Smithfield settles suits over North Carolina farms, after losing appeal

Juries in 2018 and 2019 had awarded hog farm neighbors almost $550 million.

Smithfield Foods announced Thursday that it had reached a settlement with plaintiffs who had sued the company over the stench, flies, buzzards, and truck traffic coming from its industrial swine farms in North Carolina. The announcement came immediately after the Fourth U.S. Circuit Court of Appeals in Richmond, Virginia, rejected a call from the world’s largest pork producer for a retrial in a lower court case it had lost.

Juries in 2018 and 2019 had awarded hog farm neighbors almost $550 million. The U.S. District Court in Raleigh, North Carolina, knocked the awards down to about $98 million because of a state law capping punitive damages. 

“In the midst of a global pandemic, where food shortages have been commonplace, it is now the time to keep our full attention on the important work of producing good food in a responsible and sustainable way — rather than returning to the court for what would be ongoing and distracting litigation,” Smithfield’s chief administrative officer, Keira Lombardo, said in a statement. Details of the settlement were not disclosed.

More than 500 North Carolinians, most of them Black, filed over two dozen lawsuits in 2014 against the Smithfield subsidiary, formerly known as Murphy-Brown. Some lived near farms that contract with Smithfield. Others lived near farms owned by the company outright. They described being trapped inside their own homes, sickened by the smell of hog waste stored in open pits, and unable to hang laundry, cook outdoors, or entertain visitors.

Smithfield lost the first five cases that went to trial. It appealed the three largest verdicts, calling the litigation an “almost existential threat” to North Carolina farmers. It claimed the district court had made numerous errors, such as allowing the neighbors’ odor expert to testify while excluding some testimony from Smithfield’s expert. 

In the new ruling, a three-judge panel rejected most of the pork producer’s arguments. The company “persisted in its chosen farming practices despite its knowledge of the harms to its neighbors, exhibiting wanton or willful disregard of the neighbors’ rights to enjoyment of their property,” Judge Stephanie Thacker, an Obama nominee, wrote for the court.

Elsie Herring, a plaintiff in another of the cases, said she was pleased that the court had sided with the neighbors on most issues. “Our lives have been destroyed by the industry,” she said. The North Carolina law firm Wallace & Graham, which represented the plaintiffs, did not respond to questions about the settlement. It said in a statement that the appellate court “fully got the truth” of its clients’ struggles.

The appellate judges did agree with Smithfield on a key point. They said the plaintiffs’ lawyers improperly used the parent company’s financial data to convince jurors that punitive damages had to be large enough for the pork giant to feel. During closing arguments in the original trial, attorney Michael Kaeske told jurors, “They know there is a problem. They know there is a fix. They willfully choose not to do anything about it. … Yet they pay $245 million [in executive compensation] to four people over four years. That’s the kind of money they can spend when they want to.”

The appellate ruling said jurors should not have heard those details. “We fail to see what value the parent company financial evidence would have that could possibly outweigh the substantial risk of prejudice it carries in that delicate context,” wrote Thacker.

In a concurring opinion, Judge J. Harvie Wilkinson III went beyond the issue of civil damages and decried the “outrageous conditions” at Kinlaw Farms, the operation at the center of the lawsuit — “conditions that there is no reason to suppose were unique to that facility.” Kinlaw Farms, which was permitted to house more than 14,000 animals at a time, and its owner, were not named as defendants. 

“How did it come to this?” wrote Wilkinson, who was nominated to the Fourth Circuit by President Ronald Reagan and has served since 1984. “What was missing from Kinlaw Farms — and from Murphy-Brown — was the recognition that treating animals better will benefit humans. What was neglected is that animal welfare and human welfare, far from advancing at cross-purposes, are actually integrally connected. The decades-long transition to concentrated animal feeding operations (CAFOs) lays bare this connection, and the consequences of its breach, with startling clarity.”

Wilkinson described a system in which pigs are forced to live in enclosures they’ve outgrown, reducing them “to almost suffocating closeness. … The dangers endemic to such appalling conditions always manifested first in animal suffering. Ineluctably, however, the ripples of dysfunction would reach farm workers and, at last, members of the surrounding community.”

Judge G. Steven Agee dissented, saying that the lower court’s errors were serious enough to warrant a whole new trial.

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