By Andrew Longstreth
NEW YORK, Feb 26 (Reuters) - Two Chinese vitamin C
manufacturers participated in a price-fixing conspiracy that
"struck a blow to our free enterprise system," a lawyer told a
jury in Brooklyn federal court on Monday.
The lawyer, William Isaacson of Boies, Schiller & Flexner,
represents a class of vitamin C purchasers that accuses the
Chinese companies of fixing prices over a period from December
2001 to June 2006. The plaintiffs, which are led by a small New
Jersey distributor called The Ranis Company Inc, are seeking $54
million, which could be tripled under antitrust law.
Isaacson told the nine-member jury that the Chinese
manufacturers, concerned about falling vitamin C prices, came to
an agreement in 2001 to limit production in an effort to
stabilize prices. He promised the jury that over the course of
the trial, it would see internal company documents, including
meeting minutes, proving a conspiracy.
"These companies met, agreed and conspired to increase
prices in the U.S., contrary to our free enterprise system,"
Isaacson said. "We paid higher prices as a result."
Throughout his opening statement, Isaacson said the conduct
at issue in the case was akin to the owners of gas stations
getting together and agreeing on a price to charge customers.
Antitrust class actions rarely go to trial and this one is
the first to involve Chinese corporate defendants, according to
lawyers involved in the case.
The case also features a seldom used defense. The Chinese
manufacturers, Hebei Welcome Pharmaceutical Co Ltd and Weisheng
Pharmaceutical Co Ltd, argue that the Chinese government
compelled them to coordinate their prices and production.
The so-called foreign compulsion doctrine protects
defendants who are compelled by their own government to break
Daniel Mason of Zelle Hofmann Voelbel & Mason, who
represents Weisheng, told the jury on Monday that the trial was
"historic" and "unprecedented." Mason said that for the first
time, a former Chinese government official would testify in a
U.S. courtroom. That official, Mason said, is the "person who
compelled the conduct in this case."
Mason counseled the jury that the Chinese government has
different views about competition than the U.S. government. The
Chinese government decided that vitamin C was a critical
industry and made sure that the companies cooperated on price
If the companies failed to heed the government's orders,
Mason said they were subject to penalties such as export limits.
"They're not gas stations in Brooklyn," Mason said.
The case is In re: Vitamin C Antitrust Litigation, U.S.
District Court for the Eastern District of New York, No.
For plaintiffs: William Isaacson of Boies, Schiller &
For Weisheng: Daniel Mason of Zelle Hofmann Voelbel & Mason.
For Hebei: Charles Critchlow of Baker & McKenzie.
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