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Judge denies Juul's attempt to have N.C. attorney general's lawsuit dismissed

Judge denies Juul's attempt to have N.C. attorney general's lawsuit dismissed

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A Durham County Superior Court judge denied Thursday an attempt by Juul Labs Inc. to dismiss a May 2019 lawsuit filed by the N.C. Attorney General targeting its business and marketing practices.

Juul filed motions to end the litigation, limit the damages it could be assessed, or postpone the trial currently set for May. Judge Orlando Hudson denied the motions.

Juul Labs is the maker of the controversial and top-selling U.S. Juul electronic cigarette.

North Carolina was the first state to sue Juul over accusations that it targets underage youths with its products.

Most specifically, the Attorney General's office accuses Juul of violating the state's Unfair and Deceptive Trade Practices Act.

The attorney general wants Juul required to: cease selling e-cigs to N.C. minors; limit the flavors sold in the state; stop advertising and marketing practices that are intended to or likely to appeal to minors; and delete all data for customers whom Juul cannot confirm are at least 18.

The lawsuit is similar in approach to the avalanche of county- and state-level lawsuits filed against opioid manufacturers to thwart product usage.

The Attorney General's office is requesting civil penalties and disgorgement of Juul profits from “its unfair and deceptive practices to the state.”

Juul said in a statement Friday that "we will respond to the allegations through the appropriate legal channels.”

“We will continue to reset the vapor category in the U.S. and seek to earn the trust of society by working cooperatively with attorneys general, legislators, regulators, public health officials and other stakeholders to combat underage use and transition adult smokers from combustible cigarettes," Juul said.

Attorney General Josh Stein said in October 2018 he was launching an investigation into Juul’s marketing and operational practices. He requested details on Juul’s efforts, in marketing as well as relationships with retailers and re-sellers, to verify age before purchase, and any youth education and awareness programs.

Stein said he has determined that Juul designs, markets and sells its e-cigs and flavorings to attract young people.

Juul entered the mainstream retail marketplace in 2015 and has proven that a startup manufacturer can compete with the Big Three manufacturers: Philip Morris USA, R.J. Reynolds Tobacco Co. and ITG Brands LLC.

The Juul e-cigarette is sold in the form of a pen or a USB flash drive that’s easy to use — and hide — because the vapor typically does not have a smell and quickly dissipates.

Juul held a 74.6% U.S. e-cig market share at the time of the Attorney General's lawsuit.

However, e-cigarettes sales have slumped most of the past eight months after the Food and Drug Administration implemented in February its latest round of heightened regulations on the products.

The FDA launched its youth e-cigarette campaign in April 2017 with Juul square in the crosshairs.

The latest FDA restrictions on the sector debuted Feb. 6, following the FDA raising the legal smoking age from 18 to 21 on Dec. 20.

Those restrictions foremost required manufacturers of cartridge-based e-cigarettes, such as Juul Labs Inc., R.J. Reynolds Vapor Co., NJoy and Fontem Ventures, to stop making, distributing and selling “unauthorized flavorings” by Feb. 6, or risk enforcement actions.

As of the Nielson convenience store survey of Oct. 17, Juul had a still dominant 55.1% market share, followed by Reynolds Vapor's Vuse at 26.8%.

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@rcraverWSJ

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