A North Carolina hog supplier, Maxwell Foods LLC, has won the right to take some of its breach of contract claims to trial in its lawsuit against Smithfield Foods Inc., accusing the pork giant of unfair pricing practices that led to the downfall of its swine operations.
In a decision released Thursday, Judge Adam M. Conrad of the North Carolina Business Court allowed Maxwell to proceed with claims alleging Smithfield breached their long-standing production sales agreement. The suit centers around an arrangement where Maxwell agreed to supply Smithfield with hogs for processing and packaging.
Judge Conrad ruled that a jury will decide if Smithfield breached the agreement by allegedly offering a better pricing deal to another major swine supplier and by underpaying Maxwell for its hogs. He also found that Smithfield is liable for at least one breach of contract related to its failure to accept all of Maxwell’s hogs during the COVID-19 pandemic, leaving the issue of damages to a jury.
“It is undisputed that Smithfield did not buy all hogs produced by Maxwell in and after April 2020,” Judge Conrad wrote, noting that under the contract, Smithfield was required to purchase all of Maxwell’s swine up to a limit of 155,000 per month. Smithfield tried to invoke a force majeure clause to excuse its failure to accept the hogs, citing the pandemic as a reason for its inability to process them.
