D. Lamar Deloach, et al., v. Philip Morris Companies, et al., 1:00CV01235 U.S. District Court for the Middle District of North Carolina
In an action filed in February 2000, plaintiffs alleged that tobacco manufacturers and buyers conspired to rig bids at tobacco auctions throughout the southeastern United States. Manufacturers were Philip Morris, Inc.; R. J. Reynolds Tobacco Co.; Brown & Williamson Tobacco Corporation; and Lorillard Tobacco Co. Buyers were Universal Leaf Tobacco Co.; J.P. Taylor Co., Inc.; Southwestern Tobacco Co., Inc.; DIMON, Inc.; and Standard Commercial Corporation.
Plaintiffs also alleged that defendants submitted decreased purchase intentions in order to reduce the federal tobacco quota, and refused to purchase large quantities of tobacco at auction in order to obtain tobacco at a deep discount from cooperatives.
At the request of plaintiffs’ counsel, Howrey, Simon, Arnold & White of Washington, D.C., Nathan Associates’ President John Beyer assessed economic issues related to whether the alleged conspiracy would have affected all members of the proposed class of tobacco growers and quota holders, and whether a methodology existed for assessing class-wide damages.
Nathan Associates surveyed tobacco quota holders and used the survey findings to estimate the average tobacco quota rental rate paid by growers during the alleged conspiracy. Survey findings and estimates of damages suffered by quota holders and leaf tobacco growers as a consequence of the deep discounts were to be presented at trial.
On April 3, 2002, United States District Judge William L. Osteen certified the class of quota holders and growers. In 2003 and 2004, Judge Osteen approved settlements by the defendants, valued at more than $1.7 billion combined.