Pacific Seafood denies monopoly claims in new lawsuit

Published on
August 12, 2016

Pacific Seafood Group is denying claims made in a new federal antitrust lawsuit alleging that it is monopolizing seafood markets, including Dungeness crab, Pacific coldwater shrimp, Pacific whiting and trawl-caught groundfish.

Seawater Seafoods Company of Newport, Oregon, Seawater owner Bret Hamrick and Front St. Marine LLC claim in their lawsuit that Pacific has “actively protected its monopoly power through a variety of predatory tactics calculated to exploit and reinforce existing barriers to entry in the monopolized markets, leverage its monopoly power to create new barriers, and specifically target incipient competitors.”

Pacific Seafood, based in Portland, Oregon, has engaged in fraudulent acquisitions, according to the complaint, by “regularly targeting and acquiring competing processors at prices substantially below fair-market value by leveraging fraudulent claims against them to negotiate acquisition at a discounted price.”

The complaint also states that Pacific secretly negotiated to acquire its largest competitor, Ocean Gold Seafoods, Inc. and its affiliated entities, in violation of the Sherman Act's prohibition on monopolization and the Clayton Act's prohibition on anticompetitive mergers and acquisitions.

The lawsuit further alleges that Pacific began harassing Ocean Gold Seafoods at the beginning of the 2014-2015 Dungeness crab season, when it moored an 18-foot derelict skiff immediately adjacent to the western boundary of tax lot 1800.

“Defendants' sole object in mooring the derelict skiff in that location was to illegally obstruct crab fishermen from delivering their catch to Seawater's facility by cutting off access to the public waterway adjacent to defendants' property,” the complaint stated.

The attorney for Seawater Seafoods did not return a phone call from SeafoodSource.

However, the new federal antitrust lawsuit stems from a dock dispute between Pacific and Seawater, according to Daniel C. Occhipinti, general counsel and director of government affairs for Pacific Seafood.

“Plaintiffs have a 30-foot dock and want to moor 60- to 70-foot vessels without any regard for their neighbors,” he said. “This isn’t about antitrust; it’s about being a good neighbor.”

Seawater also sued Pacific last year in state court over the dock dispute. The judge in the case denied the company’s request for a restraining order against Pacific and Seawater later dropped the case.

Now, Pacific is seeking a new declaration by the state court.

“This dock dispute is being addressed in a local Newport courthouse and we are confident that the federal case will be dismissed,” Occhipinti said. The federal lawsuit is simply “a rehash of the same frivolous allegations this lawyer made in lawsuits in 2010 and 2015.”

Instead of being anti-competitive, Occhipinti pointed out how Pacific is helping the local seafood economy grow.

“We recently invested more than USD 6 million (EUR 5.4 million) in upgrading the dock structure and buildings in the Newport waterfront, along with putting in new freezers and new processing equipment, which will provide a lot more opportunities for local fishermen to deliver local catch, especially whiting,” Occhipinti said. “This will result in increased employment and investing in our flagship port.”

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