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Smithfield loses $50 million lawsuit

darcy maulsby/ThinkstockPhotos Hogs in pen in modern hog barn
Why didn’t lawyers use North Carolina’s Right-to-farm statute?

Murphy Brown LLC, a subsidiary of Smithfield Foods and hog producer, received a verdict last Thursday from a North Carolina jury that it must pay plaintiffs $50 million in damages as a result of a nuisance lawsuit. The jury ruled in a unanimous verdict each plaintiff should be awarded $75,000 in compensatory damages and $5 million in punitive damages.

Smithfield will appeal the decision.

The North Carolina legislature has also passed a law in the last year which will likely limit each plaintiff’s compensatory damages so it is unlikely any plaintiff will see the $5 million. The Wall Street Journal indicated, ”It is unclear if a state law that caps punitive damages at the higher of 3 times compensatory damages…would apply.”

This is the first of 26 cases to go to trial. The second case is slated to go to trial next month. A spokesperson for Smithfield stated, “These lawsuits are an outrageous attack on animal agriculture, rural North Carolina and thousands of independent family farmers who own and operate contract farms.”

What happened?

Murphy Brown was accused of failing to eliminate obnoxious, recurrent odors and large number of pests from a CAFO which plaintiffs claimed affected their homes. This was a dispute between adjacent property owners regarding how society views common law nuisance, environmental law and agricultural land use.

The rights of neighbors vs. hog production goes back to the 1600s in England. A famous case we all learn about in law school, William Aldred’s case, dates back to 1611. This is the first case on record which tried to rectify an alleged environmental harm. The court in 1611 stated “[a] an action on the case lies for erecting a hogstye so near the house of the plaintiff that the air thereof was corrupted.” Ever since this case, upset landowners have sought to protect their right to the enjoyment of their property. 

Nuisance is a result of some conduct that is intentional, negligent or subject to strict liability. Nuisance as a cause of action seems fairly simple.  However, virtually every state in the Union has passed a Right to Farm Statute to protect farmers because it can be alleged farming is a nuisance to a neighbor because farms generate dust, noise, pesticide drift and odors.

In this case, plaintiffs alleged Murphy Brown and its hogs placed on a contract farmer’s land created an unlawful interference with a neighbor’s use and enjoyment of their land. (Pretty simple.)

The jury instructions provided by the court provides interesting insight. The court instructed the jury to base its view on the law given to it by the Court and instructed the jurors they must not be swayed by bias or prejudice towards either party.

The court stated, “Our system of law does not permit jurors to be governed by prejudice or sympathy or public opinion” (impossible). He also told the jurors they were the sole judges of credibility and believability of each witness.

After going through the preliminary instructions, he identified 10 plaintiffs by name and told the jurors to decide the case based on the issues presented to them. The first issue the Court directed jurors to consider was, “Did the defendant substantially and unreasonably interfere with the plaintiffs’ use and enjoyment of his or her property?” The judge further instructed that an inference could be drawn and stated, “Inference is substantial when it results in significant annoyance, material physical discomfort or injury to a person’s health or property.”

The court then defined the term “substantial interference” and whether that interference would be unreasonable to a person of ordinary prudence and discretion. The Court went on to define substantial interference being unreasonable and listed several factors, such as suitability to the location of the defendant’s property; the nature, utility and social value of the plaintiffs’ use and enjoyment of his property, and had that been invaded.

The Court then said if the answer to issue one is yes, then his second instruction was, “What amount of damages, if any, is plaintiff entitled from the defendant?” Then the Court explained to the jurors that if they awarded actual damages, they should ask “Is the defendant liable to the plaintiff for punitive damages?”

The Court told the jurors that the plaintiff had to prove by clear and convincing evidence there was malice or willful or wanton conduct exhibited by Murphy Brown (I found this instruction amazing).The court explained, “Malice means a sense of personal ill will toward the plaintiff that activated or incited the defendant to perform the act or undertake the conduct that resulted in harm to the plaintiff.”

The Right to Farm statute in North Carolina played no role in the jury trial. Without this defense, defeat was almost certain.      

The opinions of the author are not necessarily those of Farm Futures or Farm Progress.

TAGS: Hog
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