Philip Morris Suit Dismissed, Again

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Philip Morris Suit Dismissed, Again

RICHMOND, Va. -- Philip Morris USA announced that the U.S. Court of Appeals for the Sixth Circuit has upheld a lower court's ruling, dismissing an antitrust lawsuit brought against the company by Smith Wholesale Co. Inc. and 29 other wholesalers.

In the suit, the plaintiffs alleged that the company's Wholesale Leaders program, which gave participants the opportunity to earn higher payments based on their market share of Philip Morris USA products, constituted illegal price discrimination and an attempt to monopolize the U.S. cigarette market in violation of federal antitrust laws.

The district court, and now the Court of Appeals, found instead that the program "was offered to all of Philip Morris' direct distributors … using a nondiscriminatory formula" and that wholesalers were free to choose whether or not to participate. The court noted in its ruling that "it is [the plaintiffs' business] choices, not Philip Morris' formula, that determine whether plaintiffs will earn Philip Morris' higher discounts."

"We are pleased that the 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, Philip Morris USA. "The Wholesale Leaders program is, and has been, equally available to all of our wholesale customers. The court's ruling affirmed our belief that the program complied with the antitrust laws in all respects."

Philip Morris USA is an operating company of Altria Group Inc.