U.S. Judge Approves Settlement In StarKist Tuna Can Case

American Samoa cannery owner to pay $12 million settlement for underfilling tuna cans

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, Oct. 4, 2016) – A federal court judge has granted final approval of a multi million dollar settlement in a lawsuit filed in February 2013 by a California resident against StarKist Co., which owns StarKist Samoa cannery in American Samoa.

As previously reported by Samoa News, it was July last year that U.S. District Court Judge Haywood S. Gilliam Jr. at the federal court in San Francisco granted preliminary approval of the $12 million settlement reached between plaintiff Patrick Hendricks and StarKist, which was accused of “negligent misrepresentation”, “unjust enrichment”, violating California consumer laws, and “fraud” with allegations that StarKist has been under-filling its canned tuna products.

Both sides agreed to the proposed settlement in which StarKist denied any wrongdoing. The agreement was to avoid the expense and risks of continuing the lawsuit. Plaintiff filed a motion Dec. 11 last year asking the court for final approval and a “fairness” hearing was held Dec. 17.

However, Gilliam in February issued a decision in which the court “denies final approval without prejudice” of the proposed settlement. And the basis for denying the settlement — settlement notice was inadequate; and the scope of the original release claims as well as the amended release of claims violates the identical factual predicate rule.

Thereafter more motions were filed in court, as well as arguments as plaintiff, who was joined by others, and StarKist seek to have the settlement approved, for which Gilliam last Thursday granted final approval of the settlement.

In his 28-page order, Gilliam granted final approval of the settlement, in which StarKist agrees to pay $8 million in cash and $4 million in vouchers for StarKist products. This amount includes payments to claimants for release of their claims, any award of attorneys’ fees and costs, claims administrator costs, and any incentive awards to Hendricks and interested parties, the decision states.

When the notice went out last year about the proposed settlement, more than 2.5 million residents submitted claims. Of the total claims, 902,643 residents chose to receive vouchers and they will receive approximately $4.43 per claim.

And of the total claims received more than 1.6 million choose to receive cash, according the decision, states claims who qualify for both cash and voucher are residents, consisting of residents of the United States who, from February 19, 2009 through October 31, 2014, purchased any of the StarKist Products (i.e., 5 oz. Chunk Light in Water, 5 oz. Chunk Light in Oil, 5 oz. Solid White in Water, and 5 oz. Solid White in Oil).

According to the decision the average retail price for a 5-ounce can of StarKist Chunk Light In Water was 86 cents between February 2009 through October 2014. Testing showed that there was an average underfill between 4.5% and 16.7%, resulting in damages between 3.87 cents and 14.3 cents per can.

Therefore a $1.97 cash payment per claim would provide full recovery for 13 to 50 cans and a voucher of $4.43 per claim would provide full recovery for 30 to 114 cans. Id. Accordingly, this factor weighs in favor of approving the settlement.

It should be noted that the $1.97 per claim is after taking out attorneys’ fees and other costs which totaled just over $3.5 million.

According to the decision, the $12 million settlement amount, while constituting only a single-digit percentage of the maximum potential exposure, is reasonable given the stage of the proceedings and the defenses asserted in this action.

“Based on the facts in the record and the parties’ arguments at the final fairness hearing, the Court finds that the settlement is within the range of reasonableness in light of the risks and costs of litigation,” Gilliam concluded.

The Samoa News
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