Nearly half a billion dollars in damages was awarded by a federal jury in Raleigh on Friday to plaintiffs in a nuisance lawsuit involving Pender County farms owned by the company of a prominent White Lake businessman.
Jurors needed just three hours before announcing a $473.5 million judgment against the world’s largest pork producer, Smithfield Foods, the parent company of Murphy-Brown and a part of Chinese conglomerate WH Group. They said the company did not stop “the obnoxious, recurrent odors and other causes of nuisance” resulting from closely packed hogs, which “generate many times more sewage than entire towns.”
The record verdict from the 10 women and two men of the jury included $23.5 million in compensatory damages and $450 million in punitive damages. By state law, those totals will be reduced to $94 million.
The third of 26 lawsuits against Smithfield Foods is the second with significant ties to Bladen County. Plaintiffs are yet to taste defeat and all have been represented by Texas lawyer Michael Kaeske.
Reaction throughout multiple media outlets was strong. Environmental advocates cheered the decision and said it was possible for hog farming to continue using more modern operations that protect the public. Supporters of agriculture described a severe blow to the “greatest food system in the world” and to the livelihood of eastern North Carolinians, to the extent of making this a “welfare state.”
“We need to come up with model legislation, we need to figure out what the federal government should do,” said U.S. Sen. Thom Tillis, a Republican who was part of an agriculture roundtable in Raleigh as the jury was deciding and announcing its verdict. “We need to send a very clear message to the trial lawyers: We’re bigger than you when we coordinate. Literally, while this meeting has been going on, another blow has been struck.”
Hearings by the Senate Agriculture and Judiciary committees will be requested by Tillis.
Victory for plaintiffs Joyce McKiver, Woodell McGowan, Eunice Anderson, Annjeanette Gillis and Ben Artis exploded virally across the country. Publications coast to coast picked up the story, from The Wall Street Journal and The Washington Post on the Atlantic Seaboard to the St. Louis Post-Dispatch in America’s Heartland to West Coast publications like the San Francisco Chronicle and Los Angeles Times.
Farms named in the suit are owned by HD3 Farms of the Carolinas, the company led by Dean Hilton of White Lake. A gag order from Judge Earl Britt remained in place during and at the conclusion of the trial, preventing Hilton and other participants from commenting publicly.
A message on the company’s Facebook page posted Friday afternoon said in part, “We stand firm in the choices that we have made and the way that we have operated both Greenwood 1 & 2 farms in Pender County since we purchased them in late 2014. Since then, we have made improvements to the farms and our practices to ensure that we were being good neighbors and unfortunately, those facts didn’t seem to resonate with the jury during our trial.
“Despite the outcome, we will persevere. … We will continue to pray for and support those farmers who have to face this unjust situation after us. We mourn our losses with those who endured before us. We are humbled by all of your love, support and prayers and ask that you continue them in the days and weeks to come. Sadly, this fight is not over and it will continue for many months to come.”
North Carolina has roughly 2,200 hog operations. It is an $11 billion business for the state, with about 46,000 jobs.
“It’s a ripple effect that would devastate our communities,” said state House Rep. John Bell, a Republican from Wayne County. “You want to talk about a welfare state? Lose agriculture in eastern North Carolina. We will not exist.”
The Upper Neuse Riverkeeper, attending the agriculture roundtable where Tillis and Bell offered their comments, disagreed.
“We don’t have to choose between having agriculture in North Carolina and other communities,” Matthew Star said. “We can have both and it’s time for the people that were at this meeting who spoke today to advocate for that.”
Smithfield Foods has a large slaughtering operation near Tar Heel. More than 5,000 people are employed there.
The first lawsuit against Smithfield involved Kinlaw Farms, which raises about 15,000 pigs in the White Oak community off N.C. 53. It ended in late April with jurors awarding $50 million; a second lawsuit ended with a $25 million judgment.
Both amounts were later reduced by Britt.
“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,” U.S. Rep. David Rouzer said Thursday, the day closing arguments concluded. He’s a Republican representing part of Bladen County that is in District 7. “This is a very slippery slope that threatens the very existence of every form of agriculture nationwide.”
Kaeske, owner of a law firm in Austin, Texas, is a former member of the Dallas law firm Baron & Budd suing Chemours, the chemical plant at the Bladen-Cumberland county line that produces the GenX compound.
McGuireWoods represented Murphy-Brown, the defendant. The firm has headquarters in Virginia, an office in Raleigh and internationally in Beijing and Brussels.
Jimmy Dixon, a turkey farmer and outspoken Republican from Duplin County in the N.C. House, was at the roundtable and offered an expectation of the remaining 23 lawsuits continuing into 2019.
“I’ve had special meetings with high-level officials from Smithfield,” Dixon said. “And they said they will not settle.”
The lawsuits have named Smithfield Foods rather than farm owners because of the strict guidelines it imposes in contracts with hog operators. The less expensive waste system is part of the equation that helped Hong Kong-based WH Group to about $1 billion in profits last year.
For the six-year period covered in the litigation, the top four officials in WH Group reportedly received $245 million in compensation.
Jurors were told and later reminded by Kaeske, the lawyer for the plaintiffs, that odor-controlling technology and equipment costs about $1.75 million per farm to install and $350,000 per year to operate. He said it was a solution with known costs “to prevent harm.”
That’s installation costs of more than $3.6 billion for North Carolina farms.
“These juries are repeatedly seeing problems with the kind of waste management that’s used,” said Cassie Gavin, a lobbyist for the North Carolina Sierra Club. “Clearly it’s time for the state and the industry to take a hard look at their waste management and modernize it so the public is protected.”
An appeal by Smithfield Foods would go to the U.S. Court of Appeals for the Fourth Circuit in Richmond, Virginia.
Zippy Duval, also at the roundtable, is president of the American Farm Bureau Federation and is a third-generation farmer from Georgia.
“This is pitting neighbor against neighbor, and community against community,” he said. “And it could spread across America and handicap the greatest food system in the world.”
A federal jury decided Friday that the world’s largest pork producer should pay $473.5 million to neighbors of three North Carolina industrial-scale hog farms for unreasonable nuisances they suffered from odors, flies and rumbling trucks.
Alan Wooten can be reached at 910-247-9132 or firstname.lastname@example.org.