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Three Excused From Noodle Price-Fixing Case

SAN FRANCISCO (CN) - A federal judge dismissed three of eight Korean noodle makers from an antitrust class action accusing them of conspiring to fix noodle prices in the United States.

U.S. District Judge William Orrick on Tuesday partially granted and partially denied motions from several Korean companies and their U.S. distributors.

Orrick found that lead plaintiff Stephen Fenerjian has not plausibly pleaded that all of the defendant companies were involved in a conspiracy to raise the prices of dried noodles in the United States.

The Korean Fair Trade Commission in 2012 fined four Korean companies for conspiring to raise the price of instant noodles.

Fenerjian et al. sued lead defendant Nongshim Co. in September 2013, claiming that the price increases in Korea led to similar increases in the United States.

The Korean defendant companies are Nongshim, Ottogi, Samyang Foods and Korea Yakult, and their U.S. counterparts, Nongshim America, Ottogi America, Sam Yang USA and Paldo Co.

Orrick dismissed with leave to amend all causes of action against Sam Yang USA because the plaintiffs did not adequately plead that its Korean counterpart owned, controlled or directed the company.

Orrick also dismissed with leave to amend causes of action against Yakult Korea, because the plaintiffs allege only that prices of Yakult's noodles "were expected" to increase, not that they actually increased.

"The mere allegation that Yakult Korea conspired to fix prices in Korea is insufficient to plausibly plead that Yakult Korea participated in the conspiracy to fix prices of Korean noodles sold in the United States," Orrick wrote.

Similarly, since Paldo was Yakult Korea's U.S. distributor, Orrick found no plausible allegations connecting it to the alleged scheme.

But Orrick denied Nongshim Korea and Nongshim Americas' motion to dismiss the Sherman Act claims.

"In combination with the allegations that Nongshim Korea controlled and directed Nongshim America and that the prices of Nongshim Korean Noodles sold in the United States did in fact increase in correlation to the increase in Korea, plaintiffs have plausibly alleged that Nongshim America was part of the conspiracy to fix prices on Korean Noodles sold in the United States," Orrick wrote.

Orrick came to a similar conclusion with Ottogi Korea and its American counterpart, and also denied their motions to dismiss the Sherman Act claims.

Orrick ruled that Samyang Korea is also liable for any injury caused by the conspiracy, even if the company didn't sell directly to the plaintiffs.

He set a case management conference for Nov. 25.

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