Court Upholds Sysco & Pilgrim's Pride Chicken Price-Fixing Class Action Settlement

Pilgrim's Pride Chicken Thighs

Litigation Funder Cries Foul as Judge Upholds Sysco's Chicken Price-Fixing Settlement

To the upset of litigation funder Burford Capital, a Chicago judge has ruled that a price-fixing settlement between food distributor Sysco and chicken producer Pilgrim Pride must go ahead because, while a contract wasn’t signed, email correspondence shows a deal was reached. 

Burford has opposed the settlement for being too low, after pumping more than $140 million into the litigation in support of Sysco, Reuters reports. Clearly, the financier wanted more in return than what the settlement would offer.

Why Is Burford Involved In A Chicken Price Fixing Lawsuit?

Burford Capital is a litigation funder, also known as a litigation finance company. The companies provide financial support to plaintiffs in legal cases in exchange for a portion of any settlement or judgment awarded. This type of funding helps plaintiffs cover the costs associated with legal action, such as attorney fees, court fees, and other expenses. 

Since 2019, early on in the case, Burford has forked out $140 million in support of Sysco’s antitrust cases. Because of the amount it has spent, and how much it wants to get through the settlement, it has opposed any settlement that it deems too low - which is the situation here.

While Sysco and Burford Capital were at loggerheads over how to proceed after Sysco agreed to a settlement with Pilgrim, they settled their disputes last year. However, on behalf of Burford Capital, Sysco called on the judge to disregard the settlement agreement that had been reached with Pilgrim.

The Price-Fixing Allegations Against Pilgrim's Pride

Pilgrim's Pride price-fixing chicken case involves allegations that Pilgrim's Pride, one of the largest poultry producers in the United States, engaged in illegal price-fixing to artificially inflate the prices of broiler chickens.

The producer was ordered to pay $107 million in criminal fines by the Department of Justice for “its participation in a conspiracy to fix prices and rig bids for broiler chicken products” in 2021. It was also hit with a range of lawsuits from others involved in the food services industry, including consumers, and has paid out hundreds of millions in settlements. 

Judge Rules Sysco's Settlement with Pilgrim's Pride Binding, Despite Missing Signature

In his rejection of Sysco’s attempt to toss the settlement, U.S. District Judge Thomas Durkin said it was enforceable, despite arguments saying it had never been confirmed, because emails between Sysco and Pilgrim’s showed otherwise. While there was no final signed agreement, those emails from 2022 “demonstrate an agreement” between Pilgrim and Sysco, he ruled.

“That is sufficient objective evidence of an agreement to enforce it,” Durkin wrote, adding his order covered Sysco’s settlement with Pilgrim’s in lawsuits in Illinois and Minnesota which Burford has also been fighting. The amounts of the settlements were not publicly disclosed. 

A Burford spokesperson told Reuters it was “concerning that the court has today opted to enforce a supposed agreement that the parties clearly never viewed as binding.”

Pilgrim Facing Other Legal Woes

While the decision will be a relief for Pilgrim who no doubt wants to wrap up the litigation, it’s not the only legal action the company is facing.

Just a few weeks ago, a class action lawsuit alleging Pilgrim’s Pride created an anti-competitive environment in which chicken farmers didn’t get paid what they deserved was green lit by an Oklahoma federal judge.

U.S. District Judge Robert J. Shelby certified a class of about 24,354 chicken growers, who argue Pilgrim’s Pride no-poach agreement with other chicken producers unfairly limited the pay of chicken farmers by snuffing out competition for their services.

Case Details

  • Lawsuit: In re Broiler Chicken Antitrust Litigation
  • Case Number: 1:16-cv-08637.
  • Court: U.S. District Court for the Northern District of Illinois
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