Two federal judges have issued contradictory rulings on whether litigation funding firm Burford Capital (BURF.L) can take over as the plaintiff in lawsuits brought by its financing client Sysco (SYY.N).
In the latest order, U.S. District Judge Tunheim in Minnesota on Monday upheld a magistrate’s February decision requiring food distribution giant Sysco to remain the plaintiff in antitrust lawsuits it filed accusing pork and beef suppliers of overcharges.
Tunheim’s order contrasted with a decision by a Chicago federal judge in March that said Burford unit Carina Ventures could be substituted as the plaintiff in another Sysco antitrust lawsuit accusing chicken processors of fixing prices.
The cases have been closely watched by the litigation funding industry, which provides financing to clients in exchange for a part of any settlement or other judgment. Burford had spent $140 million since 2019 supporting Sysco’s antitrust cases, court documents show.
Burford on Monday said it was reviewing the Minnesota decision and did not have further comment. Sysco declined to comment.
The wrangling over substitution surfaced after Sysco wanted to settle some of its claims at amounts Burford considered too low. Burford won an arbitration order barring Sysco from settling its cases.
Burford and Sysco resolved their dispute, and Sysco voluntarily transferred its claims to Burford's newly created unit Carina.
Tunheim, however, said in Monday's Minnesota order that granting substitution could harm antitrust cases around the country. "Sysco and Burford’s conduct is precisely the kind of conduct of which courts are wary," the judge wrote.
Sysco's cases in Illinois and Minnesota are in different federal appellate circuits, which could lead to a broader split on the issue if the decisions are appealed.
The cases are In re: Pork Industry Litigation, U.S. District Court for the District of Minnesota, No. 0:18-cv-01776, and In re: Cattle and Beef Antitrust Litigation, same court, No. 0:22-md-03031.
For Sysco: Christopher Wilson of Baker Botts
For Carina: Derek Ho of Kellogg, Hansen, Todd, Figel & Frederick; Scott Gant of Boies Schiller Flexner; and Christopher Seeger of Seeger Weiss
Read more:
Litigation funder Burford wins bid to take over Sysco chicken antitrust cases
Litigation funder Burford fights order denying bid to take over Sysco cases
Burford litigation funder's Carina Ventures sues US turkey suppliers in antitrust case
Sysco's plan to cede antitrust claims to Burford entity draws opposition
