An appeals court in the U.S. state of Washington has found merit in Starkist’s appeal of a decision holding it liable for all damages caused to the state’s residents by the canned tuna price-fixing conspiracy it joined with Bumble Bee and Chicken of the Sea from as early as 2004 to 2015.
King County Superior Court Judge Julie A Spector’s ruling that Starkist was jointly and severally liable for all damages from the conspiracy was reversed by a three-judge panel from Washington’s Division One Court of Appeals on Tuesday, 3 January. The panel stipulated it was rejecting Starkist’s argument that it was liable to pay damages based on only its own profits, rather than the earnings of the conspiracy as a whole, but said Spector did not explain her rationale for her ruling.
“The trial court held StarKist liable for the conspiracy’s profits without explaining its rationale for exercising its discretion in this manner and appears to have rendered this ruling as a matter of law. The failure to exercise discretion is itself an abuse of discretion,” the panel wrote in its judgment.
The panel sent the case back to Spector to recalculate the amount of restitution Starkist must pay, while asking her to explain her reasoning for her decision.
The panel noted the state of Washington agreed to consent decrees, or settlements, with both Chicken of the Sea and former Bumble Bee CEO Chris Lischewski that each amounted to a fraction of the USD 6 million to USD 12 million (EUR 5.6 million to EUR 11.3 million) an expert economist estimated the conspiracy had cost Washington consumers. Chicken of the Sea settled for USD 500,000 (EUR 470,000) in 2020, while Lischewski settled for USD 100,000 (EUR 94,000) in October 2020.
"The trial court may impute to one conspirator the actions of all co-conspirators and, as a result, may order Starkist to pay an amount equal to the conspiracy's gains if the court deems it necessary to do so," the panel wrote. "But the state of Washington settled with co-conspirators Chicken of the Sea and ... Lischewski for a fraction of these alleged consumer losses."
In 2020, the state of Washington sued Chicken of the Sea, Starkist, Bumble Bee, and the company’s foreign owners, as well as Lischewski, alleging they knowingly participated in “an unlawful conspiracy to suppress and eliminate competition by reaching agreements to fix, raise, and maintain the prices of packaged tuna products sold in the state of Washington in violation of the Consumer Protection Act,” according to the consent decree with Lischewski..
StarKist pleaded guilty in a federal criminal trial in October 2018 to fixing the prices of the canned tuna it sold in the United States between 2011 and 2013 and was ordered to pay a USD 100 million (EUR 87 million at the time) fine.
Separately, in November 2022, the U.S. Supreme Court rejected a request by Reston, Virginia, U.S.A.-based Starkist challenging the class certification in a civil lawsuit brought against it in response to its involvement in a price-fixing arrangement with Bumble Bee Foods and Chicken of the Sea from 2011 to 2013.
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