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N.C. hog farmers press for reversal of $500M in nuisance verdicts

By Daniel Fisher | Mar 13, 2019

RICHMOND, Va. (Legal Newsline) - North Carolina hog farmers, supported by national farming and manufacturing groups, have asked the U.S. Court of Appeals for the Fourth Circuit to reverse a $50 million nuisance verdict that was the opening shot in litigation that has delivered more than $500 million in verdicts for property owners who say they are being annoyed by noise and smells emanating from nearby farms.

In a filing this week with the federal appeals court in Virginia, the American Farm Bureau Federation said “it is no exaggeration to say the entire U.S. livestock sector is threatened” by the nuisance litigation, in juries have delivered huge punitive damages awards over farming practices that farmers say are approved by state and federal regulators. 

Murphy-Brown, the U.S. unit of Hong Kong-based WH Group Ltd., has lost four cases so far among 26 that were consolidated before U.S. District Judge Earl Britt in Raleigh, N.C.

“Massive damages awards based on normal farming activity that complies with applicable regulations pose an existential threat to the livelihoods of farmers and the food security of our nation,” the Farm Bureau says in its brief. 

Activist groups opposed to what they call “factory farming” have talked about using similar nuisance theories to sue poultry farmers, the group says, even though the plaintiffs in these cases can’t point to tangible damages such as diminished property values or health effects.

The North American Meat Institute, National Association of Manufacturers, Grocery Manufacturers Association and U.S. Chamber of Commerce also filed amicus briefs this week. They said nuisance litigation against permitted industries will drive up consumer costs and unjustly reward entrepreneurial plaintiff attorneys.

The U.S. Chamber Institute for Legal Reform owns Legal Newsline.

“Any industry in North Carolina is at risk for nuisance liability and punitive damages for conduct the legislature and administrative branches have blessed,” the National Association of Manufacturers' brief says. “The political branches, not the courts, are the proper venue for Plaintiff’s disagreement with North Carolina’s environmental policies.”

The North Carolina General Assembly responded to the first verdict by passing a law effectively prohibiting future nuisance lawsuits against farms that are otherwise in compliance with state and federal regulations.

The farmers are hoping the Fourth Circuit reverses Judge Britt for a second time. Last year, the court harshly criticized and ultimately threw out a sweeping gag order the judge imposed on all parties the same day the North Carolina legislature acted, preventing farm advocates from even discussing the case in public. 

In its request for appeal filed in February, Murphy-Brown said the judge made several reversible errors, including denying its motion to dismiss the plaintiffs’ claims based on “fear of” future injuries, refusing to apply North Carolina’s three-year statute of limitations and allowing plaintiff lawyers to strip away claims against the actual farm accused of being a nuisance so jurors could focus on a presumably less popular foreign corporation.

Judge Britt, using similar courtroom rules, oversaw a second trial last year in which jurors ordered two plaintiffs $130,000 in compensatory damages and $25 million in punitive damages and a third in which the jury awarded six plaintiffs $23.5 million in compensatory damages and $450 million in punitives. Punitive damages in all three were reduced under North Carolina’s punitive-damages cap. 

A fourth trial was shifted to U.S. District Judge David Faber in West Virginia after Judge Britt complained of health problems. In a switch from earlier trials, Judge Faber prevented plaintiffs from presenting potentially inflammatory evidence including executive compensation.  

The jury in that case awarded only $102,400, with individual damages ranging from $100 to $75,000, to eight plaintiffs after Judge Faber ordered a halt to the trial because the plaintiffs presented insufficient evidence to allow punitives

Murphy-Brown has complained Judge Britt skewed procedure in the plaintiffs’ favor by allowing the jury to hear irrelevant evidence about the parent company’s profits and executive compensation and letting them claim damages dating back to the mid-1990s despite the state’s three-year statute of limitations. The judge also refused to include Kinlaw Farms in the case, which would have eliminated so-called diversity jurisdiction and allowed the litigation to remand to state court where jurors may have been more favorable toward local farmers.

Judge Britt is presiding over a fifth trial currently in Raleigh.

Hog farmers complain they were the subject of intense negative publicity before this wave of litigation began, including a “cutting-edge billboard campaign” in early 2015 by Robert F. Kennedy Jr.’s New York-based Waterkeeper Alliance, which informed potential jurors about the “environmental damage and human pain and suffering” caused by “industrial swine operations” it described as “foreign-owned corporations.”

Farming and manufacturing organizations are warily watching as groups like Waterkeeper and Earthjustice join forces with plaintiff lawyers to press nuisance lawsuits against what they call “factory farms.” In a sign of how powerful the movement has become, former Google Chairman Eric Schmidt’s personal charity has given more than $1.3 million in the past several years to groups that use litigation to oppose large farming operations.

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Organizations in this Story

Murphy Brown LLC National Association of Manufacturers

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