huh, and/or Valani – would have been instrumental in bringing Crosthwaite on board at JLI.
Crosthwaite had most recently served as the vice president and chief growth officer of Altria Client
Services LLC, overseeing the company’s work, including digital marketing, packaging design and
innovation, product development, and safety, health, and environmental affairs. Crosthwaite
knows Big Tobacco’s playbook all too well, having previously served as the president and CEO
of Phillip Morris USA, the vice president and general manager at Marlboro – the leading cigarette
brand among youth, and the vice president of strategy and business development at Altria Client
Services LLC. Joe Murillo, who headed regulatory affairs for Altria and previously ran Altria’s ecigarette business, Nu Mark, is now JLI’s Chief Regulatory Officer. 473
312.

The relationship between JLI and Altria did not go unnoticed. By February 2019,

the FDA became aware that it had been deceived by JLI and Altria. On February 6, 2019, then-

472

Nathan Bomey, Marlboro maker Altria distances itself from vaping giant Juul amid legal
scrutiny, USA Today (Jan. 31, 2020), https://www.usatoday.com/story/money/2020/01/31/juulaltria-distances-itself-e-cigarette-maker-amid-scrutiny/4618993002/.
473

Jennifer Maloney, Juul Hires Another Top Altria Executive, Wall St. J. (Oct. 1, 2019),
available at https://www.wsj.com/articles/juul-hires-another-top-altriaexecutive-11569971306.
- 147 -

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FDA commissioner Gottlieb wrote JLI and Altria demanding in-person meetings, excoriating
Altria for its “newly announced plans with JUUL [that] contradict the commitments you made to
the FDA” in a prior meeting and Willard’s October 25, 2018 letter to the FDA. 474 Gottlieb’s letter
to JLI alleged that JLI’s conduct was “inconsistent with its previous representations to the
FDA.” 475
313.

The FDA demanded Altria be prepared to explain itself regarding its “plans to stop

marketing e-cigarettes and to address the crisis of youth use of e-cigarettes.”

Then-FDA

Commissioner Gottlieb told Altria that “deeply concerning data” shows that “youth use of JUUL
represents a significant proportion of overall use of e-cigarette products by children” and despite
any alleged steps the companies had taken to address the issue, he “ha[d] no reason to believe these
youth patterns of use are abating in the near term, and they certainly do not appear to be reversing.”
314.

JLI and Altria met with Gottlieb in March 2019 in a meeting the then-FDA

Commissioner described as “difficult.” 476 Gottlieb “did not come away with any evidence that
public health concerns drove Altria’s decision to invest in JLI, and instead said it looked like a
business decision. According to reporting by The New York Times, Gottlieb angrily criticized
JLI’s lobbying of Congress and the White House, stating:
We have taken your meetings, returned your calls and I had personally met with
you more times than I met with any other regulated company, and yet you still tried
474

Letter from Scott Gottlieb, M.D., FDA Commissioner, to Howard A. Willard III, Altria Group,
Inc. (Feb. 6, 2019), https://www.fda.gov/media/122589/download (emphasis added).

475

Letter from Scott Gottlieb, M.D., FDA Commissioner, to Kevin Burns, JUUL Labs, Inc. (Feb.
6,
2019),
https://web.archive.org/web/20190415152052/https://www.fda.gov/downloads/TobaccoProducts
/Labeling/RulesRegulationsGuidance/UCM630924.pdf.
476

Kate Rooney & Angelica LaVito, Altria Shares Fall After FDA’s Gottlieb Describes ‘Difficult’
Meeting on Juul, CNBC (Mar. 19, 2019), https://www.cnbc.com/2019/03/19/altria-shares-fallafter-fdas-gottlieb-describes-difficult-meeting-on-juul.html
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to go around us to the Hill and White House and undermine our public health
efforts. I was trying to curb the illegal use by kids of your product and you are
fighting me on it.” 477
315.

But just a week after the “difficult” meeting with JLI and Altria, Gottlieb posted a

statement about the FDA’s new e-cigarette policy, proposing to ban all flavors except “tobacco-,
mint- and menthol-flavored products.” 478 He cited the strong support of President Trump (whose
administration JLI had aggressively lobbied 479), and also cited “recent evidence indicat[ing] that
mint- and menthol-flavored ENDS products are preferred more by adults than minors.” 480 JLI and
Altria’s success in getting the FDA to adopt their fraudulent claim that Mint was a traditional
tobacco flavor was crucial to their mission to deceive the public into thinking that JLI does not
market to youth despite JLI continuing to sell Mint JUULpods. Just a few weeks later, Gottlieb
resigned from his position as FDA Commissioner.
316.

The cover-up activities of the Enterprise are ongoing. The Youth Marketing Cover-

Up Enterprise has recently taken another page out of Big Tobacco’s playbook, in working to
manufacture a “grassroots” campaign of adult JUUL users – what some call an “Astroturf
campaign.” In June 2019, the Enterprise retained Locust Street, another DC-based political and
communications consultant, and what some have called a “political dark arts” firm. The Enterprise

477

Creswell, supra note 211.

478

Statement from FDA Commissioner Scott Gottlieb, M.D., on advancing new policies aimed at
preventing youth access to, and appeal of, flavored tobacco products, including e-cigarettes and
cigars, FDA (Mar. 13, 2019), https://www.fda.gov/news-events/press-announcements/statementfda-commissioner-scott-gottlieb-md-advancing-new-policies-aimed-preventing-youth-access.
479

Evan Sully & Ben Brody, JLI Spent Record $1.2 Million Lobbying as Regulators Stepped Up,
Wash. Post (Oct. 22, 2019), https://www.washingtonpost.com/business/on-small-business/juulspent-record-12-million-lobbying-as-regulators-stepped-up/2019/10/22/2a0dbc52-f4de-11e9b2d2-1f37c9d82dbb_story.html.
480

Id.
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Defendants hired Locust Street to sway public opinion in New York in response to the state’s
contemplated ban on flavored e-cigarettes. As part of this effort, Locust Street contacted adult
JUUL customers by phone and/or email to encourage them to share their “switch story”:
My name is [redacted] and I am an Outreach Specialist with Locust Street
Community Solutions. I’m reaching out to you on behalf of Juul Labs, who has
contracted with Locust Street to support its services and collect success stories from
New Yorkers who have made the switch to Juul from combustible cigarettes. We
received your information as a Juul user from Juul Labs and we are only using this
contact information to support our services on behalf of the company and to discuss
your “switch story.”
I attempted to reach you by phone, but I’m emailing in case this is an easier way to
get in touch. I hope that we can talk to discuss your experience with Juul products.
Please feel free to give me a call back at [redacted] or reply to this email if you’d
like to share your story! 481
317.

This sort of fake “grassroots” campaign was a technique utilized by Big Tobacco

in decades past to decieve the public. According to Sarah Milov, an assistant professor of history
at the University of Virginia and the author of The Cigarette: A Political History, Big Tobacco
companies “pioneered techniques of manufacturing popular outrage to proposed regulations on
cigarettes because grassroots anti-smoking campaigns were beginning to gain traction in the
1970s.” 482
318.

JLI and Altria’s “Make the Switch” campaign was also fraudulent because, despite

what it represented to the public, JLI does not have authority to claim that JUUL is healthier than

481

Katie Notopoulos, Juul Is Giving Its Customer Data To Its PR Firm, BuzzFeed News (Sept. 5,
2019), https://www.buzzfeednews.com/article/katienotopoulos/juul-user-privacy-publicity-newyork.
482

Alex Norcia, Get Ready for JUUL's Grassroots Rebrand (Oct. 3,
https://www.vice.com/en_us/article/qvgwmp/get-ready-for-juuls-grassroots-rebrand.
- 150 -

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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 156 of 212

cigarettes. On September 9, 2019, the FDA warned JLI that it had violated federal law by making
unauthorized representations that JUUL products are safer than cigarettes. 483
319.

On October 17, 2019, JLI announced that it would suspend the sale of certain JUUL

flavors online. 484 However, this likely had minimal impact given that JLI was continuing to sell
the mint and menthol flavors, which both JLI and Altria knew to be popular flavors with youth, as
discussed above. Recent research confirmed that 60% of high school JUUL users prefer MMint
and enthol. 485 As former New York City Mayor Mike Bloomberg stated, “JUUL’s decision to
keep mint- and menthol-flavored e-cigarettes on the shelves is a page right out of the tobacco
industry’s playbook.” 486 Almost a month later, JLI announced that it would stop selling Mint, but
it continues to sell its Menthol JUUL products. 487
320.

Showing that JLI’s so-called remedial measures have been about swaying public

opinion and not about preventing youth access to JUUL, JLI’s purported attempts to limit the sale
of flavored JUUL products have not been effective. On November 4, 2019, VICE Magazine
reported that when it visited more than twenty stores in New York City, all but two of the stores

483

Juul Labs, Inc. Warning Letter, FDA (Sept. 9, 2019), https://www.fda.gov/inspectionscompliance-enforcement-and-criminal-investigations/warning-letters/juul-labs-inc-59095009092019.
484

Allison Aubrey, Juul Suspends Sales of Flavored Vapes and Signs Settlement to Stop
Marketing to Youth, NPR (Oct. 17, 2019), https://www.npr.org/sections/healthshots/2019/10/17/771098368/juul-suspends-sales-of-flavored-vapes-and-signs-settlement-tostop-marketing-to-.

485

Lindsey Tanner, US teen vaping numbers climb, fueled by Juul & mint flavor, Associated Press
(Nov. 5, 2019), https://apnews.com/8151770f69fd43c4b132854a335d0ef1.

486

Id.

487

Associated Press, Juul Halts Sales of Mint, Its Top-Selling e-Cigarette Flavor, N.Y. Times
(Nov.
7,
2019),
https://www.nytimes.com/aponline/2019/11/07/health/bc-us-med-juulflavor.html.
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selling JUUL products had at least one of the banned flavors available in stores, including
Mango. 488 Some of these stores were displaying these products even after JLI announced that it
would suspend the sale of certain flavors online. According to one bodega owner, the last time a
JLI representative came into his store, flavored pods including Mango were on display, but the
representative said nothing about them. 489 Photographs taken for that article showed both Mangoflavored JUULpods and flavored Eonsmoke products still being sold side by side as recently as
mid-October 2019.
J.

The Cost of JUUL’s Success

321.

JLI’s and the Management Defendants’ success in addicting a new generation to

nicotine, and Altria’s support to insulate JLI from a public outcry that could have mitigated this
harm, have come at a terrible cost to public health. On December 28, 2018, the University of
Michigan’s National Adolescent Drug Trends for 2018 reported that increases in adolescent ecigarette use from 2017 to 2018 were the “largest ever recorded in the past 43 years for any
adolescent substance use outcome in the U.S.” 490
322.

The percentage of twelfth grade students who reported consuming nicotine almost

doubled between 2017 and 2018, rising from 11% to 20.9%. 491 This increase was “twice as large
as the previous record for largest-ever increase among past 30-day outcomes in twelfth grade.”

488

Smothers, supra note 306.

489

Id.

490

National Adolescent Drug Trends in 2018, Univ. of Mich. Inst. for Soc. Res. (Dec. 17, 2018),
http://monitoringthefuture.org/pressreleases/18drugpr.pdf.

491

Teens Using Vaping Devices in Record Numbers, Nat’l Insts. of Health (Dec. 17, 2018)
https://www.nih.gov/news-events/news-releases/teens-using-vaping-devices-record-numbers.
- 152 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 158 of 212

323.

By 2018 approximately 3.6 million middle and high school students were

consuming e-cigarettes regularly, 492 and one in five twelfth graders reported using an e-cigarette
containing nicotine in the last thirty days. 493 As of late 2019, five million students reported active
use of e-cigarettes, with 27.5% of high school students and 10.5% of middle school students using
them within the last thirty days and with most youth reporting JUUL as their usual brand. 494

324.

The Secretary of HHS declared that “[w]e have never seen use of any substance by

America’s young people rise as rapidly as e-cigarette use [is rising].” 495 Then-FDA Commissioner
Gottlieb described the increase in e-cigarette consumption as an “almost ubiquitous – and
dangerous – trend” that is responsible for an “epidemic” of nicotine use among teenagers. 496 The
rapid – indeed infectious – adoption of e-cigarettes “reverse[s] years of favorable trends in our

492

See Jan Hoffman, Addicted to Vaped Nicotine, Teenagers Have no Clear Path to Quitting,
N.Y. Times (Dec. 18, 2018), https://www.nytimes.com/2018/12/18/health/vaping-nicotineteenagers.html.
493

Id.

494

National Youth Tobacco Survey, supra note 6; Cullen, supra note 244.

495

Hoffman, supra note 9; Bahl, supra note 9.

496

FDA Launches New, Comprehensive Campaign to Warn Kids About the Dangers of ECigarette Use as Part of Agency’s Youth Tobacco Prevention Plan, Amid Evidence of Sharply
Rising Use Among Kids, FDA (Sept. 18, 2018), https://www.fda.gov/NewsEvents/Newsroom/
PressAnnouncements/ucm620788.htm.
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nation’s fight to prevent youth addiction to tobacco products.” 497 CDC Director Robert Redfield
agreed, “The skyrocketing growth of young people’s e-cigarette use over the past year threatens
to erase progress made in reducing tobacco use. It’s putting a new generation at risk for nicotine
addiction.” 498 Then-Commissioner Gottlieb identified the two primary forces driving the epidemic
as “youth appeal and youth access to flavored tobacco products.” 499
325.

Within days of the FDA’s declaration of an epidemic, Surgeon General Dr. Jerome

Adams also warned that the “epidemic of youth e-cigarette use” could condemn a generation to “a
lifetime of nicotine addiction and associated health risks.” 500 The Surgeon General’s 2018
Advisory states that JUUL, with its combination of non-irritating vapor and potent nicotine hit, “is
of particular concern for young people, because it could make it easier for them to initiate the use
of nicotine . . . and also could make it easier to progress to regular e-cigarette use and nicotine
dependence.” 501
326.

As described above, JUUL uses patented nicotine salts rather than freebase

nicotine. 502 Similarly, Big Tobacco and Eonsmoke launched their own JUUL lookalikes, using
the same high concentrations of nicotine, formulated in the same manner; myblu contains 4.0%
nicotine salts, Vuse Alto contains 5.0% nicotine salts, and Eonsmoke’s products contain 6.8%

497

Id.

498

Vera, supra note 7.

499

Id.

500

Adams, supra note 2.

501

Id.

502

Becker, supra note 313.
- 154 -

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nicotine. 503 Between 2013 and 2018, the average nicotine concentration in e-cigarettes more than
doubled. 504
327.

The increased nicotine exposure facilitated by JUUL and similar vape devices has

serious health consequences. The ease of use and “smoothness” strip away external inhibitors and
enable extreme levels of unfettered use. Using JLI’s own calculations, consuming two JUULpods
in a day is the equivalent of consuming two to four packs of cigarettes a day. In this way, JLI has
not only cultivated a new generation of e-cigarette smokers, but it has also accelerated a new style
of smoking – vaping – that is more nicotine-saturated than ever before. Kids are consuming so
much nicotine that they are experiencing symptoms of nicotine toxicity, including headaches,
nausea, sweating, and dizziness, and they have even coined a term for it: “nic sick.” As one high
school student explained to CBS News, it “kinda seems like a really bad flu, like, just out of
nowhere. Your face goes pale, you start throwing up and stuff, and you just feel horrible.” 505
328.

Increased rates and duration of vaping lead to greater overall exposure to nicotine.

Nicotine is a highly addictive neurotoxin. Nicotine’s addictive properties are similar to heroin and

503

About INTENSE Flavors, blu, https://www.blu.com/en/US/explore/explore-vaping/about-bluproducts/about-blu-intense-flavors (last visited Mar. 28, 2020); faqs, Vuse Vapor,
https://vusevapor.com/faqs/product/ (last visited Mar. 28, 2020); Eonsmoke Product, supra note
301.
504

Alexa R. Romberg et al., Patterns of nicotine concentration in electronic cigarettes sold in the
United States, 2013-2018, 203 Drug & Alcohol Dependence 1 (2019),
https://www.sciencedirect.com/science/article/abs/pii/S0376871619302571.

505

High school students say about 20% of their peers are vaping, some as young as 8th grade,
CBS News (Aug. 30, 2019), https://www.cbsnews.com/news/high-school-students-say-about-20of-their-peers-are-vaping-some-as-young-as-8th-grade/.
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cocaine. 506 Nicotine fosters addiction through the brain’s “reward” pathway. Both a stimulant
and a relaxant, nicotine affects the central nervous system; increases blood pressure, pulse, and
metabolic rate; constricts blood vessels of the heart and skin; and causes muscle relaxation. Longterm exposure to nicotine causes upregulation – an increase in the number of these high-affinity
nicotinic receptors in the brain. When nicotine binds to these receptors it triggers a series of
physiological effects in the user that are perceived as a “buzz” that includes pleasure, happiness,
arousal, and relaxation of stress and anxiety. With regular nicotine use, however, these feelings
diminish, and the user must consume increasing amounts of nicotine to achieve the same effects.
329.

Youth are particularly vulnerable to nicotine addiction, as Defendants know well.

As described by the Surgeon General, “Tobacco use is a pediatric epidemic.” Nine out of ten
smokers begin by age eighteen and 80% who begin as teens will smoke into adulthood. 507
330.

The above statements apply equally, if not more so, to e-cigarettes. Further, the

Surgeon General has explained how the nicotine in e-cigarettes affects the developing brain and
can addict kids more easily than adults: “Until about age 25, the brain is still growing. Each time
a new memory is created, or a new skill is learned, stronger connections – or synapses – are built
between brain cells. Young people’s brains build synapses faster than adult brains. Because
addiction is a form of learning, adolescents can get addicted more easily than adults.” 508

506

See e.g., U.S. Dept. of Health & Human Servs., The Health Consequences of Smoking:
Nicotine Addiction, A Report of the Surgeon General, DHHS Publication Number (CDC) 88-8406
(1988), https://stacks.cdc.gov/view/cdc/22014/cdc_22014_DS1.pdf.
507

2012 Surgeon General Report, supra note 241, at 1.

508

Know The Risks: E-Cigarettes & Young People, U.S. Dep’t Health & Human Servs., https://ecigarettes.surgeongeneral.gov/knowtherisks.html (last visited Mar. 20, 2020).
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331.

Studies confirm that exposure to nicotine as a teen – even minimal exposure –

biologically primes the brain for addiction and greatly increases likelihood of dependence on
nicotine as well as other substances later in life. 509 In a study done on mice, even “very brief, lowdose exposure to nicotine in early adolescence increases the rewarding properties of other drugs,
including alcohol, cocaine, methamphetamine – and these are long-term changes.” 510 E-cigarette
use also puts adolescents at increased risk for cigarette smoking. Compared to adolescents who do
not use e-cigarettes, those who do are four times more likely to begin smoking cigarettes. 511
332.

The use of flavors only amplifies vape devices’ addictive qualities. Research done

by Nii Addy, Associate Professor of psychiatry and cellular and molecular physiology at the Yale
University School of Medicine, found that “sweet flavors can make the nicotine more palatable . .
. but also act in the brain to increase nicotine taking.” 512 This effect is especially troubling for
teenage brains, which are more sensitive than adult brains to rewards. According to University of
Pennsylvania psychologist Janet Audrain-McGovern, research shows that “if the first e-cigarette
you used was flavored, then you’re more likely to go on and use an e-cigarette again.” 513
333.

As Dr. Winickoff explained in his testimony before Congress,

509

Principles of Adolescent Substance Use Disorder: A Research Based Guide, Nat’l Inst. on
Drug Abuse (2014), https://www.drugabuse.gov/publications/principles-adolescent-substanceuse-disorder-treatment-research-based-guide/introduction.

510

Jon Hamilton, How Vaping Nicotine Can Affect A Teenage Brain, NPR (Oct. 10, 2019),
https://www.npr.org/sections/health-shots/2019/10/10/768588170/how-vaping-nicotine-canaffect-a-teenage-brain..
511

Kaitlyn M. Berry et al., Association of Electronic Cigarette Use with Subsequent Initiation of
Tobacco Cigarettes in US Youths, JAMA Network Open (Feb. 1, 2019),
https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2723425.

512

Hamilton, supra note 510.

513

Id.
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Nicotine addiction can take hold in only a few days, especially in the developing
adolescent brain that is particularly vulnerable to addiction to nicotine. . . . Many
of my patients find Juul nearly impossible to stop. Nicotine withdrawal can cause
headaches, insomnia, irritability, anxiety, and depression, and these withdrawal
symptoms are one of the primary reasons a nicotine addiction is difficult to
overcome.” 514
334.

Moreover, there is a lack of effective tools to help adolescents overcome nicotine

addiction: there is no good data on how to treat adolescents with e-cigarette dependence; there has
not been enough research on youth tobacco cessation strategies; and most of the pharmacological
therapies approved for adults have been shown to be ineffective or only marginally effective in
adolescents. 515
335.

Research indicates that daily e-cigarette use is much more likely to continue than

daily cigarette smoking. Out of surveyed students who reported ever using cigarettes daily, only
17% indicated that they remained daily smokers. 516 Out of surveyed students who reported ever
using e-cigarettes daily, 58% remained daily users. 517 This data demonstrates both that e-cigarette
use in teens is very persistent, a result consistent with the addictiveness of these products, and the
difficulty youth have in trying to quit. 518
336.

The effects of nicotine exposure on the brain of youth and young adults include not

only addiction, priming for use of other addictive substances, but also reduced impulse control,

514

Winickoff Testimony, supra note 247, at 2.

515

Id.

516

Id.

517

Id.

518

Id.
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deficits in attention and cognition, and mood disorders. 519 A psychoactive substance that targets
brain areas involved in emotional and cognitive processing, nicotine poses a particularly potent
threat to the adolescent brain, as it can “derange the normal course of brain maturation and have
lasting consequences for cognitive ability, mental health, and even personality.” 520 Animal
researchers from Yale University School of Medicine found that vaping during adolescence can
lead to long-term brain changes, like attention deficit hyperactivity disorder. 521
337.

The dangerous and destructive nature of nicotine is no recent discovery. As a key

ingredient in tobacco products, the drug and its deleterious effects have been the subject of
scientific research and public health warnings for decades. Nicotine causes cardiovascular,
reproductive, and immunosuppressive problems with devastating effects. In 2014, the Surgeon
General reported that nicotine addiction is the “fundamental reason” that individuals persist in
using tobacco products, and this persistent tobacco use contributes to millions of needless deaths
and many diseases, including diseases that affect the heart and blood vessels (cardiovascular
disease), lung diseases (chronic obstructive pulmonary disease (“COPD”) and lung cancer), cancer
almost anywhere in the body, and birth defects. Part of the reason the national decline in cigarette
use in recent years was such a victory for public health was because there was a corresponding

519

Menglu Yuan et al., Nicotine and the Adolescent Brain, 593 J. of Physiology 3397 (2015),
www.ncbi.nlm.nih.gov/pmc/articles/PMC4560573/; U.S Surgeon General and U.S. Centers for
Disease Control & Prevention, Office on Smoking and Health, Know the Risks: E-Cigarettes and
Young People (2019), https://e-cigarettes.surgeongeneral.gov/.
520

N.A. Goriounova & H.D. Mansvelder, Short- and Long-Term Consequences of Nicotine
Exposure during Adolescence for Prefrontal Cortex Neuronal Network Function, Cold Spring
Harbor
Persp.
in
Med.
2(12)
(Dec.
2012),
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3543069/.
521

Hamilton, supra note 510.
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decline in youth exposure to nicotine. From 2000 to 2017, the smoking rate among high school
students fell by 73%. 522
338.

In June 2014, the CDC reported that “by achieving a teen smoking rate of 15.7

percent, the United States has met its national Healthy People 2020 objective of reducing
adolescent cigarette use to 16 percent or less.” 523 The Surgeon General reported in 2014 that:
We are at a historic moment in our fight to end the epidemic of tobacco use that
continues to kill more of our citizens than any other preventable cause. The good
news is that we know which strategies work best. By applying these strategies more
fully and more aggressively, we can move closer to our goal of making the next
generation tobacco-free.” 524
339.

That trend has completely reversed. In 2018, more than one in four high school

students in the United States reported using a tobacco product in the past thirty days, a dramatic
increase from just one year before. 525 But there was no increase in the use of cigarettes, cigars, or
hookahs during that same time period. 526 There was only increased use in a single tobacco product:
e-cigarettes. While use of all other tobacco products continued to decrease as it had been for

522

Matthew L. Myers, On 20th Anniversary of State Tobacco Settlement (the MSA), It’s Time for
Bold Action to Finish the Fight Against Tobacco, Campaign for Tobacco-Free Kids (Nov. 26,
2018), https://www.tobaccofreekids.org/press-releases/2018_11_26_msa20.
523

Current cigarette smoking among U.S. high school students lowest in 22 years, CDC (June 12,
2014), https://www.cdc.gov/media/releases/2014/p0612-YRBS.html.

524

LET’S MAKE THE NEXT GENERATION TOBACCO-FREE: Your Guide to the 50th
Anniversary Surgeon General’s Report on Smoking and Health, U.S. Dep’t of Health & Human
Servs.
(2014),
https://www.hhs.gov/sites/default/files/consequences-smoking-consumerguide.pdf.
525

Progress Erased: Youth Tobacco Use Increased During 2017-2018, CDC (Feb. 11, 2019),
https://www.cdc.gov/media/releases/2019/p0211-youth-tobacco-use-increased.html.

526

Tobacco Use By Youth Is Rising: E-Cigarettes are the Main Reason, CDC (Feb. 2019),
https://www.cdc.gov/vitalsigns/youth-tobacco-use/index.html.
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decades, e-cigarette use increased 78% in just one year. 527 This drastic reversal caused the CDC
to describe youth vaping an “epidemic.” 528

340.

The teen vaping epidemic has had, and will continue to have, significant costs for

individual users and society alike.

Nicotine addiction alone carries significant health

consequences, and these are exacerbated when adolescents are involved. Adolescent nicotine
addiction leads to memory and attention problems, and increases chances of addiction later in life,
all of which will continue to have long-lasting impacts on society.
341.

Science is also beginning to show that e-cigarettes have the potential to cause even

more distinct health risks and costs. E-cigarettes were initially considered to be a safer alternative

527

Scott Gottlieb, Statement from FDA Commissioner Scott Gottlieb, M.D., on proposed new
steps to protect youth by preventing access to flavored tobacco products and banning menthol in
cigarettes,
FDA
(Nov.
15,
2018),
https://www.fda.gov/news-events/pressannouncements/statement-fda-commissioner-scott-gottlieb-md-proposed-new-steps-protectyouth-preventing-access.
528

Adams, supra note 2.
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to cigarettes, but recent studies done on rats and mice have demonstrated results that they are “as
damaging to pulmonary structures as traditional tobacco cigarettes.” 529 Mice exposed to ecigarette fluids containing nicotine experienced effects that are associated with chronic obstructive
pulmonary disease, such as cytokine expression, airway hyper-reactivity, and lung tissue
destruction. 530 The use of e-cigarettes also caused inflammation in mice and impaired their
immune defenses against various bacterial and viral infections. 531 Moreover, a recent study that
monitored 32,000 adults in the U.S. for three years found that e-cigarette users were 30% more
likely to develop a chronic lung disease, such as asthma, bronchitis, and emphysema, than people
who did not smoke either e-cigarettes or traditional cigarettes. 532
342.

It is not just these consequences that raise public health concerns. The CDC and

FDA recently investigated an outbreak of e-cigarette, or vaping, product use associated lung
injuries, known as EVALI. 533 As of February 18, 2020, there were over 2,800 reported cases of
hospitalization due to e-cigarette or vaping product use-associated lung injury (“EVALI”) in all

529

Reinikovaite et al., The effects of electronic cigarette vapour on the lung: direct comparison
to
tobacco
smoke
at
2,
51
Eur.
Respiratory
J.
(Jan.
23,
2018),
https://erj.ersjournals.com/content/erj/51/4/1701661.full.pdf.

530

Itsaso Garcia-Arcos et al., Chronic electronic cigarette exposure in mice induces features of
COPD in a nicotine-dependent manner, 71 Thorax, 1119, 1119-29 (Aug. 24, 2016),
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5136722/pdf/thoraxjnl-2015-208039.pdf.
531

Id.

532

Dharma N. Bhatta & Stanton A. Glantz, Association of E-Cigarette Use with Respiratory
Disease Among Adults: A Longitudinal Analysis, Am. J. Preventive Med. (Dec. 16, 2019),
https://www.sciencedirect.com/science/article/abs/pii/S0749379719303915.

533

Outbreak of Lung Injury Associated with E-cigarette Use, or Vaping, CDC,
https://www.cdc.gov/tobacco/basic_information/e-cigarettes/severe-lung-disease.html
(last
visited Mar. 28, 2020).
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fifty states and sixty-eight deaths had been confirmed by the CDC. 534 While public health officials
believe this outbreak is associated with vitamin E acetate, which is often used in connection with
vaping marijuana, 14% of patients have reported vaping nicotine only. 535
343.

Many teenagers are simply unaware of these risks, an ignorance that Defendants

have capitalized on. According to Dr. Winickoff, many of his patients believe vaping is harmless:
Counseling teens and preteens on e-cigarette use is challenging. Many of my
patients have wildly incorrect beliefs about e-cigarettes. They know that cigarettes
are dangerous, but assume that Juul – since it’s ubiquitous, comes in child-friendly
flavors, and is marketed as a healthier alternative to smoking – must be harmless.
I have to explain to kids that e-cigarettes do not have the same positive health
benefits as the fruits whose flavor they copy. Even the term vapor calls to mind
harmless water vapor. There is no water in these products. 536
K.

Vaping in Schools

344.

In addition to severe health consequences, widespread vaping and “juuling” has

placed severe burdens on society and schools in particular. It is not an overstatement to say that
JUUL has changed the educational experience of students across the nation. As one vape shop
manager told KOMO News, “It’s the new high school thing. Everyone’s got the JUUL.” 537
345.

The JUUL youth addiction epidemic spread rapidly across high schools in the

United States. JUUL surged in popularity, largely through social media networks, and created
patterns of youth usage, illegal youth transactions, and addiction, that are consistent with this
account from Reddit in 2017:
Between classes the big bathroom in my school averages 20-25 kids, and 5-10
JUULs. Kids usually will give you a dollar for a JUUL rip if you don’t know them,
534

Id.

535

Id.

536

Winickoff Testimony, supra note 247, at 1.

537

Juuling at School, supra note 270.
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if you want to buy a pod for 5$ you just head into the bathroom after lunch. We
call the kids in there between every class begging for rips ‘JUUL fiends.’ Pod boys
are the freshman that say ‘can I put my pod in ur juul?’ and are in there every block.
I myself spent about 180$ on mango pods and bought out a store, and sold these
pods for 10$ a pod, making myself an absolutely massive profit in literally 9 days.
Given because I’m 18 with a car and that’s the tobacco age around here, I always
get offers to get pod runs or juuls for kids. people even understand the best system
to get a head rush in your 2 minutes between classes, is all the juuls at once. So
someone yells “GIVE ME ALL THE JUULS” and 3-7 are passed around, two hits
each. This saves us all juice, and gives you a massive head rush. Kids also scratch
logos and words onto their juuls to make i[t] their own, every day you can find the
pod covers in my student parking lot. I know this sounds exaggerated, but with a
school with 1400 kids near the city and JUULs being perceived as popular, it’s truly
fascinating what can happen. 538
346.

In response to the post above, several others reported similar experiences:
(a)

“[T]his is the exact same thing that happens at my school, we call [JUUL

fiends] the same thing, kind of scary how similar it is.” 539
(b)

“Same thing at my school. JUUL fiend is a term too.” 540

(c)

“Yeah nicotine addiction has become a huge problem in my high school

because of juuls even the teachers know what they are.” 541
(d)

“[S]ame [expletive] at my school except more secretive because it’s a

private school. It’s crazy. Kids hit in class, we hit 3-5 at once, and everyone calls each other a
juul fiend or just a fiend. Funny how similar it all is.” 542

538

What’s Juul in School, https://www.reddit.com/r/juul/comments/61is7i/whats_juul_in_school/
(last visited Mar. 20, 2020).

539

Id.

540

Id.

541

Id.

542

Id.
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(e)

“[T]he same [expletive] is happening in my school. kids that vaped were

called [expletive] for the longest time, that all changed now.” 543
(f)

“Made an account to say that it’s exactly the same way in my school! LOL.

I’m from California and I think I know over 40 kids that have it here just in my school. We do it
in the bathrooms, at lunch etc. LMAO. ‘Do you have a pod man?’” 544
(g)

“It’s the same at my school and just about every other school in

(h)

“2 months into this school year, my high school made a newspaper article

Colorado.” 545

about the ‘JUUL epidemic.’” 546
(i)

“Wow do you go to high school in Kansas because this sounds EXACTLY

like my school. I’ll go into a different bathroom 4 times a day and there will be kids in there
ripping JUUL’s in every single one.” 547.
(j)

“At my high school towards the end of lunch everyone goes to the bathroom

for what we call a ‘juul party.’ People bring juuls, phixes, etc. It’s actually a great bonding
experience because freshman can actually relate to some upperclassmen and talk about vaping.”548

543

Id.

544

Id.

545

Id.

546

Id. (citing Juuls Now Rule the School as Students Frenzy Over E-cig (Oct. 5, 2016),
https://imgur.com/a/BKepw).

547

Id.

548

Id.
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(k)

“To everyone thinking that this is just in certain states, it’s not. This is a

nationwide trend right now. I’ve seen it myself. If you have one you’re instantly insanely popular.
Everyone from the high-achievers to the kids who use to say ‘e-cigs are for [expletives]’ are using
the juul. It’s a craze. I love it, I’ve made an insane amount of money. It’s something that has
swept through our age group and has truly taken over. And it happened almost overnight.” 549
347.

E-cigarette use has completely changed school bathrooms – now known as “the

Juul room.” 550 As one high school student explained, “it’s just a cloud.” 551 The ubiquity of ecigarette use in high school bathrooms has generated numerous online spoofs about “the juul
room.”

549

Id. (emphasis added).

550

Moriah Balingit, In the ‘Juul room’: E-cigarettes spawn a form of teen addiction that worries
doctors,
parents
and
schools,
Wash.
Post
(July
26,
2019),
https://www.washingtonpost.com/local/education/helpless-to-the-draw-of-nicotine-doctorsparents-and-schools-grapple-with-teens-addicted-to-e-cigarettes/2019/07/25/e1e8ac9c-830a11e9-933d-7501070ee669_story.html.
551

Greta Jochem, Juuling in School: e-Cigarette Use Prevalent Among Local Youth, Daily
Hampshire Gazette (Nov. 13, 2018), https://www.gazettenet.com/Juuling-in-Schools-21439655.
- 166 -

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552

348.

As another high school student explained, “You can pull it out, you can have it

anywhere. To smoke a cigarette you have to hit the bus stop. You want a Juul you hit the
bathroom, it’s easy.” 553 He added that JLI “market[s] it as an alternative to cigarettes but really
it’s a bunch of kids who have never picked up a pack and they’re starting their nicotine addiction
there.” 554 Students at another high school stated that classmates had “set off the fire alarm four
times last year from vaping in the bathrooms [at school],” adding that it is commonplace to see
students vaping in school bathrooms or in the parking lot. 555

552

Juul Hashtag Meme, Stan. U. Res. into the Impact of Tobacco Advert. (2018),
http://tobacco.stanford.edu/tobacco_main/images_pods.php?token2=fm_pods_st681.php&token
1=fm_pods_img37610.php&theme_file=fm_pods_mt068.php&theme_name=JUUL&subtheme_
name=%23juul.

553

Alison Grande, ‘Juuling’: Vaping device that looks like USB drive popular with teens, KIRO
7 (Dec. 8, 2017), https://www.kiro7.com/news/local/juuling-vaping-device-that-looks-like-usbdrive-popular-with-teens/660965605/.
554

Id.

555

Manisha Jha, ‘You need to stop vaping right now’: Students and faculty react to Washington
vape
ban,
The
Daily,
U.
of
Wash.
(Sept.
30,
2019),
http://www.dailyuw.com/news/article_960d8692-e324-11e9-870c-9f9d571115d6.html.
- 167 -

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349.

This impact was only made worse by JLI intentionally targeting schools, as

described above.
350.

Such rampant vapor product use has effectively added another category to teachers’

and school administrators’ job descriptions; many now receive special training to respond to the
various problems that vaping presents, both in and out of the classroom. A national survey of
middle schools and high schools found that 43.3% of schools have had to implement not only an
e-cigarette policy but an e-cigarette-specific policy. Participants in the survey reported multiple
barriers to enforcing these policies, including the discreet appearance of the product, difficulty
pinpointing the vapor or scent, and the addictive nature of the product.
351.

Across the United States, schools have had to divert resources and administrators

have had to go to extreme lengths to respond to the ever-growing number of students vaping on
school grounds.

According to the Truth Initiative, more than 40% of all teachers and

administrators reported that their school uses camera surveillance near the school’s restroom,
almost half (46%) reported camera surveillance elsewhere in the school, and 23% reported using
assigned teachers for restroom surveillance. 556 Some schools have responded by removing
bathroom doors or even shutting bathrooms down, and schools have banned flash drives to avoid
any confusion between flash drives and JUULs or the new “JUULalike” products – like
Eonsmoke’s device or the other copycats. Schools have also paid thousands of dollars to install
special monitors to detect vaping, which they say is a small price to pay compared to the plumbing
repairs otherwise spent as a result of students flushing vaping paraphernalia down toilets. Other

556

How are schools responding to JUUL and the youth e-cigarette epidemic?, The Truth Initiative
(Jan. 18, 2019), https://truthinitiative.org/research-resources/emerging-tobacco-products/how-areschools-responding-juul-and-youth-e-cigarette.
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school districts have sought state grant money to create new positions for tobacco prevention
supervisors, who get phone alerts when vape smoke is detected in bathrooms.
352.

Many schools have also shifted their disciplinary policies in order to effectively

address the youth vaping epidemic. Rather than immediately suspending students for a first
offense, school districts have created anti-vaping curricula which students are required to follow
in sessions held outside of normal school hours, including on Saturdays. Teachers prepare lessons
and study materials for these sessions with information on the marketing and health dangers of
vaping – extra work which requires teachers to work atypical hours early in the mornings and on
weekends. Some schools will increase their drug testing budget to include random nicotine tests
for students before they join extracurricular activities. Under this drug-testing protocol, first
offenders will undergo drug and alcohol educational programming; second and third offenders
with be forced to sit out from extracurriculars and attend substance abuse counseling.
353.

JUUL’s prevalence in schools is not a coincidence; JLI actively sought to enter

school campuses while it was coordinating with Altria. The U.S. House Subcommittee on
Economic and Consumer Policy (“Subcommittee”) conducted a months-long investigation of JLI,
including reviewing tens of thousands of internal documents, and concluded that JLI “deliberately
targeted children in order to become the nation’s largest seller of e-cigarettes.” 557

The

Subcommittee found that “(1) JUUL deployed a sophisticated program to enter schools and convey
its messaging directly to teenage children; (2) JUUL also targeted teenagers and children, as young

557

Memorandum, U.S. House Subcommittee on Econ. & Consumer Policy (July 25, 2019),
https://oversight.house.gov/sites/democrats.oversight.house.gov/files/Supplemental%20Memo.p
df.
- 169 -

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as eight years-old, in summer camps and public out-of-school programs; and (3) JUUL recruited
thousands of online ‘influencers’ to market to teens.” 558
354.

According to the Subcommittee, JLI was willing to pay schools and organizations

hundreds of thousands of dollars to have more direct access to kids. For example, JLI paid a
Baltimore charter school organization $134,000 to start a summer camp to teach kids healthy
lifestyles, for which JLI itself would provide the curriculum; offering schools $10,000 to talk to
students on campus; and giving the Police Activities League in Richmond, California, almost
$90,000 to provide JLI’s own vaping education program, “Moving On,” to teenage students
suspended for using cigarettes. Meanwhile, JLI would collect data about test scores, surveys, and
activity logs about the students.
355.

Among the more egregious incidents reported by the Subcommittee was a July 24,

2019 presentation in which no parents or teachers were in the room for the presentation, the
message conveyed was that JUUL was “totally safe,” and the presenter even demonstrated to the
students how to use a JUUL. The school was presumably paid for this meeting, which was
marketed to the school as an anti-smoking initiative. A JLI spokesman said the company is no
longer funding such programs.
356.

The problems with JLI’s youth prevention programs were widespread. According

to outside analyses, “the JUUL Curriculum is not portraying the harmful details of their product,
similar to how past tobacco industry curricula left out details of the health risks of cigarette use.” 559

558

Id.

559

Victoria Albert, Juul Prevention Program Didn’t School Kids on Dangers, Expert Says:
SMOKE AND MIRRORS. JUUL – which made up 68 percent of the e-cigarette market as of midJune – seems to have taken a page from the playbook of Big Tobacco, The Daily Beast (Oct. 19,
2018), https://www.thedailybeast.com/juul-prevention-program-didnt-school-kids-on-dangersexpert-says.
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Although it is well-known that teaching children to deconstruct ads is one of the most effective
prevention techniques, JLI programs entirely omitted this skill, and JLI’s curriculum barely
mentioned JUUL products as among the potentially harmful products to avoid. 560 As one expert
pointed out, “we know, more from anecdotal research, that [teens] may consider [JUULs] to be a
vaping device, but they don’t call it that. So when you say to a young person, ‘Vapes or e-cigarettes
are harmful,’ they say, ‘Oh I know, but I’m using a JUUL.’” 561
357.

Internal emails confirm both that JLI employees knew about the similarities of JLI’s

“youth prevention program” to the earlier pretextual antismoking campaigns by the cigarette
industry and that JLI management at the highest levels was personally involved in these efforts.

562

563

564

560

Id.

561

Id.

562

INREJUUL_00197608.

563

INREJUUL_00197607.

564

INREJUUL_00196624.
- 171 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 177 of 212

565

The paper concluded that “the Philip

Morris[‘s ‘youth prevention’] campaign had a counterproductive influence.” 566
358.

The Board was intimately involved in these “youth prevention” activities. For

example,

567

359.
568

Eventually, JLI ended this version of its

youth prevention program, but the damage had been done: following the playbook of Big Tobacco,
JLI had hooked more youth on nicotine.
L.

Impact of the Youth Vaping Crisis on Howard County

360.

Plaintiff Howard County is home to over 300,000 residents. Its county seat is

Ellicott City. Howard County Public School System (“HCPS”) manages 71 schools serving
approximately 49,000 students. Approximately 24.4% of Howard County’s residents are under
the age of 18.
361.

Howard County has been hit hard by the youth vaping epidemic. The increase in

youth vaping in Howard County is consistent with the rise in youth vaping throughout the state of
Maryland. The Maryland Department of Health Center for Tobacco Prevention and Control noted

565

INREJUUL_00265202.

566

Matthew C. Farrelly, et al., Getting to the Truth: Evaluating National Tobacco
Countermarketing Campaigns, 92 Am. J. Public Health 901 (2002).

567

JLI00151300.

568

INREJUUL_00194646.
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that “[t]he number of youth using new/emerging products, such as e-cigarettes, e-hookah, vape
pens, has increased dramatically since 2011.” 569 According to the Campaign for Tobacco-Free
Kids, 23.2% of Maryland high school students reported using e-cigarettes. 570 By contrast, only
5% of Maryland high school students reported smoking cigarettes. 571 Howard County health
officer Dr. Maura Rossman said, “We are very concerned about the increase of our Howard County
youth who are experimenting with juuling and vaping because research is now showing young
people who try or experiment with vaping are more likely to become long-term smokers of nicotine
products like cigarettes later on.” 572
362.

Howard County Executive Calvin Ball (“Ball”) recently introduced a bill to bring

the county into compliance with Maryland’s new law that raised the age of sale of tobacco and ecigarettes from 18 to 21. 573 The bill also amended what constitutes proof of age to purchase
tobacco or electronic smoking devices (“ESDs”). 574 Under the law, which went into effect on

569

Md. Dept. of Health, The Center for Tobacco Prevention and Control. (last updated Oct. 31,
2019) https://phpa.health.maryland.gov/ohpetup/pages/tob_home.aspx.

570

Campaign for Tobacco-Free Kids, The Toll of Tobacco in Maryland, (last updated Mar. 9,
2020), https://www.tobaccofreekids.org/problem/toll-us/maryland.

571

Id.

572

Jess Nocera, Howard County Officials are Stepping Up Education Efforts to Reach Teens
Who are Vaping, The Baltimore Sun (Mar. 18, 2019),
https://www.baltimoresun.com/maryland/howard/ph-ho-cf-howard-teens-juuling-0314story.html.
573

Pat Warren, Howard County Executive Pre-Files Bill to Raise Age for Tobacco, E-Cigarette
Sales from 18 to 21, (Oct. 30, 2019), https://baltimore.cbslocal.com/2019/10/30/howard-countyexecutive-pre-files-bill-to-raise-age-for-tobacco-e-cigarette-sales-from-18-to-21/.
574

County Executive Calvin Ball Pre-Files Bill to Raise Age for Tobacco and E-Cigarettes
Purchase from 18 to 21 in Howard County, Howard County Maryland (Oct. 24, 2019),
https://www.howardcountymd.gov/News/ArticleID/1721/News102419.
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December 6, 2019, consumers are no longer allowed to purchase tobacco products with an
employer or college identification document; only government issued identification documents are
acceptable. 575
363.

In connection with the announcement of the bill, Ball said, “When it comes to

vaping and when we’re looking especially at our younger adults, we’re seeing more prevalence in
using vaping and e-cigarettes.” 576 “I’m very concerned about the recent challenges when it comes
to vaping,” Ball said. 577 Ball added: “The safety of our young people is a top priority of my
administration and the responsibility of our entire community.” 578 “We know that most adults
who smoke or use tobacco started by age 21. In addition, in 2018, more than 3.6 million U.S.
youth, including 1 in 5 high school students and 1 in 20 middle school students, reported current
e-cigarette use. This legislation would slow this rise, decrease access to e-cigarettes and reduce
the likelihood of young people ever starting to use tobacco. By raising the minimum age, we
would be keeping our kids healthy and decreasing their chance of lifelong addiction.” 579
364.

Taking the same view, Senator Clarence Lam (“Lam”) of Howard County, a

medical doctor, said he would propose emergency legislation that would prohibit the sale of vaping

575

Id.

576

Warren, supra note 573.

577

Id.

578

County Executive Calvin Ball Pre-Files Bill to Raise Age for Tobacco and E-Cigarettes
Purchase from 18 to 21 in Howard County, supra note 574.
579

Id.
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products with flavors like mint, bubble gum, and other non-tobacco flavors. 580 Lam noted that the
flavors added to vaping products are often cited as one of the top reasons young people start vaping
and continue to do so once they start. 581 “We’ve really reached a tipping point in identifying a
public health crisis,” Lam said. “This is no longer a matter of convenience.” 582
365.

Data and feedback from HCPS show the scope of the youth vaping epidemic in

Plaintiff’s community. Vaping has become highly disruptive to HCPS’s operations as HCPS has
had to respond to many disciplinary issues and confiscate hundreds of vape devices from its
students. Students who are found with a nicotine product on school property are obligated to attend
a three-hour tobacco awareness program that addresses the health impacts of using tobacco and
offers resources for students. 583 HCPS and the nonprofit HC DrugFree are actively looking to
revamp how substance abuse issues are addressed with students. 584
366.

In order to combat the public health crisis caused by Defendants’ conduct, Plaintiff

spent significant and unexpected levels of time and resources addressing the pervasiveness of
youth use of vaping products. As noted, Howard County has introduced numerous pieces of
legislation in response to the vaping epidemic, including legislation to raise the legal age to
purchase tobacco products from 18 to 21 and to adopt more strict purchaser identification

580

Dominique Maria Bonessi, Maryland Lawmakers Eye Flavored Vaping Ban Amid Growing
Popularity Among Teens (Nov. 25, 2019), https://wamu.org/story/19/11/25/marylandlawmakers-eye-flavored-vaping-ban-amid-growing-popularity-among-teens/.
581

Id.

582

Id.

583

Nocera, supra note 572.

584

Id.
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requirements, 585 and legislation to ban vaping in public places. 586 In addition, at least four officials
from Howard County participated in Maryland e-facts task force on ESDs (“Task Force”), which
was announced by State Comptroller Peter Franchot following an alarming number of reports
about serious illnesses, lung disease, and deaths attributable to vaping. The Task Force was
charged with examining the public health and safety implications of ESDs and submitting
recommend new and stronger laws to ensure that consumers — particularly young people — are
protected. 587
367.

To combat the growing population of teenagers who are vaping or “juuling,” the

Howard County Health Department (“Health Department”) is stepping up its education efforts,
mirroring what was done to curb youth smoking years ago. 588 The Health Department’s efforts
include, for example, operating a Tobacco Awareness Program for Teens and partnering with
HCPS to offer the tobacco awareness program for students caught with nicotine products, noted
above. 589 The Health Department’s Cancer and Tobacco Coalition also met to increase awareness
for students, parents, teachers, coaches, and the general public about electronic smoking
products. 590

585

Warren, supra note 573.

586

Nocera, supra note 572.

587

Josh Kurtz, Franchot’s E-Cig Task Force Set to Kick Off Next Week (Nov. 26, 2019),
https://www.marylandmatters.org/blog/franchots-e-cig-task-force-set-to-kick-off-next-week/.

588

Id.

589

Id.

590

Id.
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368.

The Health Department has also worked to create a website dedicated to ESDs and

Vaping in Youth and Young Adults, and a social media campaign focused on e-cigarette
cessation. 591 The Health Department engages with youth to create videos to educate youth about
e-cigarette use, and it compensates youth for their involvement. 592
369.

Plaintiff also provides funds to law enforcement to conduct compliance checks on

tobacco retailers in the county and to issue citations for underage sale, through its Tobacco Sales
Enforcement Program to Prevent Youth Access to Tobacco, which utilizes Youth Tobacco
Investigators Information to assist Health Department enforcement Officers with undercover
tobacco purchase stings at licensed retail stores in Howard County. 593 Enforcement of e-cigarettes
sales to minors is challenging, however. Tobacco licenses do not indicate if a store sells ecigarettes, making it difficult to track e-cigarette stores. “With stores popping up and disappearing,
it is difficult to track in a live database,” said Elizabeth Menachery, director of the Health

591

Howard County Health Department (@hocohealth), Facebook (July 30, 2019),
https://www.facebook.com/hocohealth/photos/did-you-know-1-juul-pod-contains-20-cigarettesworth-of-nicotine-stop-spending-a/10157574832048960/.
592

Ryan Dickstein, Howard Co. Health Department Offering Gift Card to Vaping Teens (Jan.
13, 2020), https://www.wmar2news.com/news/region/howard-county/howard-co-healthdepartment-offering-gift-card-to-vaping-teens.

593

Tobacco Sales Enforcement Program to Prevent Youth Access to Tobacco, Howard County
Maryland (last visited Mar. 31, 2020),
https://www.howardcountymd.gov/Departments/Health/Cancer-Prevention/Tobacco-SalesEnforcement.
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Department. 594 The Health Department is working with the Maryland Legal Resource Center to
develop protocol to clamp down on sales of e-cigarettes to youth. 595
370.

Plaintiff has been taking important steps to combat the youth vaping epidemic, but

it cannot fully address the existing widespread use of vapor products and resulting nicotine
addiction among youth. Because of the potency of Defendants’ nicotine salts, combined with the
discreet device design and the ease of delivery—allowing youth to take a puff as often as every
few minutes—widespread vaping has resulted in a higher incidence of addiction than that caused
by youth cigarette smoking. In other words, unlike a combustible cigarette with its telltale smoke,
there is nothing about the JUUL device that prevents kids from taking a puff behind the closed
doors of their bedrooms or even the moment a teacher’s back is turned in the classroom. As the
researchers conducting the national Monitoring the Future survey wrote in a letter to the New
England Journal of Medicine:
Current efforts by the vaping industry, government agencies, and schools have thus
far proved insufficient to stop the rapid spread of nicotine vaping among
adolescents. Of particular concern are the accompanying increases in the
proportions of youth who are physically addicted to nicotine, an addiction that is
very difficult to overcome once established. The substantial levels of daily vaping
suggest the development of nicotine addiction. New efforts are needed to protect
youth from using nicotine during adolescence, when the developing brain is
particularly susceptible to permanent changes from nicotine use and when almost
all nicotine addiction is established. 596

594

Fatima Waseem, Clearing the Smoke on Vaping in Howard County, (Mar. 31, 2016),
https://www.baltimoresun.com/maryland/howard/columbia/ph-ho-cf-adults-vaping-overall-033120160331-story.html.
595

Id.

596

Richard Miech, Ph.D. et al., Trends in Adolescent Vaping, 2017-2019, New Eng. J. Med. (Oct.
10, 2019), https://www.nejm.org/doi/full/10.1056/NEJMc1910739.
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371.

Therefore, while Plaintiff has been working tirelessly to address the youth vaping

crisis, more resources are needed to fully counter Defendants’ conduct and implement more robust
anti-vaping efforts. With additional resources, Plaintiff would expand its educational and training
efforts, create a more robust education and prevention program, and initiate more programs and
take more actions to combat the vaping epidemic.
372.

A major concern for Plaintiff is the lack of treatment options for a generation of

addicted youth that reside within Plaintiff’s community. Howard County offers smoking cessation
classes for youth and adults, 597 however, it has shrinking resources and little research available to
help youth stop vaping. Although creating treatment options for youth addicted to nicotine is a
major priority for Plaintiff, these options will be difficult to develop. Many of the tobacco
cessation products that are approved by the FDA are not approved for use by children. Plaintiff
first needs additional research on what cessation options are possible and which ones will be
effective for youth vaping. Vaping presents unique regulatory challenges because the ability to
conceal Defendants’ products enables youth to vape more frequently, and in more locations, than
they are able to when smoking traditional cigarettes. With additional resources, Plaintiff would
support development of additional, youth-appropriate cessation options that can meet the needs of
Plaintiff’s diverse community. Plaintiff would also support the development of vaping-specific
cessation resources to address the ways in which vaping cessation may differ from traditional
smoking cessation.
373.

Fully addressing the harms to Plaintiff caused by Defendants’ conduct will require

a comprehensive approach. Without the resources to fund measures such as those described herein,
Plaintiff will continue to be harmed by the ongoing consequences of Defendants’ conduct.
597

Nocera, supra note 572.
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M.

No Federal Agency Action, Including by the FDA, Can Provide the
Relief Plaintiff Seeks Here

374.

The injuries Plaintiff has suffered and will continue to suffer cannot be addressed

by agency or regulatory action. There are no rules the FDA could make or actions the agency
could take that would provide Plaintiff the relief it seeks in this litigation.
375.

Even if e-cigarettes were entirely banned today or only used by adults, millions of

youth, including Plaintiff’s residents, would remain addicted to nicotine.
376.

Regulatory action would do nothing to compensate Plaintiff for the money and

resources it has already expended addressing the impacts of the youth vaping epidemic and the
resources it will need in the future. Only this litigation has the ability to provide Plaintiff with the
relief it seeks.
377.

Furthermore, the costs Plaintiff has incurred in responding to the public health crisis

caused by youth vaping and in rendering public services described above are recoverable pursuant
to the causes of actions raised by Plaintiff. Defendants’ misconduct alleged herein is not a series
of isolated incidents, but instead the result of a sophisticated and complex marketing scheme and
related cover-up scheme that has caused a continuing, substantial, and long-term burden on the
services provided by Plaintiff. In addition, the public nuisance created by Defendants and
Plaintiff’s requested relief in seeking abatement further compels Defendants to reimburse and
compensate Plaintiff for the substantial resources it has expended and will need to continue to
expend to address the youth vaping epidemic.
V.

CAUSES OF ACTION
COUNT I
Violations of Maryland Public Nuisance Law
378.

Plaintiff Howard County incorporates each preceding paragraph as though set forth

fully herein.
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379.

Plaintiff brings this claim under Maryland Public Nuisance law as to all Defendants.

380.

Maryland courts “ha[ve] adopted the Restatement (Second) of Torts’ definition[]

of . . . public . . . nuisance.” Cofield v. Lead Indus. As’n, Inc., No. CIV.A. MJG-99-3277, 2000
WL 34292681, at *6 (D. Md. Aug. 17, 2000). Under Maryland law, “[a] public nuisance is an
unreasonable interference with a right common to the general public. Tadjer v. Montgomery Cty.,
300 Md. 539, 552, 479 A.2d 1321, 1327 (1984). “Circumstances that may sustain a holding that
an interference with a public right is unreasonable include the following: (a) Whether the conduct
involves a significant interference with the public health, the public safety, the public peace, the
public comfort or the public convenience, or (b) whether the conduct is proscribed by a statute,
ordinance or administrative regulation, or (c) whether the conduct is of a continuing nature or has
produced a permanent or long-lasting effect, and, as the actor knows or has reason to know, has a
significant effect upon the public right.” Id. at 552, 479 A.2d at 1327-28.
381.

Plaintiff and its residents have a right to be free from conduct that endangers their

health and safety. Yet Defendants have engaged in conduct and omissions which unreasonably
and injuriously interfered with the public health and safety in Plaintiff’s community and created
substantial annoyance, inconvenience, and injury to the public by their production, promotion,
distribution, and marketing of vapor products, including, but not limited to JUUL, for use by youth
in Howard County, in violation of statutes and ordinances. Defendants’ actions and omissions
have substantially, unreasonably, and injuriously interfered with the functions and operations of
Howard County and affected the public health, safety, and welfare of the Howard County
community.
382.

Defendants’ interference with the functions and operations of Anne Arundel and

the effect of youth vaping on the public health, safety, and welfare of the Anne Arundel community

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is continuing in nature and has produced a permanent or long-lasting effect, and, as Defendants
know or have reason to know, has a significant effect upon the public right of Anne Arundel and
its residents.
383.

Each Defendant has created or assisted in the creation of a condition that is injurious

to the health and safety of Plaintiff and its residents and interferes with the comfortable enjoyment
of life and property of the entire community of Howard County.
384.

Defendants’ conduct has directly caused a severe disruption of the public health,

order, and safety. Defendants’ conduct is ongoing and continues to produce permanent and longlasting damage.
385.

This harm to Plaintiff and the public is substantial, widespread, and ongoing. It

outweighs any potential offsetting benefit of the Defendants’ wrongful conduct because
Defendants’ conduct violates Maryland’s public policy against marketing vapor products to
minors, expressed through statutes and ordinances, including, but not limiting to:
(a)

Md. Code Ann., Crim. Law §10-107, under which it is illegal to distribute

or sell tobacco products to an individual under the age of 21 years;
(b)

Md. Code Ann., Health-Gen. §24-305, under which it is illegal to sell,

distribute, or offer for sale to an individual under the age of 21 years an electronic smoking device;
(c)

Md. Code Ann., Health-Gen. §24-307, under which it is illegal to distribute

tobacco products to an individual under the age of 21 years; and
(d)

Md. Code Ann., Bus. Reg. §16.7-204.1, which requires e-cigarette retailers

to post “clearly visible” signage that states, “No person under the age of 21 may be sold tobacco
products without military identification.”
386.

Defendants’ conduct violated this public policy, including by:

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(a)

Actively seeking to enter school campuses, targeting children as young as

eight through summer camps and school programs, extensively targeting youth through social
media campaigns, and recruiting “influencers” to market to teens;
(b)

Engaging in marketing tactics specifically designed to mislead children and

youth and to ensnare minors into nicotine addiction, including by explicitly adopting tactics
prohibited from Big Tobacco, with the knowledge that those tactics were likely to ensnare children
and youth into nicotine addiction, including using billboards and outdoor advertising, sponsoring
events, giving free samples, paying affiliates and “influencers” to push vapor products, and by
selling vapor products in flavors designed to appeal to youth;
(c)

Engaging in advertising modeled on cigarette ads and featuring youthful-

appearing models and designing advertising in a patently youth-oriented fashion;
(d)

Directing advertising to youth media outlets and media designed to appeal

to children and youth, such as Instagram and other social media channels;
(e)

Hosting youth-focused parties across the United States, at which free

samples were dispensed and in which vaping was featured prominently across social media;
(f)

Formulating vapor products with flavors with the knowledge that such

flavors appealed to youth and with the intent that youth become addicted or dependent upon vapor
products; and
(g)

Promoting and assisting the growth of the vapor product market and its

availability with knowledge that vapor products were being purchased and used by large numbers
of youth.
387.

The health and safety of the youth of Howard County, including those who use,

have used, or will use vapor products, as well as those affected by others’ use of vapor products,

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are matters of substantial public interest and of legitimate concern to the Plaintiff, as well as to the
entire Howard County community.
388.

Defendants’ conduct has affected and continues to affect a substantial number of

people within Howard County and is likely to continue causing significant harm.
389.

But for Defendants’ actions, vapor products, including, but not limited to JUUL,

used by youth would not be as widespread as it is today, and the youth vaping public health crisis
that currently exists as a result of Defendants’ conduct would have been averted.
390.

Defendants knew or should have known that their conduct would create a public

nuisance. Defendants knew or reasonably should have known that their statements regarding the
risks and benefits of vaping were false and misleading, that their marketing methods were designed
to appeal to minors, and that their false and misleading statements, marketing to minors, and active
efforts to increase the accessibility of vapor products and grow JUUL’s market share, or the market
share of Defendants’ products, were causing harm to youth and to municipalities, schools, and
counties, including youth in Howard County and to Plaintiff itself.
391.

Thus, the public nuisance caused by Defendants was reasonably foreseeable,

including the financial and economic losses incurred by Plaintiff.
392.

Alternatively, Defendants’ conduct was a substantial factor in bringing about the

public nuisance even if a similar result would have occurred without it. By directly marketing to
youth and continuing these marketing practices after it was evident that children were using JUUL
products in large numbers and were specifically using these products in schools, JLI directly
facilitated the spread of the youth vaping crisis and the public nuisance affecting Howard County.
393.

By seeking to capitalize on JLI’s success in addicting minors to nicotine and by

directly marketing to youth and continuing these marketing practices after it was evident that

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children were using JUUL products and Eonsmoke products in large numbers and were
specifically using these products in schools, Eonsmoke directly facilitated the spread of the youth
vaping crisis and the public nuisance affecting Howard County.
394.

Altria, by investing billions of dollars in JLI and actively working to promote the

sale and spread of JUUL products with the knowledge of JLI’s practice of marketing JUUL
products to youth and its failure to control youth access to JUUL products, directly facilitated the
spread of the youth vaping crisis and the public nuisance affecting Howard County.
395.

Plaintiff has taken steps to address the harm caused by Defendants’ conduct,

including the following:
(a)

Spending time and resources assembling information about the dangers of

youth vaping and the extent of youth vaping in Howard County;
(b)

Collecting and publishing information about the youth vaping epidemic;

(c)

Developing infographics and factsheets about vaping and its dangers;

(d)

Responding to requests for information from HCPS and other service

providers about how to help youth who are addicted to nicotine;
(e)

Speaking to youth at schools and training counselors, teachers, and parents

to recognize vapor products;
(f)

Helping schools to assess, create, and update policies relating to vaping at

school and vaping discipline procedures;
(g)

Educating counselors, teachers, community groups, parents, and youth

about the risks of vaping;
(h)

Contracting with other organizations to develop youth vaping prevention

programs; and

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(i)
396.

Updating Plaintiff’s website to address the dangers of vapor product use.

Fully abating the epidemic of youth vaping resulting from Defendants’ conduct will

require much more than these steps.
397.

Plaintiff therefore requests all the relief to which it is entitled, including damages

in an amount to be determined at trial and an order providing for the abatement of the public
nuisance that Defendants have created or assisted in the creation of, and enjoining Defendants
from future conduct contributing to the public nuisance described above.
COUNT II
Violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18
U.S.C. §1961 et seq.
398.

Plaintiff hereby incorporates by reference the allegations contained in the preceding

paragraphs of this complaint.
399.

This claim is brought by Plaintiff against Defendants JLI and the Altria Defendants

(“Youth Marketing Cover-Up Enterprise Defendants”) for actual damages, treble damages, and
equitable relief under 18 U.S.C. §1964 for violations of 18 U.S.C. §1961 et seq.
400.

At all relevant times, each Youth Marketing Cover-Up Enterprise Defendant is and

has been a “person” within the meaning of 18 U.S.C. §1961(3), because they are capable of
holding, and do hold, “a legal or beneficial interest in property.”
401.

Plaintiff is a “person,” as that term is defined in 18 U.S.C. §1961(3), and has

standing to sue as it was and is injured in its business and/or property as a result of the Youth
Marketing Cover-Up Enterprise Defendants’ wrongful conduct described herein.
402.

Section 1962(c) makes it “unlawful for any person employed by or associated with

any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to
conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a
pattern of racketeering activity . . . .” 18 U.S.C. §1962(c).
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403.

Section 1962(d) makes it unlawful for “any person to conspire to violate” Section

1962(c), among other provisions. See 18 U.S.C. §1962(d).
404.

Each Youth Marketing Cover-Up Enterprise Defendant conducted the affairs of an

enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. §1962(c) and
§1962(d).
A.

Description of Defendants’ Youth Marketing Cover-Up Enterprise

405.

RICO defines an enterprise as “any individual, partnership, corporation,

association, or other legal entity, and any union or group of individuals associated in fact although
not a legal entity.” 18 U.S.C. §1961(4).
406.

Under 18 U.S.C. §1961(4) a RICO “enterprise” may be an association-in-fact that,

although it has no formal legal structure, has (i) a common purpose, (ii) relationships among those
associated with the enterprise, and (iii) longevity sufficient to pursue the enterprise’s purpose. See
Boyle v. United States, 556 U.S. 938, 946 (2009).
407.

Defendants JLI and Altria formed an association-in-fact enterprise – referred to

herein as the Youth Marketing Cover-Up Enterprise. This Enterprise exists separately from the
otherwise legitimate business operations of JLI and Altria.
408.

The Youth Marketing Cover-Up Enterprise is an ongoing and continuing business

organization consisting of “persons” within the meaning of 18 U.S.C. §1961(3) that created and
maintained systematic links for a common purpose: fraudulently maintaining and expanding JLI’s
massive, and ill-gotten, share of the e-cigarette market.
409.

As set forth above, JLI obtained its massive market share over a short time period

by successfully targeting youth and addicting youth to nicotine.

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B.

The Enterprise Sought to Fraudulently Deny Having Marketed to
Youth in Maintaining and Expanding JUUL’s Youth Market Share

410.

As described above, Altria – having long followed JUUL’s market-share

dominance with envy – decided to go from JLI’s competitor to its co-conspirator. Altria and JLI
thus formed the Youth Marketing Cover-Up Enterprise with the goal of preserving, and profiting
from, JUUL’s ill-gotten market share.
411.

The Youth Marketing Cover-Up Enterprise recognized that one of the keys to

preserving JUUL’s market share was to continue to falsely deny that JLI marketed its tobacco
products to youth. Both JLI and Altria knew that once JLI had established a base of young
customers, the focus had to be on covering up JLI’s past youth marketing in order to keep JUUL
products available in communities like Plaintiff’s. To further this effort, JLI and Altria have also
made repeated statements through the mail and wires, in advertising and otherwise, that JLI does
not market to youth and its marketing is only aimed at adult smokers, that none of the Youth
Marketing Cover-Up Defendants want youth to vape, and vaping is for adults only. But this is not
now, and has not ever been, an effective tactic to prevent youth initiation, as Altria well knows.
In a lawsuit against Altria, among other Big Tobacco defendants, for marketing, a court recognized
that “smoking has traditionally been viewed by adolescents and young adults as sophisticated adult
behavior to be emulated.” 598 As mentioned above, “[e]mphasizing that smoking is an adult activity
underscores the desirability of engaging in adult behavior for adolescents who are particularly
motivated to appear mature.” 599

598

Philip Morris, 449 F. Supp. 2d at 617.

599

Id. at 669.
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412.

JLI and the Altria Defendants worked in concert to defraud the public and

regulators in order to quell a public outcry and prevent regulation that would have impeded their
plan to maintain and expand sales of JUUL products to a customer base primarily consisting of
youth. Specifically, they worked to ensure that certain flavors popular with youth such as mint
remained on the market as long as possible, even while publicly declaring that they were removing
flavors from the market to address the youth vaping crisis and despite their knowledge that mint
was a particularly attractive flavor to youth.
413.

Thus, in furtherance of their Enterprise, JLI and Altria repeatedly made statements

denying that youth were intended targets for JUUL products and asserting that JUUL products
were really created and designed as a smoking cessation device, intended from the start for
“switchers” (existing smokers who are open to vaping). These statements are false, and constitute
mail and wire fraud, predicate acts under RICO.
414.

At all relevant times, each Youth Marketing Cover-Up Enterprise Defendant was

aware of the conduct of the Youth Marketing Cover-Up Enterprise, was a knowing and willing
participant in that conduct, and reaped profits from that conduct in the form of sales and
distribution of JUUL products.
415.

The persons engaged in the Youth Marketing Cover-Up Enterprise are

systematically linked through contractual relationships, financial ties, and continuing coordination
of activities.
416.

There is regular communication between JLI and the Altria Defendants in which

information regarding the Youth Marketing Cover-Up Enterprise Defendants’ scheme to protect,
maintain and expand JUUL’s market share is shared. Typically, this communication occurred,
and continues to occur, through the use of the mail and wires in which Defendants share

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information regarding the operation of the Youth Marketing Cover-Up Enterprise and its cover-up
of JLI’s efforts to target and addict youth.
417.

The Youth Marketing Cover-Up Enterprise functions as a continuing unit for the

purposes of executing and accomplishing its objectives, and when issues arise, each member of
the Enterprise agrees to take action to support the Enterprise.
418.

Each Youth Marketing Cover-Up Enterprise Defendant participated in the

operation and management of the Youth Marketing Cover-Up Enterprise by directing its affairs as
described herein.
419.

While the Youth Marketing Cover-Up Enterprise Defendants participate in, and are

members of, the Youth Marketing Cover-Up Enterprise, they have an existence separate from the
Enterprise, including distinct legal statuses, affairs, offices and roles, officers, directors,
employees, and individual personhood.
420.

Without the willing participation of each Youth Marketing Cover-Up Enterprise

Defendant, the Youth Marketing Cover-Up Enterprise’s common course of conduct would not be
successful.
C.

Predicate Acts: Mail and Wire Fraud

421.

To carry out, or attempt to carry out, the objectives of the Youth Marketing Cover-

Up Enterprise, the members of the Enterprise, each of whom is a person associated-in-fact with
the Enterprise, did knowingly conduct or participate in, directly or indirectly, the affairs of the
Enterprise through a pattern of racketeering activity within the meaning of 18 U.S.C. §§1961(1),
1961(5) and 1962(c), and employed the use of the mail and wire facilities, in violation of 18 U.S.C.
§1341 (mail fraud) and §1343 (wire fraud).
422.

Specifically, the members of the Youth Marketing Cover-Up Enterprise have

committed, conspired to commit, and/or aided and abetted in the commission of, at least two
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predicate acts of racketeering activity (i.e., violations of 18 U.S.C. §§1341 and 1343), within the
past ten years.
423.

The multiple acts of racketeering activity which the members of the Youth

Marketing Cover-Up Enterprise committed, or aided or abetted in the commission of, were related
to each other, posed a threat of continued racketeering activity, and therefore constitute a “pattern
of racketeering activity.”
424.

The racketeering activity was made possible by the Enterprise’s regular use of the

facilities, services, and employees of the Enterprise.
425.

The members of the Youth Marketing Cover-Up Enterprise participated in the

Enterprise by using mail, telephone, and the internet to transmit mailings and wires in interstate or
foreign commerce.
426.

The members of the Youth Marketing Cover-Up Enterprise used, directed the use

of, and/or caused to be used, thousands of interstate mail and wire communications in service of
the Enterprise’s objectives through common misrepresentations, concealments, and material
omissions.
427.

In devising and executing the objectives of the Youth Marketing Cover-Up

Enterprise, its members devised and knowingly carried out a material scheme and/or artifice to
defraud the public by marketing JUUL products to youth, ensuring that youth could access JUUL
products, and then denying that JUUL products were marketed to youth, and maintained that JUUL
was really created and designed as a smoking cessation device.
428.

For the purpose of furthering its desire to preserve and increase its market share,

even at the expense of exposing and addicting youth to nicotine, the Youth Marketing Cover-Up

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Enterprise committed these racketeering acts, which number in the thousands, intentionally and
knowingly with the specific intent to advance its objectives.
429.

In order to protect JLI’s ability to continue to sell JUUL products and market to

youth, the Altria Defendants and JLI, through their operation of the Youth Marketing Cover-Up
Enterprise, worked in concert to defraud the public and regulators in order to prevent the public
and political condemnation that would have impeded the Youth Marketing Cover-Up Enterprise’s
common purpose: maintaining and expanding JLI’s massive, and ill-gotten, share of the e-cigarette
market.
430.

In furtherance of their Enterprise, JLI and Altria repeatedly made statements to the

public disclaiming any desire to build a youth market, and statements that JUUL was always
intended for and marketed to adult smokers and/or as a smoking cessation device. In truth, JUUL
was a potent nicotine delivery system designed to addict non-smokers, particularly youth, to
nicotine, and in fact was specifically marketed to appeal to children. It was only in the face of
widespread public outrage and increased scrutiny that Youth Marketing Cover-Up Enterprise
dramatically re-shaped its marketing message and launched its “Make the Switch” campaign. In
making these representations, JLI and Altria intended that consumers, the public, and regulators
rely on misrepresentations that JUUL products were designed to assist smoking cessation, did not
pose a threat to public health, and were never intended to be used or marketed to appeal to youth.
431.

These statements by the Youth Marketing Cover-Up Enterprise Defendants are

false, and constitute mail and wire fraud, predicate acts under RICO.
432.

Each of the Youth Marketing Cover-Up Enterprise Defendants knew at the time of

making these statements that they were untrue and misleading. JUUL is not FDA-approved as a
cessation product.

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433.

Each of the foregoing statements and transmissions constitutes a predicate act of

wire fraud. The Youth Marketing Cover-Up Enterprise Defendants made these transmissions and
statements, knowing they would be transmitted via wire, with the intent to market to youth and to
deceive the public, the FDA, and Congress as to JLI and its officers and directors’ true intentions
of hooking underage users.
434.

As set forth herein, JLI obtained its massive market share over a short time period

by successfully targeting youth and addicting youth to nicotine. Altria’s investment in and
provision of “services” to JLI reflect an intention to further the Enterprise’s common purpose of
fraudulently maintaining and expanding JUUL’s market share, including by maintaining and
growing JLI’s youth sales. JUUL’s predominantly youth customer base ensures a steady supply of
nicotine-addicted customers – creating a new generation of customers for Altria’s products. The
Enterprise has worked to maintain and expand JUUL’s market share – which, based on Altria’s
own October 25, 2018 letter to the FDA, Altria believes was obtained by employing marketing
and advertising practices that contributed to youth vaping. The Enterprise’s efforts to cover up the
role of youth in JUUL’s sales are knowing, intentional, and fraudulent in violation of RICO.
435.

The Youth Marketing Cover-Up Enterprise’s predicate acts of racketeering (18

U.S.C. §1961(1)) include, but are not limited to:
A. Mail Fraud: the Youth Marketing Cover-Up Enterprise violated 18 U.S.C. §1341
by sending or receiving, or by causing to be sent and/or received, fraudulent
materials via U.S. mail or commercial interstate carriers for the purpose of
deceiving the public regarding its efforts to market to youth and the true purpose
and design behind its products; and
B. Wire Fraud: The Youth Marketing Cover-Up Enterprise violated 18 U.S.C.
§1343 by transmitting and/or receiving, or by causing to be transmitted and/or
received, fraudulent materials by wire for the purpose of deceiving the public
regarding its efforts to market to youth and the true purpose and design behind its
products.

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436.

The Youth Marketing Cover-Up Enterprise falsely and misleadingly used the mail

and wires in violation of 18 U.S.C. §1341 and §1343. Illustrative and non-exhaustive examples
include the following:
(a)

“Here at JUUL we are focused on driving innovation to eliminate cigarettes,

with the corporate goal of improving the lives of the world’s one billion adult smokers.” (JLI’s
Twitter Feed, July 5, 2017). 600
(b)

“It’s a really, really important issue. We don’t want kids using our

products.” (CNBC Interview of JLI’s Chief Administrative Officer, December 14, 2017). 601
(c)

“We market our products responsibly, following strict guidelines to have

material directly exclusively toward adult smokers and never to youth audiences.” (JLI Social
Media Post, March 14, 2018). 602
(d)

“JUUL Labs was founded by former smokers, James and Adam, with the

goal of improving the lives of the world’s one billion adult smokers by eliminating cigarettes.
We envision a world where fewer adults use cigarettes, and where adults who smoke cigarettes
have the tools to reduce or eliminate their consumption entirely, should they so desire.” (JLI
Website, April 2018 (or earlier)). 603

600

Jackler et al., supra note 42, at 25 (This was the first mention of the term “adult” or “adult
smoker” on JLI’s Twitter Feed).

601

Angelica LaVito, Nearly one-quarter of teens are using pot, CNBC (Dec. 14, 2017),
https://www.cnbc.com/2017/12/13/marijuana-and-nicotine-vaping-popular-among-teensaccording-to-study.html (Interview with Ashely Gould, JUUL Chief Administrative Officer).
602

Jackler et al., supra note 42, at 2 (citing a JUUL social media post from March 14, 2018).

603

Our Mission, JUUL Labs, Inc., https://www.juul.com/mission-values (last visited Mar. 28,
2020) (emphasis added).
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 200 of 212

(e)

“Our company’s mission is to eliminate cigarettes and help the more than

one billion smokers worldwide switch to a better alternative,” said JUUL Labs Chief Executive
Officer Kevin Burns. “We are already seeing success in our efforts to enable adult smokers to
transition away from cigarettes and believe our products have the potential over the long-term to
contribute meaningfully to public health in the U.S. and around the world. At the same time, we
are committed to deterring young people, as well as adults who do not currently smoke, from using
our products. We cannot be more emphatic on this point: No young person or non-nicotine user
should ever try JUUL.” (JLI Press Release, April 25, 2018). 604
(f)

“Our objective is to provide the 38 million American adult smokers with

meaningful alternatives to cigarettes while also ensuring that individuals who are not already
smokers, particularly young people, are not attracted to nicotine products such as JUUL,” said
JUUL Labs Chief Administrative Officer Ashley Gould, who heads the company’s regulatory,
scientific and youth education and prevention programs. “We want to be a leader in seeking
solutions, and are actively engaged with, and listening to, community leaders, educators and
lawmakers on how best to effectively keep young people away from JUUL.” (JLI Press Release,
April 25, 2018). 605
(g)

“JUUL was not designed for youth, nor has any marketing or research effort

since the product’s inception been targeted to youth.” (Letter to FDA, June 15, 2018). 606

604

JUUL Labs Announces Comprehensive Strategy to Combat Underage Use, supra note 389.

605

Id.

606

Letter from JUUL’s Counsel at Sidley Austin to Matthew Holman, M.D., FDA at 2 (June 15,
2018).
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(h)

“With this response, the Company hopes FDA comes to appreciate why the

product was developed and how JUUL has been marketed – to provide a viable alternative to
cigarettes for adult smokers.” (Letter to FDA, June 15, 2018). 607
(i)

“We welcome the opportunity to work with the Massachusetts Attorney

General because, we too, are committed to preventing underage use of JUUL. We utilize stringent
online tools to block attempts by those under the age of 21 from purchasing our products, including
unique ID match and age verification technology. Furthermore, we have never marketed to anyone
underage. Like many Silicon Valley technology startups, our growth is not the result of marketing
but rather a superior product disrupting an archaic industry. When adult smokers find an effective
alternative to cigarettes, they tell other adult smokers. That’s how we’ve gained 70% of the market
share. . . Our ecommerce platform utilizes unique ID match and age verification technology to
make sure minors are not able to access and purchase our products online.” (Statement from Matt
David, JLI Chief Communications Officer, July 24, 2018). 608
(j)

“We adhere to strict guidelines to ensure that our marketing and commercial

communications are directed toward existing adult smokers.” (JLI Website, July 26, 2018).
(k)

“We did not create JUUL to undermine years of effective tobacco control,

and we do not want to see a new generation of smokers.” (JLI’s website as of July 26, 2018). 609

607

Id. at 3.

608

Statement Regarding The Press Conference Held By The Massachusetts Attorney General,
JUUL Labs, Inc. (July 24, 2018), https://newsroom.juul.com/statement-regarding-the-pressconference-held-by-the-massachusetts-attorney-general/.
609

Our
Responsibility,
JUUL
Labs,
Inc.
(July
26,
https://web.archive.org/web/20180726021743/https://www.juul.com/our-responsibility
visited Mar. 29, 2020).
- 196 -

2018),
(last

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 202 of 212

(l)

“Although we do not believe we have a current issue with youth access to

or use of our pod-based products, we do not want to risk contributing to the issue.” (Letter from
Altria CEO to FDA Commissioner Gottlieb, October 25, 2018). 610
(m)

“We believe e-vapor products present an important opportunity to adult

smokers to switch from combustible cigarettes.” (Letter to FDA Commissioner Gottlieb,
October 25, 2018). 611
(n)

“We don’t want anyone who doesn’t smoke, or already use nicotine, to use

JUUL products. We certainly don’t want youth using the product. It is bad for public health, and
it is bad for our mission. JUUL Labs and FDA share a common goal – preventing youth from
initiating on nicotine.” (JLI Website, November 12, 2018). 612
(o)

“To paraphrase Commissioner Gottlieb, we want to be the offramp for

adult smokers to switch from cigarettes, not an on-ramp for America’s youth to initiate on
nicotine.” (JLI Website, November 13, 2018). 613
(p)

“We won’t be successful in our mission to serve adult smokers if we don’t

narrow the on-ramp. . . . Our intent was never to have youth use JUUL products.” (JLI Website,
November 13, 2018). 614
(q)

“Altria and JLI are committed to preventing kids from using any tobacco

products. As recent studies have made clear, youth vaping is a serious problem, which both Altria

610

Willard Letter to Gottlieb, supra note 415, at 2.

611

Id. (emphasis added).

612

JUUL Labs Action Plan, supra note 430 (statement of Ken Burns, former CEO of JUUL).

613

Id.

614

Id.
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and JUUL are committed to solve. As JUUL previously said, ‘Our intent was never to have youth
use JUUL products.’” (Altria Earnings Call, December 20, 2018). 615
(r)

“Altria’s investment sends a very clear message that JUUL’s technology

has given us a truly historic opportunity to improve the lives of the world’s one billion adult
cigarette smokers,” said Kevin Burns, Chief Executive Officer of JUUL. “This investment and the
service agreements will accelerate our mission to increase the number of adult smokers who switch
from combustible cigarettes to JUUL devices.” (Altria Earnings Call, December 20, 2018). 616
(s)

“We have long said that providing adult smokers with superior,

satisfying products with the potential to reduce harm is the best way to achieve tobacco harm
reduction. Through Juul, we are making the biggest investment in our history toward that goal.”
(Altria Earnings Call, December 20, 2018). 617
(t)

“We are taking significant action to prepare for a future where adult

smokers overwhelmingly choose non-combustible products over cigarettes by investing $12.8
billion in JUUL, a world leader in switching adult smokers . . . . We have long said that
providing adult smokers with superior, satisfying products with the potential to reduce harm is the
best way to achieve tobacco harm reduction.” (Altria Earnings Call, December 20, 2018). 618
(u)

“Almost my entire career, we have believed that our business would be

better in the long term if we could offer harm reduced products that would represent attractive

615

Altria Group, Inc., Relationship Agreement by and among JUUL Labs, Inc., Altria Group, Inc.,
and Altria
Enterprises
LLC
(Form
8-K),
Ex.
99.1
(Dec.
20,
2018),
https://www.sec.gov/Archives/edgar/data/764180/000119312518353970/d660871dex991.htm.

616

Id.

617

Id. (emphasis added).

618

Id. (emphasis added).
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alternatives to our adult cigarette smokers to switch. And we have invested billions of dollars in it
and lots of effort. And ultimately until December this year, we really didn’t have the product
portfolio to fully achieve our harm reduction aspiration. And the opportunity to invest in JUUL, I
think, really makes that harm reduction aspiration a reality.” (Altria Earnings Call, January 31,
2019). 619
(v)

“Through JUUL, we have found a unique opportunity to not only participate

meaningfully in the e-vapor category but to also support and even accelerate transition to
noncombustible alternative products by adult smokers.” (Altria Earnings Call, January 31,
2019). 620
(w)

“We expect the JUUL product features that have driven JUUL’s success

in switching adult smokers in the U.S. to strongly appeal to international adult cigarette
smokers.” (Altria Earnings Call, January 31, 2019). 621
(x)

“Throughout our analysis, it became clear that investing with JUUL to

accelerate its global growth was more value accretive than investing internally to leap frog its
product. We determined that our services and infrastructure could complement JUUL’s terrific
product and capabilities, and help advance a compelling long-term commercial and harmreduction opportunity.” (Remarks by Altria CEO, Feb. 20, 2019). 622
(y)

“First of all, I’d tell them that I’m sorry that their child’s using the product.

It’s not intended for them. I hope there was nothing that we did that made it appealing to them. As

619

Altria Q4 2018 Earnings Conference Call Transcript, supra note 453.

620

Id. (emphasis added).

621

Id. (emphasis added).

622

Altria Group, Inc., Current Report, supra note 372.
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a parent of a 16-year-old, I’m sorry for them, and I have empathy for them, in terms of what the
challenges they’re going through.” (CNBC Interview of JLI CEO, July 13, 2019). 623
(z)

“We never wanted any non-nicotine user, and certainly nobody under the

legal age of purchase, to ever use Juul products. . . .That is a serious problem. Our company has
no higher priority than combatting underage use.” (Testimony of James Monsees, July 25,
2019). 624
(aa)

James Monsees, one of the company’s co-founders, said selling JUUL

products to youth was “antithetical to the company’s mission.”(James Monsees’ Statement to The
New York Times, August 27, 2019). 625
(bb)

“Our focus is and will remain entirely on helping adult smokers switch

away from combustible cigarettes, the leading cause of preventable death in the world.” (Statement
by JLI spokesman to The New York Times, August 27, 2019). 626

623

Angelica LaVito, As Juul grapples with teen vaping ‘epidemic,’ CEO tells parent ‘I’m sorry’,
CNBC (July 13, 2019), https://www.cnbc.com/2019/07/13/as-juul-deals-with-teen-vapingepidemic-ceo-tells-parents-im-sorry.html.
624

Examining JUUL’s Role in the Youth Nicotine Epidemic: Part II: Hearing Before the House
Committee on Oversight and Reform Subcommittee on Economic and Consumer Policy at 1 (July
25, 2019), https://docs.house.gov/meetings/GO/GO05/20190725/109846/HHRG-116-GO05Wstate-MonseesJ-20190725.pdf (testimony of JUUL Founder James Monsees).
625

Richtel, supra note 131.

626

Sheila Kaplan, Philip Morris and Altria Are in Talks to Merge, N.Y. Times (Aug. 27, 2019),
https://www.nytimes.com/2019/08/27/health/philip-morris-altria-merger-tobacco.html (statement
made by Joshua Raffel, JUUL spokesperson).
- 200 -

 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 206 of 212

(cc)

“We have no higher priority than to prevent youth usage of our products

which is why we have taken aggressive, industry leading actions to combat youth usage.” (JLI
Website, August 29, 2019). 627
(dd)

“JUUL Labs, which exists to help adult smokers switch off of combustible

cigarettes. . .” (JLI Website, September 19, 2019). 628
(ee)

“We have never marketed to youth and we never will.”(JLI Statement to

Los Angeles Times, September 24, 2019). 629
(ff)

“In late 2017 and into early 2018, we saw that the previously flat e-vapor

category had begun to grow rapidly. JUUL was responsible for much of the category growth and
had quickly become a very compelling product among adult vapers. We decided to pursue an
economic interest in JUUL, believing that an investment would significantly improve our ability
to bring adult smokers a leading portfolio of non-combustible products and strengthen our
competitive position with regards to potentially reduced risk products.” (Letter from Altria CEO
to Senator Durbin, October 14, 2019). 630

627

Our Actions to Combat Underage Use, JUUL Labs, Inc. (Aug. 29, 2019),
https://newsroom.juul.com/ouractions-to-combat-underage-use/ (JUUL statement in response to
lawsuits).

628

CONSUMER
UPDATE:
9/19,
JUUL
Labs,
Inc
https://newsroom.juul.com/consumer-update-9-19/ (emphasis added).

(Sept.

629

19,

2019),

Michael Hiltzik, Column: Studies show how Juul exploited social media to get teens to start
vaping, L.A. Times (Sept. 24, 2019), https://www.latimes.com/business/story/2019-09-24/hiltzikjuul-target-teens (statement made on behalf of JUUL).
630

Willard Letter to Senator Durbin, supra note 20, at 3 (emphasis added).
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 207 of 212

(gg)

“The growth of the e-vapor category since 2017 illustrates the willingness

of adult smokers to try these products, and JUUL in particular has been highly successful at
moving adult smokers away from cigarettes.” (Remarks by Altria CEO, Feb. 19, 2020). 631
(hh)

“JUUL was designed with adult smokers in mind. . . . By accommodating

cigarette-like nicotine levels, JUUL provides satisfaction to meet the standards of adult smokers
looking to switch from smoking cigarettes.” (JLI Website, last visited March 29, 2020). 632
437.

The mail and wire transmissions described herein were made in furtherance of the

Youth Marketing Cover-Up Enterprise Defendants’ scheme and common course of conduct
designed to fraudulently grow the market of nicotine-addicted youth and to cover up JLI and the
its officers and directors’ marketing to youth, thereby increasing or maintaining JUUL’s market
share, resulting in corresponding high profits for all Youth Marketing Cover-Up Enterprise
Defendants.
438.

Some of the precise dates of the fraudulent uses of the mail and interstate wire

facilities have been deliberately hidden and cannot be alleged without access to the Youth
Marketing Cover-Up Enterprise Defendants’ books and records. However, Plaintiff has described
the types of predicate acts of mail and/or wire fraud, including the specific types of fraudulent
statements upon which, through the mail and wires, the Youth Marketing Cover-Up Enterprise
engaged in fraudulent activity in furtherance of its scheme.
439.

The members of the Enterprise have not undertaken the practices described herein

in isolation, but as part of a common scheme and conspiracy. In violation of 18 U.S.C. §1962(d),

631

Altria Group, Inc., Current Report (Form 8-K), Ex. 99.1 at 5 (Feb. 19, 2020),
https://www.sec.gov/Archives/edgar/data/764180/000076418020000013/exhibit9912020cagnyre.htm (emphasis added).

632

JUUL Labs, Inc., https://www.juul.com/ (last visited Mar. 29, 2020) (emphasis added).
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the members of the Youth Marketing Cover-Up Enterprise conspired to violate 18 U.S.C.
§1962(c), as described herein. Various other persons, firms, and corporations, including third-party
entities and individuals not named as Defendants herein, have participated as co-conspirators with
the Youth Marketing Cover-Up Enterprise Defendants and the members of the Youth Marketing
Cover-Up Enterprise in these offenses and have performed acts in furtherance of the conspiracy to
increase or maintain revenue, maintain or increase market share, and/or minimize losses for the
Youth Marketing Cover-Up Enterprise Defendants and their named and unnamed co-conspirators
throughout the illegal scheme and common course of conduct.
440.

The members of the Youth Marketing Cover-Up Enterprise aided and abetted

others in the violations of the above laws.
441.

To achieve their common goals, the members of the Enterprise hid from Plaintiff

and the public: (1) the fraudulent nature of the Youth Marketing Cover-Up Enterprise scheme; (2)
the fraudulent nature of statements made by the Youth Marketing Cover-Up Enterprise Defendants
regarding JLI’s efforts to target youth and the nature of JLI’s products; and (3) the true nature and
objective of the relationship between the members of the Enterprise.
442.

Each member of the Youth Marketing Cover-Up Enterprise, with knowledge and

intent, agreed to the overall objectives of the schemes and participated in the common course of
conduct. Indeed, for the conspiracy to succeed, each of the members of the Youth Marketing
Cover-Up Enterprise had to agree to conceal their fraudulent scheme.
443.

The members of the Youth Marketing Cover-Up Enterprise knew, and intended

that, the public would rely on the material misrepresentations and omissions made by them.
444.

As described herein, the members of the Youth Marketing Cover-Up Enterprise

engaged in a pattern of related and continuous predicate acts for years. The predicate acts

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constituted a variety of unlawful activities, each conducted with the common purpose of
maintaining JUUL’s ill-gotten market share and thereby continuing to receive significant monies
and revenues from the public, including youth, based on their misconduct.
445.

The predicate acts also had the same or similar results, participants, victims, and

methods of commission.
446.

The predicate acts were related and not isolated events.

447.

The public, including youth and parents in Plaintiff’s community, relied on

Defendants’ fraudulent misrepresentations and omissions, as alleged above.
448.

The Youth Marketing Cover-Up Enterprise Defendants’ fraudulent concealment

was material to Plaintiff and the public. The pattern of racketeering activity described above is
currently ongoing and open-ended, and threatens to continue indefinitely unless this Court enjoins
the racketeering activity.
D.

Plaintiff Has Been Damaged by the Youth Marketing Cover-Up
Enterprise Defendants’ RICO Violations

449.

Plaintiff has been injured by the Youth Marketing Cover-Up Enterprise

Defendants’ predicate acts. By fraudulently denying JLI’s youth marketing and working to
preserve and expand the market of underage JUUL customers, the Youth Marketing Cover-Up
Enterprise caused the expansion of an illicit e-cigarette market for youth in Plaintiff’s community
and caused a large number of youth in Plaintiff’s community to become addicted to nicotine. In
addition, the Youth Marketing Cover-Up Enterprise Defendants intentionally sought to reach into
schools and deceive public health officials in order to continue growing JLI’s youth customer base.
The repeated fraudulent misstatements by the Youth Marketing Cover-Up Enterprise Defendants
denying that JLI marketed to youth have served to preserve JUUL’s market share – a market share
that is based upon children purchasing JLI’s tobacco products.
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450.

Plaintiff was a direct victim of Defendants’ misconduct. The Youth Marketing

Cover-Up Enterprise Defendants displayed a wanton disregard for public health and safety by
intentionally addicting youth, including youth in Plaintiff’s community, to nicotine and then
attempted to cover up their scheme in order to maintain and expand JUUL’s market share.
Defendants actively concealed that they marketed to youth in order to avoid public condemnation
and keep their products on the market and continue youth sales. This forced Plaintiff to shoulder
the responsibility for this youth vaping crisis created by Defendants’ misconduct. The harm
created by the illicit youth e-cigarette market created by Defendants required Plaintiff to expend
its limited financial resources to mitigate the health crisis of youth vaping. The expansion of this
youth e-cigarette market was the goal of the Youth Marketing Cover-Up Enterprise and is critical
to its success. Therefore, the harm suffered by Plaintiff because it must address and mitigate the
youth vaping crisis was directly foreseeable and in fact an intentional result of Defendants’
misconduct.
451.

The creation and maintenance of this youth e-cigarette market directly harms

Plaintiff by imposing costs on its business and property. Plaintiff’s injuries were not solely the
result of them having to spend money to act governmentally. Instead, as a result of Defendants’
misconduct, Plaintiffs have been and will be forced to go far beyond what a governmental entity
might ordinarily be expected to pay to enforce the laws to promote the general welfare in order to
combat the youth vaping crisis. As a result of the conduct of the Youth Marketing Cover-Up
Defendants, Plaintiff has incurred and will incur costs that far exceed the norm.
452.

The Youth Marketing Cover-Up Enterprise Defendants’ violations of 18 U.S.C.

§1962(c) and (d) have directly and proximately caused injuries and damages to Plaintiff, its
community, and the public, and Plaintiff is entitled to bring this action for three times its actual

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damages, as well as for injunctive/equitable relief, costs, and reasonable attorneys’ fees and costs
pursuant to 18 U.S.C. §1964(c).
VI.

PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays for judgment as follows:

VII.

A.

Entering an Order that the conduct alleged herein constitutes a public nuisance
under Maryland law;

B.

Entering an Order that Defendants are jointly and severally liable;

C.

Entering an Order requiring Defendants to abate the public nuisance described
herein and to deter and/or prevent the resumption of such nuisance;

D.

Enjoining Defendants from engaging in further actions causing or contributing to
the public nuisance as described herein;

E.

Awarding equitable relief to fund prevention education and addiction treatment;

F.

Awarding actual and compensatory damages;

G.

Awarding statutory damages in the maximum amount permitted by law;

H.

Awarding punitive damages;

I.

Awarding reasonable attorneys’ fees and costs of suit;

J.

Awarding pre-judgment and post-judgment interest; and

K.

Such other and further relief as the Court deems just and proper under the
circumstances.

JURY TRIAL DEMANDED
Plaintiff hereby demands a trial by jury.

DATED: April 1, 2020

HOWARD COUNTY OFFICE OF LAW
Gary W. Kuc
Bar No. 23565
County Solicitor

s/ Louis P. Ruzzi
Louis P. Ruzzi
Bar No. 04226
Senior Assistant County Solicitor
lruzzi@howardcountymd.gov
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 Case 1:20-cv-00900-CCB Document 1 Filed 04/06/20 Page 212 of 212

s/ Melissa Goldmeier
Melissa Goldmeier
Bar No. 18769
Assistant County Solicitor
mgoldmeier@howardcountymd.gov
3450 Court House Drive
Ellicott City, Maryland 21043
410.313.2104
410.313.3292 (facsimile)
ROBBINS GELLER RUDMAN
& DOWD LLP
CHRISTOPHER C. GOLD
JASON H. ALPERSTEIN
MARK J. DEARMAN
STUART A. DAVIDSON
DOROTHY P. ANTULLIS
120 East Palmetto Park Road, Suite 500
Boca Raton, FL 33432
Telephone: 561/750-3000
561/750-3364 (fax)
cgold@rgrdlaw.com
jalperstein@rgrdlaw.com
mdearman@rgrdlaw.com
sdavidson@rgrdlaw.com
dantullis@rgrdlaw.com
KELLER ROHRBACK L.L.P.
DEAN KAWAMOTO
DEREK W. LOESER
GRETCHEN FREEMAN CAPPIO
ALISON S. GAFFNEY
FELICIA J. CRAICK
1201 Third Avenue, Suite 3200
Seattle, WA 98101
Tel: (206) 623-1900
Fax: (206) 623-3384
dkawamoto@kellerrohrback.com
dloeser@kellerrohrback.com
gcappio@kellerrohrback.com
agaffney@kellerrohrback.com
fcraick@kellerrohrback.com
Attorneys for Plaintiff

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