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Thai Union, Bumble Bee push back against tuna price-fixing lawsuits

[ 2018.10.12 ]

Lawyers for Bumble Bee Foods and Thai Union Group's Tri-Union Seafoods are arguing that groups of civil plaintiffs banding together to wage class-action lawsuits against them shouldn't be allowed to do so. 

Civil lawsuits from dozens of wholesalers, retailers and individuals across the US allege that the plaintiffs were overcharged by a long-running price-fixing conspiracy involving Bumble Bee, Tri-Union's Chicken of the Sea brand and Dongwon Enterprises' StarKist & Co. 

Those suits have all been consolidated under the oversight of San Diego,California-based federal judge Janis Sammartino,

Earlier this year, plaintiffs in four categories or "tracks", which differ depending on how they purchased tuna from the canners, asked Sammartino to certify their individual lawsuits as joint class-actions, arguing that the facts of the cases were common enough to be treated as a group. 

This would allow the groups to have common legal counsel and pool many plaintiffs' resources together to pay the costly bills for expert witnesses, lawyers fees and other expenses that come in class-action litigation. 

However, in responding to the certification motions, Thai Union and Bumble Bee argue that there are too many differences between within some of the tracks to be treated as a class. 

The large wholesalers and distributors who dealt directly with the canners are known as "direct purchasers" with a second track of direct purchasers including large buyers such as Walmart with separate lawsuits known as "direct action" plaintiffs.

Lawsuits in two other tracks, the "commercial food preparers" including restaurants and retailers, and individual consumers known as "end-payers", include plaintiffs who purchased from the canners' tuna indirectly. 

In a motion filed Oct. 2 opposing class certification for end-payer plaintiffs, Bumble Bee said that the track must show that an anti-trust violation occurred, that all of the plaintiffs were harmed by the price-fixing and by how much.

The track's plaintiffs bought dozens of different types of tuna products from different brands from thousands of different types of different-sized stores in different states at different prices over several years. Those differences, Bumble Bee argues, mean that a joint economic model "fails" to meet class certification.

"Their failure is not surprising, given the differences among members of the 32 proposed classes," Bumble Bee's lawyers said of the end-payers.

Thai Union argued similarly, advocating against class certification for the commercial food preparers. 

"The [commercial food preparers] now acknowledge that their putative class would include members as disparate as distributors who bought the product for resale; restaurants, delis, nursing homes, and caterers who buy and use the product for commercial food preparation; and individuals who bought the product for personal consumption," the canner argued.

Judge Sammartino is expected to consider the motions in December. 

DOJ investigation

The civil lawsuits began in 2015 amid an investigation into the US tuna sector into alleged price-fixing that spun out of the department's antitrust review for Thai Union's attempt to acquire Bumble Bee.

Thai Union's COSI, which in April reached a settlement in the civil lawsuit filed by large retailer Walmart, acted as a whistleblower to the U S Department of Justice (DOJ) informing on the alleged industry collusion in exchange for amnesty from prosecution. 

Bumble Bee, meanwhile, has entered a guilty plea to price fixing charges. The company agreed to pay a $25 million criminal fine, which will increase to a maximum criminal fine of $81.5m, payable by a related entity, in the event of a sale of the company subject to certain terms and conditions.

Two of the company's executives, Kenneth Worsham and Walter Cameron, have pleaded guilty to price-fixing charges but have yet to be sentenced.

Bumble Bee CEO Christopher Lischewski has been indicted by the DOJ in connection with the probe but has maintained his innocence and has stepped down temporarily to contest the allegations. 

StarKist's Stephen Hodge, a former senior vice president of sales at the company, has also pleaded guilty but has yet to be sentenced. 


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