Dividends and Juul Labs reaches settlement covering thousands of lawsuits

During WW II, the cigarette companies distributed hundreds of thousands of cigarettes to the troops fighting in Europe and many of them came back to smoke in the US. For a long time afterwards, smoking was normal and if people gathered the majority smoked. Times moved on and now smoking is still normal, but if you gathered a group together likely the smokers in the US would be a minority. For cigarette companies, they were looking for a new market and along came vaping.

In an article from the Associated Press, the company that lead the vaping success story is called Juul Labs and the company was bought by Phillip Morris. However, Juul had an emphasis on their vaping products, and they were aimed at high school teenagers. The teenagers could not smoke, but they could vape, and the flavors reflected teenage tastes.

Eventually, parents pressured school boards who pressured the Department of Justice to bring lawsuits or change laws. (it was easier to bring lawsuits). After 5 years of the process, Juul Labs has reached settlement covering thousands of lawsuits.

When a lawsuit is over, all companies including Juul announced the settlements represent a major step towards strengthening the company’s operations and a way forward.

The lawsuits provide money and funding for anti-vaping education programs.

Linking to dividend paying stocks, all profitable companies have a legal department to take care of inhouse normal legal routine matters and outside lawsuits. Often times when there are multiple lawsuits, the companies hire an outside legal firm to do the work for them. It is not unusual for companies to be sued on a regular basis. It is noted as the lawsuits go on and the amounts become higher, the inhouse resources go towards the legal process rather the focus on the business plan. Most lawsuits involve money, and the company should have a reserve fund to pay the lawsuits. Ideally, the investments you own has few lawsuits and can worry about profits and paying dividends.

There are more questions than answers, till the next time – to raising questions.


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