U.S. and Oregon, Washington, and California v. Mulkey - Complaint

HARDY MYERS
Attorney General
Andrew E. Aubertine,
Assistant Attorney General
Oregon Department of Justice
1162 Court Street NE Salem,
Oregon 97310 (503) 378-4732
OSB #83013

Liaison counsel for all plaintiffs identified on attached signature pages

I.
SUMMARY OF COMPLAINT

Plaintiffs, UNITED STATES OF AMERICA and the STATES OF OREGON, WASHINGTON, AND CALIFORNIA, bring this action in their sovereign capacities, and the plaintiff states as parens patriae, against Defendants to secure injunctive relief and civil penalties for Defendants' violations of the antitrust laws of the United States and the antitrust laws of the Plaintiff States. Plaintiffs allege that Defendants and other commercial seafood fishermen (as defined herein), who directly compete with each other:

1. Entered into and carried out agreements which had the purpose and effect of fixing the price at which crab harvested from the Pacific Ocean was to be sold to purchasers in Oregon, California and Washington;
2. Entered into and carried out agreements which had the purpose and effect of restraining price competition among competing commercial seafood fishermen who sell crab harvested from the Pacific Ocean to purchasers in Oregon, California and Washington;
3. Organized, entered into and participated in a group boycott by refusing to fish for and supply crab to processors until all processors accepted the price agreed upon by the fishermen, in an effort to facilitate the success of the price fixing agreement;
4. Were not members of any fishermens' marketing association (as defined herein) and/or conspired with competing commercial seafood fishermen who were not members of any fishermens' marketing association; and
5. Certain of the defendants and other fishermen used and/or relied on threats, intimidation, and coercion against other competing commercial seafood fishermen to facilitate the success of the price fixing agreement and the group boycott.

II.
JURISDICTION AND VENUE

1. This complaint is filed and the jurisdiction and venue of the Court are invoked under the provisions of 28 U.S.C. §§ 1331 and 1337, 15 U.S.C. § 26, and 15 U.S.C. § 4 to prevent and restrain a continuing restraint of trade by defendants in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.

2. Venue is proper in this judicial district because the Defendants are found, reside, and/or do business within the District of Oregon within the meaning of 28 U.S.C. § 1391(b) and (c) , and because many of the acts alleged herein occurred in this judicial district.

3. This Complaint also alleges violations of the following state antitrust laws and seeks both injunctive relief and civil penalties based on these claims under the following laws: California Commercial & Business Code § 16720, et seq.; Oregon Revised Statutes 646.705, et seq.; Revised Code of Washington § 19.86, et seq..

4. This Court has pendent jurisdiction over the claims based upon State laws. 28 U.S.C. § 1367(a). All claims under federal and state law are based upon a common nucleus of facts and series of events such that the entire action commenced by this Complaint constitutes a single case which would ordinarily be tried in one judicial proceeding. Pendent jurisdiction would avoid unnecessary duplication and multiplicity of actions, and should be exercised in the interests of judicial economy, convenience, and fairness.

III.
DEFINITIONS

5. As used herein:

1. "Commercial Seafood Fishermen" means fishermen who fish for and catch seafood products, including crab and crab products, and sell such products to purchasers.
2. "Crab" and "Crab Products" mean crab, crab meat, and any and all other crab products, whether fresh, raw, cooked, frozen, canned, or otherwise preserved or prepared for consumption.
3. "Ex-vessel Price" means the price paid by purchasers to fishermen for seafood.
4. "Fishermens' Association" means any group of fishermen organized under the Fisherman's Collective Marketing Act, 15 U.S.C. § 521 or under the companion laws of the states of California, Oregon, and/or Washington.
5. "Person" means any individual, sole proprietorship, partnership, firm, corporation, or any other legal or business entity.
6. "Purchasers" means commercial seafood processors, commercial seafood canneries, retail stores and/or restaurants.

IV.
PLAINTIFFS

6. The United of America by and through its attorneys, acting under the direction of the Attorney General of the United States, and the States of California, Oregon, and Washington, by and through their Attorneys General, bring this civil action in their sovereign capacities, and the plaintiff states as parens patriae, to enforce federal and state antitrust laws that Defendants have violated.

V.
DEFENDANTS

7. Defendants are commercial seafood fishermen residing in and/or doing business within the District of Oregon.

VI.

UNNAMED CO-CONSPIRATORS

8. The unnamed co-conspirators are various other commercial seafood fishermen residing in and doing business in California, Oregon and Washington, who are known and unknown to Plaintiffs and not named as Defendants herein, who compete with Defendants for the sale of crab to purchasers, who participated as co-conspirators with Defendants in the violations alleged in this Complaint, and who performed acts and statements in furtherance thereof.

VII.

TRADE AND COMMERCE

9. Defendants and unnamed co-conspirators harvest crab from the Pacific Ocean and sell that crab to purchasers in the major fishing ports in California, Oregon, and Washington.

10. The activities of Defendants and unnamed co- conspirators in selling crab were in the regular, continuous, and substantial flow of interstate commerce, and have had a substantial effect upon interstate commerce. Each year Defendants and unnamed co-conspirators sell in excess of ten million dollars of crab in California, Oregon and Washington.

11. The activities of Defendants and unnamed co- conspirators in selling crab were in the regular, continuous, and substantial flow of trade and commerce within each of the Plaintiff States.

VIII.
FIRST CLAIM FOR RELIEF

12. Beginning on a date uncertain, but as early as December 1, 1995 and continuing into January 1996, Defendants and unnamed co-conspirators entered into a combination and conspiracy to fix and stabilize the price of crab to be sold to purchasers.

13. This combination and conspiracy consisted of a continuing agreement among Defendants and unnamed co-conspirators to sell the crab they harvested from the Pacific Ocean to purchasers in the major fishing ports in California, Oregon and Washington at an ex-vessel price of not less than $1.25 per pound.

14. This combination and conspiracy was entered into, implemented, facilitated and monitored through a series of meetings among commercial seafood fishermen, including Defendants, during the months of November and December 1995. The meetings took place in fishing ports including, but not limited to, the ports of Ilwaco, Washington; Westport, Washington; Astoria/Warrenton, Oregon; Newport, Oregon; South Beach, Oregon; Charleston, Oregon; Brookings, Oregon; Crescent City, California; and Eureka, California.

15. The combination and conspiracy was also implemented, facilitated and monitored by a series of telephone calls among commercial seafood fishermen, including Defendants, located in California, Oregon and Washington. The telephone calls took place during November and December 1995 and January 1996.

16. Defendants and other co-conspirators attended, led, and/or participated in the port meetings and telephone calls among commercial seafood fishermen.

17. As a direct result of these meetings and telephone calls, an agreement was reached among Defendants and unnamed co- conspirators that they would negotiate for and accept no less than a minimum ex-vessel price of a $1.25 per pound for the sale of their crab to purchasers.

18. As a direct result of these meetings and telephone calls, an agreement was reached among Defendants and unnamed co- conspirators that the $1.25 per pound minimum ex-vessel price would be the minimum price for all crab sold in all major fishing ports in Oregon, California and Washington at the beginning of the 1995-1996 season.

19. As a direct result of these meetings and telephone calls, Defendants and unnamed co-conspirators implemented monitored and reinforced the coastwide $1.25 per pound ex-vessel price agreement.

20. Certain defendants and unnamed co-conspirators used and/or relied upon threats, intimidation and/or coercion against competing commercial seafood fishermen to enforce the coastwide $1.25 per pound ex-vessel price agreement.

21. At all times relevant herein, Defendants Jeff Mulkey, Jerry Hampel, Todd Whaley, Joseph Speir, Brad Pettinger, Allen Gann, Dennis Sturgell and Russell Smotherman and many of the unnamed co-conspirators were not members of a fishermens' association established and used and for the purpose of harvesting, marketing, or selling of crab.

22. The port meetings and telephone calls and contacts used to facilitate the $1.25 per pound ex-vessel price agreement involved commercial seafood fishermen who were not members of any fishermens' association established and used for the purpose of harvesting, marketing or selling crab; and, furthermore, the meetings, telephone calls and/or contacts were not arranged, held, or otherwise facilitated by such an association.

23. The aforementioned practices by Defendants constituted a price-fixing agreement in restraint of trade and in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.

IX.
SECOND CLAIM FOR RELIEF

24. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 12-22 with the same force and effect as if set forth fully herein.

25. An agreement was reached among Defendants and unnamed co-conspirators to engage in a group boycott, known in the commercial seafood industry as a "tie-up", in which they refused to fish for crab until all commercial seafood fishermen in every major California, Oregon and Washington fishing port were offered an ex-vessel price of at least $1.25 per pound for their crab.

26. Defendants and other co-conspirators used port meetings and engaged in conversations over the telephone and in person with other commercial seafood fishermen to:

1. Determine the level of commitment commercial seafood fishermen in each port had in supporting the minimum coastwide ex-vessel price of $1.25 per pound;
2. Determine the level of commitment commercial seafood fishermen in each port had in refusing to fish for crab until the $1.25 per pound ex-vessel price was achieved; and
3. To reinforce the commitment among commercial seafood fishermen in each port to comply with the $1.25 per pound ex-vessel price agreement.

27. The port meetings and telephone calls and contacts used to facilitate the group boycott agreement, involved commercial seafood fishermen who were not members of any association established and used for the purpose of harvesting, marketing or selling crab; and, furthermore, the meetings, telephone calls and/or contacts were not arranged, held, or otherwise facilitated by such an association.

28. In order to facilitate the success of and adherence to the tie-up, certain Defendants and other unnamed co-conspirators used and/or relied upon threats, intimidation and/or coercion against competing commercial fishermen who fished for crab during December 1995 or were about to begin fishing for crab during December while the tie-up was still in effect.

29. The purpose and effect of the threats, intimidation and coercion was to minimize the number of commercial seafood fishermen fishing for crab during the tie-up and to put pressure on purchasers of seafood in the major fishing ports to agree to pay a coastwide ex-vessel price for crab of $1.25 per pound.

30. As a direct result of the efforts employed by Defendants and other unnamed co-conspirators to facilitate the success of the tie-up, commercial seafood fishermen who received ex-vessel price offers above, at or below $1.25 per pound for their crab catch, did not fish for crab and/or discontinued their fishing for crab in December of 1995.

31. As a direct result of the agreement to tie-up boats and the efforts employed by Defendants and other unnamed co- conspirators to facilitate the success of the tie-up, the vast majority of commercial seafood fishermen did not fish for crab for the majority of December 1995.

32. Acts and practices of the type alleged in paragraphs 24 through 31 have taken place in recent years in Oregon, California and Washington prior to and/or at the beginning of commercial crab seasons.

33. The aforementioned practices by Defendants constituted a group boycott agreement in restraint of trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.

X.
THIRD CLAIM FOR RELIEF

33. Plaintiff State of Oregon repeats and realleges each and every allegation contained in paragraphs 12-22 with the same force and effect as if set forth in full herein.

34. The aforementioned practices by Defendants constituted a price-fixing agreement in violation of ORS 646.725.

XI.
FOURTH CLAIM FOR RELIEF

35. Plaintiff State of Oregon repeats and realleges each and every allegation contained in paragraphs 24-32 with the same force and effect as if set forth in full herein.

36. The aforementioned practices by Defendants constituted a group boycott agreement in violation of ORS 646.725.

XII.
FIFTH CLAIM FOR RELIEF

37. Plaintiff State of California repeats and realleges each and every allegation contained in paragraphs 12-22 with the same force and effect as if set forth in full herein.

38. The aforementioned practices by Defendants constituted a price-fixing agreement in violation of Ca. Prof. & Bus. Code §§ 16720-16770.

XIII.
SIXTH CLAIM FOR RELIEF

39. Plaintiff State of California repeats and realleges each and every allegation contained in paragraphs 24-32 with the same force and effect as if set forth in full herein.

40. The aforementioned practices by Defendants constituted a group boycott agreement in violation of Ca. Prof. & Bus. Code §§ 16720-16770.

XIV.
SEVENTH CLAIM FOR RELIEF

41. Plaintiff State of Washington repeats and realleges each and every allegation contained in paragraphs 12-22 with the same force and effect as if set forth in full herein.

42. The aforementioned practices by Defendants constituted a price-fixing agreement in violation of RCW § 19.86.030.

XV.
EIGHTH CLAIM FOR RELIEF

43. Plaintiff State of Washington repeats and realleges each and every allegation contained in paragraphs 24-32 with the same force and effect as if set forth in full herein.

44. The aforementioned practices by Defendants constituted a group boycott agreement in violation of RCW § 19.86.030.

XVI.
EFFECTS

45. The aforementioned unlawful practices had the following effects:

1. Price competition among commercial fishermen was restrained;
2. Fishermen were threatened, intimidated and/or coerced into participating in the aforementioned practices and, as a result, had their pricing independence unlawfully restricted and curtailed;
3. Purchasers and consumers of crab in each of the Plaintiff States were denied the benefits of unfettered and open competition among commercial fishermen; and
4. The amount of seafood sold to purchasers and resold to consumers was restricted.

XVII.
INJURY

46. As a result of these illegal combinations and conspiracies alleged above:

1. The Plaintiff states sustained injury to the general welfare and economy of their respective states.
2. The Plaintiff States will be subject to a continuing threat of injury to their general welfare and economy unless Defendants are enjoined from illegal conduct.
3. Purchasers and consumers of seafood residing in the Plaintiff states sustained injury to their property.
4. Purchasers, and consumers of seafood residing in the Plaintiff States are threatened with further injury to their property unless Defendants are enjoined from illegal conduct.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs pray that the Court:

1. Adjudge and decree that Defendants and co-conspirators entered into an unlawful combination and conspiracy in unreasonable restraint of interstate trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1;
2. Adjudge and decree that Defendants and co-conspirators entered into an unlawful combination and conspiracy in unreasonable restraint of California, Oregon and Washington trade and commerce in violation of the laws of California [Ca. Prof. & Bus. Code §§ 16720-16770]; Oregon [ORS 646.725]; and Washington [RCW § 19.86.030].
3. Enjoin and restrain Defendants, their employees, and all other persons acting in concert with them, from engaging in the unlawful practices described in this Complaint and from engaging in any similar unlawful practices;
4. Enter judgment against Defendants for civil penalties in an amount to be determined by the court to be just and proper, as authorized under Ca. Prof. & Bus. Code § 17200 et seq., ORS 646.760; and RCW § 19.86.080 and RCW § 19.86.090;
5. Award each Plaintiff State the cost of suit, including reasonable attorney's fees and reasonable investigative costs; and
6. Grant such other and further relief as the case may require and the Court may deem just and proper under the circumstances.

Dated this 7th day of February, 1997

4. Enter judgement against Defendants for civil penalties in an amount to be determined by the court to be just and proper, as authorized under Ca. Prof. & Bus. Code § 17200 et seq., ORS 646.760; and RCW § 19.86.080 and RCW § 19.86.090;
5. Award each Plaintiff State the cost of suit, including reasonable attorney's fees and reasonable investigative costs; and
6. Grant such other and further relief as the case may require and the Court may deem just and proper under the circumstances.