U.S. Supreme Court rejects StarKist's tuna price-fixing class action appeal (updated)

Dongwon Industries

14/11/2022 14:49

(Adds background, paragraphs 4-14)
    By Nate Raymond
       Nov 14 (Reuters) - The U.S. Supreme Court on Monday
declined to hear a bid by StarKist Co, owned by South Korea's
Dongwon Industries  006040.KS , to avoid a lawsuit by tuna
buyers accusing it of fixing prices.
    The justices turned away StarKist's appeal of a lower
court's decision that let three groups of tuna purchasers
receive class action status to jointly sue the canned tuna
company even though a large number of buyers may not have been
overcharged and injured by the price fixing. 
    The case could have given the justices, had they decided to
hear it, a chance to make it harder for consumers and other
plaintiffs to receive class action status.
    The Reston, Virginia-based company, which produces StarKist
Tuna, had asked the Supreme Court to consider whether plaintiffs
could still win class action status in cases in which some of
the members of the class were not injured by a company's alleged
wrongdoing.
    StarKist's appeal garnered the support of business groups
including the U.S. Chamber of Commerce, which in a brief to the
justices said "there are too many judges who, despite this
court's instructions, continue to put a heavy thumb on the scale
in favor of class certification."
    Class action status allows a few plaintiffs to litigate on
behalf of a much larger group rather than forcing individuals to
litigate separately. Businesses fight to avoid cases winning
class action status, which can expose them to massive potential
damages and create pressure to settle.
    The litigation, filed in federal court in California,
followed a U.S. Justice Department investigation into a
three-year conspiracy by U.S. suppliers of packaged tuna
including StarKist and Bumble Bee Foods to fix prices for their
products in violation of antitrust laws.
    StarKist pleaded guilty, admitting to having fixed the
prices of canned tuna from as early as November 2011 through at
least as late as December 2013, and was sentenced in 2019 to a
$100 million fine. Bumble Bee and three industry executives also
pleaded guilty. Former Bumble Bee CEO Christopher Lischewski was
convicted at trial and sentenced in 2020 to 40 months in prison.
    Prosecutors said the scheme affected more than $600 million
dollars of canned tuna sales.
    Amid the investigation, a number of packaged tuna purchasers
filed proposed class actions against Bumble Bee, StarKist and a
third company, Chicken of the Sea, who together sold more than
80% of the packaged tuna in the United States. The plaintiffs
accused the companies of violating federal and state antitrust
laws through a scheme that caused them to overpay for tuna.
    In 2019, a trial judge granted class action status to three
separate groups of tuna buyers: direct purchasers such as
national retailers and regional grocery stores; commercial food
preparers; and individual consumers.
    The companies appealed, saying 28% or more of direct
purchasers by their analysis may not have been harmed.
    A three-judge panel of the San Francisco-based 9th U.S.
Circuit Court of Appeals in 2021 decertified the three classes,
saying the judge had failed to determine whether or not the
number of uninjured tuna buyers was too small to justify class
action status.
    On further review, an 11-judge 9th Circuit panel voted 9-2
in April to break the three classes apart and declined to adopt
a rule against certifying a class action even if only a trivial
number of class members were harmed. StarKist appealed that
ruling to the Supreme Court.
 (Reporting by Nate Raymond in Boston; Editing by Will Dunham)
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