On 8 September, 2022, U.S. District Court Judge Cecilia M. Altonaga granted final approval to a USD 85 million (EUR 85 million) settlement in a class-action lawsuit filed against Norwegian salmon-farming firms Mowi, SalMar, Lerøy Seafood, Grieg Seafood, and Cermaq, alleging price-fixing.
The settlement did not receive any objection or request for exclusion, and it comes after more than three years of litigation that included dozens of discovery hearings and the production of more than 62 million pages of documents.
Peter Prieto, a partner with Miami, Florida, U.S.A.-based law firm Podhurst Orseck, served as co-lead counsel on the case along with Hausfeld LLP Partner Chris Lebsock. Prieto discussed the settlement and its significance in an interview with SeafoodSource.
SeafoodSource: Why did you pursue a settlement in this case? Do you consider terms fair and justified?
Prieto: The USD 85 million global settlement not only provides the class of approximately 800 direct purchasers of farm-raised Norwegian salmon and salmon products with ample monetary relief, but also avoids the delay of additional litigation, which is particularly significant because antitrust cases often last for years. We are very pleased that the court has found our settlement … fair and reasonable for our class of direct purchasers, who for several years paid an inflated price for their purchase of farm-raised Atlantic salmon. Markets can neither prosper nor properly function if those with the power to do so can conspire or collude to fix prices. Those U.S. consumers who enjoy salmon, and consumers generally, are today better off because of the court’s approval of this settlement.
The settlement was an excellent settlement, and not simply because I say it, but [Judge Altonaga] said during the final approval hearing that the settlement was an excellent settlement for the class. The class approximately 800 class members of direct purchasers who bought farm-raised Atlantic salmon farm in the U.S. So in terms of a monetary value, the settlement was excellent.
We reached a settlement simply because these antitrust cases can take years to resolve and they're incredibly expensive. We had already spent USD 2.6 million (EUR 2.6 million) in costs, and if we went forward with the case, we would have probably spent close to USD 10 million (EUR 10 million) in expenses and costs. So, given the risk of an adverse result, plus the costs, we thought it was an excellent result, where we essentially received 30 percent of what we what we would have received have we gone to trial and won.
SeafoodSource: How was it determined how the costs of the settlement would be split by the different Norwegian salmon companies involved?
Prieto: How much each defendant put in that total pot is unknown to me, for us. They essentially got together and somehow made an allocation of how each defendant would contribute to that fund. I don't know how that was allocated amongst them. [Editor’s note: several of the companies involved detailed their payments to resolve the settlement in recent public financial disclosures.]
SeafoodSource: Are there other classes involved in active suits against these companies alleging price-fixing?
Prieto: In the U.S., there's only one other class that is suing the same defendants, and that is the class of indirect purchasers. That case is also pending the Southern District of Florida, in federal court.
SeafoodSource: Giving there are likely still ongoing investigations being conducted by the European Commission and the U.S. Department of Justice, is it possible that further evidence could come to light that would open these companies up to other litigation?
Prieto: I have no idea what's happening or what's going to happen with the investigations being carried out by the European Commission and the Department of Justice in the U.S. Criminal investigations from the U.S. government are conducted via grand jury, and there are certain grand jury secrecy rules that mean government investigations are usually conducted very quiet. But for us, it's a closed matter. Usually with these cases, once they're settled, they’re not reopened.
SeafoodSource: Did you have any thought about waiting to resolve a settlement until after any potential criminal trial or even criminal charges were brought? Or was it a matter of getting remuneration to your clients as quickly as possible?
Prieto: One has really nothing to do with the other. I mean, usually for the most part, when the authorities investigate criminally, it's either to charge the corporation itself or individuals in the corporation. And maybe some restitution comes in the form of a fine, but normally, that fine does not go to the class-members or the people that were damaged … So I think we're very satisfied with our settlement. It's an excellent settlement. And I think, you know, the criminal investigation, assuming it results in anything, we don't think would have an impact on our settlements.
Obviously, you have a better case when the party you are suing has pled guilty to the same conduct. But, you know, that path was a lot riskier. We felt that our settlement on its own, without considering what would happen in the criminal investigations, was an excellent settlement. Just because the defendants are being investigated, doesn't mean that any charges will result. It's possible that they will, but they may not. And assuming there are charges, that could happen three, four, or five years down the road. I don't think the court would have permitted us to wait that long to try this case and see what happens with the criminal investigation.
SeafoodSource: In your opinion, are the Norwegian salmon companies involved in this case guilty of price fixing? Did you come to any firm conclusion on that in your own review of the evidence that you were presenting?
Prieto: We thought we had a strong case to present to a jury, as seen in the evidence that we laid out in our third amended complaint, [which laid out evidence of collusion that] began in April of 2013 and ran through the time that we filed our lawsuit. We thought was a compelling picture that we could prove our case and ultimately, satisfied verdict, that they were liable. But we believe that the settlement was in the best interest of our classrooms.
SeafoodSource: Do you think these companies have ceased any alleged collusion or price-fixing? Do you think their behavior has changed from what you’ve alleged, or they've resolved any issues that could have caused this complaint to arise?
Prieto: Look, I have no evidence of that. Although I will say that usually these kinds of cases, these class actions, do act as a deterrent on corporate misconduct. I would hope that that they that they would have cease this conduct, but I have no evidence one way or the other.
SeafoodSource: Is this settlement the end for your involvement in the of alleged salmon price-fixing in the U.S. market, or are you pursuing anything else related to it?
Prieto: No, that's it for me, other than any post-settlement issues that may arise. I have no involvement in any other related cases.
Photo courtesy of Podhurst Orseck
