State paying out $40M-plus to families after price-fixing lawsuit

OLYMPIA — Thousands of Washington households will receive a little extra money, Washington Attorney General Bob Ferguson announced in a Dec. 6 press conference. The payouts are the result of price-fixing lawsuits by the state against major producers of chicken and tuna.

“My legal team took on two large corporate price-fixing conspiracies that increased the cost for groceries for Washington families,” Ferguson said. “We've prevailed and as a result, we are sending checks to over 400,000 Washington households. To be specific, we are sending checks to 402,200 Washington families and providing a total of $40.6 million to the individuals and families who are least able to afford the impacts of this illegal price-fixing.”

The lawsuits claimed that large food-producing corporations colluded to raise prices on their products artificially, according to a statement from the attorney general’s office. 

Under the restitution plan, Washington households whose income is 175% of the federal poverty level and below will be eligible. A single-person household will receive a check for $50 and a multiple-person household will receive $120.

Because of the volume, the checks are being mailed incrementally, Ferguson said; the first round of checks went out on December 5. All checks are expected to be mailed by Dec. 31. The households are selected automatically and consumers don’t need to take any action to receive the money, Ferguson said. 

Washingtonians who do not receive a check by the end of the year but think they qualify should visit refundcheck.atg.wa.gov. They will have six months to complete a short claims form and get their share of the funds. The 402,200 households account for $39 million, Ferguson explained; the balance will be set aside for households that qualify but do not receive the money automatically.

Finding the problem

The suit against the tuna companies was filed in 2020 against StarKist and its parent company Dongwan, and against former Bumble Bee Foods CEO Christopher Lischewski, claiming that the companies had engaged in a price-fixing conspiracy from 2004 through 2015 to drive up the cost of packaged tuna, in violation of Washington’s Consumer Protection Act, according to the attorney general’s office. The suit recovered more than $5.1 million, including a $4.1 million resolution with StarKist, a $500,000 resolution with Chicken of the Sea, a $100,000 resolution with former Lischewski, and $450,000 in sanctions against StarKist’s parent company, Dongwon.

“We had been looking at this market,” said Assistant Attorney General Travis Kennedy. “And in our process of looking at it, there was private litigation (and) there were indictments against certain executives in 2020 that we were paying attention to. When we analyze an industry and we believe that there's collusion within that industry, we can issue something called the civil investigative demand. And that's what we did in 2020. We sent civil investigative demands to several companies and began investigating the industry. And that is what ultimately led to our lawsuit in 2021.”

At that time, the state filed a lawsuit against 19 chicken producers, which produce about 95% of chicken meat sold in the U.S., according to Ferguson. The suit claimed that producers drove up the price of chicken since at least 2008 through a widespread illegal conspiracy to inflate and manipulate prices, rig contract bids, illegally exchange information and coordinate industry supply reductions to maximize profits, causing consumers to overpay by millions of dollars. Sixteen of the companies settled for a total of $35.5 million; the remaining three are scheduled for trial in October 2024.

Real-world impacts

Janell Braxton, a spokesperson for the Statewide Poverty Action Network Campaign for Cash program, choked up at the press conference as she spoke about her transition from homelessness and foster care into adult life and how food prices affect that.

“It's for the single parents that are trying to make ends meet, it's for the elderly (who) have fixed incomes, it's for young people exiting systems, just learning how to cook and feed themselves. It's not fair that these companies are taking advantage of those people. It's not fair. We are struggling, and we are trying our best to survive.”

“You know, what's so maddening about the conduct of these companies is the reason that they engaged in this price-fixing conspiracy was greed,” Ferguson said. “They want to make more money. It's as simple as that. It's not complicated. And it's exactly the kind of thing that drives people crazy. Executives (getting) in a room and raising the prices of the most common products that people consume, and costing them extra dollars.”

Joel Martin may be reached via email at jmartin@columbiabasinherald.com.