Reynolds Tobacco Reaches Agreement with Tobacco Growers
April 22 2004 - 1:02PM
PR Newswire (US)
Reynolds Tobacco Reaches Agreement with Tobacco Growers
WINSTON-SALEM, N.C., April 22 /PRNewswire-FirstCall/ -- R.J.
Reynolds Tobacco Company (RJRT) today reached an agreement to
resolve a class-action lawsuit related to tobacco leaf purchases
with tobacco growers and quota holders. Under the settlement, RJRT
has agreed to pay the class a lump sum of $33 million, which after
deduction of attorneys' fees and costs, is to be distributed to the
class. Further, RJRT has agreed to purchase annually a minimum of
35 million green leaf pounds of U.S. flue-cured and burley tobacco
combined for ten years, starting with the 2004 crop year. Darryl
Marsch, senior counsel for RJRT, said, "This compromise represents
the right decision for RJRT's business and RJR shareholders.
Although Reynolds Tobacco did not engage in any wrongdoing, we felt
that avoiding a lengthy and expensive trial with the growing
community was in the company's best interests." The lawsuit, D.
Lamar DeLoach et al., v. Philip Morris USA Inc., et al., was filed
in February 2000. The suit was filed on behalf of a purported class
of tobacco growers and quota holders who alleged that RJRT, along
with other defendants in the suit at the time, violated antitrust
laws in connection with leaf purchases at auction. The class was
certified by the court in April 2002. In May 2003, Philip Morris,
Lorillard Tobacco Company, Inc., Brown and Williamson Tobacco
Corporation, and several leaf dealers arrived at a separate
settlement with the growers. The trial began today in federal
district court in Greensboro, N.C., before the settlement agreement
was reached. Both parties to the case will seek court approval of
the agreement. R.J. Reynolds Tobacco Company (RJRT) is a wholly
owned subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
(NYSE:RJR). R.J. Reynolds Tobacco Company is the second-largest
tobacco company in the United States, manufacturing about one of
every four cigarettes sold in the United States. Reynolds Tobacco's
product line includes four of the nation's 10 best-selling
cigarette brands: Camel, Winston, Salem and Doral. For more
information about RJRT, visit the company's web site at
http://www.rjrt.com/ . DATASOURCE: R.J. Reynolds Tobacco Company
CONTACT: Ellen Matthews Wallace of R.J. Reynolds Tobacco Company,
+1-336-741-6694 Web site: http://www.rjrt.com/
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