R.J. Reynolds Employees 401(k) Class Action Lawsuit

Introduction

Lieff Cabraser Heimann & Bernstein, LLP, along with co-counsel Lewis, Feinberg, Renaker & Jackson, P.C., serves as plaintiff's counsel in a class action filed on behalf of over 3,500 employees of R.J. Reynolds Tobacco Company ("RJR").

The lawsuit charges that RJR and other defendants breached their duty as fiduciaries of the employee benefit 401(k) plan by selling at a loss stock held in Nabisco foods in January 2000 after the split between the tobacco and food businesses of the former R.J. Reynolds Nabisco company, although market analysts recommended buying or holding the stock. The case, entitled Tatum v. The R.J.R. Pension Investment Committee of the R.J. Reynolds Tobacco Company Investment Plan, et al., was filed May 13, 2002 in federal court in Greensboro, North Carolina.

Plaintiff's Allegations

Under the Employment Retirement Income Security Act ("ERISA"), fiduciaries of employee pension plans must discharge their duties solely in the interest of the plan participants and beneficiaries. Prior to June 1999, R.J. Reynolds Tobacco Company and Nabisco Group Holdings were part of one parent company, RJR Nabisco Holdings, Inc. The RJR Nabisco Holdings pension plan held stock in both companies.

As alleged in the complaint, R.J. Reynolds divested the Nabisco stock held in employee 401(k) plans in January 2000 because it had decided to liquidate all Nabisco stock six months after the spin off. RJR sold the stock although analysts recommended buying or holding the stock because it was undervalued.

Soon after the divestiture of Nabisco stock, the stock rebounded. Six months later, by late June 2000, Nabisco Group Holdings common stock sold for approximately $30.00 per share, over three times the price the Plan sold it for on January 31, 2000, and Nabisco Holdings Corporation common stock sold for approximately $55 per share, nearly twice the price the Plan sold it for on January 31, 2000.

Plaintiffs' counsel allege that the fiduciaries of the 401(k) benefit plan should not have sold the stock of Nabisco Group Holdings and Nabisco Holdings Corporation at a time when the stock value was at a low, and analysts were advising that the stock should be bought or held, but not sold.

Case Status

The suit was filed on May 13, 2002, by Richard G. Tatum, an R.J. Reynolds plan participant, and names as defendants the R.J. Reynolds Tobacco Company Capital Investment Plan and R.J. Reynolds Tobacco Holdings, Inc., in addition to the R.J. Reynolds Tobacco Co. Trial commenced in January 2010.

Contact Lieff Cabraser

Participants of R.J. Reynolds 401k plan that were forced to liquidate their Nabisco stock who wish to contact an attorney at Lieff Cabraser concerning this litigation may do so by clicking here.

About Lieff Cabraser

Lieff Cabraser Heimann & Bernstein, LLP is a sixty-plus attorney law firm that has represented plaintiffs nationwide since 1972. We have offices in San Francisco, New York and Nashville. We represent plaintiffs in class and group actions and in individual lawsuits in cases involving substantial losses. For the last seven years, the National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the nation.

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