STABILIZATION PRESS RELEASE
April 10, 2002
Raleigh, NC - In an Order and Opinion issued today, Judge Ben Tennille, Special Superior Court Judge for Complex Business Cases, rejected the challenge brought against Flue-Cured Tobacco Cooperative Stabilization Corporation's marketing center plan by a small group of tobacco auction warehousemen from Georgia, South Carolina, North Carolina and Virginia. Judge Tennille, in his ruling, stated that:
"…[T]he court finds that the clear language of the statute permits the Stabilization Board to operate its own market centers and to do so without charging its members a commission or fee.
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There is no dispute for purposes of these motions that the threat of the elimination of the auction market is real and that the Stabilization Board was acting in response to that threat....
Nor is there any dispute that the motivation of the Stabilization Board was to assist its members.
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The plaintiffs' position was simply stated by their counsel at the conclusion of oral argument. They believe that the tobacco farmers have only two choices. They can sell on contract directly to the manufacturers or,…they can sell at auction in public warehouses where they must pay commissions and fees. The court believes that they have a third option of using their own funds to provide auction services to themselves for free. The goals of the market center program are to insure the survival of the auction market and the federal price support system upon which so many small farmers depend.
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[T]he Stabilization Board is acting in furtherance of sound public policy, on behalf of its members' business interests and in a manner permitted by statute . . . ."
Now that the Court has reviewed Stabilization's marketing center plan and found it legal and proper in all respects, Stabilization will continue to move forward with its plan to open 14 auction marketing centers for the 2002 tobacco marketing season. The marketing centers will be strategically located throughout the flue-cured tobacco producing area and will offer services to Stabilization members free of warehouse commissions and auction fees.