Automated Summary
Key Facts
Defendants moved for summary judgment arguing that public policy prohibits litigation funders from directly litigating antitrust claims obtained through assignment. The litigation involves allegations of a conspiracy among turkey processors to artificially suppress turkey production and increase prices. Sysco Corporation, a wholesale food distributor, had brought antitrust claims against turkey processors and assigned 100% of those claims to Carina Ventures LLC as part of a settlement with its litigation funder, Burford Capital, LLC. Carina is a wholly-owned special purpose vehicle of Burford created for prosecuting antitrust claims. Defendants argued this arrangement violated public policy, but the Court denied the motion, finding no public policy against litigation funders obtaining claims through assignment and that Carina has proper standing through the assignment.
Transaction Type
Assignment of antitrust claims from Sysco Corporation to Carina Ventures LLC as part of settlement with Burford Capital
Issues
- Defendants seek to establish a new public policy under which litigation funders cannot litigate claims they receive through assignment. The court finds that no such public policy exists at common law, in a federal statute, or any federal rule, and therefore denies the motion for summary judgment. The court notes that such policy decisions are best left to the legislature, not the judiciary.
- The court addresses whether Carina, through assignment from Sysco, has legal and proper title to bring antitrust claims. The court finds that Carina, through assignment, has legal and proper title of Sysco's antitrust claims and that established case law permits the party with legal title alone to bring suit. District courts have universally held that the subsidiary obtained both Article III and antitrust standing through assignment.
Holdings
Defendants' motion for summary judgment is denied. The Court finds Carina has standing through assignment of Sysco's antitrust claims. No public policy exists prohibiting litigation funders from litigating claims obtained through assignment. The Court rejects the champerty argument as not applicable under federal common law, and finds Burford's control over its wholly-owned subsidiary Carina does not violate public policy.
Remedies
The court denied Defendants' motion for summary judgment on Plaintiff Carina Ventures LLC's Amended Complaint, allowing the Turkey Antitrust Litigation to continue. The court found no public policy exists that would prohibit litigation funders from litigating claims they receive through assignment.
Contract Value
140000000.00
Legal Principles
- The court rejected the defendants' arguments that champerty doctrine or public policy prohibits litigation funders from litigating claims received through assignment. The court found that champerty is an antiquated doctrine whose usefulness is outweighed by its hindrance to federal antitrust enforcement interests. The court also found that Burford's relationship with Carina (wholly-owned subsidiary) does not constitute third-party litigation funding concerns since their interests are united.
- The court held that Article III and antitrust standing can be obtained through assignment, citing Sprint Communications Co. v. APCC Services, Inc. (2008). The court affirmed that Carina, through assignment from Sysco, has legal and proper title to the antitrust claims and thus standing to bring the suit. District courts in the protein cases have universally held that the subsidiary obtained both Article III and antitrust standing through assignment.
- The court determined that federal common law, not state laws on champerty, governs the assignability of federal antitrust claims. Judge Kendall's prior opinion in the Amory matter established that applying state law would create a patchwork of differing laws that would not advance the federal interest in vigorous private enforcement of antitrust laws. Therefore, the assignability of federal antitrust claims must be based on federal law.
Precedent Name
- In re Pork Antitrust Litig.
- Sprint Communications Co. v. APCC Services
- In re Turkey Antitrust Litig. (Amory matter)
- Boling v. Prospect Funding Holdings, LLC
- In re Nat'l Prescription Opiate Litig.
- In re Broiler Chicken Antitrust Litig.
- In re Valsartan NDMA Contamination Products Liability Litig.
Judge Name
Sunil R. Harjani
Passage Text
- Federal judges are not in the business of creating public policy for new developments in litigation that might be disfavored. That role falls to Congress, whose job it is to write the statutes and rules that govern federal litigation. Congress has not yet spoken on the matter. For the reasons discussed below, the Court denies Defendants' motion for summary judgment.
- While Burford is a litigation funder, and previously provided Sysco with funding for these and other antitrust claims, Burford is not acting as a litigation funder for this case. Burford and Sysco were in a multijurisdictional dispute over actions taken pursuant to their funding agreement, which resulted in a global settlement where, as part of the settlement, Burford, through Carina, received an assignment of Sysco's claims in this case. Carina is a wholly owned subsidiary of Amory, which is a wholly owned subsidiary of Burford. Therefore, although Burford controls the litigation strategy, it is not as a third-party litigation funder, but the parent company directing its wholly-owned subsidiary.
- The most discussed and potentially applicable doctrine in this area—champerty—is not at issue in Defendants' motion. The other doctrines invoked are not directly on point. Thus, in the Court's view, Defendants essentially ask the Court to expand the common law by introducing a new public policy barring litigation funders from being assigned claims and prosecuting those claims independent from the assignor.