Korean Ramen Price-Fixing Case Headed for Trial in US

SAN FRANCISCO (CN) – Two major South Korean ramen makers will go to trial over claims from food retailers and distributors that they conspired to fix noodle prices in Korea and the United States.

“There is ample (although hotly disputed) evidence of a conspiracy by the defendants to fix the price of Korean ramen in Korea that was fraudulently concealed from consumers,” U.S. District Judge William Orrick III said in a 59-page ruling.

In a July 2013 lawsuit, The Plaza Company, which runs the Plaza Market in Koreatown, accused Seoul-based Nongshim America and Ottogi Corp. of conspiring six times between 2001 and 2008 to fix prices on dozens of Korean instant noodle products, resulting in price increases of roughly 54 percent.

Plaza was joined in the lawsuit by other ramen sellers and distributors, including Pitco Foods, Summit Import and California Market, along with consumers in 23 U.S. states and the District of Columbia.

Another Korean ramen maker, Samyang Foods, settled with the retailers in 2016 for $1.5 million.

Orrick refused to grant Ottogi and Nongshim’s motion for summary judgment, nixing Nongshim’s argument that Orrick should defer to the Korean Supreme Court’s decision that overturned findings of collusion by the Korean Fair Trade Commission.

Orrick differentiated the matter before the federal court, calling it a question of whether the companies’ conduct, as it affected ramen sales in the United States, “violates federal and state antitrust and unfair competition laws.”

A jury will also have to decide whether the claimed conspiracy impacted prices for ramen made and sold in the United States.

“The much closer question is whether there is sufficient evidence that the conspiracy impacted ramen prices in the United States, in particular for ramen manufactured in the United States,” Orrick wrote.

Nongshim had argued that although the U.S. and Korean prices were linked, the seller and distributor plaintiffs needed separate proof that the U.S. prices were constrained by Korea’s. Orrick rejected this reasoning.

[P]laintiffs have significant evidence showing direct impact and linkage between the pricing of domestic Korean product and Korean-produced exported product,” he wrote. “That there may have been minor differences (according to plaintiffs) between the products destined for the U.S. market and destined elsewhere does not, on this record, make the products so fundamentally different that the differences undermine plaintiffs’ ability to sue over alleged impacts suffered in the U.S. market.

“We are pleased with the ruling and we look forward to commencing trial,” Christopher Lebsock, an attorney for the plaintiffs, told Courthouse News in an email.

The case is set for trial on Feb 23.

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