Litigation related to Smithfield Foods

Litigation related to Smithfield Foods mostly consists of nuisance suits related to the disposal of hog waste using anaerobic lagoons. State governments have responded to the suits against Smithfield and similar litigation by strengthening right-to-farm laws.

Nuisance suits

North Carolina

About 500 plaintiffs in 29 cases have sued Smithfield Foods through its subsidiary Murphy-Brown alleging harm from odors and insects associated with anaerobic lagoons. As of July 2019, a federal judge required the two sides to take turns picking cases to establish a typical case value for use in a negotiated settlement.

In April of 2018, a jury in federal court awarded 10 plaintiffs who lived close to a hog farm, Kinlaw Farms in Bladen County, with 15,000 animals a total of $750,000 in compensatory damages and $50 million in punitive damages. Kinlaw Farms was not named in the suit. The farm passed all state regulatory investigations and was never the subject of a complaint from its neighbours until this lawsuit was filed. The award for punitive damages was adjusted downward as mandated by North Carolina law that caps punitive damages at a level equal to three times the award for compensatory damages, or $250,000, whichever is greater.

In July of 2018, two plaintiffs, who were neighbors of a Smithfield operation in Dublin County, were awarded a $25 million verdict. The farm in question was owned by Joey Carter. This judgement was rendered despite the fact that the Carter farm had always met or exceeded the requirements of North Carolina'a laws and regulations governing the raising of hogs, invested in modern technologies to aid in waste disposal, and responded to concerns raised by neighbours in a timely and responsible manner. Joey Carter was not sued.

In December of 2018, eight plaintiffs who live near a contract farm in Sampson County won a verdict against Smithfield Foods. Four plaintiffs received $100 in compensatory damages. Two won $1,000 in compensatory damages. One received $25,000 in compensatory damages. One elderly female plaintiff who lived close to the farm and grew up nearby was awarded $75,000 in compensatory damages. A judge ruled that the plaintiffs did not provide enough evidence to justify the award of punitive damages. Before and during the trial many residents of the area planted yard signs that read, "Stand for hog farmers."

In March of 2019, a jury awarded only $440,000 to ten plaintiffs who allegedly suffered due to nuisances from a Smithfield operation in Duplin County that raised about 5,000 pigs. Smithfield appealed this judgement in the 4th United States Circuit Court of Appeals.

Regarding the above appeal Smithfield Foods stated in a press release: "These lawsuits are an abuse of our legal system, one that bypasses decisions made by lawmakers and regulators. As with the first three trials, the negative result is due in large measure to rulings by the court that our attorneys believe are incorrect. These errors skewed the evidence presented in favor of plaintiffs and prejudiced our ability to defend the case, our company, our industry, family farmers and all agriculture.”

Farm trade groups and sympathetic politicians have openly complained that these suits endanger their industry. North Carolina changed its right-to-farm law to further protect farmers from frivolous lawsuits. The language of the law was substantially altered to more narrowly and clearly define what qualifies as a nuisance while limiting when plaintiffs may be awarded punitive damages.

Owners of the farms at the center of this dispute were not allowed to tell their side of the story due to a gag order that was in place until it was lifted by United States District Court Judge Earl Britt on September 3rd, 2018. Earl lifted the gag order, which he had imposed, right before the United States Court of Appeals for the Fourth Circuit was able to rule on a petition to overturn it. The National Pork Council and the North Carolina Pork Council filed an amicus brief in support of the the petition to the Court of Appeals. They argued that gag orders have to be carefully crafted in order to be constitutional, that there was no compelling need for such an order in these cases, and that the order issued was vague, over broad, and ineffective.

The jurors were not allowed to visit the farms in question or the areas around them in all of these cases.

Bifurcation of compensatory and punitive damages

Smithfield moved to bifurcate the issues of its liability for compensatory damages and its liability for punitive damages. This motion was granted on October 24th, 2018 by Senior United States District Judge David A. Faber. Research shows that bifurcating trials in this manner creates more uniform verdicts for compensatory damages and decreased the chance of juries awarding extremely high judgements for compensatory damages. Bifurcation also results in lower awards for compensatory damages in cases of involving minor or less severe injuries while resulting in higher awards for in cases where injuries are severe. Jurors report they feel they use evidence more appropriately in bifurcated trials.

Insurance claims

In early 2019, Smithfield sued several of its insurance companies. Smithfield has filed suit against ACE American Insurance and Old Republic Insurance for breach of contract. It is has also filed suit against ACE Property & Casualty Insurance, American Guarantee & Liability Insurance, Caitlin Underwriting Syndicate 2003, Endurance Risk Solutions Assurance, Great American Insurance Company of New York, St. Paul Fire & Marine Insurance, XL Insurance America, and XL Specialty Insurance seeking trebled damages and legal fees for unfair claim settlement and deceptive business practices.

Smithfield has filed claims with its insurers to recover its legal fees and judgements owed due to nuisance lawsuits filed in North Carolina.

Labor disputes

The Smithfield Packing plant in Tar Heel, North Carolina, was the site of a 15-year dispute between the company and the United Food and Commercial Workers Union, which had tried since the early 1990s to organize the plant's roughly 5,000 hourly workers.

After demonstrations, lockouts, and a shareholder meeting that was disrupted by shareholders supporting the union, the union called for a boycott of Smithfield products. In 2007, Smithfield countered by filing a federal racketeering lawsuit against the union. The following year Smithfield and the union reached an agreement, under which the union agreed to suspend its boycott in return for the company dropping its racketeering case and allowing another election. In December 2008, workers voted 2,041 to 1,879 in favor of joining the union.

See also

Smithfield Foods
Right-to-farm laws
Anaerobic lagoon
Pig farming