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November 27, 2013

Owners of Infamous Calif. Slaughterhouse Pay Millions to Settle Government Fraud Case

Final judgment largest ever entered for animal cruelty

A final settlement has been reached with the remaining 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' investigation into the mistreatment of animals at the country's second largest ground beef supplier 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 alleged that the owners and investors of Westland/Hallmark slaughter facilities defrauded the federal government by violating the terms of their federal school lunch program contracts, which required the humane handling of animals. The U.S. Department of Justice intervened in the case and joined The HSUS in seeking to recover millions in taxpayer money spent on potentially tainted and inhumanely produced ground beef.

Peter Petersan, The HSUS’ director for animal protection litigation, said: "This judgment sends a strong message to those who profit from the abuse of farm animals. Although numerous line workers have been prosecuted for farm animal cruelty over the last decade, this is the first time the consequences of animal cruelty have been felt by those sitting in the corner office as well."

Under the terms of the final consent decree, the principal owners and investors will forfeit virtually all of their remaining assets, for a total settlement of $3,116,802. A partial settlement with two defendants entered in November 2012 resulted in a $316,802 payment. 

A final judgment will also be entered against Westland Meat Packing Company in the amount of $155,684,827. This is the full value of the fraud claim, but cannot be satisfied due to the defendants’ lack of assets. It is the largest monetary judgment ever entered in the United States based on animal abuse and is intended to deter future animal cruelty in the nation’s slaughterhouses. Last year, two of the defendants agreed to entry of a $500 million final judgment, but that figure was reduced to $155 million as part of the final settlement with the remaining defendants.

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 triple the amount of actual damages. The Department of Justice intervenes in less than one-quarter of all qui tam cases filed. 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 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.

 

Media Contact: Anna West: 301-258-1518; awest@humanesociety.org.


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