DOJ’s Anti Trust cops have food industry price-fixing in their sights
By Dan Flynn, Food Safety News by Marler Clark
June 24, 2020
The federal government is getting serious about food industry price-fixing. The recent sentencing of a tuna executive, the proper use of a leniency loophole, and cooperation in the poultry industry indictment are all part of a complex story.
Price-fixing is like food fraud, strictly speaking, it is not about food safety but still makes you queasy in your stomach when you hear a food company is involved. It might also mean the company’s food safety culture is at risk.
And during the past month, price-fixing scandals have washed over the tuna and poultry industries. Christopher Lischewskim, CEO of Bumble Bee Foods for almost two decades was sentenced to three years in jail and ordered to pay a $100,000 fine after a jury verdict found him guilty of price-fixing for tuna.
“The Bumble Bee executive’s sentencing is remarkable in that three years is a very long sentence for antitrust cases,” says Bilzin Sumberg Partner Scott Wagner.
“On average, most sentences range from 14 to 18 months. Sentences have been trending longer in the last 10 to 15 years. If you go back to the 1990s or early 2000s, the average sentences were much closer to a year.” he added. There are a number of reasons for this.”
“One of the major factors is the Antitrust Criminal Penalty Enhancement & Reform Act (ACPERA) statute that was passed 15 years ago. ACPERA built on the DOJ Corporate Leniency Policy. The DOJ Antitrust Division’s Corporate Leniency Policy provides the first corporation to go into DOJ and confess its involvement in a price-fixing conspiracy with complete immunity from prosecution, he continued. “The problem with this policy standing alone is that while a company would avoid criminal prosecution, it still faced enormous civil liability—under the civil antitrust laws, defendants are jointly and severally liable for treble damages for the entire effect of the conspiracy. Prior to ACPERA, companies who uncovered antitrust violations were faced with a difficult choice—seek leniency from the DOJ and face massive civil exposure or take a “wait and hope” approach—keeping quiet about the violation and hoping that a competitor would not disclose the illegal activity. ACPERA helped solve this problem by providing a drastic reduction in civil liability to amnesty applicants that also cooperate with civil plaintiffs.
Congress let ACPERA expire on June 22.
“The combination of the Corporate Leniency Policy and ACPERA has led to longer sentences and built stronger cases for two reasons,’ Wagner continues. “The first is that DOJ has someone from inside the conspiracy to point to where the bodies are buried within the mass of documents provided. Second...