WASHINGTON – Two of nine defendants in a major False Claims Act lawsuit filed by The Humane Society of the United States reached a landmark $500 million agreement to settle the case.

A final judgment was entered against Chico, Calif.-based Hallmark Meat Packing Co. of $497,000,000. The judgment is largely symbolic because the company is bankrupt. However, it is intended to deter other federal contractors from wrongdoing. Hallmark was a federal contractor to the national school lunch program. The company signed contracts agreeing to provide humane treatment to animals sent to its facilities.

“The meat industry should take notice that if they defraud federal agencies and the American taxpayers by abusing animals, there will be serious consequences for their inhumane and reckless actions,” said Jonathan R. Lovvorn, senior vice president and chief counsel for animal protection litigation at The HSUS. “We commend the U.S. Department of Justice for joining The Humane Society of the United States in seeking to hold federal meat suppliers accountable.”

Also part of the agreement, Donald Hallmark, Sr. and Donald Hallmark, Jr. agreed to pay the bulk of their remaining assets to the US Department of Justice. Additionally, the father and son agreed to make structured payments over the next five years totaling $316,802. HSUS will be awarded a “small portion” of the settlement for bringing the case against the company.

HSUS filed a civil suit against the company in 2009 under the False Claim Act, alleging the company lied about meeting the terms of its contracts with the federal government. HSUS alleged the company slaughtered and processed one downer cow every six weeks for more than three years.