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Chinese Vitamin C Makers Can Be Sued by Buyers as a Group

Jan. 26 (Bloomberg) -- North China Pharmaceutical Co. and three other Chinese makers of vitamin C can be sued in the U.S. for alleged price-fixing by buyers acting as a group, a federal judge ruled.

U.S. District Judge Brian M. Cogan in Brooklyn, New York, today certified a class of vitamin C buyers. The buyers are seeking triple damages.

“Individual class members are unlikely to have sufficient resources -- let alone fluency with federal antitrust law -- to institute a lawsuit such as this,” Cogan wrote.

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, Cogan said in a September ruling. 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.

Cogan appointed Ranis Co., a food company in Elizabeth, New Jersey, to represent the group seeking damages.

The judge also certified a group of buyers asking the court to force the Chinese companies to stop their alleged antitrust violations. He appointed Animal Science Products Inc., a Nacogdoches, Texas-based maker of animal-feed additives, to represent that group.

Chinese Law

The ruling “is important because Chinese companies selling products in the U.S. are being treated like companies from England and Switzerland and Japan and Korea,” William A. Isaacson, a lawyer for the plaintiffs at Boies, Schiller & Flexner LLP, said in a phone interview.

The class actions were filed by buyers of vitamin C who distribute it or make it into products, Isaacson said in a September interview.

In September, Cogan denied the Chinese companies’ request to rule in their favor in the case without a trial. The vitamin makers argued that the Chinese government forced them to fix prices, Cogan said. “The Chinese law relied upon by defendants did not compel their illegal conduct,” he wrote.

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, declined to comment on Cogan’s ruling.

Richard Goldstein, a lawyer for Aland (Jiangsu) at Orrick, Herrington & Sutcliffe 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).

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

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

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