Fireworks Class Action Lawsuit Alleges Price-Fixing Scheme

Fireworks direct purchasers are allegedly harmed by a price-fixing scheme, according to a recent antitrust class action.

The fireworks class action states that in the United States, around 70 percent of fireworks come from the People’s Republic of China (PRC) under the control of one man – Ding Yan Zhong.

Known to the fireworks industry as Mr. Ding, he allegedly controls the flow of fireworks from the PRC to America through two companies: Shanghai Huayang International Logistics Co. Ltd. and Firstrans International Co.

Huayang reportedly ships the Chinese fireworks to shipping ports while Firstrans imports the fireworks.

In February 2008, a fireworks explosion in the PRC allegedly led authorities to require all fireworks to be shipped out of Shanghai rather than the numerous ports which were available before the explosion. This shift in regulation reportedly allowed Huayang to take control of the flow of fireworks in the PRC.

“Huayang leveraged this situation to their advantage to dictate the methods, timeliness and rates for export fireworks, warehouse services and inland shipping from Hunan and Jiangxi to the seaports,” the fireworks class action claims.

The changes in shipping standards allegedly allowed Firstrans, Huayang’s sister company, to receive a large portion of the fireworks leaving China.

The fireworks class action claims that because Mr. Ding has control of Chinese fireworks, other companies are unable to compete and gain entry to the shipping market.

According to the fireworks class action lawsuit, consumers are required to use Firstrans to import Mr. Ding’s fireworks which allows the company to charge “grossly supracompetitive shipping prices.”

Fireworks Lady & Co., a U.S. fireworks company based in California, claims that importers are forced to pay around $3,000 to $10,000 more per container than they might otherwise pay for the same warehouse and shipping services booked through other companies.

These repeatedly charged shipping fees allegedly add up to millions of dollars every year which fireworks direct purchasers have no choice but to pay.

“The additional costs due to these predatory market practices by FIRSTRANS results in American importers of fireworks paying an additional $15 to $20 million more per year,” the fireworks class action claims.

The fireworks class action lawsuit claims that this alleged price-fixing scheme takes advantage of direct purchasers and is in violation of U.S. antitrust laws including the Sherman Act and the Clayton Act.

The American fireworks company seeks to represent a Class of direct purchasers who have hired Firstrans International Co. to ship fireworks from the People’s Republic of China to the United States since Feb. 14, 2008.

The fireworks class action seeks an order permanently enjoining the defendant from further antitrust behaviors, damages to compensate for the overcharge, court costs, and attorneys’ fees.

Fireworks Lady & Co. is represented by Celeste Brustowicz and Jerry J. Cooper Jr. of Cooper Law Firm LLC; Stephen Murray Jr. of Murray Law Firm; Donald Creadore of Creadore Law Firm; and Samuel Trussell.

The Fireworks Price-Fixing Scheme Class Action Lawsuit is Fireworks Lady & Co. LLC v. Firstrans International Co., Case No. 2:18-cv-10776-CJC-MRW, in the U.S. District Court for the Central District of California.