In November, the 4th Circuit Court of Appeals in Richmond, VA released the long-awaited opinion in the right to farm swine nuisance case McKiver, et al v. Murphy Brown, LLC. The appellate court’s three judge panel upheld the rulings of the trial judge and liability verdict of the jury sitting in the Eastern District for North Carolina, but remanded the punitive damage award for reconsideration due to inadmissible evidence.

Andrew Branan, Extension Assistant Professor with the Department of Agricultural and Resource Economics, spoke with University of Maryland’s Paul Goeringer, Extension Legal Specialist, in late December about the case and its major issues, as well as what it means for the future of nuisance litigation against integrated swine and poultry operations and systems. The recording of Paul’s podcast interview can be found on the MD Risk Management Education Podcast page.

The McKiver case – one of 26 such cases involving over 500 plaintiffs – was brought against Murphy-Brown, LLC (wholly owned subsidiary of Smithfield, Inc.) on the legal theory of nuisance regarding the waste management and other practices followed by farms raising hogs for processing. The cases came from Duplin, Bladen, and Sampson Counties (the McKiver case came from Bladen County). Five of the cases reached jury verdicts awarding compensatory and punitive damages in the tens of millions. In response to the initial filing of the lawsuits in 2014, the North Carolina General Assembly amended the North Carolina “Right to Farm” law – designed to forestall such nuisance suits against farming and forestry operations – to reduce the potential pool of plaintiffs and limit damages recovery to a multiple of impacted property value, eliminating heavier punitive damages.

(The cases – originally filed in state court – were re-filed in federal district court on “diversity jurisdiction” grounds, a feature of federal civil procedure whereby a case involving parties (plaintiff and defendant) of different states and involving a claim in excess of $75,000, though based on state law, may be heard in federal court. In these cases, the plaintiffs were North Carolina residents, whereas Murphy-Brown, LLC is domiciled in Delaware, and Smithfield, Inc. in Virginia.)

Murphy-Brown’s primary argument on appeal was this: under North Carolina legal precedent, the General Assembly may act to clarify an existing statute, and such clarification reverts back to the time of the act(s) that raised a cause of action for the plaintiffs under then existing law. The 4th Circuit Court rejected this argument, writing that the amendments to the Right to Farm Act (RTFA) were not in the nature of a clarification, but the introduction of a new concept. The Court reasoned that the amendments dealt not with who had standing to sue – the focus of the previous RTFA – but with how much the plaintiffs could recover in damages. This change – the court opined – was not a clarification, and thus could not be applied retroactively to deny plaintiff’s their nuisance claim.

The Court was clear that – at least on the facts of these cases, had the RTFA amendments been passed by the legislature prior to the filing of these cases, they likely would have barred the cases from going forward, or otherwise reduced allowable damages to the plaintiffs. As a practical matter – if this were indeed the position of a future court – nuisance lawsuits against farmers in North Carolina have lost some of their financial luster to plaintiff’s attorneys working on a contingent fee based on jury verdict or settlement.

Another issue before the court concerned the failure of the plaintiffs to join the farm operator (the contract grower for Murphy-Brown) to the lawsuit. When plaintiff lawyers made the decision – following their withdrawal of the cases before the county superior courts – to refile the cases in federal court, they excluded the operator (Kinlaw Farms) as a defendant, one presumes to achieve diversity jurisdiction and avoid a jury more local to the farm. Defendants argued this failure was fatal to the case in that a verdict would have damaged Kinlaw Farms’ “pecuniary and contractural interests.” The court – in applying its rules of review as to whether a verdict would prejudice Kinlaw Farms’ interests – determined that Kinlaw Farms was not a necessary party, in part noting that Kinlaw Farms did not seek to join the lawsuit to protect its interests, and further because Murphy-Brown terminated its contract with them shortly after the verdicts were reached, an act not related to the issues of the case.

As it happens, this case and the others were settled within days of the 4th Circuit Opinion. While the McKiver opinion is not considered precedent for state courts in North Carolina, the reasoning provided by the case is a good guide as to how future nuisance suits would be handled under the amended Right to Farm law.