Court rules StarKist must pay $100M fine in tuna price-fix­ing con­spir­acy

Pittsburgh Post-Gazette - - Front Page - By Stephanie Riten­baugh

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.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.