By Nicole D. Prysby, J.D.
In a rare antitrust case jury verdict, a federal jury in San Francisco has found that purchasers failed to prove a conspiracy to fix the prices of Korean ramen noodles. The jury deliberated for three hours before reaching a verdict in the case, which has been in litigation for over a decade (In re Korean Ramen Antitrust Litigation, Case 3:13-cv-04115-WHO).
The lawsuit stemmed from a July 2012 determination by the Korean Fair Trade Commission (KFTC) that four Korean companies—Nongshim Co., Ltd., Ottogi Co. Ltd., Samyang Foods Co. Ltd., and Korea Yakult Co. Ltd.—conspired to fix the prices of Korean noodles in Korea. In 2013, direct purchasers (consisting of food retailers and distributors) and indirect purchasers filed suit in the United States, alleging that the four companies and their U.S. distributors had also engaged in a conspiracy to fix the prices of Korean noodles sold in the United States, in violation of the Sherman Act and California’s Cartwright Act, and various other state antitrust and consumer protection laws. Both groups of purchasers were granted class certification in January 2017. The plaintiffs sought damages and attorney fees of $500 million.
Over the course of the litigation, the court rejected a number of defenses raised by the noodle companies. For example, the court rejected the defendants’ contention that the antitrust claims were barred by the Sherman Act’s four-year statute of limitations, finding that sales outside of the limitations period were also timely because the plaintiffs established that the fraudulent concealment exception applied to toll the statute of limitations until the discovery of the conspiracy. Also rejected was an argument by the defendants that the principles of international comity required the court to defer to the Korean Supreme Court’s 2015 decision overturning the KFTC’s conspiracy findings and fines.
In December 2017, the court denied the defendants’ motion for summary judgment, finding that the plaintiffs could prove that several manufacturers of the noodles violated federal antitrust law by engaging in, and fraudulently concealing, a conspiracy to fix prices of ramen in Korea. The plaintiffs had "some (albeit slim) evidence that the Ottogi America prices were impacted by the prices set by Ottogi Korea that were inflated by the conspiracy." Moreover, there was "sufficient, albeit disputed, evidence that for the [Nongshim Korea]-produced products, the alleged-conspiracy-inflated prices in Korea impacted the export-priced products sold by [Nongshim America.]" This direct evidence, combined with the evidence of shared directors and employees and expert opinions about control by Nongshim Korea over Nongshim America, raised at least a question of fact as to Nongshim America’s participation in and liability for the alleged conspiracy, the court concluded.
However, the jury rejected the plaintiffs’ argument, finding unanimously that the purchasers failed to prove a conspiracy. As a result, the jury did not need to reach questions about whether the conspiracy had a substantial impact on the United States or whether it caused damages to the plaintiffs.
According to a statement from Squire Patton Boggs, which represented defendant Nongshim Co., Ltd., there were nearly 100 depositions of fact witnesses in the case, with most of these in Korea. There were examinations of witnesses in Korean court pursuant to letters rogatory issued under the Hague Convention.
The case is No. 3:13-cv-04115-WHO.
Attorneys: Alan R. Plutzik (Bramson Plutzik Mahler & Birkhaeuser, LLP) for Rockman Co. [USA], Inc., MT Trading Corp. and The Plaza Co. John Gall, Mark Dosker, Joe Grasser, and Tania Rice (Squire Patton Boggs) for Nong Shim Co., Ltd. and Nongshim America, Inc. Joel Steven Sanders (Gibson, Dunn & Crutcher LLP) for Ottogi Co., Ltd. and Ottogi America, Inc.
Companies: Rockman Co. [USA], Inc.; MT Trading Corp.; The Plaza Co.; Nong Shim Co., Ltd.; Nongshim America, Inc.; Ottogi Co., Ltd.; Ottogi America, Inc.
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