On Tuesday a US district court in northern California sentenced ex-Bumble Bee CEO Christoper Lischewski to 40 months in prison. The court also ruled Lischewski must pay a $100,000 fine (€88,679), due in 120 days.
“It’s important to send the message that those who engage in high-level economic crimes need to face punishment as much as those that commit low-level crimes, street crime,” US District Judge Edward Chen stated before ruling on the proceedings from a mostly-empty California court room where he wore a face mask. “If we don’t, that perpetuates the idea of two levels of justice.”
The judge ruled that after release from prison, Lischewski will be on probation for three years. Chen said Lischewski has 60 days from the sentencing to report to the minimum security camp in Lompoc, California. August 17 has been set as his surrender date.
“This was not a rash act of having to commit a crime under distress,” Chen said of the reason for his sentencing. “This was a contemplated and deliberate plan.”
Chen noted the case had serious implications because the product in question–canned tuna–is a food staple for US consumers.
“It’s not expensive LCD screens, it’s not part of some high-priced consumer goods, or computers. This is food. Food for people, I think, it’s fair to say –for those who are at the lower ends of the socioeconomic scale,” Chen said.
The sentence is lighter than what US Department of Justice (DOJ) attorneys requested earlier this year, when it asked the court to sentence Lischewski to between eight and 10 years in prison and fine him $1 million (€927,540).
“He has a history of demonstrating charity before this event,” Chen said of Lischewski. “This is not a situation where somebody, after they get wind of potential criminal proceedings, decides to volunteer.”
Chen added Lischewski’s “devotion to service is one that is genuine and longstanding” and described the former CEO as an “upstanding citizen.”
Chen noted Lischewski’s years of scheming set against his other characteristics “tug in completely opposite directions.”
Last year, Lischewski was convicted by a jury for being the mastermind behind the years-long scheme involving Bumble Bee, Starkist and Chicken of the Sea International.
Since that time, Lischewski’s lawyers have been appealing the decision, as well as asking for prison alternative such as home confinement, describing a prison sentence during a coronavirus for Lischewski akin to a ‘death sentence.’
All of the particpants in the court room were required to wear masks while speaking.
Lischewski, along with his lawyer Elliot Peters were present, along with DOJ lawyers Leslie Wulff and Manish Kumar.
In addition to Lischewski and his immediate family, the judge allowed four lawyers representing civil plaintiffs in a class-action filed against Bumble Bee, Starkist and COSI who said they were harmed by the price-fixing to speak remotely.
Those individuals were Chris Lebsock, counsel for direct purchasers in the class-action lawsuit; Steve Six, counsel for Associated Wholesale Grocers; Blaine Finely, counsel for the Commercial Food Prepared participants in the class-action lawsuit; and Betsy Manifold, counsel for the consumer purchasers in the class-action lawsuit.
Lischewski’s lawyers argued in an objection filed with the court late last week that the “government’s only purpose for offering up these lawyers at sentencing is to inject a theory of customer and consumer harm that the government was unable to prove at trial or in litigation.”
On Monday Judge Chen overruled Lischewski’s motion, and allowed the lawyers to participate in the proceedings remotely.
Chen also allowed William J. Blechman, an antitrust law attorney representing Safeway, to speak during the event remotely.
“During the conspiracy, Bumble Bee’s list prices on canned tuna to Safeway went up,” he told the court. Safeway now operates as Albertson’s.
The conspiracy affecting promotions had a ripple effect on what was sold in stores subsequently, he said. He also asked how Bumble Bee’s EBITDA was rising between 2010-2014 while fish prices were also increasing.
“Albertson’s overpaid Bumble Bee millions of dollars as a result of the conspiracy events,” he said.
Lischewski said he is planning to appeal the ruling.
“I do recognize that I have been found guilty of a crime,” he said as part of his final statement to the court before the verdict was handed down.
IntraFish covered the trial live via Zoom. Read the details here.
2004 – 2010. Defendants shared a common canner in American Samoa, Impress, which is allegedly connected to collusive can size reduction.
2004. Groups colluded to increase prices of canned tuna at least twice.
2006. Groups colluded to increase prices of canned tuna at least once. “By 2007, defendants became more practiced and ambitious in their collusive designs,” allegedly downsizing their can size while raising prices.
2007: The NFI created the Tuna Council, whose only members were the defendants, allegedly.
2008. Alleged collusion on price increases on canned tuna.
2010: Defendants allegedly colluded and raised net prices on canned tuna. Net prices are the prices disseminated to brokers of shelf stable seafood products, and represent the list price, less promotional allowances offered by defendants to reduce the list price.
November 2011 – June 2013: Senior executives and sales personnel of the StarKist, Bumble Bee and Chicken of the Sea allegedly “exchanged emails and had telephone conversations about discounting and promotional practices and terms for the sale of canned tuna to customers.” They also allegedly “assured each other that they would not compete regarding the pricing and sale of canned tuna sold to customers.”
December 2011 and January 2012: Senior executives and sales personnel of defendants allegedly had telephone conversations “about coordinating and announcing a price increase for a number of products in the second quarter of 2012.” Price increases were allegedly “virtually identical” and “other products also increased by identical percentages.”
2011 – 2013: StarKist, Chicken of the Sea and Bumble Bee allegedly told customers certain factors in the tuna sector made it necessary to increase tuna prices. They allegedly “cited their own predictions about where the tuna market was heading as the basis for a price increase.”
2012 – July 2015: Defendants and their co-conspirators allegedly agreed to avoid FAD-free tuna.
July 2015: Published reports revealed US Department of Justice convened a grand jury to investigate potential antitrust violations by companies in the market for the production, pricing and/or sale of packaged seafood, including canned tuna.