New twist in US vitamin C anti-trust battle

By Jane Byrne contact

- Last updated on GMT

© istock/NiroDesign
© istock/NiroDesign
Two US companies may have a chance of collecting $148m in damages as a US Supreme Court ruling deems that the Chinese firms targeted in a vitamin C price fixing lawsuit were not compelled to follow China’s trade laws.

Yesterday’s decision reversed an earlier US federal appeals court ruling rejecting an original verdict in this longstanding anti-trust battle that found in favor of the two US buyers - animal feed additives and health company, Animal Science Products Inc and New Jersey based food company, Ranis Co.

That federal appeals judge ruled the case should never have gone to trial after China officially stepped in to advise that its laws required the vitamin C producers to violate the Sherman Act, a US antitrust law.

However, the US Supreme Court, in its ruling, determined that: "The US purchasers countered that the Ministry had identified no law or regulation ordering the Chinese sellers’ price agreement, highlighted a publication announcing that the Chinese sellers had agreed to control the quantity and rate of exports without government intervention, and presented supporting expert testimony."

Michael Gottlieb, a partner at Boies Schiller Flexner, lawyers for the plaintiffs, told FeedNavigator that yesterday's [June 14] decision can kick start the process for compensation again:

“The [Supreme] Court’s decision has vacated the Second Circuit’s opinion, which means that our jury verdict including the damages award remains intact. We will now go back down to the Second Circuit to defend that verdict on remand.”

Background

The tussle originated from a 2005 lawsuit filed by the two US vitamin C purchasers, who alleged that North China Pharmaceutical Group Corp. and its manufacturing unit, Hebei Welcome Pharmaceutical Co., were part of a group that conspired to hike prices and lower supply of vitamin C sold to US buyers.

China’s ministry for commerce (MOFCOM) has continually argued, through the filing of an amicus brief with the US courts, that the defendants were only following Chinese law and could not confirm to both that and American competition regulations.

Commenting on yesterday’s ruling, the Global Competition Review​ said the US Supreme Court rejected the idea that US courts need abide by foreign governments’ statements on the meaning of their own laws, an interpretation that was aligned closely with the arguments of the US Department of Justice in April.

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