The U.S. Seventh Circuit Court of Appeals has overturned a lower-court decision that would have enforced a proposed $50 million settlement between Pilgrim’s Pride and Sysco in long-running broiler chicken price-fixing litigation. The appellate court determined that the parties had only reached an agreement “in principle” and had not finalized several key terms required to form a binding contract.
In its Feb. 5 ruling, the court found that an email from Sysco’s associate general counsel stating acceptance was not enough to create an enforceable agreement. Judges pointed to multiple outstanding issues that both sides continued to negotiate for months afterward. These included how the deal would comply with a judgment-sharing agreement among broiler defendants, the extent of Sysco’s claim assignments, how the settlement amount would be divided across separate broiler, pork and beef cases, and the structure of a most favored nation provision.
The court noted that the record clearly showed both parties considered these items to be significant elements of the agreement rather than minor details. That ongoing back-and-forth, the judges said, weakened Pilgrim’s argument that the essential terms had been limited to the settlement amount and a release of claims.
The disagreement traces back to negotiations between Pilgrim’s and Sysco, a major buyer of chicken, beef and pork products that had secured litigation financing from Burford Capital. After Burford raised objections to the proposed terms, arbitration and court proceedings delayed progress on draft agreements that were ultimately never signed. Sysco later transferred its claims to Carina Ventures LLC, a Burford affiliate that became the plaintiff in the appeal.
The appeals court reversed the district court’s judgment in favor of Pilgrim’s and sent the case back for further proceedings. As part of its order, the court required Carina to place $50 million into escrow for return to Pilgrim’s. The opinion also referenced Pilgrim’s success in obtaining summary judgment on related beef and pork claims in Minnesota, though appeals in those matters remain ongoing.
