Litigation funder Burford Capital (BURF.L) can be named as the plaintiff in lawsuits brought by its financing client Sysco, a federal judge in Chicago has ruled, rejecting a challenge from chicken producers to block the move.
U.S. District Judge Thomas Durkin in a Thursday order granted a request from food distribution giant Sysco (SYY.N) and Burford, which had financed the company’s antitrust claims, to let Sysco withdraw as the plaintiff and allow a Burford subsidiary carry on the antitrust litigation.
In a related case in Minnesota involving pork producers, a judge last month refused to substitute Burford for Sysco. Burford’s subsidiary, Carina Ventures, has appealed that order.
Litigation funders provide financial support to clients in exchange for a part of any settlement or other judgment. Burford, a giant of the growing industry, had spent $140 million since 2019 supporting antitrust cases, court documents show.
Sysco, with Burford's backing, had accused major chicken and pork suppliers of a years-long conspiracy to fix wholesale prices in violation of U.S. antitrust law. Some defendants have agreed to settlements but all have denied wrongdoing.
Burford declined to comment on Durkin’s order, and Houston-based Sysco did not immediately respond to a request for comment.
The substitution effort arose after a falling out between Burford and Sysco over the trajectory and potential payouts from the cases.
Burford accused Sysco of trying to settle the antitrust claims for too little. Sysco said Burford was unfairly trying to assert control over its ability to resolve its lawsuits on its own terms.
Sysco and Burford settled their dispute last year, and Burford created Carina Ventures to buy Sysco’s antitrust claims. That would allow Sysco to leave the litigation, and Burford to press on.
In his order, Durkin said it generally was not his place to “interfere with sophisticated parties’ business decisions."
“Despite defendants protestations to the contrary, the assignment does not appear to be a very unusual circumstance either,” Durkin wrote. “Like litigation funding agreements, such assignments are a fact of modern litigation.”
In Minnesota, Burford was not allowed to be named the plaintiff. A U.S. magistrate judge there questioned Burford’s motives and authority to steer Sysco’s cases.
The case is Broiler Chicken Antitrust Litigation, U.S. District Court for the Northern District of Illinois, No. 1:16-cv-08637.
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