Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Indirect purchasers allege conspiracy to fix prices for Korean noodles, (Sep 18, 2013)

By Tobias J. Gillett, J.D., LL.M.

Indirect purchasers of Korean noodles for their own use have filed a complaint in the federal district court for the Northern District of California, asserting that producers of the noodles conspired to fix prices (Nguyen v. Nong Shim Co., Ltd., filed September 17, 2013). The complaint follows an action filed by food wholesalers, asserting similar noodle price fixing claims against the same defendants.

Nong Shim Co., Ltd.; Ottogi Co., Ltd.; Samyang Foods Co., Ltd.; and Korea Yakult Co., Ltd. are South Korea-based producers of Korean noodles, which consist of instant noodles often sold with a seasoning packet or dehydrated vegetables. The purchasers seek to assert claims on behalf of three classes of persons and entities that purchased Korean noodles manufactured by the defendants for their own use and not for resale.

According to the indirect purchasers’ complaint, the producers conspired to fix the price at which Korean noodles were sold in the United States and elsewhere. The complaint details a scheme under which Nong Shim, as the market leader, would generally raise its prices first, and the other producers would follow. The producers allegedly exchanged non-public pricing information to further this plan. The complaint lists six separate factory price increases occurring from 2001 to 2008, as well as various meetings, information exchanges, and other alleged collusion accompanying the increases, resulting in higher sales prices paid by purchasers of the noodles. The price increases allegedly amounted to an average of 54 percent over the class period, from May 2001 to the present.

The complaint also refers to proceedings of the Korean Fair Trade Commission (KFTC), which issued a July 12, 2012 order, finding that the producers had conspired to fix the prices of Korean noodles and imposing monetary and injunctive relief, including 136 billion won (approximately U.S. $120 million) in fines.

The complaint claims that the producers’ fraudulent concealment of their collusion tolled the statute of limitations. It asserts claims for violations of Section 1 of the Sherman Act and California’s Cartwright Act against all defendants on behalf of all indirect purchasers from May 2001 to the present. It further alleged violation of the antitrust and restraint of trade laws of the states of Arizona, California, Illinois, Kansas, Maine, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Oregon, Tennessee, Vermont, West Virginia, Wisconsin, and the District of Columbia on behalf of indirect purchasers in those states from May 2001 to the present. Finally, it claimed violation of the consumer protection laws of the states of Arkansas, California, Florida, Massachusetts, Nebraska, New Hampshire, New York, and Vermont on behalf of indirect purchasers in those states from May 2001 to the present.

The indirect purchasers seek a declaration that the producers’ conduct constituted an unlawful restraint of trade in violation of the relevant state and federal statutes, actual and treble damages, a permanent injunction, pre-judgment and post-judgment interest, costs of suit, attorneys’ fees, and any other just and proper relief.

The case is No. 3:13-cv-04308.

Attorneys: Marc G. Reich (Reich Radcliffe & Kuttler LLP) for Christina Nguyen.

Companies: Nong Shim Co., Ltd.; Ottogi Co., Ltd.; Samyang Foods Co., Ltd.; Paldo Company, Ltd.; Korea Yakult Co., Ltd.

News: Antitrust CaliforniaNews