Beyond Meat, Inc.

Period: 05/02/2019 to 01/27/2020
Lead Plaintiff Deadline: 03/30/2020

SUMMARY OF CASE:

A securities class action has been filed against Beyond Meat, Inc. (BYND) on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Beyond Meat securities between May 2, 2019 through January 27, 2020.  This case has been filed in the USDC – Central District of California.

Beyond Meat is a food company that provides plant-based meats.  It offers its products in the meat platforms of beef, pork, and poultry.  The Company sells its products to various customers in the retail and foodservice channels through brokers and distributors in the U.S. and internationally.

Don Lee Farms (“Don Lee”) is a maker of plant-based and meat proteins.  In 2014, Beyond Meat entered into an exclusive supply agreement with Don Lee to produce all of Beyond Meat’s products, including the development and launch of the Company’s popular Beyond Burger.

In early 2017, following the launch of the Beyond Burger, Beyond Meat terminated the Supply Agreement and transferred its production from Don Lee to other food manufacturers.

On May 25, 2017, Don Lee filed a complaint against Beyond Meat in the Superior Court of the State of California for the County of Los Angeles asserting claims for, inter alia, breach of contract, misappropriation of trade secrets, and unfair competition, seeking monetary damages and declaratory and injunctive relief.

Don Lee’s initial lawsuit spawned other related legal proceedings, including related claims by Don Lee against one of Beyond Meat’s new manufacturing partners, ProPortion Foods, LLC (“Proportion”), and cross-complaints by both Beyond Meat and ProPortion against Don Lee (collectively with Don Lee’s initial lawsuit, the “Don Lee Litigation”).

As the litigation progressed, Don Lee further alleged that Beyond Meat had employed lax food safety practices during the two companies’ partnership, specifically alleging, inter alia, that Don Lee found plastics, cardboard and a metal nozzle in ingredients that Beyond Meat supplied and that a Beyond Meat truck had arrived at a Don Lee processing facility with a load contaminated with an unidentified white powder.  Don Lee alleged that Beyond Meat had provided an altered copy of a food-safety audit of its manufacturing facilities, and on that basis added fraud claims to its suit against Beyond Meat in March 2019.

Beyond Meat has consistently denied the merits of Don Lee’s claims.

The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies.  Specifically, Defendants made false and/or misleading statements and/or failed to disclose that:  (i) Beyond Meat’s termination of its supply agreement with Don Lee constituted a breach of that agreement, thus exposing the Company to foreseeable legal liability and reputational harm; (ii) Beyond Meat and certain of its employees had doctored and omitted material information from a food safety consultant’s report, which the Company represented as accurate to Don Lee; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.

On January 27, 2020, post-market, Don Lee issued a press release entitled “Judge Rules Don Lee Farms Likely to Obtain a Judgment.  Beyond Meat’s CFO and Others Named Individually for Fraud.”  The press release stated, in part, that “[a] judge has ruled Don Lee Farms proved the probable validity of its claim that Beyond Meat breached its manufacturing agreement with Don Lee Farms” and that “[i]n a separate motion before a different Judge, the Court granted Don Lee Farms’ request to name Beyond Meat Chief Financial Officer Mark Nelson, Senior Quality Assurance Manager Jessica Quetsch and Director of Operations Anthony Miller in its fraud claims which allege they intentionally doctored and omitted material information from a food safety consultant’s report, and then delivered that doctored report to Don Lee Farms and affirmatively represented that it was the complete opinion of the consultant.”

On this news, Beyond Meat’s stock price fell $4.63 per share, or 3.71%, to close at $120.12 per share on January 28, 2020.