Sysco Corp. cannot transfer its claims in a pork and beef price-fixing lawsuit to litigation funder Burford Capital Ltd., a federal judge ruled on Monday. Sysco sought to substitute Burford as the plaintiff in multiple meat and poultry antitrust suits, after receiving $140 million from Burford to pursue these claims. This move followed internal disagreements over the potential settlements in these cases, which Burford deemed too low.
Federal judges in different jurisdictions have issued conflicting rulings on this strategy. Judge John R. Tunheim of the US District Court for the District of Minnesota adopted a magistrate judge’s recommendation to block Burford’s substitution in the pork and beef price-fixing case. Contrarily, in March, a federal judge in Illinois allowed Burford to take Sysco’s place in a separate chicken price-fixing case. Further details on the case can be found here.
Magistrate Judge John F. Docherty, in his February decision, highlighted public policy concerns, stating it was against public policy to allow a Burford affiliate to “step into the shoes of the party” and prevent settlement. Conversely, Judge Thomas M. Durkin of Illinois noted in his March decision that such assignments are a reality of modern litigation and a logical result of the contractual dispute between Sysco and Burford.
Meat producers have opposed substituting Burford into these cases, arguing that the funder has no direct connection to the litigation and that the assignment turns the claim into an “instrument of financial speculation.” Burford is currently reviewing the Minnesota decision and has not commented further.