ST PAUL, Minn. — Minnesota Attorney General Keith Ellison gathered with Governor Tim Walz, Lt. Gov. Peggy Flanagan and other officials at the Capitol Wednesday to reveal details from the historic settlement between the state and two e-cigarette companies, Juul and Altria, in April.
The announcement comes just 30 days after the settlement was reached, one day before closing arguments in a trial litigated by the AG's office and partnering attorneys from Robins Kaplan and Zimmerman Reed.
In a press conference Wednesday afternoon, Ellison announced that the state will receive $60.5 million in the settlement. More than $17.5 million of will be used to pay legal fees for the case, but the decision to take the case to court still paid off. Ellison said that the remaining $43 million still represents the largest Juul settlement, per capita, in the United States.
"The amount of our settlement is larger than all of the money Juul made in Minnesota between 2015 and 2021," Ellison said. "If they got paid by selling deceptive and harmful products to our kids, we got all our money back. In other words, we have disgorged and extracted all the money they never should have earned in the first place."
Ellison said the payment will occur over seven years, the first installment of which — about $20 million — will be available to the state within the next 30 days. Ellison said two-thirds will be paid out by the tobacco companies within the year, which will be dedicated to tobacco mitigation and prevention, now and in the future.
The second major provision calls for more transparency in data surrounding tobacco use. Ellison said not only will Minnesota release millions of documents, but also Altria will disclose its internal documents as well. According to Ellison, Altria dumped upward of $12 billion into Juul's business and marketing with the intention to up its sales throughout Minnesota and the rest of the country.
"We believe in putting the sunshine on this — and that's what we're doing right now," he said.
In its third major provision, the agreement requires Juul to accurately disclose the nicotine content in its tobacco products and prohibits the company from intentionally marketing and selling products to children and young adults.
"This is a notice to all companies looking to addict kids," Ellison said. "If you try to do this in Minnesota, not only will we sue you, we'll take you to court and hold you accountable and make you pay."
Money for Tobacco and Vaping Prevention and Education
Bipartisan legislation working currently pending at the Capitol would direct the remaining $43 million in settlement money to the Minnesota Department of Health with a targeted focus on tobacco use and vaping.
"We are close to wrapping up that bill and it is specifically dedicated to education and prevention," said Representative Kaohly Vang Her, DFL- "And as we've been working with advocates, this is just the first step."
"It's got to be passed by the legislature or it's not going to go to prevention," said Jeanne Weigum, President of the Minnesota Association of Non-Smokers. "We saw that in 1998."
Weigum is referencing Minnesota's whopping $6.5 billion settlement with big tobacco in 1998.
"If you ask most legislators, 'Was the settlement money from the original tobacco settlement, 25 years ago did that go to prevention?' Most of them will say, 'Yes, it did,'" Weigum said. "It didn't and it doesn't, even though every year more money comes in. Every year we still get over $100M in tobacco settlement payments that go straight to the general fund."
More than $200 million of that 1998 settlement did fund the work of Clearway Minnesota, but that ended in 2021 and Weigum says other promises gave way to politics.
"The promise was that it was going to be an endowment that would put about $20M a year into tobacco prevention," she said. "But the first time there was a budget shortfall, the money in the endowment was taken to fill the budget shortfall."
Minnesota is currently spending more than $11 million a year on tobacco prevention, according to the non-profit TobaccoFreeKids.org. But that's about half the amount the state spent just six years ago.
"We're way, way below what CDC guidelines are for prevention spending," Weigum said. "And we're way, way below what comes into this state from tobacco."
But she is hopeful, and confident that the new legislation will direct the new money to the right place.
"Nobody opposed (the legislation)," Weigum said. "This is something that everybody said makes sense, and that's what it takes. It can't just be people with good intentions. This has to be a law."
The lawsuit, which was settled one day before the state was scheduled to deliver its closing arguments at trial, accused Juul and Altria of marketing their vaping products in a way that made them attractive to Minnesota teens, developing sleek devices and flavors that were appealing to youth.
After the settlement was reached, Juul released a statement, saying:
“Resolution of issues from the company’s past and its historical legal challenges has remained a critical priority to secure certainty for our future," reads the statement from JUUL. "While we appreciate the court and jury’s time, attention, and professionalism throughout the trial, we are pleased to have reached a settlement with the state and will work to finalize this agreement over the coming weeks. We have now settled with 48 states and territories, providing over $1 billion to participating states to further combat underage use and develop cessation programs."
Speaking from the capitol Wednesday, Lt. Gov. Peggy Flanagan reflected on that work being done, using her self-described "Momma Bear" energy.
"To put it simply, our children and our young people deserve better," she said. "As adults, we have a responsibility to keep our children safe. Allowing deceptive and harmful marketing to target young children is unacceptable and we are not going to allow it in Minnesota."
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