On September 11, Judge Edward Chen of the U.S. District Court in San Francisco sentenced StarKist Co. to a criminal fine of $100 million – the statutory maximum — and a 13-month term of probation for its role in a criminal conspiracy to fix prices for canned tuna in the United States. StarKist also agreed to cooperate in the U.S. Department of Justice’s continuing investigation of canned-tuna price-fixing.
In October 2018, StarKist pleaded guilty to a one-count information, charging it with a criminal violation of the Sherman Act. The information stated that from at least November 2011 through at least December 2013, StarKist and others conspired to fix, raise, and maintain canned-tuna prices by “engag[ing] in conversations and discussions and attend[ing] meetings with representatives of other major packaged-seafood-producing firms,” “agree[ing] and reach[ing] mutual understandings during these conversations, discussions, and meetings, to fix, raise, and maintain the prices of packaged seafood sold in the United States,” and “negotiat[ing] prices with customers and issu[ing] price announcements for packaged seafood in accordance with the agreements and mutual understandings reached.”
StarKist had sought a reduction in the fine on the basis of its financial circumstances. The Justice Department’s Antitrust Division opposed that reduction, and Judge Chen found “that StarKist had not proven that its financial circumstances justified a lower criminal fine.” StarKist issued a release in which StarKist President and CEO Andrew Choe stated that the company has cooperated with the Department during the course of its investigation and accepts responsibility, and that “[w]e have addressed the necessary actions required in this agreement and we will continue to strengthen related compliance best practices.”
Note: This sentence should provide corporate compliance officers with an opportunity to remind senior executives in their companies that compliance with antitrust laws needs to be treated as seriously as compliance with other high-visibility financial crimes laws, such as the Foreign Corrupt Practices Act and money laundering. Under the Sherman Act, price-fixing, bid-rigging, and other conspiracies in restraint of trade can be criminally prosecuted, with sentences as high as fines of $100 million per violation for companies and sentences of up to 10 years’ imprisonment and $10 million fines for individuals.
The fine against StarKist is by no means the highest in Sherman Act corporate prosecutions. As of June 12, according to an Antitrust Division list, 146 corporate cases involving Sherman Act violations had resulted in criminal fines of $25 million or more, including 32 cases with fines of $100 million or more.
Moreover, the Antitrust Division’s pursuit of criminal Sherman Act violations is not limited to a few industries. Its record shows that it has prosecuted cases in dozens of industries over the years, including air and marine transportation, bread, capacitors, construction, explosives, fine arts auctions, foreign currency exchange, industrial diamonds, and vitamins. Every company and financial firm therefore needs to have an antitrust-compliance program that can pass muster under the Department’s new Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations.