Anonymous whistleblower letter critical to Lion Capital’s inclusion in Bumble Bee price-fixing lawsuit

A federal judge has ruled former Bumble Bee Foods owner Lion Capital can be held liable in a civil lawsuit alleging it was involved in a price-fixing conspiracy involving the so-called “big three” U.S. tuna companies – Bumble Bee, Starkist, and Chicken of the Sea.

The U.K.-based private equity firm purchased Bumble Bee in 2010 and operated it until it was sold out of bankruptcy to FCF Co. in 2019, following its guilty plea to a charge of price-fixing, forcing it to pay a USD 25 million (EUR 22.6 million) fine and millions more in civil damages.

Lion Capital had argued it could not be held liable in a class-action lawsuit brought by four classes of parties who have alleged they were harmed by the conspiracy – the so called direct purchaser class, the end-payer class, the commercial food preparer class, and direct action plaintiffs.

However, in an 18 August decision, Judge Dana Sabraw of the U.S. District Court for the Southern District of California ruled Lion Capital remains eligible to be sued and is eligible to stand trial in the case.

San Diego-based U.S. District Judge Dana Sabraw in an order on Friday rejected a claim by UK-based private equity firm Lion Capital that it could not be held liable for what it called "normal" investment activities. Sabraw issued a similar ruling that reinstated Lion Capital and its affiliate, Big Catch Cayman, as defendants in the case in March 2022.

While Lion Capital argued no evidence existed linking them to the price-fixing conspiracy, which impacted more than USD 600 million (EUR 552 million) in canned tuna sales in the U.S., Sabraw wrote in his recent ruling that Lion Capital turned "a blind eye to Bumble Bee's collusion.” 

"As a private equity owner, Lion Capital exerted pressure on Bumble Bee management to increase its profitability," Sabraw wrote. "Lion Capital made clear at the first post-acquisition board meeting, that it intended to hold Bumble Bee to its promise of high returns."

Sabraw said meetings between Lion Capital Partner Eric Lindberg (pictured) and Dongwon Enterprise Chairman Jae Chul Kim, the head of Starkist’s ownership group, discussing pricing matters showed Lion Capital was aware of potentially extralegal behavior at Bumble Bee. Sabraw added conversations …

Photo courtesy of Eric Lindberg/LinkedIn