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Judge Blocks Sysco’s Bid to Assign Price-Fixing Claims to Burford Capital

 |  June 5, 2024

Sysco’s attempt to assign its claims in a pork and beef price-fixing lawsuit to litigation funder Burford Capital Ltd. has been blocked by a federal judge. This decision, reported by Bloomberg, marks a pivotal moment in the legal battle that has seen contradictory rulings across different jurisdictions.

On Monday, Judge John R. Tunheim of the U.S. District Court for the District of Minnesota upheld a magistrate judge’s recommendation to prevent Burford from being substituted as the plaintiff in the pork and beef price-fixing case. This ruling follows a protracted disagreement between Sysco and Burford over potential settlements, with Burford arguing that the proposed settlement amounts were insufficient.

The legal dispute centers around Sysco’s strategy to involve Burford as the plaintiff in several antitrust suits involving meat and poultry. Burford had provided Sysco with $140 million to pursue these cases. However, Sysco’s efforts to swap in Burford as the plaintiff have met with mixed responses from federal judges.

Related: Burford Seeks Order Barring Sysco From Settling Antitrust Suit

In his ruling, Judge Tunheim noted that the magistrate judge’s recommendation was based on legitimate policy concerns, deeming the decision “not clearly erroneous.” Magistrate Judge John F. Docherty, in a February decision, argued that allowing Burford’s substitution would violate public policy by enabling a third-party funder to step into the role of the plaintiff, thereby potentially preventing settlement.

Conversely, in a separate but related case, a federal judge in Illinois allowed Burford to take Sysco’s place in a chicken price-fixing lawsuit. In March, Judge Thomas M. Durkin of the Illinois federal court adopted a different approach, stating that such assignments are an inherent part of modern litigation. Durkin described the substitution as a “logical result” of the dispute stemming from the funding agreement between Sysco and Burford.

Meat producers have expressed strong opposition to the substitution efforts, arguing that Burford, as a litigation funder, lacks a direct connection to the underlying claims. They contend that assigning the claims to Burford transforms them into mere instruments of financial speculation, disconnected from the original issues at stake.

Source: Bloomberg Law