2nd Circuit Asked To Revive Chinese Vitamin C Antitrust Case

Two US-based companies that purchase vitamin C from sources abroad urged a federal appeals court on Tuesday, September 14, to revisit a panel decision that shut down an antitrust lawsuit claiming Chinese exporters had unlawfully conspired to fix the price and supply of the nutrient.

A 2nd US Circuit Court of Appeals panel in August ordered the dismissal of the lawsuit against Chinese companies Hebei Welcome Pharmaceutical and North China Pharmaceutical Group. The panel judges, voting 2-1, concluded there was a “true conflict” between US and Chinese antitrust law that meant the defendants could not comply with US legal provisions.

In their petition seeking en banc review or panel rehearing, lawyers for Texas-based Animal Science Products and New Jersey-based Ranis argued that the panel decision, if left in place, “invites judicial micromanagement of foreign policy powers reserved to the political branches.”

William Isaacson of Paul, Weiss, Rifkind, Wharton & Garrison, a lawyer for the plaintiffs, did not immediately respond to a message on Wednesday seeking comment. Isaacson represents the plaintiffs with lawyers from Willkie Farr & Gallagher, Hausfeld and Susman Godfrey.

Jonathan Jacobson of Wilson Sonsini Goodrich & Rosati, who represents the Chinese company defendants, told Reuters on Wednesday that “the petition raises nothing remotely problematic with the court’s decision.”

Circuit Judge William Nardini, joined by Circuit Judge Jose Cabranes, concluded in the panel ruling that Chinese law required Hebei Welcome and North China Pharmaceutical “to engage in price-fixing of Vitamin C sold on the international market.”

Relevant Chinese regulations “required the defendants to collude on Vitamin C export prices and quantities as part and parcel of China’s export regime for Vitamin C,” Nardini wrote.

Circuit Judge Richard Wesley wrote the dissent, which disputed the majority’s conclusion that Chinese law required the defendants to coordinate on the price of vitamin C exports.

Isaacson and co-counsel for the plaintiffs asserted in their petition that the panel decision crafted a new test – without congressional support – to assess whether a key US antitrust law reaches conduct overseas.

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