By Jonathan Stempel
(Reuters) - Several California companies and individuals tied to the largest beef recall in U.S. history agreed to settle charges of animal cruelty and the slaughtering of sick cattle for food, including beef supplied to the National School Lunch Program, the Justice Department said on Wednesday.
The settlements end a federal fraud lawsuit begun in February 2008 by the Humane Society of the United States, which had obtained a video that appeared to show inhumane cattle treatment and improper inspections of sick cattle at a Chino, California, plant run by Westland Meat Co. and Hallmark Meat Co.
Under the settlements, Westland agreed to enter a $155.68 million consent judgment, which its lawyer said is unlikely to be collected because the company is defunct, while its owner, Steve Mendell, agreed to pay $240,000.
The government also said M&M Management LLC, Cattleman's Choice Inc., the estate of Cattleman's late owner, Aaron "Arnie" Magidow, and Magidow's widow JoAnn will pay $2.45 million. JoAnn Magidow was not accused of wrongdoing.
Two other defendants, Donald Hallmark Sr and Donald Hallmark Jr, settled in October 2012 for $304,130, the government said. The government joined the case in May 2009.
According to the lawsuit, Westland/Hallmark treated cattle inhumanely and falsely represented that it processed meat only from ambulatory cattle, when it also used "downer" cattle that can walk only with help. Such cattle are considered a greater risk to spread illness.
The case was tied to contracts from August 2003 to January 2008 under which the U.S. Department of Agriculture bought fresh and frozen beef from Westland/Hallmark for school lunches. The USDA now bans non-ambulatory cattle from entering the human food chain.
"Children across the country depend on the National School Lunch Program to provide them with a healthy meal each day," Stuart Delery, assistant attorney general for the Justice Department's civil division, said in a statement. "We all depend on companies providing food to the program to follow the rules designed to ensure those meals are safe to eat."
Mark Troy, a partner at the law firm Crowell & Moring representing Westland, Mendell and M&M, said federal meat inspectors "had been on site 100 percent of the time and inspected every single cow," but the government blamed Westland because workers had been caught on the video mistreating cows.
He said the Westland judgment is not expected to be paid because the company is out of business.
An uncollectible $497 million judgment was previously entered against Hallmark Meat, the Humane Society has said.
Edward Woods, a partner at Akin Gump Strauss Hauer & Feld representing Cattleman's Choice, Arnie Magidow's estate and JoAnn Magidow, in a statement said his clients "were able to reach a settlement with the U.S. for the costs of suit, a mere fraction of what the U.S. had been seeking."
Both lawyers noted that a federal judge had earlier this year dismissed parts of the government's case.
A February 2008 recall of Westland/Hallmark beef covered 143 million pounds (64.9 million kg) of meat over two years, of which 37 million pounds (16.8 million kg) had been bought for school lunches and other federal programs.
USDA officials at the time said much of the recalled beef had probably been consumed, but that there had been only a minor risk of illness from eating it.
Westland and M&M were based in Corona Del Mar, California, and Cattleman's Choice in Commerce, California, the Justice Department said.
The case is U.S. ex rel. Humane Society of the United States v. Westland/Hallmark Meat Co et al, U.S. District Court, Central District of California, No. 08-00221.
(Reporting by Jonathan Stempel in New York; Editing by Dan Grebler)