Is tobacco money on the way?

Tobacco growers involved in a class action lawsuit could be getting the money they won against tobacco companies soon after a recent appeals court ruling. The court rejected Philip Morris' contention that it was due a refund after R.J. Reynolds settled with the growers in the price-fixing lawsuit against major manufacturers.

“We won one and lost one,” says Keith Parrish, a Harnett County, N.C., tobacco grower and one of the principals in the class action suit.

“We won on the money issue,” Parrish says. “They cannot negotiate what they have paid in, but they could push to negotiate their buying intentions.”

Parrish says, “We believe this clears the way for the distribution of some of the money, if not all the $200 million, in the next few months, but the lawyers are looking into that question and others raised by the opinion. We hope to get you your money as soon as we can.”

The Fourth Circuit Court of Appeals ruled that Philip Morris wasn't entitled to a rebate after R.J. Reynolds settled the class action before going to trial. The court sent the purchase commitment back to the district court.

In 2003, Philip Morris, Lorillard, Brown & Williamson and leaf dealers agreed to pay tobacco farmers $212 million in cash and to buy at least 405 million pounds of U.S. flue-cured and burley tobacco for the next 12 years.

Earlier in 2004, RJR settled with the growers for $33 million in cash and a purchase commitment of 35 million pounds per year for the next 12 years.

Philip Morris had contended that it was entitled a rebate of $65 million and a reduction in its purchase commitment.

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