1 Philip Morris Companies Inc, Encyclopedia.com (Oct. 18, 2019), https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/businesses-and-occupations/philip-morris-companies-inc.

2 Elizabeth, Smith & Ruth, Malone, Altria Means Tobacco: Philip Morris's Identity Crisis, 93(4) Am. J. Pub. Health 553, 553 (2003)Google Scholar.

3 Supra note 1.

4 Id.

5 Press Release, Altria Group, Inc., Altria Group, Inc. Completes Spin-off of Philip Morris International Inc. (Mar. 28, 2008).

6 See Cf. Ciara Linnane & Tomi Kilgore, Philip Morris and Altria merger talks are off as JUUL CEO steps down amid vaping fears, MarketWatch (Sept. 28, 2019), https://www.marketwatch.com/story/philip-morris-and-altria-merger-talks-are-off-as-JUUL-ceo-steps-down-amid-vaping-fears-2019-09-25.

7 Cf. Sheila Kaplan & Matt Richtel, JUUL Closes Deal with Tobacco Giant Altria, N.Y. Times (Dec. 20, 2018), https://www.nytimes.com/2018/12/20/health/JUUL-reaches-deal-with-tobacco-giant-altria.html; Sheila Kaplan, Philip Morris and Altria Are in Talks to Merge, N.Y. Times (Aug. 27, 2019), https://www.nytimes.com/2019/08/27/health/philip-morris-altria-merger-tobacco.html#targetText=Altria%20agreed%20last%20year%20to,off%20from%20Altria%20in%202008.

8 Kaplan & Richtel, supra note 7.

9 See Angelica LaVito, Tobacco giant Altria takes 35% stake in JUUL, valuing e-cigarette company at $38 billion, CNBC (Dec. 20, 2018, 4:43 PM), https://www.cnbc.com/2018/12/20/altria-takes-stake-in-JUUL-a-pivotal-moment-for-the-e-cigarette-maker.html. The $13 billion raised by JUUL was the largest amount of money raised by a U.S. company. To put the gravity of the investment in perspective, the second largest amount raised was $5.6 billion by Uber Technologies Inc. in 2015. See Cromwell Schubarth, JUUL's $12.8B deal is the biggest U.S. funding ever. Here's the rest of the Top 11, Silicon Valley Bus. J. (Dec. 21, 2018, 5:41 PM), https://www.bizjournals.com/sanjose/news/2018/12/21/JUULs-12-8b-deal-is-the-biggest-u-s-funding-ever.html.

10 Economic Trends in Tobacco, Ctrs. for Disease Control and Prevention (2019), https://www.cdc.gov/tobacco/data_statistics/fact_sheets/economics/econ_facts/index.htm. Total adult smokers in the United States have declined from 21% of adults in 2005 to 15.5% in 2016. Additionally, year-to-date in 2019, there has been an approximately 8% decrease in the sales of cigarettes. See Natalie Sherman, JUUL: The rise of a $38bn e-cigarette phenomenon, BBC (Jan. 6, 2019), https://www.bbc.com/news/business-46654063; Andrew Edgecliffe-Johnson & Alistair Gray, US cigarette sales drop as smokers shift to vaping, Fin Times (Apr. 3, 2019), https://www.ft.com/content/8964014c-5598-11e9-91f9-b6515a54c5b1.

11 See generally Edgecliffe-Johnson & Gray, supra note 10.

12 Id.

13 Kaplan & Richtel, supra note 7.

14 Press Release, Altria Group, Inc., Altria Makes $12.8 Billion Minority Investment in JUUL to Accelerate Harm Reduction and Drive Growth (Dec. 20, 2018) (http://investor.altria.com/file/Index?KeyFile=396169695)

15 Health professionals have been critical of JUUL's marketing campaigns, noting that JUUL's campaigns target teens and youth by including attractive young models in their commercials, and displaying the “ideal” teen life. Additionally, JUUL's use of social media influencers has accelerated JUUL's notoriety amongst young people. Kathleen Chaykowski, The Disturbing Focus of JUUL's Early Marketing Campaigns, Forbes (Nov. 16, 2018, 2:38 PM), https://www.forbes.com/sites/kathleenchaykowski/2018/11/16/the-disturbing-focus-of-JUULs-early-marketing-campaigns/#7d885b5214f9.

16 Kaplan & Richtel, supra note 7. Advocacy groups have cautioned that JUUL's unprecedented growth poses an imminent danger to the youth; from 2016 to 2017, JUUL's sales increased over 600%. See JUUL Sales increase more than 600% in a year, underscoring popularity among teens, Truth Initiative (Oct. 15, 2018), https://truthinitiative.org/research-resources/emerging-tobacco-products/JUUL-sales-increase-more-600-year-underscoring.

17 Altria Group, Inc., supra note 14, at 1.

18 Id.

19 Id.

20 Id.

21 Id.

22 Id.

23 Id.

24 Id.

25 Id. at 3.

26 Id. at 3.

27 Cf. Ciara Linnane & Tomi Kilgore, Philip Morris and Altria merger talks are off as JUUL CEO steps down amid vaping fears, MarketWatch (Sept. 28, 2019), https://www.marketwatch.com/story/philip-morris-and-altria-merger-talks-are-off-as-JUUL-ceo-steps-down-amid-vaping-fears-2019-09-25.

28 Altria Group, Inc., supra note 14, at 3. Additionally, as part of the standstill agreement, Altria also cannot acquire additional shares of JUUL above its already 35% interest.

29 Id. The length of the service agreements signed is six years, so Altria can only enter the e-vapor business via JUUL during the life of the service agreements. Prior to Altria's investment in JUUL, Altria ended two of its in-house e-cigarette brands – Mark Ten and Green Smoke. See Angelica LaVito, Altria-PMI $200 billion merger would face a future with fewer smokers, more regs for tobacco giants, CNBC (Aug. 30, 2019, 9:34 AM), https://www.cnbc.com/2019/08/30/altria-pmis-200-billion-merger-would-face-future-with-fewer-cigarettes.html.

30 Cf. Altria Group, Inc., supra note 14, at 1.

31 Press Release, Altria Group, Inc., Altria Group, Inc. Confirms Discussions With Philip Morris International, Inc. Regarding Potential All-Stock, Merger of Equals (Aug. 27, 2019) (http://investor.altria.com/file/Index?KeyFile=399345873).

32 Id.

33 Id.

34 Kaplan, supra note 7.

35 Id.

36 Id. LaVito, supra note 29.

37 LaVito, supra note 29.

38 Id.

39 Id.

40 Vape Devices vs IQOS: Comparison of Characteristics and Advantages, VAPEXPO (Sept. 16, 2019, 10:40 AM), https://vapexpo.ru/en/post/vape-ili-iqos-chto-vibrat-94181. JUUL works by evaporating a liquid, and turning the evaporated liquid into a vapor which can be inhaled, whereas iQOS works by heating up tobacco to a temperature that doesn't burn the tobacco, but creates a vapor which can be inhaled.

41 Cf. LaVito, supra note 29.

42 Press Release, Food and Drug Admin., FDA permits sale of IQOS Tobacco Heating System through premarket tobacco product application pathway (Apr. 30, 2019).

43 Id.

44 Angelica LaVito, Altria launches Iqos tobacco device in US, and the timing couldn't be better, CNBC (Oct. 4, 2019, 12:01 AM), https://www.cnbc.com/2019/10/04/altria-launches-iqos-tobacco-device-inus-and-the-timing-couldnt-be-better.html.

45 Id.

46 Jamie Ducharme, As the Number of Vaping-Related Deaths Climbs, These States Have Implemented E-Cigarette Bans, TIME (Oct. 11, 2019, 9:41 AM), https://time.com/5685936/state-vaping-bans/.

47 Jamie Ducharme, ‘I Wish We Had More Answers’: Health Officials Still Don't Know Why 500 People Have Gotten Sick After Vaping, TIMES (Sept. 19, 2019), https://time.com/5681190/cdc-vaping-lunch-illnesses/.

48 Id.

49 Outbreak of Lunch Injury Associated with E-Cigarette Use, or Vaping, Ctrs. for Disease Control and Prevention (2019), https://www.cdc.gov/tobacco/basic_information/e-cigarettes/severe-lung-disease.html.

50 Ducharme, supra note 46.

51 Id.

52 Id.

53 Id. See Sarah Rense, Massachusetts Just Banned All Vapes for 4 Months. Is the Rest of America Next?, Esquire (Sept. 25, 2019), https://www.esquire.com/lifestyle/health/a29067489/which-states-banned-flavored-e-cigarettes-vaping-JUULs/.

54 Ducharme, supra note 46.

55 Id. See Katie Lannan, Baker Declares 4-Month Ban on Vaping Product Sales, WGBH (Sept. 24, 2019), https://www.wgbh.org/news/local-news/2019/09/24/baker-plans-4-month-ban-on-vaping-products-in-massachusetts.

56 Ducharme, supra note 46.

57 Id.

58 Claire Withycombe, Governor Brown imposes six-month ban on flavored vaping products, Gazette-Times (Oct. 4, 2019), https://www.gazettetimes.com/news/local/governor-brown-imposes-six-month-ban-on-flavored-vaping-products/article_b0ae9ffc-5440-5be5-bf21-bb1b57be32b9.html.

59 Ducharme, supra note 46.

60 Id.

61 Id.

62 Id.

63 See Id.

64 See Id.

65 Beth LeBlanc, State court halts Whitmer's flavored vaping ban, Detroit News (Oct. 15, 2019, 2:25 PM), https://www.detroitnews.com/story/news/politics/2019/10/15/state-court-halts-whitmers-flavored-vaping-ban/3987484002/

66 Id. (“Indeed, an agency cannot create an emergency ban by way of its own failure to act.”)

67 Fedor Zarkhin, Oregon bans on both flavored nicotine and cannabis vaping products now on hold, The Oregonian (Nov. 14, 2019), https://www.oregonlive.com/news/2019/11/court-of-appeals-blocks-flavored-thc-oil-vape-ban.html.

68 Press Release, Food and Drug Admin., Trump Administration Combating Epidemic of Youth E-Cigarette Use with Plan to Clear Market of Unauthorized, Non-Tobacco-Flavored E-Cigarette Products (Sept. 11, 2019).

69 Id.

70 Id.

71 Id.

72 Ducharme, supra note 46.

73 See Angelica LaVito, US vaping crisis helped tank merger talks with Altria, Philip Morris International's CFO says, CNBC (Oct. 17, 2019, 11:45 AM), https://www.cnbc.com/2019/10/17/us-vaping-crisis-tanked-merger-talks-between-altria-philip-morris-international-says.html

74 Press Release, Altria Group, Inc., Altria and Philip Morris International End Merger Discussion; Altria Provides Statement on JUUL Leadership Change; Tightens 2019 Full-year Earnings Guidance. (Sept. 25, 2019).

75 LaVito, supra note 73.

76 Id.

77 Id.

78 Linnane & Kilgore, supra note 27.

79 Supra note 74.

80 Id.

81 Investor Alert, BG&G, Altria Group, Inc. (MO) – Bronstein, Gewirtz & Grossman, LLC Notifies Investors of Class Action and Lead Deadline: December 2, 2019.

82 Id.

83 Id. The complaint alleges that Altria “made false and/or misleading statements and/or failed to disclose that: (1) Altria had conducted insufficient due diligence into JUUL prior to the Company's $12.8 billion investment, or 35% stake, in JUUL; (2) Altria consequently failed to inform investors, or account for, material risks associated with JUUL's products and marketing practices, and the true value of JUUL and its products; (3) all of the foregoing, as well as mounting public scrutiny, negative publicity, and governmental pressure on e-vapor products and JUUL made it reasonably likely that Altria's investment in JUUL would have a material negative impact on the [Altria]'s reputation and operations; and (4) as a result, Altria's public statements were materially false and misleading at all relevant times.”

84 Supra note 68.

85 Jennifer Maloney & Alex Leary, White House Expected to Ban Vape Flavors Except Tobacco and Menthol, N.Y. Times (Nov. 1, 2019, 7:30 PM), https://www.wsj.com/articles/trump-administration-expected-to-ban-vape-flavors-except-tobacco-and-menthol-11572649682.

86 Annie Karni et. al., Trump Retreats From Falvor Ban for E-Cigarettes, N.Y. Times (Nov. 17, 2019), https://www.nytimes.com/2019/11/17/health/trump-vaping-ban.html.

87 Steven Shepard, Why ‘vaping voters’ rattled Trump's White House, POLITICO (Nov. 27, 2019, 5:47 PM), https://www.politico.com/news/2019/11/27/vaping-voters-trump-e-cigarettes-074212.

88 Angelica LaVito, Trump questions the downside of banning flavored e-cigarettes in heated meeting, CNBC (Nov. 22, 2019, 5:18 PM), https://www.cnbc.com/2019/11/22/trump-e-cigarette-meeting-sharp-divides-on-how-to-reverse-teen-vaping-epidemic.html.

89 Sheila Kaplan et. al., JUUL Replaces Its C.E.O. With a Tobacco Executive, N.Y. Times (Sept. 25, 2019), https://www.nytimes.com/2019/09/25/health/JUUL-vaping.html.

90 Vaping Public Health Emergency, Mass.gov (Sept. 25, 2019, 3:39 PM), https://www.mass.gov/guides/vaping-public-health-emergency.

91 Id. See Philip Marcelo, Massachusetts Becomes the First State to Ban Flavored Tobacco and Vaping Products, TIME (Nov. 28, 2019), https://time.com/5741023/massachusetts-flavored-tobacco-vapingmenthol-ban/.

92 Supra note 88.

93 See Angelica LaVito, E-cigarette giant Juul suspends sales of all fruity flavors ahead of looming US ban, CNBC (Oct. 17, 2019, 1:00 PM), https://www.cnbc.com/2019/10/17/e-cigarette-giant-juul-suspends-sales-of-fruity-flavors-ahead-of-looming-ban.html; Ganesh Setty, More than half of teens who vape use Juul and its mint pods are No. 1 flavor in high school, new studies show, CNBC (Nov. 5, 2019), https://www.cnbc.com/2019/11/05/more-than-half-of-teens-who-vape-use-juul-new-studies-show.html.

94 Given that a significant number of securities class actions in 2018 were either dismissed or settled, forcing a settlement rather than risking the suit being dismissed it is likely in the shareholders best interest. Stefan Boettrich & Svetlana Starykh, Recent Trends in Securities Class Action Litigation: 2018 Full-Year Review, NERA Economic Consulting (Jan. 29, 2019), https://images.law.com/contrib/content/uploads/documents/292/39053/NERA-Consulting-Securities-Class-Actions-2018-annual-report.pdf

95 See Andrew, S. Gold, A Decision Theory Approach to the Business Judgment Rule: Reflections on Disney, Good Faith, and Judicial Uncertainty, 66 Md. L. Rev. 398, 401 (2007)Google Scholar.

96 Id.

97 Id.

98 Brehm v. Eisner, 746 A.2d 244, 264 (Del. 2000).

99 On October 29, 2019, former JUUL executive Siddharth Breja filed a lawsuit against JUUL alleging that the company sold approximately 1 million contaminated nicotine pods. As part of the lawsuit, Breja alleges that he was fired in retaliation for “whistle-blowing and objecting to the shipment of the contaminated and expired pods and other illegal and unsafe conduct.” Additionally, in the lawsuit Breja alleges a culture of “indifference to safety and quality-control” in JUUL. If these allegations are true, and if Altria had received information of these allegations (or received information regarding the allegedly contaminated pods) when performing due diligence, then the Business Judgement Rule may not insulate the decisions of the Altria directors. If the lawsuit goes to trial, the courts would have to decide whether knowledge of the allegedly contaminated inventory would fall into one of the categories which allows courts to examine a director's decision. Sheila Kaplan & Jan Hoffman, Juul Knowingly Sold Tainted Nicotine Pods, Former Executive Says, N.Y. Times (Oct. 30, 2019), https://www.nytimes.com/2019/10/30/health/juul-pods-contaminated.html.