Local News

Farmers Win Lawsuit Against Big Tobacco

Posted May 17, 2003

— The auctioneer's cry once was the sound of big-time money changing hands at tobacco auctions.

For years, some questioned whether all the bidding was fair.

The smoke has now cleared on a lawsuit claiming it wasn't.

Ten farmers led a class-action suit against Big Tobacco -- and won.

Harnett County tobacco farmer Keith Parrish said his crop is off to a good start. But he's already having a big year after winning the suit.

Tobacco growers and quota holders accused cigarette companies of rigging bids at tobacco auctions.

"What's happend in the auction for years now has been that they really just divided it out," Parrish said. "They kind of divided it amongst themselves in tie bids -- no one out-bid the other. They just started out at a bid and kept going at that same price."

The farmers and quota holders said collusion cost them a lot of money. Now, 400,000 of them are cashing in on a settlement. They'll split $200 million.

Another $800 million goes to research, a quota buyout and other programs.

Susan Ivey is the CEO for Brown and Williamson, one of the six tobacco companies that settled.

"I really look at it as an investment in a very important business partner," Ivey said. "Certainly, the growers, the farmers, are critical to the success of the tobacco industry, and I think it's a relationship that has deteriorated over recent years."

The settlement also outlined a commitment to buy fixed amounts of tobacco for years to come -- allowing farmers to plan for their future.

"Hopefully, we can move on now and put all this behind us," Parrish said.

North Carolina-based R.J. Reynolds is the only tobacco company that refused to accept the settlement. The company denied rigging bids at auctions. A trial date is set for next year.

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