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Case Number: CGC-05-438477
Filing Date: Feb-07-2005 3:52
Juke Box: 001. Image: 01133321
COMPLAINT
LINDA PHILION VS. HEBEI WELCOME PHARMACEUTICAL CO. LTD et al
001001133321
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GUIDO SAVERI (22349)
R, ALEXANDER SAVER] (173102)
GEOFFREY C. RUSHING (126910)
CADIO ZIRPOLI (179108)
SAVERI & SAVERI, INC.
111 Pine Street, Suite 1700
San Francisco, CA 94111
Telephone: (415) 217-6810
Attorneys for Plaintiff
[Additional Counsel on Signature Page]
GOR F
ay LON PAR
ELLE D
FEB7 2005
Ll, Clerk
SUMMONS ISSUED
SUPERIOR COURT OF THE STATE OF CALIFORNIA
CITY AND COUNTY OF SAN FRANCISCO
UNLIMITED JURISDICTION
LINDA PHILION, on behalf of herself and
all others similarly situated,
Plaintiff,
v.
HEBEI WELCOME PHARMACEUTICAL
CO. LTD., JIANGSU JIANGSHAN
PHARMACEUTICAL CO. LTD.,
NORTHEAST PHARMACEUTICAL
GROUP CO. LTD., WEISHENG
PHARMACEUTICAL GROUP CO. LTD.,
SHIJIAZHUANG PHARMACEUTICAL
(USA) INC., CHINA PHARMACEUTICAL
GROUP, LTD., and DOES 1 through 100
inclusive,
Defendants.
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CivitCaseNo: ' 95~439477
CLASS ACTION
COMPLAINT FOR VIOLATIONS OF
THE CARTWRIGHT ACT AND THE
UNFAIR COMPETITION LAW.
DE 1D FOR JURY TRIA
Complaint for Violations of the Cartwright Act and the Unfair Competition Lawon rn nn FW NY —
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Plaintiff Linda Phition (hereinafter “Plaintiff”), on behalf of herself and as a
representative of a class of similarly-situated indirect purchasers in California of Vitamin C,
demanding a trial by jury, complains upon information and belief with respect to all allegations
and alleges as follows:
JURISDICTI D VE
1. This class action for price fixing and unfair competition arises and is brought
under California Business and Professions Code sections 16750(a) and 17204 to recover treble
damages and obtain equitable relief due to violations by the defendants and their co-conspirators,
as alleged herein, of the Cartwright Act (Business & Professions Code section 16720 ef seq.) and
the Unfair Competition Law (Business & Professions Code section 17200 et seq.) from
December 1, 2001, up to and including the date this complaint was filed (“Class Period’).
2. Venue is proper in this judicial district pursuant to the provisions of sections
16750(a) and 17203 of the California Business and Professions Code and sections 395{a) and
395.5 of the California Code of Civil Procedure. Each defendant either maintains an office,
transacts business, has an agent, or is found in the City and County of San Francisco. Each
defendant is within the jurisdiction of this Court for purposes of service of process, and many of
the unlawful acts done pursuant to the combination and conspiracy hereinafter alleged had a
direct effect on indirect purchasers of Vitamin C within the State of California and, more
particutarly within the City and County of San Francisco. The trade and commerce hereinafter
described is carried on, in part, within the State of California and, more particularly within the
City and County of San Francisco. :
3. No portion of this complaint is brought pursuant to federal law.
4, Named Plaintiff's individual damages do not exceed $75,000.00.
DEFINITIONS
5. The term “Person” or “Persons” includes all individuals, as well as all entities
defined in Cal. Bus. & Prof. Code Sections 16702 and 17201.
THE PARTIES
6. Plaintiff Linda Philion is a person residing in the State of California. During the _
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Class Period, Plaintiff Philion indirectly purchased Vitamin C from one or more of the
Defendants and has been injured by reason of the antitrust violations alleged in this Complaint.
7. Defendant Hebei Welcome Pharmaceutical Co. Ltd. (“Hebei Welcome”) isa
Chinese corporation with operations in the Hebei province of China. Hebei Welcome is a joint
venture between North China Pharmaceutical Holding Co. Ltd., Hong Kong Sanwei Intl. Co.
Ltd. And Hong Jinxian Co. Ltd. Hebei Welcome maintains offices in California at 815 W.
Naomi Ave., Arcadia, California.
8. Defendant Jiangsu Jiangshan Pharmaceutical Co. Ltd. (“Jiangsu Jiangshan”) is a
Chinese corporation based in the Jiangsu province of China. Jiangsu Jiangshan was founded in
1990 as a joint venture between Jiangsu Glucose Factory Zhonsgshan Co. (H.K.), Jioansu
Provincial Medicine & Health Product Import and Export Co. and Expert Assets Ltd.
9. Defendant Northeast Pharmaceutical Group Co. Ltd. (“Northeast
Pharmaceutical”) is a Chinese corporation based in the Liaoning province of China. Northeast
Pharmaceutical is the largest pharmaceutical enterprise in China. It has produced Vitamin C
since the early 1990's. In 2003, Northeast Pharmaceutical registered a total export value of $100
million for its Vitamin C products.
10. Defendant Weisheng Pharmaceutical Group Co. Ltd. (“Weisheng”) is a Chinese
corporation based in the Hebei province of China. Weisheng is an affiliate of the major
pharmaceutical corporation China Pharmaceutical Group Ltd.
11. Defendant Shijiazhuang Pharmaceutical (USA) Inc. (“Shijiazhuang”) is a Chinese
corporation based in the Hebei province of China, Shijiazhuang is an affiliate of Weisheng and
the major pharmaceutical corporation China Pharmaceutical Group Ltd. Shijiazhuang is
registered to do business in California at 5460 N. Peck Road, Suite A, Arcadia, California.
12. Defendant China Pharmaceutical Group, Ltd. (“China Pharmaceutical”) is a
Hong Kong corporation based in the Hebei province of China. China Pharmaceutical was
renamed from its former corporate name China Pharmaceutical Enterprise and Investment
Corporation Ltd. on May 7, 2003. China Pharmaceutical owns, controls and dominates it
affiliates Weisheng and Shijiazhuang and through these affiliates is engaged in the business of
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Complaint for Violations of the Cartwright Act and the Unfair Competition Lawwo ON DUH FW NY &
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manufacturing and selling Vitamin C, Collectively, Weisheng, Shijiazhuang and China
Pharmaceutical are referred to hereinafter as China Pharmaceutical,
13. Each of these defendants, directly and through affiliates that they dominate and
control in this country and outside the United States, is engaged in the business of manufacturing
and selling Vitamin C in the United States and throughout the world.
14. Various other persons, firms, and corporations have participated as co-
conspirators with defendants in the offenses charged and violations alleged herein and have
aided, abetted, and performed acts and made statements in furtherance of combinations in
restraint of trade and unfair business practices alleged herein, When and if Plaintiffs lear the
identity of such co-conspirators, Plaintiffs may seek leave to amend this complaint to add said
co-conspirators as defendants.
15. The true names and capacities, whether individual, corporate, associate,
representative, or otherwise of defendants named herein as DOES 1 through 100 are unknown to
Plaintiff at this time, and they are therefore sued by such fictitious names pursuant to Code of
Civil Procedure section 474. Plaintiff will amend this complaint to allege the true names and
capacities of DOES | through 100 when Plaintiff leams them. Each of DOES 1 through 100
defendants is in some manner legally responsible for the violations of law alleged herein.
16. The acts charged in this complaint as having been done by the defendants were
authorized, ordered, or done by their officers, agents, employees, or representatives, while
actively engaged in the management of the defendants’ businesses or affairs.
17. The defendants named in this complaint as well as the DOE defendants, along
with each of their co-conspirators, are referred to herein as the “Defendants.”
CLASS ACTION ALLEGATIONS
18. Plaintiff brings this action under California Code of Civil Procedure section 382,
on behalf of herself and as a representative of the following class:
All Persons located in the State of California who indirectly
furing the petod from December 1, 2001, to and including the
date of the filing of this complaint. Excluded from the Class are
governmental entities, any judge, justice or judicial officer
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Complaint for Violations of the Cartwright Act and the Unfair Competition Law19,
20.
residing over this matter and the members of his or her immediate
family, the Defendants and other manufacturers of Vitamin C,
along with their respective parents, subsidiaries and/or affiliates,
Also excluded from this class are the legal representatives, heirs,
successors and attorneys of any excluded person or entity, and any
person acting on behalf of any excluded person or entity.
Plaintiffs do not know the exact size of the class; based upon the amount of
commerce, however, Plaintiffs believe that the number of class members is so numerous that
joinder is impractical.
Numerous questions of law and fact are common to the class, including but not
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limited to the following:
a.
whether the Defendants conspired to fix, raise, maintain or stabilize prices
of Vitamin C in violation of the Cartwright Act and Unfair Competition
Law;
whether the contract, combination, conspiracy, and common course of
conduct were implemented and caused the price of Vitamin C to rise
above competitive levels;
whether the Defendants’ conduct caused injury to the business or property
of Plaintiffs and the members of the class and, if so, the appropriate class-
wide measure of damages;
the operative time period of the contract, combination, conspiracy, and
common course of conduct;
the nature and extent of class-wide injury and the measure of damages for
that injury;
whether the class is entitled to restitution; and
Whether irrespective of any combination or conspiracy, defendants or any
of them otherwise violated the Unfair Competition Law.
21, These and other questions of law and fact predominate over any questions
affecting only individual members of the class,
22. The claims of Plaintiff are typical of the claims of the class in that Plaintiff is an .
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indirect purchaser of Vitamin C like all the members of the class. Indeed, Plaintiff's indirect
purchases were in all relevant respects typical of purchases by other class members, and the
monetary damages and injunctive relief sought are common to the class.
23, Plaintiff will fairly and adequately protect the interests of the class in that
Plaintiff isa typical purchaser of Vitamin C, has no conflicts with any other members of the :
class, and is represented by experienced and able antitrust, class action counsel. The interests of
Plaintiff are coincident with, and not antagonistic to, those of the class members.
24, The questions of law and fact common to the members of the class predominate
over any questions affecting only individual members of the class. Class action treatment is
superior to the alternatives, if any, for the fair and efficient adjudication of this controversy.
Among other things, there is no interest by members of the class in individually controlling the
prosecution of separate actions, and it is desirable to concentrate the litigation of the claims made
herein in a single proceeding to provide small claimants with a forum in which to seek redress for
these violations of California law. Whatever difficulties may exist in the management of the
class action will be greatly outweighed by the benefits of the class action procedure, including,
but not limited to, providing claimants with a method for redress of claims that may otherwise
burden the Court with individual litigation.
NATURE OF TRADE AND COMMERCE
25. Vitamin C (also known as ascorbic asid) is a water-soluble vitamin. Vitamin C
plays an important role in the biosynthesis of collagen in skin and of connective tissue, bones and
teeth. It is thought to enhance the functioning of the immune system by acting as an antioxidant.
26. The manufacture of vitamin C is multi-million dollar a year industry worldwide.
The United States market for vitamin C exceeds $100 million per year.
- 27. Defendants are manufacturers of raw vitamins for bulk sales to customers.
Defendants sell vitamin C to food and pharmaceutical distributors and manufacturers in the
United States for human consumption. The vitamins manufactured by Defendants are commonly
used in the United States as an ingredient in food and beverage products and the production of
vitamins packaged for consumer use under major brand names,
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28. Defendants also sell vitamin C to manufacturers and users of animal and animal
nutrition products. The bulk vitamin products manufactured by Defendants are used as an
ingredient in animal nutrition products and animal feed premixes.
29. The conduct of defendants and their co-conspirators has directly, substantially
and foreseeably restrained such trade and commerce in California.
FACTUAL BACKGROUND
30. Inthe early 1990s, the worldwide vitamin C market was dominated by
European and Japanese manufacturers. During 1990 to 1995, these companies engaged in a
combination and conspiracy to suppress competition and fix prices for vitamin C.
31. Through the end of the 1990s the reduction in vitamin C prices and other factors
resulted in an industry consolidation in China to four major manufacturers- the four manufacturer
defendants in this case, Hebei Welcome, Jiangsu Jiangshan, Northeast Pharmaceutical, and
Weisheng (the “defendant manufacturers”).
A, Violations of Antitrust Laws
32, Beginning December 2001, defendants and their co-conspirators formed a cartel
to control prices and the volume of exports for vitamin C, At a meeting of the Westem Medicine
Department of the Association of Importers and Exporters of Medicines and Health Products of
China. (the “Association) in December 2001, defendants and the Association successfully
reached an autonomy agreement for Chinese manufacturers of vitamin C in which they agreed to
control export quantities and achieve stable and enhanced price goals. The cartel members agreed
to restrict their exports of vitamin C in order to create a shortage of supply in the international
market. The cartel members agreed to “restrict quantity to safegaurd prices, export in a balanced
and orderly manner and adjust dynamically.” The agreements of the cartel members were
facilitated by the efforts of their trade association.
33. Defendants thus began their ongoing combination and conspiracy to suppress
competition by fixing the price and controlling export sale volumes of vitamin C offered for sale
to customers of the United States and elsewhere.
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34. The formation of the cartel in December 2001 resulted in price increases of
vitamin C in the United States from approximately $2.50 per kilogram in December 2001 to as
high as $7 per kilogram during December 2002. Defendant China Pharmaceutical reported in its
2003 annual report that average prices during 2002 rose from $3.20 per kilogram to $5.90 per
kilogram, an increase of 84 percent. China Pharmaceutical also reported gross profit margins for
its vitamin C production of 60.2 percent in 2002, an increase of 28.1 percent.
35. During the period of the charged combination and conspiracy, Defendants and
their co-conspirators have participated in meetings and conversations in China and elsewhere in
which the prices, volume of sales and exports to California and the United States, and markets
for vitamins were discussed and agreed upon. These meetings have also been coordinated with
trade association meetings for associations in which Defendants are members.
36, At the above-described meetings and during the period of conspiracy,
Defendants and others agreed to and did eliminate, suppress, and limit competition, including by:
(a) discussing the product volumes and prices of vitamin C for export to
California, the United States and elsewhere;
(6) agreeing to control the supply of vitamin C for export to California the
United States and elsewhere;
(c) agreeing to increase and maintain prices for vitamin C for the sale of
vitamin C in California, the United States and elsewhere; and
(d) _ agreeing to control the worldwide market for vitamin C.
37. During the period of the cartel, executives from the Defendants have also warned
each other against the adverse effects of the past price wars in vitamin C,
38. Defendants’ illegal concerted conduct has been facilitated by their concentrated
control over sales of vitamin C. Together, Defendants’ sales constitute approximately 60 percent
of all vitamin C sales in the world and virtually 100 percent of the manufacturers who can
produce vitamin C for a cost below $4.50 to $5 per kilogram.
39. Following the collusive price increases achieved in 2002, during 2003, the
combination of supply restrictions by the cartel and unanticipated increases in world demand for
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vitamin C, attributable in part to the outbreak of SARS in the Spring and Summer of 2003,
allowed the cartel to achieve remarkable price increases. Prices jumped to as high as $15 per
kilogram in April 2003.
40. By approximately the third quarter of 2003, although prices remained at super
competitive levels, cartel members began opportunistically reducing prices to obtain increased
sales in the enormously profitable market. Spikes in demand for vitamin C increased the
temptation among cartel members to undercut each other’s prices in order to grab super-normal
profits that still were substantially above competitive prices. Labeled a”price war” by the
industry, the competition actually reflected price reductions at levels above collusively arranged
prices.
41, To address the price cutting, the association called an”emergency meeting” in
late November or December 2003, which was attended by representatives of each of the
defendants. The association discussed with defendants at the meeting how they would
rationalize the market and restrain and limit the production level of vitamin C to increase prices.
- 42. In December 2003, defendants and their representatives, together with members
of the Association, also met at the annual China Exhibition of World Pharmaceutical Ingredients.
At this exhibition, defendants and the Association again met and devised plans to rationalize the
market and to limit production levels and increase prices. The Association also warned
defendants that it was impossible for any of them to monopolize the market to the detriment of
the others.
43. The emergency meeting called by the Association and other efforts by cartel
members were successful. Prices for vitamin C in December 2003 increased from a low of $4.20
per kilogram at the beginning of the month to over $9 per kilogram by the end of the month.
44, In June of 2004, in reaction to price reductions from their highs in December
2003, defendants agreed to also shut down production for equipment maintenance. Defendants
have also continued to agree on export volumes to the United States. These supply restrictions
again have had the result of stabilizing prices.
45, — Despite some price increases in 2004, the collusive arrangements of the cartel
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Complaint for Violations of the Cartwright Act and the Unfair Competition Law=
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have continued to maintain prices well above those of a competitive market.
46. The cartel established by defendants and their co-conspirators continues its illegal
47. Beginning at a date unknown to Plaintiff, but at least as early as December 1,
2001, and continuing thereafter to and including the date of the filing of this complaint, the
Defendants engaged in a continuing trust, combination and conspiracy for the following
conduct today.
purposes:
@)
(b)
(c)
@)
©)
to create and carry out unreasonable restrictions on the free flow of the
trade and commerce of Vitamin C described above;
to increase the price of Vitamin C;
to allocate the market for Vitamin C;
to prevent or restrain competition in the sale of Vitamin C;
and
to fix the price of Vitamin C,
48. The aforesaid combination and conspiracy consisted of a continuing express or
tacit combination, agreement, understanding, scheme and concert of action among the
Defendants, of which the substantial terms were to fix, raise, maintain and stabilize the prices of
Vitamin C sold in the State of California at supra-competitive levels,
49, _ For the purpose of forming and effectuating the aforesaid combination and
conspiracy, the Defendants have done those things which they agreed and conspired to do,
including, among other things:
@
(b)
©)
agreements reached.
participating in conversations and meetings to discuss the prices of
Vitamin C sold in California; ‘
agreeing, during those conversations and meetings, to charge prices at
certain levels and otherwise to increase and maintain prices of Vitamin C
sold in California;
issuing price announcements and price quotations in accordance with the
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Complaint for Violations of the Cartwright Act and the Unfair Competition Law18
C C
50. In formulating and effectuating the trust, combination and conspiracy, the
Defendarits have committed acts that they combined and contracted to do as part of an illegal
price-fixing scheme, including, but not limited to, the following:
@)
)
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@
discussing, exchanging and deciding among themselves the prices and
other terms of sale for Vitamin C in San Francisco and elsewhere in the
State of California;
agreeing to raise, stabilize and maintain the prices of Vitamin C in San
Francisco and elsewhere in the State of California;
agreeing to charge certain prices for Vitamin C in San Francisco and
elsewhere in the State of California; and
receiving and accepting payments from customers for Vitamin C sold at
agreed upon prices in San Francisco and elsewhere in the State of
California.
51. Beginning at a date unknown to Plaintiff, but at least as early as December 1,
2001 and continuing up to and including the date of the filing of this complaint, the Defendants
have continued to discuss and agree upon prices of Vitamin C sold in the State of California.
The combination and conspiracy alleged herein was created and effectuated through secret
communications among representatives of the Defendants. Each Defendant engaged in one or
more overt acts in furtherance of the combination and conspiracy, and each engaged in and
attended conspiratorial conversations and/or meetings:
others:
52. The aforesaid combination and conspiracy has had the following effects, among
(a)
)
)
buyers of Vitamin C from the Defendants were deprived of free and open
competition in the purchase of Vitamin C;
competition in the sale of Vitamin C among the Defendants was
restrained, suppressed and eliminated; and
prices of Vitamin C sold by the Defendants were raised, fixed and
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Complaint for Violations of the Cartwright Act and the Unfair Competition Law-
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maintained at astificial and noncompetitive levels.
53. Asadirect and proximate result of the Defendants’ unlawful conduct, Plaintiff
and members of the class have been injured in their business and property in that they paid more
for Vitamin C than they would have paid absent Defendants’ unlawful conduct.
Violation Of Californie Business e Profesctons Code §16720 Et Seq.
[The Cartwright Act]
54. Plaintiff re-alleges and incorporates each and every allegation set forth in the
paragraphs above,
55. Beginning at least as early as December 1, 2001, the exact date being unknown to
Plaintiff, and continuing up to and including the date of the filing of this complaint, the
Defendants have engaged in a continuing contract, combination, conspiracy and course of
conduct to fix prices of Vitamin C in violation of California Business & Professions Code
section 16720 ef seq.
56. The contract, combination, conspiracy and course of conduct alleged herein
consisted of a continuing agreement, understanding, and concert of action among the Defendants,
of which the substantial terms were to raise, fix, and maintain prices of Vitamin C throughout the
United States, including the State of California.
57. For the purpose of forming and carrying out the alleged combination and
conspiracy, Defendants and their co-conspirators did those things that they combined and
conspired to do, including, but not limited to meeting to discuss and agree upon future price
increases, and other activities designed to implement the illegal price-fixing conspiracy.
58. During the Class Period, Plaintiff and the other members of the class indirectly
purchased Vitamin C from the Defendants. By reason of the violations of California’s antitrust
laws alleged herein, Plaintiff and the other members of the class paid more for Vitamin C than
they would have in the absence of the Defendants’ illegal contract, combination, and conspiracy.
Asa result, Plaintiff and the members of the class have been injured and have suffered damages
in an amount presently undetermined.
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Violation Of California! Pusiness & Professions Code §17200 Et Seq.
[The Unfair Competition Law]
59. Plaintiff re-alleges and incorporate each and every allegation set forth in the
paragraphs above.
60. Section 17200 of the California Business & Professions Code prohibits unfair
competition by prohibiting any “unlawful, unfair or fraudulent business acts or practice ....”
61, This Complaint is filed and these proceedings are instituted pursuant to sections
17203 and 17204 of the California Business and Professions Code, to obtain relief from the
Defendants for business acts and practices, as alleged herein, that violate the Unfair Competition
Law. Except as specifically provided herein to the contrary, the alleged violations of the Unfair
Competition Law charged herein are distinct and independent of the alleged violations of the
Cartwright Law.
62. The Defendants’ conduct as alleged herein violates the Unfair Competition Law.
The business acts and practices of Defendants, as alleged herein, constituted and constitute a
common continuous and continuing course of conduct of unfair competition by means of unfair,
unlawful and/or fraudulent business acts or practices within the meaning of the Unfair
Competition Law including, but in no way limited to, the following:
a. the violations of Business and Professions Code section 16720 et seq., set
forth above, are unlawful;
b. Defendants’ business acts and practices, as described above, whether or not
in violation of Business and Professions Code section 16720 et seg., and
whether or not the product of concerted action are otherwise unfair,
unconscionable, unlawful and fraudulent;
c. Defendants’ business acts and practices are unfair to consumers in the
State of Califomia within the meaning of Business and Professions Code
section 17200; and
d. Defendants’ acts and practices are fraudulent within the meaning of
Business and Professions Code section 17200.
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63. — The illegal conduct alleged herein is continuing and there is no indication that
Defendants will cease such activity into the future.
64. The business acts and practices of Defendants, as alleged herein, constituted and
constitute a common continuous and continuing plan and scheme to deceive the public by means
of unfair, unlawful and/or fraudulent business practices, affecting the trade or commerce in
Copper Tubing in violation of California Business & Professions Code section 17200 et seq.
65. Defendants’ acts, omissions, misrepresentations, practices, and non-disclosures, as
alleged herein, constituted and constitute unfair, unlawful and/or fraudulent business practices
within the meaning of California Business & Professions Code section 17200 et seq.
66. Plaintiff and the members of the class are entitled to relief, including futl
restitution of all revenues, earnings, profits, compensation and benefits that may have been
obtained by defendants as a result of such business acts or practices and an injunction enjoining
Defendants to cease and desist from engaging in the practices described herein.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff, on behalf of herself and the members of the class, prays for
judgment against the Defendants, jointly and severally, as follows:
1 That the Court certify a California Class of indirect purchasers of Vitamin C
manufactured and sold by Defendants;
2. On the First Cause of Action:
a. That the unlawful trust, combination, agreement and course of conduct
alleged herein be adjudged and decreed to be in violation of California
Business & Professions Code section 16720 et seg.(Cartwright Act), and
that Plaintiff and the members of the class have been injured and damaged
as a result of said violation of the Cartwright Act;
b. That Plaintiff and the other members of the class recover treble the amount
of the damages sustained by each of them by reason of the violations of
California Business & Professions Code section 16720 et seq.;
c. For reasonable attorneys’ fees pursuant to section 16750(a) of the Business
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& Professions Code;
3. On the Second Cause of Action:
a. A declaration that Defendants have engaged in unlawful, unfair, and
deceptive business acts and practices in violation of California Business &
Professions Code §17200 et seq.; :
db. That Defendants, their agents, servants, and employees, and all persons
acting, directly or indirectly, in concert with them, be ordered to restore all
funds to each member of the class acquired by means of any act or practice
declared by this Court to be unlawful or to constitute unfair competition
under section 17200 er seq. of the California Business & Professions
Code;
c. That Defendants be ordered to make restitution to Plaintiff and each and
every member of the class due to their unfair competition pursuant to
California Business & Professions Code sections 17203 and 17204;
4. For pre-judgment interest at the highest legal rate;
5. For reasonable attorneys’ fees and costs of suit; and
6. For such other and further relief as the Court may deem just and proper.
JURY TRIAL DEMAND
Plaintiffs hereby demand a trial by jury for all issues so triable.
Dated: February 7, 2005. Wn .
AL lo. 2234
R. ALEXANDER SAVERI (No.173102)
GEOFFREY C. RUSHING (No. 126910)
CADIO ZIRPOLI (No. 179108)
SAVERI & SAVERI, INC.
111 Pine Street, Suite 1700
San Francisco, CA 94111
Telephone: (415) 217-6810
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Complaint for Violations of the Cartwright Act and the Unfair Competition Law-_
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RANDY R. RENICK (No. 179652)
LAW OFFICES OF RANDY R. RENICK
128 North Fair Oaks Avenue, Suite 204
Pasadena, CA 91103
Telephone: (626) 585-9600
Attorneys for Plaintiff
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Complaint for Violations of the Cartwright Act and the Unfair Competition Law
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AAO San Francisco Superior Courts Information Technology Group Document Scanning Lead Sheet Feb-08-2005 4:23 pm Case Number: CGC-05-438477 Filing Date: Feb-07-2005 3:52 Juke Box: 001. Image: 01133321 COMPLAINT LINDA PHILION VS. HEBEI WELCOME PHARMACEUTICAL CO. LTD et al 001001133321 Instructions: Please place this sheet on top of the document to be scanned.wo eon DN HW FF WY NH nN RW NR WYN NY NN wm me eee RBNSRRBRRRBEEBSGCRWVIABDEBHRAS C GUIDO SAVERI (22349) R, ALEXANDER SAVER] (173102) GEOFFREY C. RUSHING (126910) CADIO ZIRPOLI (179108) SAVERI & SAVERI, INC. 111 Pine Street, Suite 1700 San Francisco, CA 94111 Telephone: (415) 217-6810 Attorneys for Plaintiff [Additional Counsel on Signature Page] GOR F ay LON PAR ELLE D FEB7 2005 Ll, Clerk SUMMONS ISSUED SUPERIOR COURT OF THE STATE OF CALIFORNIA CITY AND COUNTY OF SAN FRANCISCO UNLIMITED JURISDICTION LINDA PHILION, on behalf of herself and all others similarly situated, Plaintiff, v. HEBEI WELCOME PHARMACEUTICAL CO. LTD., JIANGSU JIANGSHAN PHARMACEUTICAL CO. LTD., NORTHEAST PHARMACEUTICAL GROUP CO. LTD., WEISHENG PHARMACEUTICAL GROUP CO. LTD., SHIJIAZHUANG PHARMACEUTICAL (USA) INC., CHINA PHARMACEUTICAL GROUP, LTD., and DOES 1 through 100 inclusive, Defendants. 1 CivitCaseNo: ' 95~439477 CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE CARTWRIGHT ACT AND THE UNFAIR COMPETITION LAW. DE 1D FOR JURY TRIA Complaint for Violations of the Cartwright Act and the Unfair Competition Lawon rn nn FW NY — NN NY BR Nm eee C Cc Plaintiff Linda Phition (hereinafter “Plaintiff”), on behalf of herself and as a representative of a class of similarly-situated indirect purchasers in California of Vitamin C, demanding a trial by jury, complains upon information and belief with respect to all allegations and alleges as follows: JURISDICTI D VE 1. This class action for price fixing and unfair competition arises and is brought under California Business and Professions Code sections 16750(a) and 17204 to recover treble damages and obtain equitable relief due to violations by the defendants and their co-conspirators, as alleged herein, of the Cartwright Act (Business & Professions Code section 16720 ef seq.) and the Unfair Competition Law (Business & Professions Code section 17200 et seq.) from December 1, 2001, up to and including the date this complaint was filed (“Class Period’). 2. Venue is proper in this judicial district pursuant to the provisions of sections 16750(a) and 17203 of the California Business and Professions Code and sections 395{a) and 395.5 of the California Code of Civil Procedure. Each defendant either maintains an office, transacts business, has an agent, or is found in the City and County of San Francisco. Each defendant is within the jurisdiction of this Court for purposes of service of process, and many of the unlawful acts done pursuant to the combination and conspiracy hereinafter alleged had a direct effect on indirect purchasers of Vitamin C within the State of California and, more particutarly within the City and County of San Francisco. The trade and commerce hereinafter described is carried on, in part, within the State of California and, more particularly within the City and County of San Francisco. : 3. No portion of this complaint is brought pursuant to federal law. 4, Named Plaintiff's individual damages do not exceed $75,000.00. DEFINITIONS 5. The term “Person” or “Persons” includes all individuals, as well as all entities defined in Cal. Bus. & Prof. Code Sections 16702 and 17201. THE PARTIES 6. Plaintiff Linda Philion is a person residing in the State of California. During the _ 2 Complaint for Violations of the Cartwright Act and the Unfair Competition Lawwo wo nN DH UH F&F YW YN = y NNN Nm eis BNRRRBRBNHBESESZSWIABEBSHAS Class Period, Plaintiff Philion indirectly purchased Vitamin C from one or more of the Defendants and has been injured by reason of the antitrust violations alleged in this Complaint. 7. Defendant Hebei Welcome Pharmaceutical Co. Ltd. (“Hebei Welcome”) isa Chinese corporation with operations in the Hebei province of China. Hebei Welcome is a joint venture between North China Pharmaceutical Holding Co. Ltd., Hong Kong Sanwei Intl. Co. Ltd. And Hong Jinxian Co. Ltd. Hebei Welcome maintains offices in California at 815 W. Naomi Ave., Arcadia, California. 8. Defendant Jiangsu Jiangshan Pharmaceutical Co. Ltd. (“Jiangsu Jiangshan”) is a Chinese corporation based in the Jiangsu province of China. Jiangsu Jiangshan was founded in 1990 as a joint venture between Jiangsu Glucose Factory Zhonsgshan Co. (H.K.), Jioansu Provincial Medicine & Health Product Import and Export Co. and Expert Assets Ltd. 9. Defendant Northeast Pharmaceutical Group Co. Ltd. (“Northeast Pharmaceutical”) is a Chinese corporation based in the Liaoning province of China. Northeast Pharmaceutical is the largest pharmaceutical enterprise in China. It has produced Vitamin C since the early 1990's. In 2003, Northeast Pharmaceutical registered a total export value of $100 million for its Vitamin C products. 10. Defendant Weisheng Pharmaceutical Group Co. Ltd. (“Weisheng”) is a Chinese corporation based in the Hebei province of China. Weisheng is an affiliate of the major pharmaceutical corporation China Pharmaceutical Group Ltd. 11. Defendant Shijiazhuang Pharmaceutical (USA) Inc. (“Shijiazhuang”) is a Chinese corporation based in the Hebei province of China, Shijiazhuang is an affiliate of Weisheng and the major pharmaceutical corporation China Pharmaceutical Group Ltd. Shijiazhuang is registered to do business in California at 5460 N. Peck Road, Suite A, Arcadia, California. 12. Defendant China Pharmaceutical Group, Ltd. (“China Pharmaceutical”) is a Hong Kong corporation based in the Hebei province of China. China Pharmaceutical was renamed from its former corporate name China Pharmaceutical Enterprise and Investment Corporation Ltd. on May 7, 2003. China Pharmaceutical owns, controls and dominates it affiliates Weisheng and Shijiazhuang and through these affiliates is engaged in the business of 3 Complaint for Violations of the Cartwright Act and the Unfair Competition Lawwo ON DUH FW NY & NN Nei manufacturing and selling Vitamin C, Collectively, Weisheng, Shijiazhuang and China Pharmaceutical are referred to hereinafter as China Pharmaceutical, 13. Each of these defendants, directly and through affiliates that they dominate and control in this country and outside the United States, is engaged in the business of manufacturing and selling Vitamin C in the United States and throughout the world. 14. Various other persons, firms, and corporations have participated as co- conspirators with defendants in the offenses charged and violations alleged herein and have aided, abetted, and performed acts and made statements in furtherance of combinations in restraint of trade and unfair business practices alleged herein, When and if Plaintiffs lear the identity of such co-conspirators, Plaintiffs may seek leave to amend this complaint to add said co-conspirators as defendants. 15. The true names and capacities, whether individual, corporate, associate, representative, or otherwise of defendants named herein as DOES 1 through 100 are unknown to Plaintiff at this time, and they are therefore sued by such fictitious names pursuant to Code of Civil Procedure section 474. Plaintiff will amend this complaint to allege the true names and capacities of DOES | through 100 when Plaintiff leams them. Each of DOES 1 through 100 defendants is in some manner legally responsible for the violations of law alleged herein. 16. The acts charged in this complaint as having been done by the defendants were authorized, ordered, or done by their officers, agents, employees, or representatives, while actively engaged in the management of the defendants’ businesses or affairs. 17. The defendants named in this complaint as well as the DOE defendants, along with each of their co-conspirators, are referred to herein as the “Defendants.” CLASS ACTION ALLEGATIONS 18. Plaintiff brings this action under California Code of Civil Procedure section 382, on behalf of herself and as a representative of the following class: All Persons located in the State of California who indirectly furing the petod from December 1, 2001, to and including the date of the filing of this complaint. Excluded from the Class are governmental entities, any judge, justice or judicial officer 4 Complaint for Violations of the Cartwright Act and the Unfair Competition Law19, 20. residing over this matter and the members of his or her immediate family, the Defendants and other manufacturers of Vitamin C, along with their respective parents, subsidiaries and/or affiliates, Also excluded from this class are the legal representatives, heirs, successors and attorneys of any excluded person or entity, and any person acting on behalf of any excluded person or entity. Plaintiffs do not know the exact size of the class; based upon the amount of commerce, however, Plaintiffs believe that the number of class members is so numerous that joinder is impractical. Numerous questions of law and fact are common to the class, including but not 27 28 limited to the following: a. whether the Defendants conspired to fix, raise, maintain or stabilize prices of Vitamin C in violation of the Cartwright Act and Unfair Competition Law; whether the contract, combination, conspiracy, and common course of conduct were implemented and caused the price of Vitamin C to rise above competitive levels; whether the Defendants’ conduct caused injury to the business or property of Plaintiffs and the members of the class and, if so, the appropriate class- wide measure of damages; the operative time period of the contract, combination, conspiracy, and common course of conduct; the nature and extent of class-wide injury and the measure of damages for that injury; whether the class is entitled to restitution; and Whether irrespective of any combination or conspiracy, defendants or any of them otherwise violated the Unfair Competition Law. 21, These and other questions of law and fact predominate over any questions affecting only individual members of the class, 22. The claims of Plaintiff are typical of the claims of the class in that Plaintiff is an . 5 Complaint for Violations of the Cartwright Act and the Unfair Competition Lawwo Oe NY DH UH WN y eee BNRRBRRBBRESCSIARREBTE ES C C indirect purchaser of Vitamin C like all the members of the class. Indeed, Plaintiff's indirect purchases were in all relevant respects typical of purchases by other class members, and the monetary damages and injunctive relief sought are common to the class. 23, Plaintiff will fairly and adequately protect the interests of the class in that Plaintiff isa typical purchaser of Vitamin C, has no conflicts with any other members of the : class, and is represented by experienced and able antitrust, class action counsel. The interests of Plaintiff are coincident with, and not antagonistic to, those of the class members. 24, The questions of law and fact common to the members of the class predominate over any questions affecting only individual members of the class. Class action treatment is superior to the alternatives, if any, for the fair and efficient adjudication of this controversy. Among other things, there is no interest by members of the class in individually controlling the prosecution of separate actions, and it is desirable to concentrate the litigation of the claims made herein in a single proceeding to provide small claimants with a forum in which to seek redress for these violations of California law. Whatever difficulties may exist in the management of the class action will be greatly outweighed by the benefits of the class action procedure, including, but not limited to, providing claimants with a method for redress of claims that may otherwise burden the Court with individual litigation. NATURE OF TRADE AND COMMERCE 25. Vitamin C (also known as ascorbic asid) is a water-soluble vitamin. Vitamin C plays an important role in the biosynthesis of collagen in skin and of connective tissue, bones and teeth. It is thought to enhance the functioning of the immune system by acting as an antioxidant. 26. The manufacture of vitamin C is multi-million dollar a year industry worldwide. The United States market for vitamin C exceeds $100 million per year. - 27. Defendants are manufacturers of raw vitamins for bulk sales to customers. Defendants sell vitamin C to food and pharmaceutical distributors and manufacturers in the United States for human consumption. The vitamins manufactured by Defendants are commonly used in the United States as an ingredient in food and beverage products and the production of vitamins packaged for consumer use under major brand names, 6 : Complaint for Violations of the Cartwright Act and the Unfair Competition Lawow on A WH FF WN = Se = em wv nN —- Oo 28. Defendants also sell vitamin C to manufacturers and users of animal and animal nutrition products. The bulk vitamin products manufactured by Defendants are used as an ingredient in animal nutrition products and animal feed premixes. 29. The conduct of defendants and their co-conspirators has directly, substantially and foreseeably restrained such trade and commerce in California. FACTUAL BACKGROUND 30. Inthe early 1990s, the worldwide vitamin C market was dominated by European and Japanese manufacturers. During 1990 to 1995, these companies engaged in a combination and conspiracy to suppress competition and fix prices for vitamin C. 31. Through the end of the 1990s the reduction in vitamin C prices and other factors resulted in an industry consolidation in China to four major manufacturers- the four manufacturer defendants in this case, Hebei Welcome, Jiangsu Jiangshan, Northeast Pharmaceutical, and Weisheng (the “defendant manufacturers”). A, Violations of Antitrust Laws 32, Beginning December 2001, defendants and their co-conspirators formed a cartel to control prices and the volume of exports for vitamin C, At a meeting of the Westem Medicine Department of the Association of Importers and Exporters of Medicines and Health Products of China. (the “Association) in December 2001, defendants and the Association successfully reached an autonomy agreement for Chinese manufacturers of vitamin C in which they agreed to control export quantities and achieve stable and enhanced price goals. The cartel members agreed to restrict their exports of vitamin C in order to create a shortage of supply in the international market. The cartel members agreed to “restrict quantity to safegaurd prices, export in a balanced and orderly manner and adjust dynamically.” The agreements of the cartel members were facilitated by the efforts of their trade association. 33. Defendants thus began their ongoing combination and conspiracy to suppress competition by fixing the price and controlling export sale volumes of vitamin C offered for sale to customers of the United States and elsewhere. 7 Complaint for Violations of the Cartwright Act and the Unfair Competition Lawoe nN DN A ek WN NY NN NH NY NY NN Nm ee oN ND UN kk YW N KF oO ODO we YN DH NH FWY NY — O&O C C 34. The formation of the cartel in December 2001 resulted in price increases of vitamin C in the United States from approximately $2.50 per kilogram in December 2001 to as high as $7 per kilogram during December 2002. Defendant China Pharmaceutical reported in its 2003 annual report that average prices during 2002 rose from $3.20 per kilogram to $5.90 per kilogram, an increase of 84 percent. China Pharmaceutical also reported gross profit margins for its vitamin C production of 60.2 percent in 2002, an increase of 28.1 percent. 35. During the period of the charged combination and conspiracy, Defendants and their co-conspirators have participated in meetings and conversations in China and elsewhere in which the prices, volume of sales and exports to California and the United States, and markets for vitamins were discussed and agreed upon. These meetings have also been coordinated with trade association meetings for associations in which Defendants are members. 36, At the above-described meetings and during the period of conspiracy, Defendants and others agreed to and did eliminate, suppress, and limit competition, including by: (a) discussing the product volumes and prices of vitamin C for export to California, the United States and elsewhere; (6) agreeing to control the supply of vitamin C for export to California the United States and elsewhere; (c) agreeing to increase and maintain prices for vitamin C for the sale of vitamin C in California, the United States and elsewhere; and (d) _ agreeing to control the worldwide market for vitamin C. 37. During the period of the cartel, executives from the Defendants have also warned each other against the adverse effects of the past price wars in vitamin C, 38. Defendants’ illegal concerted conduct has been facilitated by their concentrated control over sales of vitamin C. Together, Defendants’ sales constitute approximately 60 percent of all vitamin C sales in the world and virtually 100 percent of the manufacturers who can produce vitamin C for a cost below $4.50 to $5 per kilogram. 39. Following the collusive price increases achieved in 2002, during 2003, the combination of supply restrictions by the cartel and unanticipated increases in world demand for 8 Complaint for Violations of the Cartwright Act and the Unfair Competition Lawwo ON KH WH BW ND & nN NY MN NMR NN Se ee ewe Be ew Se ew eH Se BSRRRPBOBRES EEA ABDBEBHAS C Cc vitamin C, attributable in part to the outbreak of SARS in the Spring and Summer of 2003, allowed the cartel to achieve remarkable price increases. Prices jumped to as high as $15 per kilogram in April 2003. 40. By approximately the third quarter of 2003, although prices remained at super competitive levels, cartel members began opportunistically reducing prices to obtain increased sales in the enormously profitable market. Spikes in demand for vitamin C increased the temptation among cartel members to undercut each other’s prices in order to grab super-normal profits that still were substantially above competitive prices. Labeled a”price war” by the industry, the competition actually reflected price reductions at levels above collusively arranged prices. 41, To address the price cutting, the association called an”emergency meeting” in late November or December 2003, which was attended by representatives of each of the defendants. The association discussed with defendants at the meeting how they would rationalize the market and restrain and limit the production level of vitamin C to increase prices. - 42. In December 2003, defendants and their representatives, together with members of the Association, also met at the annual China Exhibition of World Pharmaceutical Ingredients. At this exhibition, defendants and the Association again met and devised plans to rationalize the market and to limit production levels and increase prices. The Association also warned defendants that it was impossible for any of them to monopolize the market to the detriment of the others. 43. The emergency meeting called by the Association and other efforts by cartel members were successful. Prices for vitamin C in December 2003 increased from a low of $4.20 per kilogram at the beginning of the month to over $9 per kilogram by the end of the month. 44, In June of 2004, in reaction to price reductions from their highs in December 2003, defendants agreed to also shut down production for equipment maintenance. Defendants have also continued to agree on export volumes to the United States. These supply restrictions again have had the result of stabilizing prices. 45, — Despite some price increases in 2004, the collusive arrangements of the cartel 9 Complaint for Violations of the Cartwright Act and the Unfair Competition Law= oon aA HH fF YW NY C have continued to maintain prices well above those of a competitive market. 46. The cartel established by defendants and their co-conspirators continues its illegal 47. Beginning at a date unknown to Plaintiff, but at least as early as December 1, 2001, and continuing thereafter to and including the date of the filing of this complaint, the Defendants engaged in a continuing trust, combination and conspiracy for the following conduct today. purposes: @) (b) (c) @) ©) to create and carry out unreasonable restrictions on the free flow of the trade and commerce of Vitamin C described above; to increase the price of Vitamin C; to allocate the market for Vitamin C; to prevent or restrain competition in the sale of Vitamin C; and to fix the price of Vitamin C, 48. The aforesaid combination and conspiracy consisted of a continuing express or tacit combination, agreement, understanding, scheme and concert of action among the Defendants, of which the substantial terms were to fix, raise, maintain and stabilize the prices of Vitamin C sold in the State of California at supra-competitive levels, 49, _ For the purpose of forming and effectuating the aforesaid combination and conspiracy, the Defendants have done those things which they agreed and conspired to do, including, among other things: @ (b) ©) agreements reached. participating in conversations and meetings to discuss the prices of Vitamin C sold in California; ‘ agreeing, during those conversations and meetings, to charge prices at certain levels and otherwise to increase and maintain prices of Vitamin C sold in California; issuing price announcements and price quotations in accordance with the 10 Complaint for Violations of the Cartwright Act and the Unfair Competition Law18 C C 50. In formulating and effectuating the trust, combination and conspiracy, the Defendarits have committed acts that they combined and contracted to do as part of an illegal price-fixing scheme, including, but not limited to, the following: @) ) ©) @ discussing, exchanging and deciding among themselves the prices and other terms of sale for Vitamin C in San Francisco and elsewhere in the State of California; agreeing to raise, stabilize and maintain the prices of Vitamin C in San Francisco and elsewhere in the State of California; agreeing to charge certain prices for Vitamin C in San Francisco and elsewhere in the State of California; and receiving and accepting payments from customers for Vitamin C sold at agreed upon prices in San Francisco and elsewhere in the State of California. 51. Beginning at a date unknown to Plaintiff, but at least as early as December 1, 2001 and continuing up to and including the date of the filing of this complaint, the Defendants have continued to discuss and agree upon prices of Vitamin C sold in the State of California. The combination and conspiracy alleged herein was created and effectuated through secret communications among representatives of the Defendants. Each Defendant engaged in one or more overt acts in furtherance of the combination and conspiracy, and each engaged in and attended conspiratorial conversations and/or meetings: others: 52. The aforesaid combination and conspiracy has had the following effects, among (a) ) ) buyers of Vitamin C from the Defendants were deprived of free and open competition in the purchase of Vitamin C; competition in the sale of Vitamin C among the Defendants was restrained, suppressed and eliminated; and prices of Vitamin C sold by the Defendants were raised, fixed and u Complaint for Violations of the Cartwright Act and the Unfair Competition Law- oo nN DH UH F&F HY NY 10 Cc C maintained at astificial and noncompetitive levels. 53. Asadirect and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the class have been injured in their business and property in that they paid more for Vitamin C than they would have paid absent Defendants’ unlawful conduct. Violation Of Californie Business e Profesctons Code §16720 Et Seq. [The Cartwright Act] 54. Plaintiff re-alleges and incorporates each and every allegation set forth in the paragraphs above, 55. Beginning at least as early as December 1, 2001, the exact date being unknown to Plaintiff, and continuing up to and including the date of the filing of this complaint, the Defendants have engaged in a continuing contract, combination, conspiracy and course of conduct to fix prices of Vitamin C in violation of California Business & Professions Code section 16720 ef seq. 56. The contract, combination, conspiracy and course of conduct alleged herein consisted of a continuing agreement, understanding, and concert of action among the Defendants, of which the substantial terms were to raise, fix, and maintain prices of Vitamin C throughout the United States, including the State of California. 57. For the purpose of forming and carrying out the alleged combination and conspiracy, Defendants and their co-conspirators did those things that they combined and conspired to do, including, but not limited to meeting to discuss and agree upon future price increases, and other activities designed to implement the illegal price-fixing conspiracy. 58. During the Class Period, Plaintiff and the other members of the class indirectly purchased Vitamin C from the Defendants. By reason of the violations of California’s antitrust laws alleged herein, Plaintiff and the other members of the class paid more for Vitamin C than they would have in the absence of the Defendants’ illegal contract, combination, and conspiracy. Asa result, Plaintiff and the members of the class have been injured and have suffered damages in an amount presently undetermined. 12 Complaint for Violations of the Cartwright Act and the Unfair Competition Lawwv ONY DAD HwH WN = NR NM NR ND NR mmm C C Violation Of California! Pusiness & Professions Code §17200 Et Seq. [The Unfair Competition Law] 59. Plaintiff re-alleges and incorporate each and every allegation set forth in the paragraphs above. 60. Section 17200 of the California Business & Professions Code prohibits unfair competition by prohibiting any “unlawful, unfair or fraudulent business acts or practice ....” 61, This Complaint is filed and these proceedings are instituted pursuant to sections 17203 and 17204 of the California Business and Professions Code, to obtain relief from the Defendants for business acts and practices, as alleged herein, that violate the Unfair Competition Law. Except as specifically provided herein to the contrary, the alleged violations of the Unfair Competition Law charged herein are distinct and independent of the alleged violations of the Cartwright Law. 62. The Defendants’ conduct as alleged herein violates the Unfair Competition Law. The business acts and practices of Defendants, as alleged herein, constituted and constitute a common continuous and continuing course of conduct of unfair competition by means of unfair, unlawful and/or fraudulent business acts or practices within the meaning of the Unfair Competition Law including, but in no way limited to, the following: a. the violations of Business and Professions Code section 16720 et seq., set forth above, are unlawful; b. Defendants’ business acts and practices, as described above, whether or not in violation of Business and Professions Code section 16720 et seg., and whether or not the product of concerted action are otherwise unfair, unconscionable, unlawful and fraudulent; c. Defendants’ business acts and practices are unfair to consumers in the State of Califomia within the meaning of Business and Professions Code section 17200; and d. Defendants’ acts and practices are fraudulent within the meaning of Business and Professions Code section 17200. 13 Complaint for Violations of the Cartwright Act and the Unfair Competition LawOo eo ND UU hk WwW NH = — ee ee BNRRRRERESVPSIRABDEBREAS C C 63. — The illegal conduct alleged herein is continuing and there is no indication that Defendants will cease such activity into the future. 64. The business acts and practices of Defendants, as alleged herein, constituted and constitute a common continuous and continuing plan and scheme to deceive the public by means of unfair, unlawful and/or fraudulent business practices, affecting the trade or commerce in Copper Tubing in violation of California Business & Professions Code section 17200 et seq. 65. Defendants’ acts, omissions, misrepresentations, practices, and non-disclosures, as alleged herein, constituted and constitute unfair, unlawful and/or fraudulent business practices within the meaning of California Business & Professions Code section 17200 et seq. 66. Plaintiff and the members of the class are entitled to relief, including futl restitution of all revenues, earnings, profits, compensation and benefits that may have been obtained by defendants as a result of such business acts or practices and an injunction enjoining Defendants to cease and desist from engaging in the practices described herein. PRAYER FOR RELIEF WHEREFORE, Plaintiff, on behalf of herself and the members of the class, prays for judgment against the Defendants, jointly and severally, as follows: 1 That the Court certify a California Class of indirect purchasers of Vitamin C manufactured and sold by Defendants; 2. On the First Cause of Action: a. That the unlawful trust, combination, agreement and course of conduct alleged herein be adjudged and decreed to be in violation of California Business & Professions Code section 16720 et seg.(Cartwright Act), and that Plaintiff and the members of the class have been injured and damaged as a result of said violation of the Cartwright Act; b. That Plaintiff and the other members of the class recover treble the amount of the damages sustained by each of them by reason of the violations of California Business & Professions Code section 16720 et seq.; c. For reasonable attorneys’ fees pursuant to section 16750(a) of the Business ! 14 Complaint for Violations of the Cartwright Act and the Unfair Competition Lawwo ey DAUM F&F WN Rms oO AN AH kh YY = SO 21 22 23 24 25 26 27 28 C C & Professions Code; 3. On the Second Cause of Action: a. A declaration that Defendants have engaged in unlawful, unfair, and deceptive business acts and practices in violation of California Business & Professions Code §17200 et seq.; : db. That Defendants, their agents, servants, and employees, and all persons acting, directly or indirectly, in concert with them, be ordered to restore all funds to each member of the class acquired by means of any act or practice declared by this Court to be unlawful or to constitute unfair competition under section 17200 er seq. of the California Business & Professions Code; c. That Defendants be ordered to make restitution to Plaintiff and each and every member of the class due to their unfair competition pursuant to California Business & Professions Code sections 17203 and 17204; 4. For pre-judgment interest at the highest legal rate; 5. For reasonable attorneys’ fees and costs of suit; and 6. For such other and further relief as the Court may deem just and proper. JURY TRIAL DEMAND Plaintiffs hereby demand a trial by jury for all issues so triable. Dated: February 7, 2005. Wn . AL lo. 2234 R. ALEXANDER SAVERI (No.173102) GEOFFREY C. RUSHING (No. 126910) CADIO ZIRPOLI (No. 179108) SAVERI & SAVERI, INC. 111 Pine Street, Suite 1700 San Francisco, CA 94111 Telephone: (415) 217-6810 15 Complaint for Violations of the Cartwright Act and the Unfair Competition Law-_ wo en Au hk WwW DN RANDY R. RENICK (No. 179652) LAW OFFICES OF RANDY R. RENICK 128 North Fair Oaks Avenue, Suite 204 Pasadena, CA 91103 Telephone: (626) 585-9600 Attorneys for Plaintiff 16 Complaint for Violations of the Cartwright Act and the Unfair Competition Law