Tobacco companies liable under settlement

The North Carolina Supreme Court has ruled that U.S. tobacco companies must pay tobacco growers $424 million as part of the 1999 anti-smoking settlement.  Under the settlement, the companies had agreed to pay tobacco farmers, who had hitherto been paid by the Federal government to grow tobacco, $5.1 billion to compensate them for the losses they’d face from reduced demand.  The settlement provided that the companies would offset any amounts they received from other sources against the companies’ obligations.

After Congress agreed to pay $10.1 billion to farmers in exchange for ending tobacco quotas and price supports, the companies argued that they should not have to pay the amounts that had not yet been distributed.