by Jon Guze
Senior Fellow, Legal Studies, John Locke Foundation
More than 500 North Carolina plaintiffs are suing Smithfield Foods and other swine farmers for nuisance. In response to this litigation, Reps. Jimmy Dixon, David Lewis, and John Bell have sponsored a bill “to clarify the remedies available in private nuisance actions against agricultural and forestry operations.”
House Bill 467 imposes limits on compensatory damages in such actions. In the case of permanent nuisance, damages are limited to “the reduction in the fair market value of the plaintiff’s property.” In the case of temporary nuisance, they are limited to “the diminution of the fair market rental value.” The bill applies to “actions filed, arising, or pending on or after” the date of passage.
The bill has come in for a fair amount of criticism, and not just by the plaintiffs’ attorneys. Critics include progressive advocacy groups like Progress NC — which calls it a “Chinese bail-out bill” designed to “shaft the little guy” — as well as property rights advocates like former house member Skip Stam, who declares, “No matter how well-intentioned, it is not constitutional.”
There’s a lot to dislike about the swine farm nuisance litigation, not least the huge contingency fees that will be awarded to the plaintiffs’ attorneys if they are successful. Nevertheless, in my judgment Rep. Stam is right. By making it impossible for them to recover damages for annoyance, discomfort, and similar nonmonetary losses, H.B. 467 infringes on the property owners’ constitutional right to the quiet enjoyment of their property. And by having a retroactive effect on pending litigation, it infringes on their constitutional right to due process.
This is not to say that the other side’s arguments are completely without merit. The North Carolina courts have yet to specify when, if ever, a property owner may recover nuisance damages for annoyance and discomfort. However, under traditional common law a property owner may recover such damages, and this is as it should be. The common law principle has, moreover, been endorsed by the American Law Institute in its Restatement of Torts:
(1) If one is entitled to a judgement for harm to land resulting from a past invasion and not amounting to a total destruction of value, the damages include compensation for
(a) the difference between the value of the land before the harm and the value after the harm, or at his election in an appropriate case, the cost of restoration that has been or may be reasonably incurred,
(b) the loss of use of the land, and
(c) discomfort and annoyance to him as an occupant.
An ancient common law principle like this one may be subject to exceptions, but — especially then the issue arises in the course of litigation — working out when those exceptions occur is a job for the courts, not the legislature.
Similarly, our courts have sometimes permitted clarifying legislation to have a retroactive effect over pending litigation. However, in such cases the legislature has typically been clarifying its own past legislation, not the common law as it has existed for centuries. Moreover, in such cases the legislature has typically been acting to protect plaintiffs and make them whole, not limit their right to restitution. Permitting the legislature to intervene in pending litigation in a way that clearly favors one party while harming the other is a dangerous precedent that threatens not only the right to due process of law, but also the separation of powers.
For all these reasons, the House should think carefully before it approves H.B. 467.