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Published July 30, 2012, 02:50 PM

Thompson Farms awarded $600,000 in damages

A jury ordered Aurora County, S.D., to pay $600,000 to Thompson Farms for damages caused by a county zoning ordinance restricting dairy cow numbers.

By: Chris Mueller, Forum Communications

YANKTON, S.D. — A jury ordered Aurora County, S.D., to pay $600,000 to Thompson Farms for damages caused by a county zoning ordinance restricting dairy cow numbers.

The jury unanimously agreed on the verdict July 27, following nearly four hours of deliberation. The trial to determine the damages amount, which was moved to Yankton, S.D., to avoid media coverage in the Aurora County area, took seven days.

Because county officials failed to provide timely notice of the lawsuit years ago to the county’s insurer, the insurer has been released from liability for the damages. That means the Aurora County Commission must now consider how it will meet the obligation.

“We have to think about what our next actions will be,” says Aurora County Commissioner Del Persson.

The jury arrived at its decision by calculating what it believed to be the value of Thompson Farms before and after the ordinance was enacted. Without the ordinance, the jury found the value of the dairy to be $5.8 million; with the ordinance, the jury found its value to be $5.2 million. The difference was awarded in damages.

Thompson Farms had asked the jury for $2.6 million, claiming a 1998 county ordinance limiting animal-feeding operations to 1,050 animals damaged the value of the operation and forced the multimillion-dollar dairy to close. Thompson Farms had invested money into expanding the dairy before the ordinance was enacted. The dairy was located about three miles north of Storla, S.D.

Legal battle

The verdict was the latest development in a 14-year legal battle between the dairy and the county. It comes after a 2009 court ruling found Aurora County’s ordinance violated the rights of Thompson Farms, and a Davison County jury’s decision in January making the county, not its insurance provider, liable to pay any damages awarded in the case.

Determining how the county might pay the $600,000 awarded to Thompson Farms will be addressed once an appeal decision is made, Persson says.

Persson, a commissioner since 1991, has been involved in the legal battle with Thompson Farms since it began.

“I think it’s closer to an end now than it has been in a couple of years,” he says. “But, an appeal of course can encompass another couple of years.”

When the ordinance was originally enacted, Persson says there was no indication of the ensuing legal troubles.

“The voters wanted it,” he says, noting county residents passed the ordinance with more than 70 percent support.

The ordinance is still in place in Aurora County.

During closing arguments, Thompson Farms attorneys Mark Meierhenry and Clint Sargent both told the jury that its decision would have far-reaching constitutional ramifications pertaining to property rights.

Meierhenry is a former attorney general of South Dakota. A member of the county’s trial team, Roger Tellinghuisen, also is a former South Dakota attorney general.

“This case is bigger than all of us. Bigger than everyone in this courtroom,” Sargent told jurors. “Your job is to enforce the constitution and return the constitutionally just compensation.”

Sargent referenced evidence presented earlier in the trial that showed Thompson Farms began planning its expansion years before the county enacted its livestock cap. He argued that at the time, Thompson Farms was prepared to expand the dairy and hoped to attract investors by doing so.

“But they weren’t allowed to do that,” Sargent said. “Their 1,000-cow dairy couldn’t go to a 2,000-cow dairy because the county enacted an ordinance … that inhibited their ability to attract investors and that made their property less valuable when they tried to sell.”

Dick Tieszen, the lead attorney for Aurora County, made causation the centerpiece of his closing arguments.

“Before you start running to the calculator as to damages, you’re supposed to decide if this ordinance was really the cause of the damages or not,” he said.

Much of the testimony from the county’s witnesses focused on the dire financial situation — a witness testified July 26 that the operation was “on its financial deathbed” — and questionable management at Thompson Farms around the time the ordinance was enacted.

“This is a sad story,” Tieszen said. “It’s a sad story about some really nice people who didn’t make it in their dairy business. And while unfortunate, just because we have a sad story does not mean it is somebody else’s fault.”

Thompson Farms was in such a decline that the county’s ordinance had no chance to affect it, he argued.

“Use your own common sense about what was really going on,” Tieszen told the jury.

Meierhenry spoke the final words to the jury members before they were led out of the courtroom to begin deliberating. He read a portion of South Dakota’s constitution guaranteeing personal property rights and indicated county officials had violated those rights.

“If you would accept their argument, you would rate these constitutional rights as worthless,” he said.

Editor’s Note: This article is from Forum Communications, which owns Agweek.

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