N.C. Supreme Court Rules Big Tobacco Payments Due To Farmers
Posted August 19, 2005 6:41 a.m. EDT
RALEIGH, N.C. — The North Carolina State Supreme Court ruled Friday that cigarette makers must continue making payments to tobacco farmers in 14 states as required by a landmark 1998 settlement.
The ruling reverses a lower court that said the tobacco-quota buyout approved by Congress in 2004 overruled the requirement.
The cigarette makers have paid millions of dollars in the payments to compensate tobacco growers for losses they were expected to suffer under higher cigarette prices resulting from the 1998 master settlement agreement to a lawsuit between Big Tobacco and the states.
Cigarette companies argue that because Congress approved a $10.1 billion tobacco buyout last fall, they were not obligated to make a $424 million payment for 2004.
With about $180 million slated for North Carolina, the payout should translate into tens of thousands of dollars for most farmers.
The state's longtime cash crop is dwindling and farmers say this money will help them pay down debt.
"When we owe a debt, we have to pay it," said tobacco farmer Jody Clemmons. "It's kinds of what's right is right and what's wrong is wrong. It gets down to be a moral issue."
'We disagree with the ruling," said R.J. Reynolds spokesman David Howard. "The trust agreement clearly spelled out duplicate payments were not intended."
Tobacco companies are considering other legal options.