Chinese Vitamin C Exporter Appeals $153 Million Class Action Judgment for Price Fixing
A Chinese exporter of Vitamin C is appealing an award of $153,300,000 in a class action suit related to antitrust violations. Hebei Welcome Pharmaceutical filed its appeal Dec. 23 in the 2nd Circuit U.S. Court of Appeals, contesting a Nov. 26 judgment at the Eastern New York U.S. District Court that found the company liable for damages related to a price fixing scheme.
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According to the 2005 complaint, Hebei Welcome and several other major Chinese manufacturers of vitamin C conspired to restrict exports and inflate prices. The companies, which at the time controlled over 60 percent of the world market for vitamin C, reached the deal in 2011 at a conference of importers and exporters. World prices for vitamin C consequently rose from about $2 to $3 per kilogram at the end of 2011 to $5 per kilogram and beyond in following years, said the complaint. Other participants in the alleged conspiracy, including Northeast Pharmaceutical and China Pharmaceutical Group, settled the allegations in early 2013, but not Hebei Welcome.
A district court jury in March 2013 found Hebei Welcome participated in the cartel, and was not forced to do so by the Chinese government. It awarded $54.1 million in damages against Hebei Welcome and its parent company North China Pharmaceutical Group, to be reduced by $9 million received from other defendants in the class action suit and then tripled for a grand total of $153,300,000. District Judge Brian Cogan upheld the verdict on Nov. 26, and on Dec. 30 awarded another $4,093,165.35 to cover attorney fees for the class action plaintiffs, which represent all purchasers of vitamin C from the Chinese defendants beginning Dec. 1, 2001.
Email ITTNews@warren-news.com for a copy of the Nov. 26 judgment.