Filed:   June 25, 2003

                   UNITED STATES COURT OF APPEALS

                       FOR THE FOURTH CIRCUIT


                           No. 02-1595
             (CA-99-185-1, CA-99-207-1, CA-99-232-1)



R. J. Reynolds Tobacco Co., et al.,

                                              Plaintiffs - Appellants,

          versus


Philip Morris USA, Inc.,

                                                 Defendant - Appellee.



                              O R D E R



     The court amends its opinion filed June 24, 2003, as follows:

     On page 2, section 1, line 1 -- counsel’s name is corrected to

read “Ronald Stuart Rolfe.”

                                          For the Court - By Direction



                                          /s/ Patricia S. Connor
                                                   Clerk
                           UNPUBLISHED

            UNITED STATES COURT OF APPEALS

                 FOR THE FOURTH CIRCUIT
4444444444444444444444444444444444444444444444447
RJ REYNOLDS TOBACCO COMPANY;
LORILLARD TOBACCO COMPANY;
BROWN & WILLIAMSON TOBACCO
CORPORATION,                             No. 02-1595
     Plaintiffs-Appellants,

     v.

PHILIP MORRIS USA, INCORPORATED,
     Defendant-Appellee.
4444444444444444444444444444444444444444444444448

            Appeal from the United States District Court
       for the Middle District of North Carolina, at Durham.
               Frank W. Bullock, Jr., District Judge.
            (CA-99-185-1, CA-99-207-1, CA-99-232-1)

                      Argued: April 2, 2003

                     Decided: June 24, 2003

         Before WIDENER and MICHAEL, Circuit Judges,
 and Richard L. WILLIAMS, Senior United States District Judge   for
the Eastern District of Virginia, sitting by designation.

____________________________________________________________

Affirmed by unpublished per curiam opinion.

____________________________________________________________
                            COUNSEL

ARGUED: Richard Melvyn Cooper, WILLIAMS & CONNOLLY,
L.L.P., Washington, D.C.; James Thomas Williams, Jr., BROOKS,
PIERCE, MCLENDON, HUMPHREY & LEONARD, L.L.P.,
Greensboro, North Carolina; Ronald Stuart Rolfe, CRAVATH,
SWAINE & MOORE, New York, New York, for Appellants. David
Boies, BOIES, SCHILLER & FLEXNER, L.L.P., Washington, D.C.,
for Appellee. ON BRIEF: Steven R. Kuney, WILLIAMS & CON-
NOLLY, L.L.P., Washington, D.C.; Jennifer K. Van Zant, BROOKS,
PIERCE, MCLENDON, HUMPHREY & LEONARD, L.L.P.,
Greensboro, North Carolina; David Greenwald, CRAVATH,
SWAINE & MOORE, New York, New York; Norwood Robinson,
Michael L. Robinson, Kevin L. Miller, ROBINSON & LAWING,
L.L.P., Winston-Salem, North Carolina; Irving Scher, August T. Hor-
vath, WEIL, GOTSHAL & MANGES, L.L.P., New York, New York;
Randolph S. Sherman, Mark S. Popofsky, KAYE SCHOLER, L.L.P.,
New York, New York; Daniel R. Taylor, Mark A. Stafford, KIL-
PATRICK STOCKTON, L.L.P., Winston-Salem, North Carolina, for
Appellants. Jonathan D. Schiller, Robert Silver, Stuart Singer,
Michael A. Brille, Carl Nichols, BOIES, SCHILLER & FLEXNER,
L.L.P., Washington, D.C.; Larry B. Sitton, Gregory G. Holland,
SMITH MOORE, L.L.P., Greensboro, North Carolina; Jerome I.
Chapman, ARNOLD & PORTER, Washington, D.C., for Appellee.

____________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

____________________________________________________________
                              OPINION

PER CURIAM:

    The plaintiffs, R.J. Reynolds Tobacco Company, Lorillard Tobacco
Company, and Brown & Williamson Tobacco Corporation, sued
Philip Morris Incorporated in U.S. District Court for the Middle Dis-
trict of North Carolina for alleged violations of sections 1 and 2 of the
Sherman Act, 15 U.S.C. §§ 1 and 2; North Carolina General Statutes
§§ 75-1, 75-1.1, 75-2, and 75-2.1; and North Carolina common law
prohibiting unfair competition. The plaintiffs, who are cigarette man-
ufacturers competing with Philip Morris, base their case on a retail
marketing program called "Retail Leaders" that Philip Morris started

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in 1998. Under Retail Leaders, Philip Morris provides discounts to
retailers on its popular Marlboro brand in exchange for the most
advantageous display and signage space in retail establishments. This
arrangement, the plaintiffs say, restricts the flow of information to
consumers, limits the plaintiffs' abilities to promote their products,
insulates Philip Morris from effective competition, and results in
higher cigarette prices.

    The district court, after considering an exhaustive record that
includes extensive data and information about sales, trends, and con-
ditions in the cigarette market for over two decades, granted (in a
thorough opinion) Philip Morris's motion for summary judgment as
to all of the plaintiffs' claims. See R.J. Reynolds Tobacco Co. v.
Philip Morris Inc., 

 (M.D.N.C. 2002). The district
court concluded that in the period "since [Philip Morris] implemented
its challenged Retail Leaders program [in 1998], the cigarette market
in the United States remains highly competitive, as evidenced by the
general stability of market shares in the light of long-term trends, the
profitability of the Plaintiffs, and the ongoing entry and increasing
market share of new manufacturers." Id. at 397. We affirm the grant
of summary judgment to Philip Morris, and we do so on the reasoning
of the district court with one exception. With respect to the plaintiffs'
claim under section 1 of the Sherman Act, we decline to conclude, as
did the district court, that Philip Morris lacks market power. We
agree, however, with the rest of the district court's analysis of the sec-
tion 1 claim. Assuming for the sake of argument that Philip Morris
has market power, the plaintiffs did not show that Retail Leaders sub-
stantially forecloses competition in the relevant market. See id. at
386-93. Accordingly, as the district court ultimately determined, the
plaintiffs' section 1 claim fails. On the remaining issues, we affirm on
the reasoning of the district court without any modification.

   The judgment of the district court is affirmed.

                                                            AFFIRMED

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