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Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.
United States Supreme Court
509 U.S. 209 (1993)
In 1980, Liggett (plaintiff), a company now known as Brooke Group Ltd., began offering generic cigarettes priced significantly lower than the branded cigarettes that were prevalent at the time. The product was a success, and soon other cigarette companies began developing their own generic cigarette lines. Brown & Williamson Tobacco Corporation (Brown) (defendant) developed a generic line in direct competition with Liggett’s line. The two products were so similar that retailers generally only carried one or the other. A price war broke out between the two products, and Brown eventually established a lower effective price by offering volume rebates to wholesale distributers. In response, Liggett brought a suit against Brown, alleging antitrust violations based on predatory-pricing practices. A jury returned a verdict for Liggett, but the district court granted Brown’s motion for judgment as a matter of law. The court of appeals affirmed the decision, and Liggett appealed.
Rule of Law
Holding and Reasoning (Kennedy, J.)
Dissent (Stevens, J.)
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