Litigation funder Burford Capital (BURF.L) cannot be named as the plaintiff in antitrust lawsuits brought by its financing client Sysco (SYY.N), a U.S judge ruled on Friday, in a decision that questioned Burford's motives and authority to steer the food distributor's cases.
Minnesota-based U.S. Magistrate Judge John Docherty in a 29-page ruling said Burford had no interest beyond a financial stake in Sysco’s lawsuits, which accuse major beef and pork suppliers of price-fixing, and could not be a party.
Docherty said Burford’s bid to take Sysco’s place as the plaintiff, which Sysco supported, went against public policy because such arrangements could discourage settlements.
Houston-based Sysco did not immediately respond to a request for comment.
Burford said in a statement that it would contest the order, which it called “illogical” since Burford last year purchased Sysco’s antitrust claims.
The ruling was the latest development in the unusual clash involving onetime collaborators Sysco and Burford, one of the country’s biggest financiers of litigation. Burford and its rivals invest in cases with the intent to take a chunk of an eventual settlement or judgment.
Burford had spent $140 million since 2019 supporting Sysco’s antitrust cases, according to court documents.
Burford last year accused Sysco of moving to settle claims for insufficiently high amounts. The financier won an arbitration order in New York in March barring Sysco from finalizing any deals.
Docherty’s order came after months of legal wrangling between Sysco, Burford and major producers of beef and pork over whether and how a litigation funder can override decisions of a client that wants to settle claims.
The meat producers fought Sysco’s bid to hand over its claims and let Burford affiliate Carina Ventures be named as the plaintiff.
They said substituting Carina for Sysco could "meaningfully frustrate any future attempts for settlement discussions."
Docherty in his order said “the litigation burden caused by Burford’s efforts to maximize return on investment has been enormous."
Burford’s private financial interests, Docherty wrote, “cannot overcome the strong public policy in favor of settling lawsuits or the public policy in favor of allowing litigants to control their own cases.”
The case drew attention last year from the U.S. Chamber of Commerce, which has warned about consequences of third-party money supporting legal cases.
The Chamber had urged a judge to "allow Sysco to make its own litigation decisions."
The cases are In re: Pork Industry Litigation, U.S. District Court, District of Minnesota, No. 0:18-cv-01776-JRT-JF, and In re: Cattle and Beef Antitrust Litigation, same court, No. 0:22-md-03031-JRT-JFD.
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Sysco's plan to cede antitrust claims to Burford entity draws opposition
Litigation funder Burford slams Sysco, as U.S. Chamber steps into court fight
