What the $50 Million Swine Nuisance Verdict Could Mean for Midwestern Producers05/02/2018
A verdict last week in a nuisance lawsuit in North Carolina against the pork production division of Smithfield Foods has shocked and scared hog farmers in the Midwest, who are wondering if this could affect them in the future.
On April 26, 2018, a federal jury awarding 10 neighbors of a contract hog farm in the Smithfield system $50 million in punitive damages and $750,000 in compensatory damages for odor and noise. North Carolina law caps punitive damage awards at $25 million.
Smithfield is appealing the verdict, saying in a statement, “From the beginning, the lawsuits have been nothing more than a money grab by a big litigation machine.” (See the company’s complete statement at the bottom.)
Michael Blaser, an attorney with BrownWinick, Des Moines, Iowa, says he got calls immediately from pork producers seeking advice. “I told them I don’t think the verdict translates here,” says Blaser. “There isn’t a good analogy between the manure handling systems they’ve been using down there and the systems primarily used in Iowa and the surrounding states.”
Blaser was general counsel to Iowa Select Farms from 1995 to 2000, and is on the environmental committee for the National Pork Producers Council (NPPC).
In a statement, the NPPC called the nuisance lawsuit “frivolous,” a “misuse of our legal system,” and an “unwarranted attack on livestock agriculture.”
This North Carolina case is a “bellwether case that will test the water to see what might happen when more cases go to trial,” says Blaser. “Clearly, it was not a good result for Smithfield.”
However, he points out that in Iowa, the largest pork producing state in the nation, most hog manure is knife-injected into the ground. “As a general rule, we don’t use spray guns or center pivots, so there is little drift.”
Cases are Fact-Specific
Eldon McAfee, an attorney with Brick Gentry, West Des Moines, Iowa, says that the outcomes of farm nuisance cases are very specific to the individual facts of each case.
“Most come down to manure handling practices,” he says. “The jury considers evidence of the practices used by the producer and also general practices for farms in that area. In the recent case in North Carolina, the jury found those particular practices caused a nuisance.”
McAfee tracks nuisance cases for the Iowa Pork Producers Association. (See important cases below.) He says that in four out of five of the cases in the past 10 years, juries found no nuisance.
“It all depends on the individual facts introduced at trial to the jury,” says McAfee. “I’m sure Smithfield introduced evidence that supported their position that there was no nuisance, but the jury found otherwise.”
“As an attorney representing livestock producers, I’ve been on the winning side and I’ve been on the losing side of jury verdicts,” says McAfee. “It comes down to the individual facts presented to the jury as witness testimony and evidence.”
Testimony from third-party witnesses is vital, he explains. “Juries pay particular attention to witnesses who aren’t parties in the case, such as other neighbors located near the hog farm. They may say, ‘Yeah, I smell it, but it doesn’t cause me any problems.’ That is pretty powerful evidence for the jury to consider and can be the determining factor.”
Recent swine nuisance suits in Iowa
McIlrath v. Prestage Farms of Iowa, Poweshiek County, Iowa, February 4, 2015. Plaintiff lived 2,200 feet northeast of a 2,490-head swine finishing site. Jury awarded $400,000 in personal damages and $125,000 in loss in property value. Following trial, the judge reduced the jury verdict to $462,500. On appeal, the Iowa Court of Appeals upheld the verdict. A motion is pending for the Iowa Supreme Court to further review the case.
Pauls et. al. v. JBS Live Pork, LLC, Wapello County, Iowa, February 29, 2016. Case involved a 4,280-head swine finishing site. There were nine plaintiffs and four residences from 1.2 to 2.5 miles away from the site. Jury verdict was no nuisance and $0 awarded. After trial, the court ordered plaintiffs to pay $48,666.61 for litigation costs and expenses (no attorney fees).
Cases of importance in other states include:
- Scott County, Illinois, 2016: Two 7,500-head swine finishing farms .25 mile apart, 10 plaintiffs, and five residences from .10 to 1.6 miles away. Jury verdict was no nuisance and $0 awarded.
- Todd County, Minnesota, December 2017: A 3,200-head sow farm, six plaintiffs, four residences from .25 to .5 mile away. Jury verdict was no nuisance and $0 awarded.
Livestock nuisance cases in Iowa currently pending set for trial in 2018 and 2019 include:
- Poweshiek Co. – swine finishing – jury trial 9/11/18
- Louisa Co. – swine finishing – jury trial 12/4/18
- Buchanan Co. – cattle feedlot – jury trial 1/9/19
- Henry Co. – swine finishing – jury trial 1/29/19
- Poweshiek Co. – swine finishing – jury trial 2/5/19
- Jefferson Co. – swine finishing – jury trial 6/18/19
- Des Moines Co. – swine finishing – jury trial 6/25/19
- Davis Co. – swine finishing – jury trial, not yet set for trial
- Wapello Co. – swine finishing – case pending a ruling by the Iowa Supreme Court on the constitutionality of Iowa’s animal feeding operation nuisance defense law
We are extremely disappointed by the verdict. We will appeal to the Fourth Circuit, and we are confident we will prevail. We believe the outcome would have been different if the court had allowed the jury to (1) visit the plaintiffs’ properties and the Kinlaw farm and (2) hear additional vital evidence, especially the results of our expert’s odor-monitoring tests. These lawsuits are an outrageous attack on animal agriculture, rural North Carolina, and thousands of independent family farmers who own and operate contract farms. These farmers are apparently not safe from attack even if they fully comply with all federal, state, and local laws and regulations. The lawsuits are a serious threat to a major industry, to North Carolina’s entire economy, and to the jobs and livelihoods of tens of thousands of North Carolinians. From the beginning, the lawsuits have been nothing more than a money grab by a big litigation machine. Plaintiffs’ original lawyers promised potential plaintiffs a big payday. Those lawyers were condemned by a North Carolina state court for unethical practices. Plaintiffs’ counsel at trial relied heavily on anti-agriculture, anti-corporate rhetoric rather than the real facts in the case. These practices are abuses of our legal system, and we will continue to fight them. – Keira Lombardo, senior vice president of corporate affairs, Smithfield Foods
Source: Betsy Freese, Agriculture.com