A statute of limitations challenge from StarKist and Bumble Bee Foods to a class-action lawsuit alleging price-fixing of canned tuna has been dismissed by a federal judge.
Judge Dana Sabrow of the U.S. District Court for the Southern District of California ruled on Monday, 7 February against the canned tuna companies, which argued that a statue of limitations had expired on claims of price-fixing. Specifically, Sabrow ruled evidence showed the tuna companies had fraudulently concealed their illegal actions, thereby voiding limitations regarding the timeliness of the suit.
The canned tuna companies argued the claims filed in 2015 by companies that had brought their own lawsuits against them, a class known as the “direct-action plaintiffs” (DAPs), were made past the four-year statute of limitations, as the price-fixing conspiracy began in December 2007.
But Sabrow ruled coordinated actions by the tuna companies had hidden their illicit behavior.
“The evidence reflects that defendants utilized their sophistication and commercial power to clandestinely communicate with their competitors and alter the markets in such a way that would have averted detection,” he wrote.
Sabrow said evidence presented by the DAPS showed the companies had issued similar-sounding public explanations of their move to five-ounce cans of tuna from six-ounce cans, and that they had destroyed or altered documents containing sensitive pricing information shared by the three companies. The companies also exchanged pricing information using private emails and addresses of family members, ostensibly to avoid detection.
“In one example, DAPs point to an email, presumably drafted by Hubert Tucker of [Chicken of the Sea], where he receives StarKist’s price increase letter and reminds himself to send [Chicken of the Sea]’s letter to Bruce Bollmer of StarKist,” Sabrow wrote. “Notably, the email is sent to Tucker’s wife and the subject line reads, ‘I miss you! Come home!’”
Sabrow also cites the federal indictment of former Bumble Bee President Chris Lischewski, who is now serving a prison sentence for his role in the price-fixing conspiracy.
“Lischewski and his co-conspirators, ‘employed measures to conceal their conduct, including, but not limited to, using code when referring to coconspirators, meeting at offsite locations to avoid detection, limiting distribution and discouraging retention of documents reflecting conspiratorial contacts, and providing misleading justifications for prices,’” Sabrow wrote.
As a result of this obfuscation, “defendants have failed to introduce evidence that irrefutably demonstrates that DAPs discovered or should have discovered their causes of action against defendants but failed to timely file their complaints,” Sabrow said.
At the time of the price-fixing, StarKist, Bumble Bee, and Chicken of the Sea own a combined 80 to 85 percent of the USD 1.7 billion (EUR 1.5 billion) canned tuna market in the United States, with StarKist’s share estimated at 40 to 44 percent, Bumble Bee at 24 to 25 percent, and Chicken of the Sea at 15 to 17 percent.
On 26 January, 2022, Sabrow gave preliminary approval to settlements between various parties involved in the class-action suit.
Chicken of the Sea and its owner Thai Union have agreed to pay 3.2 percent of the combined sales of packaged tuna products they sold to the direct purchasers pursuing a collective class action (DPPs). The agreement is expected to provide around USD 13 million (EUR 11.4 million) to the class members, after accounting for all of the anticipated opt-outs, plus an additional USD 5.95 million (EUR 5.21 million) for legal fees. A final approval hearing on the settlement is scheduled for 17 June, 2022.
A separate settlement between Chicken of the Sea and Thai Union and individual consumers proceeding as a joint class, or end-payer plaintiffs (EPPs), has also received preliminary approval from Sabrow. Consumers from 27 states who indirectly purchased packaged tuna in cans or pouches smaller than forty ounces for end consumption between June 2011 to July 2015 would receive up to USD 20 million (EUR 17.5 million), including USD 5 million (EUR 4.4 million) to cover legal fees. A final approval hearing on the settlement is scheduled for 15 July, 2022.
And a third settlement between Chicken of the Sea and Thai Union and commercial food-preparers (CFPs), or entities that indirectly purchased packaged tuna products involved in the price-fixing conspiracy through DOT Foods, Sysco, US Foods, Sam’s Club, Wal-Mart, or Costco from June 2011 through December 2016 will pay the class an unspecified sum. Details of the settlement will be disseminated by 13 April, 2022, and final approval of the settlement is set for a hearing on 12 August, 2022.
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