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The Agriculture Department on Thursday said growers can begin registering for the $10 billion tobacco quota buyout next month, and published the first of two regulations dictating how the program will work...
The new regulation spells out quarterly deadlines, beginning Feb. 25, for tobacco companies to tell the government the amount of each type of tobacco they manufactured or imported. That information will be used to determine each company's assessment.
Rep. Ben Chandler, a Kentucky Democrat who sits on the House Agriculture Committee, said he was pleased at the Agriculture Department's pace in managing the program, largely because it will help farmers receive checks more quickly.
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A $10 billion buyout for American tobacco farmers heads for the floor of the U.S. House today, but a decision to shield tobacco from Food and Drug Administration regulation left the measure's outcome uncertain.
Both Republican and Democratic senators weighed tactics that could prevent the measure from coming to a vote in the Senate.
The two tobacco provisions, and their political implications on the North Carolina Senate race, have emerged as focal points of sprawling tax legislation that would provide more than $130 billion in tax cuts for businesses in the next 10 years.
The provisions would bring about $3.8 billion to nearly 76,000 people who grow tobacco or own quotas in North Carolina.
One of the Senate candidates, Rep. Richard Burr, a Winston-Salem Republican and member of the conference committee that approved the measure Wednesday, is billing himself as the buyout's crucial mover. In response, his Democratic opponent, Erskine Bowles, flew to Washington to join in lobbying for the buyout provision, which would end the Depression-era quota system.
A federal judge has ruled that a lawsuit filed by tobacco growers and quota holders alleging bid-rigging against cigarette manufacturers can be class action.
This allows all other quota holders and tobacco holders to be included although they not have signed the original litigation. According to Keith Parrish of Coats, U.S. Judge William Osteen presiding in Greensboro made the ruling Wednesday. This means there are now 500,000 plaintiffs, Mr. Parrish said.
"It's a good day for farmers. A lot of folks were feeling very desperate," he said.
The lawsuit has been several years in progress. First, high-profile attorney Alexander Pires had to get farmers committed. Then, it has been waiting in the court system and going through changes.
Originally, farmers and quota holders were suing because of the master settlement distribution from cigarette manufacturers. That suit maintained the federal and state attorney generals and cigarette companies ignored the farmers in their deliberations and subsequent compensations.
However, Mr. Parrish said, the lawsuit has evolved and now it is an anti-trust suit. . .
The litigation now maintains the cigarette companies acted in collusion by price fixing and creating an environment deterimental to tobacco farmers and quota holders.
Mr. Parrish said no matter where you went in the tobacco market or what state, the prices cigarette companies were offering for tobacco were the same. "Everything was bringing the same price," he said.
A lawsuit filed in February by more than 4,000 tobacco growers and quota holders against major cigarette makers has been revised and refiled, adding almost 2,000 more plaintiffs and alleging that manufacturers manipulated the tobacco auction system.
Lawyer Alexander J. Pires Jr. of Washington, the lead attorney bringing the lawsuit, said he'd gotten help from two antitrust law experts to rewrite the suit, which provides new detail. "It's more explicit, and spells out how they [defendant companies] have rigged the auctions," Pires said.
He said the major tobacco companies agree to the prices to be bid at public tobacco auctions and coordinate bidding so that 90 percent of all bids end in ties. This results in artificially depressed prices and losses of millions of dollars for farmers, he said.
In addition, the lawsuit, with 5,930 plaintiffs, says the cigarette makers have tried to eliminate the federal tobacco program through manipulation of tobacco quota and through illegal contracts.
Philip Morris has retained David Boies, who led the federal government's successful courtroom battle against Microsoft, to help defend against a $69 billion lawsuit by tobacco growers.
New Yorker Boies is widely viewed as a superlitigator and was credited by a number of legal experts as out-litigating, along with his team, the Microsoft opponents. . .
Alexander J. Pires, the Washington lawyer who brought the growers' lawsuit, said he was not surprised by Boies' involvement.
"This is the most important case they [Philip Morris] have," Pires said. "The only allies they have ever had for 60 years are suing them, and they know how important it is. That's why they hired Boies."
The lawsuit, filed by tobacco farmers and quota holders, charges among other things that the tobacco companies have conspired, contracted and combined to eliminate the federal statutory scheme regulating the quantity of tobacco (called ``quota'') that may be grown annually and cheated the farmers and quota holders out of fair settlement under the Growers Trust.
``Why should the American public care about this lawsuit?'' asks lead plaintiff attorney Alexander J. Pires, Jr. ``Because multi-billion dollar tobacco companies are once again defrauding the public and exerting control well beyond the scope of what the U.S. Congress mandated in the tobacco program.''