DEG Tobacco Case Settles for $33 Million, Plus 10-year Purchase Agreement of $700 Million
APRIL 2004; GREENSBORO, NORTH CAROLINA – Digital Evidence Group, LLC was
entrusted with video production and consulting work in the case D. Lamar DeLoach et al.
v. Philip Morris USA Inc., et al. The case is one of the largest antitrust cases the tobacco
industry has seen.
R.J. Reynolds Tobacco Company agreed to settle a class action lawsuit brought by
tobacco growers and quota holders alleging a price-fixing conspiracy. United States
District Judge William L. Osteen gave the settlement between the class and R.J.
Reynolds preliminary approval at a hearing in Greensboro, North Carolina, on April 22,
Under the terms of the agreement, R.J. Reynolds will pay the class a lump sum of $33
million, and agreed to purchase 35 million green leaf pounds annually of U.S. flue-cured
and burley tobacco annually for the next ten years. This tobacco purchase obligation
may generate a revenue stream of approximately $700 million over the next ten years,
beginning with the 2004 tobacco crop. The settlement is believed to be the largest
antitrust settlement ever by R.J. Reynolds in an antitrust case.
The class was represented by Howrey of Washington, D.C. The lawsuit was filed in
February 2000 on behalf of tobacco growers and quota holders, who alleged that
Reynolds and other cigarette manufacturers and their leaf dealers conspired to fix the
price of leaf tobacco sold at auctions for several years. 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.
Under the settlements with all defendants, the benefits to class members include:
• The purchase of 440 million green leaf pounds annually for ten years and,
• The distribution of over $200 million in cash to the class