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A former SVP at Juul is suing the company for shipping 1 million contaminated pods



Reported today on The Verge

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Reported today in The Verge.

A former SVP at Juul is suing the company for shipping 1 million contaminated pods

In a lawsuit filed Tuesday, Siddharth Breja — former global senior vice president of finance at Juul — alleged that the company knowingly “sent to market, at a minimum, approximately one million mint-flavored e-cigarette nicotine pods that it admits were contaminated,” and that he was unlawfully terminated in retaliation for raising concerns about public safety. As reported by Buzzfeed News, after Breja raised the issue with management, Juul did not warn consumers that their pods might have been adulterated or issue a recall.

The story the suit tells is a strange one, although not completely unfamiliar, and outlines how a company led by a charismatic leader — Kevin Burns, Juul’s former CEO — and under federal pressure can find itself on the wrong end of potentially significant legal exposure.

As relayed in the lawsuit, Burns felt that Juul needed to win at all costs, and was prone to saying TV-boss things, like there could “only be one king at Juul.” (At one point, Burns apparently told Breja and a room of executives, “Tell that motherfucker I’ll take him out of the room and shoot him with a shotgun if he challenges my decisions,” which is trés HBO.)

The trouble started in February, two months after Altria — formerly Philip Morris, one of the largest tobacco companies in the world — spent $12.8 billion acquiring 35 percent of Juul. Last year, in an effort to avoid federal scrutiny of its products, and in a gesture of public goodwill, Juul shut down nearly all of its social media presence and quit selling its fruitier pods in retail stores, saying they’d only sell them online. (As of this month, they have pulled those flavors from their online store.) They still, however, sell mint-flavored pods, which are classified as menthol and therefore not considered flavored.

According to Breja’s lawsuit, after the fruit pods disappeared from stores, the share of Juul’s mint pods as a percentage of total pod sales jumped from one-third last September to two-thirds by this February. The increased demand created a supply-chain shortage; retailers were out of stock. “You need to have an IQ of 5 to know that when customers don’t find mango they buy mint,” Burns allegedly said at the time. That February, after a distributor returned pods that were nearly a year old — on its site, Juul claims that its pods don’t expire for at least a year but are best used soon after purchase — the company resold them without adding, as Breja had suggested, an expiration date on the packaging. “Half our customers are drunk and vaping like mo-fos, who the fuck is going to notice the quality of our pods,” said Burns, allegedly, in a typically pungent response.

The next month, Breja reportedly learned in an executive team meeting that some batches of the mint e-liquid Juul uses to fill its pods were contaminated, and that, according to the lawsuit, “approximately 250,000 ‘Mint Refill Kits,’ the equivalent of one million pods, manufactured with this contaminated eLiquid have already been shipped to retailers.” It’s not yet clear what the mint Juul pods may have been contaminated with. Breja told his supervisor that he thought the company should issue a product recall, or at least put out a warning to the public; in response, his boss, who is no longer with the company, allegedly told him to remember his loyalty to Juul. At the same time, Breja was allegedly told to recover $7 million from the supplier for the contaminated stock.

It remains to be seen what will happen, either with the pods or with the lawsuit, although Breja is asking for a jury trial. And then there’s the proverbial elephant in the room: across the country, there’s been an outbreak of lung injuries from vaping. As we’ve reported previously, 1,604 probable cases have been identified and it’s been linked to 34 deaths as of just last week. The spread, however, has been blamed mostly on adulterated THC e-liquid, and there’s no word on any connection to vaping legal nicotine pods.

For its part, a Juul spokesperson told The New York Times that Breja had been terminated because he wasn’t a good leader. “The allegations concerning safety issues with Juul products are equally meritless, and we already investigated the underlying manufacturing issue and determined the product met all applicable specifications,” the spokesperson continued.

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