Attorneys for a subsidiary of Smithfield Foods, the world’s largest pork producer, went before the Fourth U.S. Circuit Court of Appeals in Richmond, Virginia, Friday and asked three judges to overturn a $3.25 million jury award in a lawsuit filed by neighbors of a large North Carolina hog farm.
During the hearing, they received a sharp lecture from the bench about environmental justice and economic fairness.
The Virginia-based food company was appealing the first in a series of verdicts holding its hog-production subsidiary, formerly known as Murphy-Brown, responsible for the odor, flies, buzzards, and heavy truck traffic that neighbors said prevented them from enjoying their homes. In five trials in 2018 and 2019, held at the U.S. District Court in Raleigh, juries awarded 36 plaintiffs a total of almost $550 million. The court reduced the awards to about $98 million because of a state law limiting punitive damages.
The case before the Fourth Circuit, McKiver et al. v. Murphy-Brown, involved 10 residents of White Oak, a rural community in Bladen County. In the mid-1990s, a farmer named Billy Kinlaw bought property near their homes and started a hog operation that was permitted to house more than 14,000 animals at a time. Smithfield’s Murphy-Brown subsidiary owned the pigs and contracted with Kinlaw to raise them.
Like many North Carolina hog farmers, Kinlaw disposed of the pigs’ feces and urine by flushing it from the barns, which house hundreds of animals, into open lagoons, and then sprayed the waste onto his fields as fertilizer.
In their legal complaint, the plaintiffs alleged that Kinlaw’s farm generated a “noxious and sickening odor” that nauseated them and made their eyes sting. Forced indoors, they claimed, they could no longer garden, hold cookouts, or even keep their windows open. Smithfield’s subsidiary “has the resources to eliminate the nuisance,” the complaint said.
During Friday’s oral arguments, in a Richmond courtroom, Murphy-Brown defense attorney Stuart Raphael called the awards in the McKiver case excessive and the nuisance caused by his client minimal. “The odor is not as they claim it is,” Raphael told the three-judge appellate panel.
In North Carolina, juries can award punitive damages for “willful and wanton conduct” that disregards the rights and safety of others. The McKiver jury in April 2018 awarded the 10 plaintiffs, including Joyce McKiver, a total of $750,000 in actual damages and $50 million in punitive damages. Senior District Judge W. Earl Britt reduced the punitive portion to $2.5 million because of the state cap.
Raphael argued that nothing at Kinlaw’s farm constituted “willful and wanton conduct” and therefore punitive damages were unwarranted.
“There were no complaints to Murphy-Brown before the suits were filed,” he said. “There was no violation of North Carolina law.”
But Judge J. Harvie Wilkinson III, who was nominated to the Fourth Circuit by President Ronald Reagan and has served since 1984, suggested that Kinlaw’s neighbors were being made to suffer in part because of their modest means.
“If this were my property, I would be outraged at some of these conditions,” said Wilkinson, the court’s former chief judge. “And less fortunate fellow citizens, they have property rights too… They have a right to good health, and they have a right to enjoyment of their property.”
If the plaintiffs lived in “McMansions” or had political influence, Wilkinson asked, “wouldn’t these conditions have been cleaned up sooner rather than later?”
Wilkinson also alluded to the history of water contamination near large North Carolina hog operations, and to studies that have associated hog-farm emissions with health conditions like asthma. “Nobody wants another Flint, Michigan,” he said. “And this can’t be good for children’s respiratory systems.”
The judges reserved some criticism for the other side too. During the 2018 trial, plaintiffs’ attorney Michael Kaeske emphasized that Smithfield is a multibillion-dollar company and also told jurors how much money top executives earned. “They know there is a problem,” Kaeske said in his closing statement. “They know there is a fix. They willfully choose not to do anything about it. Not even figure out how much it would cost, but yet they pay $245 million to four people over four years.”
At the Fourth Circuit, the plaintiffs’ appellate attorney, Tillman Breckenridge, said the company’s resources are relevant to its ability to solve the odor problem.
Wilkinson, though, suggested that bringing up executive compensation went beyond the pale. “Since when do corporate executives—how would they be expected to chip in 10, 15 percent of their salaries for abatement?” the judge asked. “Isn’t that just throwing a dead rat on the table?”
Likewise, Judge G. Steven Agee wondered aloud why Kaeske told jurors that a Chinese company, WH Group, owns Smithfield. “I don’t see how any of that can be relevant,” said Agee, who was nominated by President George W. Bush.
The third panelist, Judge Stephanie Thacker, was largely silent. She was appointed by President Barack Obama.
The Fourth Circuit’s decision will help determine whether other cases against Murphy-Brown move forward. More than 500 North Carolinians filed a total of 26 lawsuits against the Smithfield subsidiary. McKiver and the other four trials were bellwether cases designed to test the strength of the plaintiffs’ claims.
Attorneys on both sides say it could take weeks, or even months, before the court makes a ruling.