Major media outlets and a handful of industry pundits quickly attached the “landmark” label to a recent multimillion-dollar jury verdict against Murphy-Brown, the hog production division of Virginia-based Smithfield Foods. But a closer look at the trial reveals several ways the jury’s decision could leave little or no mark.

The $50-million-plus award followed three weeks of trial and a parade of witnesses in North Carolina federal court. In the end, 10 plaintiffs were awarded $75,000 each for compensatory (actual) damages and $5 million each for punitive (exemplary) damages.

After roughly two days of deliberations, jurors determined the plaintiffs’ use and enjoyment of their properties had been substantially and unreasonably interfered with because of the odors generated by hog waste at nearby Kinlaw Farms, which operates under a contract with Murphy-Brown.

High-dollar award won’t stand

Although $50 million may seem like a lot of money, there was no chance the entire amount would be approved when the jury announced its verdict. One reason is because North Carolina state law, which governs this case, caps exemplary damages at three times the amount of actual damages or $250,000, whichever is greater.

Consequently, less than two weeks after the verdict, the federal court judge applied the North Carolina statute and slashed the punitive damages award to a total of $2.5 million for all 10 plaintiffs. Now, if the verdict withstands further scrutiny, the total recovery for all 10 plaintiffs, including both actual and punitive damages, would be somewhere around $3.25 million overall. That is a far cry from what the jury awarded.

Appeal issues abound

There are many issues Murphy-Brown’s attorneys undoubtedly will raise in their already announced appeal.  

Expect the company to assert there was not enough proof for the jury to award actual damages and that there was no “clear and convincing” evidence of fraud, malice or willful misconduct, which is required for a punitive damage award.

It is also worth noting the plaintiffs did not sue the owner of Kinlaw Farms, but instead targeted Murphy-Brown in its role as the processor of the hogs raised there. If an appellate court finds only the farm owner could be sued or should bear some responsibility, the entire verdict could be in doubt.

Another potential issue for appeal is comments reportedly made by the judge at the end of the trial before jurors were sent to deliberate. According to media accounts, the judge announced, “My only comment is that I am tired of looking at that dirty hog,” referring to a life-size, waste-covered hog model that sat in the courtroom during the trial.

If the company chooses, it could argue the judge’s comments prejudiced the jury, which could lead to a new trial altogether.

The eventual impact of this verdict will not be known for quite a while based on the work required to complete an appeal. In the meantime, the “landmark” label needs to be shelved while our courts determine the final outcome.  NP