In re Broiler Chicken Antitrust Litig.

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IN RE BROILER CHICKEN ANTITRUST LITIGATION

No. 16 C 8637

United States District Court, N.D. Illinois, Eastern Division

March 21, 2024

MEMORANDUM OPINION AND ORDER

Honorable Thomas M. Durkin, United States District Judge.

Litigation funding agreements are a fact of contemporary complex litigation. Plaintiff Sysco Corporation's claims in this case (and several others) were funded by Burford Capital LLC. When Sysco and Burford disagreed about how to manage the cases, Sysco assigned its claims to a specially created Burford affiliate called Carina Ventures LLC. Sysco and Carina have jointly moved to have Carina substituted for Sysco as the plaintiff in interest in this case, pursuant to Federal Rule of Civil Procedure 25(c), which permits such substitution in the Court's discretion to determine “that the transferee's presence would facilitate the conduct of the litigation.” Otis Clapp &amp Son, Inc. v. Filmore Vitamin Co., 754 F.2d 738, 743 (7th Cir. 1985).

Defendants object to Carina's substitution arguing that: (1) it will “not facilitate the litigation” but “will make this case even harder to manage,” R. 6654 at 5; and (2) the assignment is not valid because of “its champertous nature,” which Defendants argue “may render the agreement invalid as contrary to public policy, or mean that Carina lacks Article III and/or statutory standing.” Id. at 5-6.

The first argument ignores reality. This case is already complicated and slow, and Sysco's litigation funding agreement with Burford and the ensuing assignment to Carina is only one small aspect of many complications and delays this case has suffered. The funding agreement is at the bottom of this motion, and Defendants do not argue that there was anything improper or unusual about that agreement. The assignment is an unsurprising and logical result of the dispute between Sysco and Burford that arose from the funding agreement. Despite Defendants protestations to the contrary the assignment does not appear to be a very unusual circumstance either. Like litigation funding agreements, such assignments are a fact of modern litigation. Even if Defendants are correct that the assignment might add some time to an already extended case, absent some palpable prejudice to case management or the rights of the parties, it is generally not the Court's place to interfere with sophisticated parties' business decisions about the value of their claims.

Defendants' second argument crams three arguments into one: standing champerty, and public policy. First, there is no question that the assignment gives Carina standing. See Sprint Commc'ns Co., L.P. v. APCC Servs., Inc., 554 U.S. 269, 275 (2008). The Supreme Court has explained that “[a]ssignees of a claim . . . have long been permitted to bring suit,” and an assignee “may properly bring suit to redress the injury originally suffered by his assignor.” Id. at 275, 287. Similarly, under Illinois law, a legal claim is generally assignable. See Liu v. T & H Mach., Inc., 191 F.3d 790, 797 (7th Cir. 1999). Defendants make no argument as to why this principle should not apply to establish Carina's standing.

Ironically, standing is key to Defendants' next argument that the assignment is champertous. This is because Defendants lack standing to make it. The Illinois Supreme Court has explained that in Illinois, champerty is only available as a defense by a party to a contract. See Oil, Inc. v. Martin, 44 N.E.2d 596, 600 (Ill. 1942) (“[T]he defense of champerty can only be interposed in an action between the parties to the champertous contract, and does not furnish any reason for refusing relief in the proceeding to which the champertous agreement relates.”). And courts in this district have followed suit. See CNTRST Debt Recovery v. Ybarra, 2023 WL 5228026, at *4-5 (N.D. Ill. Aug. 14, 2023); Miller UK Ltd. v. Caterpillar, Inc., 17 F.Supp.3d 711, 726 (N.D. Ill. 2014).

Even if Defendants had standing to raise the issue of champerty, it would not invalidate the assignment to Carina. Illinois law prohibits “champerty” only when there is “officious intermeddling,” meaning when an uninjured third party “volunteer[s] [their] services where they are neither asked for nor needed.” Miller, 17 F.Supp.3d at 725 (citing cases). Defendants do not allege that is what happened here. The Court is not aware of the circumstances leading to the initial funding agreement between Sysco and Burford. However, the Court does know that Sysco is a sophisticated and large corporation, and not a simple and ordinary individual who is vulnerable to the temptation of a “wicked” non-party “willfully” intending to “stir up” or “foment useless . . . or meritless litigation . . . for the sake of harassment.” Id. (citing cases). That melodramatic language signals that the concern for champerty is of a different era and circumstances which are not present. See id. at 727 (“[O]ver the centuries, maintenance and champerty have been narrowed to a filament. Indeed, they ‘ha[ve] been so pruned away and exceptions so grafted upon [them], that there is nothing of substance left of [them] in this State, and [they] ha[ve] been wholly abandoned in others.'” (quoting Dunne v. Herrick, 37 Ill.App. 180, 182 (1890) (alternations in Miller)). The sophisticated funding agreement and related assignment of claims at issue here are of a different nature altogether.

Defendants rely almost exclusively on a case from the Central District of Illinois in which a married couple sold and assigned their products liability claim regarding their car to another individual. See R. 7011 at 7-8 (citing Birner v Gen. Motors Corp., 2007 WL 269847, at *3 (C.D. Ill. Jan. 26, 2007)). In Birner, the court found the assignment to be champertous and against public policy because the assignee “apparently sought out and purchased this cause of action for purposes of pursuing the litigation that he would otherwise have no...