Court: Schools May Be Due Hog Giant's Environmental Payments

North Carolina judges are setting up a court battle to decide whether the world's largest pork producer will keep paying for environmental projects as it promised 18 years ago, or if the millions should go to public schools instead.

A divided state Court of Appeals resurrected a lawsuit Tuesday challenging Smithfield's 2000 agreement to pay up to $2 million a year for 25 years. The state attorney general has largely decided who receives the money.

The court determined a trial should rule if the payments are actually penalties for bad behavior. If so, the money could be funneled into public schools as the state constitution requires.

Smithfield agreed in the same 2000 deal to phase out open-air hog waste pits within five years. Despite that promise, cesspools are still used on hundreds of farms raising Smithfield's hogs.