Decide: StarKist to pay $100M high quality in tuna price-fixing case


SAN FRANCISCO — A federal decide in San Francisco on Wednesday ordered StarKist Co. to pay a $100 million high quality in a canned tuna price-fixing conspiracy involving the trade’s prime three firms.

The Pittsburgh-based firm was additionally sentenced to 13 months of probation.

The tuna large had requested U.S. District Court docket Decide Edward Chen to scale back the high quality to $50 million, arguing a $100 million penalty may bankrupt it as a result of it nonetheless faces tens of millions extra in potential civil damages.

However Chen stated the courtroom discovered the corporate has the property, the power to borrow cash to pay the high quality and a authorized recourse to ask for an prolonged cost schedule if it runs into monetary hassle.

He ordered the corporate to pay $5 million inside 30 days and $11 million subsequent 12 months. Beginning in 2021, the corporate must make funds of $21 million annually for 4 years.

“The purpose of this courtroom is to err on the facet of offering some aid on the entrance finish to StarKist as a result of … the subsequent two years would be the essential interval, it appears to me,” Chen stated.

StarKist Co. final 12 months agreed to plead responsible to a felony value fixing cost as a part of a broad collusion that included Bumble Bee Meals and Rooster of the Sea.

“We now have cooperated with the DOJ in the course of the course of its investigation and settle for accountability,” Andrew Choe, Starkist Co. president, stated in a press release. “We’ll proceed to conduct our enterprise with the utmost transparency and integrity.”

The scheme got here to mild when an try by Thai Union Group Rooster of the Sea to purchase San Diego-based Bumble Bee failed in 2015, in keeping with courtroom information.

Rooster of the Sea executives then alerted federal investigators, who agreed to protect the corporate from felony prosecution in change for cooperation.

Bumble Bee Meals pleaded responsible in 2017 to the identical cost and paid a $25 million high quality, $111 million decrease than prosecutors stated it ought to have been. Prosecutors stated they feared placing the financially struggling Bumble Bee out of enterprise with a excessive high quality and agreed to let the corporate make interest-free funds for 5 years.

Scott Meece, StarKist’s normal counsel, addressed the courtroom earlier than the sentencing, asking the decide to contemplate the corporate’s 2,600 U.S. staff.

“These staff have had this hanging over their heads for a very long time,” Meece stated. “They’re apprehensive about what’s going to occur to their jobs.”

Meece stated the corporate will most likely must make cuts and will contemplate layoffs or relocating its American Samoa plant to Thailand.

Chen stated the corporate, which is owned by South Korean firm Dongwon Industries, didn’t display by “preponderance of the proof” that’s unable to pay the $100 million high quality.

Two former executives of Bumble Bee and one from StarKist have additionally every pleaded responsible to price-fixing prices. None of them have been sentenced.

Former Bumble Bee chief government Christopher Lischewski has pleaded not responsible to a price-fixing cost.

The three firms face myriad lawsuits from wholesalers, meals service firms and retailers equivalent to Walmart, Goal and Kroger.

“As we speak’s end result demonstrates our dedication to implementing the antitrust legal guidelines aggressively towards firms that repair costs,” stated Assistant Legal professional Basic Makan Delrahim of the Justice Division’s Antitrust Division. “When an organization cheats prospects on the checkout line, the Antitrust Division will maintain it accountable to the best extent.”

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