Pago Pago, AMERICAN SAMOA — The “inability” of StarKist Inc., to pay $100 million as proposed by the US Department of Justice has been raised in the latest court filings in the federal government’s criminal case against the owner of StarKist Samoa.

The revelation was made in separate filings on Mar. 28 by USDOJ and StarKist at the federal court in San Francisco, where the cannery will be sentenced in June this year after pleading guilty last November for participating in the packaged seafood conspiracy — to fix prices of packaged seafood sold in the United States.

The statutory maximum fine is $100 million, according to federal prosecutor Mikal J. Condon of the USDOJ’s Antitrust Division.

On Mar. 21, 2019 Olean Wholesale Grocery Cooperative, Inc. and Direct Purchaser Plaintiff class (or DPPs) — who are among the several plaintiffs in a civil case against StarKist and other major US canned tuna producers at the federal court in San Diego — filed a motion seeking to be heard in connection with StarKist’s evidentiary hearing pursuant to the federal Crime Victims' Rights Act (CVRA).

A hearing on the DPPs motion is set for later this week.

In its response to the DDPs motion, Condon said the only issue left unresolved under the plea agreement is “whether StarKist can pay the $100 … fine without substantially jeopardizing the company’s ongoing operations, thereby warranting a reduction” under provision of federal law.

According to USDOJ, the court has already referred the matter to the Probation Office for a pre-sentence report and to consider whether to accept the plea agreement and, if it does, “whether StarKist has an inability to pay a $100 million fine.”

“In the event that the Court determines StarKist has an inability to pay, StarKist cannot request nor may the Court impose a fine of less than $50 million,” Condon said, adding that the government does not oppose the DPPs’ rights under the CVRA, as victims of the criminal price-fixing conspiracy, to be reasonably heard at StarKist’s sentencing or to make a written statement.

However, Condon argued that the “CVRA does not grant DPPs, or any of StarKist’s victims, the right to access the confidential pre-sentence report and un-redacted sentencing memoranda submitted by the parties.”

“Those documents are confidential records of the Court,” Condon pointed out.

In its response, StarKist echoed the USDOJ’s arguments, saying StarKist also reserves the right to object or respond to any argument or information DPPs submit to the Court in relation to StarKist’s sentencing.

it argued that DPP seeks much more than the “right to be reasonably heard” and “instead requests the disclosure of confidential court records in order to purportedly conduct the same inability-to-pay analysis that StarKist and the USDOJ have already completed.”

 The company’s attorneys argued in court documents that “StarKist and DOJ have both engaged experts to analyze StarKist’s financial condition and assets, and the Probation Office has evaluated these respective reports.”

According to the company, the pre-sentence report as well as the forthcoming sentencing memoranda are likely to contain references to: StarKist’s long-range plan and other forward-looking proprietary financial analysis; and the terms of confidential settlements that StarKist has reached with other Plaintiffs in the civil litigation.

A footnote in the company’s motion states that “StarKist’s long range plan is a contemporaneously created business document in which StarKist forecasts various confidential business metrics, including information related to its production capacities and sales strategies, over the course of the coming five years.”

Another footnote states that StarKist’s sentencing memoranda will identify the alleged damages that each of the civil Plaintiffs (including DPPs) claim in the civil cases as well as the settlement amounts StarKist has already paid to certain plaintiffs in the civil cases.

Additionally, DPPs’ claims against StarKist remain pending and have not been resolved at this time and StarKist disputes DPPs’ assessment of civil damages.

Samoa News understands that the final plea agreement and sentencing memos by both sides are expected to be filed under seal. A plea agreement between the government and USDOJ filed Nov. 14, 2018 is not available for public access.

CIVIL LITIGATIONS

StarKist announced last month that it has entered into a settlement agreement with a large group of plaintiffs in the pending antitrust litigation over price fixing in the US canned tuna sector at the federal court in San Diego.

As previously reported by Samoa News, several major US retailers including many individuals across the U.S. had filed about five years ago, lawsuits against StarKist and other US canned tuna brands, such as Chicken of the Sea and Bumble Bee Food.

In a statement last month, StarKist said the settlement agreement resolves antitrust claims of 33 retailers, that were represented in several consolidated complaints. StarKist settled earlier with other plaintiffs including Target and Wal-Mart.

StarKist president and CEO, Andrew Choe, says the company is “committed to being a socially responsible company and is pleased to resolve this lawsuit with customers under fair and reasonable terms.”

It's unclear whether the settlements in the civil litigations will be made public at a later time.