Hog farmers have optimism for appeals process

By: Alan Wooten - Bladen Journal

ELIZABETHTOWN — Three defeats in the federal courtroom of Judge Earl Britt haven’t diminished the resolve of the hog farming industry.

“We don’t know which three judges we’ll draw, but we feel confident that whichever ones are there that this will get overturned,” said David Mixon, operations manager for Elizabethtown-based HD3 Farms of the Carolinas.

Greenwood Livestock LLC, a division of HD3 Farms, is owner of the Greenwood 1 and 2 farms that were in the most recent lawsuit. A jury ruled in favor of plaintiffs, awarding $473.5 million in damages against defendant Murphy-Brown, a subsidiary of Smithfield Foods that contracts with Greenwood and HD3 Farms.

State law on punitive damages caps the award at $94 million.

The other two cases involved Kinlaw Farms, off N.C. 53 in the White Oak community of Bladen County, and the Joey Carter Farm near Beaulaville in Duplin County. Appeals in all three cases are moving forward at the 4th Circuit Court of Appeals in Richmond, Virginia.

There is also talk of settlement. In a motion filed last week, lawyers for both sides said, “The parties have also agreed to pursue potential options for alternative resolution of future trials.”

Back on the farms, Smithfield has sent letters explaining why it can’t continue with new contracts.

“Right now, to be honest, we’re supporting the ones that are out there,” Mixon said of the next steps, referring to 23 more nuisance cases coming. “We’ve met with Gregg Schmidt. They’re confident on the appeals.”

Schmidt is president of the hog production division of Smithfield Foods.

In the case involving HD3 Farms and Greenwood, if an appeal happened, the farm will be ready to continue operations.

“It’s looking like Greenwood 1 will start running out at the end of September,” Mixon said of hogs going to production. “Greenwood 2 will probably be out middle of October. Both sites at that point will be empty.

“We’re continuing to run it like we’re going to get hogs, because we’re still hopeful this appeals thing will get taken care of before we get to that point. We’re running it like we’re going to be in business right through. That’s what we’re hoping for, and I do feel confident eventually we’ll get hogs back in the building.”

That means the operation at 6500 Piney Woods Road in Willard will be cleaned and prepped once the hogs there go to production. Equipment will get checked and repaired where necessary. The day things change, Mixon said, the farm will be ready.

Judge Earl Britt issued a far-reaching gag order for all three cases, which have ended with plaintiffs awarded $549.25 million in damages — $97.88 million after state law is applied to punitive damages. Schmidt and Smithfield Foods representatives are among those prevented from speaking publicly about the cases and were not able to comment for this story.

Hog farming provides 46,000 jobs and is an $11 billion industry in the state. HD3 Farms has 27 locations in eight counties.

Reverberations from the lawsuits have already hit Washington, D.C.

North Carolina Sen. Thom Tillis said out-of-state lawyers are taking advantage of “legal technicalities.” Steve Troxler, the state agriculture commissioner, has called it a “blight” and threat to farmers and ranchers across the country.

Zippy Duvall, of the American Farm Bureau Federation, and former acting deputy U.S. agriculture secretary in the Obama administration Michael Scuse, now the Delaware agriculture secretary, said people move in around farms and then object to what is around them.

“This is really and truly a nationwide issue,” Scuse said.

Perhaps even one that an overturn in Richmond won’t necessarily solve.

“I don’t think anybody thought it would get to this point,” Mixon said. “When you look at it in a legal sense, we’ve not broken any laws, we’ve followed the state laws, everybody felt pretty good that we’d win this thing. I think we’re very optimistic about the appeals court. But let me also say, we were optimistic about the first cases.

“I think everybody is kind of scratching their heads. Even Smithfield. We’re shocked to this point.”

Still, he said, his company is working hard and trying to help others who will soon have a day in court. And they hope their day in Richmond is better than in Raleigh.

”You’ve got to believe when put into a judge’s hand, and not playing on people’s emotions, it’s strictly law,” Mixon said. “When it is looked at that way — have we done anything to break the law? — everybody feels we’ve done what we’re supposed to do. And in our case, with our farm, we’ve done things to improve.

“We’ve gone above and beyond, to go that extra step beyond and become more efficient. We’ve got great people in management. It’s a shame to see hogs pulled out of the buildings.”

Alan Wooten

Bladen Journal

Alan Wooten can be reached at 910-247-9132 or awooten@bladenjournal.com. Twitter: @alanwooten19.

Alan Wooten can be reached at 910-247-9132 or awooten@bladenjournal.com. Twitter: @alanwooten19.