Ads by Google Ads by Google

StarKist, other tuna canners embroiled in new conspiracy lawsuit

Cans of StarKist tuna
Claiming can-size reduction facilitated by co-conspirator, Impress Samoa

Pago Pago, AMERICAN SAMOA — StarKist Inc. and it’s owner, South Korean-based Dongwon Industries, along with the former chief executive of Bumble Bee Foods, Christopher Lischewski are defendants in a new civil lawsuit filed Tuesday by Washington state Attorney General Bob Ferguson at King County Supreme Court in Washington state.

Washington was the first state to bring a case over the price-fixing conspiracy that drove up the cost of packaged tuna for more than a decade, costing Washingtonians at least $6 million, according to the 53-page lawsuit.

Ferguson asserts that the defendants engaged in a price-fixing conspiracy from 2004 through 2015 to drive up the cost of packaged tuna, violating Washington’s Consumer Protection Act. As a result, Washington residents paid millions more than they should have.

“We cannot have a free market when corporate titans are able to tip the scales to their own bank accounts,” Ferguson said in a national news release after the suit was filed. “Washingtonians lost millions as a result of this corporate greed. I intend to get that back for them.”

The lawsuit asks the court to order the defendants to pay restitution to Washington consumers as well as the costs and fees of bringing the case.

It alleges — among other things — that the collusive can-size reduction was facilitated by co-conspirator, Impress, the then-owner of the can manufacturing plant in American Samoa that supplied cans to the three major canned tuna producers — StarKist, Bumble Bee, and Chicken of the Sea International (COSI).

(Samoa News notes that the can-plant — which was called Impress Samoa Inc. — was sold in 2015 to Dongwon and renamed Talofa Systems American Samoa Inc., still based at Satala.)

The suit further alleges that contacts at Impress communicated StarKist’s plans to downsize the cans and StarKist’s hope that COSI and Bumble Bee would agree to do the same.

Furthermore, StarKist needed COSI and Bumble Bee to agree to the downsizing in packaging because any company that downsized their packages unilaterally would have faced fierce customer backlash and loss of market share.

Retailers and purchasers would simply shift to buying the still-6-ounce cans from its competitors, instead of StarKist’s five-ounce cans, the lawsuit alleges.

It further alleges that the defendants and their co-conspirators (who were not identified in the lawsuit) knew at the time that Impress was sharing production and other information about each of them with the others, and used Impress as a conduit to facilitate the exchange of information during the conspiracy.

Through a series of telephone and email communication, and at least one in person meeting in March 2008, StarKist, Bumble Bee and COSI reached agreement to reduce their standard can size from six ounces to five ounces, according to the lawsuit.

It also states that when Dongwon purchased StarKist in 2008, it transferred equipment and technology that increased the manufacturing capacity of StarKist’s plant in American Samoa.

Between approximately 2004 and 2010, the lawsuit contends that defendants shared a common can manufacturer in American Samoa — which was Impress.

“StarKist, Bumble Bee, and COSI each knew at the time that Impress was sharing production and other information about each company with the others,” the lawsuit alleges.

“They used Impress as a conduit to facilitate the exchange of information in furtherance of the conspiracy. Impress is a co-conspirator and its role in this regard is illustrated in connection with the collusive can size reduction that occurred in 2007 and 2008,” it further alleges.

Allegations outlined in the state lawsuit are similar to those made by federal prosecutors, who filed a criminal case at the federal court in San Francisco more than two years ago against StarKist, Bumble Bee Foods and COSI.

StarKist pled guilty to and was fined $100 million in September 2019 for its role in the US Justice Department (USDOJ) packaged tuna price-fixing investigation. USDOJ filed a separate criminal case against Lischewski, who was found guilty last December by a jury for his role in the price-fixing scheme.

Federal court records show that Lischewski was to be sentenced yesterday afternoon. However, at press time the outcome was not available and court records didn’t provide information on the sentencing hearing.

Federal prosecutors in San Francisco didn’t immediately response to Samoa News requests for comments.

 According to court records, defense attorneys sought a sentence of 12 months home-confinement and a $25,000 fine, while prosecutors recommended a prison term between 97 and 120 months, and a $1 million fine.