Chicken of the Sea Class Action Settlement Refused by Judge

Plaintiffs in a $6.5 million Chicken of the Sea settlement will have to go back to the drawing board after a federal judge denied preliminary approval.

U.S. District Judge Janis L. Sammartino determined the settlement agreement had numerous problems, leading her to deny the plaintiffs’ motion for approval.

The settlement aimed to resolve allegations that Chicken of the Sea conspired with other seafood companies to fix the prices of canned tuna products.

Judge Sammartino determined that the written settlement agreement did not show that the deal was negotiated at arm’s length. Arm’s length negotiation helps ensure that the parties involved are not influencing each other and adds legal credibility to an agreement.

“The motion is not accompanied by any declaration in support of its factual assertions, including the assertion that the settlement was negotiated at arm’s length. Several factual issues must be considered to eventually approve the settlement,” Judge Sammartino wrote in her denial.

Additionally, Judge Sammartino found the distribution of the settlement fund to be too low in terms of Class payments. Considering that the company admitted to wrongdoing in a criminal antitrust case, the judge reportedly wanted to see higher payments towards affected parties.

Instead, 77 percent of the $6.5 million settlement, or $5 million, was reportedly directed towards attorneys’ fees and costs. The fees themselves were reportedly set to be $3 million – equal to 46 percent of the settlement fund.

“Distribution of a disproportionate part of the settlement to counsel is one of the indicators that class counsel may not have negotiated in the best interest of the class,” Judge Sammartino said.

In a statement with Law360, plaintiff attorneys said; “…to clarify one point that we failed to make clear — at least half of the proceeds of the settlement, net of notice costs, would go to the class.”

The attorneys will reportedly work with defendant lawyers to revise their deal.

“We have been in touch with defense counsel and believe that both sides are committed to exploring ways to improve the agreement, better explain it, and make a more complete and clear record for the court’s consideration,” the attorneys noted.

Plaintiffs brought claims against several other canned tuna companies including StarKist. These claims, in nine class action lawsuits and 44 related cases, were consolidated into a multidistrict litigation in December 2015. Last year, the MDL won Class certification.

Are you affected by the alleged Chicken of the Sea price-fixing scheme? Let us know in the comment section below.

The plaintiffs are represented by attorneys from Cuneo Gilbert; Joseph Saveri Law Firm Inc.; Derfner & Altman; Lovelace & Associates PA; Del Mar Law Group LLP; Barrett Law Group PA; Thrash Law Firm PA; Larson King LLP; Arthur N. Bailey & Associates; Neal & Harwell PLC; Lite Depalma Greenberg LLC; and Shindler Anderson Goplerud & Weese PC.

The Chicken of the Sea Class Action Lawsuit is In re: Packaged Seafood Products Antitrust Litigation, Case No. 3:15-md-02670, in the U.S. District Court for the Southern District of California.

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