Federal judge grants injunction against Pacific Seafood
Published 7:11 am Monday, March 9, 2015
Stepping in to avert a potential monopoly, a federal judge has granted commercial fishermen a preliminary injunction to block Pacific Seafood Group from acquiring Ocean Gold Seafoods.
The fishermen have alleged that Pacific Seafood would have a monopoly over the groundfish, whiting and coldwater shrimp markets if it acquires Ocean Gold, a large fish processor in Westport, Wash.
The ruling Friday by Judge Owen Panner in U.S. District Court in Medford came after the Oregon Attorney General’s office described the potential merger as “presumptively unlawful given the degree of market concentration.”
Panner ruled that maintaining competition is in the public interest. The judge set a trial date for July.
Pacific Seafood had said after the judge issued a temporary restraining order in January that its acquisition of Ocean Gold had been canceled. But the judge — and the attorney general — agreed that the economic motivation behind a merger has not changed.
Pacific Seafood, a top fish processing and distribution company based in Clackamas, has an exclusive marketing agreement with Ocean Gold that runs through next February. Frank Dulcich, Pacific Seafood’s president and chief executive officer, also holds substantial stock in Ocean Gold.
“This is a major victory for the plaintiff fishermen and for the future of competition in three of the four largest seafood markets on the West Coast,” Michael Haglund, an attorney representing the fishermen, including Dennis Rankin of Rankin Fish in Astoria, said in an email. “If this case results in a permanent injunction, Ocean Gold Seafoods will be free and independent and what have been highly concentrated markets will be significantly improved by more robust competition that benefits both fishermen and American consumers.”
Daniel Occhipinti, Pacific Seafood’s general counsel and director of government affairs, said the legal challenge should be moot since the acquisition of Ocean Gold has been canceled.
“The preliminary injunction was entered to prevent a transaction that was already terminated over a month ago,” he said in an email. “The whole case should be moot at this point.”
Pacific Seafood had argued in court that the commercial fishermen did not have an antitrust injury because they do not sell fish or shrimp to Pacific Seafood or Ocean Gold.
But Judge Panner held that under the umbrella theory of antitrust injury other seafood processors could follow Pacific Seafood’s lead on prices. The judge found that the fishermen have shown a reasonable probability that Pacific Seafood’s acquisition of Ocean Gold would substantially lessen competition in the buyer’s market for fish and shrimp.
Commercial fishermen had previously challenged Pacific Seafood, alleging monopolistic business practices, in a federal antitrust lawsuit that was settled in 2012.
As part of the settlement, Pacific Seafood agreed to end its exclusive marketing arrangement with Ocean Gold when it expires next year.
The federal court has noted that Pacific Seafood was in negotiations to acquire Ocean Gold during the previous lawsuit, but dropped plans after the fishermen moved for a temporary restraining order.
The Attorney General’s office, in its brief with the court, said the state “continues to be concerned about the potential consolidation of the seafood production market.
“The public interest supports maintaining competition in the market to best ensure choice and competitive purchase prices for fishermen’s catches, as well as competitive sales prices for the products offered by Pacific Seafood and Ocean Gold.”