Names on an amended list of 64 witnesses filed with L.A. County Superior Court on Friday, Oct 7 to be available to speak at the Spring Street Courthouse in Los Angeles include:
- Current board chair Seth Goldman, who served as executive chairman between November 2015 and February 2020;
- CEO and co-founder Ethan Brown;
- Chief innovation officer Dr Dariush Ajami, who can speak to conditions in Don Lee Farms’ facility in Mansfield, Texas, when the two parties worked together in 2016-17;
- Mattson CEO Justin Shimek, who can speak to the development of Beyond Meat products;
- Various operations, QA, and food safety experts at the two parties and external consultants and testing labs.
- Former CFO Mark Nelson; customer compliance document manager Jessica Roark (formerly Quetsch); and former director of operations Anthony Miller; are also named as defendants in Don Lee Farm’s claims of fraud and negligent misrepresentation vs Beyond Meat.
Neither party has responded to questions from FoodNavigator-USA about how many of these witnesses might be asked to testify or how long the trial might therefore last, but attorneys we spoke to (not involved in the case) explained that it is unlikely all 64 witnesses will appear on the stand.
“A witness must be listed or can’t be called, so likely parties are erring on the side of over-inclusiveness.”
Another legal source predicted that given the scope of the trial, it could nevertheless last four weeks, adding that 64 “is an unusually large number of witnesses, but not unheard of.”
According to court papers, witness testimony is estimated to last 98.7 hours assuming everyone speaks for the length of time estimated in the filings, which have several speakers down to speak for a few minutes but others such as Ethan Brown and Danny Goodman expected to testify for several hours.
What is the case about?
The two parties have been engaged in an ugly legal dispute since early 2017, triggered by the early termination of an exclusive five-year supply agreement between the two parties.
Under the deal, struck in December 2014, Beyond Meat provided Don Lee with its pea protein base and other ingredients and Don Lee processed them into Beyond Burgers at its facilities before returning the packaged products to Beyond Meat.
According to a joint statement on the case* filed with Los Angeles Superior Court on October 7, the relationship came to an abrupt end on May 23, 2017, after Beyond Meat terminated the supply agreement two years into the five-year deal, citing ongoing concerns with Don Lee’s food safety practices leading to listeria and salmonella outbreaks.
Don Lee, in turn, insisted its facility was safe and claimed Beyond Meat was in fact responsible for the food safety issues, and also claimed that Beyond Meat terminated their agreement early because it thought it could secure better terms with another co-packer.
Don Lee went on to accuse Beyond Meat of negligent misrepresentation and fraud, accusing executives of fraudulently deleting information from a third-party report assessing food safety at a Beyond Meat manufacturing facility.
Beyond Meat, in turn, argued that Don Lee’s facilities in Mansfield, Texas, were “grossly unsafe,” and accused Don Lee of stealing trade secrets and infringing trademarks to create its own line of copycat products. It also claimed Don Lee had breached NDAs by disclosing Beyond Meat’s confidential food safety assessment report to a Bloomberg News reporter days before Beyond Meat’s IPO in spring 2019.
What claims remain to be tried before the jury?
Following motions for summary adjudication, the Court dismissed various of the parties’ claims, including DLF’s claims against Beyond Meat for trade secret misappropriation and unfair competition. According to court documents, the following claims now remain to be tried to the jury:
• Beyond Meat’s claims for trade secret misappropriation, breach of the supply agreement, breach of the NDA, breach of the implied covenant of good faith and fair dealing, negligent supervision, fraud and concealment, and trademark infringement; and
• DLF’s claims for breach of the supply agreement, fraud, and negligent misrepresentation.
Damages sought by Beyond Meat
Beyond Meat seeks:
- At least $6m in compensatory damages in connection with its claims for fraud and concealment, breach of the supply agreement, and breach of the covenant of good faith and fair dealing;
- At least $14m in compensatory damages in connection with its trade secret misappropriation and trademark infringement claims;
- Up to $93m in compensatory damages in connection with its claim for negligent supervision, which is based on the reduction in Beyond Meat’s value—and the concomitant increase in its cost of capital—caused by Bloomberg’s publication of information provided to it by Don Lee Farms.
- Punitive damages on its fraud, concealment, negligent supervision, and trade secret misappropriation claims.
Beyond Meat: ‘The amount of any material loss or range of any losses that is reasonably possible to result from this lawsuit is not estimable’
So what happens if Beyond Meat fails to persuade the jury that it is in the right?
In a 10-K filing with the SEC in May 2022, Beyond Meat explained: “If Don Lee Farms succeeds in the lawsuit, the Company could be required to pay damages, including but not limited to contract damages reasonably calculated at what the Company would have paid Don Lee Farms to produce the Company’s products through 2019, the end of the contract term.
“Based on the Company’s current knowledge, the Company has determined that the amount of any material loss or range of any losses that is reasonably possible to result from this lawsuit is not estimable.”
*The case is Don Lee Farms vs Savage River Inc (d.b.a. Beyond Meat) Case #: BC662838 in Los Angeles County Superior Court, CA.
Beyond Meat: ‘Don Lee started knocking off the Beyond Burger…’
In a supplemental trial brief filed yesterday (Oct 10) by Beyond Meat and named defendants Mark Nelson, Jessica Roark, and Anthony Miller, Beyond Meat added more color/background to the case, alleging that:
“Shortly after the end of the parties’ relationship, Don Lee Farms [DLF] started ‘knocking off’ the Beyond Burger. DLF had never manufactured a product like the Beyond Burger before its relationship with Beyond Meat, and DLF’s R&D department consists of one person: Daniel Goodman. Nonetheless, DLF was able to deliver a sample of its knock-off burger to Costco less than two months after the end of its relationship with Beyond Meat.”
Interested in meat alternatives?
Register for our upcoming FREE-to-attend virtual summit: Futureproofing the Food System, November 15-17, which features a session on ‘The Future of Meat’ featuring:
- Dr Elliot Swartz, lead scientist, cultivated meat, The Good Food Institute
- Ethan Brown, co-founder and CEO, Beyond Meat
- Dr Lisa Dyson, founder and CEO, Air Protein
- Dr Tyler Huggins, co-founder, Meati Foods
- Abena Foli, head of regulatory affairs, Orbillion Bio