State Court of Appeals hears arguments in challenge to legislature’s limits on hog nuisance lawsuits

Eastern NC residents say industry-initiated prohibitions in 2017 and 2018 Farm Acts are unconstitutional  

On Wednesday afternoon, a 90-minute court hearing boiled down to an essential question: Do the Farm Acts of 2017 and 2018 — still controversial years after their enactment — provide a “right without a remedy”?

And if there is no remedy — in this situation, the right to file a nuisance suit against Smithfield Foods and the plethora of industrialized hog farms it controls, said Burton Craige, attorney for the plaintiffs, — the right “is an illusion.” 

Civil rights attorneys Craige and Elizabeth Haddix are representing REACH, a group of Eastern North Carolina residents, in a legal challenge to the Farm Act.

The plaintiffs attorneys asked the three appeals court justices — John Tyson, Jefferson Griffin and Fred Gore — not to rule on the constitutionality of the Farm Acts, but rather to correct what they view as a major error by a lower court.

In 2020, a three-judge panel in Wake Superior Court dismissed the plaintiffs’ constitutional challenges. On appeal, the plaintiffs are asking that the case return to Superior Court to be reviewed under a different method — one in which the government is less likely to prevail.

The Superior Court judges applied a “rational basis” review to the case. This method evaluates whether a government’s actions are a legitimate and “rational” state interest. 

Courts that apply “rational basis” overwhelmingly find in favor of the government and uphold the challenged law, according to several legal journals.

Craige argued that the Superior Court should have applied a different method of review, known as a “means-ends” test to determine the constitutionality of the Farm Acts.

This method poses three questions that represent a higher bar for the government.

• Is the law necessary to accomplish the government’s goals?
• Is the law reasonable in its degree?
• And is the law enacted for a public purpose?

“The fundamental right to property is as old as our state” Craige said, quoting NC Supreme Court Chief Justice Paul Newby. “Property includes not only thing possessed but the right to land to possess, to use, to enjoy and to dispose of …”

Craige argued that Farm Acts of 2017 and 2018 — House Bill 467 and Senate Bill 711, respectively — denied neighbors of agricultural and forestry operations that fundamental right.

Legislation passed at the behest of industry

Lawmakers introduced and passed both bills in direct response to federal nuisance lawsuits filed by hundreds of neighbors of industrialized hog farms in eastern North Carolina.

Gov. Cooper vetoed both bills, but they became law after legislative overrides. 

Policy Watch reported at the time that lawmakers, including Rep. Jimmy Dixon and Sen. Brent Smith, openly stated that the purpose of the Farm Acts was to immunize the hog industry, primarily Smithfield, from nuisance suits. 

(On the Senate floor, Floyd McKissick Jr., a Durham Democrat, objected to the 2017 bill, calling its provisions “a carve-out.”)

These legislative pronouncements, Craige argued, indicate that the Farm Acts were “not enacted for public purpose but a private purpose.” 

Nathan Huff, an outside attorney hired by state lawmakers, has represented the Farm Bureau in other cases. He called agriculture “essential to health and welfare and prosperity of state.” For that reason, the Farm Acts are not a special consideration for the hog industry, but a “public benefit.”

Judge Gore seemed to agree. “I can only imagine what would happen if agriculture was taken out of state.”

(Considering the amount of investment — $100 million in Smithfield’s Tar Heel slaughter plant alone — that’s an unlikely scenario.)

Environmental and social justice advocates viewed the Farm Act of 2017 as an opening salvo. It limited the amount of compensatory damages plaintiffs could recover if they prevail in a nuisance suit. Winning plaintiffs could receive money equivalent to the devaluation of their property, but not to exceed its value. Nor could they recover damages for any loss of quality of life.

(The 2017 Act didn’t affect the ongoing federal suits, although Murphy-Brown/Smithfield unsuccessfully tried to make the legislation retroactive.)

During the committee debates, several members of the public, including neighbors, noted that existing law protected Smithfield from frivolous lawsuits. 

“There’s no evidence Smithfield needed the law,” Craige told the court — or that it was necessary to accomplish the government’s goals, another prong of the means-ends test.

By the summer of 2018, two juries had found for the plaintiffs, with proposed payouts from Smithfield of $50 million. A state cap on punitive damages required a federal judge to reduce the amount to $3.25 million, but Smithfield was taken aback by the verdicts. 

These losses prompted lawmakers to further restrict, and for practical purposes, eliminate North Carolinians’ ability to sue farmers and foresters for nuisance. 

Making it all but impossible to sue

Under the Farm Act of 2018, neighbors can’t sue unless they do so within a year that the farm begins operating. Since all of North Carolina’s hog farms began operating before 1997, when a moratorium on new or expanded farms went into effect, it’s nearly impossible to sue for nuisance.

The law also set a geographic radius for neighbors who are eligible to sue for nuisance: a half-mile of a problematic farm.

Hog farms that operate negligently are exempt from nuisance suits, as long as the state has not cited them for civil or criminal penalties for water quality violations in the past three years; degraded air quality is not grounds for a nuisance suit. 

For the rare neighbor who somehow navigates all of the restrictions, the law forbids the person from recovering punitive damages, which juries can assess for “willful or wanton” conduct — and did in cases involving Smithfield.

And a series of exclusions “double-locked the door,” Craige argued.

Farms and forestry operations can’t be sued for nuisance if the ownership or type of agriculture changes — from chickens to hogs, for example. These entities are also immune even if they expand or install new technology — like biogas systems. 

Because of these restrictions, the Farm Acts, Craige argued, are not reasonable in their degree, a third provision of the means-ends test.

“No change, however radical will meet the threshold,” Craige told the court.

Huff contended that lawmakers were within their constitutional authority when they passed the Farm Acts. He asked the judges to reject the plaintiffs’ arguments and let the lower court’s ruling stand. 

“These are public interest groups,” Huff said of the plaintiffs, “and they lost that policy debate.” He denied that the laws are equivalent to a “total ban.” 

“You can get full value of your property,” Huff told the court. “That’s not an annihilation.” 

“There are definite remedies and restrictions and preconditions,” he acknowledged. “You can argue the laws are too strict,” Huff told the court, “but they are within the purview of the General Assembly.”

Tyson replied: “So long as it’s constitutional.”

There is no timetable for the court to rule. Either side can appeal the decision to the state Supreme Court.