A US judge ruled on Friday that Burford Capital, a prominent litigation finance firm, cannot be named as the plaintiff in antitrust lawsuits initiated by its financing client, Sysco, a major US food distributor. The ruling, delivered by Minnesota-based U.S. Magistrate Judge John Docherty in a 29-page document, questioned Burford’s motives and authority to steer Sysco’s cases.
Judge Docherty asserted that Burford’s interests were purely financial and that the firm lacked any legitimate stake beyond its financial investment in Sysco’s lawsuits. These lawsuits, which target major beef and pork suppliers, allege price-fixing practices within the industry. Docherty’s ruling emphasized that allowing Burford to assume Sysco’s position as the plaintiff could contravene public policy by potentially discouraging settlements.
Burford Capital, however, expressed its intention to contest the court order, labeling it “illogical.” The firm highlighted its acquisition of Sysco’s antitrust claims in the preceding year as a basis for its contention against Docherty’s decision, reported Reuters.
The legal dispute marks the latest episode in an unconventional clash involving Sysco and Burford, once considered collaborators. Burford Capital, among the largest financiers of litigation in the United States, typically invests in cases with the expectation of securing a portion of any eventual settlement or judgment. According to court documents, Burford has allocated $140 million since 2019 to support Sysco’s antitrust litigation efforts.
The rift between Burford and Sysco escalated last year when Burford accused Sysco of seeking inadequate settlements for the claims. In March, Burford obtained an arbitration order in New York preventing Sysco from finalizing any such agreements.
Judge Docherty’s ruling emerges after extensive legal maneuvering involving Sysco, Burford Capital, and major beef and pork producers. The crux of the legal battle has revolved around the question of whether and to what extent a litigation funder can supersede decisions made by a client seeking to resolve claims through settlements.