Jury Renders Price-Fixing Verdict Against Vitamin C Manufacturers Despite Assertion of Foreign Sovereign Compulsion Defense

On March 14, 2013, the jury in In re Vitamin C Antitrust Litigation, 06-MD-1738 (E.D.N.Y.) returned a $54.1 million verdict ($162.3 million post-trebling) for the direct purchaser class plaintiffs after a trial that lasted nearly three weeks. The plaintiffs, in what is the first antitrust case ever filed against Chinese companies in a U.S. court, alleged that the four major Chinese producers of vitamin C conspired to fix prices and production levels of vitamin C exported from China to the United States. The defendants, with support from the Ministry of Commerce of the People’s Republic of China, mounted a defense based on the foreign sovereign compulsion doctrine and argued that although the Chinese vitamin C producers coordinated on pricing and production, the Chinese government required them to do so.

Of the four manufacturer-defendants, one was not sued for monetary damages because its sales contracts contained arbitration clauses that required any claims for such damages to be resolved by arbitration. Another manufacturer settled the case before trial for $9 million. A third manufacturer settled the case during the trial for $22.5 million. The jury found the overcharges amounted to $54.3 million dollars. After trebling and a reduction for amounts paid in settlement, the defendant against which the court entered judgment will be liable for $131.7 million plus attorney’s fees.