|Envelopes are arriving in mailboxes
announcing a proposed $200 million settlement in an anti-trust class action suit brought
against tobacco companies on behalf of growers and quota holders of burley and flue-cured
The suit, DeLoach v. Philip Morris Class Action, alleges that Philip Morris
USA, Inc., R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp., Lorillard
Tobacco Co., Universal Leaf Tobacco Co., J.P. Taylor Co., Southwestern Tobacco Co., DIMON,
Inc. and Standard Commercial Corp. "unlawfully agreed and conspired to restrain
competition and fix prices for and allocate domestic flue-cured and burley tobacco sold at
tobacco auctions in the United States, and engaged in other unlawful conduct to stabilize
prices of tobacco at levels below those that would have existed in a competitive
market". It also alleges that the tobacco companies caused the quota under the
federal tobacco program to be depressed.
All but R.J. Reynolds Tobacco Co. are part of the settlement. The lawsuit continues
against R.J. Reynolds.
Sharing in the settlement are all domestic producers of flue-cured or burley tobacco
who sold tobacco at auction in the United States at any time from March 1, 1996, to
February 28, 2001, as well as anyone who owned flue-cured or burley tobacco quotas in the
United States during that same time period.
The recent mailing also includes a claim
form that needs to be completed and postmarked before October 14.
The settlement, reached on May 16 in US District Court in Greensboro, North Carolina,
calls for $100 million to go to growers and $100 million to quota holders, and will be
based on quota pounds and sales during that time period.
In addition, the settlement calls for Philip Morris USA, Brown & Williamson and
Lorillard to commit to purchase a total of at least 405 million pounds annually of
domestic flue-cured and burley tobacco.
Philip Morris USA will also pay $8 million into a fund to be used for leaf tobacco
research and extension programs; $5 million of that fund may be used to promote quota
This class action settlement is separate from the existing Phase II Tobacco Settlement
Those who believe they are qualified to receive a portion of the settlement and did not
receive the documents by mail can call 800-371-9820 or visit www.deloachclassaction.org on