Mckiver v. Murphy-Brown, LLC

980 F.3d 937 (4th Cir. 2020)

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Nature of the Case

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Facts

D is a commercial hog producer, who contracted with third-party 'grower' Kinlaw Farms LLC to operate an industrial hog feeding facility in Bladen County. D is a single-member LLC of a wholly-owned subsidiary of Smithfield Foods, Inc. which is in turn owned by WH Group Limited (WH Group), a publicly-traded company based in Hong Kong. Operators like D require their contract growers like Kinlaw Farms to comply with specific policies. They impose standard operating procedures for all of its contract growers. D (1) directs grower management procedures; (2) mandates design and construction of operations; (3) can require the use of technological enhancements; (4) can require capital investments; (5) dictates how many of its hogs are to be placed at a given operation; and (6) controls hog waste management systems. Ps are residents who owned properties near Kinlaw Farms. Kinlaw Farms annually maintained nearly 15,000 hogs. They generate 153,000 pounds of feces and urine daily. Kinlaw Farms housed the hogs in hog sheds that used vents and fans to move fumes from the hogs to the outside of the building. The waste in the sheds fell through slats in the flooring, where the waste was then stored in three open-air pits within view of Ps'' homes. These pits or 'lagoons' contained millions of gallons of hog waste. At D's direction, Kinlaw Farms used a lagoon-and-sprayfield method for hog waste disposal. Kinlaw Farms drained waste from the lagoons and spread it across open 'sprayfields' on the Kinlaw Farms property. Approximately eight million gallons of hog feces were sprayed in the air annually at Kinlaw Farms. D routinely visited the Kinlaw Farms property for inspections. D instructed its growers to refrain from applying the hog waste to sprayfields 'out of respect for their neighbors' if the contractor was aware that neighbors planned to have guests over for weddings or cookouts. Spraying occurred regularly three to five days a week for an average of six hours per day. Trucks frequented Kinlaw Farms to deliver new hogs, take away live hogs, and pick up dead hogs. Trucks ran at an all-day, all-night pace. Hog carcasses pending pickup were stored in 'dead boxes,' dumpsters placed in open fields on the Kinlaw Farms property. These would pile up and rot in these dumpsters in open fields until collection of the carcasses was scheduled. They attracted dozens of buzzards and flies that would accumulate around the dead boxes and pour over into neighboring properties. Agricultural experts and lay media alike researched and reported environmental effects associated with industrial hog operations. D was aware of the articles, scientific studies, and state government documents reporting the effects of odor, including upper respiratory and gastrointestinal ailments, on neighbors of concentrated animal feeding operations like Kinlaw Farms. D routinely opposed regulations that would require lagoon-and-sprayfield operations to curtail their effects on neighbors. D was fully aware of the complaints. All parties agreed Kinlaw Farms consistently followed D's policies, compliance which D actively monitored. D had never monitored odor at any operation nor terminated a grower because of complaints about odor. In 1997, North Carolina banned new lagoon-and-sprayfield hog operations. Kinlaw Farms was grandfathered in. In 1999, North Carolina's governor announced an intention to end lagoon-and-sprayfield operations. D's parent company signed an agreement with the Attorney General of North Carolina to fund research for replacement technologies and to implement technologies found to be feasible. In 2006, a scientific expert identified alternative abatement technologies but, they were not deemed economically feasible for existing hog farms. This 2006 feasibility analysis did not consider D's profits or ability to pay. In 2013, Ps eventually filed a suit in federal court naming D only. The jury returned a verdict awarding $75,000 in compensatory damages to each of the ten P and also awarding $5 million in punitive damages. The district court then applied North Carolina's punitive damages cap, reducing the total punitive award to $2.5 million. After the judgment, D terminated its relationship with Kinlaw Farms and withdrew its hogs from that facility, alleging that Kinlaw Farms failed to 'comply with standard operating procedures.' D asserts, 'the jury's nuisance finding effectively required that Kinlaw Farm cease operations until any nuisance is abated.' D’s third argument in this appeal is that North Carolina private nuisance law bars recovery of compensatory damages of any kind, other than damages for reduction in the harmed properties' fair market or rental value.