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Fourth Circuit issues split decision forcing Smithfield to settle in effort to offer certainty moving forward.
November 20, 2020
The U.S. Court of Appeals for the Fourth Circuit issued a split decision Nov. 19 that upheld a 2018 jury verdict requiring Smithfield Foods subsidiary Murphy-Brown LLC to award monetary damages to neighbors of a North Carolina hog operation but said the district court did not follow the law in North Carolina in regard to how punitive damages are decided and awarded.
“We have resolved these cases through a settlement that will take into account the divided decision of the court,” Keira Lombardo, Smithfield chief administrative officer, said in a statement. Information about the terms of the settlement will not be disclosed.
The 2018 jury returned a verdict in favor of the neighbors, to the tune of $75,000 in compensatory damages per plaintiff, along with a total of $5 million in punitive damages, which was subsequently reduced to $2.5 million due to North Carolina’s punitive damages cap. On Thursday, a majority of the three-judge panel rejected the arguments of attorneys for Murphy-Brown that a new trial should be ordered.
Judge Stephanie Thacker, who wrote the opinion for the case, said, “We affirm the jury’s verdict as to liability for compensatory and punitive damages, but we vacate the award of punitive damages and remand for a rehearing on that issue based on our evidentiary standards.”
Lombardo stated, “The lower court’s actions in this case allowed plaintiffs’ attorneys to unlawfully inflame the jury. This resulted in outrageous awards by an urban jury against a highly regulated rural farming operation.”
Circuit Judge G. Steven Agee wrote separately to say he would have given Murphy-Brown a new trial. Circuit Judge J. Harvie Wilkinson agreed with Thacker’s opinion but wrote his own.
Lombardo said, “We disagree with other conclusions of the appellate court while noting that Judge Agee’s dissent finds that cumulatively erroneous actions by the district court judge in this case are ‘so profound that a full new trial is necessary.’”
She noted that Smithfield’s hog production division and network of independent family farmers operate with great care for animal well-being, the environment, its employees and its communities while feeding tens of millions of people. “We are grateful for the deep support that we, in the field of agriculture, have received as these unfair and misguided cases have persisted over a seven-year period,” Lombardo added.
“In the midst of a global pandemic, where food shortages have been commonplace, it is now the time to keep our full attention on the important work of producing good food in a responsible and sustainable way – rather than returning to the court for what would be ongoing and distracting litigation involving this farm and dozens of other farming operations. Farmers, grain growers, truck drivers, food processors – and so many tens of thousands more in North Carolina who depend on the pork industry to support their families – have lived under a cloud of uncertainty for too long,” Lombardo said.
Her statement added: These civil actions brought in North Carolina are part of a coordinated effort by plaintiffs’ attorneys and their allies aimed at dismantling our safe, reliable and modern system of food production. From the outset of these cases, we committed to vigorously defend agriculture and protect North Carolina’s farm families from this assault. Our support for America’s farmers does not end with this decision.”
Policy editor, Farm Futures
Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.
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