Vimbai Chikomo Jan. 7, 2016, 2:58pm


NEW YORK (Legal Newsline) -- A class action lawsuit against R.J. Reynolds over its termination of a consumer loyalty program associated with the company’s Camel brand of cigarettes has been settled.

On Sept. 10, Jeffrey Feinman, Richard Holter and Donald Wilson filed a class action lawsuit on behalf of themselves and others, against R.J. Reynolds Tobacco Co. in the U.S. District Court for the Southern District of New York, claiming that the tobacco company breached its contract with consumers when it discontinued its Camel Cash consumer loyalty program.

Three months later, the two sides notified the court they reached a settlement in principle, resulting in a discontinuance of proceedings. However, should the settlement not be finalized within 60 days, the plaintiffs can apply to reinstate the case.

The Camel Cash promotion ran from Oct. 1, 1991 to March 31, 2007, and rewarded consumers who purchased packs of Reynolds’ Camel brand of cigarettes with “C-Notes” they could use to redeem merchandise listed in a catalogue. The C-notes were enclosed in the cigarette packaging. The catalogue included merchandise like ash trays, pool tables, NASCAR trading cards, apparel, computers and pinball machines.

The plaintiffs allege that after Oct.1, 2006, the merchandise became limited, and the Camel Cash program was discontinued altogether on March 31, 2007, offering consumers with C-notes the option to redeem coupons or more cigarettes. The plaintiffs claim that RJR breached its contract with them by failing to provide merchandise for C-note holders to redeem, which they allege was part of the agreement.

Class action law expert Geoffrey Hazard, Jr, who is Trustee Professor of Law Emeritus at the University of Pennsylvania Law School, told Legal Newsline that although there was some probability that RJR could prove that it provided an alternative reward to customers who participated in the Camel Cash program by offering coupons and more cigarettes in exchange for the C-notes, everything boiled down to what the contract states.

“It’s a question of contract law, and it depends on what the terms of the offers were,” Hazard said.

Bryan Hatchell, spokesman for RJR declined to comment, stating that the company does not comment on ongoing litigation.

Terms of the settlement were not disclosed.

C-note holders in New York are not the only ones taking legal action against the tobacco powerhouse for the alleged violation. A similar class action was revived and certified by a California judge in 2014, and the case is still pending. A nationwide class action cannot be certified because contract laws vary from state to state.

RJR was founded in 1875, is based in North Carolina and is the second-largest tobacco company in the country.

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