Case Name: RJ REYNOLDS TOBACCO COMPANY; Lorillard Tobacco Company; Brown & Williamson Tobacco Corporation, Plaintiffs-Appellants, v. PHILIP MORRIS USA, INCORPORATED, Defendant-Appellee
Court: United States Court of Appeals for the Fourth Circuit
Jurisdiction: United States
Decision Date: 2003-06-24
Citations: 67 F. App'x 810
Docket Number: No. 02-1595
Parties: RJ REYNOLDS TOBACCO COMPANY; Lorillard Tobacco Company; Brown & Williamson Tobacco Corporation, Plaintiffs-Appellants, v. PHILIP MORRIS USA, INCORPORATED, Defendant-Appellee.
Judges: Before WIDENER and MICHAEL, Circuit Judges, and Richard L. WILLIAMS, Senior United States District Judge for the Eastern District of Virginia, sitting by designation.
Reporter: West's Federal Appendix
Volume: 67
Pages: 810–812

Head Matter:
RJ REYNOLDS TOBACCO COMPANY; Lorillard Tobacco Company; Brown & Williamson Tobacco Corporation, Plaintiffs-Appellants, v. PHILIP MORRIS USA, INCORPORATED, Defendant-Appellee.
No. 02-1595.
United States Court of Appeals, Fourth Circuit.
Argued April 2, 2003.
Decided June 24, 2003.
ARGUED: Richard Melvyn Cooper, Williams & Connolly, L.L.P., Washington, D.C.; James Thomas Williams, Jr., Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., Greensboro, North Carolina; Ronald Stuart Rolfe, Cravath, Swaine & Moore, New York, New 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 Carolina; 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.
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.

Opinion:
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 violations 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 plaintiffs, who are cigarette manufacturers competing with Philip Morris, base their case on a retail marketing program called "Retail Leaders" that Philip Morris started in 1998. Under Retail Leaders, Philip Morris provides discounts to retailers on its popular Marlboro brand in exchange for the most advantageous display and 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 effective competition, and results in higher cigarette prices.
The district court, after considering an exhaustive record that includes extensive data and information 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 Morris] implemented its challenged Retail Leaders program [in 1998], the cigarette market in the United States remains highly 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 Morris, and we do so on the reasoning of the district court with one exception. 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 Morris has market power, the plaintiffs did not show that Retail Leaders substantially forecloses competition 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.