RICHMOND, Va. (CN) - The 4th Circuit has ruled that two tobacco producers lost their bid to challenge the government's method of calculating payouts under the Fair and Equitable Tobacco Reform Act because they traded their contracts to third parties in exchange for a lump-sum payment.
The Act allows the secretary of agriculture to offer buyout contracts to tobacco producers who had previously operated under a fixed quota system. Appellants William Neese and Daniel Johnson accepted a series of contracts for annual payments over the next 10 years, but then sold those contracts - and all accompanying rights - to third parties for one large payment.
They then sued the government for more money, claiming the secretary improperly calculated their contract payouts under the Act.
The appeals court held that the producers had "abandoned any right to challenge the secretary's calculations when they assigned their buyout contracts to third parties."
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