9th Circ. Keeps Seafood-Processor Merger on Ice

PORTLAND, Ore. (CN) - The Ninth Circuit on Tuesday upheld an injunction arising from an antitrust lawsuit brought by a group of West Coast fishers that will prevent a seafood-processor merger.

Lead plaintiff Jeff Boardman sued the Pacific Seafood Group and Ocean Gold Seafoods in January 2015, arguing that Pacific Seafood's plans to buy Ocean Gold would monopolize the West Coast seafood market.

A federal judge granted the plaintiffs' motion for a preliminary injunction, barring the seafood processors "from undertaking any further act to acquire or control any interest in" Ocean Gold's stock or assets, and the Circuit's three-judge panel upheld that judgment.

Writing for the panel, Circuit Judge Wallace Tashima said that the fishers' argument satisfied the statutory requirements for a preliminary injunction since they adequately demonstrated that the proposed merger could substantially reduce competition and could cause irreparable harm.

The plaintiffs also showed that an injunction was in the public interest, Tashima said.

The Circuit also held that the trial court was right not to compel arbitration in the case. The seafood processors had pointed to an arbitration provision in the settlement of a 2010 antitrust lawsuit brought against them, but the panel found that the fishers' claims were not within the scope of that provision.

But Senior Sixth Circuit Judge Ronald Gilman, sitting by designation, wrote in a separate partial dissent that he would have granted the defendants' motion to compel arbitration in the case since he believed that the scope of the provision's language was "at best ambiguous."

"Because this court's long-standing precedent requires that any ambiguity regarding the scope of an arbitration agreement be resolved in favor of arbitration, I would hold that plaintiffs' claims are arbitrable," Gilman said.

The parties' attorneys did not immediately respond to emails requesting comment on Tuesday morning.

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