Two Chinese manufacturers of vitamin C and their lawyers at Baker & McKenzie have started the process of trying to overturn a $162 million damages award that the companies were hit with after a jury found that they had participated in a price-fixing conspiracy. In this motion, filed on Thursday in U.S. district court in Brooklyn, North China Pharmaceutical Group Corp. (NCPG) and Hebei Welcome Pharmaceutical Co. Ltd. repeated their earlier claim that they were simply following orders from the Chinese government by entering into agreements with competitors that boosted the price of vitamin C exported to the U.S. As we’ve previously reported, that argument—in which the defendants tried to use the rarely invoked foreign sovereign compulsion doctrine—has failed to persuade U.S. district judge Brian Cogan and a Brooklyn jury.
In addition to their motion renewing the foreign compulsion claim, the defendants filed two additional motions for judgment as a matter of law. In one motion, they argue that NCPG did not directly participate in the price-fixing scheme and should not be held liable since it was only involved via its indirectly owned subsidiary, Hebei. In the other motion, the defendants argue that the damages award should have been reduced by $7.5 million before it was trebled, because the damages calculation improperly included contracts involving other alleged members of the price-fixing cartel, and those contracts could have included arbitration clauses. The damages class previously certified in the case includes vitamin C purchasers in the U.S. whose contracts did not include an arbitration clause.
For what it’s worth, Judge Cogan ruled on Friday that the there was no need for the defendants to file three separate motions. He terminated the motions dealing with foreign compulsion and corporate structure, saying that he would deal with those issues when he rules on the motion on reducing the award.
William Isaacson of Boies, Schiller & Flexner—who represents the plaintiffs in the case along with lawyers from Susman Godfrey and Hausfeld LLP—told us on Friday that "these are 100 percent arguments that have been made before and have not succeeded." We named Isaacson Litigator of the Week after the jury in the case came back with a $54 million verdict against Hebei and NCPG, which Judge Cogan trebled to $162 million. Isaacson’s co-counsel James Southwick at Susman told us, "These are the same positions that [the defendants] urged upon the court for eight years … There aren’t any new issues here and I don’t expect that there will be any different results."
We reached out to Baker’s Charles Critchlow, who represented NCPG and Hebei at trial, but did not immediately hear back from him.