Economists see big pay day in salmon lawsuit

Posted: Monday, March 17, 2003

ANCHORAGE (AP) Lawyers are not the only ones expected to earn large sums of money in the Bristol Bay salmon trial now under way in an Anchorage courtroom.

Some economists also stand to make a windfall.

The economists are getting as much as $550 an hour, with some logging total billings of as much as $800,000, according to their testimony.

The economists are hired as expert witnesses in the complex antitrust case. Bristol Bay commercial fishermen accuse fish processors and Japanese seafood importers of illegally conspiring to cheat the fishermen out of a fair price for their catches in the early 1990s.

Lawyers for the fishermen are seeking up to $1.4 billion in compensation. The processors and importers insist they did nothing wrong and say a big judgment could ruin them.

Several of the experts are veterans of many high-profile cases, having worked for, or against, some of the world's top business names, including Microsoft and Exxon Mobil.

So far, only the fishermen's four experts have testified in the trial, now in its sixth week. The processors and importers are expected to call as many as eight of their own experts to testify.

One fishermen's expert, Jeffrey Leitzinger, president of a Los Angeles-based consulting company called Econ One, testified he and his firm have earned as much as $800,000 on the Bristol Bay case. Another expert, University of California Berkeley professor Gordon Rausser, testified he and consulting firms he works with have earned up to $300,000.

Two University of Alaska Fairbanks professors, Joshua Greenberg and Mark Herrmann, testified they've each billed $125 an hour working for the fishermen's lawyers. Greenberg said he's made about $85,000 while Herrmann said he's made about $135,000.

Economists for the defense also are collecting big fees. One, Peter Max of Washington, D.C., said in an interview that he doubts he and his firm have billed $1 million, but that they've probably'' earned more than $600,000. Max once helped some of the same defendants win a price-fixing trial in Seattle in 1981.

Processing company Trident Seafoods Corp. of Seattle, the biggest Bristol Bay salmon buyer, also will call an Alaska university professor, fisheries economist Gunnar Knapp. However, unlike with Greenberg and Herrmann, Knapp said he won't personally pocket any extra cash from the case. Rather, all the processor defendants will pay the University of Alaska Anchorage about $82 an hour as compensation for letting Knapp spend day after day in the courtroom monitoring what he calls an important event for the Alaska commercial salmon industry.

The goal of all the experts is to explain to the 12 jurors how fish markets work and how price-fixing conspiracies operate.

Each economist testifying so far, however, has been careful not to express an opinion on the main question: Did the processors and importers really scheme to drive down prices to fishermen?

This is the responsibility of the jury,'' testified Rausser, who notes in his 55-page resume that he once served as senior economist on the president's Council of Economic Advisors.

Leitzinger, in an interview, said he believes economists can provide useful information for jurors.

When an economist does his or her job well and does a good piece of analysis, it adds a lot to a case and there's real value there,'' Leitzinger said.

Herrmann noted that his $135,000 in billings came over a period of about six years, and at the expense of free time with family and his other research projects. He said his work on the Bristol Bay case never cut into his teaching job at UAF, where he makes $79,000.

He said this is the first time he's ever testified as an expert witness, and preparing for the Bristol Bay case was grueling.

There's so much more work than you see at the trial,'' Herrmann said. The amount of time you spend is unbelievable. Not only are you writing your expert reports and supplemental reports, you're giving depositions. The lawyers have lots of questions and you're constantly in contact with them, traveling to different meetings. We also read and comment on all of the other expert witnesses' reports and depositions, and we read anything and everything on salmon markets.''

Herrmann and the other Alaska university witnesses said they weren't testifying just for money, but because they're deeply immersed in, and care about, the Alaska salmon industry.

Although he's a witness for the processors, Knapp said he doesn't feel like he's on one side or the other. He said that he just wants to share his specialized knowledge with jurors and that his long-held view corresponds more with that of the defense that legitimate market forces can explain why salmon prices to fishermen declined sharply after the 1988 season.

For a researcher, Knapp said, the trial presents can unparalleled opportunity to see the inside of this business, essentially the inner workings of all these companies.''

He said he decided not to take any extra money for himself out of the case to deflect sometimes pointed criticism from some commercial fishermen that he's biased.



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