Case 3:15-md-02670-JLS-MDD Document 2533-2 Filed 03/31/21 PageID.230196 Page 1 of
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`Michael P. Lehmann (Cal. Bar No. 77152)
`Bonny E. Sweeney (Cal. Bar No. 176174)
`Christopher L. Lebsock (Cal. Bar No. 184546)
`Samantha J. Stein (Cal. Bar No. 302034)
`HAUSFELD LLP
`600 Montgomery Street, Suite 3200
`San Francisco, CA 94111
`Tel: (415) 633-1908
`Fax: (415) 358-4980
`E-mail: mlehmann@hausfeld.com
`E-mail: bsweeney@hausfeld.com
`E-mail: clebsock@hausfeld.com
`E-mail: sstein@hausfeld.com
`
`Class Counsel for the Direct Purchaser Class
`
`
`UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF CALIFORNIA
`
`
`
`
`
`IN RE: PACKAGED SEAFOOD
`PRODUCTS ANTITRUST
`LITIGATION
`
`This filing relates to the Direct
`Purchaser Plaintiff Class Action
`Track
`
`
`
`
`Case No. 3:15-md-02670-JLS-MDD
`
`DECLARATION OF BONNY E.
`SWEENEY IN SUPPORT OF
`DIRECT PURCHASER
`PLAINTIFFS’ MOTION FOR
`PRELIMINARY APPROVAL OF
`SETTLEMENT
`
`DATE: May 20, 2021
`TIME: 10:30 a.m.
`JUDGE: Janis L. Sammartino
`CTRM: 4D
`
`
`
`SWEENEY DECL.
`
`CASE NO. 15-MD-2670-JLS (MDD)
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`I, Bonny E. Sweeney, declare as follows:
`1. I am an attorney licensed to practice law in the State of California. I am a
`partner at Hausfeld LLP, 600 Montgomery St., Suite 3200, San Francisco, CA, 94111.
`I make this declaration in support of the Direct Purchaser Plaintiffs’ (the “DPPs”)
`Motion for Preliminary Approval of their proposed Settlement with Chicken of the
`Sea International (“COSI”) and its parent company, Thai Union Group PCL (“TUG”).
`I have personal knowledge of the facts set forth herein and, if called upon to do so, I
`could and would testify competently thereto.
`2. Attached as Exhibit A is a true and accurate copy of the proposed Settlement
`Agreement between the DPPs, COSI, and TUG, executed on March 11, 2021.
`3. Attached as Exhibit B is a true and correct copy of a news article available
`https://www.post-gazette.com/business/money/2019/01/25/StarKist-Walmart-
`at
`million-settle-antitrust-claims-tuna-price/stories/201901250139.
`4. The Court appointed Hausfeld LLP as Class Counsel for the Direct
`Purchaser Plaintiffs.
`5. I and the other attorneys at my firm who have worked on this case are
`experienced attorneys who have litigated many prior complex antitrust class actions
`such as this one, including against leniency applicants under the Antitrust Criminal
`Penalty Enhancement and Reform Act (“ACPERA”). We have successfully resolved
`many of those cases in districts within this Circuit. We have brought that experience
`and knowledge to bear on behalf of the Class and in this proposed Settlement. As
`described below, the negotiations leading to the settlement with COSI and TUG were
`vigorous, informed, and thorough; occurred over a span of many months; and were
`not concluded until after the completion of fact and expert discovery and full briefing
`of dispositive motions. The parties conducted their negotiations in good faith under
`the supervision of mediator Jan Adler (ret.), a former United States Magistrate Judge
`for this District.
`
`
`SWEENEY DECL.
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`CASE NO. 15-MD-2670-JLS (MDD)
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`the proposed Settlement provides fair
`that
`6. Class Counsel believe
`compensation to the Settlement Class and is likely to be approved at a final approval
`hearing. The settlement amount is fair, adequate, and reasonable in light of COSI’s
`status as the leniency applicant in the U.S. Department of Justice’s (“DOJ”) criminal
`investigation. Unlike its co-conspirators, COSI’s maximum civil liability following a
`trial might well be limited by ACPERA to single damages and liability only for
`overcharges on its own sales, as opposed to treble damages and joint and several
`liability that COSI’s co-conspirators are subject to under the Clayton Act, 15 U.S.C.
`§ 15. Following the DOJ’s criminal investigation, COSI admitted violations of the
`Sherman Act, sought leniency, and cooperated with both the DOJ and civil claimants
`by providing evidence against its co-conspirators and co-Defendants, StarKist Co. and
`Bumble Bee Foods LLC.1
`7. Based on existing and anticipated requests for exclusion (from the Direct
`Action Plaintiffs (“DAPs”), for example), the proposed Settlement will deliver
`approximately $13 million
`in compensation
`to remaining Class members.
`Specifically, the Settlement amount is calculated at 3.2% of COSI and TUG commerce
`that remains in the Settlement Class following notice and the opportunity to opt out.
`This is significant relief for the Settlement Class Members, whose purchases (after the
`DAPs are excluded) represent approximately 20% the commerce at issue in this case,
`as described in the DPPs’ economist’s expert report. See Mangum Merits Reply
`Report ¶ 244, attached to the Declaration of Samantha Stein (ECF No. 2143), Ex. 242.
`By comparison, it has been publicly reported that one of the most powerful retailers
`in the market, Wal-Mart, which was Defendant StarKist’s largest customer and
`accounted for approximately 20% of packaged tuna purchases during the relevant
`
`1 When Bumble Bee and StarKist pleaded guilty to violations of the antitrust laws, the
`DOJ sent letters to DPP Class Counsel pursuant to the Crime Victim Rights Act to
`notify victims of the conspiracy, including DPP Class members, of their rights to be
`heard in connection with the sentencing of these companies.
`
`
`SWEENEY DECL.
`
`CASE NO. 15-MD-2670-JLS (MDD)
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`period, settled with StarKist for $20.5 million. See Mangum Merits Report ¶ 61,
`attached to the Declaration of Samantha Stein (ECF No. 2143), Ex. 24. And Class
`Counsel were able to more precisely calculate Wal-Mart’s settlement as a percentage
`of its commerce based on information available to it and can confirm that the
`Settlement is in the range of Wal-Mart settlement. Notably, StarKist is not the leniency
`applicant, and so remains subject to joint and several liability and treble damages.
`Thus, comparatively, the DPPs’ proposed settlement achieves a result that is fair,
`reasonable and adequate—and does so without taking any fees or costs out of the
`Class’s recovery or burdening class members with the distractions associated with
`litigating on their own behalf.
`8. The Settlement was achieved after significant discovery and development of
`the case. Among other things, Class Counsel have conducted extensive discovery,
`reviewing millions of pages of documents and taking depositions of dozens of
`witnesses, including several of COSI’s and TUG’s employees and former employees.
`Class Counsel have also conducted extensive written discovery, including serving
`interrogatories to which COSI responded by describing its conspiracy with StarKist
`and Bumble Bee during the relevant period, admitting it had entered into agreements
`to raise prices with these competitors. As a result of these and other efforts, Class
`Counsel were able to secure relief from COSI/TUG for a period of time longer than
`the period for which the DOJ has secured guilty pleas.
`9. Class Counsel have also investigated and litigated claims against the parent
`entity Defendants in this case (which were not charged by the DOJ), and as a result of
`those efforts, TUG is settling with the DPPs as well. Although TUG denied its
`participation in the conspiracy and any potential alter ego or agency liability, it
`produced discovery and its top executives sat for depositions.
`10. The Parties also conducted expert discovery and briefed dispositive
`motions, with the DPPs and COSI/TUG filing cross motions for summary judgment
`
`
`SWEENEY DECL.
`
`CASE NO. 15-MD-2670-JLS (MDD)
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`on various issues and Daubert motions against the opposing experts. See, e.g., ECF
`Nos. 1967, 1970, 1976, 1984, 2001, 2015, 2030. The DPPs hired three experts for use
`against COSI and TUG: Dr. Russell Mangum (economist); Dr. Gary Hamilton
`(sociologist); and Marianne DeMario (forensic accountant). COSI and TUG hired four
`experts to oppose the DPPs: Dr. Randal Heeb (economist); Dr. Michael Moore
`(economist); Gary Kleinrichert (accountant); and Arthur Laby (attorney). The Parties
`have completed all expert depositions and submitted final expert reports. The experts
`in this case have serious disputes about the likely overcharge percentage, among other
`things.
`11. All of this discovery, expert work and motion practice has given Class
`Counsel more than sufficient information to evaluate the DPPs’ claims. Particularly
`in light of the late stage of the litigation, Class Counsel is well-positioned to make an
`informed decision as to the value of the settlement compared to the risks of continued
`litigation.
`12. The Settlement—the DPPs’ first with any of the Defendants—was
`negotiated over two years, at arm’s length, with the assistance and oversight of a
`neutral mediator, the Honorable Jan Adler (retired), a former Magistrate Judge in the
`Southern District of California. The Settlement Agreement was negotiated over
`multiple in-person, video conference, and telephonic mediation sessions.
`13. The DPPs also understand that they were the last party in the litigation to
`settle with COSI and TUG, after years of vigorously fought litigation. All of the
`DAPs—which comprise the largest members of the DPP Class and collectively
`account for approximately 80% of the purchases by DPP Class members—have
`already entered into settlement agreements with COSI and TUG and have dismissed
`their claims against these Defendants. Class Counsel understand that the DPPs’
`proposed Settlement is in a range similar to the DAP settlements.
`
`
`SWEENEY DECL.
`
`CASE NO. 15-MD-2670-JLS (MDD)
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`14. However, importantly, Class Counsel’s fees, costs, and expenses will not
`be deducted from the Settlement fund. Instead, the Settlement Agreement provides
`that the parties will separately arbitrate costs and fees in a contested proceeding for an
`amount not to exceed $7 million. The DPPs’ costs alone total approximately $4.6
`million—nearly $3.8 million in expert costs, plus an additional $850,000,
`approximately, in out-of-pocket costs. Although a neutral arbitrator will make a
`recommendation for an award of fees and costs, the ultimate determination of fees and
`costs will be decided by this Court (see Fed. R. Civ. P. 23(h)), and Class Counsel will
`not ask for more than the amount awarded in arbitration. The arbitration will be
`completed prior to the opt-out deadline so that the Class and the Court will have the
`benefit of the arbitrator’s award before deciding whether to opt-out and whether final
`approval of this Settlement is appropriate. Moreover, this separate process for
`determining fees and costs stands to further benefit the Class because counsel for the
`DPPs intend to ask the arbitrator—and this Court—to allocate most or all of the award
`in the following order of priority: first, to reimburse past costs, second, to offset
`continuing and future litigation expenses (effectively, a “war chest” for ongoing
`litigation), and third—in the event any funds remain unspent—to Counsel’s
`contingent fee.
`15. There are no side agreements between the DPPs, Class Counsel, or the
`Class Representatives with COSI or TUG. The Settlement Agreement before the Court
`is the only agreement between the Parties. Neither COSI nor TUG has promised the
`Class Representatives or Class Counsel preferential treatment in exchange for the
`Settlement. Class Counsel expect COSI and TUG to vigorously oppose the proposed
`award of costs and fees in arbitration.
`
`
`SWEENEY DECL.
`
`CASE NO. 15-MD-2670-JLS (MDD)
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`16. The DPPs have retained JND2, a settlement and notice administrator, to
`provide notice of the Settlement, which will be mailed directly via first-class mail to
`the DPP Class as well as by email to those Class Members for whom the DPPs have
`email addresses. There will also be a Press Release, and given the widespread interest
`in this case, it is likely to be picked up by relevant media outlets, including those
`known to report on this case. The DPPs’ proposed notice plan also encourages Class
`Members to go to the dedicated website and register for further direct updates via
`email for future important events or information. Although the DPPs anticipate that
`notice and claims administration will cost approximately $100,000, the Settlement
`conservatively provides that Class Counsel may withdraw funds as necessary for
`notice and administration from the Settlement Fund up to $500,000.
`17. A key part of the notice plan is also to encourage Class Members to sign
`up and register their preferred email and other contact information on the DPPs’ case
`website to receive updates about the case. The DPPs will thus be able to notify the
`Class about any news with respect to the appeal or this case in general by posting that
`information on the website and sending updates via email.
`18. Under the DPPs’ proposed plan of allocation, Class members who stay in
`Settlement will be able to make claims for their pro rata share of the Settlement
`Amount. Those who make a claim will be entitled to receive cash, with the actual
`amount received depending on the number of claims and the volume of commerce
`represented in those claims. Class Counsel have the transactional data from the
`Defendants, which identifies all purchases in this case. If possible, the Claims
`Administrator intends to set up an online portal or other mechanism by which Class
`members will be able to check their claim volume, and in the event that their own data
`
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`2 Class Counsel solicited bids from other administrators, and then engaged in
`substantial further negotiations with those that responded to ensure a cost-competitive
`retention was secured.
`
`SWEENEY DECL.
`
`CASE NO. 15-MD-2670-JLS (MDD)
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`suggests that a different claimed volume of commerce is appropriate, they can provide
`that information, and it will be considered by the Claims Administrator, subject to
`audit.
`19. The proceeds of the Settlement will be distributed at a reasonable time in
`the future after consideration of the costs associated with such a distribution and the
`amounts of other settlements, if any, available to distribute.
`20. As required by the Class Action Fairness Act, 28 U.S.C. § 1711, et seq.,
`the DPPs understand that COSI/TUG will provide the relevant notices.
`21. As to the other Defendants, Bumble Bee went into Chapter 11 bankruptcy
`in 2019, which was recently converted to a Chapter 7 bankruptcy. All claims against
`Defendants StarKist, Dongwon, and Lion (Americas) remain pending.
`22. Finally, the DPPs are respectfully requesting a service award of $5,000
`per Class Representative given their work and efforts in this case. The Class
`Representatives have faithfully represented the Class for nearly six years, including
`producing documents, responding to interrogatories, sitting for depositions, and
`monitoring the progress of the case. When Bumble Bee filed for bankruptcy, several
`class representatives were called upon to assist Class Counsel by participating in the
`meetings of creditors, and in particular, Olean Wholesale Grocery Cooperative sent a
`representative to spend an entire day at a creditor’s committee meeting, traveling a
`significant distance to protect the Class’s interests. These modest proposed service
`awards hardly reflect the contribution these Class Representatives have made. Neither
`Class Counsel nor COSI or TUG made any promises about requesting such awards.
`I declare under penalty of perjury that the foregoing facts are true and correct
`and that this declaration was executed in San Diego, California on March 31, 2021.
`
`
`By: s/ Bonny E. Sweeney
`Bonny E. Sweeney
`HAUSFELD LLP
`
`
`SWEENEY DECL.
`
`CASE NO. 15-MD-2670-JLS (MDD)
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`bsweeney@hausfeld.com
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`Class Counsel for the Direct Purchaser
`Class
`
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`SWEENEY DECL.
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`CASE NO. 15-MD-2670-JLS (MDD)
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