Ozarks Law & Economy

I’ve heard that the vows of many vegetarians have been temporarily broken by the craving induced by the smell of bacon being cooked over a campfire.

But the process of creating bacon, ham and pork chops can create such awful odors that a Missouri jury awarded $11 million to those who could not escape the smell of hog farm effluent applied to neighboring fields.

Premium Standard Farms operates several hog farms in northern Missouri, where sparse population and proximity to feed grains hold costs down. These confinement feeding operations (CAFOs) produce lots of pork and staggering amounts of pungent effluent (urine and feces). PSF disposes of the effluent by tilling the fields around its hog houses and spraying the effluent into the air over the loosened soil. While the effluent is being sprayed (as much as 300 feet into the air) and as it soaks into the soil, it releases foul odors.

In one of many suits against PSF, sixty-one neighboring property owners sued PSF and its affilliates in 2002  for damages resulting from the bad smells wafting from PSF’s effluent application over an 11-year period ending in 2010. After much pretrial wrangling, with the plaintiffs being split up into groups based on distance from the hog farm, a four-week trial was held in Kansas City, and fifteen plaintiffs were awarded just over $11 million in compensatory damages.

The claims were made under the legal theory of temporary nuisance, which allows damages to be awarded if the plaintiffs can prove that the use of the defendant’s property was detrimental to the plaintiffs’ use and enjoyment of the plaintiffs’ properties. Plaintiffs are not required to prove that their property values were permanently diminished by the nuisance, only that their use and enjoyment of their properties were harmed during the time of the nuisance.

PSF appealed the jury verdict, claiming six different errors, a couple of which are interesting. The Western District of the Missouri Court of Appeals rejected all six. PSF’s most interesting arguments are:

• owners of unoccupied farmland are not entitled to recover in a temporary nuisance suit because of their business use of their property.
• the only measure of damages for loss of use of business property is the loss of  property value during the period of the nuisance, rather than whatever a jury thinks would compensate the owner for unreasonable interference with the use and enjoyment of the owner’s property.

The law of nuisance grew out of the common law. For nearly 150 years, law students have been told about Rylands v. Fletcher, an 1868 decision of an English court that changed the law of nuisance by establishing strict liability of those who produce or harbor dangerous or noxious substances on their land. Those who have the bad stuff on their land can be liable to their neighbors if the bad stuff escapes, regardless of whether the escape of the bad stuff happened as a result of negligence.

State legislatures don’t like to adopt regulations that create liability for those who create lots of jobs and tax revenues, so it remains the job of judges and juries to fashion remedies for dealing with some kinds of pollution. The Court of Appeals rejected PSF’s analysis of case law, concluding

there is no persuasive reason that land used for business purposes could not support an award for the loss of the use and enjoyment of such property by the business owner…We refuse to say as a matter of law that the owners of farmland are not entitled to the reasonable use and enjoyment of that land merely because business activities are conducted on it.

CAFOs provide markets for feed grains raised by neighboring farmers. That’s why many CAFOs are located in areas of fertile soil and ample water. Neighbors to a CAFO are likely to be substantial farmers, some of whom produce grains that feed the CAFO’s poultry, cattle or hogs. Many of their farms are large and highly mechanized and often owned by farming corporations or limited liability companies. CAFOs support local economies, generating tax revenues, income and jobs, keeping alive communities that would otherwise continue to wither.

CAFOs also consume huge amounts of water that becomes effluent, the smell of which can make it impossible to be outside during and shortly after it is applied to fields. Under Missouri law, users of private wells pay nothing for the withdrawn water, even though the withdrawals deplete shared acquifers. In other words, CAFO operators, like other businesses, don’t want to bear all the costs of their activities, hoping that these costs can be spread over the larger community. The judicial system, applying the common law, still allows juries to force polluters to bear more of their social costs than the polluters would voluntarily accept.