L.A. grocery seeks class action ramen lawsuit

A Korean supermarket based in Los Angeles has asked U.S. District Court to approve the filing of a class action suit on behalf of its customers against four Korean ramen companies for allegedly fixing prices for 10 years, according to industry sources.

“We are aware that the supermarket has requested the court to approve the class action suit filing this week [July 22] against four companies, including us,” said an official from Nongshim, the country’s largest maker of instant noodles. “But whether or not the suit will be approved by the court is still to be seen. Nothing has been decided as of yet.”

The official’s comments confirming the possible suit against Korean ramen companies in the United States were made after a local newspaper reported last week that four ramen manufacturers - Nongshim, Samyang, Ottogi, and Korea Yakult - may face a suit seeking 840 billion won ($756 million) in damages if the court approves.

According to the report, the Los Angeles-based supermarket claims that it should receive compensation for damage it incurred as a result of a ruling by Korea’s Fair Trade Commission ruling that the four companies fixed ramen prices for 10 years, from 2001 to 2010.

In March 2012, the FTC imposed a total penalty of 135.4 billion.

In August, the four ramen makers asked the Seoul High Court to cancel the penalty, and they are currently waiting for a ruling.

“The results will come out in late September,” said an official from Ottogi.

The official said he expects the U.S. District Court’s decision regarding the class action suit request will probably be made after the Seoul High Court’s ruling.

According to California-based Courthouse New Service, the 35-page lawsuit stated, “This conspiracy [price fixing] was hidden from the public until July 12, 2012, when the Korean FTC issued an order and findings revealing that the defendants had colluded to increase prices and keep such prices inflated.”

The complaint also stated that “as determined by the FTC, the truth is that Korean noodle price increases substantially exceeded increased input costs,” while seeking compensation for damages.

The official from Nongshim, however, said that “the FTC ruling was only targeting ramen prices in Korea” and that “if the Seoul High Court dismisses the FTC’s decision against, then this whole class action suit will be of no use.”

BY LEE EUN-JOO [angie@joongang.co.kr]