State Politics

Hog farm’s neighbors not entitled to punitive damages, judge rules

A federal judge on Thursday brought the fourth hog farm nuisance trial to an abrupt halt by ruling that the plaintiffs presented insufficient evidence to impose punitive damages.

The end to the month-long trial came after jurors on Wednesday returned verdicts in favor of all eight plaintiffs, who live near a Sampson County hog farm, and imposed compensatory damages of a little more than $100,000 in all. Jurors were expected to begin deliberating the punitive damages phase of the trial on Thursday or Friday, after hearing testimony.

A jury in a previous lawsuit against hog producer Murphy-Brown in August imposed punitive damages of $473.5 million. A state cap on punitive damages lowered that amount to $94 million.

This week’s verdict was the fourth loss for the hog industry, but a victory for Murphy-Brown, considering the extremely low monetary damages. The jury awarded $100 compensatory damages to four plaintiffs, $1,000 to two plaintiffs, $25,000 to one and $75,000 to another — an elderly woman who lived closest to the hog farm and grew up there.

Verdicts in previous lawsuits had awarded half a billion dollars in damages against Murphy-Brown. The cap lowered that amount to about $100 million.

Under the cap, punitive damages can’t exceed three times compensatory damages or $250,000, whichever is larger. Plaintiffs’ attorney Michael Kaeske, in closing arguments last week, asked the jury to return compensatory damages of $32 million to $40 million.

Smithfield Foods issued a statement on behalf of Murphy-Brown, saying it contends that punitive damages in the previous trials were a misapplication of the law and it will continue to challenge them.

“While we recognize that the outcome of this trial was far more favorable for our subsidiary Murphy-Brown and our industry than the three previous trials, we continue to believe these lawsuits are an abuse of the legal system and an attack on agriculture,” said Keira Lombardo, senior vice president of corporate affairs. “We will continue to vigorously defend them.”

One difference in this trial and the previous trials was that it was presided over by a different judge — David Faber of West Virginia — who replaced Judge W. Earl Britt of North Carolina. Plaintiffs said rulings by the judge restricted their ability to present evidence supporting punitive damages.

There are 26 lawsuits with 500 defendants involved in the hog farm controversy. Both sides have been taking turns choosing which plaintiffs will be represented in each trial. It was Murphy-Brown’s turn to pick the plaintiffs in this trial.

This first batch of trials are meant to test the strengths and weakness of the cases, to help determine whether they will be settled. The next trial is scheduled in January.

The neighbors’ attorneys issued a statement saying they were grateful for the jury’s unanimous verdict finding Murphy-Brown was liable for creating a nuisance, and for the compensatory damages that were awarded.

“This is the fourth straight trial in which a North Carolina jury has unanimously found there was a problem and awarded damages,” attorney Mona Wallace of Salisbury said. “The plaintiffs’ team looks forward to the next trial in January of the new year.”

Smithfield’s Lombardo said it has filed post-trial motions asking a judge vacate the damages awarded in the previous trials. Once that issue is resolved, she said, then appeals of the verdicts will continue.

“During those trials, the real case about the plaintiffs and their properties was buried in an avalanche of distraction and manipulation,” she said. “Our attorneys are confident we will prevail on appeal.”

The trial began Nov. 14 in Raleigh, asking jurors to weigh how bad hog waste can smell and whether the nuisance of being its neighbor deserves a monetary award. The focus was Sholar Farm in Sampson County, which has 6,000 hogs and 10 million gallons of waste in its lagoons.

Plaintiffs argued they could not enjoy their property enough to host a family barbecue, let kids play outside or tend a garden. Plaintiffs’ attorney Kaeske on Wednesday told the jury that punitive damages were a way to force a company to change its bad practices. In this case, he said, Murphy-Brown had failed to heed alarms about its hog waste lagoons for two decades.

Murphy-Brown attorney James Neale outlined improvements the company had made over the years, and said punitive damages were reserved for the worst offenders, not for the hog producers.

On Thursday, Faber granted a motion by defense attorneys to deny punitive damages.

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Craig Jarvis is in his seventh year covering politics for The N&O. He has been a reporter and editor here covering crime, legal affairs, general assignment, arts and real estate. Contact him at cjarvis@newsobserver.com or (919) 829-4576.
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