Gathering set to discuss ways to stymie spread of nuisance lawsuits against agri-business

By John Breslin | Aug 2, 2018

RALEIGH, N.C. (Legal Newsline) - A major gathering of politicians and representatives of state agencies will convene Friday for a round table discussion on how to stymie the spread of nuisance lawsuits against agri-business companies and producers.

The gathering is taking place in the number two hog producing state in the nation, one that has faced a flurry of nuisance suits, and where legislators passed provisions as part of an omnibus farm bill that severely limits the ability of neighbors to take legal action.

Those supporting restrictions on nuisance lawsuits argue that they are leading to the destruction of the livelihoods of farmers and agricultural workers.

Opponents believe the big agri-business companies have increasingly backed producers into a corner, replacing livestock markets with contracts that offer pay per animal, and force them to cover the costs of waste disposal and housing of livestock.

The round table discussion, which will take place at the North Carolina State Fairgrounds, was convened, by among others, U.S. Rep. David Rouzer (R-7th-NC), chairman of the House Agriculture Subcommittee on Livestock and Foreign Agriculture.

"Today’s nuisance lawsuits that are destroying livelihoods and communities in North Carolina are the tip of the iceberg for what is to come absent a well-informed public and good public policy," Rouzer said in a statement ahead of the gathering.

Other panelists will include Rep. Mick Conaway (R-11th-TX), North Carolina U.S. Senator Thom Thillis, Steve Troxler, the North Carolina Commissioner of Agriculture, his South Carolina counterpart, Hugh Weathers, and Zippy Duvall, president of the American Farm Bureau Federation.

The moves, both via legislation and by lobbying, to curtail lawsuits was largely driven by some two dozen launched against producers and agri-business.

Smithfield Foods, more correctly its subsidiary, Murphy-Brown, is a target, and a jury returned a verdict award of more than $50 million against the multi-national over claims it dictated farm operations and failed to invest in changes that would alleviate the "nuisance" caused by producers. The damages were limited to $3 million due to a previous act signed into law in North Carolina.

The most recent legislation, passed in June, limits the time frame in which a neighbor can sue and prohibits any action against a producer, or the ultimate controller of the business such as Smithfield, if there is no violation of state regulations or criminal law.

Those opposing the legislation argued it could face constitutional challenges over property rights and because it singles out the hog industry, and logging, over other industries.

The legislation has received strong support from the North Carolina Chamber of Commerce.

Gary Salamido, president of the chamber's Legal Institute, said North Carolina's agriculture and agribusiness "is one of the state’s greatest economic engines, employing 17 percent of the state’s workforce and contributing more than $84 billion in gross state product."

"Not only do these frivolous lawsuits clog our legal system, impede job creation and weaken our competitive legal climate, but they also keep hard-working farmers from focusing on their business and force them to shell out exorbitant legal fees," Salamido told Legal News Line.

"It’s clear that North Carolina’s competitive economy is reliant on the success of the state’s agriculture and agri- business industry, which is why the North Carolina Chamber supported legislation in 2017, and again this year, to establish greater protections against nuisance lawsuits."

But Ryke Longest, of Duke University School of Law and the Nicholas School of the Environment, believes the emphasis and pressure on producers is allowing big agri-businesses like Smithfield, itself part of the Hong Kong-headquartered WH Group, which racked up $22 billion in revenues last year, to evade their responsibilities.

In a recent op-ed in Durham's Herald and Sun newspaper, Longest argued that producers have to keep more and more hogs, and for longer, because of production contracts.

"In the case of a contract entered into evidence at the most recent trial, Smithfield’s Murphy-Brown subsidiary agreed to pay a producer $.082 per day for each hog that was raised on that farm," Longest wrote.

And he added, "These production contracts require the producers to pay for waste disposal and housing, which require large amounts of capital.

"Hog producers under contract have to be careful to toe the company line or lose their investment as well as their income. With no public livestock markets as a back-up, the producer works for Murphy-Brown indefinitely." He added plaintiffs have tried to sue the owners of the hogs, not the local producers.

In his statement announcing the round table discussion this Friday, Rep. Rouzer said that a "nuisance is very much in the eye of the beholder."

He added, "Every single farm family that is in compliance with all applicable regulations – no matter what they are growing – should have a safe harbor from legal action being brought against them."

"This is a very slippery slope that threatens the very existence of every form of agriculture nationwide," Rouzer said of the use of nuisance lawsuits.

Aside from the use of lawsuits, traditional agriculture is also coming under pressure from innovation, with Google chief executive Eric Schmidt citing "fake meat" as one to watch in the near future. He argues that such a switch will help to combat carbon emissions and global warming.

Emissions from the livestock industry account for 14.5 percent of total carbon emissions, according to the United Nations Food and Agriculture Organization, as cited by the Smithsonian Magazine in an article published this week.

The article raised the possibility that rising consumption of meat in countries such as China will lead to a doubling in production in the next 30 years, increasing emissions.

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Organizations in this Story

American Farm Bureau Federation Duke University School of Law North Carolina Chamber of Commerce

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