In Re: Korean Ramen Antitrust Litigation: a Panel Discussion With Trial Counsel

• Jurisdiction: United States,Federal,California
• Citation: Vol. 30 No. 1
• Publication year: 2020
• Author: By Jill M. Manning
• topic: Antitrust and Competition,Commercial Litigation,Civil Procedure

IN RE: KOREAN RAMEN ANTITRUST LITIGATION: A PANEL DISCUSSION WITH TRIAL COUNSEL

By Jill M. Manning¹

This antitrust class action alleged a price-fixing conspiracy in Korea that raised the price of ramen noodles manufactured and sold in Korea. Plaintiffs, direct purchasers and indirect purchasers, alleged that the elevated prices in Korea had an impact on the prices of ramen noodles sold in the United States. Judge William H. Orrick certified the classes and denied summary judgment, stating, "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."

After a five-week trial, a jury returned a verdict in favor of the defendants, answering only the first question on the verdict form: "Did Plaintiffs prove there was a conspiracy to fix the prices of Korean ramen noodles? No." How did the case progress from a court stating that there was ample evidence of conspiracy to a jury finding no conspiracy? From the reversal of fines levied by the Korean Fair Trade Commission to the exclusion of testimony from the plaintiffs' key witness, this case involved unique issues, twists and turns, and a few lighthearted moments. You will have to continue reading to find out more.

The Panelists

• Christopher L. Lebsock was trial counsel for the direct-purchaser plaintiffs in the Korean Ramen litigation. Mr. Lebsock is a partner in the San Francisco office of Hausfeld LLP and a member of the firm's antitrust and financial services group. He represents consumers and businesses in complex legal disputes in a variety of jurisdictions across the globe. He regularly consults with clients, trade associations, and law firms about competition issues and legal strategies that span international borders. Mr. Lebsock has briefed and/or argued matters in numerous courts across the United States, including in the California Courts of Appeal, the California Supreme Court, the Second, Ninth, and Eleventh Circuits, and the United States Supreme Court.
• Rachel S. Brass was trial counsel for defendants Ottogi Co., Ltd. and Ottogi America, Inc. in the Korean Ramen litigation. Ms. Brass is a partner of Gibson Dunn & Crutcher LLP's Litigation Department where her practice focuses on investigations and litigation in the antitrust, labor, and employment areas. Ms. Brass has extensive experience representing international and domestic clients in high-stakes appellate litigation in the Supreme Court, as well as Federal and State appellate courts throughout the United States. Her antitrust and competition experience includes international cartel matters, mergers and acquisitions, grand jury investigations, and other antitrust investigations by governmental entities in the United States and around the world, as well as litigation in trial and appellate courts.
• Mark Dosker was trial counsel for defendants Nongshim Co., Ltd. and Nongshim America, Inc. in the Korean Ramen litigation. Mr. Dosker is a partner in the San Francisco office of Squire Patton Boggs LLP. He has represented clients since 1984 in solving complex disputes in class action litigation nationwide and in international arbitration. Mr. Dosker has successfully handled a wide range of cases involving antitrust law, banking law, business practices and transactions, consumer products, insurance coverage, intellectual property, security law technology, wage and hour, and other business issues. Mr. Dosker is also an international arbitrator who has served in a variety of cases with parties from the United States, Asia, Europe, and Latin America, on three-member panels (both as Chair and Co-Arbitrator), and as sole Arbitrator and as Emergency Arbitrator.

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Case Background

MS. MANNING: We're going to jump right into the case. I'm just going to give you a little bit of background on the case before we start with questions. This was an antitrust case consolidated in the Northern District of California. The direct purchaser plaintiffs and indirect purchaser plaintiffs alleged a price-fixing conspiracy in Korea that raised the price of ramen noodles manufactured and sold in Korea. Plaintiffs alleged that the elevated prices in Korea had an impact on the prices in the United States. The case originated from an investigation by the Korean Fair Trade Commission. The KFTC ruled that Korean ramen manufacturers had conspired to fix prices and succeeded in raising prices to super competitive levels from 2001 through January 2010 and imposed fines totaling 125 million.

However, the Supreme Court of Korea overturned the KFTC's ruling, finding that the pricing patterns, pointed to as evidence of the price-fixing conspiracy, were actually explained by the structure of the market and the government's price controls, and it ordered all of the fines to be repaid.

Then, we have the federal litigation. Judge Orrick certified classes of direct and indirect purchasers. He denied the defendants' motion to decertify the IPP class and denied summary judgment. In his order denying summary judgment, he stated, "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."

The indirect and direct purchaser cases were tried together before a single jury. The two defendants were Korean-based companies Nongshim and Ottogi and their subsidiaries supplying ramen noodle to the U.S. market. Most of the witnesses in the trial were located in Korea and beyond the Court's subpoena power. After a five-week trial, a jury ruled in favor of the defense, after three hours of deliberation, finding that plaintiffs had failed to prove a conspiracy to fix the prices of ramen noodles.

So how did the case progress from a Court stating that there was ample evidence of conspiracy to a jury finding no conspiracy? Let's find out.

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Chris, this was a rare trial of an antitrust class action. Knowing that antitrust cases rarely proceed to trial, how did that affect your strategy in the case?

Parties' Trial Strategies

MR. LEBSOCK: I think it affected our strategy in a few ways, but for purposes of this question, what I want to focus on is voir dire. Because we represented wholesalers and distributors and we were trying this case in combination with consumers, indirect purchasers, we felt that we needed to get ahead of this idea that this was a class action. We had businesses who had substantial losses, but we also had consumers in the case who, when you broke down the damages, may have suffered 10 to 15 cents of overcharge on each packet of ramen. So we made a decision that we wanted to talk about the class action process with the jury, get their reaction just right away, writing a jury questionnaire and a voir dire, and actually spent quite a bit of time with the jury in the voir dire process talking about their views of class actions, and you had the full range of opinions from the venire. You had people who were very pro class action, understood it was a mechanism that was useful in bringing justice to people with small claims, and you had folks on the jury who were very anti class action. And then you had a range of people in the middle who talked about their experience with class action, including, you know, sending in the claims, getting a check for 15 cents or a dollar.

So we explored all that with the jury right away, and I will say, on reflection, I'm not sure from my perspective that it was particularly useful to do it. You certainly put the issue front and center with the jury and then discussed it for quite a long time. It was a point of interest for everybody, but it's sort of hung in the discussion with the panel. And as I reflected back on who we struck: we struck the jurors who were anti class action, but they had other red flags, so I'm not sure that talking about it as extensively as we did was a particularly useful thing.

MS. BRASS: My client is Ottogi. We had an unusual situation representing Ottogi, which is by the time we got to trial, the lead senior associate who had been on the case from day one was still on the team, and everyone else was new. And one of the things that meant what we did for trial is really think about how we constituted the trial team. And my own bias, and I'm sure this is the best audience to say it to, is that antitrust lawyers can be a little precious about their ideas.

And so we very specifically constituted a team where we're the only antitrust lawyer, and we had one of our lead trial lawyers join the team, and the first antitrust case he had ever worked on, learned the case like a juror. And one of the heads of our Supreme Court practice joined the team to make a very aggressive record fight throughout the trial. We had a huge range of novel issues in this trial, from the duplicative recovery questions to Hartford Fire questions about conduct that happened exclusively outside the jurisdiction of the U.S. to other questions about things like market definition.

And in parallel, we had someone whose whole job is looking at appellate questions in a new way, not an antitrust specialist, thinking about the law and creative arguments we could press. I think one of the ones that he came up with that caught everyone off guard was a really clever argument about fraudulent concealment and diligence, and one of our arguments at the end of the trial was that none of the plaintiffs had testified to exercising any diligence, not necessarily the kind of question that antitrust lawyers who are thinking about market definition and prices and regressions focus on, but a huge asset to us in getting a jury instruction that said, "was there evidence of diligence by the plaintiffs for the conduct outside the statute?", which was almost all of the conduct in all of the sales in the case.

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The other thing we did was as that team worked up the arguments there were key arguments we did not put in trial...