In re Vitamin C Antitrust Litigation

279 F.R.D. 90, 2012 WL 251909
CourtDistrict Court, E.D. New York
DecidedJanuary 26, 2012
DocketNos. 06-MD-1738 (BMC)(JO), 05-CV-0453
StatusPublished
Cited by35 cases

This text of 279 F.R.D. 90 (In re Vitamin C Antitrust Litigation) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Vitamin C Antitrust Litigation, 279 F.R.D. 90, 2012 WL 251909 (E.D.N.Y. 2012).

Opinion

MEMORANDUM DECISION AND ORDER

COGAN, District Judge.

Plaintiffs are suing Chinese vitamin C manufacturers for allegedly violating Section 1 of the Sherman Act, 15 U.S.C. § 1, by engaging in a cartel to fix prices and limit the output of vitamin C exported to the United States. The four main defendants are Hebei Welcome Pharmaceutical Co. Ltd.; Jiangsu Jiangshan Pharmaceutical Co. Ltd.; Northeast Pharmaceutical Co. Ltd.; and Weisheng Pharmaceutical Co. Ltd. (collectively “defendants”). Plaintiffs The Ranis Company (“Ranis”) and Magno-Humphries Laboratories, Inc. (“MHL”) move for class certification on behalf of a group of direct purchasers seeking treble damages against all defendants except Northeast Pharmaceutical Co. Ltd. (“Northeast”). Plaintiff Animal Science Products, Inc., (“Animal Science”) has moved separately for certification of a class of direct and indirect purchasers seeking injunctive relief against all defendants, including Northeast. Defendants opposed [97]*97both motions for class certification. For the reasons stated below, I grant class certification on behalf of a damages class represented by Ranis, but I determine that MHL cannot serve as class representative because it is not a member of the class it seeks to represent. I also grant certification of an injunction class represented by Animal Science.

BACKGROUND

Ranis and Animal Science commenced this action on January 26, 2005. Related actions were subsequently filed in other districts, and all of these eases were eventually coordinated by the Judicial Panel for Multidistrict Litigation and transferred to this Court for pretrial proceedings. In April, 2007, Ranis and Animal Science moved separately for class certification under Rule 23 of the Federal Rules of Civil Procedure. Both putative classes are represented by the same counsel.

Ranis seeks to represent a class composed of purchasers who bought vitamin C directly from the defendants during the class period (the “Damages Class”). The only relief sought by this putative class is damages. The exact class definition is as follows:

All persons or entities, or assignees of such persons or entities, who directly purchased vitamin C for delivery in the United States, other than pursuant to a contract containing an arbitration clause, from any of Defendants or their co-conspirators, other than Northeast Pharmaceutical (Group) Co. Ltd., from December 1, 2001 to the present. Excluded from the proposed class are all governmental entities, Defendants, their co-conspirators, and their respective subsidiaries or affiliates.

Animal Science seeks to represent a class composed of purchasers who bought vitamin C manufactured by the defendants, regardless of whether the vitamin C was purchased directly from the defendant or through an intermediary (the “Injunction Class”). This putative class seeks only injunctive relief. The exact class definition is as follows:

All persons or entities, or assignees of such persons or entities, who purchased vitamin C manufactured by Defendants for delivery in the United States, other than pursuant to a contract with a Defendant containing an arbitration clause, requiring injunctive relief against Defendants to end Defendants’ antitrust violations.

Defendants opposed Ranis’s motion for class certification primarily on the basis of Ranis’s adequacy to serve as class representative. Defendants’ chief concern is that Ranis is not presently, and has never been, involved in the vitamin C business. Instead, Ranis purchased this antitrust claim from The Graymor Chemical Company (“Graymor”) for $100 and is not currently engaged in any business aside from prosecuting Graymor’s claim. Defendants question the motives behind the assignment of Graymor’s claim and argue that assignees may not serve as class representatives. Defendants further argue that Ranis and putative class counsel have conflicts of interest with other class members; have made decisions that are contrary to the class’s interests; and lack the requisite integrity and candor to represent absent class members.

Before briefing was complete on Ranis’s motion to certify the Damages Class, however, counsel for Ranis informed defendants of counsel’s intention to add a second plaintiff as putative class representative in this action. On September 27, 2007, plaintiffs amended the complaint to add MHL as a plaintiff and the company from which MHL bought vitamin C—JSPC America, Inc. (“JSPCA”)—as a defendant.1 The parties were then permitted to supplement their class certification briefing to address this new putative class representative. Defendants’ supplemental opposition to class certification again focused on the adequacy of Ranis and MHL to represent the class.

In their supplemental opposition to certification of the Damages Class, defendants argued that JSPCA, a subsidiary of defendant Jiangsu Jiangshan Pharmaceutical Co., Ltd. (“Jiangsu”), was not part of the price-fixing conspiracy and should therefore be dismissed [98]*98from the ease. Moreover, defendants argued that MHL—who did not purchase from any defendant other than JSPCA—should be deemed an indirect purchaser and prohibited from joining a class of direct purchasers.2 After briefing was complete on the issue of class certification, JSPCA moved for summary judgment. On December 27, 2011, I granted JSPCA’s motion and dismissed it from the case, finding that JSPCA was legally incapable of having conspired with Jiangsu or the other defendants in this action.

Defendants also opposed Animal Science’s motion to certify the Injunction Class. Once again, defendants’ attacks focus on the adequacy of Animal Science to serve as class representative. Defendants’ primary arguments are that that Animal Science and class counsel suffer from various conflicts of interest and have demonstrated a willingness to sacrifice important class interests.

Although briefing related to class certification was complete in early 2008, a decision on this motion was reserved pending defendants’ omnibus motion for summary judgment. On September 6, 2011, I rejected defendants’ contention that the Chinese government had compelled the price-fixing conspiracy and accordingly denied defendants’ motion for summary judgment.

DISCUSSION

Rule 23(a) of the Federal Rules of Civil Procedure requires that any proposed class action: “(1) be sufficiently numerous, (2) involve questions of law or fact common to the class, (3) involve class plaintiffs whose claims are typical of those of the class, and (4) involve a class representative or representatives who adequately represent the interests of the class.” Myers v. Hertz Corp., 624 F.3d 537, 547 (2d Cir.2010). Courts commonly use a shorthand summary to describe these requirements, referring to the four prongs simply as “numerosity,” “commonality/’ “typicality,” and “adequacy.” See, e.g., Gen. Tel. Co. of the Sw. v. Falcon,

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Bluebook (online)
279 F.R.D. 90, 2012 WL 251909, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-vitamin-c-antitrust-litigation-nyed-2012.