Global companies are paying greater attention to criminal antitrust risks – and with good reason.  We often dwell on the impact to a company of a major FCPA investigation.  A global criminal antitrust investigation often in destabilizing given the mature global enforcement environment.  Cartel members often have to respond to multiple jurisdictions to resolve their potential liability.

In early December 2019, after a four-week trial, a California federal jury found Bumble Bee Foods’ CEO Chris Lischewski guilty of participating in a price-fixing conspiracy involving canned tuna with his competitors at StarKist and Chicken of the Sea.  The jury deliberated for only a few hours before returning a guilty verdict.  Lischewski faces a maximum penalty of 10 years in prison at sentencing.

Lischewski’s defense attacked the credibility of the government’s cooperating witnesses and claiming that aggressive prosecutors were twisting the evidence to nail a “big fish.” (No pun intended).

Lischewski’s motive for engaging in illegal price fixing was to increase revenue prior to selling Bumble Bee and cashing in on his ownership share in the company. 

In 2014, Chicken of the Sea sought to acquire Bumble Bee for $1.5 billion.  The acquisition never happened because while reviewing the proposed acquisition, the Justice Department uncovered the price-fixing conspiracy.  StarKist settled for $100 million  and Bumble Bee paid $25 million.  Chicken of the Sea secured leniency and immunity.  In 2018, Lischewski was indicted.

Former executives from Bumble Bee, StarKist and Chicken of the Sea, who plead guilty, testified against Lischewski.  The defense challenged their testimony claiming that each had a motive to point the finger at Lischewski.  Chicken of the Sea’s CEO testified to his participation in the cartel with Lischewski.

In an interesting twist, Lischewski testified and admitted that he “occasionally” received confidential information from competitors and asked his employees to collect such information from his competitors.

Prosecutors produced relevant emails and other communications to prove the existence of the conspiracy, along with the testimony of the cooperating witnesses.  The evidence established that senior executives from all three companies orchestrated the price-fixing conspiracy with the assistance of underlings who shared confidential pricing information among the three cartel members. 

Bumble Bee has filed for bankruptcy, claiming that it has suffered serious financial harm from the antitrust enforcement action and its fall out.  FCF Co., Bumble Bee’s tuna supplier, has proposed to buy the company out of bankruptcy.