The appellate panel said emails between two parties didn’t establish enough parameters for the price-fixing settlement under Illinois law.
(CN) — A Seventh Circuit panel determined Thursday that an email exchange between a food distribution giant and Pilgrim’s Pride, one of the world’s largest chicken producers, didn’t sufficiently hash out a $50 million settlement over price fixing accusations.
According to U.S. Circuit Judge David Hamilton, while the email agreement settled on the important financial terms, the parties failed to work out at least four material terms that affected the value of the deal, rendering it wholly incomplete.
In a 23-page opinion, Hamilton — a Barack Obama appointee who was particularly critical of Pilgrim’s argument during oral arguments in November 2025 — calls the agreement from which a Illinois federal court was tasked with determining if material terms had been settled a “barebones email exchange that fails to mention terms other than the price.”
Hamilton said there were at least four material terms left unresolved: compliance with the Judgement Sharing Agreement, the volume of assignments, the “most favored nation” clause and the allocation of the global settlement sum.
The case stems from a massive multidistrict litigation where food distributors accuse a swath of poultry farms and chicken product producers of aligning their prices in order to artificially inflate the wholesale price of chickens.
Global food service distributer Sysco joined the litigation in January 2018 by suing Pilgrim’s Pride. The pair negotiated a settlement for almost three years before coming to the agreement — but the process was derailed by multibillion-dollar finance firm, Burford Capital, which entered into litigation funding agreement with Sysco.
The Chicago-based firm appointed an affiliate, Carina Ventures, in place of Sysco. Carina Ventures then refused to sign the settlement that Sysco had already verbally accepted. U.S. District Judge Thomas Durkin later ruled in September 2023 that an exchange that ended with an “We accept” email reflected the “heart” of the agreement, which was enough evidence to enforce it.
However, Hamilton said the four unresolved terms drove early offers from Pilgrim’s and acted as guideposts for the email exchanges, but never worked out after Carina Ventures took over Sysco’s claims.
Though Pilgrim offered during oral arguments that the court could fill in those material blanks by looking at previous drafts of the agreement, Hamilton says this is not enough to satisfy Illinois law.
“We cannot substitute a party’s assent to material terms in later drafts for the party’s lack of assent at the time the agreement was said to have been reached,” Hamilton said. “Contrary to Pilgrim’s argument and the district court’s judgment, the parties continued to negotiate terms they said were essential long after the ‘We accept’ email in September 2022.”
Hamilton questioned whether the purported settlement established how the $50 million would be divided between the chicken, pork and beef claims — the latter two of which were consolidated in the District of Minnesota but still bound by Durkin’s enforcement order.
Since enforcement, the Minnesota court ruled that Sysco, and therefore Carina Ventures, settled its claims with Pilgrim’s Pride and issued summary judgment to the producer.
In a concurring opinion, U.S. Circuit Judge Nancy Maldonado, a Joe Biden appointee, conducted what she called a postmortem of the case to memorialize the complications created by Burford’s seizing of Sysco’s claims.
“Having turned the courtroom into a trading floor, and calculated that continued litigation was more profitable than settlement, Burford wrested total control over the settlement of Sysco’s claims. This case is a cautionary tale to any party who seeks to fund its litigation through a third party,” Maldonado said.
In July 2024, Pilgrim’s sent $50 million in three separate checks to Sysco for each of its protein antitrust claims. Sysco forwarded the funds to Carina Ventures, who maintained that the payments were not proper and would return the money to Pilgrim’s.
The money will be moved into escrow with federal court while the settlement litigation continues, according to Hamilton.
U.S. Circuit Judge Frank Easterbrook, a Ronald Reagan appointee, also joined the panel.
Representatives for Carina Ventures and Pilgrim’s Pride did not immediately respond to a request for comment.
The Pilgrim’s settlement is just one part of the multidistrict litigation that kicked off in 2016 with food service distributer Maplevale Farms suing poultry farms and chicken product producers over purported price fixing of “broiler chickens” — a chicken bred to gain lots of weight very fast.
Over the years, several bulk purchasers of the broiler chicken product like Walmart, Kraft Heinz and Nestle joined the suit and the case ballooned with over 100 associated lawsuits and more than 7,400 filings.
The largest chicken producers in the world are implicated alongside Pilgrim’s, prompting liability sharing provisions so that no single producer bears more weight.
Several multimillion-dollar settlements between producers and consumers have been signed, including one totaling $41.5 million against Pilgrim’s Pride. In that case, the plaintiffs were shareholders in the company who claimed it lied to investors about the price-fixing scheme in press releases intended to drive up profits.
Read more on Court House News Service
