The Minnesota Supreme Court is hearing arguments on whether the state's 75-cents-per-pack tobacco fee violates the 1998 nationwide tobacco settlement between Big Tobacco and the states, the Associated Press reported April 11.

Tobacco companies claim that the "health impact fee" approved last year violates the 1998 agreement, which trades billions in payments by tobacco companies in exchange for protection from future health claims. Appearing before the high court, however, industry lawyers admitted that state lawmakers could impose the fee as long as they don't say that the money is to be used to pay for health care.

"I guess I'm having a difficult time seeing what's the harm here," said Justice Alan Page, prompting industry lawyer Stephen Patton to reply, "The harm, your honor, is a deal is a deal."

The fee generates about $15 million every month for the state. It was struck down by a lower-court judge who said that state officials violated the 1998 deal by publicly linking the fee to smoking cessation.

One possible solution would be to convert the "fee" into a tax, but both lawmakers and Gov. Tim Pawlenty have been averse to raising taxes, even if it is just a matter of semantics in this case.