RICHMOND, Va. (CN) - The 4th Circuit tossed out a $30 million judgment for peanut farmers in seven states, who claimed the federal crop insurance program should have paid them 31 cents per pound of peanuts damaged by severe drought in 2002.
Peanut farmers in Florida, Texas, North Carolina, South Carolina, Alabama and Georgia filed claims over their poorly yielding crops, expecting the government to pay them the standard quota rate of 31 cents per pounds. Instead, they received only 17.75 cents per pound. The farmers filed a series of lawsuits claiming the government owed them the higher rate under their Multiple Peril Crop Insurance policies. In 2005, the district court ruled that the government breached its contract and awarded the peanut farmers $30 million.
The appeals court sided with the government on appeal, basing its decision to vacate the award on the 2002 Farm Bill, which eliminated the peanut quota system.
The timing of the bill was "unfortunate for the farmers," the ruling states, but they knew well in advance that Congress was about to "dramatically change the quota program."
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