Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Shelf-stable seafood purchaser claims unsavory price fixing conspiracy, (Sep 1, 2015)

By Greg Hammond, J.D.

Bumble Bee Foods LLC, Tri-Union Seafoods LLC (Chicken of the Sea), and StarKist Co.—the three largest producers of packaged seafood products (PSPs) in the United States—allegedly conspired to fix, raise, maintain, and/or stabilize prices for PSPs, according to a complaint filed by a caterer in the federal district court in Little Rock, Arkansas (Machin v. Bumble Bee Foods LLC, August 31, 2015).

PSPs are shelf-stable seafood products, such as tuna, that are sold in cans, pouches, or ready-to-eat serving packages. The complaint asserts that PSPs are sold directly to restaurant wholesale suppliers, retail groceries, grocery cooperatives, and mass merchandisers, and that these direct purchasers subsequently sell PSPs to various customers, including restaurants and caterers. Bumble Bee, StarKist, and Chicken of the Sea control roughly 75 percent of the PSP market.

Janet Machin, a caterer who purchased PSPs from food distributors, brought four claims against the defendants, alleging that the three PSP producers conspired to artificially fix, raise, maintain, and/or stabilize the price of PSPs and restrained, suppressed, or eliminated competition in the sale of PSPs. In addition, Machin asserts that the conspiratorial acts have caused unreasonable restraints in the market for PSPs and she, along with other purchasers, have consequently been harmed by being forced to pay inflated, supra-competitive prices for such products. The complaint brings claims for violations of the Sherman Act, state antitrust statutes, state consumer protection statutes, and unjust enrichment.

Machin has proposed two classes: (1) a nationwide class consisting of all legal entities that indirectly purchased packaged seafood products for their own use in food preparation, rather than for resale, within the United States, its territories, and the District of Columbia, from one or more defendant or any predecessor, subsidiary, or affiliate thereof, at any time between July 24, 2011, and the present; and (2) a damages class consisting of all legal entities that indirectly purchased packaged seafood products for their own use in food preparation, rather than for resale, in Arizona, Arkansas, California, the District of Columbia, Florida, Illinois, Iowa, Kansas, Maine, Michigan Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia, or Wisconsin, from one or more defendant or any predecessor, subsidiary, or affiliate thereof, at any time between July 24, 2011, and the present.

Finally, Machin requests trebled damages; restitution and/or disgorgement of profits unlawfully gained; permanent injunctive relief, prohibiting the defendants from continuing, maintaining, or renewing the conduct, contract, conspiracy, or combination alleged in the complaint; pre- and post-judgment interest; and costs of suit and reasonable attorney fees.

Two similar complaints were filed in the federal district court in San Diego, California. A group of indirect purchasers brought a 24-count complaint claiming that Bumble Bee, StarKist, Chicken of the Sea, and King Oscar, Inc. violated the Sherman Act, as well as state antitrust and consumer protection laws (Olive v. Bumble Bee Foods LLC, August 28, 2015). Colin Moore, another indirect purchaser, filed suit against Bumble Bee, Chicken of the Sea, and StarKist, claiming violations of the Sherman Act and Hawaii antitrust and consumer protection laws (Moore v. Bumble Bee Foods LLC, August 28, 2015).

The case numbers are 3:15-cv-01909-BEN-WVG, 4:15-cv-00545-SWW, and 3:15-cv-01911-DMS-NLS.

Attorneys: Thomas P. Thrash (Thrash Law Firm, P.A.) for Janet Machin. Betsy C. Manifold (Wolf Haldenstein Adler Freeman & Herz LLP) for Evelyn Olive. Kimberly A. Kralowec (The Kralowec Law Group) for Colin Moore.

Companies: Bumble Bee Foods LLC; StarKist Co.; Tri-Union Seafoods LLC; King Oscar, Inc.

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