A federal jury in Raleigh in April roasted a subsidiary of pork giant Smithfield Foods over waste disposal methods at a hog farm in Bladen County. But a judge’s interpretation of a business-friendly law capping punitive damages could help save the company’s bacon.
The 10-person jury awarded $50.75 million in compensatory and punitive damages to neighbors of Bladen County’s Kinlaw Farms, which has a contract to raise 15,000 hogs for Smithfield-owned Murphy-Brown. It was the first of a series of suits over the company’s waste-disposal methods. Plaintiffs had complained that the stench caused by hog waste at the farm prevented them from going outside or opening their windows, making a relatively new legal argument. Jurors decided each of the 10 plaintiffs should receive $75,000 in compensatory damages and $5 million in punitive damages. Still pending are another 25 cases pitting the working-class plaintiffs against the Chinese-owned company, which has annual revenue of $15 billion.
The company lashed out at the litigation. “These lawsuits are an outrageous attack on all animal agriculture (not only hogs, but poultry, cattle, etc.), rural North Carolina and thousands of independent family farmers who own and operate contract farms,” said Keira Lombardo, senior vice president of corporate affairs at Smithfield Foods, in a statement.
Lawyers for the company argued that a state law capped the amount of punitive damages payable to plaintiffs. In a May ruling, U.S. District Court Judge Earl Britt agreed, rolling back punitive damages to $250,000 per plaintiff. The substantial reduction could lessen the company’s potential liability in the 25 other cases, several legal experts said.
Britt’s ruling had nothing to do with the merits of the case, says Michelle Nowlin, supervising attorney for the Environmental Law and Policy Clinic at Duke Law School and an advocate for the plaintiffs. Awarding any amount required the jury to make a finding “that the defendant’s conduct was a willful disregard of the plaintiff’s rights,” she says. “If this is the opening finding … I would be very concerned about these other cases.”
Nowlin says there are other methods for disposing of hog waste than the open-air lagoons in use at some of the state’s contract farms, including some new approaches that Smithfield employs at company-owned farms in Missouri. She also favors more environmentally friendly ways to raise animals, including pasturing hogs, though that is more labor intensive and expensive. The company contends such changes aren’t warranted because the lagoons present no environmental harm.
Britt’s decision to lower punitive damages definitely reduces the sting for Smithfield. But, Nowlin adds, “I hope the company will still take it to heart” and change its hog-waste disposal ways.
WILMINGTON — Apiture opened its new headquarters downtown. The 50-employee financial-technology company is a joint venture between Live Oak Bank and First Data,
an Atlanta-based technology company.
WILMINGTON — Pharmaceutical Product Development, a contract-research company, named former Pfizer Chief Commercial Officer Christopher Scully chief financial officer.
WILMINGTON — Former Goldman Sachs partner Huntley Garriott will become Live Oak Bank’s new president by October 1. He succeeds Scott Custer, who will remain at the small-business lender in a senior position.
FAYETTEVILLE — Chemical company Chemours will spend $100 million to keep GenX and other compounds from being released into the air at its Fayetteville Works plant. The N.C. Department of Environmental Quality filed a legal notice in April after it was found the company had contaminated the drinking water of thousands of people in southeastern North Carolina.
FAYETTEVILLE — Cape Fear Valley Health and UnitedHealthcare formed an accountable-care organization for patients enrolled in UnitedHealthcare Medicare Advantage plans. It is UnitedHealthcare’s first ACO in eastern N.C.