Tyson Foods 2011 Annual Report Download - page 13

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We believe our present facilities are generally adequate and suitable for our current purposes; however, seasonal fluctuations in
inventories and production may occur as a reaction to market demands for certain products. We regularly engage in construction and
other capital improvement projects intended to expand capacity and improve the efficiency of our processing and support facilities.
We also consider the efficiencies of our operations and may from time to time consider changing the number or type of plants we
operate to align with our capacity needs.
ITEM 3. LEGAL PROCEEDINGS
Refer to the description of certain legal proceedings pending against us under Part II, Item 8, Notes to Consolidated Financial
Statements, Note 19: Commitments and Contingencies, which discussion is incorporated herein by reference. Listed below are certain
additional legal proceedings involving the Company and/or its subsidiaries.
On October 23, 2001, a putative class action lawsuit styled R. Lynn Thompson, et al. vs. Tyson Foods, Inc. was filed in the District
Court for Mayes County, Oklahoma by three property owners on behalf of all owners of lakefront property on Grand Lake O’ the
Cherokees. Simmons Foods, Inc. and Peterson Farms, Inc. also are defendants. The plaintiffs allege the defendants’ operations
diminished the water quality in the lake thereby interfering with the plaintiffs’ use and enjoyment of their properties. The plaintiffs
sought injunctive relief and an unspecified amount of compensatory damages, punitive damages, attorneys’ fees and costs. While the
District Court certified a class, on October 4, 2005, the Court of Civil Appeals of the State of Oklahoma reversed, holding the
plaintiffs’ claims were not suitable for disposition as a class action. This decision was upheld by the Oklahoma Supreme Court and the
case was remanded to the District Court with instructions that the matter proceed only on behalf of the three named plaintiffs.
Plaintiffs seek injunctive relief, restitution and compensatory and punitive damages in an unspecified amount in excess of $10,000.
We and the other defendants have denied liability and asserted various defenses. The defendants have requested a trial date, but the
court has not yet scheduled the matter for trial.
Since 2003, nine lawsuits have been brought against us and several other poultry companies by approximately 150 plaintiffs in
Washington County, Arkansas Circuit Court (Green v. Tyson Foods, Inc., et al., Bible v. Tyson Foods, Inc., Beal v. Tyson Foods, Inc.,
et al., McWhorter v. Tyson Foods, Inc., et al., McConnell v. Tyson Foods, Inc., et al., Carroll v. Tyson Foods, Inc., et al., Belew v.
Tyson Foods, Inc., et al., Gonzalez v. Tyson Foods, Inc., et al., and Rasco v. Tyson Foods, Inc., et al.) alleging that the land
application of poultry litter caused arsenic and pathogenic mold and fungi contamination of the air, soil and water in and around
Prairie Grove, Arkansas and seeking recovery for several types of personal injuries, including several forms of cancer. On August 2,
2006, the Court granted summary judgment in favor of Tyson and the other poultry company defendants in the first case to go to trial,
which the plaintiffs appealed, and the trial court stayed the remaining eight lawsuits pending the appeal. On May 8, 2008, the
Arkansas Supreme Court reversed the summary judgment and remanded for a new trial. The remanded trial was held and the jury
returned a verdict in our favor. The plaintiffs appealed this verdict to the Arkansas Supreme Court, which affirmed the verdict and
denied the plaintiffs' petition for rehearing. The trial court has scheduled the second trial for October 22, 2012.
In 2010 our Mexican subsidiary, Tyson de Mexico (TdM), provided the National Water Commission (CONAGUA), an agency of the
Mexican government’s Ministry of the Environment and Natural Resources, with information on TdM’s water usage for 2008 and
2009 at certain water wells that are part of TdM’s poultry production operations. In February 2011, the regional CONAGUA office
informed TdM that it was the regional CONAGUA office’s opinion that TdM’s permits for water usage from certain wells lapsed
between the period of January 1, 2009 through May 5, 2009, and it estimated TdM owed approximately 6.5 million pesos
(approximately $560,000) for water usage during this period. TdM has had ongoing discussions with the regional CONAGUA office
on this matter and is awaiting the regional office’s final determination.
In late 2010, the United States Environmental Protection Agency (EPA) Region 7 began a Clean Air Act investigation of the company
related to operation and maintenance of ammonia refrigeration equipment at multiple facilities. The EPA subsequently referred the
matter, which involves allegations of potential non-compliance with the Clean Air Act’s Risk Management Plan requirements at 15
Tyson facilities in Kansas, Missouri, Iowa and Nebraska, to the United States Department of Justice (DOJ). The EPA and DOJ have
indicated they will seek monetary penalties (but the EPA and DOJ have not yet indicated an amount) and injunctive relief requiring
equipment and infrastructure changes at several facilities.
Other Matters: We currently have approximately 115,000 employees and, at any time, have various employment practices matters
outstanding. In the aggregate, these matters are significant to the Company, and we devote significant resources to managing
employment issues. Additionally, we are subject to other lawsuits, investigations and claims (some of which involve substantial
amounts) arising out of the conduct of our business. While the ultimate results of these matters cannot be determined, they are not
expected to have a material adverse effect on our consolidated results of operations or financial position.
ITEM 4. REMOVED AND RESERVED
Not applicable.