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Company Press Release

R.J. Reynolds Issues Minnesota Statement

WINSTON-SALEM, N.C., May 8 /PRNewswire/ -- R.J. Reynolds Tobacco Co. confirmed today that it, along with Philip Morris, Inc., Brown & Williamson Corp. and Lorillard Tobacco Co., has agreed to settle litigation in Minnesota.

The company issued the following statement:

``We agreed to the settlement because we concluded that it would be extremely difficult to reach a fair outcome, based on what we believe are a series of incorrect rulings by the court favoring the state, which in essence placed a loaded gun to our head.

``When we have been allowed to present all of the relevant evidence and arguments in defending a case, jurors have denied plaintiffs recovery. We believe they will continue to do so in a fair hearing, given that a vast majority of Americans believe the industry should not be subjected to this type of litigation.

``Americans appear to understand that it is irrational to hold companies liable for selling a legal product that has been widely known to have health risks.

``When the government decides to use its coercive powers against a politically unpopular industry it can ultimately produce any result it wants regardless of the merits.

``In 1995, the Seventh Circuit Court of Appeals wrote about the absurdity of companies being faced with rolling the dice with a jury with the only likely alternative being bankruptcy. In denying certification for a class action for hemophiliacs, the court expressed concern '...with forcing these defendants to stake their companies on the outcome of a single jury trial, or be forced by fear of the risk of bankruptcy to settle even if they have no real liability...'

``This country has to decide whether it wants prohibition, government-run monopolies or a free enterprise system for the sale of tobacco products. The country has to decide whether one court, like Minnesota, should have the power to bring the industry to the brink of bankruptcy with all the negative implications of such a decision.''

SOURCE: R.J. Reynolds Tobacco Company