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Filed an Amended Complaint Against E-Cigarette Manufacturer JUUL

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Filed an Amended Complaint Against E-Cigarette Manufacturer JUUL 27-CV-19-19888 Filed in District Court State of Minnesota 12/10/2020 12:13 PM STATE OF MINNESOTA DISTRICT COURT COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT Case Type: Other Civil STATE OF MINNESOTA, by its Attorney General, Court File No.: 27-CV-19-19888 Keith Ellison, The Honorable Laurie J. Miller Plaintiff, vs. JUUL LABS, INC., a Delaware corporation FIRST AMENDED COMPLAINT f/k/a PAX LABS, INC. f/k/a PLOOM PRODUCTS, INC.; ALTRIA GROUP, INC. f/k/a PHILIP MORRIS COMPANIES, INC.; PHILIP MORRIS USA INC. f/k/a PHILIP MORRIS INC.; ALTRIA CLIENT SERVICES LLC; ALTRIA GROUP DISTRIBUTION COMPANY; ALTRIA ENTERPRISES LLC, Defendants. 27-CV-19-19888 Filed in District Court State of Minnesota 12/10/2020 12:13 PM TABLE OF CONTENTS Page INTRODUCTION ........................................................................................................................................................ 1 PARTIES ...................................................................................................................................................................... 8 JURISDICTION ........................................................................................................................................................... 9 VENUE ...................................................................................................................................................................... 10 FACTS ....................................................................................................................................................................... 10 A. The “Traditional” Tobacco Industry.................................................................................................................. 10 B. The Emergence of E-Cigarettes ........................................................................................................................ 13 C. E-Cigarettes Are Dangerous.............................................................................................................................. 15 D. E-Cigarettes Are Especially Dangerous to Youth .............................................................................................. 19 E. JUUL’s Dangerous and Deceptive Nicotine Potency ....................................................................................... 22 F. JUUL’s Targeting of Youth ............................................................................................................................... 28 1. JUUL’s Youth-Oriented Physical Design ........................................................................................................ 30 2. JUUL’s Youth-Oriented Flavors ...................................................................................................................... 33 3. JUUL’s Unique Chemical Formula ................................................................................................................. 35 4. JUUL’s Multi-Faceted Youth-Marketing Campaign ....................................................................................... 37 5. JUUL’s In-Person Marketing at Schools ......................................................................................................... 45 6. JUUL’s Dangerous and Careless Approach to Age Verification ..................................................................... 47 G. Altria Substantially Contributed to JUUL’s Use Among Youth ........................................................................ 50 1. Altria Failed to Corner the E-cigarette Market ................................................................................................ 53 2. Altria and JUUL Joined Forces to Expand JUUL’s Market Domination ........................................................ 58 3. The Altria Defendants Expanded JUUL’s Reach with Their Vast Distribution and Sales Network ................ 62 4. The Altria Defendants Expanded JUUL’s Reach with Their Vast Promotional and Marketing Network ....... 64 5. The Altria Defendants Marketed JUUL’s Products in Highly Visible Retail Locations ............................... 67 6. The Altria Defendants Provided JUUL with Public Relations, Regulatory, and Lobbying Support ................ 70 H. Defendants’ Pervasive Actions, Statements, and Omissions Violated Minnesota Law ..................................... 75 I. Defendants’ Marketing Plan Worked in Minnesota .......................................................................................... 77 J. Defendants Have Caused a Public Health Epidemic ......................................................................................... 79 K. JUUL’s “Action Plan” Is Insufficient ............................................................................................................... 86 CLAIMS FOR RELIEF ............................................................................................................................................. 88 COUNT I: CONSUMER FRAUD ............................................................................................................................. 88 COUNT II: DECEPTIVE TRADE PRACTICES ...................................................................................................... 91 COUNT III: UNLAWFUL TRADE PRACTICES ..................................................................................................... 96 COUNT IV: FALSE STATEMENT IN ADVERTISEMENT ..................................................................................... 98 COUNT V: PUBLIC NUISANCE ........................................................................................................................... 101 COUNT VI: NEGLIGENCE & NEGLIGENCE PER SE ........................................................................................ 104 COUNT VII: UNJUST ENRICHMENT .................................................................................................................. 106 i 27-CV-19-19888 Filed in District Court State of Minnesota 12/10/2020 12:13 PM COUNT VIII: CIVIL CONSPIRACY ...................................................................................................................... 107 RELIEF .................................................................................................................................................................... 109 JURY DEMAND ...................................................................................................................................................... 111 ii 27-CV-19-19888 Filed in District Court State of Minnesota 12/10/2020 12:13 PM INTRODUCTION 1. Twenty years after the State of Minnesota entered into its historic settlement with Big Tobacco, and Minnesota Attorney General Hubert H. Humphrey III famously proclaimed, “the tobacco industry has surrendered,”1 Minnesota is again facing a tobacco addiction epidemic.2 JUUL’s e-cigarettes’ youth-focused chemical formulas, flavors, design, and marketing efforts, coupled with its deceptive sales practices, have created an addiction crisis. 2. A 2017 survey revealed that new and regular tobacco use among Minnesota high school students increased for the first time in seventeen years, fueled by a nearly 50% jump in e- cigarette use.3 3. The same survey revealed that at least one in five Minnesota high school students use e-cigarettes, which are now the most commonly used tobacco products among teens.4 Among Minnesota students, e-cigarette use is five times cigarette use.5 The rise has prompted Governor Walz to recently warn that “[v]aping is a public health crisis for young Minnesotans, 6 and it is critical that we act now to bring the rate down.” 7 4. Young adults are similarly addicted. A 2018 survey revealed that more than one 1 Pam Belluck, Tobacco Companies Settle a Suit With Minnesota for $6.5 Billion, NYTIMES (May 9, 1998), https:// www.nytimes.com/1998/05/09/us/tobacco-companies-settle-a-suit-with-minnesota-for-6.5-billion.html. 2 Erin Golden, Minnesota schools battle ‘epidemic’ of teen vaping, STARTRIBUNE (Sept. 15, 2018), http://www.startr ibune.com/minnesota-schools-battle-epidemic-of-teen-vaping/493390151/. 3 Minn. Department of Health, New survey shows Minnesota youth tobacco use rising for the first time in 17 years (Feb. 15, 2018), https://www health.state.mn.us/news/pressrel/2018/youthtob021518.html. 4 Minn. Department of Health, Teens and Tobacco in Minnesota: Highlights from the 2017 Minnesota Youth Tobacco Survey, https://www.health.state.mn.us/data/mchs/surveys/tobacco/teen_tobacco17.pdf. 5 Minn. Department of Health, E-cigarettes and Vaping, https://www health.state.mn.us/ecigarettes. 6 Minn. Department of Health, Student survey shows vaping rates up sharply (Oct. 2, 2019), https://www.health.state.mn.us/news/pressrel/2019/survey100219.html. 7 For purposes of this Complaint, “young adults” are defined as all youth between the ages of eighteen and twenty- four. 1 27-CV-19-19888 Filed in District Court State of Minnesota 12/10/2020 12:13 PM in five young adults in Minnesota currently use e-cigarettes, which is double the rate last seen in 2014.8 Of these e-cigarette smokers, almost three out of four had never smoked cigarettes before. 5. The rapid rise in e-cigarette use among Minnesota youth9 only appears to be accelerating, especially among our youngest. A recent October 2019 survey revealed that, since 2016, vaping had doubled among Minnesota eighth graders and increased 54% among Minnesota eleventh graders.10 School administrators, educators, and parents
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