Cases Against Pork Giant Continue After Big Penalty Slashed
Lawyers for the world's largest pork producer don't want jurors to hear about the finances of a company whose industrial-scale hog operations caused a stench so bad it made life miserable for its rural neighbors.
Jury selection is scheduled to start Tuesday in a Raleigh federal courthouse for the second trial over claims the method in which Hong Kong-owned, Virginia-based Smithfield Foods raises hogs caused a number of problems for neighbors after the operations moved in.
"Plaintiffs have suffered episodes of noxious and sickening odor, onslaughts of flies and pests, nausea, burning and watery eyes, stress, anger, worry, loss of use and enjoyment of their property" among other harms, attorney Mona Lisa Wallace wrote in a court filing.
Angry neighbors say for years they've put up with livestock sewage that was supposed to be sprayed over crops instead drifting to coat their homes and cars. They said they tolerate clouds of flies drawn to open waste cesspools. And they say buzzards are drawn to feast on the flesh of dead hogs stacked near their homes.
As many as 10 of the two dozen lawsuits by more than 500 neighbors could go to trials this year.
The first case in the series ended last month with jurors awarding the 10 neighbors of a 15,000-head swine operation a total of $750,000 in compensation, plus $50 million in damages designed to punish Smithfield. But the judge slashed the punitive damages to a total of $2.5 million, citing a state law that limits the punishment for corporate misdeeds.
Still, the verdict rocked the industry in the country's No. 2 pork-producing state, where local and state politicians have either supported the pork industry or backed down in the face of its clout.
The results of the coming trial and others to follow could protect or tarnish Smithfield's reputation, and that could have spillover effects on its business, said Michelle Nowlin, the supervising attorney of Duke University's Environmental Law and Policy Clinic. But North Carolina's liability limits mean even if juries think the company is a bad actor, Smithfield won't take a bath financially, she said.
"This was a cap that was designed to protect corporations and it is working as it was intended, putting corporate interests ahead of community interests and ahead of those who have been injured by corporate malfeasance. That's the unfair system that we have," Nowlin said.
Smithfield has not changed the locally dominant method of hog waste disposal since intensive hog operations multiplied in North Carolina in the 1980s and '90s. The practice involves housing thousands of hogs together, flushing their waste into holding pits, allowing bacteria to break down the material, then spraying it onto fields with agricultural spray guns.
The upcoming trial involves a Duplin County operation of up to 4,700 animals owned by Joey Carter, former police chief of the nearby town of Beulaville. As with the hog farm owner in the first trial, Carter is not being sued because Smithfield's hog-raising division uses strict contracts to dictate how farm operators raise livestock Smithfield owns, attorneys for the neighbors said.
Evidence presented at the first trial "was inflammatory, resulting in punitive awards for each plaintiff over twenty times larger than permitted by North Carolina law," said Mark Anderson, an attorney representing Smithfield's Murphy-Brown division. To prevent that from happening again, U.S. District Judge W. Earl Britt "should exclude all evidence of either Murphy-Brown or its parent companies' financial condition."
WH Group, which bought Smithfield Foods in 2013, generated $22 billion in revenues last year, the company reported in March. The vast majority of the 20 million hogs it produced last year are in the U.S. and Europe, the company said. Murphy-Brown has operations in 12 states, including 1,400 sites in North Carolina.
Like the financial resources available to change its North Carolina hog growing operations, jurors should not be told about decades of complaints executives heard unless and until the jury decides neighbors were harmed and should be compensated, company attorneys said in court filings. Only then should jurors be told more about Smithfield's record as they consider whether to punish the company, Anderson wrote in a court filing.