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Seafood's high-profile legal cases and what's coming next

Several noteworthy seafood industry court cases are worming their way through the courts.

There never seems to be a dull moment in the ever-evolving, ever-litigious seafood sector.

From salmon and tuna price fixing to allegations of stolen million-dollar trade secrets to a painfully long attempt to sell Peruvian fishing assets, here are the biggest seafood-related court cases IntraFish is following.

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CEO faces $1 million fine and a 10-year jail term

b154177a4fefed77ec573d97ba920d95 Chris Lischewski was the former Bumble Bee CEO. Photo: Bumble Bee

Former Bumble Bee CEO Chris Lischewski faces $1 million (€867,345) fine and a 10-year jail term for tuna price-fixing.

The US Department of Justice (DOJ) is asking a federal judge to move forward with allowing communications that reveal a more intimate glimpse into the long-awaited criminal trial for the embattled former CEO and his involvement in a effort to fix canned tuna prices. The DOJ plans to use a slew of salacious evidence against Lischewski.

The price fixing occurred between the three biggest US tuna producers -- Starkist, Bumble Bee and Thai Union-owned Chicken of the Sea -- from 2010 to 2016, and all three companies are involved in ongoing lawsuits related to the scandal.

Bumble Bee has been so hard-hit by the lawsuits, it is even considering bankruptcy.

Key upcoming court date: Criminal trial begins August 27.

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Starkist battles ability to pay $100-million fine

3c71eb73f749a542ae8629c04f8b69b6 Photo: Genista/Flickr

Dongwon-owned US tuna giant Starkist pled guilty last November to its participation in the the canned tuna price fixing case. The company's plea agreement with the DOJ in November said it would pay the fine for its role in a conspiracy to fix prices of packaged seafood sold in the United States.

But the story didn't end there.

Since April, the company has been involved in a drawn-out battle with the DOJ over whether it can pay the $100 million (€89.2 million) criminal fine. The DOJ wants Dongwon to sell its investment in TechPack Solutions, which the company has valued at $155 million (€138.2 million), to pay the fine. The company is balking at this idea.

Key upcoming court date: Criminal trial begins September 11.

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CleanFish sues former co-founder

acde9554e4c8b3702aab13ebe8a6703a Photo: CleanFish via Instagram

In June, Delaware-based CleanFish filed a lawsuit against its former co-founder Dale Sims for launching Buena Vista Seafood. CleanFish alleges Sims stole "confidential data" as well as customers to create the new venture.

The company filed a temporary restraining order against Sims and his new business, stating the need for the court to expedite the discovery surrounding Sims alleged stealing of confidential data. But US District Judge Haywood Gilliam, Jr., struck down that order, citing CleanFish has "not met its burden of identifying and establishing the existence of any trade secret" with its own customer list it considers proprietary.

Buena Vista Seafood has filed a motion to dismiss the case based on a lack of sufficient evidence.

Key upcoming court date: Hearing for the motion to dismiss is set for December 12.

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High Liner sues ex-Rubicon execs for poaching Kroger

ed3fc46e3c5819490c160e993d8a491b Photo: Rubicon Resources

In June, Delaware-based High Liner sued Haven Foods, a company founded by ex-Rubicon employees Nicholas Leonard and Justin Kirby, for stealing trade secrets related to the US shrimp market from Rubicon, a subsidiary of High Liner.

The former employees are denying allegations they stole trade secrets and "poached" significant business from Rubicon’s key customer, Kroger, in order to create Haven Foods.

High Liner stated it had paid over one $100 million (€88.3 million) to acquire the trade secrets it is accusing Haven Foods of stealing.

The case is awaiting a court date in California.

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Norwegian salmon price fixing

0c05c728ad63303da1876ec7c8260516 Mowi has been accused of price-fixing in an emerging US lawsuit. Photo: Mowi

US seafood supplier Euclid Fish Company opened the antitrust floodgates in the United States in April when it filed a class action lawsuit against multiple salmon farming companies, alleging price fixing in the US market.

The full list of defendants includes: Mowi ASA; Marine Harvest USA; Marine Harvest Canada, Inc.; Ducktrap River of Maine LLC; Grieg Seafood ASA; Grieg Seafood BC Ltd; Bremnes Seashore AS; Ocean Quality AS; , Ocean Quality North America Inc., Ocean Quality USA Inc; Ocean Quality Premium Brands, Inc; SalMar ASA; , Leroy Seafood Group ASA; Leroy Seafood USA Inc.; and Scottish Sea Farms Ltd.

The US case started shortly after the European Commission announced it is investigating the farming giants' operations in Scotland over similar allegations of price collusion.

In mid-August, the plaintiffs amended the lawsuit to include claims that salmon associations such as the Global Salmon Initiative (GSI) enabled companies to “switch from competition to cooperation.”

Key upcoming court date: Transcript from a major status conference set to be released September 12.

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China Fishery sale drags on in court case that never ends

5a4d09fdb4ddaa3cc119174c849f6dd7 Photo: CFG

Earlier this month William Brandt, Jr., Chapter 11 trustee for beleaguered China Fishery Group (CFG), asked a New York bankruptcy court for permission to hire litigation and arbitration firm Quinn Emmanuel, citing a looming lawsuit and his own inability to find a bidder to purchase CFG's Peruvian assets, even after contacting hundreds of individuals.

Why is the sale so difficult?

Liquidators involved in the ongoing bankruptcy proceedings of Pacific Andes companies, which include CFG, allege the company's founding Ng family conducted a wide-scale, multi-year fraud scheme that funneled potentially billions of dollars back to Pacific Andes.

Brandt told the court in July potential bidders are being scared away by a lawsuit by FTI Consulting, the liquidators in bankruptcy proceedings that allege CFG Peru benefited from the $152 million (€135.4 million) acquisition of Copeinca through fraudulent trading practices.

For over two years Brandt has been unable to sell the assets, which have a minimum sale threshold of $1.2 billion (€1.1 billion).

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'Codfather' fined and kicked to the curb

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Former fishing vessel captain Carlos Rafael, known as the "Codfather," was ordered in August to pay the National Oceanic and Atmospheric Administration (NOAA) a $3,010,633 (€2,711,677) civil penalty, and permanently cease all fishing.

NOAA said the New Bedford fishing magnate will also relinquish the seafood dealer permit issued to Carlos Seafood by Sept. 1, permanently cease all commercial fishing, except for scalloping, by Dec. 31 and cease scallop fishing by March 31.

Rafael is serving a 46-month sentence after pleading guilty last year to falsifying fish quotas, false labeling of fish species, conspiracy, smuggling large amounts of cash out of the country and tax evasion.

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