RICHMOND, Va. -- The U.S. Court of Appeals for the Sixth Circuit last week upheld a lower court's ruling dismissing an antitrust lawsuit brought by Smith Wholesale Co. Inc. and 29 other wholesalers against Philip Morris USA.
"We are pleased that the Sixth Circuit Court of Appeals affirmed the district court's decision and agreed with our position that the lawsuit lacked merit," said Denise Keane, executive vice president and general counsel for Richmond, Ca.-based PM USA. "The Wholesale Leaders program is and has been equally available to all of our [image-nocss] wholesale customers. The court's ruling affirmed our belief that the program complied with the antitrust laws in all respects."
In the suit, the plaintiffs alleged the company's programwhich gave participants the opportunity to earn higher payments based on the participant's market share of PM USA productsconstituted illegal price discrimination and an attempt to monopolize the U.S. cigarette market in violation of the federal antitrust laws.
The district court and now the court of appeals found instead that the program "was offered to all of PM's direct distributors...using a nondiscriminatory formula" and that wholesalers were free to choose whether or not to participate. The court noted that "it is [the plaintiffs' business] choices, not PM's formula, that determine whether plaintiffs will earn PM's higher discounts."
R.J. Reynolds Co. announced a similar ruling in a related lawsuit last week. For more on that ruling, click here.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.