The World Trade Organization (WTO) has held that Mexico can impose $163 million in trade sanctions against the United States for enacting tougher “dolphin-safe” requirements on fish caught in a part of the Pacific Ocean used primarily by Mexican fishers. The decades-long dispute began when international conservation efforts pressured countries to protect dolphins, which commonly swim with yellowfin tuna in that area. In response, the United States implemented stringent rules for tuna catches and imports, which Mexico argues has shut its fishing businesses out of an import market worth $680 million in 2014. The U.S. revised its requirements after WTO found in favor of Mexico in 2012, but Mexico argued that the revisions still improperly restricted tuna imports and asked for $472 million in sanctions. WTO rejected a U.S. argument to decide the dispute based on 2016 revisions that expanded the same requirements to all countries, but an expected July…
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A California court held that Bumble Bee Foods, LLC did not act illegally by claiming its tuna was an “excellent source” of omega-3 fatty acids despite a U.S. Food and Drug Administration (FDA) proposal to prohibit the practice. Garrett v. Bumble Bee Foods, LLC, No. 14-264322 (Cal. Sup. Ct. Santa Clara Cty., order entered March 30, 2017). The plaintiffs alleged Bumble Bee began making the omega-3 claim in 2008, one year after FDA published its proposed rule, but the court found that Bumble Bee ended the claim after the rule was finalized in April 2014. “The fact that Bumble Bee engaged in conduct that was proscribed by a ‘proposed’ rule does not make it unlawful or illegal,” the court said. Bumble Bee began using the omega-3 claim after a supplement maker notified FDA in 2005 that it intended to use an omega-3 nutrient content claim on its product labels. Because…
A California federal court has postponed issuing a final dismissal order in Safeway Inc.’s proposed settlement with a putative class, ordering the parties to develop a plan for publicizing the settlement to alert other potential plaintiffs that the statute of limitations will begin to run. In re Safeway Tuna Cases, No. 15-5078 (N.D. Cal., order entered March 13, 2017). The class action, involving allegations of underfilled cans of tuna sold in Safeway grocery stores and those of its subsidiary Vons, received significant media coverage in outlets such as the Los Angeles Times and the San Francisco Chronicle. The court said it “is concerned that potential class members who may have seen such coverage would now be unaware that the case has been dismissed, and that the limitations period for filing a further suit therefore may run upon dismissal.” The U.S. Supreme Court has held that the filing of a class…
Walter Scott Cameron, a former senior vice president of sales at Bumble Bee Foods, LLC has pleaded guilty to combination and conspiracy to fix, raise and maintain the prices of packaged seafood, including canned tuna. U. S. v. Cameron, No. 16-CR-0501 (N.D. Cal., information filed December 7, 2016). The criminal information accuses Cameron of conspiring with other seafood companies to fix prices of seafood sold in the United States. "Today’s charge is the first to be filed in the Antitrust Division’s ongoing investigation into price fixing among some of the largest suppliers of canned tuna and other packaged seafood,” said an attorney with the U.S. Department of Justice’s Antitrust Division in a December 7, 2016, press release. “All consumers deserve competitive prices for these important kitchen staples, and companies and executives who cheat those consumers will be held criminally accountable.” Issue 625
A California federal court has dismissed a claim of negligent misrepresentation in a lawsuit alleging that Safeway Inc. underfilled its tuna cans by 10 to 20 percent, according to testing conducted by the U.S. National Oceanic and Atmospheric Administration. In re Safeway Tuna Cases, No. 15-5078 (N.D. Cal., order entered July 13, 2016). Details about the complaint appear in Issue 584 of this Update. In a motion to dismiss, Safeway challenged the plaintiffs’ claims of unjust enrichment and negligent misrepresentation. The court dismissed arguments that unjust enrichment is not a cause of action in California, finding that the claim could be construed as a quasi-contract claim. Safeway also argued that the negligent misrepresentation claim was barred by the economic loss rule, which “requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise.” Because…
A California federal court has rejected a May 2015 settlement agreement reached by StarKist Co. and a class of consumers who alleged the company underfilled its cans of tuna. Hendricks v. StarKist Co., No. 13-0729 (N.D. Cal., order entered February 19, 2016). The court identified two issues with the settlement: (i) the notice sent to class members did not notify the class of the amended release of future claims, so the settlement notice was inadequate; and (ii) the scope of the original and amended releases violates the identical factual predicate rule. Specifically, the release was too broad because it released StarKist from claims relating to any purchase of StarKist products rather than limiting it to a release from claims related to the purchase of underfilled StarKist tuna products. Details about the settlement agreement appear in Issue 566 of this Update. Issue 595
The U.S. Department of Justice (DOJ) has intervened in an ongoing series of lawsuits against Tri-Union Seafoods, StarKist and Bumble Bee Foods alleging the companies conspired to set prices for tuna in the United States. In re Packaged Seafood Prods. Antitrust Litig., 15-2670 (S.D. Cal., order entered January 20, 2015). A California federal court granted the government’s unopposed motion to intervene at a status conference with attorneys representing several consumer and competitor plaintiffs in the consolidated action. The court found “common questions of law and fact between this civil action and an ongoing criminal grand jury investigation” conducted by the DOJ and accordingly granted a stay in the case. Details about the consolidation appear in Issue 588 of this Update and additional information on lawsuits brought by grocers appears in Issues 574 and 590. Issue 591
Three major grocers—Albertsons Companies, Hy-Vee and The Kroger Co.—have reportedly filed a lawsuit against three tuna companies alleging they conspired to fix prices of canned tuna. The companies join other grocers and consumers in pursuing damages from Tri-Union Seafoods, Starkist and Bumble Bee Foods for alleged price fixing, a practice the plaintiffs argue began in 2008 and continued until July 2015. See Undercurrent News, January 11, 2016. Details about lawsuits by other grocers appear in Issue 574 of this Update, while information about the consolidation of the suits by the U.S. Judicial Panel on Multidistrict Litigation appears in Issue 588. Issue 590
A consumer has filed a proposed class action against Trader Joe’s Co. alleging the company sells 5-ounce cans of store-brand tuna filled with only 3 ounces of product. Magier v. Trader Joe’s Co., No. 16-0043 (S.D.N.Y., filed January 5, 2016). According to the complaint, “Independent testing by the U.S. National Oceanic and Atmospheric Administration (NOAA) determined that, over a sample of 24 cans, 5-ounce cans of Trader Joe’s Albacore Tuna in Water Salt Added contain an average of only 2.61 ounces of pressed cake tuna when measured precisely according to the methods specified by [the federal statute].” The complaint further alleges similar NOAA test results for six other Trader Joe’s tuna products, amounting to breach of warranties, unjust enrichment, negligent misrepresentation, fraud and violations of New York’s consumer-protection statute. The plaintiff seeks class certification, declaratory judgment, compensatory and punitive damages, an injunction, attorney’s fees and a jury trial. Issue…
Nine putative class actions and 44 related cases alleging that StarKist Co., Bumble Bee Foods LLC and Tri-Union Seafoods LLC conspired to fix prices of canned tuna have been consolidated by the U.S. Judicial Panel on Multidistrict Litigation. In re Packaged Seafood Prods. Antitrust Litig., No. 15-2670 (S.D. Cal., order entered December 9, 2015). The court found that the actions "share factual questions arising out of an alleged conspiracy by defendants—the three largest producers of packaged seafood products in the U.S. with an alleged collective market share of more than 70%—to fix prices of packaged seafood products." The court also noted that the issue is "the subject of an ongoing criminal investigation by the U.S Department of Justice." Additional details about one of the proposed class actions appears in Issue 574 of this Update. Issue 588
