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Firm Allowed to Plead No Contest to Matzah Price-fixing Charges

A federal judge has decided to allow the B. Manischewitz Co. to plead no contest to charges that it conspired with other firms to set the wholesale prices of Passover matzah products.

U.S. District Court Judge Harold Ackerman has set a hearing for April 26 in Newark, N.J., to formally accept the kosher food company’s plea, which was opposed by federal prosecutors.

The judge made his decision April 11 in a two-paragraph order, received by attorneys in the case this week.

His action comes less than a year after he rejected a similar plea application, saying it would not be in the public interest. The judge’s order gave no indication of his reasons for deciding to accept the new plea.

Under strict legal definition, a no-contest plea in a criminal case is equivalent to an admission of guilt in that case only. The defendant can still deny the same allegations in any other proceedings, such as civil lawsuits for damages.

Government lawyers argued against the no-contest plea because they said that, in the eyes of the public, it lacks the stigma of a guilty plea.

The prosecutors argued that such a plea –even though it might bring a fine of up to $1 million — could signal to other companies that price-fixing is just a cost of doing business.

Gina Talamona, a Justice Department spokeswoman, said the government would not comment on the judge’s decision to accept the plea.

Manischewitz, which claims to be the largest matzah maker in the world, has denied the charges of price-fixing. But it wanted to plead no contest to get the case behind it.

FIVE CLASS-ACTION LAWSUITS

Lawyers for the company, which is based in Jersey City, N.J., argued that the firm had suffered enough because of the massive adverse publicity following the one-count indictment and the fine expected to be levied by the judge.

“It’s an appropriate resolution of the case,” Jim Plaisted, an attorney for Manischewitz, said of the no-contest plea.

“In essence, the company tried to practically resolve the situation so the company could move on and conduct its business,” he said. “It’s not pleading guilty to any offense.”

Plaisted said five class-action lawsuits –four by retailers and one by a California caterer — asking for triple their damages caused by the alleged price-fixing “have been resolved in principle.”

The federal indictment, brought in March 1990, just weeks before Passover, alleged that between “sometime in 1981 and continuing at least through April 1986,” Manischewitz and unnamed others conspired “to suppress competition by fixing prices of kosher for Passover matzah products in the United States.”

The indictment charged that Manischewitz and other conspirators made agreements about how much Passover matzah product prices would be increased.

The indictment said Manischewitz and the unnamed co-conspirators sold approximately $25 million of Passover matzah products between 1981 and 1986.

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