Burford Blocked From Taking Over Sysco’s Price-Fixing Lawsuit

Sysco Corp. can’t turn over its claims in a pork and beef price-fixing lawsuit to litigation funder Burford Capital Ltd., a federal judge ruled Monday.

Sysco is seeking to swap Burford in as the plaintiff in multiple meat and poultry antitrust suits, which the funder gave the company $140 million to pursue. The moves came after Sysco and Burford squabbled over potential settlements in the cases, for an amount that Burford deemed too low.

The strategy has been met with contradictory rulings from federal judges in different jurisdictions.

Judge John R. Tunheim, of the US District Court for the District of Minnesota, on Monday adopted a magistrate judge’s recommendation to block Burford’s substitution in the pork and beef price-fixing case. A federal judge in Illinois, however, in March allowed Burford to take Sysco’s place in a separate chicken price-fixing case.

Tunheim wrote Monday that the magistrate judge’s order was based on valid policy concerns and “therefore not clearly erroneous.”

Magistrate Judge John F. Docherty wrote in his February decision that it went against public policy to allow the substitution of a Burford affiliate as the plaintiff and “step into the shoes of the party” in order to prevent settlement.

Judge Thomas M. Durkin, the Illinois federal judge in the poultry case, took a different tack.

“Like litigation funding agreements, such assignments are a fact of modern litigation,” Durkin said in the March decision. He called the substitution “an unsurprising and logical result of the dispute between Sysco and Burford that arose from the funding agreement.”

Meat producers have opposed efforts to substitute Burford into the cases, arguing that the funder doesn’t have a direct connection to the litigation. They wrote in court documents that the assignment turns the claim into an “instrument of financial speculation for a litigation funder with no connection to the underlying claim.”

“Burford is reviewing the decision and doesn’t have any comment at present,” said David Helfenbein, a company spokesperson.

The case is: In re Pork Antitrust Litigation, D. Minn., 18-cv-01776, 6/3/24