Court rules StarKist must pay $100M fine in tuna price-fixing conspiracy
A federal court ruled Wednesday that Pittsburgh-based StarKist Co. will have to pay a $100 million fine for its role in an investigation into a conspiracy to fix the price of canned and pouched tuna.
The fine, which could have ranged from $50 million to $100 million, is the highest to be levied in the case involving the “big three” tuna companies. StarKist was also sentenced to a 13-month term of probation.
The sentencing “brings to an end StarKist’s involvement in the [Department of Justice’s] investigation and resolves all outstanding criminal antitrust issues for the company,” the company said in a statement.
In a joint statement regarding sentencing filed in the U.S. District Court for the Northern District of California, StarKist and the DOJ debated whether the company could afford a $100 million fine. StarKist argued that such an amount wouldn’t give it the flexibility needed to pay restitution in the remaining civil cases involving price-fixing claims while remaining financially viable. The DOJ disputed those claims.
In the same document, the DOJ also said, “If future events threaten StarKist’s ability to make restitution or remain financially viable, the government can petition the court to modify StarKist’s fine.” StarKist, which is based on the North Shore and owned by South Korea-based Dongwon Enterprise, can also ask to have the payment schedule changed.
U.S. District Judge Edward M. Chen found that StarKist had not proven that its financial circumstances justified a lower criminal fine. In addition to the fine and term of probation, StarKist has also agreed to cooperate in the antitrust
division’s ongoing investigation, according to a statement from the DOJ.
While several civil cases are ongoing — in fact, a judge granted class-action status to three tracts in August — the DOJ has been moving forward with parallel cases.
In 2017, Bumble Bee Foods pleaded guilty to its role in the antitrust conspiracy and agreed to pay a $25 million criminal fine. That fine, to be paid over a period of five years, was reduced from $136.2 million “due to Bumble Bee’s inability to pay a full criminal fine without substantially jeopardizing the continued viability of the organization,” according to court documents. The fine will jump to $81.5 million if the company is sold.
San Diego-based Chicken of the Sea had stepped forward as a whistleblower in the DOJ’s antitrust case.
Three former tuna company executives were previously charged and have pleaded guilty. In May 2018, a federal grand jury indicted Christopher Lischewski, former president and CEO of Bumble Bee Foods LLC, on a one-count felony charge that he carried out the conspiracy. Mr. Lischewski stepped down from the company and has pleaded not guilty in that ongoing case.
“Today’s result demonstrates our commitment to enforcing the antitrust laws aggressively against companies that fix prices,” Assistant Attorney General Makan Delrahim, of the DOJ’s antitrust division, said in a statement.
“Hard-working Americans deserve the benefits of open competition when they spend their hard-earned money on items that stock kitchen shelves. When a corporation cheats customers at the checkout line, the antitrust division will hold it accountable to the greatest extent.”