Bumble Bee Parent Lion Capital Dragged Back Into Antitrust Case

Lion Capital, owner of bankrupt Bumble Bee Foods LLC, was pulled back into antitrust litigation over an alleged price-fixing scheme by top U.S. canned tuna makers when a federal judge in San Diego reversed an earlier ruling letting the British private equity firm out of the case.

Chief Judge Dana M. Sabraw ruled Monday for the retailers challenging a decision by Judge Janis L. Sammartino, who previously presided over the long-running multidistrict lawsuit in the U.S. District Court for the Southern District of California. Sammartino recused herself in August.

Sabraw granted the retailers’ motion for reconsideration, citing plausible claims that Lion Capital—which prides itself on “granular” involvement in the operations of its subsidiaries—knew about the collusion before buying Bumble Bee in 2010 and took part in it after completing the acquisition.

The allegations show Lion Capital “ratified and encouraged” the scheme by setting financial goals that “were untenable in the absence of collusion,” the judge wrote. “Lion Capital’s role in knowingly encouraging Bumble Bee’s collusion was crucial to the continued viability of the conspiracy.”

The ruling reinstates claims against the firm more than two years after it escaped the case in January 2020, although Sammartino at the time did let the lawsuit move forward against a U.S. subsidiary, Lion Americas.

The price-fixing litigation, which emerged from a Justice Department probe, targeted Chicken of the Sea International, Starkist Co., Bumble Bee Foods LLC, and their owners. It’s part of a wave of cartel cases involving livestock and protein, including chicken, beef, pork, turkey, salmon, and eggs.

Several industry executives are facing or serving prison time in connection with the price-fixing allegations, including former Bumble Bee CEO Chris Lischewski, who’s doing a three-year sentence after a jury convicted him of criminal antitrust violations.

The scandal played a role in driving Bumble Bee into bankruptcy. Washington state’s attorney general also brought an enforcement action against Lischewski and StarKist, which paid a $100 million fine in 2019 after pleading guilty to federal criminal charges. StarKist is owned by Dongwon Industries Co.

Sabraw’s decision Monday came two months after he tentatively approved a trio of class action settlements worth $40 million between Chicken of the Sea and the consumers, restaurants, and bulk buyers leading part of the civil case. Chicken of the Sea is owned by Thai Union Group Pcl.

The case is In re Packaged Seafood Prods. Antitrust Litig., S.D. Cal., No. 15-md-2670, 3/21/22.