Split appeals court upholds ruling on hog farm’s liability, kicks back multi-million dollar damages

BLADEN COUNTY, N.C. (WECT) - A federal appeals court upheld a district court ruling holding a Bladen County hog farm and the corporation that it supplied liable for damages to neighbors.

However, the three-judge panel did remand the issue of punitive damages in the case back to the lower court.

Residents of rural Bladen County sued Smithfield Foods and its subsidiary Murphy-Brown over the smell of Kinlaw Farms and other issues created by the hog rearing operation.

The district court found the companies liable for the nuisance, and awarded the plaintiffs $75,000 in compensatory damages, as well as $2.5 million in punitive damages.

Smithfield and Murphy-Brown appealed the decision, and while one of the three judges believed an entirely new trial was warranted based on that appeal, the other two ruled in a bipartisan opinion that only the punitive measures needed to be revisited.

Civil cases against hog farms in North Carolina have numbered more than two dozen over the last five years, but in the case of Kinlaw Farms, the plaintiffs didn’t blame their direct neighbors — but the large company that contracted with it.

They took issue with the “odors, pests, and noises” created by the farm and not properly mitigated, and that the activity created a recurrent nuisance.

Smithfield was purchased by a Chinese company in 2013—a fact the defendants argued in the appeal should not have been relayed to the jury, because it would lead to bias.

The appeals court disagreed, saying that information was allowable.

What the panel did say was inappropriate was telling the jury the worth of the companies and the salaries of their executives as evidence during the determination of the amount of punitive damages.

While the court determined that information was allowable evidence in determining whether or not the companies were liable, they agreed with the defendants that the information could be “inflammatory” for a jury when determining a final amount.

The district court had ultimately awarded the plaintiffs $2.5 million—$250,000 each—but a new hearing was ordered to be held to re-examine the amount of punitive damages.

Smithfield Chief Administrative Officer Keira Lombardo said in a statement Friday they have “reached a settlement” that will resolve the cases and “take into account the divided decision of the court.”

The company will not be disclosing the terms of said settlement, a spokesperson said.

The statement also indicates Smithfield still takes the position that they have not done anything wrong.

“These civil actions brought in North Carolina are part of a coordinated effort by plaintiffs’ attorneys and their allies aimed at dismantling our safe, reliable and modern system of food production. From the outset of these cases, we committed to vigorously defend agriculture and protect North Carolina’s farm families from this assault. Our support for America’s farmers does not end with this decision.”

Attorneys for the plaintiffs, on the other hand, celebrated that the appeals court upheld the overall case.

“Court of Appeals recognized that the jury was right—Smithfield willfully and wantonly interfered with our clients’ ability to live comfortably in their own homes,” lead counsel during the appeal Tillman Breckenridge said in a statement released Thursday.

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