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SUPREME COURT TO RULE ON AGENT ORANGE SUIT

The Supreme Court agreed Monday to decide whether the government must pay two chemical companies the $31 million settlement they paid to Vietnam veterans who blamed health problems on the defoliant Agent Orange.

The court said it will hear the companies' argument that the government should have to pay because it required them to manufacture Agent Orange.Hercules Inc. of Wilmington, Del., and now-defunct William T. Thompson Co. made Agent Orange for the Pentagon during the 1960s under the federal Defense Production Act. That law allows the government to require companies to make products needed by the military.

Agent Orange was used to clear dense jungle growth in Vietnam. Veterans filed a class-action lawsuit against Agent Orange manufacturers years later, saying exposure to the defoliant caused health problems including cancer and birth defects.

Hercules, Thompson and other companies agreed in 1984 to pay the veterans $180 million. Hercules' share of the settlement was $18.7 million and Thompson's share was $3 million.

Thompson stopped operating because of the threat of additional liability, its lawyers said.

In 1990, the two companies sued the federal government, seeking reimbursement for their settlement costs and legal fees.

The two companies said the government violated its contract by failing to disclose that the defoliant would contain toxic dioxins. Also, they said the Defense Production Act promised that no company would be held liable for following government orders.

A U.S. Claims Court judge dismissed their lawsuits, and the U.S. Court of Appeals for the Federal Circuit agreed last year.

In other court action, the Supreme Court Monday allowed states to charge sales taxes on the full price of bus trips and other transportation heading out-of-state.

The Constitution lets states tax transportation even when part of the travel occurs outside their borders, the court ruled in voting, 7-2, to let Oklahoma reinstate its tax on the out-of-state portion of bus trips.