## Filed: June 25, 2003

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 02-1595 (CA-99-185-1, CA-99-207-1, CA-99-232-1)

R. J. Reynolds Tobacco Co., et al., Plaintiffs - Appellants,

versus

Philip Morris USA, Inc., Defendant - Appellee.

O R D E R

The court amends its opinion filed June 24, 2003, as follows: On page 2, section 1, line 1 -- counsel’s name is corrected to
read “Ronald Stuart Rolfe.” For the Court - By Direction

/s/ Patricia S. Connor ClerkUNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

4444444444444444444444444444444444444444444444447 RJ REYNOLDS TOBACCO COMPANY; LORILLARD TOBACCO COMPANY; BROWN & WILLIAMSON TOBACCO CORPORATION, No. 02-1595 Plaintiffs-Appellants,

v. PHILIP MORRIS USA, INCORPORATED, Defendant-Appellee. 4444444444444444444444444444444444444444444444448 Appeal from the United States District Court for the Middle District of North Carolina, at Durham. Frank W. Bullock, Jr., District Judge. (CA-99-185-1, CA-99-207-1, CA-99-232-1) Argued: April 2, 2003 Decided: June 24, 2003 Before WIDENER and MICHAEL, Circuit Judges, and Richard L. WILLIAMS, Senior United States District Judge for the Eastern District of Virginia, sitting by designation.

____________________________________________________________ Affirmed by unpublished per curiam opinion.

____________________________________________________________ COUNSEL
ARGUED: Richard Melvyn Cooper, WILLIAMS & CONNOLLY, L.L.P., Washington, D.C.; Ja mes Thomas Williams, Jr., BROOKS, PIERCE, MCLENDON, HUMPHREY & LEONARD, L.L.P.,Greensboro, North Carolina; R onald Stuart Rolfe, CRAVATH, SWAINE & MOORE, New York, Ne w York, for Appellants. David Boies, BOIES, SCHILLER & FLEXNER, L.L.P., Washington, D.C., for Appellee. ON BRIEF: Steven R. Kuney, WILLIAMS & CONNOLLY, L.L.P., Washington, D.C.; Jennifer K. Van Zant, BROOKS, PIERCE, MCLENDON, HUMPHREY & LEONARD, L.L.P., Greensboro, North Carolina; David Greenwald, CRAVATH, SWAINE & MOORE, New York, New York; Norwood Robinson, Michael L. Robinson, Kevin L. Miller, ROBINSON & LAWING, L.L.P., Winston-Salem, North Carolin a; Irving Scher, August T. Horvath, WEIL, GOTSHAL & MANGES, L.L.P., New York, New York; Randolph S. Sherman, Mark S. Popofsky, KAYE SCHOLER, L.L.P., New York, New York; Daniel R. Taylor, Mark A. Stafford, KILPATRICK STOCKTON, L.L.P., Winston-Salem, North Carolina, for Appellants. Jonathan D. Schiller, Robert Silver, Stuart Singer, Michael A. Brille, Carl Nichols, BOIES, SCHILLER & FLEXNER, L.L.P., Washington, D.C.; Larry B. Sitton, Gregory G. Holland, SMITH MOORE, L.L.P., Greensboro, North Carolina; Jerome I. Chapman, ARNOLD & PORTER, Washington, D.C., for Appellee.

____________________________________________________________ Unpublished opinions are not binding precedent in this circuit. See Local Rule 36(c).

____________________________________________________________ OPINION
PER CURIAM: The plaintiffs, R.J. Reynolds Tobacco Company, Lorillard Tobacco Company, and Brown & Williamson Tobacco Corporation, sued Philip Morris Incorporated in U.S. District Court for the Middle District of North Carolina for alleged viol ations of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2; North Carolina General Statutes §§ 75-1, 75-1.1, 75-2, and 75-2.1; and North Carolina common law prohibiting unfair competition. The pl aintiffs, who are cigarette manufacturers competing with Philip Mo rris, base their case on a retail marketing program called "Retail L eaders" that Philip Morris started
2in 1998. Under Retail Leaders, Philip Morris provides discounts to retailers on its popular Marlboro brand in exchange for the most advantageous display a nd signage space in retail establishments. This arrangement, the plaintiffs say, restricts the flow of information to consumers, limits the plaintiffs' abilities to promote their products, insulates Philip Morris from effec tive competition, and results in higher cigarette prices. The district court, after considering an exhaustive record that includes extensive data and informa tion about sales, trends, and conditions in the cigarette market for over two decades, granted (in a thorough opinion) Philip Morris's motion for summary judgment as to all of the plaintiffs' claims. See R.J. Reynolds Tobacco Co. v. Philip Morris Inc. , 199 F. Supp. 2d 362 (M.D.N.C. 2002). The district court concluded that in the period "since [Philip Morri s] implemented its challenged Retail Leaders program [in 1998], the cigarette market in the United States remains highl y competitive, as evidenced by the general stability of market shares in the light of long-term trends, the profitability of the Plaintiffs, and the ongoing entry and increasing market share of new manufacturers." Id. at 397. We affirm the grant of summary judgment to Philip Morri s, and we do so on the reasoning of the district court with one excep tion. With respect to the plaintiffs' claim under section 1 of the Sherman Act, we decline to conclude, as did the district court, that Philip Morris lacks market power. We agree, however, with the rest of the district court's analysis of the section 1 claim. Assuming for the sake of argument that Philip Morrishas market power, the plaintiffs did not show that Retail Leaders substantially forecloses competiti on in the relevant market. See id. at 386-93. Accordingly, as the district court ultimately determined, the plaintiffs' section 1 claim fails. On the remaining issues, we affirm on the reasoning of the district court without any modification. The judgment of the district court is affirmed.
AFFIRMED
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