Starkist Co. v. State

• Decision Date: 03 January 2023
• Docket Number: 82725-1-I
• Citation: 522 P.3d 594
• Parties: STARKIST COMPANY, Appellant, v. The STATE of Washington, Respondent, and Dongwon Industries Co. Ltd., and Christopher Lischewski, Defendants.
• Court: Washington Court of Appeals

522 P.3d 594

STARKIST COMPANY, Appellant,

v. The STATE of Washington, Respondent,andDongwon Industries Co. Ltd., and Christopher Lischewski, Defendants.

No. 82725-1-I

Court of Appeals of Washington, Division 1.

Filed January 3, 2023

Howard Mark Goodfriend, Catherine Wright Smith, Smith Goodfriend PS, 1619 8th Ave. N, Seattle, WA, 98109-3007, Paul Renwick Taylor, Byrnes Keller Cromwell LLP, 1000 2nd Ave. Ste. 3800, Seattle, WA, 98104-1062, Christopher S. Yates, Ashley M. Bauer, Belinda S. Lee, Latham & Watkins LLP, 505 Montgomery Street, Suite 2000, San Francisco, CA, 94111-6538, for Petitioner.

Holly Anne Williams, Washington State Office of the Attorney, 800 Fifth Ave. Ste. 2000, Seattle, WA, 98104-3188, for Respondent.

PUBLISHED OPINION

Andrus, C.J.

¶1 StarKist Company appeals a summary judgment order holding it jointly and severally liable for the harm it and its competitors, Chicken of the Sea and Bumble Bee Foods, caused consumers when they conspired to fix the prices of packaged tuna in violation of RCW 19.86.030.

¶2 We reverse the summary judgment order—not because, as StarKist contends, it can be liable only for its own profits gained through the conspiracy, but because RCW 19.86.080 does not mandate joint and several liability. The statute instead confers discretion on the trial court to determine what judgment "may be necessary" to restore to consumers the money acquired by an unlawful conspiracy. The trial court may impute to one conspirator the actions of all coconspirators and, as a result, may order StarKist to pay an amount equal to the conspiracy's gains if the court deems it necessary to do so.

¶3 But the State of Washington settled with coconspirators Chicken of the Sea, and Bumble Bee's chief executive officer, Christopher Lischewski, for a fraction of these alleged consumer losses. And StarKist contends it was an insignificant player in the overall price-fixing scheme. We therefore reverse the summary judgment order imposing joint and several liability on StarKist "for the harm caused by its co-conspirators Bumble Bee and Chicken of the Sea" and remand for the trial court to enter findings of fact to justify any restitution it orders StarKist to pay under RCW 19.86.080.

FACTS

¶4 In 2016, Chicken of the Sea International (COSI) disclosed to federal investigators that it had conspired with competitors, including StarKist and Bumble Bee, to fix prices on packaged tuna products. Following these disclosures, Bumble Bee and StarKist were charged with and pleaded guilty in federal court to conspiring to fix prices with competitors in violation of the Sherman Antitrust Act, 15 U.S.C. § 1. Both companies admitted that from November 2011 until December 2013, they "participated in a conspiracy among major packaged-seafood-producing firms, the primary purpose of which was to fix, raise, and maintain the prices of packaged seafood sold in the United States."

¶5 In March 2020, the State of Washington, through the Attorney General, brought an antitrust lawsuit against Chicken of the Sea, seeking an injunction, damages, restitution, and other relief under the Consumer Protection Act (CPA) for this price-fixing conspiracy. Soon thereafter, Chicken of the Sea entered into a consent decree in which it agreed to pay $500,000 to the State of Washington in exchange for a release of liability.

¶6 On June 2, 2020, the State of Washington brought a similar antitrust lawsuit against StarKist, StarKist's parent company, Dongwon Industries Co. Ltd., and Bumble Bee Foods LLC's former chief executive officer, Christopher Lischewski, alleging these defendants had engaged in a conspiracy in restraint of trade with Chicken of the Sea.

¶7 In October 2020, the State entered into a consent decree with Lischewski in which he agreed to pay $100,000 to the State of Washington to compensate consumers allegedly harmed by the conspiracy.

¶8 In February 2021, the trial court held StarKist liable as a matter of law under RCW 19.86.030 for engaging in a price-fixing conspiracy during the period specified in its federal guilty plea.

¶9 On March 9, 2021, the State disclosed the report of its expert economist, Dr. David Sunding, who opined that the price-fixing scheme between StarKist, Chicken of the Sea, and Bumble Bee caused Washington consumers to overpay for packaged tuna by a total of $11,981,526. Sunding attributed $1,074,589 of the total losses to StarKist's sales.

¶10 The State then moved for partial summary judgment, seeking to hold StarKist "jointly and severally liable for the actions of its co-conspirators." The trial court granted the motion, concluding that StarKist "is jointly and severally liable for the harm caused by its co-conspirators Bumble Bee and Chicken of the Sea as a result of the price-fixing conspiracy from at least November 2011 continuing through ... December 2013." StarKist sought and we granted discretionary review of this order.

ANALYSIS

¶11 StarKist contends the trial court erred in imposing joint and several liability as a matter of law, arguing that the tort principle of joint and several liability cannot apply to an equitable action for restitution under RCW 19.86.080. We conclude that RCW 19.86.080(2) and (3) give the trial court broad discretion to determine what judgment "may be necessary" to restore to consumers monies acquired by an unlawful conspiracy. The trial court may impute to one conspirator the actions of all coconspirators and, as a result, may order StarKist to pay an amount equal to all consumer losses from the entire conspiracy if the court deems it necessary to do so. But we reverse the trial court's summary judgment order because RCW 19.86.080 does not mandate joint and several liability, as the trial court's order implies.

Standard of Review

¶12 We review a summary judgment order de novo. Seattle Events v. State, 22 Wash. App. 2d 640, 648-49, 512 P.3d 926 (2022). Statutory interpretation of the CPA presents an issue of law that this court also reviews de novo. State v. LG Elecs. , 186 Wash.2d 1, 7, 375 P.3d 636 (2016).

Conspiracies in Restraint of Trade

¶13 RCW 19.86.030 declares unlawful "[e]very contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce." Conspiring with competitors to fix prices is a per se illegal restraint of trade under the Sherman Antitrust Act,¹ Leegin Creative Leather Prods., Inc. v. PSKS, Inc. , 551 U.S. 877, 886, 127 S. Ct. 2705, 168 L. Ed. 2d 623 (2007), and a violation of the CPA.² See Murray Pub. Co., Inc. v. Malmquist , 66 Wash. App. 318, 325, 832 P.2d 493 (1992) (" RCW 19.86.030 is essentially identical to section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1.")

¶14 The trial court held StarKist liable under this statute and StarKist does not challenge this ruling. There is no dispute that from November 2011 until December 2013, StarKist engaged in an unlawful conspiracy with Chicken of the Sea and Bumble Bee to fix the price of packaged tuna in Washington.

¶15 The CPA provides two methods for enforcing RCW 19.86.030. RCW 19.86.090 authorizes any person injured in their business or property by a violation of RCW 19.86.030 to bring a civil action for "actual damages" and to seek treble damages. It also authorizes the State, when injured directly or indirectly by a violation of the act, to sue for its actual damages. LG Elecs. , 186 Wash.2d at 8, 375 P.3d 636.

¶16 RCW 19.86.080, the statute at issue here, authorizes the attorney general to bring an enforcement action "in the name of the state, or as parens patriae on behalf of persons residing in the state" for injunctive relief.³ In addition, under RCW 19.86.080(2) and (3), the court has "broad, discretionary authority to order restitution." State v. Comcast Cable Commc'ns Mgmt., LLC , 16 Wash. App. 2d 664, 686, 482 P.3d 925 (2021). The statute provides:

(2) The court may make such additional orders or judgments as may be necessary to restore to any person in interest any moneys or property, real or personal, which may have been acquired by means of any act herein prohibited or declared to be unlawful.

(3) Upon a violation of RCW 19.86.030, 19.86.040, 19.86.050, or 19.86.060, the court may also make such additional orders or judgments as may be necessary to restore to any person in interest any moneys or property, real or personal, which may have been acquired, regardless of whether such person purchased or transacted for goods or services directly with the defendant or indirectly through resellers. The court shall exclude from the amount of monetary relief awarded in an action pursuant to this subsection any amount that duplicates amounts that have been awarded for the same violation. The court should consider consolidation or coordination with other related actions, to the extent practicable, to avoid duplicate recovery.

RCW 19.86.080 ; see also LG Elecs. , 186 Wash.2d at 17, 375 P.3d 636 (Supreme Court described the attorney general's claims under RCW 19.86.080(2) and (3) as "restitution claims"); State v. Ralph Williams’ North West Chrysler Plymouth, Inc. , 87 Wash.2d 298, 321, 553 P.2d 423 (1976) (when the attorney general proves a defendant has acquired possession of property of a customer unlawfully, the court can order restitution).

¶17 When the attorney general seeks a restitution award under RCW 19.86.080(2) or (3), it is not required to prove causation or injury. State v. CLA Estate Services, Inc. , 23 Wash.App.2d 279, 302–03, 515 P.3d 1012 (2022).⁴ And the court may calculate restitution based on the amount of illegal gains rather than net damages sustained by consumers. Id. at 303–04, 515 P.3d 1012.

Scope of Restitution under RCW 19.86.080

¶18 In this appeal, StarKist argues that any restitution award must be limited to the illegal gains StarKist itself enjoyed and cannot extend to the illegal gains realized by its coconspirators. It contends that the tort concept of "joint and several liability" is a principle applicable only to claims for actual damages...