A Southern California beef supplier agreed to pay a record fine of nearly $497 million to settle slaughterhouse animal abuse allegations, but the company is bankrupt and won’t be making any payments.

While the Hallmark Meat Company fine was considered a symbolic victory by animal rights groups because of the first-time use of federal statutes in animal protection litigation, a more tangible settlement was reached with two of the nine individual defendants in the case.

Owners Donald Hallmark Sr. and Donald Hallmark Jr. will pay $316,802 in structured payments over five years to settle the lawsuit brought by the Human Society of the United States (HSUS), and joined by the U.S. Department of Justice in 2009. Hallmark Meat supplied beef to the national school lunch program.

The company’s legal troubles began after an undercover video shot for the Humane Society, showing mistreatment of animals at its Chino slaughterhouse, surfaced in 2008. The video of “downer” cows too sick or weak to walk being dragged by chains, hauled by forklifts and buffeted by pressurized hoses went viral on the internet.

The ensuing recall of 143 million pounds of beef cost the government an estimated $150 million.

The suit filed in U.S. District Court, Central District of California, in 2009 also named Westland Meat Co. as a defendant, but that company is not part of the settlement and continues to contest the allegations.

Hallmark's slaughterhouse supplied Westland Meat, which processed the carcasses. The facility was the second-largest supplier of beef to the Commodity Procurement Branch of the U.S. Department of Agriculture (USDA), which distributes beef to needy families and the elderly in addition to schools.

Westland was named a USDA “supplier of the year” for 2004-2005, but the honor was rescinded after the scandal broke. Westland also declared bankruptcy.

–Ken Broder

To Learn More:

California Slaughterhouse Agrees to Record Fine for Animal Abuse (by Tracie Cone, Associated Press)

Owners of Infamous Hallmark Meat Company Pay $300,000 in HSUS Slaughterhouse Cruelty Case (The Human Society)