Huge Verdict Awarded Against Chinese Vitamin C Companies

BROOKLYN, N.Y.A jury in New York didn't buy into the argument that the Chinese government compelled a group of vitamin C makers to fix prices.

The jurors on Thursday voted in favor of a $54.1 million judgment against four Chinese companies, and a federal judge tripled the damages to $162.3 million as required by U.S. antitrust law, The New York Times reported.

Lawyers for the Chinese companies reportedly argued the Chinese government compelled them to fix the prices. But the jury agreed with the plaintiffs' attorneys in the class-action lawsuit that the Chinese companies acted on their own, the Times wrote.

Had the jury found the companies were forced by the Chinese government to set prices, they may have been protected from a judgment thanks to a little-known legal doctrine.

In an interview with Reuters after the trial, attorney William Isaacson, who represented the plaintiffs, acknowledged he was concerned before trial that jurors would make such a finding.

"Our concern was that an average American juror, when told that the Chinese government made these companies do it (fix prices), would just say, 'Well that sounds right,'" said Isaacson, a Washington, D.C.-based partner with the national law firm Boies, Schiller & Flexner LLP.

The lawsuit, which was filed on behalf of vitamin C purchasers, claims prices of vitamin C skyrocketed more than a decade ago after the defendants agreed to fix the prices. Hebei Welcome Pharmaceutical Co. and affiliated company North China Pharmaceutical Group Corp. were found liable for price fixing in the case, according to The Wall Street Journal.

The antitrust suit is not the first one involving price fixing of vitamin C and other vitamins. More than 11 years ago, 13 companies were ensnared in a years-long vitamin price-fixing conspiracy that resulted in more than $1 billion in fines being imposed by the European Commission.

Isaacson told Reuters the recent judgment "means Chinese companies selling products in the United States have to pay attention to the antitrust laws."

The North China Pharmaceutical Group Corp. said it would appeal the fines, according to China's People's Daily Online.