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Litigation Update: Recent Smithfield Jury Verdicts Provide an Important Reminder for Minnesota Pork Producers Image

Litigation Update: Recent Smithfield Jury Verdicts Provide an Important Reminder for Minnesota Pork Producers

Posted by: Matthew C. Berger

On April 26, 2018, a jury in North Carolina awarded a judgment against Murphy-Brown LLC (an affiliate of Smithfield Foods) for more than $50 million in a nuisance lawsuit arising from the operation of a hog confinement facility. This judgment was later reduced by the judge to $3.25 million. But only a couple of months later, a second jury in North Carolina entered another judgment against Murphy-Brown for more than $25 million in a second nuisance lawsuit arising from the operation of a different hog confinement facility (although this award is also likely to be reduced by the judge). And several more nuisance cases are pending in North Carolina and are awaiting trial. These judgments have caused many Minnesota pork producers to re-examine the threat that nuisance litigation may pose here.

Under Minnesota law, a “nuisance” is a condition that is either harmful to the health or is indecent or offensive to a neighboring property owner’s senses. A person may bring a private nuisance claim if she can prove that (i) a nuisance condition exists, (ii) the nuisance “materially and substantially interferes with the comfortable enjoyment of life or property,” and (iii) the defendant wrongfully created the nuisance condition. In the context of livestock farms, the most common nuisance conditions that are raised include odor, emission of air pollutants, flies and vermin, noise, and light. The determination of whether a claimed nuisance is indecent or offensive and whether it substantially interferes with the enjoyment of property is measured based on an objective standard of “ordinary people in the area” where the property is located rather than a subjective standard of the particular person experiencing the nuisance condition.

As these standards suggest, the ultimate success or failure of a nuisance claim is highly dependent on the specific facts and circumstances of both the farming operation that is alleged to create a nuisance and the neighboring property owner(s) who bring the claim. For example, the recent cases in North Carolina involved manure storage and application practices—such as open, uncovered lagoons and spray irrigation application techniques—that are more likely to cause odor than the manure storage and application practices that have become more common in Minnesota over the last several years.

The results of past nuisance cases in Minnesota have, thus far, been favorable for Minnesota pork producers. In July 2001, a neighboring property owner commenced a lawsuit against Forst Farms, Inc., and Wakefield Pork, Inc., alleging nuisance conditions at a hog farm in Nicollet County. Following a two-week jury trial in March and April 2004, the jury returned a verdict finding that the farm had not created a nuisance. More recently, neighboring property owners brought a lawsuit against Gourley Premium Pork, L.L.C., and Protein Sources LLP alleging nuisance conditions at a hog farm in Todd County. And again last year, the jury in Todd County returned a verdict finding that the hog farm had not created a nuisance. And although one jury in Poweshiek County, Iowa, returned a verdict (which resulted in a $462,500.00 judgment) against Prestage Farms, other recent nuisance cases in Wapello County, Iowa, and Scott County, Illinois, also resulted in jury verdicts in favor of hog producers.

Ultimately, the results of past nuisance litigation suggest that many modern site selection, facility design, production management, and manure storage and application practices reduce odors and other potential nuisance conditions from hog farms and thus reduce the threat posed to hog producers by nuisance litigation. But the recent Murphy-Brown jury verdicts provide an important reminder of the value of the improvements that Minnesota pork producers have made over the last several years and the dire consequences of not implementing such practices.

ACTION ITEM

Pork producers should be aware of potential nuisance issues when identifying sites, designing and constructing new facilities, and improving existing facilities. Pork producers should also consider implementing production and manure application techniques that may minimize potential nuisance conditions that may develop.

This information is general in nature and should not be construed for tax or legal advice.