Joyce McKiver v. Murphy-Brown, LLC

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 19-1019

JOYCE MCKIVER; DELOIS LEWIS; DAPHNE MCKOY; ALEXANDRIA

MCKOY; ANTONIO KEVIN MCKOY; ARCHIE WRIGHT, JR.; TAMMY

LLOYD; DEBORAH JOHNSON; ETHEL DAVIS; PRISCILLA DUNHAM,

Plaintiffs - Appellees,

and

DENNIS MCKIVER, JR.; LAJUNE JESSUP; DON LLOYD, Administrator of the

Estate of Fred Lloyd; TERESA LLOYD; TANECHIA LLOYD; CARL LEWIS;

ANNETTE MCKIVER; KAREN MCKIVER; BRIONNA MCKIVER; EDWARD

OWENS; DAISY LLOYD; A. (DAUGHTER); A. (SON),

Plaintiffs,

v.

MURPHY-BROWN, LLC, d/b/a Smithfield Hog Production Division,

Defendant – Appellant.

------------------------------

AMERICAN FARM BUREAU FEDERATION; NATIONAL PORK

PRODUCERS COUNCIL; NORTH CAROLINA FARM BUREAU

FEDERATION; NORTH CAROLINA PORK COUNCIL; NORTH AMERICAN

MEAT INSTITUTE; NATIONAL ASSOCIATION OF MANUFACTURERS;

GROCERY MANUFACTURERS ASSOCIATION; CHAMBER OF

COMMERCE OF THE UNITED STATES OF AMERICA; NATIONAL TURKEY

FEDERATION; NATIONAL CHICKEN COUNCIL; JOEY D. CARTER; JOEY

CARTER FARMS; WILLIAM R. KINLAW; KINLAW FARMS, LLC; PAUL

STANLEY; PAGLE CORP.; GREENWOOD LIVESTOCK, LLC,

Amici Supporting Appellant.

LAW PROFESSORS WITH EXPERTISE IN TORT AND REGULATORY LAW;

AMERICAN ASSOCIATION FOR JUSTICE; NORTH CAROLINA JUSTICE

CENTER; HUMANE SOCIETY OF THE UNITED STATES; PUBLIC JUSTICE,

P.C.; FOOD & WATER WATCH; WATERKEEPER ALLIANCE, INC.; NORTH

CAROLINA ENVIRONMENTAL JUSTICE NETWORK; RURAL

EMPOWERMENT ASSOCIATION FOR COMMUNITY HELP; DR.

LAWRENCE CAHOON; ELIZABETH CHRISTENSON; DR. BRETT

DOHERTY; MIKE DOLAN FLISS; DR. JILL JOHNSTON; BOB MARTIN; DR.

SARAH RHODES; DR. ANA MARIA RULE; DR. SACOBY WILSON; DR.

COURTNEY WOODS,

Amici Supporting Appellee.

Appeal from the United States District Court for the Eastern District of North Carolina, at

Wilmington. W. Earl Britt, Senior District Judge. (7:14-cv-00180-BR; 5:15-cv-

00013.BR)

Argued: January 31, 2020 Decided: November 19, 2020

Before WILKINSON, AGEE and THACKER, Circuit Judges.

Affirmed in part, vacated and remanded in part by published opinion. Judge Thacker wrote

the opinion, in which Judge Wilkinson concurred. Judge Wilkinson wrote a concurring

opinion. Judge Agee wrote an opinion concurring in part and dissenting in part.

ARGUED: Stuart Alan Raphael, HUNTON ANDREW KURTH, LLP, Washington, D.C.,

for Appellant. Tillman J. Breckenridge, PIERCE BAINBRIDGE BECK PRICE &

HECHT, LLP, Washington, D.C., for Appellee. ON BRIEF: Robert M. Tata,

Washington, D.C., Trevor S. Cox, Kevin S. Elliker, David M. Parker, HUNTON

ANDREWS KURTH LLP, Richmond, Virginia, for Appellant. Mona Lisa Wallace, John

Hughes, WALLACE AND GRAHAM, P.A., Salisbury, North Carolina; Tanya Fridland,

PIERCE BAINBRIDGE BECK PRICE & HECHT, LLP, Washington, D.C., for

Appellees. Michael B. Kimberly, Washington, D.C., Timothy S. Bishop, Brett E. Legner,

Jed Glickstein, Chicago, Illinois, Michael B. Kimberly, MAYER BROWN LLP,

Washington, D.C.; Ellen Steen, Travis Cushman, AMERICAN FARM BUREAU

FEDERATION, Washington, D.C.; Phillip Jacob Parker Jr., NORTH CAROLINA FARM

2

BUREAU FEDERATION, Raleigh, North Carolina; Michael C. Formica, NATIONAL

PORK PRODUCERS COUNCIL, Washington, D.C., for Amici The American Farm

Bureau Federation, National Pork Producers Council, North Carolina Farm Bureau

Federation, and North Carolina Pork Council. Daryl L. Joseffer, Michael B. Schon,

UNITED STATES CHAMBER LITIGATION CENTER, Washington, D.C., for Amicus

Chamber of Commerce of the United States of America. Sean Marotta, HOGAN

LOVELLS US LLP, Washington, D.C., for Amici Chamber of Commerce of the United

States of America, North American Meat Institute, National Association of Manufacturers,

Grocery Manufacturers Association, National Turkey Federation, and National Chicken

Council. Matthew Nis Leerberg, Kip D. Nelson, Troy D. Shelton, FOX ROTHSCHILD

LLP, Raleigh, North Carolina, for Amici Joey D. Carter, Joey Carter Farms, William R.

Kinlaw, Kinlaw Farms, LLC, Paul Stanley, Pagle Corp., and Greenwood Livestock, LLC.

Steven M. Virgil, WAKE FOREST UNIVERSITY SCHOOL OF LAW, Winston-Salem,

North Carolina, for Amici Law Professors with Expertise in Tort and Regulatory Law.

Elise Sanguinetti, President, Jeffrey R. White, AMERICAN ASSOCIATION FOR

JUSTICE, Washington, D.C.; David Arbogast, ARBOGAST LAW, San Carlos,

California, for Amicus American Association for Justice. Elizabeth Haddix, Mark

Dorosin, JULIUS L. CHAMBERS CENTER FOR CIVIL RIGHTS, Carrboro, North

Carolina, for Amici North Carolina Environmental Justice Network and the Rural

Empowerment Association for Community Help. Emily P. Turner, NORTH CAROLINA

JUSTICE CENTER, Raleigh, North Carolina; J. Jerome Hartzell, HARTZELL &

WHITEMAN, LLP, Raleigh, North Carolina, for Amicus North Carolina Justice Center.

Anna Frostic, Laura Fox, Peter Brandt, THE HUMANE SOCIETY OF THE UNITED

STATES, Washington, D.C., for Amicus The Humane Society of the United States.

Marianne Engelman-Lado, YALE SCHOOL OF FORESTRY & ENVIRONMENTAL

STUDIES, New Haven, Connecticut; Peter Hans Lehner, Alexis Andiman,

EARTHJUSTICE, New York, New York, for Amici Dr. Lawrence B. Cahoon, Elizabeth

Christenson, Dr. Brett Doherty, Mike Dolan Fliss, Dr. Jill Johnston, Bob Martin, Dr. Sarah

Rhodes, Dr. Ana María Rule, Dr. Sacoby Wilson, and Dr. Courtney Woods. Tarah

Heinzen, FOOD & WATER WATCH, Washington, D.C., for Amicus Food & Water

Watch. David S. Muraskin, Jessica L. Culpepper, Kellan Smith, PUBLIC JUSTICE, P.C.,

Washington, D.C., for Amici Public Justice and Food & Water Watch. Chandra T. Taylor,

Blakely Hildebrand, Nick Jimenez, SOUTHERN ENVIRONMENTAL LAW CENTER,

Chapel Hill, North Carolina, for Amicus Waterkeeper Alliance.

3

THACKER, Circuit Judge:

Murphy-Brown, LLC (“Appellant”) challenges a jury verdict against it awarding

compensatory and punitive damages to neighbors of its hog production facilities. Those

neighbors, residents of rural Bladen County, North Carolina, sought relief under state

nuisance law from odors, pests, and noises they attribute to farming practices Appellant

implemented at an industrial-scale hog feeding farm. Having heard evidence of those

harms and Appellant’s role in creating them, a jury returned a verdict in favor of the

neighbors, to the tune of $75,000 in compensatory damages per plaintiff, along with a total

of $5 million in punitive damages, which was subsequently reduced to $2.5 million due to

North Carolina’s punitive damages cap.

Appellant asserts seven reasons why we should overturn the decision below and

grant a new trial. For the reasons detailed below, we affirm the jury’s verdict as to liability

for compensatory and punitive damages, but we vacate the award of punitive damages and

remand for a rehearing on that issue based on our evidentiary standards.

I.

A.

Appellant is a commercial hog producer, who contracted with third-party “grower”

Kinlaw Farms LLC (“Kinlaw Farms”) to operate an industrial hog feeding facility in

Bladen County, North Carolina. 1 Appellant is a single-member LLC of a wholly owned

1

Appellant is a vertically integrated hog producer, which means Appellant farms

hogs on an industrial scale by controlling each stage of pork production from the raising

and feeding of the livestock to slaughter and packaging for sale. Appellant operates in part

(Continued)

4

subsidiary of Smithfield Foods, Inc. (“Smithfield”), which is in turn owned by WH Group

Limited (“WH Group”), a publicly traded company based in Hong Kong.

Industrial farming operators like Appellant require their contract growers like

Kinlaw Farms to comply with specific policies. The controlling industrial farmer issues

detailed mandates to its growers in order to ensure consistency across their various contract

operations. Appellant imposes standard operating procedures for all of its contract

growers. Specifically, Appellant (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.

Joyce McKiver, Delois Lewis, Daphne McKoy, Alexandria McKoy, Antonio Kevin

McKoy, Archie Wright, Jr., Tammy Lloyd, Deborah Johnson, Ethel Davis, and Priscilla

Dunham (collectively, “Appellees”) are North Carolina residents who owned properties

near Kinlaw Farms. Appellees are a subset of a number of plaintiffs (“Plaintiffs”) who

sued Appellant for alleged nuisances associated with the hog operations at Kinlaw Farms.

The operation at Kinlaw Farms annually maintained nearly 15,000 of Appellant’s

hogs. These hogs generated approximately 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. By design, the hog waste in the sheds fell through

by supplying livestock and feed to contractors known as “growers” who house and care for

Appellant’s hogs for certain portions of the animals’ life cycle, subject to Appellant’s

control.

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slats in the flooring, where the waste was then stored in three open-air pits within view of

Appellees’ homes. These pits or “lagoons” contained millions of gallons of hog waste.

As part of its standard operating procedures for contract growers, Appellant wrote

the policy dictating how Kinlaw Farms disposed of the waste from Appellant’s hogs. At

Appellant’s direction, Kinlaw Farms used what is known as the lagoon-and-sprayfield

method for hog waste disposal. Kinlaw Farms periodically 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.

Appellant was aware of the proximity of Kinlaw Farms to neighboring residences

because Appellant’s corporate predecessor had sited and designed the facility, and

Appellant routinely visited the Kinlaw Farms property for inspections. Notably, because

of its operations’ proximity to surrounding properties, Appellant 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. Despite this policy, spraying of hog waste in summer months occurred at Kinlaw

Farms as regularly as three to five days a week for an average of six hours per day.

Additionally, through its contractual arrangement, Appellant was solely responsible

for the Kinlaw Farms trucking schedule and for the decision of where to site the facility’s

entrance road that passed near Appellees’ properties. Trucks frequented Kinlaw Farms on

a regular basis to deliver new hogs, take away live hogs, and pick up dead hogs. Appellant

set Kinlaw Farm’s delivery and pickup schedules for trucks at an all-day, all-night pace.

6

As an example, on one night in 2016, at least 12 trucks passed through to the Kinlaw Farms

property between midnight and six in the morning.

At Appellant’s direction, hog carcasses pending pickup were stored in “dead boxes,”

dumpsters placed in open fields on the Kinlaw Farms property. Hog carcasses would pile

up and rot in these dumpsters in open fields until collection of the carcasses was scheduled.

These dead boxes attracted dozens of buzzards and flies that would accumulate around the

dead boxes and frequent Appellees’ neighboring properties.

B.

For decades predating the lawsuit at issue here, agricultural experts and lay media

alike researched and reported environmental effects associated with industrial hog

operations in Eastern North Carolina. Indeed, Appellant itself collected and stored

hundreds of newspaper articles documenting neighbors’ complaints about lagoon-and-

sprayfield industrial hog operations and was aware of 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. For years, Appellant defended its practices against critics in North Carolina

communities and public offices, and routinely opposed regulations that would require

lagoon-and-sprayfield operations to curtail their effects on neighbors. In particular,

Appellant’s former director Don Butler admitted that Appellant was aware of Bladen

County community complaints about unabated lagoon-and-sprayfield hog operations of the

7

kind Appellant prescribed to its growers -- specifically that individuals were complaining

about “odor, flies, noise, trucks, [and] interference with their quality of life.” J.A. 7466. 2

Although there is no evidence of complaints made directly to Appellant about

Kinlaw Farms specifically, Kinlaw Farms did receive complaints from one plaintiff in this

suit and another neighbor, who also complained about Kinlaw Farms to the North Carolina

Department of Environment and Natural Resources. The record demonstrates that all

parties agreed Kinlaw Farms consistently followed Appellant’s policies, compliance which

Appellant actively monitored. Yet before the recent nuisance suits, Appellant had neither

monitored odor at any operation (including Kinlaw Farms), nor terminated a grower

because of complaints about odor.

C.

Reacting to mounting community pressure, in 1997, North Carolina banned new

lagoon-and-sprayfield hog operations. See N.C. Sess. Laws 1997–458. Existing farms

including Kinlaw Farms were grandfathered in and not subjected to the ban, but the North

Carolina legislature did bind the state’s Department of Agriculture to “develop a plan to

phase out the use of . . . lagoons and sprayfields as primary methods of disposing of animal

waste at swine farms.” See id. § 12.4(a). And in 1999, North Carolina’s governor

announced an intention to end lagoon-and-sprayfield operations.

The following year, Smithfield, Appellant’s parent company, signed an agreement

with the Attorney General of North Carolina to fund research for replacement technologies

2

Citations to the “J.A.” refer to the Joint Appendix filed by the parties in this appeal.

8

and to implement technologies found to be feasible (the “AG Agreement”). In 2006, the

scientific expert designated by the AG Agreement identified alternative abatement

technologies but, applying the AG Agreement’s criteria, the designee did not deem those

technologies economically feasible at that time for existing hog farms. This 2006

feasibility analysis did not consider Smithfield’s profits or ability to pay.

Appellant’s growers were not expected to pay for waste management improvements

on their own. Because of the extensive control Appellant maintained over its contract

growers -- and the control in turn exerted over Appellant by Smithfield and its parent WH

Group -- Appellant’s president explained it had the power to implement abatement

technologies at its growers’ operations by prescribing those technologies and getting

money from the parent companies to help pay for them. Due to the integrated nature of

Appellant’s farming operations, company procedures would have Appellant receive

funding from the parent companies for waste management improvements it might choose

to implement.

D.

In 2013, Appellant and several of its contract growers, including Kinlaw Farms,

were sued in North Carolina state court by neighbors of their hog operations, including

Appellees. As Appellees explained, “after learning the full extent of [Appellant’s] control

over the operations causing the nuisance and the growers’ powerlessness to address it,” the

plaintiffs dismissed those state actions and refiled suit in federal court in the Eastern

District of North Carolina in 2014, naming Appellant only. Appellees’ Br. 16.

9

The district court for the Eastern District of North Carolina coordinated 26 related

cases filed by neighbors of Appellant’s various hog operations as part of a Master Case

docket. 3 During the Master Case proceedings, the district court issued a number of

decisions, including denying Appellant’s motion for judgment on the pleadings based on

failure to join its contract farmers including Kinlaw Farms as necessary parties. The court

also denied Appellant’s motion to dismiss claims for noneconomic damages and motion

for partial summary judgment on the plaintiffs’ punitive and annoyance damage claims.

On the other hand, the court granted the plaintiffs’ motion for partial summary judgment

on Appellant’s statute of limitations defense.

In the fall of 2017, the district court ordered trials to move forward from the Master

Case docket, with Appellees’ case being first in line. During the trial, the district court

denied Appellant’s motion to bifurcate the punitive damages phase from the liability phase

of the trial and also denied Appellant’s evidentiary objections as to proof of profits,

executive compensation of its parent companies, and certain expert opinions. At the close

of all evidence, the district court denied Appellant’s motion for judgment as a matter of

law as to (i) the sufficiency of evidence to support punitive damages; (ii) vicarious liability;

3

In all, this opinion refers to three sets of plaintiffs involved in suits against

Appellant. Complainants in the Master Case Docket cases were neighbors of Appellant’s

various hog operations. Among this broadest set of neighbor plaintiffs were our Plaintiffs,

neighbors of Kinlaw Farms whose claims related particularly to Appellant’s operations

there. Appellees are a subset of the Plaintiffs who originally brought suit against Appellant

over the Kinlaw Farms operation.

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(iii) the statute of limitations; and (iv) evidence supporting fear of future injuries. And,

before submitting the case to the jury, the district court rejected Appellant’s proposed jury

instructions relating to the (i) statute of limitations; (ii) scope of available compensatory

damages; and (iii) vicarious liability for contractors.

In Spring 2018, the jury returned a verdict awarding $75,000 in compensatory

damages to each of the ten Appellees 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. See N.C. Gen. Stat. § 1D-25(b) (limiting per-plaintiff

punitive damages to the greater of $250,000 or treble compensatory damages); Rhyne v. K-

Mart Corp., 594 S.E.2d 1, 5 (N.C. 2004) (explaining N.C. Gen. Stat. § 1D-25 “applies to

limit recovery of punitive damages per each plaintiff”). Appellant timely appealed,

challenging each of the rulings noted above.

Following the judgment, Appellant terminated its relationship with Kinlaw Farms

and withdrew its hogs from that facility, alleging in the termination letter that Kinlaw

Farms failed to “comply with standard operating procedures.” J.A. 9593 (quoting May 4,

2018 Kinlaw Letter at 2, McKiver v. Murphy-Brown, LLC, No. 14-cv-00180-BR (E.D.N.C.

Sept. 28, 2018), ECF No. 324-2). On appeal, Appellant asserts, “[t]he jury’s nuisance

finding effectively required that Kinlaw Farm cease operations until any nuisance is

abated.” Appellant’s Br. 12.

II.

Appellant raises seven purported errors on appeal, each of which Appellant

contends will require a new trial. We address each in turn.

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A.

Necessary and Indispensable Party

First, Appellant argues that Kinlaw Farms was a necessary and indispensable party

to this suit, and thus, should have been joined pursuant to Federal Rule of Civil Procedure

19. Appellant presented this argument to the district court in both a motion pursuant to

Federal Rule of Civil Procedure 12(c) and in a post-trial motion. The district court rejected

Appellant’s contentions on each occasion.

1.

We review a district court’s Rule 19 rulings for an abuse of discretion. Nat’l Union

Fire Ins. Co. of Pittsburgh v. Rite Aid of S.C., Inc., 210 F.3d 246, 250 (4th Cir. 2000)

(citation omitted). Generally, “[t]he inquiry contemplated by Rule 19 is a practical one,”

properly “addressed to the sound discretion of the trial court.” Coastal Modular Corp. v.

Laminators, Inc., 635 F.2d 1102, 1108 (4th Cir. 1980) (citations omitted).

2.

Rule 19 sets up “a two-step inquiry.” Owens-Illinois, Inc., v. Meade, 186 F.3d 435,

440 (4th Cir. 1999) (citation omitted). We ask “first whether the nonjoined party is

necessary under Rule 19(a) and then whether the party is indispensable under Rule 19(b).”

Gunvor SA v. Kayablian, 948 F.3d 214, 218 (4th Cir. 2020) (citation omitted).

Pursuant to Rule 19(a), a party is necessary if

(A) in that person’s absence, the court cannot accord

complete relief among existing parties; or

(B) that person claims an interest relating to the subject of

an action and is so situated that disposing of the action

in the person’s absence may: (i) as a practical matter

12

impair or impede the person’s ability to protect the

interest; or (ii) leave an existing party subject to a

substantial risk of incurring double, multiple, or

otherwise inconsistent obligations because of the

interest.

Fed. R. Civ. P. 19(a). A necessary party should be ordered into the action. See Owens-

Illinois, Inc., 186 F.3d at 440. But “[w]hen a party cannot be joined because its joinder

destroys diversity, the court must determine whether the proceeding can continue in its

absence or whether it is indispensable pursuant to Rule 19(b) and the action must be

dismissed.” Id. (citation omitted).

Rule 19(b) provides guidance on the identification of an indispensable party: “If a

person who is required to be joined if feasible cannot be joined, the court must determine

whether, in equity and good conscience, the action should proceed among the existing

parties or should be dismissed.” Fed. R. Civ. P. 19(b). In this regard, we are given the

following nonexclusive factors to consider:

(1) the extent to which a judgment rendered in the person’s

absence might prejudice that person or the existing parties;

(2) the extent to which any prejudice could be lessened or

avoided by: (A) protective provisions in the judgment; (B)

shaping the relief; or (C) other measures;

(3) whether a judgment rendered in the person’s absence would

be adequate; and

(4) whether the plaintiff would have an adequate remedy if the

action were dismissed for nonjoinder.

Id. “Courts are loath to dismiss cases based on nonjoinder of a party, so dismissal will be

ordered only when the resulting defect cannot be remedied and prejudice or inefficiency

will certainly result.” Owens-Illinois, Inc., 186 F.3d at 441 (citations omitted).

13

Neither prong of Rule 19 is to be applied merely as a “procedural formula.” Home

Buyers Warranty Corp. v. Hanna, 750 F.3d 427, 433 (4th Cir. 2014) (quoting Provident

Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 119 n.16 (1968)). To the

contrary, the “[d]ecisions must be made pragmatically, in the context of the substance of

each case, and courts must take into account the possible prejudice to all parties, including

those not before it.” Id. (citations and internal quotation marks omitted).

3.

Applying Rule 19(a), there is nothing before us to suggest that the district court

could not have “accord[ed] complete relief among existing parties” in this suit without the

addition of Kinlaw Farms, and Appellant does not so claim. Fed. R. Civ. P. 19(a)(1)(A).

Nor does Appellant argue that it would be subject to multiple or inconsistent judgments.

Fed. R. Civ. P. 19(a)(1)(B)(ii).

Instead, Appellant argues “Kinlaw Farms has significant pecuniary and contractual

interests threatened by this litigation.” Appellant’s Br. 55. This argument is aimed at the

second prong of Rule 19(a)’s test -- whether a third party “claims an interest relating to the

subject of an action” whose ability to protect that interest “as a practical matter” will be

impaired or impeded if excluded from the existing suit. Fed. R. Civ. P. 19(a)(1)(B)(i). This

aspect of the test “directs us to consider a non-joined party’s ability to protect its own

interests.” Home Buyers Warranty Corp., 750 F.3d at 433.

Appellant insists that Kinlaw Farms needed to be made a party to this suit in order

to protect its own interests. Yet Kinlaw Farms did not seek to join the suit or otherwise

“claim[ ] an interest relating to the subject of an action” before the district court, and

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Appellant did not assert a claim against Kinlaw Farms to bring the grower into the suit.

Fed. R. Civ. P. 19(a)(1)(B)(i). Unlike the instant case, our Rule 19(a) decisions Appellant

cites each involve a situation where the contracts or obligations of the “necessary” party

were being interpreted or were otherwise directly at issue. See Home Buyers Warranty

Corp., 750 F.3d at 434 (determining third parties “actively contesting their liability in state

court” under a contract and entitled to insurance by the defendants for construction defects

like those alleged had “a natural interest in any adjudication of the terms of [the] contract”);

Yashenko v. Harrah’s NC Casino Co., 446 F.3d 541, 552–53 (4th Cir. 2006) (deeming

necessary and indispensable the third party whose preferential hiring policy dictated the

defendant casino operator’s conduct, where the court would be deciding the legality of the

policy); Nat’l Union Fire Ins. Co. v. Rite Aid of S.C., Inc., 210 F.3d 246, 251 (4th Cir.

2000) (indicating that the court’s decision would “necessarily require it to interpret the

notice provisions of the policy and other agreements” between the plaintiff and the absent

party).

“[E]ven if [an absent party] is alleged to have played a central role” in the action at

issue, “and even if resolution of the action will require the court to evaluate the absent

party’s conduct,” that party “in many cases . . . will not have interests that warrant

protection under Rule 19(a)(1)(B)(i).” Ward v. Apple Inc., 791 F.3d 1041, 1050 (9th Cir.

2015). The interest in question should “be more than a financial stake, and more than

speculation about a future event.” Id. at 1051 (internal quotation marks omitted).

Here, the suit’s practical consequence for the third party, Kinlaw Farms, was

Appellant’s termination of its grower relationship. But Appellant’s post-verdict

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termination of Kinlaw Farms was not a necessary or inevitable consequence of anything

resolved in this suit. Though no doubt financially difficult for Kinlaw Farms, that

termination was not compelled by the court’s decision and cannot control Appellees’ case.

Appellant’s termination letter to Kinlaw Farms suggested that Kinlaw Farms failed to

“comply with standard operating procedures.” J.A. 9593 (quoting May 4, 2018 Kinlaw

Letter at 2, McKiver v. Murphy-Brown, LLC, No. 14-cv-00180-BR (E.D.N.C. Sept. 28,

2018), ECF No. 324-2). But this is the exact opposite of what Appellant (and Appellees)

argued at trial, where both parties had contended that Kinlaw Farms followed Appellant’s

policies to the letter.

Nothing found by the jury in this case or mandated by the judgment required

Appellant’s termination of its relationship with Kinlaw Farms after the litigation was over.

The jury’s decision left Appellant free to continue its grower relationship with Kinlaw

Farms in a manner that respects the property rights of its neighbors if it so chose.

Appellant’s assessment of the costs and benefits of doing so -- and its business decision

based thereon -- cannot retroactively make Kinlaw Farms a necessary party.

And even assuming Kinlaw Farms was a necessary party, dismissal of a case is “a

drastic remedy that should be employed only sparingly.” Gunvor SA, 948 F.3d at 219

(quoting Home Buyers Warranty Corp., 750 F.3d at 433). Owing deference to the district

court’s determination under the abuse of discretion standard, we see no reason to hold that

Kinlaw Farms is a necessary party, let alone an indispensable one whose absence warrants

dismissal. Appellant’s arguments that Kinlaw Farms is indispensable are cursory and do

not creditably address any of the Rule 19(b) factors, other than pointing out that Plaintiffs

16

could have brought this suit against Kinlaw Farms and Appellant in state court. There is

nothing to indicate that the judgment rendered is not adequate or that Kinlaw Farms’s

absence unfairly prejudices either Kinlaw Farms or Appellant. We therefore affirm the

district court’s judgment as to Rule 19.

B.

Statute of Limitations

Next, Appellant contends the district court erred in rejecting its statute of limitations

defense. Appellant contended that Plaintiffs’ claims should have been barred by a three-

year statute of limitations applying to actions involving a “continuing” nuisance. In

response, Plaintiffs moved for partial summary judgment on Appellant’s statute of

limitations defense, asserting that this case involves a “recurrent” nuisance, for which the

three-year limit acts only to constrain the amount of damages available, not to completely

bar the claim. The district court partially denied Plaintiffs’ summary judgment motion

with regard to certain other affirmative defenses but held “as a matter of law” with regard

to the statute of limitations defense that the alleged nuisance was recurring. J.A. 3473. 4

Appellant alleges this was error. Appellant further claims the court erred in refusing to

give an instruction for the jury to decide whether the nuisance was continuing or recurring.

4

The denial of Plaintiffs’ summary judgment motion with regard to the other

affirmative defenses is not at issue in this appeal.

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1.

We review a district court’s summary judgment decision de novo, Woods v.

Berryhill, 888 F.3d 686, 691 (4th Cir. 2018) (citation omitted), and the court’s refusal to

grant a jury instruction for abuse of discretion, United States v. Savage, 885 F.3d 212, 222

(4th Cir. 2018). A district court’s refusal to provide a jury instruction is reversible only if

the defendant’s requested instruction “(1) was correct; (2) was not substantially covered by

the court’s charge to the jury; and (3) dealt with some point in the trial so important, that

failure to give the requested instruction seriously impaired the defendant’s ability to

conduct his defense.” Savage, 885 F.3d at 223 (quoting United States v. Lewis, 53 F.3d 29,

32 (4th Cir. 1995)).

2.

North Carolina law applies a three-year statute of limitations for suits based on

“trespass upon real property,” and this standard applies equally to nuisance actions. N.C.

Gen. Stat. Ann. § 1-52(3); Wilson v. McLeod Oil Co., 398 S.E.2d 586, 596 (N.C. 1990).

“When a trespass is a continuing one,” the suit must be “commenced within three years

from the original trespass, and not thereafter.” N.C. Gen. Stat. Ann. § 1-52(3). A

“continuing” nuisance (involving a single event causing ongoing damage) is materially

distinct from a “recurrent” nuisance (involving repeated injuries). See Wilson, 398 S.E.2d

at 596.

The North Carolina Supreme Court in Wilson v. McLeod Oil Co., Inc., 398 S.E.2d

586, 595 (N.C. 1990), made clear that the distinction between a continuing trespass and a

recurrent one hinges on whether there has been a completed act. The Wilson court

18

referenced a previous case in which it had rejected a statute of limitations defense for

repeated flooding:

“Suppose [the defendant] had lamed the plaintiff’s horse more

than three years ago, and he had continued lame ever since; the

action would be barred. So, as he first injured the plaintiff’s

land more than three years age, and it has continued injured

ever since, the action is barred.” [quoting the defendant].

The fallacy [in this premise] is in not drawing the distinction

between a single act of injury and continuous acts. In our case,

he flooded the land more than three years ago, it is true; and

for that the action is barred; but he has also continued to flood

it anew every day within three years, and for that the action

lies.

Id. (quoting Spilman v. Roanoke Nav. Co., 74 N.C. 675, 678 (1876) (emphasis in original)).

Noting this, the Wilson court refused to apply the statute of limitations to bar a suit where

plaintiffs complained of ongoing seepage of gasoline from a neighboring property. See id.

at 596. Because the invasion of the plaintiffs’ land stemmed from an ongoing leak, the

North Carolina Supreme Court concluded that it was a renewing or recurrent injury and

not complete. See id. Though damages were to be limited to the previous three-year

period, the court did not bar the plaintiffs’ nuisance suit from going forward even though

there was evidence to demonstrate that the plaintiffs knew of gasoline contamination well

before the three-year mark. See id.

Appellant itself cites Wilson in attempt to support its defense. However, Appellant

fails to apply the case’s analysis to the facts at hand. The harm claimed here is the loss of

use and enjoyment of property caused by repeated invasion by odor, noise, and pests.

Appellant argues that statements by Appellees referring to these invasions as constant

19

raised a material dispute of fact for the jury to decide whether the nuisance was continuing.

See, e.g., Appellant’s Br. 53 (citing one Appellee’s statement that “there’s not a day we

don’t have trouble with buzzards” (quoting J.A. 7425), another Appellee’s testimony that

“the odor was ‘always annoying’ and that she heard ‘hogs squealing all the time’” (quoting

J.A. 7754–55), and another Appellee’s statement “that traffic annoyed her ‘all the time,

day and night’” (quoting J.A. 7917)). In response, Appellees point out that interpreting

these statements as though there was literally unending odor, truck noise, and pests is

unreasonable. We agree with Appellees on this point.

Moreover, even at that most extreme, Appellees’ cited harms would be no less

constant than the gas seepage in Wilson, claims which were spared from the three-year

statute of limitations due to their recurrent nature. As the North Carolina Supreme Court

there explained, “[c]ontinuous injuries caused by the maintenance of a nuisance are barred

only by the running of the statute against recurrent trespasses . . . .” Wilson, 398 S.E.2d at

596 (emphasis supplied) (quoting Anderson v. Waynesville, 164 S.E. 583, 587 (N.C.

1937)). In this regard, it is important to note that Appellees did not rest their case on

establishing Kinlaw Farms constituted a nuisance per se. That is -- the nuisance alleged

was not simply the years-ago construction of a lagoon-and-sprayfield hog operation -- but

rather the ongoing maintenance of conditions that in fact caused harm.

Put in the simple terms of the Wilson court, the question before us is whether the

injurious act is completed or ongoing. See Wilson, 398 S.E.2d at 595 (quoting Spilman, 74

N.C. at 678). That is, do the harms flow from something done in the past as a single,

complete act or do the harms constitute a renewed, avoidable violation each time they

20

occur? Here, maintenance of odiferous, noisy, and pest-ridden farm operations resulted in

repeated -- i.e., recurrent -- invasions of Appellees’ properties. The nuisance was not the

solitary act of building a lagoon-and-sprayfield hog farm in the past but was instead the

practical operation of that farm in a manner inconsistent with its neighbors’ use and

enjoyment of their own properties. The district court’s decision as to the applicable statute

of limitations was therefore not legal error and refusing to give the inapplicable jury

instruction on continuing nuisances was not an abuse of discretion.

C.

Private Nuisance Damages

Appellant’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. Specifically, Appellant points to a 2017

amendment to North Carolina’s Right to Farm Act (the “2017 RTFA amendment”) enacted

three years after the filing of the lawsuit in this case. The 2017 RTFA amendment limited

compensatory damages in nuisance suits to the reduction in fair market value caused by

the nuisance (for permanent nuisances) and to the diminution in fair rental value (for

temporary nuisances). See N.C. Sess. Laws 2017-11, codified at N.C. Gen. Stat. § 106-

702. Appellant asserts that the amendment merely “clarified” this limitation on the

available forms of compensatory damages in North Carolina nuisance law. Appellant’s

Br. 44.

Because Appellees stipulated they were not seeking damages for property or rental

value losses and focused only on loss of use and enjoyment of their property, the parties

21

do not disagree that this suit if filed today would likely be barred by the 2017 RFTA

amendment. But the question before us is whether the 2017 RTFA amendment’s limitation

of damages actually changed the state’s law or simply clarified a preexisting principle. If

the former, the district court did not err; if the latter, Appellant’s argument holds water.

At summary judgment, the district court concluded that the issue of annoyance and

discomfort damages should go to the jury, citing longstanding North Carolina case law

allowing such recovery in nuisance suits, including compensation for “the inconvenience,

discomfiture, and unpleasantness sustained.” J.A. 3476 (quoting Thomason v. Seaboard

Air Line Ry., 55 S.E. 198, 204 (N.C. 1906)). In the face of that decision, Appellant still

sought a jury instruction that North Carolina plaintiffs “may not recover damages for

physical discomfort or annoyance.” J.A. 5373. The district court refused to give this

instruction.

1.

We review a district court’s summary judgment decision de novo, Woods, 888 F.3d

at 691, and the refusal of a jury instruction for an abuse of discretion, Savage, 885 F.3d at

222.

Both federal and North Carolina courts maintain a longstanding presumption against

retroactive application of legislation. See Landgraf v. USI Film Products, 511 U.S. 244,

265 (1994); Vanderbilt v. Atl. Coast Line R.R. Co., 125 S.E. 387, 391 (N.C. 1924). Indeed,

“the presumption is very strong that a statute was not meant to act retrospectively, and it

ought never to receive such a construction if it is susceptible of any other.” Vanderbilt,

125 S.E. at 391 (quoting U.S. Fid. & Guar. Co. v. United States, 209 U.S. 306, 314 (1908)).

22

We must not give a statute a retroactive construction “unless the words used are so clear,

strong and imperative that no other meaning can be annexed to them or unless the intention

of the Legislature cannot be otherwise satisfied.” Id. (quoting U.S. Fid. & Guar. Co., 209

U.S. at 314).

In North Carolina, “[t]he primary goal of statutory construction is to effectuate the

purpose of the legislature in enacting the statute.” State v. Curtis, 817 S.E.2d 187, 189

(N.C. 2018) (internal quotation marks omitted). “The intent of the General Assembly may

be found first from the plain language of the statute, then from the legislative history, the

spirit of the act, and what the act seeks to accomplish.” Midrex Techs., Inc. v. N.C. Dep’t

of Revenue, 794 S.E.2d 785, 792 (N.C. 2016) (quoting Lenox, Inc. v. Tolson, 548 S.E.2d

513, 517 (N.C. 2001)). And of course, “[a] statute will not be construed to have retroactive

effect unless that intent is clearly expressed or arises by necessary implication from its

terms.” In re Mitchell’s Will, 203 S.E.2d 48, 50 (N.C. 1974) (citations omitted). Case law

is thus very clear that we should look for clear signs of intentional and unavoidable

retroactive application if a statute is indeed to have that effect.

2.

Turning to the statute’s text, the 2017 RTFA amendment, enacted as HB 467 on

May 11, 2017, includes the following effective date language: “This act is effective when

it becomes law and applies to causes of action commenced or brought on or after that date.”

N.C. Sess. Laws 2017-11, codified at N.C. Gen. Stat. § 106-702. Appellees argue that our

inquiry should start and end with this provision inasmuch as they assert this language

speaks clearly about which causes of action fall under the amended law and no other part

23

of the statute provides such a “clear, strong and imperative” message. Vanderbilt, 125 S.E.

at 391 (quoting U.S. Fid. & Guar. Co., 209 U.S. at 314).

Appellant, for its part, points to the 2017 RTFA amendment’s title: “An Act to

Clarify the Remedies Available in Private Nuisance Actions Against Agricultural and

Forestry Operations.” N.C. Sess. Laws. 2017-11. This title, Appellant asserts, indicates

that the North Carolina General Assembly only intended the law to “clarify” existing law

rather than change anything substantive about the law. According to Appellant, this

distinction matters because North Carolina law provides, “[a] clarifying amendment, unlike

an altering amendment, is one that does not change the substance of the law but instead

gives further insight into the way in which the legislature intended the law to apply from

its original enactment.” Ray v. N.C. Dept. of Transp., 727 S.E.2d 675, 681 (N.C. 2012)

(citation omitted). If the 2017 RFTA amendment only clarified “the way in which the

legislature intended the law” to originally apply, the amendment would be stating the law

as it applied at the time of the pending suit as well as how it will apply going forward. Id.

(“[I]n addition to applying to all cases brought after their effective dates, [clarifying]

amendments apply to all cases pending before the courts when the amendment is adopted,

regardless of whether the underlying claim arose before or after the effective date of the

amendment.” (citations omitted)).

Evaluating each of these arguments, we note -- as do Appellees -- that the 2017

RTFA amendment expressly states it will apply to causes of action going forward. See

N.C. Sess. Laws 2017-11. And, apart from the amendment’s title, no provision lends itself

to a view that the legislature was merely “clarifying” North Carolina law on damages.

24

While we cannot ignore the act’s title, it does not control as compared to the operative text

of the statute. See United States v. Capers, 61 F.3d 1100, 1110 (4th Cir. 1995) (explaining

that the drafters’ characterization of an enactment as clarifying “cannot be accepted as

conclusive, because that would enable [them] to make substantive changes in the guise of

‘clarification’” (internal quotation marks omitted)).

Nevertheless, Appellant points to Ray v. North Carolina Department of

Transportation, 727 S.E.2d 675, 682 (N.C. 2012), which specifies that a prospective

effective date does not itself determine whether a law is clarifying or altering. In Ray, the

court held that the amendment relevant there was meant to clarify “the General Assembly’s

original intent” regarding claims created “when the legislature enacted the S[tate] T[ort]

C[laims] A[ct].” Id. There, the court explained, “[g]iven that all statutes have [ ] effective

dates, an effective date standing alone, is insufficient information” for the court to

determine whether an enactment is clarifying or substantive. Id.

But if the 2017 RTFA amendment is a “clarifying” one -- what precisely is it

clarifying? Before the 2017 amendment, North Carolina’s RTFA codified the “coming-

to-the-nuisance” defense, thereby limiting who could bring nuisance claims. But before

2017, the law did not contain any provision as to the damages available for those claims.

This situation poses a stark contrast to Ray and the examples it contains -- situations where

a statute “initially fails expressly to address a particular point” related to what the statute

originally set out or created. See Ray, 727 S.E.2d at 682 (suit at issue was brought under

the State Tort Claims Act, which originally “did not address the application of the public

duty doctrine to claims made under it” (emphasis supplied)); Ferrell v. Dep’t of Transp.,

25

435 S.E.2d 309, 311 (N.C. 1993) (law empowering department to reconvey property did

not specify at what price).

By contrast, here, the General Assembly added a new section to the RTFA expressly

limiting the damages available in private common law actions for nuisance. The RFTA

never previously purported to do anything of the sort. For the “clarifying” principle to

apply here, we would need to conclude that, through the original RFTA and its previous

amendments, the General Assembly intended -- but never saw fit to mention -- that the law

revoked a long-recognized measure of recovery in North Carolina nuisance suits, being the

loss of use and enjoyment of one’s property beyond mere property value. See, e.g., Hanna

v. Brady, 327 S.E.2d 22, 25 (N.C. Ct. App. 1985) (explaining the availability of “physical

pain, annoyance, stress, deprivation of the use and comforts of one’s home” as damages

“left to the sound judgment and discretion of the trier of fact”).

In Ray, the court concluded, “[b]ecause the legislature left essentially all [the state’s]

pre-amendment cases intact,” the amendment did not constitute “a complete change in the

law but instead only an explanation of the limited role of the public duty doctrine” to suits

brought pursuant to the State Tort Claims Act. 727 S.E.2d at 683. In the case of the 2017

RTFA amendment, however, stripping all but property value losses from traditional

nuisance suits did violence to North Carolina precedent. While it is true that the parties

here are able to cite to conflicting authorities, it is beyond debate that North Carolina case

law dating back over 100 years includes recognition of loss of use and enjoyment from

26

annoyance and discomfort, as well as other forms of damages now barred by the 2017

RTFA amendment. 5

Thus, the 2017 RTFA amendment represents a substantive, forward-looking change

in the law. This is supported by the legislative history and statements about the law’s

intended effect. Even focusing on Appellant’s substantive-versus-clarifying test, we have

nothing from which to conclude the 2017 RFTA amendments should apply retroactively.

In contrast, we have a multitude of backdrop principles guiding us firmly away from that

conclusion.

For one thing, the implications for vested rights -- and therefore the doctrine of

constitutional avoidance -- support rejection of retroactivity here.

Both the federal and North Carolina constitutions protect vested rights. See

Landgraf, 511 U.S. at 266 (noting the Fifth Amendment’s role in protecting vested rights);

Fogleman v. D & J Equip. Rental, Inc., 431 S.E.2d 849, 852 (N.C. 1993) (refusing

retroactive application of an amended statute where it “deprived appellants of vested rights

and, thus, was unconstitutionally retroactive”). Even where there are two reasonable

constructions of a statute’s language, we are to avoid adopting the unconstitutional reading.

See United States v. Mills, 850 F.3d 693, 699 (4th Cir. 2017).

5

See BSK Enters., Inc. v. Beroth Oil Co., 783 S.E.2d 236, 249–50 (N.C. Ct. App.

2016); Broadbent v. Allison, 626 S.E.2d 758, 762 (N.C. Ct. App. 2006); Evans v. Lochmere

Recreation Club, Inc., 627 S.E.2d 340, 343 (N.C. Ct. App. 2006); Whiteside Estates, Inc.

v. Highlands Cove, LLC, 553 S.E.2d 431, 440 (N.C. Ct. App. 2001); Hanna v. Brady, 327

S.E.2d 22, 25 (N.C. Ct. App. 1985); Barrier v. Troutman, 55 S.E.2d 923, 926 (N.C. 1949);

Oates v. Algodon Mfg. Co., 8 S.E.2d 605, 606 (N.C. 1940); Thomason v. Seaboard Air Line

Ry., 55 S.E. 198, 204 (N.C. 1906).

27

In North Carolina, the right to compensatory damages “vest in a plaintiff upon

injury.” Rhyne v. K-Mart Corp., 594 S.E.2d 1, 12 (N.C. 2004) (citation omitted).

Appellant’s only response to this point is to say that a right to annoyance damages did not

exist at the time of injury. But, as explained, the weight of North Carolina case law and

the district court’s determination on the basis of that law are to the contrary. And,

“annoyance” damages aside, the 2017 RTFA amendment limited available damages to only

reduction in market value (for permanent nuisances) and rental value (for temporary

nuisances). See N.C. Sess. Laws 2017-11, § 1; codified at N.C. Gen. Stat § 106-702(a).

This without question would strip plaintiffs in pending suits of vested rights to damages

noted even in Appellant’s authorities, such as “reasonable costs of replacement or repair

[and] restoration of the property to its prenuisance condition; and other added damages for

incidental losses.” Rudd v. Electrolux Corp., 982 F. Supp. 355, 372 (M.D.N.C. 1997).

Further, policy and justice concerns weigh against allowing retroactive amendments

to alter the damages available in pending suits. A decision in Appellant’s favor as to the

effect of the 2017 RTFA amendment would reward powerful defendants who, faced with

a possible judgment against them, could escape responsibility by raising a specter of doubt

about something the state’s courts have long made available. North Carolina’s legislators

were worried about the constitutionality and fairness of the RTFA’s amendment, and these

concerns motivated the change from the original language -- specifying it would apply to

pending cases -- to the current version applying only to claims filed on or after the effective

date. Motivated by all of the above concerns, we have previously declined to apply

responsive enactments and we do so here. See Ward v. Dixie Nat’l Life Ins. Co., 595 F.3d

28

164, 171–72 (4th Cir. 2010) (refusing to retroactively apply an amendment where, on first

appeal, we ruled for the plaintiffs and the state legislature then adopted a definition

purporting to affect pending cases that “was, in effect, that advocated by defendants and

rejected by this court”).

We therefore affirm the district court with regard to the availability of compensatory

damages beyond property or rental value in this case.

D.

Expert Testimony

Next, Appellant asserts the district court erred when it approved the testimony of

Appellees’ expert, Dr. Shane Rogers, but excluded certain opinions of Appellant’s own

expert, Dr. Pamela Dalton.

1.

We review a district court’s decisions on the admissibility of expert testimony for

abuse of discretion. United States v. Campbell, 963 F.3d 309, 313 (4th Cir. 2020).

Rule 702 of the Federal Rules of Evidence provides that a qualified expert witness

“may testify in the form of an opinion or otherwise if . . . [his or her] scientific, technical,

or other specialized knowledge will help the trier of fact to understand the evidence or to

determine a fact in issue.” Fed. R. Evid. 702(a). The expert’s testimony must be “based

on sufficient facts or data” and be “the product of reliable principles and methods.” Fed.

R. Evid. 702(b), (c). And “the expert [must] reliably appl[y] the principles and methods to

the facts of the case.” Fed. R. Evid. 702(d).

29

“Implicit in the text of Rule 702 is a district court’s gatekeeping responsibility to

‘ensur[e] that an expert’s testimony both rests on a reliable foundation and is relevant to

the task at hand.’” Nease v. Ford Motor Co., 848 F.3d 219, 229 (4th Cir.) (alteration in

original) (emphases in original) (quoting Daubert v. Merrell Dow Pharms., 509 U.S. 579,

597 (1993)). “With respect to reliability, the district court must ensure that the proffered

expert opinion is based on scientific, technical, or other specialized knowledge and not on

belief or speculation, and inferences must be derived using scientific or other valid

methods.” Id. (internal quotation marks omitted) (emphasis omitted). “Relevant evidence,

of course, is evidence that helps ‘the trier of fact to understand the evidence or to determine

a fact in issue.’” Id. (quoting Daubert, 509 U.S. at 591).

As the Supreme Court has repeatedly explained, Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993), offers district courts several guidepost

factors that the court “may consider” in assessing an expert’s evidentiary reliability to the

extent that the factors are relevant to the specific facts of the case at hand. See Kumho Tire

Co., Ltd. v. Carmichael, 526 U.S. 137, 141 (1999) (emphasis in original). These factors

include “[w]hether a theory or technique . . . can be (and has been) tested”; whether the

theory or technique “has been subjected to peer review and publication”; whether a given

technique has a “high known or potential rate of error and whether there are standards

controlling the technique’s operation”; and “[w]hether the theory or technique enjoys

general acceptance within a relevant scientific community.” Id. at 149–50 (internal

quotation marks omitted). These factors “may or may not be pertinent in assessing

30

reliability, depending on the nature of the issue, the expert’s particular expertise, and the

subject of his [or her] testimony.” Id. at 150 (internal quotation marks omitted).

2.

a.

Dr. Rogers

i.

Appellees called upon Dr. Shane Rogers to testify that a DNA marker of hog feces

could be found on the homes neighboring Kinlaw Farms, as support for the idea that hog

waste chemicals could and did reach their properties. The district court qualified Dr.

Rogers as “an expert in environmental engineering, . . . animal waste management

engineering and technology, and microbiology.” J.A. 6185. The district court was

informed that Dr. Rogers earned a Ph.D with honors in environmental engineering, has

held professorships in civil and environmental engineering for a decade, and previously

served as an environmental engineer at the United States Environmental Protection

Agency. His specialty was described as “the fate and transport of fecal pathogens.” Id. at

6184.

According to Appellant, Dr. Rogers offered unreliable opinions both in his report

and at trial. As support, Appellant cites purported errors in sample collecting and limited

training and experience of Dr. Rogers’s teams. Appellant further contends that Dr. Rogers

utilized a DNA indicator called Pig2bac to show the presence of fecal material “as a proxy

for odor” leaving the farm, even though he conceded that he is not an expert on how people

perceive odor and that this use of Pig2bac had not been peer-reviewed. Appellant’s Br. 35.

31

Appellant argues the district court did not discharge its Daubert “gatekeeping”

responsibility in admitting the testimony of Dr. Rogers. In this regard, Appellant asserts

that the court failed to “make any reliability findings” and did not use “Daubert’s

guideposts or any other factors to assess the reliability of [Rogers]’s testimony.”

Appellant’s Br. 34 (quoting Nease, 848 F.3d at 230). Appellant further complains that its

request for a Daubert hearing was refused.

ii.

As to the reliability of Dr. Rogers’s testimony, the errors Appellant alleges as to Dr.

Rogers’s sample collecting and labeling were explained to the district court in briefing as

resulting from Appellant’s last minute changes to the sampling location. Appellees

informed the court that these issues were fully considered in the report’s methodology.

And, while it is true that Dr. Rogers’s Pig2bac method itself has not been peer-reviewed,

this is only one of the several factors -- that do not “necessarily nor exclusively” apply in

every case. Kumho Tire Co. Ltd., 526 U.S. at 141 (citing the “flexible” nature of the

reliability test (quoting Daubert, 509 U.S. at 594)). “[A] trial court may consider one or

more of the more specific factors that Daubert mentioned when doing so will help

determine that testimony’s reliability.” Id.

Here, though Dr. Rogers’s work itself had not been peer-reviewed, Pig2bac, upon

which the report was based, has been used globally to demonstrate the traceability of swine

fecal wastes and was applied in this case using protocols for sampling and analysis by a

team of four Ph.D. holders, each with experience with field work, animal operations, and

environmental health and engineering. Moreover, Appellant was permitted to put on a

32

counter-expert, Dr. Jennifer L. Clancy, who critiqued Dr. Rogers’s report but who also

admitted that Dr. Rogers’s method “was acceptable,” at least “in some cases.” Dep. of

Jennifer Lee Clancy, Ph.D. at 4, McKiver v. Murphy-Brown, LLC, No. 14-cv-00180-BR

(E.D.N.C. Sept. 28, 2018), ECF No. 124-1.

Finally, any contention that Dr. Rogers was not qualified was met with evidence

that his area of expertise in waste management qualified him to opine on odor traceability,

waste management measures, and their testability. See Expert Report of Dr. Shane Rogers

at 4, McKiver v. Murphy-Brown, LLC, No. 14-cv-00180-BR (E.D.N.C. Sept. 28, 2018),

ECF No. 81-2 (citing Dr. Rogers’s work with livestock agriculture and related emissions

and “development of good management practices to decrease potential exposures of

manure pollutants to neighbors and downwind produce growing areas”). Although Dr.

Rogers is not (and never claimed to be) an expert on the ability of humans to perceive odor,

that is beside the point. Appellees called Dr. Rogers as an expert on tracing how the

compounds creating odor travel in agricultural settings.

Taking all of this information as a whole, we conclude that the district court did not

abuse its discretion in determining that Dr. Rogers’s opinions were both reliable and

relevant to the issues in this case.

iii.

Further, as to Appellant’s grievance that the district court ruled on the admissibility

of the testimony of Dr. Rogers without first affording Appellant a hearing, this argument

fails.

33

A trial court has “considerable leeway in deciding in a particular case how to go

about determining whether particular expert testimony is reliable.” Kumho Tire Co., Ltd.,

526 U.S. at 152 (emphasis supplied). As the Supreme Court has made clear, Daubert’s

factors “do not constitute a definitive checklist or test.” Id. at 150 (emphasis in original)

(internal quotation marks omitted). “[T]he gatekeeping inquiry must be tied to the facts of

a particular case.” Id. (internal quotation marks omitted). Importantly, “[t]he trial court

must have the same kind of latitude in deciding how to test an expert’s reliability, and to

decide whether or when special briefing or other proceedings are needed to investigate

reliability, as it enjoys when it decides whether or not that expert’s relevant testimony is

reliable.” Id. at 152 (emphasis in original).

As the Supreme Court has explained, the district court here was entitled to rely on

the parties’ materials without requiring further submissions or a Daubert hearing. The

district court’s ruling from the bench reflected that it considered the parties’ arguments and

briefing as to Dr. Rogers’s qualifications, area of expertise, and the relevance and reliability

of his report. We conclude that the district court had sufficient information before it -- as

detailed above -- such that refusing to grant a Daubert hearing was not an abuse of

discretion.

b.

Dr. Dalton

i.

According to Appellant, it was prejudiced by the district court’s “allowing only

Plaintiffs’ expert to testify on the central issue.” Appellant’s Br. 33 (emphasis in original).

34

While Dr. Rogers was permitted to testify, Appellant argues that its own odor expert, Dr.

Pamela Dalton, was improperly prevented from testifying about her “odor monitoring

study and her opinion regarding the lack of odor nuisance emanating from Kinlaw

Farm[s].” J.A. 8596. The district court qualified Dr. Dalton, a scientist specializing in

understanding the human perception of odor, as an odor expert, but it barred her from

offering certain testimony about odor monitoring she conducted at Kinlaw Farms.

Appellant’s arguments about the testimony of Dr. Dalton are inaccurate on a number of

levels.

First, contrary to Appellant’s assertions, the issues on which Dr. Rogers and Dr.

Dalton opined are not the same. 6 Dr. Rogers did not purport to opine as to whether odors

reaching Appellees’ properties constituted a nuisance or that an objective measure of

objectionable odors was even possible. Dr. Dalton, on the other hand, asserted “to a

reasonable degree of scientific certainty . . . that the normal operating activities at the farm

do not produce odors that travel offsite at an intensity, frequency or duration that would be

considered a nuisance level at the [Appellees’] properties.” Expert Report of Pamela

Dalton, Ph.D, MPH at 5, McKiver v. Murphy-Brown, LLC, No. 14-cv-00180-BR (E.D.N.C.

Sept. 28, 2018), ECF No. 96-1. Dr. Dalton also indicated, “It is generally agreed that unless

6

Though the Rules of Evidence do not guarantee perfect correspondence of adverse

expert witness testimony, Appellant was in any event permitted to use Dr. Jennifer L.

Clancy as a rebuttal witness to Dr. Rogers. Dr. Clancy’s testimony included her critique

of Dr. Rogers’s methodology and report.

35

an odor can be detected at a 7:1 dilution or higher, it is not an objectionable odor.” Id. at

4.

Citing its obligation to ensure “a valid scientific connection to the pertinent inquiry,”

Nease, 848 F.3d at 229 (quoting Daubert, 509 U.S. at 592), the district court rejected the

proposed testimony of Dr. Dalton as to the odor levels emanating from Kinlaw Farms.

Though the court did allow Dr. Dalton to testify about the unreliability of human self-

reports of odor, it excluded Dr. Dalton’s “testimony about the odor monitoring study and

her opinion regarding the lack of odor nuisance emanating from Kinlaw Farm[s].” J.A.

8596. The district court explained, “North Carolina (unlike some other jurisdictions) has

not adopted a dilution to threshold ratio or any other objective standard for assessing

whether an odor is objectionable,” and even Dr. Dalton recognized “the perception of odors

is a highly subjective experience.” Id. For these reasons, the district court concluded that

her testimony “would have a strong likelihood of confusing or misleading the jury,” and

her opinion based on her report would likewise “not be helpful to the jury and would be

confusing.” Id.

ii.

We conclude that the exclusion of Dr. Dalton’s odor monitoring testimony was not

an abuse of discretion. Though an expert’s “opinion is not objectionable simply ‘because

it embraces an ultimate issue to be decided by the trier of fact’ -- [here, whether the odors

leaving Kinlaw Farms created a nuisance] -- . . . such an opinion may be excluded if it is

not helpful to the trier of fact under Rule 702.” Kopf v. Skyrm, 993 F.2d 374, 377–78 (4th

Cir. 1993) (quoting Fed. R. Evid. 704(a)). Dr. Dalton purported to provide objective

36

evidence as to whether Kinlaw Farms was giving off odors constituting a nuisance and

asserted that odors below a particular threshold were not considered objectionable. Given

that North Carolina has not adopted an objective measurement for nuisance odors, and that

Plaintiffs themselves would be testifying about their experiences relative to the nuisance at

their respective properties, the district court’s judgment that Dr. Dalton’s testimony would

not be helpful and would in fact confuse the jury was not an abuse of discretion.

3.

The Supreme Court has cautioned appellate courts against “fail[ing] to give the trial

court the deference that is the hallmark of abuse-of-discretion review” in the expert

testimony context. General Elec. Co. v. Joiner, 522 U.S. 136, 143 (1997). “[I]t is very

much a matter of discretion with the court whether to receive or exclude the evidence;

[such that] the appellate court will not reverse in such a case, unless the ruling is manifestly

erroneous.” Id. at 142 (quoting Spring Co. v. Edgar, 99 U.S. 645, 658 (1879)). This is

true whether the evidence is physical or testimonial, from a lay witness or expert. See id.

Here, none of the concerns lodged by Appellant render the district court’s evidentiary

decisions “manifestly erroneous.” Id. (quoting Spring Co., 99 U.S. at 658). And

Appellant’s argument that the district court erred in admitting one expert without the other

fails to appreciate that the testimonies speak to different issues -- one to whether odor-

causing particles are present and the other to whether the odors were causing a nuisance --

not to mention that no such parity is guaranteed by the Rules of Evidence. We therefore

affirm the district court’s decisions as to admission and exclusion of the testimonies of Drs.

Rogers and Dalton, respectively.

37

E.

Jury Instruction as to Vicarious Liability for Nuisance

Next, Appellant contends the district court misstated North Carolina law in its jury

instruction on nuisance. Specifically, the district court instructed the jury that a party can

be vicariously liable for nuisance “if it employs an independent contractor to do work

which that party knows or has reason to know to be likely to involve the creation of a

nuisance.” J.A. 9165. This language was based on section 427B of the Restatement

(Second) of Torts (1965). Appellant claims, however, that this instruction misstated North

Carolina law because the North Carolina Supreme Court has not explicitly adopted the

language from this Restatement.

1.

“We review de novo whether the district court’s instructions to the jury were correct

statements of law.” Gentry v. East West Partners Club Mgmt. Co., 816 F.3d 228, 233 (4th

Cir. 2016) (quoting Emergency One, Inc. v. Am. FireEagle, Ltd., 228 F.3d 531, 538 (4th

Cir. 2000)). “Even if a jury was erroneously instructed, however, we will not set aside a

resulting verdict unless the erroneous instruction seriously prejudiced the challenging

party’s case.” Id. (emphasis in original) (quoting Bunn v. Oldendorff Carriers GmbH &

Co. KG, 723 F.3d 454, 468 (4th Cir. 2013)).

2.

First, we look to the language of Restatement section 427B, which states, “One who

employs an independent contractor to do work which the employer knows or has reason to

know to be likely to involve a trespass upon the land of another or the creation of a public

38

or a private nuisance, is subject to liability for harm resulting to others from such trespass

or nuisance.” The comments to section 427B explain that the section applies particularly

“where the contractor is directed or authorized by the employer to commit such a trespass,

or to create such a nuisance, and where the trespass or nuisance is a necessary result of

doing the work.” Restatement (Second) Torts § 427B cmt. b. But the section 427B rule

will apply even if the employer did not “direct[] or authorize[]” the nuisance; “[i]t is

sufficient that the employer has reason to recognize that, in the ordinary course of doing

the work in the usual or prescribed manner, the trespass or nuisance is likely to result.” Id.

3.

As Appellant indicates, North Carolina’s highest court has not expressly adopted

the Restatement provision at issue. But Appellees urge that North Carolina case law

demonstrates the Restatement’s “likely to” liability theory applies here.

First and foremost, we are mindful of our role as a federal court sitting in diversity.

In Rhodes v. E.I. du Pont de Nemours & Co., 636 F.3d 88 (4th Cir. 2011) we explained,

“[a] federal court acting under its diversity jurisdiction should respond conservatively when

asked to discern governing principles of state law.” Id. at 96 (citing Day & Zimmermann,

Inc. v. Challoner, 432 U.S. 3, 4 (1975) (per curiam)). As a result, “in a diversity case, a

federal court should not interpret state law in a manner that may appear desirable to the

federal court, but has not been approved by the state whose law is at issue.” Id. With this

principle in mind, in Rhodes, “we decline[d] the plaintiffs’ invitation to predict that the

West Virginia Supreme Court of Appeals would adopt the specific provisions of the

Restatement advanced by the plaintiffs.” Id. The Rhodes court identified a case from West

39

Virginia’s highest court directly conflicting with one of the Restatement theories the

plaintiffs urged and found nothing else to show the alternative theory had been “embraced”

by the state’s courts. See id. at 95–96.

“But in a situation where the [state’s highest court] has spoken neither directly nor

indirectly on the particular issue before us, we are called upon to predict how that court

would rule if presented with the issue.” Private Mortg. Inv. Servs., Inc. v. Hotel and Club

Assocs., Inc., 296 F.3d 308, 312 (4th Cir. 2002). The state’s intermediate appellate courts’

decisions “constitute the next best indicia of what state law is, although such decisions may

be disregarded if the federal court is convinced by other persuasive data that the highest

court of the state would decide otherwise.” Id. (internal quotation marks omitted).

We are therefore tasked with understanding whether North Carolina has embraced

the jury instruction’s rule, as borrowed from the Restatement.

4.

In Coastal Plains Utilities, Inc. v. New Hanover County, 601 S.E.2d 915 (N.C. Ct.

App. 2004) itself -- the case Appellant cites for what it says is a general rule against

contractor liability -- the intermediate Court of Appeals of North Carolina considered a

party’s argument that a contractor’s employer is liable for a trespass “if the independent

contractor’s trespass was committed at the direction of the employer, or where the work

necessarily involved a trespass or where trespass is likely to occur.” Id. at 925 (emphasis

supplied) (internal citations omitted). The plaintiff there directly cited Restatement section

427B for this principle and argued that the defendant’s water and sewer system was likely

to result in a trespass. See id. at 925–26. Without question, the court went straight to

40

applying the “likely to” test Appellant here challenges. Id. at 926. The independent

contractor rather than its employer designed the project, so the court observed, “[The

plaintiff] ha[d] not pointed to any evidence that the project, if properly designed, would

likely have caused a trespass. Without such evidence, the County could not be held liable

under this theory.” Id. at 926 (emphasis supplied). If “North Carolina does not hold

employers vicariously liable for hiring independent contractors to do work that is ‘likely’

to create a nuisance,” as Appellant contends, Appellant’s Br. 47 (emphasis in original), we

would expect that the Court of Appeals would have just said so, rather than attempting to

apply that very standard.

The district court’s jury instruction on the “likely to” exception here thus appears to

be consistent with North Carolina law. The district court here possessed North Carolina

precedent applying that very test, with nothing from the state’s highest court to suggest

otherwise. Application of the test appears in the very case Appellant advances to

demonstrate North Carolina’s rule. See Appellant’s Br. 47 (quoting Coastal Plains Utils.,

Inc., 601 S.E.2d at 923). Where the Rhodes court saw the West Virginia Supreme Court

of Appeals announcing a contrary rule to the Restatement and silence as to an alternative

Restatement theory, 636 F.3d at 96, the district court here was presented with North

Carolina precedent applying the exact exception provided in the jury instruction it selected.

Still, Appellant argues that the allegedly erroneous vicarious liability jury

instruction given by the district court “significantly prejudiced” Appellant’s defense and

permitted “reams of so-called ‘notice’ evidence about odor problems at other farms” to be

admitted. Appellant’s Br. 49 (emphasis omitted). In Appellant’s view, evidence that

41

Appellant knew of odor problems at contract grower operations other than Kinlaw Farms

would only be relevant under a theory of vicarious liability. But Appellant’s awareness of

the known issues associated with its prescribed farming methods is relevant under a direct

liability theory as well, such that -- even if the contested instruction as to vicarious liability

were erroneous -- prejudice did not result.

In North Carolina, harms caused by a “corporation’s acts or policies” constitute “a

theory of direct liability” in the punitive damages context. Everhart v. O’Charley’s Inc.,

683 S.E.2d 728, 737 (N.C. Ct. App. 2009). Therefore, the jury’s finding in favor of

punitive damages could rest on Appellant’s acts itself, in making and enforcing the

problematic policies and decisions, not merely on its direction of Kinlaw Farms. Evidence

of the known effects of Appellant’s policies and procedures, as uniformly applied across

their various grower operations including Kinlaw Farms, would therefore be relevant

irrespective of any supposed vicarious liability theory based on supervision of its

contractor.

As a result, we hold that the contested jury instruction did not prejudice Appellant

because the evidence admitted and the jury’s judgment equally apply under a theory of

direct liability such that, even if the instruction were erroneous, it did not prejudice -- much

less “seriously prejudice[]” -- Appellant. Gentry, 816 F.3d at 233 (emphasis in original).

42

F.

Punitive Damages

Finally, Appellant asks us to decide whether the district court erred in submitting

the issue of punitive damages to the jury, rather than deciding as a matter of law that

Appellees could not meet the punitive damages standard.

1.

At the close of Appellees’ case and again at the close of all evidence, Appellant

moved for judgment as a matter of law that Appellees did not present sufficient evidence

to meet North Carolina’s standard for punitive damages. The district court denied the

motion each time.

We review denial of a motion for judgment as a matter of law de novo, with all

evidence and reasonable inferences taken in the light most favorable to the nonmoving

party. See Russell v. Absolute Collection Servs., Inc., 763 F.3d 385, 391 (4th Cir. 2014).

Judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50 is proper

when “a party has been fully heard on an issue during a jury trial and the court finds that a

reasonable jury would not have a legally sufficient evidentiary basis to find for the party

on that issue.” Fed. R. Civ. P. 50(a)(1). A district court should grant judgment as a matter

of law “if the nonmoving party failed to make a showing on an essential element of his

case with respect to which he had the burden of proof.” Russell, 763 F.3d at 392 (internal

quotation marks omitted).

North Carolina makes punitive damages available to plaintiffs who demonstrate that

(1) the defendant is liable for compensatory damages and (2) either fraud, malice, or willful

43

or wanton conduct are present as aggravating factors and are related to the injury for which

compensatory damages were awarded. N.C. Gen. Stat. Ann. § 1D-15(a). A plaintiff bears

the burden of proving the existence of one of the aggravating factors by clear and

convincing evidence. Id. § 1D-15(b). Here, Appellees alleged “willful or wanton

conduct,” which North Carolina defines as “the conscious and intentional disregard of and

indifference to the rights and safety of others, which the defendant knows or should know

is reasonably likely to result in injury, damage, or other harm.” Id. § 1D-5. “Willful or

wanton conduct means more than gross negligence.” Id. (internal quotation marks

omitted).

North Carolina does not permit punitive damages to be awarded “solely on the basis

of vicarious liability for the acts or omissions of another.” N.C. Gen. Stat. Ann. § 1D-

15(c). “Punitive damages may be awarded against a person only if that person participated

in the conduct constituting the aggravating factor giving rise to the punitive damages, or if,

in the case of a corporation, the officers, directors, or managers of the corporation

participated in or condoned the conduct” in question. Id. In this context, we have

previously explained, “[t]he plain meaning of ‘condone’ is to ‘forgive or overlook,’ or

‘permit the continuance of.’” Vandevender v. Blue Ridge of Raleigh, LLC, 901 F.3d 231,

239 (4th Cir. 2018) (quoting Miller v. B.H.B. Enters., Inc., 568 S.E.2d 219, 225 (N.C. Ct.

App. 2002)). This means, for example, “[a] manager condones employees’ actions when

the manager is aware of those actions and fails to intervene.” Id. (citation omitted).

44

2.

Appellant argues Appellees did not put forth evidence from which a reasonable jury

could conclude Appellant engaged in willful or wanton conduct as an aggravating factor

supporting punitive damages. Appellant makes no argument that the conduct at issue was

not “related to” the claimed injuries. N.C. Gen. Stat. Ann. § 1D-15(a).

a.

Appellant Claims Lack of Knowledge

Appellant’s primary wanton-and-willful argument is that it lacked knowledge of the

conditions associated with its operation at Kinlaw Farms, and therefore cannot be said to

have consciously disregarded any possible nuisance there. Appellant points, in part, to a

lack of complaints from Appellees to Appellant as to the Kinlaw Farms operation. But

Appellees argue that industrial hog operations are a “predictably messy business,” In re

Murphy Brown, LLC, 907 F.3d 788, 792 (4th Cir. 2018), and contend Appellant “has

known for decades that its ‘messy business’ is a nuisance when placed near residences,”

Appellee Br. 30.

i.

Knowledge of Harms

A lack of complaints about Kinlaw Farms in particular does not save Appellant from

punitive damages. There can be no doubt that Appellees provided evidence of Appellant’s

deliberate corporate policies and evidence that Appellant knew these policies had

associated harms. Appellees’ proof in this regard included Appellant’s own collection of

45

media articles reporting conditions associated with its farming practices and policies, as

well as its knowledge of studies detailing the effects of lagoon-and-sprayfield operations

and types of effective remediation. 7 This evidence details effects on properties much

further from the various hog operations than Appellees’ were from Kinlaw Farms. Yet,

despite this knowledge, Appellant persisted in practices it knew were reasonably likely to

result in injury to neighboring properties. The practices include but are not limited to (i)

use of the existing lagoon-and-sprayfield waste management system without further

remedial measures; (ii) the use of “dead boxes” to collect corpses; and (iii) persistent and

unconstrained truck traffic.

Still, according to Appellant, the lack of evidence that it had received complaints

about Kinlaw Farms in particular forced Appellees to resort to what it calls a “nuisance per

se” argument. Appellant’s Br. 20. But Appellees’ theory of liability was not that all

lagoon-and-sprayfield farms are “inherently bad,” as Appellant phrases it, id. at 22, but

rather that they create known risks to neighbors that must be monitored and remediated to

avoid creating a nuisance. That is, Appellees sought to provide evidence sufficient for a

reasonable jury to conclude that, in practice, Appellant’s persistent use of lagoons and

sprayfields with only minimal remedial methods -- i.e. methods not comparable to known

7

Articles in Appellant’s possession and read into the record include accounts

explaining that hog farms in Bladen County “stink” with a “sickening and nauseating

odor,” such that neighbors “can’t plan outdoor activities because [they] never know which

way the wind will blow.” J.A. 7451. In one letter in Appellant’s possession read at trial,

a Bladen County resident explained that the hog farm in her community was affecting her

“house and land and most of all [her] health” and that she had made verbal complaints

about odor “several times.” Id. at 7449.

46

effective methods -- created a nuisance affecting neighbors of Kinlaw Farms, and that

Appellant knew its failure to fully remediate the harms associated with those practices was

“reasonably likely to result in injury, damage, or other harm.” N.C. Gen. Stat. Ann. § 1D-

5. For instance, Appellant admitted awareness of a number of available waste management

technologies (such as soil technologies or lagoon covers) that would prevent nuisance

odors from reaching neighbors and admitted that it could have its growers change to such

technologies if it so chose.

Yet Appellant argues that, because its farms were operated legally and consistent

with all requisite permits, Appellees failed to prove that its lagoon-and-sprayfield

operations were nuisances per se. This is beside the point. Lawful enterprises can

constitute a nuisance in fact. See Jones v. Queen City Speedways, Inc., 172 S.E.2d 42, 47

(N.C. 1970). The parties do not debate that Kinlaw Farms’s grandfathered use of the

lagoon-and-sprayfield system satisfied North Carolina’s permitting requirements. But

North Carolina law hardly “protects” these operations as Appellant suggests. Appellant’s

Br. 21. Indeed, new hog operations seeking permits in North Carolina cannot utilize the

lagoon-and-sprayfield methods as they existed at Kinlaw Farms and existing lagoon-and-

sprayfield farms are being slated for conversion to other methods of waste management.

See N.C. Gen. Stat. § 143-215.10I; N.C. Sess. Laws 1997–458. The farm’s

“grandfathering” does not serve to shield Appellant from nuisance liability, but rather is

evidence a jury could use to conclude Appellant knew its operations posed a threat of

nuisance to neighboring properties absent additional remedial measures.

47

Moreover, Appellees’ claims were not solely based on effects of lagoon-and-

sprayfield practices, but also on other known side effects associated with industrial hog

farming. For example, “dead boxes” and frequent traffic doubtlessly can create a nuisance

in fact by interfering with neighbors’ use and enjoyment of their land due to pests, odors,

and noises. Appellant’s former director Don Butler’s testimony reflected the company’s

knowledge that Bladen County residents complained about “odor, flies, noise, trucks, [and]

interference with their quality of life” from neighboring hog farms. J.A. 7466. A jury

reasonably could hold Appellant responsible for knowing about the likelihood of these

resultant harms but still persisting in its existing carcass-management and trucking policies.

Appellant cites Finch v. BASF Catalysts, LLC, No. 1:16-cv-1077, 2018 WL

3941978 (M.D.N.C. Aug. 16, 2018), for the principle that “general awareness of danger is

not enough to establish a conscious disregard of a known duty.” Id. at *5–6 (citation

omitted). Indeed, “knowledge of broad statements about potential harms under undefined

conditions is insufficient to show willful and wanton misconduct.” Id. at *6 (internal

quotation marks omitted). But, although Appellant may not have had received specific

complaints about Kinlaw Farms, the known dangers here were far from generic.

Appellant had far more knowledge than the defendant in Finch, who was only

“generally aware asbestos had health risks.” 2018 WL 3941978, at *6. Appellant was

specifically aware of the risks associated with its chosen policies: Appellant possessed

studies of Eastern North Carolina lagoon-and-sprayfield hog farms that explained the

effects of those operations on their neighbors’ properties, received comments specifically

about farms managed with its own methods, and knew Kinlaw Farms was in fact

48

implementing those practices as directed. The evidence demonstrates that Appellant

ensured that its growers, including Kinlaw Farms, uniformly applied its practices:

Appellant conducted weekly inspections of Kinlaw Farms to confirm that it maintained

total compliance with Appellant’s prescribed policies. From this, a jury could reasonably

conclude Appellant knew that Kinlaw Farms’s compliance with those procedures would

create nuisance conditions for its neighbors.

Further still, Appellees’ evidence demonstrated that Appellant knew the conditions

as they actually existed at Kinlaw Farms based on multiple weekly inspections of the

facility, including the proximity of neighbors, number of hogs, use of dead boxes, trucking

schedule, and absence of control technologies. Thus, Appellees provided evidence from

which a jury could conclude Appellant knew the procedures in place at Kinlaw Farms did

not adequately address -- and actually persisted in -- known harms associated with lagoon-

and-sprayfield operations and similar tightly controlled large hog farms in the region.

ii.

Intentional Disregard of Harms

In all, there is abundant evidence supporting Appellant’s conscious disregard of the

conditions at Kinlaw Farms. Appellees supplied evidence that Appellant knew the farming

methods it mandated at Kinlaw Farms -- including lagoon-and-sprayfield waste

management, minimal distance from neighboring properties, dead boxes, all-hours

trucking, and a high volume of hogs -- caused known impacts to neighbors. This evidence

included scientific studies and news reports in Appellant’s own collection, exposure to and

participation in years of accumulated public comment on Appellant’s practices, and visible

49

political pressure to ensure adequate mitigation of the effects of those practices -- practices

Appellant worked hard to ensure its contract growers, including Kinlaw Farms,

implemented precisely. Appellees further provided evidence that, despite this knowledge,

Appellant did not attempt to alleviate the effects of methods it knew Kinlaw Farms used at

Appellant’s direction. Appellees also provided evidence demonstrating Appellant was

aware of available technologies and its ability to alleviate the above described harms but

chose not to implement those technologies. Finally, Appellees’ evidence demonstrated

that Appellant did not even attempt to assess the impact of its operations on neighbors,

despite known risks.

Based on this abundance of evidence, a jury could reasonably conclude that

Appellant persisted in its chosen farming practices despite its knowledge of the harms to

its neighbors, exhibiting wanton or willful disregard of the neighbors’ rights to enjoyment

of their property.

b.

Proactive Measures by Parent Companies

Appellant also attempts to defeat punitive damages by relying on proactive

measures taken by its parent companies as evidence that it could not have acted with

wanton or willful disregard. Appellant offers Faris v. SFX Ent., Inc., No. 3:04-cv-08, 2006

WL 3690632, at *7 (W.D.N.C. Dec. 12, 2006), for the proposition that “even ineffective

action may ‘show assertive effort inconsistent with disregard or indifference to the safety

of others,’” Appellant’s Br. 22–23 (quoting Faris, 2006 WL 3690632, at *7).

50

First, as a district court opinion, Faris has no precedential value. See Booker v. S.C.

Dep’t of Corrs., 855 F.3d 533, 538 n.1 (4th Cir. 2017). Beyond that, Faris fails to aid

Appellant’s cause. In Faris, having heard word that two patrons had been electrically

shocked in a stairwell, the defendant concert venue had a maintenance worker tape off the

fixtures suspected of causing the problem; thus, the tortfeasor acknowledged the problem

and took targeted action aimed at completely removing the risk of harm. 2006 WL

3690632, at *7. The court credited the defendant’s repeated efforts to correct, then test the

correction, of the danger. Id. Therefore, the district court in Faris concluded that the

plaintiff had not “produce[d] evidence that [the defendant] intentionally turned a blind eye

to the danger: he looked, he saw, and he acted,” though his action was unfortunately

ineffective. Id.

The Faris court itself contrasted the facts presented there with a situation -- much

like Appellant’s -- where the defendant “looked at [its options], saw the danger involved

in using [the chosen approach], and used it despite the known danger.” 2006 WL 3690632,

at *7. Here, Appellees presented clear and convincing evidence Appellant knew about

likely harms, denied their existence, and fought for them not to come to light. Appellees

also provided evidence demonstrating that the supposed proactive steps -- investment in

feed conversion and nutrient output -- were motivated by profit and/or efficiency of

operations, as opposed to concern for neighbors of Appellant’s hog operations. The fact

that Appellant’s policies expressly encouraged growers to avoid spraying at times

neighbors were known to be outside demonstrates that Appellant knew its sprayfield

operation was still likely to interfere with its neighbors’ use and enjoyment of their

51

property, even taking into account other supposed proactive efforts. Even further,

Appellant’s indifference to the effectiveness of its supposed remediation methods

reasonably implies corresponding indifference to the rights of others to be free from the

harms those methods are meant to avoid. See id. (noting defendant’s repeated efforts to

ensure problem was resolved).

Appellant’s conduct -- through its parent Smithfield -- might suggest an effort to

reduce some odor effects. But a jury could still reasonably find conscious disregard of

neighbors’ rights as evidenced by Appellant’s awareness that its methods fell far short of

abating the problem, while it rejected alternatives demonstrably able to do so. 8 Moreover,

even making proactive efforts to reduce fecal odor does not excuse Appellant from

persisting in other practices such as dead boxes and all-hours trucking without any attempt

to limit these practices out of respect for neighbors’ rights. On the whole, Smithfield’s

limited proactive measures cannot rescue Appellant from punitive damages.

8

We pause here to note the inapplicability of Ward v. Autozoners, LLC, 958 F.3d

254 (4th Cir. 2020) provided by Appellant as supplemental authority on this point. Ward

is wholly inapposite to the case at hand. Ward applied a theory of vicarious liability

pursuant to Title VII, which provides its own separate standard for punitive damages,

requiring the employer to act “with malice or with reckless indifference.” 42 U.S.C.

§ 1981a(b)(1). In Ward, we concluded that an employee’s supervisors had been negligent

“at best . . . not recklessly indifferent” where “there was simply not sufficient evidence

demonstrating that [they] engaged in . . . steps [to address harassment] with ‘subjective

appreciation’ of the inadequacy.” Id. at 268. Appellant attempts to use Ward to illustrate

how punitive damages represent a “high standard [for a plaintiff] to meet,” but the standard

the plaintiff there was asserting would apply punitive damages “imputed to an employer

based solely on negligence by management level employees.” Id. at 269 & n.5 (emphasis

supplied). Here, by contrast, we are of course not applying Title VII’s punitive damages

standard, and the evidence in the record supports a reasonable jury finding more than

negligence.

52

c.

Participation in or Condoning Misconduct

Appellant’s final argument as to why punitive damages should not have been an

available option for the jury is that Appellees failed to prove Appellant’s officers, directors,

or managers “participated in or condoned” any misconduct. Appellant’s Br. 24 (quoting

N.C. Gen. Stat. § 1D-15(c)).

i.

Appellant’s Policies

Pursuant to North Carolina law, “[a] corporation may be subject to punitive damages

based on a theory of direct liability where the corporation’s acts or policies constitute the

aggravating factor.” Everhart v. O’Charley’s Inc., 683 S.E.2d 728, 737 (N.C. Ct. App.

2009) (citation omitted). In Everhart v. O’Charley’s, Inc., 683 S.E.2d 728 (N.C. Ct. App.

2009), an intermediate North Carolina appellate court considered whether a company’s

policy of requiring managers to complete an incident form before rendering aid to

customers in medical distress met the wanton-and-willful standard. There, the court

concluded a jury could reasonably find the company chose to protect the restaurant from

harm over preventing or mitigating harm to others, and from this the jury could find willful

or wanton disregard of guests’ rights. See id. at 736. As in Everhart, a reasonable jury

here could conclude that Appellant’s own policies reflected conscious and intentional

disregard of the safety and wellbeing of others in the interest of protecting the company’s

bottom line, rendering direct liability applicable. See id. at 737 (explaining that the

company’s policy “recklessly disregards customers’ safety and well-being in order to begin

53

the process of protecting O’Charley’s against potential litigation,” supporting direct

liability).

Here, Appellees advanced evidence that Appellant’s own corporate policies -- as

opposed to a separate policy of Kinlaw Farms -- prescribed the lagoon-and-sprayfield

system, waste and carcass management, and all-hours truck traffic underlying the

complaints. As a result, in contrast to vicarious liability for acts of its contractor,

Appellant’s liability is premised on the corporation’s own act of maintaining a set of

policies it knew perpetuated the effects of hog farming that (i) caused the state to outlaw

such operations within a mile of homes, except where neighbors came to the nuisance and

(ii) resulted in well-documented complaints and study results that applied to Kinlaw Farms,

since the policies mandated uniform conditions across Appellant’s grower sites.

ii.

Officers & Managers Condoning Conduct

Furthermore, the evidence demonstrates that Appellant’s officers and managers had

notice of the harms caused by its operations, based on studies, community meetings, and

political engagement. See N.C. Gen. Stat. Ann. § 1D-15(c). Yet Appellant’s leadership

persisted in mandating the culpable practices and participated in political efforts aimed at

minimizing regulation of harms known to be associated with Appellant’s chosen farming

methods. This evidence is sufficient to support punitive damages.

In Vandevender v. Blue Ridge of Raleigh, LLC, 901 F.3d 231, 238–39 (4th Cir.

2018), plaintiffs provided sufficient evidence to support an award of punitive damages by

demonstrating the defendants’ managers had notice that their policy of maintaining

54

inadequate staffing created a danger to their facilities’ patients. See 901 F.3d at 238–39.

Similarly, here Appellees provided sufficient proof by demonstrating Appellant’s

principals had notice that their policy of maintaining their standard lagoon-and-sprayfield

systems, bins, and trucks created annoyance and disturbance to neighbors, as evidenced by

(i) community comments; (ii) studies focused on their practices and region; (iii) successful

legislation/activism to ban their form of farming and find alternatives; (iv) regular

inspections of the farm in question, showing knowledge that its practices were by-the-book;

and (v) longstanding advocacy to limit nuisance suits by neighbors, from which a jury could

reasonably infer knowledge that Appellant intended to persist in its methods without

amending its conduct to respect its neighbors’ use and enjoyment of their property. We

did not require the plaintiffs in Vandevender to show the defendant knew the likely harms

had already come to pass at the facility in question.

It is therefore clear that a jury could find Appellant’s principals at minimum

“forg[a]ve,” “overlook[ed],” or “permit[ted] the continuance of’” the conditions at Kinlaw

Farms. Vandevender, 901 F.3d at 239 (each quoting Miller, 568 S.E.2d at 225). Appellees

here provided evidence that Appellant’s decisionmakers actually required Kinlaw Farms’

continued application of the problematic policies and attendant harms (such as dead boxes),

in the face of statewide policy pressure to change these methods due to their known effects

on neighbors when used as Appellant prescribed and with the knowledge that area residents

were complaining about odor, flies, noises, and trucks associated with industrial hog

operations.

55

Therefore, considering all evidence in the light most favorable to Appellees, we

conclude the district court did not err in allowing the jury to decide whether Appellant’s

principals “participated in or condoned” the aggravating conduct -- here, requiring its

growers to persist in methods known to have associated harms.

d.

In sum, Appellees presented “clear and convincing evidence that [Appellant] w[as]

fully aware” of the nuisance effects of its prescribed farming practices “yet did nothing or

worse.” Vandevender, 901 F.3d at 239. From the evidence here, a jury could reasonably

conclude Appellant and its officers “knew -- because they were repeatedly told -- that [their

currently prescribed remediation of odors, noise, and pests] was reasonably likely to result

in [injury to neighboring properties].” Id. at 240. “They nonetheless deliberately continued

to disregard duties imposed by law” -- here the duty not to harm neighbors’ use and

enjoyment of their own land -- “because doing so would increase profits.” Id. “This is

precisely the type of egregious conduct punitive damages are meant to deter.” Id. (citing

N.C. Gen. Stat. § 1D-1, which explains that the purpose of punitive damages is “to punish

a defendant for egregiously wrongful acts and to deter the defendant and others from

committing similar wrongful acts”).

Having reviewed all of the evidence in this case, we lack reason to reject either the

district court’s submission of the question of punitive damages to the jury or the jury’s

determination here that clear and convincing evidence established that punitive damages

apply.

56

G.

Financial Evidence

Appellant’s final assignment of error is that the district court erred by admitting

financial information of Appellant’s “corporate grandparent” Smithfield and “ultimate

parent entity” WH Group, and by refusing to bifurcate the punitive damages portion of the

trial from the liability phase due to the allegedly inflammatory nature of such evidence.

Appellant’s Br. 26. The contested evidence includes the values of Appellants’ parent

companies and their executive compensation.

We address this “parent evidence” argument in two parts. First, we analyze the

evidence in the context of the jury’s verdict as to liability. Then, we do the same with

regard to punitive damages.

1.

Parent Evidence with Regard to Nuisance Liability

a.

Federal Rule of Evidence 403 states that a “court may exclude relevant evidence if

its probative value is substantially outweighed by a danger of,” among other things, “unfair

prejudice.” Fed. R. Evid. 403. “Except under the most ‘extraordinary’ of circumstances,

where [the district court’s] discretion has been plainly abused, this Court will not overturn

a trial court’s Rule 403 decision.” In re C.R. Bard, Inc. MDL. No. 2187, Pelvic Repair Sys.

Products Liab. Litig., 810 F.3d 913, 920 (4th Cir. 2016) (internal quotation marks omitted).

57

b.

We turn first to assess the probative value of the challenged financial evidence with

regard to liability. The finances and executive compensation expenditures of Smithfield

and WH Group were relevant to the question of nuisance liability because they are

probative of the feasibility or impracticality of Appellant’s adoption of mitigation measures

to avoid the harm to neighbors’ lands. In this regard, Appellees put forward testimony

indicating that if Appellant wanted to cover its lagoons, Smithfield or WH Group would

cover the costs. Specifically, Appellant’s president George Schmidt testified as follows:

[Appellees’ Counsel]: If or when -- if the hog production

division wanted to go cover the lagoons, it could go ask

Smithfield or WH Group for the money to do it, right?

Mr. Schmidt: That would be the procedure, yes.

[Appellees’ Counsel]: And, as a matter of fact, if you wanted

to do it, that would be where you’d get the money, you’d go to

Smithfield or the WH Group for them to give you the money,

right?

Mr. Schmidt: Correct.

J.A. 7908. The ability of Smithfield and WH Group to pay is therefore relevant evidence

of whether Appellant would face undue hardship in abating the nuisance. If the cost of

remediation were to be borne by a highly profitable parent company, Appellant’s claim

that it would be harmed -- or that financial limitations prevented successful remediation --

rings hollow. Indeed, the AG Agreement itself committed Smithfield to providing

financial assistance to convert lagoon-and-sprayfield systems operated by its contract

growers. Smithfield’s ability to pay to do so thus is fundamental in deciding whether such

58

conversions were feasible. And significantly, Appellant conflated itself with its parent

company, Smithfield, when asking the district court to credit Appellant with the AG

Agreement and other policies adopted by Smithfield as though they were Appellant’s own.

For all these reasons, we deem the parent financial evidence relevant to the question

of whether any feasible effective remedial measures were out of Appellant’s reach.

Therefore, we cannot conclude that the district court abused its discretion in deciding the

probative value of this evidence -- which speaks to a key defensive argument raised -- was

not “substantially outweighed” by unfair prejudice. Fed. R. Evid. 403. The district court

carefully considered whether mention of Appellant’s parent companies’ finances was

unduly prejudicial and whether this prejudice outweighed the probative value of that

information. Further, the court made clear that the parent companies’ information could

not itself be used to argue in favor of punishing Appellant. See J.A. 5726–27 (explaining

that comparing individual executives’ salaries to local residents or using the foreign

identity of Appellant’s corporate grandparent could not be used to argue in favor of

punishment). The court also recognized that keeping information about parent companies’

ability to pay from the jury would permit a defendant to unfairly claim both that it is too

poor to afford existing remedial measures, but also that it has been proactive (through its

parent company) in developing new alternatives. And because Appellant wanted to claim

Smithfield’s conduct as a shield, the district court reasonably concluded that evidence of

Smithfield’s ability to cover remediation costs also could come in as a sword.

Furthermore, due to North Carolina’s particular nuisance framework, mention of

the parent companies’ identities and ownership bears a cognizable relationship to the

59

question before the jury. See N.C. Pattern Jury Instr. (Civ.) § 805.25 (noting the relevance

of the “nature, utility, and social value of the defendant’s operation” to the existence of a

nuisance). The task before the jury was to compare the community’s benefit with

Appellees’ harm, and the fact that much of the profit from the injurious conduct left the

area while Appellant and its local grower Kinlaw Farms were left unable to afford to abate

the harm speaks to whether and how much the community benefitted from the operation.

Ultimately, the district court did not bar Appellant from claiming its parent

companies’ efforts as its own, but likewise also did not bar evidence of those companies’

abilities to do better. Though Appellant admits that contrasting “the community’s benefit

against the harm to [Appellees]” is consistent with North Carolina law, Appellant’s Br. 28

(citing N.C. Pattern Jury Instr. (Civ.) § 805.25), it nonetheless contends that conflating

Appellant and its parent companies in this analysis was unnecessary and unfair. But having

invoked its parent companies’ identities in its defense, Appellant cannot complain that the

court allowed the jury to have information about those entities for the purposes of

comparing benefits and harms as delineated by North Carolina law. Where this is the case,

we cannot override the district court’s considered judgment that the evidentiary value of

the parent companies’ information was not substantially outweighed by undue prejudice.

2.

Parent Evidence with Regard to Punitive Damages

Though we decline to overturn the district court’s admission of Appellant’s parent

company financial evidence relevant to liability, we reach a different conclusion as to

bifurcation and the amount of punitive damages. Specifically, we conclude that the value

60

and compensation evidence was relevant to whether punitive damages should have been

awarded and do not disturb the district court’s considered judgment that any prejudice

associated with that information did not substantially outweigh its probative value in that

context. However, this evidence does not bear the same level of relevance to the

determination of the amount of punitive damages supported by Appellant’s conduct.

Because of this irrelevance and because of the particular ability of potentially inflammatory

evidence to sway a jury’s calculation of punitive damage awards, we vacate the judgment

below as to the amount of punitive damages and remand for rehearing on that issue alone.

a.

We review a district court’s decision not to bifurcate a trial for abuse of discretion.

Shetterly v. Raymark Indus., Inc., 117 F.3d 776, 782 (4th Cir. 1997).

North Carolina has a mandatory bifurcation statute. N.C. Gen. Stat. § 1D-30. “But,

in our federal system, bifurcation is a case-specific procedural matter within the sole

discretion of the trial court.” Nester v. Textron, Inc., 888 F.3d 151, 163 (5th Cir. 2018)

(citation omitted). Federal courts sitting in diversity “are to apply state substantive law and

federal procedural law.” Hanna v. Plumer, 380 U.S. 460, 465 (1965). Therefore, “a district

court is simply not bound by state law when deciding whether to bifurcate.” Nester, 888

F.3d at 163 (citing Getty Petroleum Corp. v. Island Transp. Corp., 862 F.2d 10, 15 (2d Cir.

1988) and Rosales v. Honda Motor Co., 726 F.2d 259, 260 (5th Cir. 1984)); see Shugart v.

Cent. Rural Elec. Co-op, 110 F.3d 1501, 1504 (10th Cir. 1997); Sellers v. Baiser, 792 F.2d

690, 694 (7th Cir. 1986); Moss v. Associated Transp., Inc., 344 F.2d 23, 27 (6th Cir. 1965).

61

Federal Rule of Civil Procedure 42(b) specifies, “[f]or convenience, to avoid

prejudice, or to expedite and economize, the court may order a separate trial of one or more

separate issues . . . .” As we have explained, “when it is determined that the evidence

relevant to the appropriate amount of punitive damages will be prejudicial to the jury’s

consideration of liability or compensatory damages, bifurcation of the trial under Fed. R.

Civ. P. 42(b) remains an available solution.” Mattison v. Dallas Carrier Corp., 947 F.2d

95, 110 (4th Cir. 1991) (citation omitted). This does not mean it is the only solution.

“[S]ince the evidence usually overlaps substantially, the normal procedure is to try

compensatory and punitive damage claims together with appropriate instructions to make

clear to the jury the difference in the clear and convincing evidence required for the award

of punitive damages.” Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1021

(9th Cir. 2004) (alteration in original) (quoting McLaughlin v. State Farm Mut. Auto. Ins.

Co., 30 F.3d 861, 871 (7th Cir. 1994)).

“The party requesting separate trials bears the burden of convincing the court that

such an exercise of its discretion will (1) promote greater convenience to the parties,

witnesses, jurors, and the court, (2) be conducive to expedition and economy, and (3) not

result in undue prejudice to any party.” F&G Scrolling Mouse, LLC v. IBM Corp., 190

F.R.D. 385, 387 (M.D.N.C. 1999) (citations omitted).

b.

Appellant raises a very real specter of prejudice stemming from the parent company

financial information. The Supreme Court has reminded us that “the presentation of

evidence of a defendant’s net worth creates the potential that juries will use their verdicts

62

to express biases against big businesses, particularly those without strong local presences.”

State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 417 (2003) (quoting Honda

Motor Co. v. Oberg, 512 U.S. 415, 432 (1994)). Importantly, “[o]ur concerns are

heightened when the decisionmaker is presented . . . with evidence that has little bearing

as to the amount of punitive damages that should be awarded,” because “[v]ague

instructions, or those that merely inform the jury to avoid passion or prejudice do little to

aid the decisionmaker in its task of assigning appropriate weight to evidence that is relevant

and evidence that is tangential or only inflammatory.” Id. at 418 (internal quotation marks

omitted).

As explained above, the district court here did not abuse its discretion where,

through the AG Agreement and Appellant’s admissions, Appellant’s ability to remediate

harms necessarily implicated the financial worth and expenditures of its parent companies.

But having decided to admit this evidence on the question of liability, the district court

nonetheless needed to evaluate the effect that same information would have in the context

of punitive damages and whether the risk of prejudice -- as described by the Supreme Court

-- required bifurcation.

A jury must be convinced by clear and convincing evidence to award punitive

damages. This is a higher evidentiary burden than applies to the simple question of whether

a defendant is liable for a nuisance. In finding nuisance, the jury had already concluded

that Appellant had the ability to abate the harm without undue hardship. As with nuisance

liability, we recognize the relevance of parent company financials relative to punitive

damages where, as here, a defendant admits the connection of its parents to its own ability

63

to abate a nuisance. However, with regard to determining the amount of punitive damages

to award, we fail to see what value the parent company financial evidence would have that

could possibly outweigh the substantial risk of prejudice it carries in that delicate context.

As the Supreme Court has recognized, inflammatory financial evidence can be

especially destructive in the context of punitive damages because of the leeway given to

juries in selecting the appropriate amount necessary to punish and deter. See State Farm

Mut. Auto Ins., 538 U.S. at 417 (explaining how “punitive damages pose an acute danger

of arbitrary deprivation of property” because of the “wide discretion” given to juries “in

choosing amounts”). To be sure, juries are and should be afforded substantial room to

exercise their discretion, but it is the court’s responsibility to ensure that the tools the jury

uses to exercise that discretion are appropriate. See Mattison, 947 F.2d at 105 (“When a

jury is left to its own devices to take property or mete out punishment to whatever extent

it feels is best in the course of the process, our sensibilities about that process are

offended.”).

“[A] defendant’s financial position is a proper consideration in assessing punitive

damages.” See Stamathis v. Flying J, Inc., 389 F.3d 429, 442 (4th Cir. 2004) (citing Pacific

Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 22 (1991)). The jury here was instructed to

consider Appellant’s ability to pay punitive damages, and the district court did not

reference Appellant’s parents’ ability to pay. This makes sense: while testimony indicated

that Appellant’s parent companies would be responsible for remediation costs -- justifying

admission of the financial evidence on the matter of liability -- there was no such evidence

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that Appellant’s parent companies would be made to bear the costs of a punitive damage

award.

Still, without a more specific jury instruction, a jury exposed to the high-dollar

values of Appellant’s parent companies and the parents’ executive compensation could

understandably -- but inappropriately -- apply that information when it came time to decide

how much money would be required for Appellant to “feel” the effect of the damages

award. Appellees used the high values and high-dollar compensation figures of Smithfield

and WH Group to argue that Appellant, through its relationship to these wealthy parents,

“ha[d] the money to eliminate the odor, [yet] cho[se] to do nothing.” J.A. 5817; see also

J.A. 9050 (“They know there is a problem. They know there is a fix. They willfully choose

not to do anything about it. Not even figure out how much it would cost [to fix], but yet

they pay $245 million to four people over four years. That’s the kind of money they can

spend when they want to.”) But though this evidence is relevant to the question of whether

Appellant’s refusal to change policies and technologies was a willful choice, it does not

bear the same relevance to the proper amount of punitive damages necessary “to punish

[Appellant] for egregiously wrongful acts.” N.C. Gen. Stat. § 1D-1.

Thus, given the irrelevance of the parents’ financial information to the amount of

punitive damages, and given the lack of guidance provided to the jury as to how that

information is to be applied in the analysis, in the absence of a limiting instruction, we

conclude that the district court should have bifurcated the trial pursuant to Federal Rule of

Civil Procedure 42(b) in order to avoid any undue prejudice associated with such evidence.

To be quite clear -- we do not disturb the district court’s decision to submit the availability

65

of punitive damages to the jury or the jury’s determination that those damages are

appropriate in this case; rather, we are only remanding for a new calculation of those

damages absent the parent company financial evidence that threatens significant prejudice

without any relevance to the question of the appropriate amount of punitive damages to

award.

“Exacting appellate review ensures that an award of punitive damages is based upon

an application of law, rather than a decisionmaker’s caprice.” State Farm Mut. Auto. Ins.,

538 U.S. at 418 (internal quotation marks omitted). Juries are given greater latitude in

assigning value to punitive damages than they possess in the liability and compensatory

damages contexts, where the damages awarded are grounded in actual losses to the

plaintiff. Because of this distinction, our deferential standard of review requires us to only

redress the evidentiary prejudice as it pertains to the amount of punitive damages, where

financial prejudice has a unique ability to do harm to a defendant. Here, a limited remand

so that the amount of the punitive damages award can be reconsidered with constraints on

the parent financial information will ensure that the award is based solely on Appellant’s

own conduct and ability to pay, and not on any unfair prejudice against its status as the

subsidiary of a wealthy parent. We therefore vacate the jury’s judgment as to the amount

of punitive damages, and remand for rehearing with omission of the inflammatory parent

company financial evidence.

III.

For the foregoing reasons, we conclude that none of Appellant’s arguments require

the grant of a new trial wholesale. We do however remand this case for the limited purpose

66

of determining the proper amount of punitive damages without the parent company

financial evidence, including executive compensation.

AFFIRMED IN PART;

VACATED AND REMANDED IN PART

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WILKINSON, Circuit Judge, concurring:

I am pleased to concur in Judge Thacker’s well-reasoned opinion. It ably explains

why compensatory and punitive damages were appropriate here and why the admission of

certain financial information, specifically the valuation and executive compensation

structure of Murphy-Brown’s parent companies, was especially prejudicial with respect to

the amount of any punitive award. As Judge Thacker notes, punitive damages represent

an especially unmoored and ungrounded form of relief, and it makes sense to keep their

consideration free of gratuitously inflammatory evidence. The danger of an unleashed jury,

moreover, is far greater where it sets the amount of a punitive award than when it

determines willfulness and wantonness. See Sasaki v. Class, 92 F.3d 232, 238 (4th Cir.

1996) (affirming a jury finding of punitive liability while remanding for a redetermination

of punitive damages). It is that danger that Judge Thacker rightly perceives requires a

remand here.

I write separately, however, to highlight the facts in this case that support the jury’s

finding that liability for compensatory and punitive damages in some amount was

warranted. It is past time to acknowledge the full harms that the unreformed practices of

hog farming are inflicting.

This is not to say that the industry is unimportant. In fact, quite the contrary. Hog

farming is central to economic life in North Carolina. It supports 46,000 much-needed,

mostly low-skill jobs and accounts for approximately $11 billion of the state’s annual

economic productivity. Brief of the American Farm Bureau Federation et al. as Amici

Curiae Supporting Appellant 8, McKiver v. Murphy-Brown (No. 19-1019) [hereinafter

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Am. Farm Bureau Brief]. 1 This economic activity is concentrated in the state’s relatively

rural eastern region. Sampson, Duplin, and Bladen counties collectively contain over forty

percent of the state’s hog farms, where size undoubtedly makes for market efficiencies.

See id. at 8–9. The efforts of those who work in these farms play an important role in

preserving the nation’s food supply. Pork products include not only bacon, sausage, ham,

and pork chops, but also byproducts with pharmaceutical applications. Inedible byproducts

such as pig hair and skin can be useful in producing, respectively, such things as paint

brushes and wallets. John R. Romans et al., Purdue University, Pork By-Products,

https://www.animalgenome.org/edu/PIH/128.html.

It is the hog’s misfortune, and, I suppose, humanity’s good fortune that it has

become such an indispensable animal. To safeguard the hog farming industry, the state

legislature amended the Right to Farm Act, limiting future nuisance recoveries to declines

in a property’s market value. See N.C. Sess. Laws 2017-11, codified at N.C. Gen. Stat. §

106-702. The state had also generally capped punitive awards per plaintiff at “three times

the amount of compensatory damages or two hundred fifty thousand dollars ($250,000),

whichever is greater.” N.C. Gen. Stat. § 1D-25(b). In passing these laws, the state

legislature acted within its constitutional police powers.

1

While it is of course true that amicus briefs were not part of the jury’s

consideration, they align in this case to an exceptional extent with the extensive trial

testimony that is herein referenced.

69

But our job is different. In this case, the ancient tort of nuisance, which has long

refereed disputes between neighbors, see e.g., Tenant v. Goldwin (1705) 92 Eng. Rep. 222,

is claimed to have a very contemporary application. Plaintiffs, almost all of modest means

and minorities, live in close proximity to Kinlaw Farms, the hog farm at issue in this case.

They have brought suit contending that Murphy-Brown, which by virtue of contract

directed Kinlaw’s operations, “substantially” and “unreasonabl[y]” interfered—in a

“willful and wanton” manner—with the “use and enjoyment of their property.” Complaint

at 35, 39, McKiver v. Murphy-Brown, LLC, No. 4:14-cv-00153-F (E.D.N.C. Aug. 21,

2014); see also Morgan v. High Penn Oil Co., 77 S.E.2d 682, 689 (N.C. 1953); N.C. Gen.

Stat. § 1D-15(a). The industry counters that such suits pose “a dire threat to hog farming”

in North Carolina, and—even more urgently—“an existential threat to the livelihoods of

farmers and the food security of our Nation.” Am. Farm Bureau Brief 3, 9. As noted

above, I fully recognize the essential contributions of the pork industry in general, and of

North Carolina’s hog farms in particular. I am also not so naive as to imagine that hog

farming could ever be an antiseptic enterprise. But the record here reveals outrageous

conditions at Kinlaw Farms—conditions that, when their effects inevitably spread to

neighboring households, violated homeowners’ rights to the healthful enjoyment of their

property. All this the jury recognized, and its verdict, once capped, was essentially a just

one.

How did it come to this? What was missing from Kinlaw Farms—and from

Murphy-Brown—was the recognition that treating animals better will benefit humans.

What was neglected is that animal welfare and human welfare, far from advancing at cross-

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purposes, are actually integrally connected. The decades-long transition to concentrated

animal feeding operations (“CAFOs”) lays bare this connection, and the consequences of

its breach, with startling clarity. Once, most hogs were raised on “smaller, pasture-based

hog farms.” J.A. 618. Now, the paradigm has shifted: “large numbers of hogs, often many

thousands” crowd together in each of the many cramped “confinement structures” that

comprise the typical hog CAFO. J.A. 618; see also USDA Nat’l Agric. Statistics Serv.,

2017 Census of Agriculture: Vol. 1, Ch. 1: U.S. National Level Data, Tbl. 23: Hogs and

Pigs – Inventory by Type of Producer: 2017. The following illustrates how Kinlaw, an

endpoint of this pasture-to-CAFO transition, created serious ecological risks that, when

imprudently managed, bred horrible outcomes for pigs and humans alike. 2

The warp in the human-hog relationship, and the root of the nuisance in this suit,

lay in the deplorable conditions of confinement prevailing at Kinlaw, conditions that there

is no reason to suppose were unique to that facility. Confinement defined life for the over

14,000 hogs—all of which Murphy-Brown owned—that Kinlaw Farms had crammed into

its twelve confinement sheds. J.A. 6197–98, 6908. Consistent with Kinlaw’s role as a

“finishing” facility, hogs arrived at around forty pounds, to be fattened to over seven times

their starting weight. J.A. 6200. The one thing that never grew with the hogs, though, was

the size of their indoor pens. Even though “[h]ogs grow bigger now,” id., the pens’ design

has not changed a whit in twenty-five years. See J.A. 6200, 7823. The sad fate of Kinlaw’s

2

Following the jury verdict, Smithfield Hog Production stopped placing new hogs

at and removed existing hogs from Kinlaw Farms. J.A. 9322–23.

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hogs was, therefore, to remain in these densely packed pens from the time they arrived to

the time they were shipped for slaughter, straining in vain as their increasing girth slowly

but surely reduced them to almost suffocating closeness. See J.A. 6198.

To manage waste under such conditions, the concrete floors of Kinlaw’s sheds were

partially slatted. Id. These slats were supposed to allow the hogs’ feces and urine to fall

through to a gutter system below. J.A. 6200–02. But due to the close confinement just

described, hogs were often packed too tightly to defecate over the slats. J.A. 5211. As a

result, waste built up, id., and as photos of Kinlaw’s facilities show, hogs ended up covered

in feces. J.A. 6758–64; see also J.A. 5828–29, 8510, 9027.

The waste that did make it through the slats to the gutter system was flushed four to

six times a day to one of three nearby open-air “lagoons”—essentially three uncovered, 8

million-gallon cesspools. J.A. 6202–03; see also J.A. 6740–41. From there, the waste

material was sprayed into the air, to fertilize nearby crops—a waste disposal method known

as the lagoon-and-sprayfield system. J.A. 4980, 6203–04, 6958–59.

The dangers endemic to such appalling conditions always manifested first in animal

suffering. Ineluctably, however, the ripples of dysfunction would reach farm workers and,

at last, members of the surrounding community. To start, take the basic issue of air quality.

When pigs defecated, gases accumulated in their sheds. J.A. 5217, 6198–99. But at certain

concentrations—only possible under conditions of overcrowded, indoor confinement—

these gases could become toxic, even fatal, to the hogs. J.A. 6199. To prevent its hogs

from dying in their own wind, Kinlaw ventilated their sheds by opening curtains that

released these noxious fumes unfiltered into the air outside. J.A. 5217, 6197–99.

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Viewing the sheds’ diminished air quality solely as a “hog problem” misses the very

real hazard it represented for workers. See Brief for Dr. Lawrence B. Cahoon et al. as

Amici Curiae Supporting Plaintiffs-Appellees 9–15, McKiver v. Murphy-Brown (No. 19-

1019) [hereinafter Dr. Cahoon Brief]. Workers, after all, breathe the same air as the hogs

they tend. Given that these gases could kill pigs, it is entirely unsurprising that

“approximately 50 percent of [CAFO] workers experience one or more of the following

health outcomes: bronchitis, toxic organic dust syndrome, hyper-reactive airway disease,

chronic mucous membrane irritation, occupational asthma and hydrogen sulfide

intoxication.” J.A. 8244.

What may seem surprising, but should not, is the gaseous spiral’s final arc: the air

quality threat posed to Kinlaw’s neighbors. Like workers, neighbors living within two

miles of hog CAFOs suffer from elevated rates of respiratory problems. J.A. 8242–43.

Nearby residents may also suffer from aggravated rates of high blood pressure, depression,

and infant mortality. Dr. Cahoon Brief 10–13; see also J.A. 8243. One study has even

shown that children attending schools as far as three miles away from a hog CAFO face an

increased likelihood of presenting asthma-related symptoms. Dr. Cahoon Brief 13; see

also J.A. 935.

This triangular rotation among animals, workers, and homeowners is no fluke. It

repeats again and again. Consider another similarly structured example: the problem of

viral disease. It is well-established that close confinement leads to the “increased risk of

the spread of disease” between hogs. J.A. 5206; see also Brief for the Humane Society of

the United States as Amici Curiae Supporting Plaintiffs-Appellees 17, McKiver v. Murphy-

73

Brown (No. 19-1019) [hereinafter Humane Society Brief]. The buildup of excrement is,

for example, “conducive to . . . breeding flies and insects,” J.A. 5211, which are known

“vectors of disease,” J.A. 2567. Indeed, Kinlaw Farms suffered an outbreak of Porcine

Epidemic Diarrhea Virus. J.A. 1801. It was, again, the hogs that suffered first.

But humans are not far behind. Pathogens like H1-N1 “swine flu,” which incubate

and mutate in pigs, can sometimes jump to human hosts. J.A. 5204–05, 5972–73. The

swine flu outbreak of 2009, which led to almost 275,000 hospitalizations and 12,500 deaths

in the United States, put the country on notice of that fact. In any future pig-to-human

transmission, individuals working directly with affected pigs at facilities like Kinlaw are

likely to be among the first infected, followed shortly thereafter by other members of their

community.

Analogous is the problem of diseases communicated not virally, but rather through

bacterial infection. And again, it starts with the harms that pigs suffer in confinement: to

compensate for the stressors of close confinement, CAFOs commonly administer

antibiotics at subtherapeutic concentrations both “as prophylactic drugs and to increase

feed efficiency and daily weight gain.” J.A. 5205; see also J.A. 5973; Humane Society

Brief 17, 23. The predictable result is the genesis of novel strains of antibiotic-resistant

bacteria. J.A. 5205. These strains, much more difficult to eradicate, plague the hogs more

acutely.

As before, though, the problem’s impact on pigs is only the first link in a longer

chain that wraps around workers and the surrounding homeowners. Antibiotic-resistant

bacteria can spread from hogs to people, J.A. 5971–72; see also J.A. 5206 (“The capacity

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for human care workers, their families, and residents of nearby communities to become

infected with antibiotic-resistant microorganisms from swine CAFOs has long been

documented.”), and even beyond the farm’s neighboring communities. J.A. 5972–73. The

human health implications arising from antibiotic-resistant bacteria are severe: “if we use

antibiotics . . . when we don’t really need them to treat people, they’ll lose their

effectiveness when we really need them.” J.A. 5971; see also J.A. 5205–06.

The fourth and, in many senses, final confinement-related variation on this theme is

the sheer amount of death at hog CAFOs like Kinlaw. Up to “ten percent of pigs die in

confinement most likely due to complications from their overcrowded environment and

lack of individualized veterinary care.” Humane Society Brief 11; J.A. 9014. The hogs at

Kinlaw faced a slightly lower, but still significant, mortality rate of around seven percent.

See J.A. 5201–02. This figure assumes that Kinlaw operated at full capacity. There is

some suggestion that Kinlaw operated above capacity to account for the fact that “some

[hogs] are going to die.” J.A. 6908. 3

Dying hogs imperil human well-being in other ways. As Judge Thacker has noted,

the problem lies in Kinlaw’s method of storing and disposing of the numerous dead hogs.

See Maj. Op., ante at 48–49. Kinlaw piled carcasses into uncovered storage containers that

3

The calculation works are follows. Kinlaw Farms had a permitted hog count of

14,688. J.A. 5202. Based on the typical finishing operation turnover of 2.5 sellouts per

year, J.A. 5201, approximately 36,720 hogs passed through Kinlaw in a year (= 14,688 x

2.5). Kinlaw had average weekly fatalities of 49 hogs, J.A. 5202, or 2,548 hogs per year

(= 49 * 52). Thus, around 6.9% of hogs passing through Kinlaw were expected to die

(= 2,548 / 36,720).

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plaintiffs call “dead boxes.” J.A. 4956, 5679–80, 7867. Unfortunately for Kinlaw’s

neighbors, exposed hog carcasses attracted buzzards and flies, which range with scant

concern for property rights. J.A. 8446. A sorely unwelcome buzzard startled one

neighbor’s little girl so badly that she slammed a door on her foot. J.A. 7757. Other

homeowners detailed their distress at finding flies in their hair and food, J.A. 7317, and

suffering invasions of “more gnats than you’ve ever seen in your life,” J.A. 7352. These

unwelcome visitations were not minor inconveniences. They were hazardous to health and

vectors of disease. See J.A. 1098–99, 2566–67. And they originated with the mistreatment

of Kinlaw’s hogs.

The plentiful hog carcasses of Kinlaw Farms also posed a nuisance to neighbors

when they were carted away daily in “dead trucks,” which caused the worst of the odors.

J.A. 7260–62. Other Kinlaw trucks created noise and dust ceaselessly. As part of the initial

design, Murphy-Brown placed a private service road leading to Kinlaw Farms within feet

of nearby homes when an alternate route would have impacted neighbors far less. J.A.

2024, 7271–72, 7813–16, 7918. Instead, neighbors suffered from trucks constantly

entering and leaving Kinlaw Farms—the truck delivery schedule, set by Murphy-Brown,

showed eleven deliveries between 12:30 a.m. and 5:30 a.m. during a single morning. J.A.

7273. Again, Murphy-Brown cut corners and its neighbors suffered for it.

At the risk of replaying this theme ad nauseum, it should be observed that these

interlocking dysfunctions were characteristic not just of close confinement but of the

lagoon-and-sprayfield system as well. The negative effects on animals, workers, and

homeowners are here all visible in a single glance. As with any large, uncovered cesspool,

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it should come as no surprise that “[e]nvironmental and health concerns with the lagoon

technology include emissions of ammonia, odors, pathogens, and water quality

deterioration.” J.A. 6384 (internal citations omitted). The waste in these lagoons almost

“certainly” contained “pathogenic microorganisms and bacteria,” including antibiotic-

resistant bacteria. J.A. 6969. When this waste material is sprayed into the air, everything

around, including nearby homes, is at the mercy of the prevailing winds. J.A. 5242–43.

While the odor potential from spraying untreated hog waste high into the air—where it

then drifts toward nearby homes—is self-evident, Murphy-Brown also knew of odor

complaints from neighbors of hog farms with setups similar to Kinlaw. J.A. 5242–43,

7466–68. Nevertheless, it persisted in requiring the system for Kinlaw.

Even setting dispersion aside, the existence of lagoons maintained like Kinlaw’s

tends to compromise local water quality. Studies have shown that many lagoons leach

waste material into both surface water and groundwater. Dr. Cahoon Brief 15. In surface

water, leakage can produce toxic algae blooms inimical to local wildlife and their habitat.

Id. at 15–16; see also J.A. 5974–76. And waste that enters groundwater creates a health

hazard, particularly for any nearby residents who drink or bathe with well water. Dr.

Cahoon Brief 17–18; see also J.A. 5975. Water quality concerns are especially pressing

here because Kinlaw—like many eastern North Carolina hog facilities—sits in a

floodplain. J.A. 618, 5761–63. Similarly situated lagoons have overflowed during

hurricanes, Dr. Cahoon Brief 18; J.A. 5761, and even under less dramatic weather

conditions, recently sprayed waste material at Kinlaw can easily flow into the nearby Cape

Fear River. See J.A. 624, 5231. Needless to say, deterioration in the local water quality is

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a grievous blow to both animal and human welfare. Here as elsewhere, these two values

are not orthogonal, but integrally connected.

At the end of all this wreckage lies an uncomfortable truth: these nuisance

conditions were unlikely to have persisted for long—or even to have arisen at all—had the

neighbors of Kinlaw Farms been wealthier or more politically powerful. Indeed, North

Carolina’s ban on building new lagoon-and-sprayfield systems arose after CAFOs

threatened to expand into a General Assembly member’s home district of Moore County,

a popular destination for golfers and tourists. Stuart Leavenworth, Golfers Take on Pork

Producers over Hog-Farm Rules, News & Observer, Feb. 27, 1997 (“When it hits home in

your district, you become more keenly aware of problems that other parts of the state are

having. . . . Travel and tourism are so very important to my district.” (quoting Rep. Richard

Morgan of Moore County)); see also N.C. Sess. Law 1997-458; J.A. 5810–11, 7532. In

1997, residents of Bladen County suffered from a poverty rate almost twice that of Moore

County—by 2018, the poverty rate grew to nearly three times that of Moore County. State

and County Estimates for 1997, U.S. Census Bureau, Small Area Income and Poverty

Estimates Program, https://www.census.gov/data/datasets/1997/demo/saipe/1997-state-

and-county.html; 2018 Poverty and Median Household Income Estimates—Counties,

States, and National, U.S. Census Bureau, Small Area Income and Poverty Estimates

Program (Dec. 2019), https://www.census.gov/data/datasets/2018/demo/saipe/2018-state-

and-county.html. And a substantial proportion of residents near Kinlaw Farms are people

of color. J.A. 5697.

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It is well-established—almost to the point of judicial notice—that environmental

harms are visited disproportionately upon the dispossessed—here on minority populations

and poor communities. See Brief of the North Carolina Environmental Justice Network

and the Rural Empowerment Association for Community Help as Amici Curiae Supporting

Plaintiff-Appellees 26, McKiver v. Murphy-Brown (No. 19-1019) (noting that “[Industrial

hog operations are] disproportionately concentrated in communities of color” and “that

African Americans, Latinos, and Native Americans are 1.54, 1.39, and 2.18 times

(respectively) more likely than whites to live within three miles of one or more

[operations].”); see also J.A. 2263–64, 8422–23, 8426. But whether a home borders a golf

course or a dirt road, it is a castle for those who reside in it. It is where children play and

grow, friends sit and visit, and a life is built. Many plaintiffs in this suit have tended their

hearths for generations—one family for almost 100 years. J.A. 7796. They are exactly

whom the venerable tort of nuisance ought to protect. Murphy-Brown’s interference with

their quiet enjoyment of their properties was unreasonable. It was willful, and it was

wanton. The record fully supports the jury’s finding that punitive damages were warranted.

Moreover, plaintiffs’ suffering—stemming from Murphy-Brown’s mistreatment of

its hogs—was avoidable. The scale of industrial hog farming is no warrant to ride

roughshod over the property rights of neighbors, the health of workers and community

members, and the lives of the hogs themselves. In fact, not one of the above problems is

insuperable. Many can be mitigated using “[s]imple management and manure handling

controls.” J.A. 5221. For example, facilities could decrease the number of hogs penned in

each shed, id., install covers on lagoons to lessen air and water pollution, J.A. 7896–900,

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or implement available controls to remove pollutants from the air prior to ventilation, J.A.

5223. Moreover, “[i]f Smithfield paid for more labor, [it] may be able to keep the swine

houses cleaner, which would also keep the hogs cleaner, reduce the dust, and reduce the

odor.” J.A. 5221. This suggestion appears particularly apt for Kinlaw, where a single

employee managed all twelve hog sheds—over 14,000 hogs—largely by himself. Id.

Perhaps due to labor constraints, Kinlaw flushed waste from the gutter beneath the

sheds “around four to six times a day,” while a North Carolina State facility using similar

technology flushes waste “up to 12 times a day.” J.A. 6202. This difference matters,

because when you flush more, “it’s less waste accumulation so, of course, less opportunity

for . . . gases and other things to evolve and to be emitted from the hog facility.” Id.

Beyond these straightforward improvements, more sophisticated solutions abound.

Of note, “Terra Blue” advanced wastewater treatment technology—which was developed

under the AG Agreement, see Maj. Op., ante at 8–9—is known for “pathogen reduction,

odor reduction beyond the property boundaries, and . . . treat[ing] . . . wastewater

constituents to a high quality before that material is disposed of.” J.A. 6985–86. It is

sometimes true that economic development and environmental quality are incompatible.

But it is not always the case, and the notion that we are invariably forced to a binary choice

is a fallacy. Mutual benefit would seem within reach here. Advanced systems may benefit

hogs and farmers by decreasing hog mortality and increasing weight gain “compared to the

traditional lagoon management.” See J.A. 6392. However, Murphy-Brown never diverged

from the lagoon-and-sprayfield system, J.A. 1988, 2005–10, or instructed Kinlaw to

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implement any available technological improvements, or so much as considered the cost.

J.A. 7628, 7656–65, 7874–80.

All this and more this nuisance lawsuit has laid bare. Courts may take note when

an industry has “unduly lagged in the adoption of new and available devices.” The T.J.

Hooper, 60 F.2d 737, 740 (2d Cir. 1932). While it is obviously not our job to displace

corporate decision-making with our own, improvements in technology may bear relevance

at trial to a company’s remediation efforts and options. As Gregg Schmidt, the president

of Murphy-Brown, wrote in 2013: “We also believe that . . . many of our contract farms

are approaching the age where significant renovations are necessary to ensure that the farm

continues to operate efficiently.” J.A. 5231. These renovations were long overdue at

Kinlaw Farms.

And efficiency is only one piece in the responsible stewardship of this essential

industry. Leaders of such industries can cultivate them in ways that account for their full

impact on all stakeholders. Business Roundtable, Statement on the Purpose of a

Corporation (Aug. 2019). Smithfield itself has put it best:

We believe that financial stability and sustainability go hand in hand. Our

sustainability strategies help us improve our company.

We seek to create value for our stakeholders, for our employees, and for our

company as a whole. . . . We believe we can create greater value for each of

our stakeholders by recognizing the intrinsic interconnections between our

business objectives and our sustainability objectives. . . .

We use the term “value creation” broadly and think of it in ways that go

beyond just our own company’s value.

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J.A. 6632. Stakeholders do not just include consumers, suppliers, and employees; they

include neighbors of hog facilities, children who go to school nearby, medical patients who

rely on antibiotics, wildlife and water sports enthusiasts, and many more.

Finally there is Wilbur, the pig who was friends with a spider, a rat, geese, sheep,

cows, and a little girl. Charlotte’s Web reminds us that all life is interconnected. And

while not all pigs will be pardoned like Wilbur, it is fitting that the creatures who give their

very lives for us, receive in return our efforts to make their brief stay on earth less

intolerable. For their sake and for ours. Such is the web of life.

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AGEE, Circuit Judge, concurring in part and dissenting in part:

Although I concur in the resolution of several issues addressed in the majority

opinion, I disagree that the admission of evidence relating to Murphy-Brown’s corporate

parents posed an improper risk only to the jury’s calculation of punitive damages. In my

view, the admission of this evidence was also patently erroneous as to liability for both

compensatory and punitive damages. The prejudice from this error is so profound that a

full new trial is necessary.

In addition, I disagree with the majority opinion’s affirmance of the district court’s

decisions regarding the admissibility of certain expert witness testimony. Specifically, I

conclude the district court abused its discretion in (1) failing to exercise its Daubert 1

gatekeeping function, which should have led to the limitation of testimony from Plaintiffs’

expert witness Dr. Shane Rogers, and (2) excluding Murphy-Brown’s expert witness Dr.

Pamela Dalton from testifying about the results of olfactometer measurements taken at and

near Kinlaw Farms. These evidentiary errors so affected the entire trial that they too require

remanding for a new trial.

For these reasons, described in greater detail below, I respectfully dissent in part. 2

1

Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).

2

I concur in the majority opinion’s conclusions that: (1) Kinlaw Farms was not a

necessary and indispensable party in this case, Maj. Op. II.A; (2) the statute of limitations

would not bar Plaintiffs’ nuisance claims because this case alleged a “continuing” nuisance,

Maj. Op. II.B; and (3) at the time this case was filed, North Carolina law authorized

recovery of compensatory damages for loss of use and enjoyment of property, and the 2017

amendment to the Right to Farm Act does not operate retroactively to bar Plaintiffs from

recovering such damages as a matter of law, Maj. Op. II.C.

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I. Legal Background & District Court Proceedings

A. North Carolina Nuisance Law

Before exploring the particulars of the evidentiary errors, a brief discussion of

Plaintiffs’ claim is warranted. Each of the ten plaintiffs asserted a single cause of action—

private nuisance under North Carolina law—against a single defendant, Murphy-Brown,

LLC, d/b/a Smithfield Hog Production Division. Because operating “a lawful enterprise is

not a private nuisance per se,” Plaintiffs asserted that Kinlaw Farms was a private nuisance

per accidens, meaning that they alleged it “bec[a]me [a] nuisance[] by reason of [its]

location, or by reason of the manner in which [it was] constructed, maintained or operated.”

Watts v. Pama Mfg. Co., 124 S.E.2d 809, 813 (N.C. 1962). 3 A plaintiff must prove two

things to hold a defendant liable for creating or maintaining a private nuisance per

accidens: “(1) that the defendant’s use of its property, under the circumstances,

unreasonably invaded or interfered with the plaintiff’s use and enjoyment of the plaintiff’s

property; and (2) because of the unreasonable invasion or interference, the plaintiff suffered

substantial injury.” Elliott v. Muehlbach, 620 S.E.2d 266, 269 (N.C. Ct. App. 2005). The

two elements operate in tandem, as North Carolina courts have summarized a plaintiff’s

prima facie case to require a showing of “the existence of a substantial and unreasonable

interference with the use and enjoyment of [the plaintiff’s] property.” The Shadow Group,

L.L.C. v. Heather Hills Home Owners Ass’n, 579 S.E.2d 285, 287 (N.C. Ct. App. 2003).

3

I have omitted internal quotation marks, alterations, and citations here and

throughout the opinion, unless otherwise noted.

84

The “unreasonableness” component of a nuisance per accidens cause of action

recognizes that individuals generally have freedom to use their property as they desire and

some interferences with another person’s use of his property are expected when living in

community. Watts, 124 S.E.2d at 815. This inquiry does not look to “whether a reasonable

person in plaintiffs’ or defendant’s position would regard the invasion as unreasonable, but

whether reasonable persons generally, looking at the whole situation impartially and

objectively, would consider it unreasonable.” Id. at 814. That is why “[w]hat is reasonable

in one locality and in one set of circumstances may be unreasonable in aanother [sic].” Id.

North Carolina courts have identified many circumstances that factfinders can consider

when determining whether an interference is unreasonable, including:

the surroundings and conditions under which defendant’s conduct is

maintained, the character of the neighborhood, the nature, utility and social

value of defendant’s operation, the nature, utility and social value of

plaintiffs’ use and enjoyment which have been invaded, the suitability of the

locality for defendant’s operation, the suitability of the locality for the use

plaintiffs make of their property, the extent, nature and frequency of the harm

to plaintiffs’ interest, priority of occupation as between the parties, and other

considerations arising upon the evidence.

Id. “[N]o single factor is decisive, [and] all the circumstances in the particular case must

be considered.” Elliott, 620 S.E.2d at 270.

The “substantial injury” component recognizes that because “[t]he law does not

concern itself with trifles,” recovery is limited to invasions involving “more than slight

inconvenience or petty annoyance.” Watts, 124 S.E.2d at 815. North Carolina courts have

explained that a “substantial interference” means “a substantial annoyance, some material

85

physical discomfort or injury to the plaintiff’s health or property.” The Shadow Group, 579

S.E.2d at 200.

B. The Claim & the Trial

Plaintiffs’ case was built around the allegation that three aspects of Kinlaw Farms’

operations constitute a cognizable nuisance: (1) regular—though not constant—odors

emanating onto their property from hogs and the lagoon-and-sprayfield waste management

system; (2) buzzards and flies that frequented their properties, particularly when hog

carcasses were stored in “dead boxes” awaiting removal from Kinlaw Farms; and (3) trucks

driving on the dirt road that passed close to their residences to access Kinlaw Farms

throughout the day and night to deliver and remove hogs. Plaintiffs each lived between

one-tenth to one-half mile from the hog-confinement buildings, waste lagoons, or

sprayfields on Kinlaw Farms; several of Plaintiffs’ residences abut the unpaved roads used

to access Kinlaw Farms.

Much of the evidence Plaintiffs submitted in support of their case was uncontested

and is not at issue on appeal. Broadly described, their evidence included Plaintiffs’

anecdotal descriptions of all three complained-of circumstances; records about Kinlaw

Farms’ operations, including waste spraying and truck transport schedules; expert

testimony about how the lagoon-and-sprayfield waste management system works and the

long-studied effects of industrial hog operations, including the type of lagoon-and-

sprayfield system used at Kinlaw Farms, on surrounding communities; and testimony about

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North Carolina’s hog industry generally, including legislative action regulating it from the

1990s to present day. 4

Similarly, much of Murphy-Brown’s evidence was uncontested and is not at issue

on appeal. It consisted of testimony describing (and records documenting) Kinlaw Farms’

compliance with North Carolina laws regulating lagoon-and-sprayfield waste management

systems on hog farms; Smithfield Foods, Inc.’s cooperation in studies regarding odor

reduction following a 2000 agreement with North Carolina’s Attorney General (“2000 AG

Agreement”) 5; Murphy-Brown’s responsiveness to reports of odor problems at other farms

and the absence of any such complaints about Kinlaw Farms; efforts Murphy-Brown had

undertaken to minimize odors associated with hog waste at its farms, including Smithfield

Foods, Inc.’s research and development of hog feed that decreased the volume and odor of

4

Both parties presented extensive evidence about North Carolina’s regulation of the

industry. It included newspaper articles and scientific and legislative reports regarding

statewide complaints about industrial hog farm odors in the 1990s that led to the

legislature’s decision to prohibit new lagoon-and-sp

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