Tyson Foods 2010 Annual Report Download - page 13

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ITEM 3. LEGAL PROCEEDINGS
Refer to the description of certain matters under Part II, Item 8, Notes to Consolidated Financial Statements, Note 23: Contingencies,
which 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.
On January 9, 2003, we received a notice of liability letter from Union Pacific Railroad Company (“Union Pacific”) relating to our
alleged contributions of waste oil to the Double Eagle Refinery Superfund Site in Oklahoma City, Oklahoma. On August 22, 2006, the
United States and the State of Oklahoma filed a lawsuit styled United States of America, et al. v. Union Pacific Railroad Co. in the
United States District Court for the Western District of Oklahoma seeking more than $22 million (the amount sought was
subsequently increased to more than $30 million) to remediate the Double Eagle site. Certain Tyson entities joined a “potentially
responsible parties” group on October 31, 2006. A settlement between the “potentially responsible parties” group, the United States,
and the State of Oklahoma was reached and the Tyson entities paid $625,586 into escrow towards the settlement of the matter. In
furtherance of finalizing the settlement, the U.S. Department of Justice filed a complaint styled United States of America, et al. v.
Albert Investment Co., Inc. et al., and includes the “potentially responsible parties.” A proposed Consent Decree addressing all alleged
liability of the Tyson entities for the site was lodged on June 27, 2008. On October 10, 2008, Union Pacific initiated litigation to
challenge the proposed Consent Decree by filing a motion to intervene, which the District Court denied. Union Pacific appealed this
decision to the United States Court of Appeals for the Tenth Circuit. The “potentially responsible parties” group and other parties filed
briefs in the Tenth Circuit, and oral arguments occurred on September 21, 2009. On November 10, 2009, the Tenth Circuit Court of
Appeals reversed the District Court’s decision, and Union Pacific was permitted to intervene in the litigation. After negotiations
amongst the interested parties, an Amended Consent Decree was lodged with the Court on October 8, 2010. The Amended Consent
Decree includes a reopener for certain future response costs. A notice will be published in the Federal Register inviting public
comment on the Amended Consent Decree. On October 14, 2010, Union Pacific filed a Notice of Dismissal of Intervention. Assuming
the Court approves and enters the Amended Consent Decree, Tyson will be required to make an additional principal payment of
$50,669 plus interest. Upon such payment, the matter will be concluded.
In November 2006, the Audit Committee of our Board of Directors engaged outside counsel to conduct a review of certain payments
that had been made by one of our subsidiaries in Mexico, including payments to individuals employed by Mexican governmental
bodies. The payments were discontinued in November 2006. Although the review process is ongoing, we believe the amount of these
payments is immaterial, and we do not expect any material impact to our financial statements. We have contacted the Securities and
Exchange Commission and the U.S. Department of Justice to inform them of our review and preliminary findings and are cooperating
fully with these governmental authorities.
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. In addition to the poultry company defendants, plaintiffs sued Alpharma, the manufacturer of a feed
ingredient containing an organic arsenic compound that has been used in the broiler industry. Plaintiffs are 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 and denied summary judgment as to Alpharma.
The case was tried against Alpharma and the jury returned a verdict in favor of Alpharma. Plaintiffs appealed the summary judgment
in favor of the poultry company defendants and the Court stayed the remaining eight lawsuits pending the appeal. On May 8, 2008, the
Arkansas Supreme Court reversed the summary judgment in favor of the poultry company defendants. The remanded trial in this case
against us and the other poultry company defendants was held, and on May 14, 2009, the jury returned a verdict in favor of the
defendants. The plaintiffs appealed this verdict to the Arkansas Supreme Court. The parties have submitted briefs in this matter and
are awaiting the Arkansas Supreme Court's ruling.