Thai Union Group has acknowledged its U.S. subsidiary, Chicken of the Sea, is the whistleblower in a price-fixing scandal that has led to a United States Department of Justice investigation and prosecution of its primary competitors in the U.S. canned tuna market.
The ongoing investigation by the DOJ has already resulted in the criminal prosecution of Bumble Bee Foods, resulting in a USD 25 million (EUR 22.8 million) fine, which was later reduced. Former Bumble Bee executives Walter Scott Cameron and Ken Worsham and StarKist executive Stephen Hodge also each pleaded guilty to conspiracy as part of the investigation.
In a notice filed on Monday, 11 September, with the Stock Exchange of Thailand, where the firm is publicly listed, Thai Union said Chicken of the Sea had received conditional leniency under the Department of Justice’s Corporate Leniency Program. In exchange, the company and subsidiary Tri-Union, which controls U.S. canned tuna producer Chicken of the Sea, are required to provide information to assist the DOJ’s antitrust investigation of the packaged seafood industry in the United States.
“Provided Tri-Union continues to fully cooperate with the DOJ, Tri-Union’s conditional leniency status means that neither Tri-Union nor any cooperating executives or employees within the scope of the Investigation will face criminal fines, jail time or prosecution,” the statement said.
The DOJ began investigating collusion in the U.S. canned tuna industry following a failed bid by Thai Union to buy Bumble Bee in 2015. It is unclear when Thai Union began cooperating with the DOJ, but according to the DOJ’s Corporate Leniency Policy, it did not yet have information about illegal activity that was likely to result in a sustainable conviction when Thai Union initiated contact with the department.
The protections Thai Union gained from its status as a whistleblower may still leave it vulnerable in the numerous civil lawsuits that have been filed by U.S. customers and retailers. Thai Union, StarKist, and Bumble Bee still faces civil litigation brought by a number of U.S. retailers, including Walmart, Target, Wegmans, Hy-Vee, Publix, and Kroger.
Three more retailers – Dollar General, Moran Foods (owners of Save-A-Lot), and New York grocery chain Krasdale Foods – sued the so-called “Big Three” tuna companies last week. However, those cases remain frozen due to the ongoing DOJ investigation, according to court documents filed in the ongoing civil litigation being overseen by United States District Court for the Southern District of California Judge Janis L. Sammartino.
Sammartino approved a third limited stay on deposition discovery on 6 September, blocking some depositions after 30 September, while unspecified others are blocked until 30 March, 2018.
A further delay in the case has resulted from both StarKist and Bumble Bee replacing their legal teams, with StarKist replacing Latham & Watkins LLP with the law firm of Hogan Lovells US LLP, and Bumble Bee replacing O’Melveny & Myers LLP with Paul Weiss, Rifkind, Wharton & Garrison LLP as its counsel in this litigation.
