U.S. Supreme Court declined to hear StarKist's petition on tuna price-fixing class action

U.S. Supreme Court declined to hear StarKist's petition on tuna price-fixing class action

A complaint filed by tuna buyers claiming StarKist Co. of price fixing has been dismissed by the U.S. Supreme Court. StarKist Co. is controlled by Dongwon Industries in South Korea.

Even though many customers may not have been overcharged and harmed by the price fixing, the United States Supreme Court denied StarKist's appeal of a lower court's decision to grant class-action status to three groups of tuna purchasers so that they may sue the canned tuna company jointly.

The StarKist Tuna Company, which is based in Reston, Virginia, had asked the Supreme Court to take into account whether plaintiffs could still get class-action certification in situations where some of the class members were not harmed by a company's alleged wrongdoing.

The corporate community, including the United States government, were impressed by StarKist's pitch. 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."

Instead of requiring each plaintiff to bring a case individually, class action status enables a small number of plaintiffs to represent a significantly larger group in court. In order to limit their exposure to potentially catastrophic losses and settlement pressure, businesses work hard to prevent claims from being certified as class actions.

The case was brought in a California federal court after an investigation by the U.S. Department of Justice which uncovered a three-year price-fixing conspiracy involving U.S. suppliers of packed tuna, including StarKist and Bumble Bee Foods which was in violation of antitrust laws.

In 2019, StarKist was forced to pay a $100 million fine after pleading guilty to fixing the price of canned tuna from at least November 2011 through December 2013. Even Bumble Bee and the three executives from their industry admitted culpability. Former Bumble Bee CEO Christopher Lischewski was convicted at trial and sentenced in 2020 to 40 months in prison.

According to the prosecution, the conspiracy damaged sales of canned tuna worth more than $600 million.

More than 80% of the packed tuna supplied in the United States was sold by three companies: Bumble Bee, StarKist, and Chicken of the Sea. During the course of the inquiry, a number of consumers filed proposed class actions against these corporations. The plaintiffs claimed that the defendants' illegal pricing system drove up the price of tuna sold in the marketplace.

A trial judge in 2019 ruled that three categories of tuna purchasers were eligible for class action status: direct purchasers (such as national merchants and regional grocery stores), commercial food preparers, and individual consumers.

The businesses filed an appeal, claiming that 28 percent or more of direct buyers may not have suffered loss based on their study.

The 9th U.S. Circuit Court of Appeals, which has its headquarters in San Francisco, has a three-judge panel. The Third-, Second-, and Fourth-Class Actions were all decertified by the Circuit Court of Appeals in 2021 because the judge had not established whether or not there were insufficient uninjured tuna purchasers to warrant class-action status, the court ruled.

After additional study, a panel of 11 judges from the 9th Circuit ruled 9-2 in April to divide the three classes and refused to adopt a rule against certifying a class action even if only a trivial number of class members were harmed. In response, StarKist appealed the Supreme Court.