LOS ANGELES--(BUSINESS WIRE)--The Superior Court of California ruled fraud claims on Beyond Meat and their upper management can move forward. Fraud claims regarding Beyond Meat’s doctored food safety report and contract claims will proceed to a public trial.
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 for fraud. The fraud claim alleges Beyond Meat deliberately altered and excluded important information from their food safety consultant’s report on their facility which was then sent to Don Lee Farms.
The Superior Court of California already 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.
Don Lee Farms is also 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 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.”
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.
About Don Lee Farms:
Established in California in 1982, Don Lee Farms is a family-owned producer of fresh and frozen foods for some of the world's most recognized and successful brands. Don Lee Farms makes plant-based and meat proteins for over 10,000 markets, clubs, foodservice and school foodservice locations. Consumer products and end items are sold at major retailers nationwide such as Costco Wholesale, Whole Foods Markets, Trader Joes, Kroger, Publix, HEB and Albertsons Companies under the Don Lee Farms label, private brands and under brands of their partners. For more information, visit www.DonLeeFarms.com or follow Don Lee Farms on Facebook and Twitter, @DonLeeFarms.