Plaintiff, the State of Colorado, ex rel. Philip J. Weiser, Colorado Attorney General
(the “Attorney General”), commenced a lawsuit against Defendant JUUL Labs, Inc. (“JLI”)
regarding potential violations of the Colorado Consumer Protection Act, Colo. Rev. Stat.
§ 6-1-101, et. seq. The lawsuit is State of Colorado, ex rel. Philip J. Weiser, Attorney
General v. JUUL Labs, Inc., Denver District Court Case No. 2020CV032283 (July 7, 2020)
(the “Lawsuit”).
The Parties stipulate that this Court may enter this Consent Judgment in this
Lawsuit.
DISTRICT COURT, CITY AND COUNTY
OF DENVER, COLORADO
1437 Bannock Street
Denver, CO 80202
STATE OF COLORADO, ex rel. PHILIP J. WEISER,
ATTORNEY GENERAL
Plaintiff,
v.
JUUL LABS, INC.
Defendants.
▲COURT USE
ONLY▲
Case No.
2020CV32283
Div.: 215
FINAL STIPULATED CONSENT JUDGMENT
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This Court has jurisdiction over the subject matter of this lawsuit and over all
Parties. The terms of this Consent Judgment are governed by the laws of Colorado. Entry
of this Consent Judgment is in the public interest and reflects a negotiated agreement
among the Parties. By entering into this Consent Judgment, the Parties have agreed to
resolve the matters released as provided herein.
The Parties enter into this Consent Judgment without trial or adjudication of any
contested issue of fact or law, and without finding or admission of wrongdoing or liability
of any kind. JLI neither admits nor denies any wrongdoing or allegations in the
Complaint, and no part of this Consent Judgment, including its statements and
commitments, shall constitute evidence of any liability, fault, or wrongdoing by JLI. JLI is
entering into this Consent Judgment solely for the purpose of concluding this matter, and
nothing contained herein may be taken as or construed to be an admission or concession of
any alleged violation of law, rule, or regulation, or of any other matter of fact or law, or of
any liability or wrongdoing. This Consent Judgment shall not be construed or used as a
waiver of any defense JLI may raise in any other proceeding.
Nothing in this Consent Judgment will be construed as an approval by the Attorney
General, the Court, the State of Colorado, or any agency thereof, of JLI’s past, present, or
future conduct. JLI shall not represent or imply that the Attorney General, the Court, the
State of Colorado, or any agency thereof, has approved or approves of any of JLI’s actions
or any of JLI’s past, present, or future business practices.
I. DEFINITIONS
1. As used herein:
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a. “Adult-Only Facility” means a facility or restricted area (whether
open-air or enclosed) where the operator ensures or has a reasonable
basis to believe (such as by checking identification as required under
state law, or by checking the identification of any person appearing to
be under the age of 30) that no Youth are present. A facility or
restricted area need not be permanently restricted to persons over 21
years of age in order to constitute an Adult-Only Facility, provided
that the operator ensures or has a reasonable basis to believe that no
Youth are present during the event or time period in question.
b. “Attorney General” means the Attorney General of Colorado or any
of its duly designated representatives.
c. “Bankruptcy Proceedings” means if JLI seeks relief or is placed
involuntarily into relief under Title 11 of the United States Code or
under any state or federal receivership or insolvency law; provided,
however, that JLI shall not be deemed to have entered Bankruptcy
Proceedings if involuntary proceedings against it are dismissed within
sixty (60) days of commencement.
d. “Brand Name” means a brand name (alone or in conjunction with any
other word), trademark, logo, symbol, motto, selling message,
recognizable pattern of colors, or any other indicia of product
identification identical or similar to, or identifiable with, those used for
any JUUL Products.
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e. “Billboard” means an individual advertisement that both (1) is placed
outdoors or in an arena, stadium or shopping mall and (2) occupies an
area larger than 70 square feet (or is placed in such proximity to any
other such advertisement so as to create a single “mosaic”-type
advertisement larger than 70 square feet); provided that “Billboard”
does not include an advertisement on the outside (but on the property)
of a JLI facility.
f. “Cartoon” means any drawing or other depiction of an object, person,
animal, creature, or any similar caricature that satisfies any of the
following criteria: (1) the use of comically exaggerated features; (2) the
attribution of human characteristics to animals, plants, or other
objects, or the similar use of anthropomorphic technique; (3) the
attribution of unnatural or extra-human abilities, such as
imperviousness to pain or injury, X-ray vision, tunneling at very high
speeds, or transformation; or (4) is presented in a non-realistic style.
g. “Claims” means any and all civil (i.e., non-criminal) claims, demands,
actions, suits, causes of action, damages, fines, penalties, and liabilities
and monetary impositions of any nature, as well as costs, expenses,
and attorneys’ fees, whether known or unknown, suspected or
unsuspected, accrued or unaccrued, whether legal, equitable,
statutory, regulatory, or administrative.
h. “Compliance Officer” means the person appointed by JLI pursuant
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to Paragraph 39.
i. “Covered Conduct” means any and all of the following:
i. All conduct related to age verification, product quantity limits,
Nicotine content, flavors, or the size, shape, operation, or
appearance of the product in the design, manufacture,
marketing, advertising, product description, promotion,
distribution, sale, or offer of JUUL Products.
ii. All conduct that could have induced a person, including a Youth,
to use or purchase JUUL Products.
iii. All conduct that could have allowed a person, including a Youth,
to use or purchase JUUL Products without allegedly adequate
age verification, product quantity limits, or other age-based
limitations or procedures.
iv. All conduct that may have violated federal or state laws,
regulations, or rules, or that could give rise to any common law
cause of action, relating to the conduct described in
subparagraphs (i)-(iii).
v. For the avoidance of doubt, Covered Conduct does not include
any conduct relating to an undisclosed non-Nicotine ingredient
hazard in JUULpods resulting in personal injury to a consumer
(other than a non-Nicotine ingredient hazard alleged in the
Lawsuit).
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vi. As used herein, “conduct” includes, without limitation, any act,
failure to act, practice, omission, statement, or representation.
j. “Depository Documents” means documents created on or before
September 14, 2019, produced by JLI, Pax Labs, Inc., or the Individual
Defendants to any of the Settling Litigating States. “Depository
Documents” shall also include any documents identified by the Settling
Litigating States pursuant to the next paragraph that were both
produced by JLI, Pax Labs, Inc. or the Individual Defendants to any of
the Settling Litigating States, and were created after September 14,
2019 to the extent that such documents include, in whole or in part,
information or data that pre-dates September 14, 2019. Examples of
Depository Documents include, but are not limited to: (i) copies of
JUUL advertisements and social media posts; (ii) Microsoft Excel
spreadsheets; (iii) extracts of Slack messages; and (iv) extracts of text
messages.
By June 1, 2023, the Settling Litigating States will provide a final list
of documents that were created after September 14, 2019 and meet the
specifications of the preceding paragraph for inclusion in the
Document Depository. JLI will assist the Settling Litigating States by:
(i) identifying the bates numbers of documents described on the list for
which the Settling Litigating States are unable to provide bates
numbers; and (ii) identifying whether any documents on the list have
7
been re-produced and/or downgraded and providing the bates numbers
of such reproductions and/or downgrades. If this information is not
readily identifiable, JLI will work with the Settling Litigating States
in good faith to identify relevant documents based on sample
documents found by the Settling Litigating States, provided that JLI
shall not be required to conduct a search for new and/or previously un-
produced documents.
k. “Document Depository” means a single depository established
pursuant to Section III below.
l. “Effective Date” of this Consent Judgment means the date the Court
enters the Consent Judgment.
m. “Individual Defendants” means Adam Bowen, James Monsees,
Nicholas Pritzker, Riaz Valani, and Hoyoung Huh.
n. “JLI” means JUUL Labs, Inc. and its successors and assigns.
o. “JUUL Device” means any electronic Nicotine delivery system
(“ENDS”) device sold, marketed, and/or distributed by JLI in the
United States.
p. “JUULpod Packs” means a package of JUULpods sold as one unit by
JLI.
q. “JUULpods” means any disposable pods sold, marketed, distributed,
and/or manufactured by JLI and prefilled with a liquid solution that
consumers use as part of the closed-pod, liquid-based, ENDS sold,
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marketed, and/or distributed by JLI in the United States.
r. “JUUL Product” means any electronic Nicotine delivery product sold,
marketed, and/or distributed by JLI in the United States, including a
closed-pod, liquid-based ENDS product composed of one or more of the
following components: JUUL Device, JUULpods, JUULpod Packs,
and/or a charger.
s. “Multistate Leadership Committee” means the coordinating
committee referenced in Paragraph 68, and shall consist of
representatives from some or all of the Settling Litigating States.
t. “Nicotine” means all forms of nicotine or nicotine analogues, whether
derived from tobacco or other plants, or synthetic.
u. “Outdoor Advertising” means (1) Billboards; (2) signs and placards
in arenas, stadiums, and shopping malls; and (3) any other
advertisements placed (A) outdoors, or (B) on the inside surface of a
window facing outward; provided that “Outdoor Advertising” does not
mean (1) an advertisement on the outside of a JLI facility; (2) an
individual advertisement that does not occupy an area larger than 14
square feet (and that neither is placed in such proximity to any other
such advertisement so as to create a single “mosaic”-type
advertisement larger than 14 square feet, nor functions solely as a
segment of a larger advertising unit or series), and that is placed (A)
on the outside of a Colorado Retail Store, (B) outside (but on the
9
property of) any such store, or (C) on the inside surface of a window
facing outward in any such store; or (3) an advertisement inside a
Colorado Retail Store that sells JUUL Products that is not placed on
the inside surface of a window facing outward.
v. “Parties” or “Party” means the Colorado Attorney General ex. rel.
Philip J. Weiser, and JLI, collectively and individually, respectively.
w. “Reference Date” means the date ninety-one (91)-days after JLI has
made all payments due under Paragraph 48(a)-(e).
x. “Promote,” “Promotion,” or “Promotional” (or any conjugation or
use of such terms), when used herein, refer to any activity that
involves advertising, marketing, distribution, sales, licensing, product
placement, or an offer to do these activities, regardless of whether
payment or consideration is associated with the activity and regardless
of the form of promotion, whether print, digital, webpage, or other.
y. “Released Parties” means (1) JLI, (2) Pax Labs Inc. in its capacity as
a predecessor of JLI, (3) their past and present direct or indirect
subsidiaries and affiliates listed in Exhibit A (and their respective
successors and assigns), and (4) each and all of the past and present
principals, partners, officers, directors, supervisors, employees,
stockholders and members (other than Altria Group, Inc. and its direct
or indirect subsidiaries), and insurers of any of the persons and
entities listed in (1)-(4), but only to the extent that the person or entity
10
was acting in such capacity on behalf of JLI.
z. “Releasors” means (1) the Attorney General, and (2) only to the full
extent of the Attorney General’s power and authority under Colorado
law to release Claims, the State of Colorado and any other State entity
or official or public or governmental entity or official within the State.
“Releasors” does not include a person or entity otherwise within clause
(2) if the Attorney General lacks power and authority under Colorado
law to release Claims of that person or entity as to the Claim at issue.
Nothing in this Consent Judgment shall release or preclude the right
of any government entity within Colorado that is participating in (and
does not opt out of) the government Entity Settlement entered into on
December 6, 2022 between JLI and the Plaintiffs’ Leadership in MDL
No. 2913 and JCCP No. 5052 to participate in and obtain its
designated recovery under that settlement.
aa. “Settling Litigating State” means the States of California, Colorado,
Illinois, New Mexico, and New York, the Commonwealth of
Massachusetts, and the District of Columbia.
bb. “Colorado Retail Store” means a physical retail location in Colorado
that purchases JUUL Products either directly from JLI or from a JLI
authorized distributor for resale directly to consumers.
cc. “Social Media Platform” means any internet-based platform,
including those which may be accessed through an app, through which
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users are able to create and/or share content that is accessible to
members of the public, and includes, but is not limited to, current and
future sites such as Facebook, Instagram, Snapchat, TikTok, Twitter,
Reddit, Clubhouse, Pinterest, Tumblr, Google+, and YouTube.
dd. “Third-Party Sales Websites” means websites that offer for sale or
sell goods or services to consumers in the United States, other than
any website owned and/or operated by JLI.
ee. “Verified” means determined to be 21 years or older through the use
of reliable and independent age-verification service(s) that cross-
references the customer’s name, address, and date of birth against
independent, competent, and reliable data sources, such as official
government records. Specifically, “Verified” requires: (1)(a) that each
customer submit a non-expired government identification, and (b) for
the sale of JUUL Products only, that the billing address on the method
of payment matches the address listed in cross-referenced data sources
and the shipping address for that order, or (2)(a) that the name,
address, and date of birth provided by the customer are cross-
referenced against information obtained from official government
records or similar independent, competent, and reliable data sources,
and (b) for the sale of JUUL Products only, that (i) the last four digits
of the customer’s Social Security Number is provided by the customer
and is cross-referenced against information obtained from official
12
government records or similar independent, competent, and reliable
data sources, (ii) a phone number or other personal indicator provided
by the customer is used for two-factor authentication, and (iii) the
billing address on the method of payment matches the shipping
address for that order.
ff. “Youth” means individuals who are under the age of 21.
II. COMPLIANCE PROVISIONS
Prohibition on Youth Targeting and Sales
2. JLI shall not take any action, directly or indirectly, that targets Youth within
Colorado in the Promotion of JUUL Products, or take any action a purpose of which is to
initiate, maintain, or increase the incidence of Youth use of any JUUL Product within
Colorado.
3. JLI shall not (1) directly fund or operate any Youth education campaigns or
Youth prevention activities in Colorado, or (2) provide materials on Youth education
programs or events in Colorado.
4. JLI shall not depict or portray any individual under the age of thirty-five (35)
in any Promotion or Promotional materials for JUUL Products in Colorado.
5. JLI shall not use Cartoons in any of its Promotional activities for JUUL
Products in Colorado.
6. JLI shall not make any payment or provide other consideration to any person
or entity in exchange for the placement of a JUUL Product or Brand Name displayed or
accessible in any of the following in Colorado: any motion picture, television show,
13
theatrical production or other live performance, live or recorded performance of music,
commercial film, virtual reality system, or video, video game, including any of the
foregoing displayed on any streaming media or website or that JLI has reason to believe
would be shared on any Social Media Platform (collectively, “Media”). Provided, however,
that the foregoing prohibition shall not apply to (a) Media where the audience or viewers
are within an Adult-Only Facility (provided such Media are not visible to persons outside
such Adult-Only Facility); (b) Media not intended for distribution or display to the public;
or (c) instructional Media concerning how to use a JUUL Product viewed only by or
provided only to persons who are not Youth. The prohibition in this Paragraph on product
placement includes the prohibition on the use of any JUUL Product as a prop.
7. JLI shall not retain or encourage individuals to Promote JUUL Products on
an individual’s personal account, or any account controlled in whole or in part by that
individual, on any Social Media Platform. JLI shall not retain or encourage any person or
entity to Promote JUUL Products as “brand ambassadors,” influencers, or affiliates (i) on
any Social Media Platform accessible in Colorado; or (ii) in person in Colorado, unless the
operator of the location of the in-person Promotion represents to JLI that in connection
with such Promotion it will undertake reasonable industry standard measures to prohibit
access by Youth and JLI has a good-faith belief that the operator is adhering to such
representation.
8. JLI shall not Promote or cause to be Promoted any of the following that bears
a Brand Name in Colorado: any apparel, any other goods whose primary use is unrelated
to the use or care of JUUL Products, or any item designed to be affixed to any such
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apparel or goods. Provided, however, that nothing in this subsection shall (a) require JLI
to retrieve, collect or otherwise recover any item previously Promoted or caused to be
Promoted; or (b) prohibit the distribution to any JLI employee who is not Youth of apparel
or other goods that is intended for use in employment. For the avoidance of doubt, nothing
in this Paragraph shall prevent JLI from the use of the Brand Name on any JUUL
Product, the JUUL Device, accessories directly related to the use or care of the JUUL
Device (including JUULpods, charger, and carrying case), or any other Nicotine related
JLI products, or in any print or digital Promotional materials or coupons for any of the
foregoing listed in this sentence.
9. JLI shall not Promote or otherwise provide any JUUL Product to any
consumers, wholesalers, or Retail Stores in Colorado in any flavor that JLI does not
distribute or sell in Colorado as of the Effective Date, unless and until JLI receives written
FDA authorization that permits the marketing of that flavored JUUL Product. JLI shall
not Promote or otherwise provide any JUUL Product to any consumers in any flavor that
violates state or local laws in Colorado.
10. JLI shall require any individual in the Colorado to be Verified at the first
point of access to any website owned and/or operated by JLI before that consumer is able
to access or view any content. Such first point of access may include a welcome page so
long as it does not contain any information beyond the Brand Name and identification of
the website. The requirements of this Paragraph are not applicable to JLI’s corporate
website currently available at www.juullabs.com or www.juullabsscience.com so long as
such websites contain exclusively non-commercial content and, as to
15
www.juullabsscience.com, JLI maintains an attestation on the welcome page as set out in
Exhibit B. JLI shall maintain records sufficient to document its compliance with this
Paragraph. Such records shall be provided to the Colorado Attorney General upon request.
Nicotine Content
11. JLI shall not make any claims or representations in Promotional materials in
Colorado comparing the quantification of the amount of Nicotine in JUUL Products to that
found in tobacco products or any other ENDS, unless JLI receives written FDA
authorization that permits such claims or representations.
12. Beginning nine (9) months after the Effective Date, if JLI makes any
statement about the Nicotine content of JUUL Products in any Promotional materials in
Colorado other than through the JUUL Product packaging or label, JLI shall also disclose
the amount of Nicotine content in milligrams per milliliter (mg/ml) and as a percentage in
terms of total volume of a JUULpod. This shall include any display of the Nicotine content
portion of the JUUL Product packaging or label in any Promotional materials. The
obligations under this Paragraph are no longer in effect if (1) the FDA implements a
uniform Nicotine content disclosure standard for ENDS products or (2) JLI receives
written FDA authorization for JUUL Products that permits JLI to use a specific Nicotine
content disclosure.
Sponsorships and Naming Rights
13. JLI shall not sponsor any events in Colorado in which payment is made (or
other consideration is provided) in exchange for use of any Brand Name.
14. Notwithstanding Paragraph 13, JLI may sponsor events in Colorado:
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a. At an Adult-Only Facility, and
b. In the name of JLI’s corporate name, provided that the sponsorship uses the
abbreviation “JLI” for the corporate name, does not use the word “JUUL,” and does not
include reference to JUUL Products.
Advertising and Marketing
15. JLI shall not Promote JUUL Products in media or outlets in Colorado unless,
according to nationally established advertising demographic services, such as Comscore,
85% or more of the individuals comprising the audience of the media or outlets are not
Youth. This provision does not apply to Promotion through Outdoor Advertising, on the
property of Colorado Retail Stores selling JUUL Products, or on any online website that
requires Colorado consumers to be Verified before being able to further access the website.
16. JLI shall not use Billboards in Colorado. JLI shall not place or cause to be
placed Outdoor Advertising at any location in Colorado that at the time of the placement,
or renewal of the placement, of the Outdoor Advertising is within 1,000 feet of any
elementary, middle, or high school, or of any public playground in Colorado.
17. JLI shall not place or cause to be placed any Promotion in or on public
transportation or inside public transportation facilities in Colorado, including, but not
limited to, taxicabs, rideshare services (e.g., Uber or Lyft), public buses or bus stations,
public trains or train stations, or airports. This Paragraph shall not apply to any in-store
materials at any Colorado Retail Store located in a public transportation facility.
18. JLI shall not publish any Promotional material for JUUL Products on any
Social Media Platform accessible in Colorado, provided that JLI shall be permitted to use
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Twitter, LinkedIn, and YouTube for (i) hosting testimonial videos of the experiences of
persons thirty-five (35) years of age or older who are or were habitual combustible
cigarette smokers using JUUL Products, and (ii) non-Promotional communications. JLI
shall not use any testimonials or other Promotional material in Colorado that makes a
claim or representation that JUUL Products or vaping is safer or healthier than
combustible cigarettes, are modified risk products, or are smoking cessation devices until
JLI receives written FDA authorization for JUUL Products that permits JLI to make such
a claim or representation.
19. JLI shall not create or use any hashtags in Colorado for the purpose of
Promoting any JUUL Product.
20. JLI shall not retain or encourage any person or entity to Promote JUUL
Products in person in Colorado, unless the operator of the location or event represents to
JLI that in connection with such Promotion it shall undertake reasonable industry
standard measures to prohibit access by Youth and JLI has a good-faith belief that the
operator is adhering to such representation.
21. JLI shall not include any person in Colorado who is not Verified on JLI’s
marketing distribution lists for JUUL Products.
22. JLI shall not send direct-to-consumer Promotional emails, materials, or text
messages for JUUL Products to any Colorado consumers who are not Verified.
23. JLI shall not use in its Promotions any research that JLI sponsored, funded,
or otherwise supported or provided consideration for unless JLI clearly and conspicuously
discloses the source and funding of the research, including specifically the extent to which
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JLI or any other ENDS company or trade association was directly or indirectly responsible
for the research.
Samples
24. JLI shall not provide free JUUL Products to Colorado consumers, nor shall it
provide JUULPods to Colorado consumers at a nominal price, defined as a sale price lower
than the larger of (i) 20% of the suggested retail price or (ii) $3 per JUULPod. To the
extent that packs of JUULPods are sold, the nominal price shall scale with the number of
JUULPods in a pack.
Sales and Distribution Restrictions
25. JLI shall not expressly authorize or otherwise enter into any agreement with
any Colorado Retail Store to (1) display unsecured JUUL Products in a location other than
behind a counter or (2) allow individuals to access JUUL Products without the assistance
of a Colorado Retail Store employee. If the Attorney General notifies JLI or JLI customer
service is notified that any Colorado Retail Store is engaging in any activity that JLI is not
permitted to authorize in this Paragraph, JLI shall promptly take commercially
reasonable steps to investigate and halt any such activity.
26. JLI shall limit online sales to Colorado consumers of JUUL Products on any
website owned and/or operated by JLI to no more than two (2) JUUL Devices per month,
ten (10) JUUL Devices per calendar year, and sixty (60) JUULpods per month, sold
individually or through JUULpod Packs.
27. JLI shall take reasonable steps to limit retail transactions at Retail Stores in
Colorado to one (1) JUUL Device and/or sixteen (16) JUULpods, sold individually or
19
through JUULpod Packs, per transaction, including (a) requiring that any contract it
enters with a Colorado Retail Store for the purchase or sale of JUUL Products provide
that the Colorado Retail Store shall comply with such limits and (b) continuing to
maintain the bulk sale limits in the JUUL Labs Authorized Reseller Program Policy. JLI
shall continue to assess compliance through JLI Compliance Checks as described in
Paragraph 40 below.
28. JLI shall not offer, sell, deliver, or in any manner directly provide any JUUL
Products to Colorado consumers who have not been Verified.
29. In furtherance of Paragraph 28, for all sales of JUUL Products to Colorado
consumers on any website owned and/or operated by JLI, JLI shall continue to recommend
to credit card companies (through JLI’s third-party payment gateways or processors) that
the words “JUUL TOBACCO PRODUCT” be printed on the consumer’s credit card
statement (in addition to such other language as may be required by Colorado law or
regulation).
30. JLI shall require an adult signature for delivery of JUUL Products to a
residential address in Colorado for all orders for JUUL Products purchased through a
website owned or operated by JLI in conformance with the PACT Act.
31. Prior to distributing JUUL Products to Colorado consumers through a
consumer warranty program, JLI shall first confirm that the individual requesting the
warranty replacement is Verified. For the purposes of this Consent Judgment, a
distribution through a consumer warranty program shall be considered a sale of JUUL
Products.
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32. Prior to enrolling Colorado consumers in any auto-shipment program, JLI
shall first confirm that the individual to be enrolled in the auto-shipment program is
Verified.
33. If JLI is provided notice pursuant to this Consent Judgment by the Colorado
Attorney General that a JUUL Product previously purchased by a consumer through an
online sale is later provided to a Youth, JLI shall not knowingly sell JUUL Products on
any website owned and/or operated by JLI to that Colorado purchasing consumer.
34. JLI shall not license or authorize any third party to engage in conduct that is
impermissible under the terms of this Consent Judgment if done directly by JLI.
35. JLI shall continue to monitor Social Media Platforms and Third-Party Sales
Websites to identify content Promoting use of JUUL Products by Youth, unauthorized
sales of JUUL Products or counterfeit JUUL Products, or content that would otherwise be
impermissible by JLI under this Consent Judgment.
36. JLI shall continue to use reasonable efforts, including possible legal action, to
work with Social Media Platforms and owners of Third-Party Sales Websites to remove
content promoting use of JUUL Products by Youth, unauthorized sales of JUUL Products
or counterfeit JUUL products, or content that would otherwise be impermissible by JLI
under this Consent Judgment.
37. The Parties agree that JLI shall be deemed to be in compliance with
Paragraph 36 if it continues to (i) engage a nationally recognized service provider to
monitor Social Media Platforms and Third-Party Sales Websites using the service
provider’s “web-scraping” or similar technology for effective monitoring, and (ii) maintain
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a process for diligently requesting that Social Media Platforms or owners of Third-Party
Sales Websites remove the content identified through such monitoring. JLI may follow any
procedures that Social Media Platforms or websites have established for providing notice
of the content.
38. The Parties agree that compliance with Paragraphs 35-36 does not create any
liability for JLI for content posted by a third party or for the failure of a third party to
remove posted content after being requested by JLI. JLI shall maintain records related to
monitoring of Social Media Platforms and Third Party Sales Websites and requests to
operators and owners of those Platforms and websites sufficient to document its
compliance with Paragraphs 35-36.
Retail Compliance
39. JLI shall designate and maintain a Compliance Officer, who shall be a
corporate senior-level employee responsible for ensuring compliance with this Consent
Judgment and shall act as a point of contact with the Colorado Attorney General to
address any compliance-related issues.
40. JLI shall maintain a retailer-compliance program for Colorado Retail Stores
that requires:
a. JLI to send representatives to conduct unannounced JLI Compliance
Checks at 86 Colorado Retail Stores per year until the later of (i) four
(4) years after the Effective Date, or (ii) the date when the payments
established in Paragraph 48 are paid to State in full. A “JLI
Compliance Check” is an assessment of a Colorado Retail Store’s
22
compliance with the (a) federal requirements to verify a purchaser’s
age pursuant to 21 C.F.R. § 1140.14 or (b) product-quantity limits of up
to one (1) JUUL Device and sixteen (16) JUULpods, sold individually
or through JUULpod Packs, per transaction, or (c) both.
b. JLI to use reasonable efforts to have the representatives conduct JLI
Compliance Checks at different Colorado Retail Stores each month.
JLI to use reasonable efforts to have the Compliance Checks conducted
by service providers engaged by JLI.
c. The representative conducting the JLI Compliance Check to complete
a standardized form documenting the transaction(s) in which he or she
participated in each Retail Store, which shall note any violations. The
representative’s compensation shall not be dependent on the results of
the retailer-compliance inspections.
d. JLI to implement the following penalties to Colorado Retail Stores for
violations of the JLI Compliance Checks:
i. First JLI Compliance Check Failure: JLI shall issue a letter
notifying the Colorado Retail Store of its first violation. The
letter shall reiterate the requirements of the JLI Compliance
Checks and the penalty escalation structure. For any Colorado
Retail Store that commits a first violation, JLI shall perform a
second JLI Compliance Check within ninety (90) days of the first
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violation, which shall be in addition to the above-stated annual
requirement.
ii. Second JLI Compliance Check Failure: If a second violation
occurs within one year of the first violation, JLI shall issue a
letter notifying the Colorado Retail Store of the second violation.
JLI shall suspend (or shall instruct any wholesaler, distributor,
or sub-distributor through which JLI supplies the Colorado
Retail Store to suspend) the Colorado Retail Store from any
Promotional activities for six (6) months following the date of
the second failed JLI Compliance Check. For any Colorado
Retail Store that commits a second violation, JLI shall perform a
third JLI Compliance Check within ninety (90) days of the
second violation, which shall be in addition to the above-stated
annual requirement. For any second age-verification failure, JLI
shall communicate the age-verification non-compliance to the
United States Food and Drug Administration (“FDA”).
iii. Third JLI Compliance Check Failure: If a third violation occurs
within one year of the first violation, JLI shall issue a letter
notifying the Colorado Retail Store of the third violation. JLI
shall cease doing business with the Colorado Retail Store as an
authorized retailer for three (3) years from the date of the third
failed JLI Compliance Check, and notify all applicable
24
wholesalers, distributors, and sub-distributors to suspend sales
of JUUL Products to the Colorado Retail Store for the three-year
period. For any Colorado Retail Store that commits a third
violation, JLI shall perform a fourth JLI Compliance Check
within ninety (90) days of the third violation, which shall be in
addition to the above-stated annual requirement. For any third
age-verification failure, JLI shall communicate the age-
verification non-compliance to the FDA.
iv. Fourth JLI Compliance Check Failure: If a fourth violation
occurs within one year of the first violation, JLI shall cease
doing business with the Colorado Retail Store and notify all
applicable wholesalers, distributors, and sub-distributors to
suspend sales of JUUL Products to the Colorado Retail Store.
The embargo on doing business with that Colorado Retail Store
shall remain in place until new ownership of that Colorado
Retail Store wholly unrelated to the embargoed ownership is in
place and licensed to sell vapor products. Where that Colorado
Retail Store is part of a chain or similar group of stores,
“ownership” in the preceding sentence shall refer to the owner or
franchisee of the specific Colorado Retail Store at issue, and not
to a parent company or owner of the chain. For any fourth age-
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verification failure, JLI shall communicate the age-verification
non-compliance to the FDA.
e. If (i) JLI receives information pursuant to this Paragraph 40, or (ii) JLI
customer service receives information or complaints of Colorado Retail
Stores violating the age-verification requirements or product quantity
limits, JLI shall conduct a JLI Compliance Check of those Retail Stores
within ninety (90) days of receipt of such information or complaints.
f. JLI’s obligations under this Paragraph become effective on the first
day of the first full calendar month beginning no earlier than twenty-
one (21) days after the Effective Date.
g. Every six (6) months, JLI shall provide the Colorado Attorney General
with results of its JLI Compliance Checks of Colorado Retail Stores
conducted pursuant to Paragraph 40(a), with the first set of results
being provided six (6) months and two weeks after the terms of this
Paragraph become effective pursuant to Paragraph 40(f).
41. The Parties agree that JLI shall not be subject to any liability for any conduct
by Colorado Retail Stores arising out of or relating to JLI’s creation and maintenance of
the retailer-compliance program described above.
42. JLI shall continue to include serial numbers on JUUL Devices that permit
Colorado’s consumers to report the serial number of a JUUL Device confiscated from a
Youth through a website, currently https://www.juul.com/trackandtrace. Every six (6)
months with the reports provided pursuant to Paragraph 40(g), JLI shall report to the
26
Colorado Attorney General any and all information regarding any submissions to the
website for transactions identified as relating to a Colorado Retail Store.
III. DOCUMENT DEPOSITORY
43. Depository Documents shall be made available to the public in a Document
Depository established consistent with this Part:
a. Within six (6) months of the Effective Date, JLI shall identify the
Depository Documents that were made available to the public, withheld, or
redacted pursuant to Section IV of the Consent Judgment between JLI and
the State of North Carolina dated June 28, 2021. The Colorado Attorney
General may transmit these documents to the Depository Institution to be
made available to the public on the same basis as resolved pursuant to the
North Carolina Consent Judgment. The Colorado Attorney General may not
make any additional objections to withheld or redacted documents that were
made available to the public, withheld, or redacted pursuant to the North
Carolina Consent Judgment.
b. For Depository Documents that have not already been made available
to the public, withheld, or redacted pursuant to the North Carolina Consent
Judgment, JLI may redact the following categories of information from the
Depository Documents:
i. Privileged information or attorney work product.
ii. Trade secret material, including documents that could be
used to create counterfeit or black market JUUL Products.
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iii. Confidential Tax information.
iv. Confidential Personal Information and JLI personnel files,
so long as those personnel files do not contain information
about any employee’s Covered Conduct. For the avoidance
of doubt, information related to compensation; purchase of
shares, or financial details relating to company acquisition
are not encompassed within the definition of Confidential
Personal Information or JLI personnel files.
v. Information that may not be disclosed under applicable
federal, state, or local law.
vi. Information that cannot be disclosed without violating the
contractual rights of third parties that JLI may not
unilaterally abrogate.
vii. Information regarding personal or professional matters
unrelated to JLI or ENDS, including but not limited to
emails produced from the files of JLI custodians discussing
vacation or sick leave, family, or other personal matters.
c. JLI may withhold a Depository Document in its entirety if it
contains only information in subparagraphs 43(b)(i)-(vii) above.
Documents so withheld must be replaced by JLI with a slip sheet
identifying the document by Bates Number (where available) and
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JLI must identify any category that forms the basis for redaction
or withholding.
d. JLI’s inadvertent failure to redact or withhold a document under
Paragraph 43(b) shall not constitute a waiver of any
confidentiality rights that JLI has under this Paragraph, nor
shall it prevent JLI from later redacting or withholding the
document, or requesting that the State return the inadvertently
produced copy of the document.
e. Within sixteen (16) months of the Effective Date, JLI shall
identify every Depository Document it seeks to redact or withhold
and identify the category that forms the basis for redaction or
withholding. Within three (3) months of JLI’s identification of a
document for redaction or withholding, the Multistate
Leadership Committee shall confer with JLI about its redaction
or withholding requests. The Multistate Leadership Committee
may challenge such requests on the ground that the information
at issue does not fall within the categories in Paragraph 43(b)(i)-
(vii) above. In the event differences remain between the Parties
with regard to JLI’s redaction or withholding requests, within
thirty (30) days after the deadline for the Multistate Leadership
Committee and JLI to meet and confer, the Parties shall request
that a court in one of the Settling Litigating States appoint one
29
or more special masters to review any disputed documents and
determine whether the information that JLI requests to redact or
withhold falls within the categories in Paragraph 43(b)(i)-(vii)
above. The determination of the special master(s) shall be
binding on the Parties. The costs and fees of the special master(s)
shall be borne equally by the Parties. For the avoidance of doubt,
JLI’s prior designation of any Depository Document under a
Settling Litigating State confidentiality or protective order shall
not create any presumption as to the confidentiality of such
document for purpose of the Document Depository.
44. The Document Depository shall be maintained and operated by one or more
public universities or similar research entities chosen by the Settling Litigating States
(the “Depository Institution”). The Settling Litigating States shall notify JLI of the
Depository Institution chosen. Upon its selection, the Depository Institution will commit to
hosting for the public the Depository Documents for no less than ten (10) years. The
Document Depository shall be freely accessible to the public and government entities of all
States and territories in the United States.
45. JLI shall be responsible for and shall reimburse the Depository Institution
for any reasonable expenses incurred by it in the receiving, indexing, storing, and
providing public access to the Depository Documents for ten (10) years, not to exceed
$5,000,000. JLI shall establish a single escrow account to be used by the Settling
Litigating States collectively for the purpose of reimbursing the Depository Institution
30
established under Paragraph 44 for such expenses, which shall be funded with $1,000,000
within ninety (90) days of the Effective Date; provided that the $1,000,000 shall be used
only after (i) the amounts reimbursed by JLI under this Paragraph exceed $4,000,000 in
the aggregate or (ii) JLI is unable to reimburse the Depository Institution within ninety
(90) days of receipt of a written request for reimbursement. In the case of a change in
control of JLI or a sale of all or substantially all of JLI’s assets, JLI agrees to place the
remaining $4,000,000 in escrow for the purpose of reimbursing the Depository Institution
within ninety (90) days of such event.
46. The Depository Institution will make the Depository Documents produced by
JLI available to the public within two (2) years of its selection, provided that the
documents produced by or on behalf of the Individual Defendants shall be made available
to the public only after the Reference Date. Should the Depository Institution choose to
discontinue hosting the Depository Documents, the Depository Documents shall be
transferred to the Settling Litigating States, where they will remain available to the
public at the discretion of and in the form selected by such States.
IV. MONETARY PAYMENT
47. JLI hereby warrants and represents that, as of the date of the execution of
this Consent Judgment, it is not insolvent as such term is defined and interpreted under
11 U.S.C. §§101 et seq. (“Code”) including, without limitation, Code §§ 547 and 548.
48. Subject to the terms and conditions below, JLI shall pay a total amount of
$31,713,649 to the State of Colorado as follows: (a) $3,964,206.13 within ninety (90) days
of the Effective Date; (b) $3,964,206.13 by June 1, 2024; (c) $3,964,206.13 by June 1, 2025;
31
(d) $3,964,206.13 by June 1, 2026; (e) $3,964,206.12 by June 1, 2027; (f) $3,964,206.12 by
June 1, 2028; (g) $3,964,206.12 by June 1, 2029; and (h) $3,964,206.12 by June 1, 2030.
JLI shall notify the Colorado Attorney General, in writing, at least ninety (90) days prior
to transmitting each payment required under subparagraphs (b)-(h).
49. JLI shall have the right to prepay any amount in Paragraphs 48(b)-(h) in
whole or in part before such amount becomes due at a discount calculated using an
effective discount rate of 7.5% per annum, with the discount calculated at the daily rate of
–0.021357045% for each day between (i) the later of (a) September 1, 2025 or (b) the date
such payment is made by JLI, and (ii) the due date for payment of the amount under
Paragraph 48. Such pre-payment shall constitute full payment of the undiscounted
payment amount due under Paragraph 48. JLI shall notify the Colorado Attorney General,
in writing, at least ninety (90) days prior to transmitting any pre-payment under this
Paragraph.
50. At the Colorado Attorney General’s direction, JLI shall direct payment in the
amount of $167,324.00 to the National Association of Attorneys General for
reimbursement of grant monies made available by the Tobacco Enforcement Fund to
support Colorado’s litigation efforts in this matter. Such payment shall be made from the
initial payment required under Paragraph 48(a) and shall be made in accordance with the
instructions of the Colorado Attorney General.
51. Payment under this Consent Judgment shall be made in accordance with
wiring instructions from the Colorado Attorney General. The Colorado Attorney General
shall cause the payment to be held, along with any interest thereon, in trust by the
32
Colorado Attorney General to be used in the Colorado Attorney General’s sole discretion
for reimbursement of the Attorney General’s actual costs and attorneys’ fees, the payment
of restitution, if any, and for future consumer fraud or antitrust enforcement, consumer
education, or public welfare purposes, including but not limited to the purposes described
in Paragraph 52 of this Consent Judgment.
52. The amount paid to each Settling Litigating State shall be used for any
lawful purpose and shall be used consistent with the Colorado Attorney General’s
authority including, but not limited to:
a. Programs that provide cessation assistance to Colorado residents who
were exposed to ENDS while under the age of 21;
b. Education or prevention programs that are designed to prevent or
reduce use of ENDS by Colorado residents who are under the age of 21;
c. Research in support of preventing ENDS use by Colorado residents
who are under the age of 21 by independent third parties;
d. Research into the health effects, whether short, medium, or long-term,
of the use of ENDS by persons, including persons under the age of 21;
e. Programs or equipment that are designed to abate the impact that
ENDS and other Nicotine products have had on Colorado students,
schools, school districts and to prevent such impact in the future;
f. Efforts to mitigate the impact of, including by enforcing Colorado and
federal law with respect to, disposable ENDS, Nicotine products, and
companies that have not taken steps similar to those described in this
33
Consent Judgment to limit access to or usage of Nicotine products by
Colorado residents who are under the age of 21;
g. Other consumer education and enforcement efforts; and
h. Reimbursement for the costs of the investigation and litigation,
including attorneys’ fees.
53. At least 50%, in the aggregate, of the amounts paid to the Settling Litigating
States constitutes compensatory restitution and remediation within the meaning of 26
U.S.C. §162(f)(2)(A). As such, the Settling Litigating States shall cause to be completed
and timely filed a Form 1098-F with the Internal Revenue Service (“IRS”) that identifies
not less than 50%, in the aggregate, of the amounts paid to the Settling Litigating States
as compensatory restitution and remediation within the meaning of 26 U.S.C.
§ 162(f)(2)(A), including appurtenant IRS regulations, guidance, and instructions, and
shall timely furnish Copy B of such Form 1098-F (or an acceptable substitute statement)
to JLI.
V. NOTICE
54. All notices or certifications required to be provided to a Party or a designated
state office shall be sent in written form electronically and by first class mail, postage pre-
paid, as follows, unless a Party gives notice of a change to the other Party:
a. For JLI:
Tyler Mace
Chief Legal Officer
JUUL Labs, Inc.
1000 F Street
Washington, D.C. 20004
34
With a copy to:
JB Kelly
Wachtell, Lipton, Rosen & Katz
51 West 52
nd
Street
New York, NY 10019
b. For the State of Colorado:
Jeffrey Leake
Brady Grassmeyer
Colorado Department of Law
1300 Broadway, 7
th
Floor
Denver, CO 80302
VI. ENFORCEMENT
55. JLI shall, after diligent inquiry, beginning one hundred and twenty (120)
days from the Effective Date and thereafter annually certify compliance with this Consent
Judgment to the Colorado Attorney General pursuant to the notice provisions above.
56. For the purposes of resolving disputes with respect to compliance with the
injunctive terms of this Consent Judgment, should the Colorado Attorney General have a
reasonable basis to believe that JLI has engaged in a practice that may have violated the
terms of this Consent Judgment, the Colorado Attorney General shall notify JLI of the
specific objection, identify with particularity the provision of this Consent Judgment that
the practice appears to violate, and give JLI thirty (30) days to respond to the notification.
JLI shall have the thirty (30) day period to provide a good faith written response to the
Colorado Attorney General’s notification, containing either a statement explaining why
JLI believes it is in compliance with the Consent Judgment or a detailed explanation of
35
how the alleged violation occurred and a statement explaining how JLI intends to remedy
the alleged breach. Following receipt of JLI’s written response, the Parties shall meet and
confer in good faith regarding the alleged violation. Nothing in this Section limits the
Colorado Attorney General’s Civil Investigative Demand or investigative subpoena
authority, and JLI reserves all of its rights in responding to a Civil Investigative Demand
or investigative subpoena issued pursuant to such authority.
57. The Colorado Attorney General may assert any claim that JLI has violated
this Consent Judgment in a separate civil action to enforce compliance with this Consent
Judgment, or may seek any other relief afforded by law for violations of the Consent
Judgment, but only after providing JLI an opportunity to respond to the notification
described in Paragraph 56 above; provided, however, that the Colorado Attorney General
may take any action at any time if it believes that, because of the specific practice, a
threat to the health or safety of the public requires immediate action.
58. A State or Attorney General may not enforce the Consent Judgment of
another State or Attorney General.
VII. RELEASE
59. Releasors release and forever discharge the Released Parties from any and
all Claims based on, arising out of, or in any way related to the Covered Conduct prior to
the Effective Date to the full extent of the Colorado Attorney General’s power and
authority to release Claims (the “Released Claims”); provided, however, that if JLI fails to
make any of the payments required under Paragraph 48(a)-(e) by thirty (30) days after
such payment’s due date or JLI enters Bankruptcy Proceedings prior to the Reference
36
Date, then the release and discharge of the Individual Defendants shall no longer be
effective.
60. The release in Paragraph 59 is intended by the Parties to be broad and shall
be interpreted so as to give all the Released Parties the broadest possible bar against any
liability relating in any way to Released Claims. Subject to the enumerated carve-outs in
this Section VII, this Consent Judgment shall be a complete bar to any Released Claims.
61. Nothing in Paragraphs 59-60 will be construed as an approval by the
Colorado Attorney General, the Court, the State of Colorado, or any agency thereof of
Released Parties’ past, present, or future conduct or business practices.
62. Notwithstanding any term of this Consent Judgment, any and all of the
following forms of liability are specifically reserved and not released under Paragraph 59:
a. Any criminal liability;
b. Any liability for state or federal securities violations;
c. Any liability for state or federal tax violations (other than tax liability
alleged or Claims brought against any Released Party in the Lawsuit);
d. Any state or federal antitrust liability;
e. Any state or federal environmental liability (other than such liability
alleged or Claims brought against any Released Party in the Lawsuit);
and
f. Any enforcement of the terms of this Consent Judgment.
63. The Parties acknowledge that the payments set forth in this Consent
Judgment are in compromise of Claims asserted in the Lawsuit, based on JLI’s
37
representations regarding its financial condition and its willingness to enter into this
Consent Judgment, and are subject to the following: If JLI fails to make any payment
required under Paragraph 48 within thirty (30) days of its due date, and JLI has not
entered Bankruptcy Proceedings, the Colorado Attorney General may immediately collect
any amount then due under Paragraph 48 using the methods allowed under Colorado law,
and by any other means authorized by the Colorado Attorney General or other applicable
law;
64. If JLI enters Bankruptcy Proceedings prior to the Reference Date, then:
a. The Multistate Leadership Committee may provide notice to JLI that
the financial obligations and release of JLI under this Consent;
Judgment are terminated and the Colorado Attorney General may
then seek judgment against JLI on liability and damages to the extent
allowed by the Bankruptcy Court pursuant to any claim or cause of
action brought in the Lawsuit;
b. if the Colorado Attorney General receives a judgment as described
above, all amounts previously received by the Colorado Attorney
General under this Consent Judgment shall be credited against such
judgment; and
c. Provisions regarding the release of all Released Parties under
Paragraph 59 other than JLI shall remain in full force and effect;
d. Alternatively, the Settling Litigating States may notify JLI that the
remaining payments under Paragraph 48 are fully accelerated and
38
due, the release of JLI under Paragraph 59 shall remain in full force
and effect, and the Colorado Attorney General may immediately collect
any amount then due under Paragraph 48 using the methods allowed
under Colorado law, and by any other means authorized by the State of
Colorado or other applicable law, unless stayed under federal
bankruptcy law.
65. If JLI enters Bankruptcy Proceedings later than the Reference Date but prior
to ninety-one (91) days of payment of all amounts due under Paragraph 48, the Colorado
Attorney General may immediately collect any amount then due under Paragraph 48
using the methods allowed under Colorado law, and by any other means authorized by the
Colorado Attorney General or other applicable law, unless stayed under federal
bankruptcy law.
66. Any applicable statute of limitation with respect to the Released Parties is
tolled from the date of this Consent Judgment until the Reference Date.
VIII. PARITY PROVISION
67. If, after the Effective Date but before the date four (4) years after such date,
JLI enters into any pre-trial and pre-judgment settlement or consent judgment with
another state, commonwealth, or territory of the United States or the District of Columbia,
by and through their attorneys general (“Other State(s)”), that resolves claims similar to
the Released Claims, and such settlement or consent judgment contains overall payment
or compliance provisions more favorable to such Other State(s) than the overall payment
or compliance terms of this Consent Judgment, then this Consent Judgment will be
39
revised to contain such more favorable payment or compliance provisions. This Section
VIII does not apply to, and there is no ability of any Settling Litigating State to seek or
obtain revision of this Consent Judgment based on, any Other State agreement with JLI
that is entered into after date ninety (90) calendar days prior to the scheduled start date of
a trial between JLI and the Other State or any severed or bifurcated portion thereof.
68. If JLI enters into a pre-trial or pre-judgment settlement or consent judgment
with an Other State during the time period referenced in Paragraph 67, JLI shall provide
a copy of such Other State’s settlement document to the Multistate Leadership Committee
for review within ten (10) days of its effective date. If, after review of the Other State’s
settlement document, the Multistate Leadership Committee believes such settlement
document contains overall conduct terms requiring revision to this Consent Judgment,
then, on behalf of the Attorneys General of the Settling Litigating States, the Multistate
Leadership Committee shall provide written notice to JLI within fifteen (15) days of
receipt of the Other State’s settlement document requesting that this Consent Judgment
be revised to contain such more favorable conduct terms. JLI and the Multistate
Leadership Committee or its representative states shall promptly meet and confer in good
faith concerning any such request. If an agreement is reached between JLI and the
Multistate Leadership Committee that a revision of this Consent Judgment is required,
this Consent Judgment shall be revised accordingly. If an agreement is reached between
JLI and the Multistate Leadership Committee that no revision of this Consent Judgment
is required, then this Consent Judgment shall not be revised. If after meeting and
conferring JLI and the Multistate Leadership Committee fail to reach an agreement as to
40
whether a revision is required, the Attorney General of Colorado may request that the
Court determine whether revision of this Consent Judgment is required under this
Paragraph.
IX. GENERAL TERMS
69. Term: The provisions of Paragraphs 2–42 shall remain in place as follows:
a. The provisions of Paragraphs 2–5, 7, 15, 16, 19–25, 28, and the
provisions of Paragraph 34 to the extent the underlying terms at issue
have not expired under this Paragraph 69, shall not expire (subject to
the provisions of subparagraph c below).
b. The provisions of Paragraphs 9, 11, and 12, shall not expire except as
described in those provisions.
c. The remaining provisions shall expire six (6) years after the Effective
Date. If JLI receives an Authorization Order that contains
authorizations, obligations, standards, or requirements as to conduct
addressed in such remaining provisions (including by incorporating
actions, obligations, standards, requirements proposed or set forth in
JLI’s application for such Authorization Order), then as of the date of
such Authorization Order:
i. such authorizations, obligations, standards, or requirements
shall supersede any different obligations, standards, or
requirements in Section II; and
41
ii. actions by JLI that act within or reasonably implement such
obligations, standards, or requirements of the Authorization
Order shall be permissible under this Consent Judgment even if
any remaining provision hereof would provide otherwise.
d. Within thirty (30) days, or such other time as the Parties may
mutually agree, after the FDA’s issuance of an Authorization Order,
JLI shall meet and confer with the Multistate Leadership Committee
regarding the scope of the Authorization Order, whether JLI believes
the Order addresses provisions of subparagraph c above, and JLI’s
plans to implement the Authorization Order.
e. “Authorization Order” means a granted written marketing order from
the FDA authorizing a Premarket Tobacco Product Application
(“PMTA”) submitted by JLI related to JUUL Products or other written
authorization from the FDA to JLI related to JUUL Products
(including a Modified Risk Tobacco Product Application).
70. Any failure of the Colorado Attorney General to exercise any right under any
provision of this Consent Judgment shall not constitute a waiver of any rights of the
Colorado Attorney General to enforce such provision prospectively.
71. Applicability: This Consent Judgment applies only to JLI in its corporate
capacity and acting through its respective successors and assigns, directors, officers,
employees, agents, subsidiaries, divisions, or other internal organizational units of any
kind or any other entities acting in concert or participation with them. The remedies,
42
penalties, and sanctions that may be imposed or assessed in connection with a violation of
this Consent Judgment (or any order issued in connection herewith) shall only apply to
JLI.
72. Successors: This Consent Judgment is binding on, and inures to the benefit
of, the Parties’ successors and assigns. For the avoidance of doubt, if JLI ceases selling a
type of JUUL Product that JLI either sold in the United States or had in development as
of either April 1, 2022 or the Effective Date, and a company other than JLI thereafter sells
such type of JUUL Product in Colorado, that company shall be considered a successor of
JLI with respect to such JUUL Product for purposes of compliance provisions under
Section II of this Consent Judgment and all associated provisions necessary for their
enforcement and interpretation. For the avoidance of doubt, the compliance provisions of
Section II of this Consent Judgment shall not apply to such company’s own products.
73. The compliance provisions of Section II of this Consent Judgment shall be
binding on the Individual Defendants and on any business that the Individual Defendants
control directly or indirectly that engages in the Promotion or sale of ENDS or Nicotine
products.
74. Non-Release: Except as otherwise specifically provided in this Consent
Judgment, nothing in this Consent Judgment shall limit, prejudice, or otherwise interfere
with the rights of any Settling Litigating State to pursue any and all rights and remedies
it may have against any non-Released Party.
75. Restrictions on Transfers: JLI shall not in one (1) transaction, or a series of
related transactions, sell or transfer assets having a fair market value equal to twenty-five
43
percent (25%) or more of the consolidated assets of JLI (other than sales or transfers of
inventories, or sales or transfers to an entity owned directly or indirectly by JLI) where
the sale or transfer is announced after the Effective Date, is not for fair consideration, and
would foreseeably and unreasonably jeopardize JLI’s ability to make the payments under
this Consent Judgment that are due on or before the payment date under Paragraph 48(e)
following the close of a sale or transfer transaction, unless JLI obtains the acquiror’s
agreement that it will be either a guarantor of or successor to the percentage of JLI’s
remaining payment obligations under this Consent Judgment equal to the percentage of
JLI’s consolidated assets being sold or transferred in such transaction. Percentages under
this section shall be determined in accordance with the United States’ generally accepted
accounting principles and as of the date of JLI’s most recent publicly filed consolidated
balance sheet prior to the date of entry into the sale or transfer agreement at issue.
76. Negotiated Judgment: The Parties are entering into this Consent Judgment
for the purpose of compromising and to avoid the time, expense, burden, and uncertainty
associated with continuing litigation, and to address the Colorado Attorney General’s
concerns with JLI’s historical business practices with respect to JUUL Products. It is
expressly agreed that this Consent Judgment is not admissible in any proceeding (except
in a dispute between the State and JLI regarding compliance with this Consent Judgment
or as necessary for the Released Parties to enforce the release provisions), and it is also
expressly agreed and understood that nothing contained in this Consent Judgment may be
taken as or construed to be an admission or concession of any liability, wrongdoing, or
violation of any source of law, or of any other matter of fact or law. This Consent
44
Judgment is not intended to be used or admissible in any unrelated administrative, civil,
or criminal proceeding. JLI does not waive any defenses it may raise elsewhere in other
litigation or matters.
77. Private Action: This Consent Judgment shall not confer any rights upon, and
is not enforceable by, any persons or entities besides the Colorado Attorney General and
the Released Parties. The Colorado Attorney General may not assign or otherwise convey
any right to enforce any provision of this Consent Judgment, provided that nothing in this
sentence shall preclude the Colorado Attorney General from employing the services of a
collection agency for the purpose of pursuing collection of payments due under this
Consent Judgment.
78. Conflict with Other Laws: Nothing in this Consent Judgment shall impose an
obligation on JLI that is less restrictive than JLI’s obligations under federal, state, or local
law, rule, regulation, or guidance, including but not limited to Colorado Revised Statute
§ 44-7-104.7. In the event there is a conflict between this Consent Judgment and the
requirements of federal, state, or local laws, such that JLI cannot comply with this
Consent Judgment without violating these requirements, JLI shall document such
conflicts and notify the Colorado Attorney General that it intends to comply with the
federal, state, or local requirements to the extent necessary to eliminate the conflict.
Within thirty (30) days after receipt of a notification from JLI referenced above, the
Colorado Attorney General may request a meeting to discuss the steps JLI has
implemented to resolve the conflict, and JLI shall comply with any such reasonable
45
request. Nothing in this Consent Judgment shall relieve JLI of its obligation to comply
with all local, State and federal laws.
79. The Promotion or sale of JUUL Products solely for consumers outside of
Colorado shall not be deemed actions taken (or omitted to be taken) in Colorado or
directed at consumers in Colorado, and the provisions of this Consent Judgment shall not
be applicable to such Promotion of JUUL Products.
80. Nothing in this Consent Judgment shall prohibit JLI from complying with
the terms of any court order.
81. Except as expressly set forth herein, this Consent Judgment shall not be
modified (by this Court, by any other court, or by any other means) without the written
consent of both the Colorado Attorney General and JLI, or as provided for in Paragraphs
67-68.
82. This Consent Judgment shall not be construed or used as a waiver or any
limitation of any defense otherwise available to JLI in any pending or future legal,
regulatory, or administrative action or proceeding, or JLI’s right to defend itself from, or
make any arguments in, any individual or class claims or suits.
83. Each Party shall bear its own attorneys’ fees and costs arising out of, related
to, or in connection with entry of this Consent Judgment.
84. Except for Paragraphs 59-66, if any provision of this Consent Judgment shall,
for any reason, be held illegal, invalid, or unenforceable, in whole or in part, such
illegality, invalidity, or unenforceability shall not affect any other provision or clause of
this Consent Judgment and this Consent Judgment shall be construed and enforced as if
46
such illegal, invalid, or unenforceable provision, in whole or in part, had not been
contained herein.
85. This Consent Judgment represents the entire agreement between the
Parties, and there are no representations, agreements, arrangements, or understandings,
oral or written, between the Parties relating to the subject matter of this Consent
Judgment that are not fully expressed herein or attached hereto. In any action undertaken
by the Parties, no prior versions of this Consent Judgment and no prior versions of any of
its terms that were not entered by the Court in this Consent Judgment may be introduced
for any purpose whatsoever.
86. The Court retains jurisdiction over this Consent Judgment and the Parties
with respect to this Consent Judgment.
87. This Consent Judgment does not limit the rights of any private party to
pursue any private remedies allowed by law. This Consent Judgment is not intended to
create any private right of action by other parties.
88. This Consent Judgment may be executed by the Parties in counterparts and
be delivered by facsimile or electronic transmission, or a copy thereof, such constituting an
original counterpart hereof, all of which together will constitute one and the same
document.
APPROVED FOR FILING and SO ORDERED, this _____ day of April, 2023.
___________________________________________
District Court Judge
Second Judicial District
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48
Peter A. Farrell, P.C. (20PHV6265)
Katherine R. Katz (20PHV6266)
KIRKLAND & ELLIS LLP
1301 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
Telephone: (202) 389-5100
Facsimile: (202) 389-5200
Zharna Shah (21PHV6474)
KIRKLAND & ELLIS LLP
300 North LaSalle
Chicago, IL 60654
Phone: 312.862.2582
Fax No.: 312.862.2200
Xavier Jarron Avery, No. 53453
KIRKLAND & ELLIS LLP
609 Main Street
Houston, TX 77002
Phone: (713) 836-3516
Cynthia D. Love (22PHV7205)
KIRKLAND & ELLIS LLP
60 East South Temple
Salt Lake City, UT 84111
Phone: (801) 877-8243
Fax No.: (801) 877-8101
Thomas F. Fleming (22PHV7029)
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, NY 10022
Phone: (212) 446-6463
Fax No.: (212) 446-4900
Clint Cowan (23PHV7308)
KIRKLAND & ELLIS LLP
4550 Travis Street
49
Dallas, TX 75205
Phone: (214) 972-1770
Bradley R. Johnson (23PHV7307)
GUNSTER
One Independent Drive, Suite 2300
Jacksonville, Florida 32202
Phone: (904) 350-7163
