Litigation funder Burford slams Sysco, as U.S. Chamber steps into court fight

(Reuters) - A dispute between Sysco Corp and a major litigation funder escalated on Monday as Burford Capital accused the food distributor of "outrageous" conduct and the U.S. Chamber of Commerce warned against what it called "serious problems" from third-party financing of court cases.

Sysco is suing Burford in Chicago federal court, seeking to thwart an arbitration order that is preventing it from settling antitrust claims it brought against certain chicken, beef, pork, and turkey suppliers.

Burford said it had advanced more than $140 million to Sysco since 2019 to support the litigation, and it has since accused Sysco of violating the terms of the deal by trying to settle cases for "unreasonably low" amounts and without consent.

In its filing, the U.S. Chamber, which isn't a party to the dispute, urged a federal judge to block the arbitration order against Sysco's ability to settle its cases on its own terms. Burford sought and won an arbitral order in New York that is blocking Sysco's ability to settle certain antitrust cases. Sysco argues that Burford unfairly has taken control over the litigation.

The U.S. Chamber has long questioned the propriety of the now multibillion-dollar litigation funding industry, in which financiers support plaintiffs in exchange for a piece of a settlement or other award.

In its filing, lawyers for the U.S. Chamber said the Sysco-Burford dispute highlights a potential for conflicts of interest in litigation funding. They urged the Chicago court to "allow Sysco to make its own litigation decisions."

In a statement on Tuesday, Burford CEO Christopher Bogart said the U.S. Chamber "exists to create an unlevel playing field skewed in its favor." Burford bills itself on its website as the world's largest legal finance provider.

Representatives for Sysco and the Chamber had no immediate comment on Burford's latest filings.

Court filings do not reveal how much Sysco has agreed to settle its antitrust cases. The litigation has generated hundreds of millions of dollars in class proceedings involving other plaintiffs.

Sysco had first sued in Chicago over a temporary restraining order blocking its ability to settle cases, and then it filed an amended complaint after the arbitral panel on March 10 issued a preliminary injunction.

Lawyers for Burford on Monday argued in a court filing that Sysco made an "unauthorized" amended filing. They also accused Sysco of "blatant forum shopping" and said Sysco's case belongs in New York "at the seat of the arbitration" instead of Chicago.

Burford is separately suing Sysco in New York to confirm the arbitration panel's award.

The case is Sysco Corp v Glaz LLC, Posen Investments LP and Kenosha Investments LP, U.S. District Court, Northern District of Illinois, No. 1:23-cv-01451.

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