Litigation funder fires back at Tyson Foods over settlement interference claims
June 18 (Reuters) - (Billable Hours is Reuters' weekly report on lawyers and money. Please send tips or suggestions to D.Thomas@thomsonreuters.com, opens new tab)
A fight over the power of outside funders to influence lawsuits is unfolding in Chicago federal court, where leading litigation financier Burford Capital fired back this week against allegations that it illegally interfered with efforts to settle chicken price-fixing claims against meat processing giant Tyson Foods.
Tyson sued, opens new tab Burford in April, alleging it sought to "co-opt the legal system" by blocking a potential settlement between Tyson and Burford's funding client Sysco in the chicken case in order to press for a larger recovery.
Burford asked a court this week to dismiss Tyson's lawsuit, accusing, opens new tab the company of trying to divert attention away from the underlying price-fixing claims.
Litigation funders provide financial support to clients in exchange for a part of any settlement or other judgment. Burford is the world's largest litigation finance provider.
The clash is part of a broader, long-running litigation accusing Tyson and other meat processors of price-fixing in a variety of meat industries. Some of the cases have generated tens of millions of dollars or more in settlements. Tyson has denied any wrongdoing.
Burford has spent $140 million since 2019 backing antitrust claims by food distributor Sysco against Tyson and other meat processors, court documents show. Sysco's contract with Burford allowed the funder to participate in some of Sysco's settlement discussions, Burford said in court papers.
In 2023, Burford successfully blocked Sysco from settling with a different defendant in the price-fixing litigation for an amount that the funder thought was too low. Sysco is no longer a party in the case, after transferring its litigation rights to a Burford affiliate called Carina Ventures.
Burford and Sysco declined to comment, and Tyson did not immediately respond to a request for comment.
Burford in its filing this week denied it had interfered with Sysco's settlement plans and called Tyson's claims 'threadbare' and 'rank speculation.' Burford said it was Tyson that declined Sysco's last settlement offer in late 2021.
– U.S. Senate Republicans on Monday included a provision in proposed changes to President Donald Trump's sweeping tax-cut and spending bill that would raise the tax third-party litigation funders pay on litigation proceeds to nearly 41%.
Republican Senator Thom Tillis in a May statement introducing the bill said the legislation would curb "abusive practices" and promote transparency in the industry.
Paul Kong, executive director of the International Legal Finance Association, a trade group for commercial litigation funders, in a statement said the tax would undermine access to justice by placing "significant barriers in front of small businesses, inventors, startups, and other less well-resourced claimants seeking redress."
– Houston-based law firm Jackson Walker has been hit with another civil lawsuit, opens new tab over its failure to disclose a romantic relationship between one of its partners and former U.S. Bankruptcy Judge David Jones.
Bondholders of financial services company GWG filed the lawsuit in Houston federal court last week, accusing Jackson Walker, former firm partner Elizabeth Freeman, and Jones of deceiving them and the public by keeping the romance hidden "and taking millions from distressed entities for their own benefit."
The bondholders' lawyers at the Bandas Law Firm have brought two previous cases against Jackson Walker on behalf of shareholders who said their investments in certain companies were wiped out in bankruptcy cases where Jones was involved before he resigned from the bench in October 2023.
One lawsuit, filed by Morton Bouchard, is still pending. A federal judge last year dismissed a similar lawsuit brought by Michael Van Deelen, who first brought Jones' relationship with Freeman to light.
Mikell West, a lawyer at the Bandas Law Firm, did not respond to a request for comment.
A spokesperson for Jackson Walker and a lawyer for Freeman both declined to comment. Attorneys for Jones and a spokesperson for Porter Hedges, a Houston-based law firm that was also named in the GWG investors' complaint, did not immediately respond to requests for comment.
– U.S. District Judge John Tunheim in Minnesota has awarded $23 million in legal fees to plaintiffs firm Sanford Heisler Sharp McKnight for its work on a $69 million class action settlement involving the UnitedHealth Group.
Lawyers for the plaintiffs in a court filing, opens new tab this month called the $69 million deal the "largest-ever ERISA settlement alleging breach of fiduciary duty for failure to remove underperforming investment options." The plaintiffs' teams said they dedicated more than 12,800 hours on the litigation, which focused on participants who were invested in a certain Wells Fargo fund.
UnitedHealth denied any wrongdoing in agreeing to settle the litigation, which began in 2021. Kirkland represented UnitedHealth.
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