Keep an eye on Smithfield trials (Editorial)
On Aug. 3, a North Carolina jury handed down a decision against Smithfield Foods, awarding $473.5 million in damages to six neighbors of contract hog farmers.
It was the third decision against the pork giant since April.
The award was reduced to about $94 million, as state law caps punitive damages in certain lawsuits.
The first suit’s $50 million award was reduced to $3.25 million and the second suit’s award was changed from $25 million to $630,000.
Prompted by concern over the first verdict against Smithfield, state lawmakers in June passed and then overrode the governor’s veto on the North Carolina Farm Act, which places new limits on how residents can sue their farmer neighbors.
Organized by a team of in- and out-of-state trial attorneys, a total of 26 lawsuits were filed in 2014 with more than 500 plaintiffs suing Smithfield subsidiary Murphy-Brown for odor, flies and truck traffic issues at neighboring hog farms. The lawsuits were consolidated in 2015, and five of them were initially chosen to prepare for trial.
It may be a third strike against Smithfield, but they are not out. On the same day the third verdict was announced, state and national lawmakers and agriculture officials held a roundtable discussion focuses on combating nuisance lawsuits.
There, state Rep. Jimmy Dixon, a turkey farmer from Duplin County said despite its legal defeats, Smithfield will continue with the remaining 20-plus nuisance trials scheduled for the rest of the year and into 2019.
“I’ve had special meetings with high-level officials from Smithfield,” Dixon said. “And they said they will not settle.”
At more than $15 billion in annual revenue, Smithfield likely has the war chest to fight the suits thought the appeal process or pay the reduced, but still eye-popping, awards.
It’s important to note that hog producers are not specifically listed as defendants in the cases, however the collateral damage to the farms involved and the rest of the contract growers in the state could be immense.
There are more than 2,300 hog farms in the state and the industry employs about 46,000 people.
It’s expected to take years to work through all 26 lawsuits.
The first two verdicts were appealed by Smithfield and the third is likely to go the same route, keeping attorneys on both sides busy and and perhaps the only winners to really come out of the ordeal.
The situation in North Carolina, though huge by comparison, is all too familiar to farmers on Delmarva and not something they’d like to see happen again. Farmers pulled into lawsuits while following the laws of the land is enough to make any farmer cringe and worry if his or her farm is at risk.
Whatever success the plaintiffs inevitably have in the Smithfield lawsuits will indeed determine the next moves of trial lawyers involved in the cases and around the country eyeing a huge payday.
Many believe Delmarva is on the short list of the lawyers’ next stop, if they haven’t started already. Just as the Hudson case in Maryland years ago caught national attention for the precedent it could set, these lawsuits in North Carolina could have profound implications
Granted, poultry farming on Delmarva has many differences from North Carolina’s hog industry including how manure is applied and managed and its stringent regulations.
But in the increasingly urbanized Mid-Atlantic region with already documented neighbor relations issues scattered throughout that area, the stage could be set for the industry to defend itself in court once again.
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