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Burford Capital denied substitution for Sysco ( SYY ) in Minnesota

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Chicago court earlier ruled for Burford in related case

By Mike Scarcella

June 4 (Reuters) - Two federal judges have issued

contradictory rulings on whether litigation funding firm Burford

Capital can take over as the plaintiff in lawsuits

brought by its financing client Sysco ( SYY ).

In the latest order, U.S. District Judge Tunheim in

Minnesota on Monday upheld a magistrate's February decision

requiring food distribution giant Sysco ( SYY ) 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 ( SYY ) 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 ( SYY ) antitrust

cases, court documents show.

Burford on Monday said it was reviewing the Minnesota

decision and did not have further comment. Sysco ( SYY ) declined to

comment.

The wrangling over substitution surfaced after Sysco ( SYY ) wanted

to settle some of its claims at amounts Burford considered too

low. Burford won an arbitration order barring Sysco ( SYY ) from

settling its cases.

Burford and Sysco ( SYY ) resolved their dispute, and Sysco ( SYY )

voluntarily transferred its claims to Burford's newly created

unit Carina.

Meat suppliers fought the substitution effort, however,

arguing that putting the funding company in charge went against

public policy that favored litigants settling cases on their own

terms.

In the earlier Chicago ruling, U.S. District Judge Thomas

Durkin said it "generally was not his place" to "interfere with

sophisticated parties' business decisions."

Tunheim, however, said in Monday's Minnesota order that

granting substitution could harm antitrust cases around the

country. "Sysco ( SYY ) and Burford's conduct is precisely the kind of

conduct of which courts are wary," the judge wrote.

Sysco's ( SYY ) 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 ( SYY ): 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 ( SYY )

chicken antitrust cases

Litigation funder Burford fights order denying bid to take

over Sysco ( SYY ) cases

Burford litigation funder's Carina Ventures sues US turkey

suppliers in antitrust case

Sysco's ( SYY ) plan to cede antitrust claims to Burford entity

draws opposition