The Vaping Market Is Igniting

The multibillion-dollar vaping market has taken a hit. The recent outbreak of vaping-related illnesses is sure to ignite litigation. The Centers for Disease Control (CDC) promptly initiated an investigation preliminarily identifying an additive ingredient associated with products containing tetrahydrocannabinol (THC) as a common thread.

The reaction by states to ban vaping products in response to the issue was swift. Additionally, the deadline for e-cigarette market approval submissions to the Food and Drug Administration (FDA) was recently moved up by two years. Vaping products are at the center of a storm, and lawyers are busy.

Vaping 101

Vaping is the act of inhaling aerosolized liquid from an electronic battery-powered device. Electronic cigarettes—or e-cigarettes—are also called vapes, e-hookahs, vape pens, and electronic nicotine delivery systems (ENDS). ENDS are noncombustible tobacco products. The liquid in vaping products can contain nicotine, THC, cannabinoid (CBD) oils, and additives like propylene glycol, vegetable glycerin, and varying compositions of flavorings. THC is the psychoactive compound of marijuana that produces the “high.”

E-cigarettes hit the U.S. market over a decade ago and were promoted as a safer alternative to traditional tobacco cigarettes. They gained significant traction over the last few years when USB-sized vaporizers were introduced. Correspondingly, a spike in vaping occurred, especially among teens and young adults. Until then, this was a segment of the population, according to the CDC, that had been using fewer tobacco products.

By the Numbers

The number of vapers has been increasing rapidly, from about 7 million in 2011 to 41 million in 2018. Market research group Euromonitor estimates that the number of adults who vape will reach almost 55 million by 2021. The global market is estimated to be worth $19.3 billion, up from $6.9 billion just five years ago. According to the Business Research Group, the market is expected to grow to $29.39 billion through 2022. The United States, United Kingdom, and France are the biggest markets. Vapers in these three countries spent more than $10 billion on smokeless tobacco and vaping products in 2018.

FDA Regulation

In 2009, the FDA acquired regulatory oversight of vaping products when the Family Smoking Prevention and Tobacco Control Act became law and classified them as tobacco products. The FDA did not publish proposed rules to begin formally regulating ENDS until 2014. The proposed rules, which were adopted in May of 2016 and effective in August of that year, required ENDS to undergo a “premarket” review process for New Tobacco Products, and required a prominent warning on packaging stating that the products contain the addictive chemical nicotine.

In 2017, the time allowed for submission of applications was extended from three to six years from the 2016 effective date of the rule. However, in July 2019, a federal judge moved that deadline back from 2022 to May 11, 2020. Reaction from the industry was mixed. San Francisco–based JUUL Labs, Inc., said it was supportive of the application process and had been preparing research on its products and how they are used by smokers. “We’re confident in the content and quality of the materials we will submit with our application,” said spokeswoman Lindsay Andrews in an interview with Bloomberg.

However, Fontem US Inc, the marketer of blu e-cigarettes, voiced concern about the pushed-up deadline. “We are disappointed with the court’s decision imposing an accelerated timeline on the premarket review process. This will undoubtedly hamper the ability of manufacturers to conduct the scientific research needed to ensure that potentially less harmful products are available to adult smokers seeking to make the switch from combustible tobacco products,” the company said in a release.

The Outbreak

In August 2019, the CDC advised of health concerns related to reports in 22 states of vaping-related respiratory issues. At the time, the CDC had not identified a cause. On November 8, 2019, however, the CDC stated that vitamin E acetate, an additive in some THC-containing products, could be the cause of the reported lung illnesses. The announcement did not officially rule out other possible ingredients as a cause of the lung injuries, but a report from the CDC said no other potential toxins were detected in its tests. The CDC stated that anyone who uses vaping products “should not buy these products off the street (e.g., e-cigarette products with THC, other cannabinoids) and should not modify e-cigarette products or add any substances to these products that are not intended by the manufacturer.”

As of November 5, 2019, 2,051 cases of lung injury associated with vaping product use had been reported to CDC from 49 states (all except Alaska), the District of Columbia, and one U.S. territory. Thirty-nine deaths were confirmed in 24 states and the District of Columbia.

The Ban

In response to the vaping-related lung illnesses and concern over increasing youth use of vaping products, governors and health departments of the following states have acted to implement state-wide bans on e-cigarettes or vaping-related products: Massachusetts, Michigan, Montana, New York, Oregon, Rhode Island, and Washington. San Francisco, the home of JUUL Labs, Inc., was the first major U.S. city to implement a ban on nicotine e-cigarette products.

The Lawsuits

The litigation involving vaping companies comes in a variety of forms including lawsuits against businesses for their marketing practices, personal injury claims, and actions by governmental entities and school districts.

In October 2019, the U.S. Judicial Panel on Multidistrict Litigation (JPML), in MDL 2913, In re JUUL Labs, Inc. Marketing, Sales Practices and Products Liability Litigation, ordered the consolidation of 10 lawsuits in the Northern District of California. Those lawsuits involve allegations that JUUL targeted young people when marketing its products, created products with sweet flavors specifically to attract minors, and promoted nicotine addiction. The legal actions include both individual personal injury cases and class action lawsuits.

JUUL, however, has long disputed that it has marketed to kids. Ted Kwong, a spokesman for JUUL, said in a statement, “We have never marketed to youth and do not want any non-nicotine users to try our products. These suits largely copy and paste unfounded allegations previously raised in other lawsuits, which we have been actively contesting for over a year. These cases are without merit, and we will defend our mission throughout this process.”

States are also getting in on the action, with New York and California recently suing JUUL in November 2019, claiming the company engaged in deceptive marketing practices. About the New York lawsuit, JUUL said in a statement, “[W]e remain focused on resetting the vapor category in the U.S. and earning the trust of society by working cooperatively with attorneys general, regulators, public health officials, and other stakeholders to combat underage use and convert adult smokers from combustible cigarettes. . . . Our customer base is the world’s 1 billion adult smokers, and we do not intend to attract underage users.”

Vaping product companies should no doubt expect a significant number of lawsuits arising from the outbreak of vaporizer-related illnesses, and plaintiffs’ attorneys are certainly viewing the “vape panic of 2019” as beneficial to business. Ned McWilliams, a plaintiffs’ attorney based in Florida, stated in an interview, “I’ve been a lawyer for about 13 or 14 years now, and of all the projects I’ve worked on, I’ve never seen an outpouring of people seeking help. I’m not exaggerating when I say that I talk to at least 10 families a day.” Scott Schlesinger, also a Florida-based plaintiffs’ attorney, stated that he’s suing e-cigarette manufacturers “all over the place . . . and suing the vape shops, too.”

As with any situation that produces a lot of litigation, however, there will be a variety of suits, and the credibility of claims will come into question. For instance, in Florida, one plaintiff claims she had to undergo a double-leg amputation due to complications associated with respiratory failure purportedly related to vaping CBD oil. In response to that allegation, the manufacturer stated that it “has sold hundreds of thousands of cartridges and is not aware of a single complaint that even remotely resembles that of the plaintiff.”

Regarding the potential for lawsuits involving vaping-related illnesses, personal injury attorneys “smell blood in the water,” said Greg Conley, president of the American Vaping Association, in an interview with Courthouse News. Litigators get ready.