Growing safety concerns are taking a toll on foundering Juul Labs

In December of 2018, Altria, manufacturer of Marlboro products and one of the largest tobacco companies in the world, made a risky play and took a 35% interest in the vaping company Juul Labs at a cost of $12.8 billion. Over its three years of existence, Juul had climbed its way to become the dominant e-cigarette company, claiming 75% of the quickly emerging market.

On October 31, 2019, Altria cut the book value of its investment by $4.5 billion amid growing concerns about the safety of vaping. Governmental agencies have initiated investigations into several areas, including rampant use of vaping products by teenagers, concerns about health risks unique to vaping, and a string of deaths that some are attributing to vaping products. Juul has also found itself defending against several lawsuits, which are likely the opening salvo in a barrage of similar suits.

One lawsuit is a claim of whistleblower retaliation. Siddharth Breja, Juul’s former vice president of global finance, alleged the company had shipped over one million contaminated mint e-liquid pods to retailers. Breja alleges executive management refused to issue a recall despite his urging.

Breja was terminated soon thereafter. He responded with a seven-count Complaint, alleging, amongst other things, his termination was in violation of California’s whistleblower protection laws. After its filing, regulators began investigating whether the company knowingly distributed contaminated product. The company’s CEO at the time of Breja’s termination has since been removed.

Another lawsuit filed by a public interest group ended in a consent judgement under which Juul agreed to limit the product’s appeal to teenagers. Specifically, Juul agreed to not advertise at certain public events open to individuals under the age of 21 and only use models over the age of 28 in its marketing campaigns. Juul contends the agreement reflects its internal policies; however, there is now an enforcement mechanism through the agreement.

The most recent lawsuit, which is the first of its kind but likely the first of many, is a claim against Juul for wrongful death of Daniel Wakefield. The suit, filed in the Federal District Court for the Northern District of California, describes the highly addictive nature of nicotine vaping products and the health dangers associated therewith. It also puts a spotlight on the marketing practices of Juul, particularly focused on flavored liquids and other practices that are appealing to teenagers.

Wakefield is described as being severely addicted to Juul products, having begun using the product at the age of 15. The Complaint attributes serious behavioral shifts to vaping, even detailing an event where Wakefield threw a mini refrigerator from the top floor of his home because of a particularly severe craving.

Less than a year after Wakefield began using Juul, he was hospitalized for “breathing and lung complications.” The Complaint does not specifically allege the hospitalization was caused by Juul use, but it does emphasize that Wakefield was so addicted that he was forced to use nicotine patches while in the hospital due to his severe cravings.

On August 31, 2018, Wakefield was found dead by his father. The cause of death was officially identified as breathing complications. The suit claims that Juul products were a substantial factor in his death. The Complaint alleges 10 separate counts, ranging from design defect and failure to warn, to misrepresentation and unfair business practices, and finally wrongful death. The Complaint does not specifically outline the physiological processes that led to Wakefield’s death, however. In the event that the wrongful death claim survives summary judgment, a lengthy battle of the experts can be anticipated.

As the science surrounding vaping of both nicotine and THC develops, litigation over its health risks will accelerate. If you or a loved-one has suffered serious injury from use of vaping products, contact the experienced attorneys at Neumann Law Group to discuss your legal rights.