Bloomberg News

Chinese Vitamin C Makers Must Face Antitrust Trial in U.S.

September 06, 2011

(Updates with lawyer’s comment in sixth paragraph.)

Sept. 6 (Bloomberg) -- North China Pharmaceutical Co. and three other Chinese makers of vitamin C must face trial in U.S. lawsuits accusing them of price fixing, a judge ruled.

U.S. District Judge Brian M. Cogan, in a decision posted on the case docket today in Brooklyn, New York, denied the companies’ request to rule in their favor without a trial. The vitamin makers argued that the Chinese government forced them to fix prices, Cogan said.

“The three doctrines upon which defendants rely recognize that a foreign national should not be placed between the rock of its own local law and the hard place of U.S. law,” Cogan wrote. “Here, there is no rock and no hard place. The Chinese law relied upon by defendants did not compel their illegal conduct.”

The defendants, including Aland (Jiangsu) Nutraceutical Co., Northeast Pharmaceutical Co. and Weisheng Pharmaceutical Co., captured more than 60 percent of the worldwide market for vitamin C by 2001, according to Cogan. China’s share of vitamin C imports to the U.S. climbed to more than 80 percent in 2002 from 60 percent in 1997, he wrote.

The class actions were filed by direct buyers of vitamin C who distribute it or make it into products, William A. Isaacson, a lawyer for the plaintiffs, said in a telephone interview. His firm, Boies, Schiller & Flexner LLP, helped win a $1.1 billion antitrust settlement from European and Japanese vitamin makers in 1999, he said.

‘Cheap Product’

“Cheap Chinese product broke up the vitamin C part of that cartel,” Isaacson said. “The irony is that by 2001 you had this.”

Richard Goldstein, a lawyer for Aland (Jiangsu) at Orrick, Herrington & Sutcliffe LLP in New York, declined to comment on Cogan’s ruling.

North China’s unit in the case is Hebei Welcome Pharmaceutical. Charles Critchlow, a lawyer for Hebei Welcome at Baker & McKenzie LLP in New York; James Serota, a lawyer for Northeast Pharmaceutical at Greenberg Traurig LLP in New York; and Daniel Mason, a lawyer for Weisheng Pharmaceutical at Zelle Hofmann Voelbel & Mason LLP in San Francisco, didn’t immediately return calls for comment on the decision.

The case is In re Vitamin C Antitrust Litigation, 06-md- 1738, U.S. District Court, Eastern District of New York (Brooklyn).

--Editors: Peter Blumberg, Stephen Farr

To contact the reporter on this story: Thom Weidlich in Brooklyn, New York, federal court at tweidlich@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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