Maricopa County officials have dropped their challenge to a ruling saying authorities in metro Phoenix couldn't charge immigrants who paid to be brought to the U.S. illegally with conspiracy to smuggle.
A judge at the end of last year prohibited county authorities from using the tactic, which expanded the state's smuggling law.
This led to complaints that the statute was intended for smugglers, not their customers.
The Wednesday settlement called for the county to drop its appeal in exchange for paying $675,000 in attorney fees for the lawyers who challenged the tactic.
In exchange, the lawyers who brought the case agreed to drop an appeal that sought to invalidate more than 1,000 convictions brought against smuggling customers.
The Associated Press contributed to this report.