In late April, a federal jury in North Carolina awarded $50,000,000 in punitive damages and $750,000 in compensatory damages to 10 neighbors of a hog facility contracted with Murphy-Brown, a subsidiary of the Smithfield Foods system. The court subsequently reduced the verdict according to North Carolina’s cap on punitive damages and Smithfield will appeal. However, is the damage already done?
The jury took all of a few hours to hand out the unanimous verdict which will be seen as a bellweather case and possibly spur aggressive claims against livestock operations around the country. Smithfield is already facing several more similar claims and will have to take into account the North Carolina verdict when deciding whether to litigate or settle the case. Could the Smithfield verdict lead to an explosion of nuisance cases across the country and the mass Concentrated Animal Feeding Operation (“CAFO”) reform that certain environmental groups seek?
Doubtful. Before hitting the panic button, please remember that farm nuisance cases are fact-specific. No two fact scenarios are the same and state regulations governing CAFOs differ. Furthermore, state courts interpret and apply right to farm laws differently. Most importantly, no two juries are the same. The neighbors who presented their specific fact scenario in conjunction with North Carolina regulations and right to farm law to the 12 jurors who were somewhat randomly selected hit a home run. Another set of neighbors presenting another set of facts in conjunction with another set of regulations to a another randomly selected jury may strike out. Litigation is never a sure thing.
Although the award may not be a bellweather case, it is also not likely a fluke. Verdicts such as the one against Smithfield are legitimate risks which farm and ranch operators must minimize, including maintaining a proper manure management system.