Ramen Noodle Cos. Move to Dismiss Price-Fixing Class Action Lawsuit

On Wednesday, four South Korean companies pleaded with a federal  judge to dismiss a proposed ramen noodle price-fixing class action lawsuit alleging the instant ramen noodle manufacturers had formed a cartel and raised the prices of their products. The Korea-based companies argued that the plaintiffs could not support their claims that the alleged ramen cartel affected the price of the ramen products sold in the United States and, therefore, the claims should be thrown out.

Legal counsel for Yakult, SamYang Foods, Nong Shim, Ottogi and their American subsidiaries urged U.S. District Judge William H. Orrick to dismiss the case because the plaintiffs “haven’t plausibly pled a conspiracy to affect U.S. prices.” Although the Korean Fair Trade Commission did report a price-fixing conspiracy between the ramen manufacturers in 2012, the defense claimed that the plaintiffs could not provide sufficient evidence to show the alleged South Korean ramen noodle cartel had affected U.S. commerce.

The companies also argued that even if the ramen noodle prices in the United States did rise, it occurred months after the agreements between the companies, demonstrating a lack of connection. Additionally, according to the motion to dismiss the ramen noodle price fixing class action lawsuit, the plaintiffs failed to allege that any investigation was done into the alleged price-fixing of the American noodle products and failed to provide reports detailing the alleged ramen cartel in the U.S. subsidiaries.

According to Korea Yakult legal representative Edward Scwartz, the plaintiffs must produce “specific facts that the conduct had the requisite effect on commerce,” and not simply plead that the companies imported their products into the United States according to statutes aid out by the Foreign Trade Antitrust Improvements Act.

Ottogi attorney Joel Sanders has asked Judge Orrick to review the state law claims, stating, “State consumer protection laws are anything but uniform” and that each separate state claim would have to be reviewed on an individual basis, which would prove to be a significant burden to the price-fixing class action lawsuit. He also claimed that the judge should dismiss the claims if there is no standing instead of waiting for the plaintiffs to submit a motion for class certification.

While Judge Orrick has not made any final decisions regarding the ramen noodles price-fixing class action lawsuit, he has made his opinions known on the evidence and pleading of the plaintiffs. For example, the judge believes the allegations against Nong Shim were plausibly pled, but that Yakult might be able to duck the allegations, considering the company did not participate in the price-fixing agreement. Similarly, Judge Orrick also stated that the claims against SamYang Foods were thin at best given the lack of evidence demonstrating a connection to the ramen noodle cartel.

Judge Orrick is set to make a decision on the life of the ramen noodles price-fixing class action lawsuit within the month.

The plaintiffs are represented by Bramson Plutzik Mahler & Birkhaeuser LLP, Izard Nobel LLP, Cohen Milstein Sellers & Toll, Gold Bennett Cera & Sidener LLP, Hausfeld LLP and The Terrell Law Group.

The Ramen Noodles Price Fixing Class Action Lawsuit is In Re: Korean Ramen Indirect Antitrust Litigation, Case No. 3:13-cv-04115, in the U.S. District Court for the Northern District of California.

UPDATE: On Dec. 17, 2018, a federal jury recently determined that Korean ramen noodle companies were not liable for alleged price-fixing which purchasers claim raised prices.

UPDATE 2: August 2019, a $350,000 settlement fund will be distributed between direct purchasers of Korean noodles that were allegedly the subject of a price-fixing scheme.