News & Insights

Court Reduces $50 Million Punitive Damages Award In Hog Farm Nuisance Case

A federal judge in North Carolina has reduced a $50 million punitive damages award in a nuisance suit against a hog farm that stored the animal waste in open-air lagoons and sprayed it on nearby fields.  McKiver, et al. v. Murphy-Brown, LLC, 7:14-CV-180 (May 7, 2018, E.D.N.C.).  The Court relied on North Carolina’s law capping punitive damages awards to reduce the $50 million reward to $3.25 million.

The case was brought by ten plaintiffs whose property is located near a major industrial hog farm operated by Murphy-Brown, LLC, Smithfield Foods’ hog-production division.  The plaintiffs alleged the 15,000-head hog farm operation constituted a public nuisance because the anaerobic lagoons – huge pits of hog feces – emitted noxious odors and attracted buzzards and swarms of insects.  Plaintiffs also alleged the practice of spraying the broken-down animal waste on nearby fields creates a stench that remains in their clothing and coats their homes and cars with liquid waste.

The jury awarded each plaintiff $75,000 in compensatory damages and $5 million in punitive damages, which the Court reduced to $325,000 per plaintiff pursuant to North Carolina’s cap on punitive damages. North Carolina’s legislature changed the state’s nuisance law last year to make suits against the hog industry more difficult to bring and capped punitive damages to three times compensatory damages.  The original bill contained a provision to make the law retroactive, but that provision was ultimately stricken.

The case was the first in a series of twenty-seven nuisance suits filed against Murphy-Brown selected for trial to gauge the likelihood of a possible larger resolution.  As many as ten of the suits filed by more than 500 property owners could go to trial this year.  The case is significant for Smithfield Foods, which has operations in twelve states, including 1,400 sites in North Carolina.