Chinese vitamin C manufacturer settles antitrust class action

Posted on: June 6th, 2012 by Steve Larson

A Chinese company has agreed to pay $10.5 million to U.S. purchasers of vitamin C who accused it of conspiring to raise prices by limiting exports, a proposed settlement showed.  The proposed settlement, filed in U.S. District Court in Brooklyn on Monday, is the first in a long-running legal battle brought by commercial buyers of vitamin C against four Chinese companies.

 If it is approved by the judge overseeing the case, it would be the first civil settlement reached with a Chinese company under U.S. antitrust cartel law, lawyers for the purchasers said.  “As such, the settlement is an important step in private enforcement of U.S. antitrust laws,” a court document said.  Under the settlement, the company, formerly known as Jiangsu Jiangshuan and now called Aland (Jiangsu) Nutraceutical Co., will pay $9.5 million to direct purchasers of vitamin C and an additional $1 million to indirect purchasers.

The two groups of purchasers were certified as separate classes by Judge Brian Cogan in January.  In September, Cogan rejected the defendants’ key defense: that they were required under Chinese law to coordinate production and prices of their exports. The defendants had argued that they should be shielded from the U.S. lawsuit under a doctrine which protects foreign companies compelled by their own governments to go against U.S. law. 

The purchasers sued Aland and three other Chinese vitamin C makers in 2005 after their alleged price-fixing deal in 2001 sent vitamin C prices sky-rocketing. The other three Chinese defendants are Hebei Welcome Pharmaceutical Ltd, Northeast Pharmaceutical Co Ltd and Weisheng Pharmaceutical Co Ltd.

The case is In re: Vitamin C Antitrust Litigation, in the U.S. District Court for the Eastern District of New York, No. 06-md-1738.