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 1,000 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.
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. The case was initially dismissed by the
district court, but plaintiffs won a reversal in the Court of Appeals for
the Fourth Circuit. A second motion to dismiss, which plaintiffs opposed,
is now pending.
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 50-plus attorney law firm with offices in San Francisco, New York and Nashville. Our firm is committed to protecting the rights of employees nationwide to equitable treatment and fair wages. Lieff Cabraser employment attorneys have represented thousands of employees seeking to vindicate their rights in cases involving gender and race discrimination, overtime pay and wage and hour violations, and the mishandling of funds in pension and 401k plans.
We served as counsel in a class action suit against Abercrombie & Fitch, which led to a novel, precedent-setting settlement in 2005. The settlement required the retail clothing giant to pay $40 million to Latino, African-American, Asian-American and female applicants and employees who charged the company with discrimination. In addition, Abercrombie was required to promote diversity among its workforce and to prevent discrimination based on race or gender.
We served as class counsel for approximately 25,000 female employees of,
and applicants for employment with, Home Depot. In 1998, the Court approved
a settlement of the case in which Home Depot agreed to modify its hiring,
promotion and compensation practices, and paid $87.5 million, one of the highest
amounts ever paid in a gender discrimination case.
Lieff Cabraser has obtained lost wages and benefits for employees in overtime pay lawsuits, including the successful representation of employees of Denny's, Carrow's, the advertising firm TMP Worldwide, the California State Automobile Association, as well as several corporations in the computer industry including IBM and Computer Sciences Corporation.
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