Stay Advances $41M Poultry Settlement

LINCOLN, Neb. (DTN) -- A federal appeals court cleared the way for a proposed $41 million settlement in a 21-year-old lawsuit against six poultry companies alleging they polluted the Illinois River watershed. Those companies and the state of Oklahoma asked a court to stay and vacate a December 2025 judgment.

The U.S. Court of Appeals for the 10th Circuit this week issued a stay of that original judgment reached in the U.S. District Court for the Northern District of Oklahoma but declined to vacate the judgment.

"We grant the stay motion and stay the judgment pending further order of the court," the 10th Circuit said this week.

"We direct a limited remand to permit the district court to consider the parties' request for relief from the judgment in light of the changed circumstances in the first instance."

So, the district court will need to decide whether to set aside the original judgment.

In December 2025, the Oklahoma federal court issued a judgment holding poultry corporations jointly responsible and required them to fund decades of cleanup and imposed strict restrictions on waste application practices. In July 2026, the state of Oklahoma reached a new $41 million settlement after a previously announced settlement was rejected by the district court.

Because the newly proposed settlement came after the court's 2025 judgment, the case had to be appealed to the 10th Circuit for clarification.

The 10th Circuit cited U.S. Bancorp Mortgage Co. V Bonner Mall Partnership, a 1994 U.S. Supreme Court decision that held when parties settle after a judgment has been entered and appealed, the settlement itself does not automatically justify vacating a lower-court judgment.

Oklahoma sued Tyson Foods, Cargill, George's, Peterson Farms, Cal-Maine and Simmons Foods in 2005. The Oklahoma federal court found the companies liable for pollution and then rejected a narrower settlement with four of the six companies.

AGREEMENT TO CLOSE CASE

The new agreement filed in federal court is expected to close the case with all six companies.

The settlement will require the companies to pay tens of millions of dollars into an environmental relief fund that will be transferred to the Oklahoma Conservation Commission.

The companies will pay a combined $420,000 in penalties to the state and will fund a $1.9 million auditor fund to pay for a compliance monitor.

Under the settlement, the companies will progressively reduce how much poultry litter removed from poultry houses each year is applied to land in the watershed.

No more than 40% of litter will be applied in years one and two, up to 30% in years three and four, then reduced to no more than 20% in years five through seven, according to the settlement.

Litter that is exported from the watershed to meet the limits may not be land-applied in any other "nutrient-sensitive" watershed in Oklahoma.

The companies agreed to fund or to secure funding for half the cost to install vegetative buffers on poultry farms along Lake Tenkiller as well as the watershed's Scenic Rivers system, which filters runoff before it reaches water.

CONTRACT GROWERS PROTECTED

In addition, the settlement includes protections for contract poultry farmers.

"The released parties agree not to use this settlement as the reason or basis for any decision not to renew or extend contracts with IRW growers," according to the settlement.

In February 2026, Tyson agreed to pay $19 million for remediation and conservation of the watershed, while Cargill Inc. and Cargill Turkey Production agreed to pay $6.5 million. George's agreed to pay $5 million to the state for remediation and conservation projects in the watershed, along with attorney fees.

That settlement was rejected by the court.

According to Save the Illinois River Inc., as of 2019 there were 398 farms in the Arkansas counties of Benton and Washington, with the capacity to house more than 42 million birds at 1,835 poultry houses.

The Oklahoma counties of Adair, Cherokee and Delaware are in the watershed. As of 2018, poultry producers in those Oklahoma counties reported a licensed bird capacity of about 23.3 million at 1,054 poultry houses.

The companies sought to dismiss the case that has been ongoing for more than 20 years, in a court filing in October 2023. At that time, the companies argued that any penalties or relief of any kind would be based on outdated information as to pollution levels and other watershed issues.

Read more on DTN:

"Oklahoma to Close 21-Year Poultry Case," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com.

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