Burford Foiled in Bid to Undo Sysco Price-Fixing Settlement

A settlement deal that Sysco Corp. accepted in meat price-fixing lawsuits is enforceable, despite objection by the litigation funder now controlling the company’s claims, according to a federal court.

Sysco legally accepted a global settlement deal with beef, pork and chicken producers, an Illinois federal judge ruled Friday. Although the company didn’t sign the agreement—and later transferred its claims to funder Burford Capital Ltd.—it agreed to the “heart” of the deal in email communications and draft documents.

“That is sufficient objective evidence of an agreement to enforce it,” Judge Thomas M. Durkin wrote.

The ruling muddies a long running dispute involving Burford, Sysco and defendants in antitrust claims against meat producers. The lawsuits accuse the producers of conspiring to elevate meat prices.

Burford gave Sysco $140 million to pursue the cases, but the companies last year squabbled after the funder deemed the settlement too low. The terms of the deal have not been made public. Sysco eventually agreed that a Burford affiliate would take over the claims, a plan that other parties to the sweeping litigation have opposed.

“It is concerning that the court has today opted to enforce a supposed agreement that the parties clearly never viewed as binding,” Burford spokesman David Helfenbein said via email. “We think corporate America will be surprised to learn that emails from mid-level corporate functionaries can be sufficient to bind companies to substantial settlements in the absence of executed settlement agreements.”

Durkin ruled in March that Sysco could hand off its chicken price-fixing claims to Burford. But a Minnesota federal judge hearing related beef and pork price-fixing cases rejected a similar substitution earlier this month.

Durkin in Friday’s ruling granted a motion by Pilgrim’s Pride Corporation, a chicken producer sued for price fixing, to enforce the global settlement covering the poultry, beef and pork cases.

Burford’s affiliate Carina Ventures opposed the motion, arguing that the parties did not reach an agreement because they did not execute a final signed written agreement. Pilgrim’s has not “performed any of its obligations under the supposed settlement,” Carina said.

Carina argued that the company waited to long to enforce the agreement, which was filed in September 2023, a year after the settlement was reached. It also said the court lacks jurisdiction to enforce the settlement for the pork and beef claims because they are pending in the Minnesota court.

“Settlement of claims beyond those expressly alleged in a single complaint is an unsurprising and common characteristic of settlement agreements,” Durkin ruled, rejecting the jurisdiction argument. “The goal of settlement is often to globally extinguish litigation between the parties involved.”

The case is In re Broiler Chicken Antitrust Litig., N.D. Ill., No. 16-cv-8637, 6/14/24.