Pilgrim's Pride has beaten off another attempt by an arm of the world's largest funder of lawsuits to prevent it from exiting a court fight with food distributor Sysco, which had accused Pilgrim's Pride and other meat producers of illegally conspiring to boost the price of chicken.
On Dec. 16, U.S. District Judge Thomas Durkin again sided with Pilgrim's Pride in its dispute with an affiliate of litigation financier Burford Capital over the fate of Pilgrim's and Sysco's apparent agreement to settle the legal action over chicken prices.
The ruling means Burford, through its affiliate Carina Ventures, cannot set aside the deal and revive the lawsuit in a bid to extract more money and increase its return on its investment in Sysco's action.
In the ruling, Durkin said, ultimately, Burford and Carina Ventures could not overcome evidence showing communications between lawyers for the two companies which the judge said clearly indicated the parties had a "meeting of the minds" that resulted in a deal to settle the lawsuit, despite Burford's desires otherwise.
The ruling comes as one of the latest steps in the sprawling litigation pending in federal courts in Chicago and Minneapolis over claims meat producers violated federal antitrust laws by allegedly colluding to keep the prices of chicken, beef and pork artificially high.
While the beef and pork-related lawsuits have been consolidated in Minnesota, the chicken price lawsuits have remained pending in Chicago federal court since 2016.
At that time, Pilgrim's Pride and other poultry producers were first pecked by a wave of collective action antitrust lawsuits, accusing the producers of suppressing the supply of chickens to make customers pay more.
Sysco Corp. was among the litany of food buyers, distributors and sellers who lodged lawsuits seeking a share of whatever the meat producers may ultimately pay out.
In 2022, however, those claims by Sysco received significant attention, as in a rare moment of transparency, Sysco and Burford tangled in federal court over an otherwise secret financing arrangement that undergirded Sysco's lawsuits.
In that court fight, Sysco accused Burford of improperly using $140 million in lawsuit loans to improperly interfere with Sysco's attempts to settle its lawsuits and exit the litigation.
According to public reports, Burford annually invests billions of dollars into lawsuits targeting American companies.
According to court documents, Burford was unhappy with the deals Sysco had negotiated, apparently believing it should receive far more on its investment than what Sysco was willing to accept. Burford, through three subsidiaries, instead demanded Sysco continue suing until it could extract a bigger settlement or judgment at trial.
The court fight between Sysco and Burford ended in a settlement, under which Sysco agreed to sign over its legal claims to a Burford subsidiary company, Carina Ventures.
Pilgrim's Pride and other producers failed to snuff out that settlement, despite their claims that Burford and its affiliates should not be permitted to take control of the lawsuits, because those investors had no motive in the lawsuits other than a desire to maximize their return on investment.
While Durkin allowed the arrangement between Sysco and Carina to move forward, a federal magistrate judge in Minneapolis blocked Burford from claiming control of Sysco's actions against beef and pork producers.
In Chicago federal court, Pilgrim's Pride then asked Durkin to end Sysco's legal actions against them, asserting they had a settlement deal.
According to court documents, around the time that Sysco and Burford took their legal beef public, Pilgrim's and Sysco appeared to reach a deal to end their court fights in both Chicago and Minneapolis courts.
The terms of that deal have not been disclosed.
The settlement, however, was never signed by Sysco executives, as they were at the time embroiled in the court fight with Burford over their rights to direct their own legal affairs.
In pushing for the settlement, Pilgrim's Pride presented Durkin with emails between Pilgrim's and Sysco, showing Pilgrim's had presented a settlement plan and Sysco had accepted.
Burford, through Carina, objected and challenged the deal in court, arguing no deal was ever signed and Durkin could not approve a deal to end the litigation pending in Minnesota court.
Durkin, however, approved the deal in June, saying he agreed a deal had been reached, despite Burford's arguments to the contrary.
Burford appealed that ruling, and won a respite in the U.S. Seventh Circuit Court of Appeals. In that decision, the Seventh Circuit agreed Durkin had overreached slightly, noting his order did not include any kind of particular "direction" to the parties on what the existence of the settlement agreement should mean.
Noting he believed the Seventh Circuit was correct, Durkin on Dec. 16 issued a new order. The order again found a settlement agreement was in place, as the judge said Carina and Burford still fail to show the deal was invalid.
The judge also now added "direction" declaring the lawsuit over.
"The Court having found that Sysco agreed that the claims should be released upon payment of the agreed upon sum, and Pilgrim's having made the payment, the Court sees no reason why judgment should not be entered against Carina's continuing prosecution the claims (sic) against Pilgrim's in this case," Durkin wrote.
The judge, however, noted the order does not address Carina's and Burford's claims against Pilgrim's Pride over beef and pork prices in Minneapolis federal court.