ANCHORAGE, Alaska--One defendant settled shortly after a trial began Feb. 3 in Alaska Superior Court in Anchorage in a lawsuit filed by fishermen who claim a conspiracy depressed prices paid to them for salmon from Alaska's Bristol Bay region (Alakayak v. British Columbia Packers, Alaska Super. Ct., No. 3AN-95-4676-CI, settlement announced 2/7/03).

Two days after opening arguments began, one corporate defendant agreed to pay $25 million to settle claims made against it and its subsidiaries. Marubeni Corp., a Japanese conglomerate, announced the settlement in a Feb. 7 news release.

The settlement "is not an admission or suggestion that the Marubeni Group defendants have committed any wrongdoing and the Marubeni Group defendants have denied and continues to deny any wrongdoing or liability alleged by plaintiff in the action," the company's statement said.

"However, considering the uncertainty that jury trials may involve and the size of verdict that plaintiffs are seeking, and based upon the advice from our attorneys in charge, the Marubeni Group defendants have concluded that the settlement serves its best interest," the statement said.

The Marubeni defendants are the Marubeni Corp., Marubeni American Corp., and North Pacific Processors Inc., three of the 16 named defendants still in the case when the trial began.

The Marubeni settlement was added to several prior settlements that totaled about $15 million. Those settlements were paid by 17 defendant processors and importers before 2002; the money has been held in escrow at an Anchorage bank.

Suit Started After Fishermen's Strike.

The lawsuit, filed in 1995, grew out of a 1991 fishermen's strike in which fishermen docked their boats to protest price offers of 50 cents a pound for Bristol Bay sockeye. Three years earlier, fishermen were paid more than $2 a pound for the salmon.

About 4,500 fishermen are in the plaintiff class. They allege that seafood processors and importers, most of them Japanese-owned, conspired after 1988 to fix prices for the salmon. Bristol Bay, in southwestern Alaska, is the site of the world's richest sockeye salmon runs. Most of the harvested salmon is sold to Japanese markets. In pretrial motions, the plaintiffs estimated they would seek over $1 billion in damages.

Judge Peter Michalski expects the trial to run for a total of three months.

Opening Statements.

In opening statements on Feb. 5, plaintiffs' attorneys said they have accumulated evidence of a conspiracy within a highly concentrated, vertically integrated industry. Plaintiffs' attorney Parker Folse said the plaintiff team will present communications between salmon-buying companies aimed at keeping prices low. He also pointed to the experience of small companies that bought salmon for processing, which he said were driven out of business because they tried to pay higher prices to fishermen.

"Will you buy into the idea that what happened in Bristol Bay was at the invisible hand of the free-market system, or will you believe what you see and what you hear … that what happened there was what was made to happen there by the heavy hand of the defendants in this courtroom?" Folse asked the jury.

But attorneys for the processing and importing companies denied any collusion on prices. In opening statements, they promised to provide evidence that world market forces--specifically the boom in production of cheaper farmed salmon from elsewhere--is what drove down prices for Alaska salmon.

"No person who understands this industry wouldn't think that farmed salmon has had a significant impact on wild salmon, including that from Bristol Bay," said Ralph Palumbo, an attorney for Trident Seafoods Corp.

Both sides had lined up economists scheduled to testify on their behalf.

Defendants still in the case as of Feb. 21 were Icicle Seafoods Inc., Nichirei Corp., Nichiro Corp., Nippon Suisan Kaisha Ltd., Nippon Suisan K.K., Ocean Beauty Seafoods Inc., Okaya & Co., Okaya (USA) Inc., Okaya (Canada) Co., Peter Pan Seafoods Inc., Trident Seafoods, Unisea Inc., and Wards Cove Packing Co.

Alaska Supreme Court Ruling.

In 1999 Michalski dismissed the price-fixing lawsuit, citing what he said was lack of sufficient evidence of a conspiracy. But the state Supreme Court revived the lawsuit with a May 31, 2002 ruling. (Alaskayak v. British Columbia Packers, Alaska S-5575). The Supreme Court found that the plaintiffs' evidence, though circumstantial, was enough to keep the case alive. The evidence "does create an issue of fact as to the existence of a price-fixing conspiracy, involving some or all of the defendants," said the ruling, written by Justice Dana Fabe.

The supreme court ruling did agree with the defendants on one point: The court narrowed the lawsuit's scope to the periods of 1991 to 1995, removing 1989 and 1990 from the case.

Plaintiffs' attorney Bruce Stanford, who launched the lawsuit, said he was gratified that it was moving forward. "I'm bound and determined to make sure this thing goes to trial, and we'll take whatever verdict we get and be happy with it," the Anchorage-based attorney said on the trial's opening day.

Some state officials have voiced concerns that the price-fixing lawsuit will harm the Alaska salmon industry at a time when they say fishermen and processors should be united against the rising tide of farmed salmon.

State Sen. Ben Stevens (R) on Jan. 31 issued a statement criticizing the lawsuit, which he said "has taken on a life of its own" and could "mean the end of an industry that has been a crucial part of Alaska's economy for decades."

"It's now in the hands of a Texas law firm that is only interested in harvesting money from Alaska--not fish. To add insult, at least half of the fishermen who stand to profit from this suit don't live in Alaska," said Stevens, who fished in Bristol Bay in the past and now chairs a joint House-Senate salmon industry task force.

Stanford rejected the argument that the fishermen's lawsuit was destructive. The processors and importers are large companies that do not hesitate to sue fishermen over contract disputes, he said. "It's not like the defendants are defenseless," he said.

The plaintiff team is led by Stephen Susman, an antitrust specialist whose firm, Susman Godfrey, is based in Houston. Other plaintiffs' attorneys include Bruce Stanford of Anchorage, Alaska, and Parker Folse of the Seattle office of Susman Godfrey.

Defense attorneys include Ralph Palumbo of the Summit Law Group in Seattle, who represents Trident.

By Yereth Rosen