Court upholds hog verdict; Smithfield announces settlement

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FILE- In this July 21, 2017, file photo, young hogs owned by Smithfield Foods gather around a water source at a farm in Farmville, N.C. A federal appeals court on Thursday, Nov. 19, 2020 upheld a 2018 jury verdict that led to awarding monetary damages to neighbors of a North Carolina industrial hog operation for smells and noise they said made living nearby unbearable. (AP Photo/Gerry Broome, File)

RALEIGH, N.C. – A federal appeals court on Thursday upheld a 2018 jury verdict that led to awarding monetary damages to neighbors of a North Carolina industrial hog operation for smells and noise they said made living nearby unbearable.

But judges ruled the jurors' multimillion-dollar awards — intended to penalize a subsidiary of the world's largest pork producer for wrongdoing — were unfairly weighed against its corporate assets and must be reconsidered.

The decisions by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, came hours before Smithfield Foods said it had put an end to this and similar nuisance cases filed by North Carolina residents either already on appeal that went against the company or hadn’t gone to trial.

“We have resolved these cases through a settlement that will take into account the divided decision of the court,” Smithfield Foods Chief Administrative Officer Keira Lombardo said in a statement. The company won't disclose financial terms.

Attorneys representing the plaintiffs and those in other cases neither confirmed nor mentioned a settlement late Thursday. A statement from lawyers involved in the appeal praised the court's decision to affirm the verdict.

The case ruled upon Thursday by the appeals panel was the first that went to trial among dozens of lawsuits filed by more than 500 neighbors complaining about hog operations. Five that went to trial went against Smithfield, leading to hundreds of millions of dollars in punitive damages, which were later reduced because of state law capping such awards. While one lawsuit still resulted in $94 million in damages, more recent verdicts led to much lower compensation.

A majority of the three-judge panel rejected Thursday the arguments of attorneys for Murphy-Brown LLC that a new trial should be ordered. Murphy-Brown is a subsidiary of Smithfield, which is owned by Hong Kong-based WH Group Limited.

The jurors found the company liable for the nuisance conditions at a Bladen County farm in eastern North Carolina that raised 15,000 hogs annually for the company and disposed of massive amounts of feces and urine there. The neighbors of Kinlaw Farms had filed suit, complaining they had suffered for years from intense, putrid smells coming from open-air hog waste lagoons. They alleged that Smithfield Foods refused to spend money on technology that could address these problems.