Debate over FAD-free claims may get Lischewski off the hook

Published on
April 18, 2019

Lawyers for former Bumble Bee Foods CEO Chris Lischewski are making an argument that his efforts to align U.S. canned tuna suppliers against marketing products as “FAD-free” are protected from prosecution by the First Amendment of the U.S. Constitution.

And because of this ostensible overstep, the single charge filed by the U.S. government against Lischewski, which includes allegations of both price-fixing and anti-competitive behavior in regard to FAD-free branding, should be dismissed, Lischewski’s lawyers are arguing in advance of a June hearing in the case.

“Because these two aspects of the purported conspiracy the government chose to allege in a single count will require different evidence at trial, the sole count of the indictment should be dismissed,” Lischewski’s lawyers wrote in a motion to dismiss the case.

In their response, prosecutors from the U.S. Department of Justice’s Antitrust Division dismissed the motion as “ignoring the actual charge and instead converting one of the means and methods of the conspiracy into a separate offense.”

“[Lischewski] is not charged with refusing to advertise his tuna in a particular way. He is charged with joining a price-fixing conspiracy accomplished, in part, by an agreement not to offer certain products,” they wrote in opposing the motion to dismiss the case. “The First Amendment does not immunize speech made in furtherance of a criminal conspiracy.”

A hearing on the motion will take place on 12 June, with a trial date tentatively set for 4 November. U.S. District Court Judge Edward M. Chen of the Northern District of California, in San Francisco, California, is overseeing the case.

FADs, or fish-aggregating devices, are natural or artificial floating objects that are used to lure tuna into larger groups for easier capture. FADs have been criticized by some environmental groups, who see them as harmful as data shows their use in fishing leads to higher rates of juvenile catch and bycatch.

In the time period Lischewski is accused of working to fix the prices of canned tuna – November 2010 through December 2013 – environmental NGO Greenpeace was leading an effort to pressure major tuna companies to commit to going “FAD-free,” or ending their associations with fishing companies that used FADs.

Lischewski’s indictment alleges that he conspired “to limit and restrict competition between the conspirators as to certain types and categories of products, including, but not limited to, competition for products based on certain types of fishing methods.”

However, Lischewski’s lawyers argue that he and his alleged co-conspirators had “lawful, procompetitive reasons for resisting pressure from Greenpeace to artificially segment the market into ‘FAD’ and ‘FAD-free’ tuna, with the latter misleadingly touted as more ‘responsible, sustainable or eco-friendly,’” they wrote. “Because resistance to arguably misleading ‘FAD-free’ branding has procompetitive value, it cannot be unlawful.”

If Lischewski’s goal in entering into a conspiracy was to raise the price of canned tuna, he would have no reason to oppose a “FAD-free” label, as the outcome of enacting FAD-free practices globally would be less tuna reaching the market, his lawyers argued, resulting in “massive price increases.”

“Whatever one may think about Greenpeace’s antipathy to FADs from an environmental or political perspective – and the potential salience of those perspectives underscores the First Amendment concerns raised by the government’s allegations – resisting the demonization of FAD fishing to maintain higher quantities of tuna on the market, at lower prices, is at least arguably procompetitive, not ‘manifestly anticompetitive,’” Lischewski’s lawyers wrote. 

While bycatch rates for FAD fishing are higher than free-school tuna fishing, “80 to 95 percent of the bycatch is of species that are not at risk,” Lischewski’s lawyers argued, adding that the “marginally lower” bycatch rates for FAD-free fishing are offset by “the use of more fuel (with a higher associated carbon footprint).” No mention of juvenile catch rates is made in the document.

His lawyers further argue that it was not unlawful for Lischewski and others involved in the alleged price-fixing to “resist the segmentation of the tuna market by means of brands and labels that overstate, directly or by implication, the purported environmental attribute[s] or benefit[s] of FAD-free fishing.”

If the accusations related to the FAD-free communications made by Lischewski are separated from the price-fixing charge he faces, any additional charges related to those communications should be thrown out as it is time-barred, Lischewski’s lawyers argue. The alleged agreement not to sell FAD-free branded tuna occurred in 2012, past the five-year statute of limitations for the charge.

However, the Department of Justice prosecutors said Lischewski’s FAD-related communications tie into the larger conspiracy charge, and therefore are not subject to the five-year statute of limitations.

“As long as an indictment alleges an overall conspiracy, it is not duplicitous, and the means and methods of that conspiracy may include sub-agreements, multiple crimes, or acts that, if taken by themselves, would be entirely legal,” they wrote. “It does not matter whether the fishing-methods agreement would be … time-barred if it were a standalone charge, because no such charge exists – the fishing-methods allegation is one means of the price-fixing conspiracy. Similarly, defendant’s justifications for reaching the fishing methods agreement also do not matter, because neither FTC truth-in-advertising regulations nor the First Amendment offer protection for conduct in furtherance of a price-fixing conspiracy.”

Lischewski’s legal efforts to contextualize his FAD-related communications as opposition to Greenpeace “are both irrelevant and improper on a motion to dismiss,” they wrote.

“The court should reject defendant’s improper attempt to redraft the indictment and introduce additional facts not alleged by the grand jury. This case is not about Greenpeace or Federal Trade Commission regulations,” they said. “[Lischewski] was not charged for following the law and exercising his First Amendment rights. He was charged properly with price-fixing, which is not protected by the First Amendment.”

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