RICHMOND, Va. (Legal Newsline) – A federal appeals court overturned a $2.5 million punitive damages award against a subsidiary of Smithfield Foods in a lawsuit by North Carolina residents who complained about odors, pests and noise from an industrial-scale hog farm, precipitating a settlement of those claims.
The U.S. Court of Appeals for the Fourth Circuit on Nov. 19 upheld the jury’s 2018 award of $75,000 in compensatory damages to each of the 10 plaintiffs. Shortly after the appeals court ruling, Smithfield agreed to settle the lawsuit and others in North Carolina, The Associated Press reported.
“We have resolved these cases through a settlement that will take into account the divided decision of the court,” said Smithfield Foods chief administrative officer Keira Lombardo in a statement, according to the AP.
The jury originally ruled that the Bladen County residents were entitled to $5 million in punitive damages against Smithfield subsidiary Murphy-Brown, but that amount was reduced to $2.5 million because of North Carolina’s cap on punitive damages, according to the ruling.
The jury should not have been provided with financial information about Smithfield, which was “potentially inflammatory evidence to sway a jury’s calculation of punitive damage awards,” Judge Stephanie D. Thacker wrote.
“To be quite clear -- we do not disturb the district court’s decision to submit the availability of punitive damages to the jury or the jury’s determination that those damages are appropriate in this case,” Thacker wrote.
“We are only remanding for a new calculation of those damages absent the parent company's financial evidence that threatens significant prejudice without any relevance to the question of the appropriate amount of punitive damages to award.”
In a statement following the ruling, Tillman Breckenridge, attorney for the residents, told The Associated Press that the appeals court “recognized that the jury was right – Smithfield willfully and wantonly interfered with our clients’ ability to live comfortably in their own homes.”