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Vitamins Cartel Action Filed Against Roche in Panama

Law360, New York (September 10, 2009) -- The Panamanian livestock-raising firm Industrias Lacteas SA on Thursday launched an antitrust class action against F. Hoffmann-La Roche Ltd., accusing the global health care giant of overcharging for purchases of bulk vitamins between January 1992 and March 1998.

The Spanish-language complaint, filed in the First Judicial Circuit of Panama, seeks recovery for parties who were overcharged in what Roche admitted in 1999 was a cartel, but could not recover in the United States as a result of the U.S. Supreme Court's landmark 2004 Empagran SA v. Hoffmann–La Roche decision.

That ruling curtailed the ability of foreign plaintiffs to pursue their claims against cartels in U.S. courts.
“This case grows out of the outcome of cases that preceded it elsewhere,” attorney Brian A. Ratner of Hausfeld LLP said.

Ratner's firm is working with the Panamanian plaintiff's firm Rubio Alvarez Solis & Abrego to prosecute the newly filed lawsuit.

“Roche was the ringleader for this notorious vitamins cartel,” Ratner said Thursday. “It's the same cartel that has been prosecuted in the U.S., Europe and elsewhere.”

The lawsuit, filed in Panama under the country's newly enacted Law 19 of 2008, is the first international class action filed in Latin America against a non-Latin American defendant, according to Ratner's firm.

The case also contemplates representing purchasers outside of Panama, Ratner said Thursday.

While over $1 billion has already been recovered in connection with litigation and investigations into vitamin overcharges across the globe, Ratner said Thursday, the 10-year cartel probably took in more than $10 billion in profits, and many who were overcharged still have not recovered.

Hausfeld cannot technically represent the plaintiffs in Panama because of that country's laws, Ratner said Thursday of his firm, which went after Roche in the U.S. and won a $148 million jury verdict in 2003 in the In Re Vitamins Antitrust multidistrict case.

Therefore, he said, the firm is taking a consulting role with the Panamanian firm to help them pursue the newly filed claims.

In 1999, Roche agreed to pay the U.S. Department of Justice a record $500 million fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the U.S. and elsewhere. Certain Roche executives pled guilty, paid criminal fines and served prison sentences as a result of their participation in the cartel.

In 2001, the European Commission fined Roche €462 million for its role as the “instigator of the cartel” and because it participated in all of the vitamin cartels.

The plaintiffs are represented in the newly filed case by Rubio Alvarez Solis & Abrego.

Counsel information for Roche was not immediately available, and the company did not return a request for comment.

A case number was not immediately available.

More information on this case: Vitamins

Practice Areas: Antitrust / Competition