United States: New York Court Affirms Jury Verdict Against Chinese Manufacturers Of Vitamin C, Awards Attorneys' Fees To Plaintiffs

In a recently released decision, a federal court in New York has declined to overturn a jury's $153.3 million verdict against vitamin C manufacturer Hebei Welcome Pharmaceutical and its parent, North China Pharmaceutical Group ("NCPG") for price-fixing, and the court permanently enjoined the companies from engaging in any further violations of U.S. antitrust law.

In finding for the plaintiff class of purchasers of vitamin C from Hebei Welcome or three other vitamin C manufacturers, the U.S. jury rejected the Chinese companies' defense that their conduct was compelled by the Chinese government, and found that the plaintiffs suffered $54.1 million in damages, which was trebled under American antitrust law.¹  The court refused to overturn the jury's verdict, rejecting the defendant Chinese manufacturer's argument that foreign sovereign compulsion is a question of law, rather than fact.  The defendants further failed to persuade the court that the ruling would put the Chinese manufacturer in the position of having to comply with the court's injunction on the one hand, and the demands of Chinese regulators on the other hand.

Finally, in a separate order, the court ordered Hebei Welcome and NCPG to pay the plaintiffs' attorneys' fees in excess of $4 million, plus post-judgment interest.  While the defendants had challenged the rates charged by the plaintiffs' attorneys, the court found that the complexity of the case, in particular the difficulty of arguing points of Chinese law and working with primarily foreign-language documents, justified the rates charged.²  As a result of the court's findings, the two Chinese manufacturers now face a total judgment of over $158 million, plus post judgment interest.

Footnotes

1 The court reduced the total amount of recovery by $9 million due to a settlement between the plaintiffs and a third defendant.

2 Nevertheless, the court did reduce the amount owed, from an initial request of over $15 million, largely due to the plaintiffs' settlements with other defendants.

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