Embattled pork producer suing insurers to cover litigation losses


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With damages from federal nuisance lawsuits in North Carolina surpassing the half-billion-dollar mark – fended off by the state's punitive cap – a major pork producer in piedmont and coastal counties has filed suit against its insurers.

Attorneys for Smithfield Foods and its subsidiary in North Carolina, Warsaw-based Murphy-Brown, filed suit March 5 in the General Court of Justice, Superior Court Division, against about a dozen insurance companies. The companies are seeking compensatory and punitive damages for having to fend off years of litigation over how its pork production is handled in North Carolina from liability insurers who issued policies to Smithfield Foods and Murphy-Brown between 2010 and 2015.

"The dispute concerns the obligation of those insurers to defend and/or reimburse defense costs incurred by Murphy-Brown and Smithfield and to indemnify Murphy-Brown for the claims for property damage, bodily injury and damages alleged by individuals living near hog farms in eastern North Carolina where Murphy-Brown's hog products are grown," the lawsuit said.

About nine million hogs live in North Carolina, making the state the second-largest pork producer in the U.S. behind Iowa. In Sampson and Duplin counties, hogs outnumber people by about 30 to one, according to an industry website.

The lion's share of pork production in North Carolina, about 90 percent, is processed through Virginia-based Smithfield Foods, which itself is owned by the world's largest pork company, WH Group in China.

Smithfield and Murphy-Brown have for years encountered legal difficulties, particularly in federal court, over the company and its subsidiary's alleged part in raising hogs in North Carolina. In December 2017, a federal judge ordered Murphy-Brown to live up to a 2006 agreement and clean up 11 sites in Bladen, Columbus, Duplin, Pitt, Sampson and Scotland counties.

Last spring, a federal court jury in the eastern part of the state handed down a $50 million nuisance verdict in favor of property owners adjacent to a Murphy-Brown pig farm in Bladen County. That litigation was only one of a line of cases the pork producer has been fighting. By the time Smithfield and Murphy-Brown filed its lawsuit against its insurers, the company and subsidiary had lost five federal nuisance cases with damages reaching more than $550 million, well more than the state's $97.2 million punitive-charges cap.

In February, WH Group announced an expected drop in revenue and profits because of trade tensions spawned by the Trump administrations tariffs.

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