The state Attorney General’s office issued summonses to three lobster dealers, part of what appears to be an investigation into allegations of price-fixing, focusing on Washington County dealers.
Three dealers confirmed that they received the summonses in November from the Attorney General, but spoke on the condition that they not be identified. All three dealers are from Washington County.
Working Waterfront saw a copy of the summons sent to one dealer, dated November 2. The summons asked this dealer to produce documents relating to the investigation by November 23. It is not clear how many other dealers received the summons.
According to this summons, the Attorney General “is investigating whether shellfish dealers in certain regions of coastal Maine have engaged in practices constituting one or more agreements in restraint of trade or commerce in any market for shellfish sales and distribution in the State of Maine …. This summons is issued pursuant to 10 M.R.S. 1107 at the request of Attorney General Janet T. Mills.”
When asked to confirm this investigation, Kate Simmons, spokesperson for the Attorney General’s Office, said, “I can neither confirm nor deny there is an investigation.” Because Assistant Attorney General Christina M. Moylan signed the summons letter, this reporter asked her to confirm the investigation. Moylan said, “I’m afraid I won’t be able to give you anything of substance.”
This reporter spoke to four dealers west of Washington County: one each from Kittery and Portland, and two from the Midcoast. All said they did not receive the summons. Sources told this reporter that a number of Downeast dealers received the summons letter.
When asked how many received the summons, and if the investigation is limited to Washington County, Moylan replied, “I can’t comment. I can’t. I mean, you’ve got what you’ve got, and there’s no gag order, and you can draw conclusions; but I’m not even going to confirm the existence of an investigation.”
The summons sent to the first dealer asked for documents relating to communication about the purchase of lobster and other shellfish “… from June 1, 2008 to the date on which documents are produced in response to this summons,” according to the copy of Moylan’s summons.
The summons requested the following be produced no later than November 23:
“1. Any and all Documents Relating to Your purchase of lobster and other shellfish, including but not limited to prices, quantities and payees;
2. Any and all Documents Relating to Communications with other Shellfish Dealers, wherever situated, including but not limited to phone records, written and electronic correspondence and notes or summaries made by You and any other Person;
3. Documents sufficient to Identify any and all Shellfish Dealers within the State of Maine with whom You have had contact since June 1, 2008.”
Lobstermen sell their catch in one of three ways: to dealers; to a lobster co-operative that buys the catch from members and sells it for members; or as an independent to the highest bidder, frequently a restaurant. Dealers can range from: a fisherman, or dealer, with scales and a pickup truck who buys from wharfs or from fishermen and peddles it directly to the consumer; to dealers who sell from small lots or small wharves with holding systems who can hold from 5,000 lbs.; to dealers with large properties and lobster pounds and/or refrigerated holding systems that can hold over 100,000 lbs. of lobster.
The second of the three dealers who confirmed receiving the summons, and who spoke on the condition that his name not be used, said, “Yes, I got one, but what makes me different from a dealer in Kittery, Maine?” The second dealer said he had spoken with Moylan because he, “Wanted to know what [the investigation] was about.” The dealer said he gathered that, “Enough fishermen in this area complained about the price: supposedly we’re not paying enough or whatever.
“Price fixing is like,” said the dealer, pausing. “Come on, anybody that knows this industry [understands] it’s a supply and demand market. The co-ops more or less set the price, and we go by that,” he said.
The second dealer said he told the assistant attorney general, “We practice the same methods as Stonington, Vinalhaven, … It’s not like we’re doing anything different.”
He said, “Everybody [who received the summons] feels the same way,” adding, “the people who got these letters are saying, ‘Fair is fair: the guys who ultimately should be getting it are sitting there, laughing their —-s off because they didn’t get one.'” He talked about the costs involved for dealers to defend themselves and said, “In the lobster business, the only people who make out in cases like this are lawyers.”
The third dealer who received the summons, but also spoke on the condition his name not be used, questioned why this investigation seems to be limited to Washington County. “Why is Washington County being targeted? Is it the big dealers doing it, pushing for territory, trying to put the little guys out of business, or is it actual price fixing?”
“If there’s an issue with price fixing,” he said, “they’d better start with the co-ops in the state of Maine … It isn’t the local dealers, it’s the big boys. Mark my words: in five years there will be six dealers, and if you don’t bow to those six dealers, you’re out of it. They’re driving me out of business.”