First of its kind government fraud case based on farm animal cruelty
A partial settlement has been reached with two of the nine defendants in a major False Claims Act lawsuit filed by The Humane Society of the United States against the owners and investors responsible for the 2008 downed animal abuse scandal in Chino, Calif. The HSUS’s investigation into the mistreatment of animals at the country’s second largest supplier of ground beef to the National School Lunch Program led to the largest meat recall in the nation’s history, and the bankruptcy of several of the companies responsible.
The lawsuit alleges that the defendants defrauded the federal government by violating and misrepresenting their compliance with the terms of their federal school lunch program contracts requiring the humane handling of animals. After reviewing The HSUS’ complaint, the U.S. Department of Justice elected to intervene in the case and join The HSUS in seeking to recover approximately $150 million in taxpayer money spent on potentially tainted ground beef during the period covered by the recall.
“The meat industry should take notice that if they defraud federal agencies and the American taxpayers by abusing animals, there will be serious consequences for their inhumane and reckless actions,” said Jonathan R. Lovvorn, senior vice president and chief counsel for animal protection litigation at The HSUS. “We commend the U.S. Department of Justice for joining The Humane Society of the United States in seeking to hold federal meat suppliers accountable.”
The partial settlement is with two of the individual defendants, Donald Hallmark Sr. and Donald Hallmark Jr. Under the terms of the agreement, the Hallmarks will pay the bulk of their remaining personal assets to the U.S. Department of Justice, and also make structured payments over the next five years, for a total of $316,802. Under the provisions of the federal False Claims Act, The HSUS will be awarded a small portion of the settlement proceeds for its role in successfully prosecuting the case.
The settlement also includes the Hallmarks’ agreement to cooperate fully with the United States and The HSUS in the litigation against the remaining defendants, to turn over documents concerning the litigation, and to the entry of a final judgment against defendant Hallmark Meat Packing Company in the amount of $497,000,000 in favor of the Department of Justice under the treble damages provision of the False Claims Act. The full judgment—which will be the largest court judgment ever entered for animal abuse—cannot be collected in light of Hallmark’s insolvency, and is intended to deter future animal cruelty in the nation’s slaughterhouses.
The False Claims Act empowers private citizens with knowledge of fraud against the U.S. government to present those claims by bringing a lawsuit, called a qui tam suit, on behalf of the United States to recover significant civil penalties and treble damages. The Department of Justice intervenes in less than one-quarter of all qui tam cases filed.
The HSUS is represented in the case by Milbank, Tweed, Hadley & McCloy, and lawyers with The HSUS’ animal protection litigation section. The case is captioned as United States of America ex rel. The Humane Society of the United States v. Hallmark Meat Packing Company; Westland Meat Company, Inc.
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