A motion to compel was filed on behalf of Don Lee Farms, a leading plant-based and meat protein manufacturer for national food brands and once exclusive supplier of Beyond Meat products, in the Superior Court of the State of California on Friday.
Don Lee Farms is seeking, among other things, the appointment of an independent forensic examiner to assess the potential deletion of text messages by Ethan Brown, Co-Founder and CEO of Beyond Meat. The motion filed on Friday stated that Beyond Meat outright ignored the Order requiring it to provide the text messages of Mr. Brown. The Court ordered Beyond Meat to provide an explanation for “the 17 months for which [Beyond Meat CEO] Ethan Brown has produced no text messages as well as the missing text messages evidently sent or received but not produced.”
Separately, members of Beyond Meat’s senior management team, namely its former chief financial officer Mark Nelson, its senior quality assurance manager Jessica Quetsch and its director of operations Anthony Miller, are being sued under a fraud claim. The fraud claim contains allegations that they deliberately altered and excluded important information from a food safety consultant’s report which was then sent to Don Lee Farms.
Previously in the case, the Superior Court of California ruled Beyond Meat must pay Don Lee Farms in their contract dispute. The Court found that, despite Beyond Meat’s claim, products in question were not adulterated and no evidence submitted by Beyond Meat disputed the fact that Don Lee Farms fully performed under their Exclusive Supply Agreement with respect to this claim. The Court stated that Beyond Meat cannot create a triable issue of material fact based on speculation or guesswork. The Court also ruled that Beyond Meat had no evidence to support their property claim and that their negligent misrepresentation claim was meritless.
Today, Don Lee Farms is announcing the expansion of its legal team by hiring John C. Hueston of Hueston Hennigam. Mr. Hueston is nationally recognized as a lead prosecutor for the Enron trial. Mr. Hueston recently defeated the SEC’s contempt action against Elon Musk and successfully represented SpaceX’s trade secrets cases.
The Court has continued the Beyond Meat trial to 5/16/22.
About the Beyond Meat and Don Lee Farms Relationship:
Whole Foods Market, a customer of Don Lee Farms’ plant-based and meat proteins since 2012, introduced startup Beyond Meat to Don Lee Farms in 2014 to help Beyond Meat make meat alternatives. Beyond Meat entered into an exclusive supply agreement with Don Lee Farms to produce all of their products (including the development and launch of the Beyond Burger). The Beyond Burger was solely manufactured by Don Lee Farms under the exclusive supply agreement in 2016. After the success of the new burger, the startup walked away from the agreement in 2017 and transferred production and processes developed by Don Lee Farms under the agreement to other food manufacturers.
The Beyond Burger, Beyond Meat’s flagship product, is around 70% of their total sales according to the startup. Beyond Meat is currently being sued by Don Lee Farms for fraud, negligence and breach of contract. During the agreement, Don Lee Farms shared trade secrets, know-how and technology the family food company developed over 35 years.
During the partnership, Don Lee Farms raised significant concerns regarding inadequate food safety protocols for raw materials produced at Beyond Meat’s facility, after receiving adulterated product to be used to make consumer items for Beyond Meat.