Reynolds Agrees to Limited Re-opening of Camel Cash Promotion

Source from:  Winston-Salem Journal 11/30/2015

R.J. Reynolds Tobacco Co. has agreed to reopen the Camel Cash promotion for six months - for California consumers only - as part of the resolution of a 6-year-old legal dispute.

Reynolds inserted Camel Cash certificates, also known as "C-notes," in cigarette packages from 1991 to Oct. 1, 2006.

Registered participants could redeem the certificates for Reynolds products, as well as merchandise that included ash trays, pool tables, NASCAR trading cards, apparel, computers and pinball machines.

The promotion is credited for playing a role in Camel's U.S. market share jumping from 4 percent in 1991 to 7.4 percent when it ended on March 31, 2007.

By comparison, Camel's market share was 8.3 percent on Sept. 30 - making it the No. 3 U.S. brand.

The plaintiffs have accused Reynolds of breach of contract, unfair competition and deceptive practices. They have filed three amended complaints.

The settlement requires the approval of Christina Snyder, a U.S. District Court judge for the Central Court of California. A hearing is set for Dec. 7. A trial had been scheduled to begin Jan. 26.

Snyder ruled in December 2014 that 10 plaintiffs, led by Amanda Sateriale, could resume pursuing the class-action lawsuit they filed in November 2009.

The plaintiffs and Reynolds submitted a joint update Nov. 20. Under the proposal, "every member of the class would have the opportunity to redeem Camel Cash for non-tobacco rewards." Reynolds also agreed to pay the plaintiffs' legal costs.

When Reynolds notified qualified participants in October 2006 that the promotion was ending, it cautioned that "supplies will be limited, so it won't hurt to get there before the rush." The company stopped printing and issuing merchandise catalogs.

In January 2011, Snyder ruled in favor of Reynolds' dismissal request. In July 2012, a three-judge panel of the 9th U.S. Circuit Court of Appeals sent the dismissals of the breach of contract and promissory estoppel back to the lower court

The plaintiffs recommended that the C-notes be valued at 20 cents each. Snyder accepted the recommendation, saying "there is not a realistic alternative."

The plaintiffs said Reynolds "failed to make available limited amounts of merchandise for redemption" during the final six months, but instead only offered Reynolds products or coupons. They said Reynolds should have been required to "maintain a reasonable inventory of merchandise redeemable for Camel Cash" since they participated in the promotion foremost for the merchandise.

Reynolds said the promotion did not establish a contract or a bargain between the company and customers, including the need for carrying extended inventory. It said it honored the intent by offering cigarette products and coupons.

Plaintiffs claim there could be 600,000 participants in a potential national class-action lawsuit based on a Reynolds' database listing that that many individuals had redeemed C-notes during the promotion and were notified of its ending.

Snyder, however, agreed with Reynolds that a nationwide class-action lawsuit "cannot be certified because the laws of the states vary with regard to unilateral contract formation, the statute of limitations, the admissibility of extrinsic evidence and the implied covenant of good faith." Enditem