KANSAS CITY, Mo., Sept. 25, 2006 (PRIMEZONE) -- A state court jury sitting in Jackson County, Missouri returned a $4.5 million combined verdict late Friday night against industrial hog producers Premium Standard Farms, Inc. (Nasdaq:PORK) and ContiGroup Companies, Inc. in favor of six neighbors of the defendants' vast farm operations in northern Missouri. The three-week trial was considered to be a bellwether for the remaining 54 claimants who jointly filed a mass action against the two related defendants in 2002, and whose claims remain to be resolved.
Plaintiffs Les and Denise Turner; Jack and Carlotta Arnold; and David Gwin and his late father Roy Gwin alleged that the odors emanating from defendants' concentrated animal feeding operations (CAFOs) created an unreasonable nuisance. After hearing evidence centering on defendants' land application of massive quantities of liquid hog manure, maintenance of multiple-acre wastewater lagoons, and other odor producing activities at the Scott/Colby farm in Daviess County, MO, the 12-person jury agreed, returning a unanimous decision after five hours of deliberations which included a finding of grounds for an award of punitive damages. Minutes prior to entering the punitive damages phase of the trial, defendants agreed to settle with the six plaintiffs for the full amount of the compensatory damages verdict.
Counsel for the plaintiffs believe that the verdict will have significant precedential impact on the remaining claims against PSF, who last week agreed to be purchased by the industry-leading hog producer, Smithfield Foods, Inc. (NYSE:SFD) in a $652 million deal announced just last week. "The verdict has tremendous implications for the claims still outstanding," stated Stephen A. Weiss of Seeger Weiss LLP in New York, one of the plaintiffs' trial counsel. "The trial plaintiffs insisted that they would endorse no settlement unless the jury's verdict was preserved as precedent for their neighbors' remaining claims. We believe that PSF and ContiGroup will be bound by this jury's factual findings."
Mr. Weiss' co-trial counsel, Charles F. Speer of The Speer Law Firm in Kansas City, agrees that PSF's exposure can no longer be ignored, stating: "The folks living near PSF are just fed up with the company's hear-no-evil, see-no-evil mentality. After over ten years of litigation, I trust that this verdict will serve as a wake-up call to PSF."
Also serving as trial counsel for the plaintiffs was Richard H. Middleton, Jr. of The Middleton Law Firm in Savannah, GA, who played a central role in the trial proceedings. Asked about the impact of the $4.5 million verdict on the six trial plaintiffs, Mr. Middleton replied: "I've come to know these people intimately and anguish with them over their plight. Hopefully, Main Street will win out over Wall Street and PSF will now invest their dollars in proper odor control technology for the benefit of all its neighbors in northern Missouri."