Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-04115/USCOURTS-cand-3_13-cv-04115-12/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:15 Antitrust Litigation

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

STEPHEN FENERJIAN, et al.,

Plaintiffs,

v.

NONG SHIM COMPANY, LTD, et al.,

Defendants.

Case No. 13-cv-04115-WHO 

ORDER DENYING SAMYANG 

KOREA’S MOTION TO DISMISS

Re: Dkt. No. 142

INTRODUCTION

Defendant Samyang Foods Company. Ltd. (“Samyang Korea”) moves to dismiss indirect 

purchaser plaintiffs’ antitrust, unfair competition, and unjust enrichment causes of action for 

failure to plausibly allege that Samyang Korea was part of the price-fixing conspiracy alleged in 

this matter. Samyang Korea also argues that indirect purchaser plaintiffs’ purported nationwide 

class under California’s Cartwright Act is unconstitutional because the Cartwright Act conflicts 

with other states’ laws and because indirect purchaser plaintiffs’ have not alleged sufficient 

contacts between California and the claims of non-California plaintiffs.

Samyang Korea’s motion is DENIED. Indirect purchaser plaintiffs allege that Samyang 

Korea conspired with the other Korean defendants to raise factory-level prices of its noodles in 

Korea, that it imported its price-fixed noodles to the United States where they were sold to class 

members, and that the prices of Samyang’s Korean noodles in the United States increased as a 

result of the conspiracy. That is sufficient at the pleadings stage. 

At a minimum, indirect purchaser plaintiffs have plausibly pleaded a Cartwright Act claim 

on behalf of California residents. Whether indirect purchaser plaintiffs can also state a Cartwright 

Act claim on behalf of plaintiffs from other states is better resolved at class certification when the 

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parties have a better sense of the other states at issue and the contacts between the claims of 

plaintiffs from those states and California.

BACKGROUND1

Defendants Samyang Korea, Nong Shim Company, Ltd., and Ottogi Ltd. (collectively, the 

“Korean defendants”) manufacture and sell Korean noodles in Korea. Amended Consolidated 

Indirect Purchaser Compl. (“AIPC”) ¶¶ 25-28 [Dkt. No. 121]. On July 12, 2012, the Korean Fair 

Trade Commission issued an order finding that the Korean defendants conspired to increase the 

prices of Korean noodles in Korea. Id. at ¶ 3. Following that order, various direct and indirect 

purchasers of defendants’ Korean noodles in the United States filed price-fixing conspiracy 

actions against the Korean defendants and their alleged American distributors, alleging that the 

defendants conspired to raise the prices of Korean noodles sold in the United States.2 The indirect 

purchaser plaintiffs are individuals who purchased the defendants’ noodles from non-party food 

retailers in Massachusetts, Michigan, Florida, New York, California, and Hawaii. Id. at ¶¶ 10-24. 

I previously granted in part and denied in part defendants’ motion to dismiss indirect 

purchaser plaintiffs’ original consolidated complaint. Dkt. No. 115. Indirect purchaser plaintiffs 

subsequently filed an amended indirect purchaser complaint, alleging causes of action for (i) pricefixing conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1; (ii) price-fixing 

conspiracy in violation of California’s Cartwright Act, Cal. Bus. & Code §§ 16700, et seq.; (iii) 

violations of antitrust and restraint of trade laws of California, Michigan, Hawaii, and New York; 

(iv) violations of state consumer protection laws of California, Florida, and Massachusetts; and (v) 

unjust enrichment and disgorgement under the common laws of Hawaii and Massachusetts. Dkt. 

No. 121. ¶¶ 170-214. Samyang Korea moves to dismiss indirect purchaser plaintiffs’ amended

consolidated complaint. Dkt. No. 142. I heard argument on March 25, 2015. 

 

1

I assume the truth of plaintiffs’ allegations for the purpose of this motion. A fuller background is 

included in my order on defendants’ motions to dismiss the original direct and indirect purchaser 

complaints. Dkt. No. 115.

2 Defendants Nongshim America, Inc., and Ottogi America, Inc. are subsidiaries or affiliates of 

Nong Shim Company, Ltd., and Ottogi Ltd., respectively. Id. ¶ 29-31.

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LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint 

if it fails to state a claim upon which relief can be granted. The court must “accept factual 

allegations in the complaint as true and construe the pleadings in the light most favorable to the 

nonmoving party,” drawing all “reasonable inferences from those facts in the nonmoving party’s 

favor. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). A 

complaint may be dismissed if it does not allege “enough facts to state a claim to relief that is 

plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial 

plausibility when the pleaded factual content allows the court to draw the reasonable inference that 

the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 

However, “a complaint [does not] suffice if it tenders naked assertions devoid of further factual 

enhancement.” Id. (quotation marks and brackets omitted). “Threadbare recitals of the elements 

of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

DISCUSSION

Samyang Korea argues that: (i) indirect purchaser plaintiffs’ federal and state antitrust and 

consumer protection claims fail because indirect purchaser plaintiffs have not plausibly alleged 

that Samyang Korea was a member of the conspiracy to raise prices in the United States; (ii) the 

state consumer protection claims rely on the antitrust claims and therefore also fail; (iii) a 

nationwide class under California’s Cartwright Act is unconstitutional; and (iv) the unjust 

enrichment claims under Hawaii and Massachusetts law fail because plaintiffs do not allege that 

any plaintiff purchased Samyang Korea’s noodles in Hawaii or Massachusetts. I address each 

argument in turn.

I. ANTITRUST AND CONSUMER PROTECTION CLAIMS UNDER FEDERAL 

AND STATE LAW

Samyang Korea argues that “[b]ecause Plaintiffs have failed to allege that a Samyang 

subsidiary or affiliate imported Samyang products into the United States, or that Samyang 

otherwise has the capacity to conspire to fix prices in the United States, Plaintiffs’ antitrust claim 

against Samyang fails.” Dkt. No. 142 at 7. I rejected Samyang Korea’s similar argument in its 

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motion to dismiss the original complaint. As I explained:

But plaintiffs allege that Samyang Korea conspired in Korea to fix 

prices on Korean Noodles and that it imported price-fixed Korean 

Noodles into the United States. It is accordingly beside the point 

that Samyang Korea could not control the Korean Noodles once 

they arrived in the United States; plaintiffs allege that the prices had 

already been fixed at that point. As discussed above, whether 

plaintiffs can prove that that is the case is not presently before me.3 

Dkt. No. 115 at 18 n.23 (emphasis in original). 

Samyang Korea argues that the Sherman Act and state law antitrust and consumer 

protections claims4in the amended complaint should nonetheless be dismissed because “Plaintiffs’ 

theory that the functioning conspiracy depends on the ability to control a U.S. Subsidiary/Affiliate 

was not highlighted in prior briefing or argument.” Dkt. No. 151 at 4 n.1. Samyang Korea relies 

on indirect purchaser plaintiffs’ allegation that:

It was important for the Defendants to maintain the pricing 

relationships between Korean and U.S. pricing of Korean Noodles in 

order to prevent arbitrage. This required coordination between the 

Subsidiary/Affiliate Defendants and the Korean Defendants to 

ensure that the conspiracy achieved its desired result of increased 

worldwide prices for consumers of Korean Noodles.

AIPC ¶ 154. Samyang Korea also notes that indirect purchaser plaintiffs allege that “the Korean 

Defendants closely oversaw the pricing policies of their respective United States subsidiaries and 

affiliates.” Id. ¶ 152.

 

3

I further explained that:

[P]laintiffs have plausibly pleaded that Samyang Korea participated in 

a conspiracy to fix factory-level prices of Korean Noodles. Plaintiffs 

further allege that Samyang Korea shipped its price-fixed Korean 

Noodles to the United States and that the prices of Samyang Korean 

Noodles in the United States did indeed increase in correlation to the 

price increase in Korea. Plaintiffs have accordingly plausibly pleaded 

that Samyang Korea was part of the conspiracy to fix prices of Korean 

Noodles sold in the United States. Samyang Korea is therefore jointly 

liable for any injury caused by the conspiracy, and it is beside the point 

that Samyang Korea did not itself sell directly to plaintiffs.

Dkt. No. 115 at 18-19.

4

Indirect purchaser plaintiffs allege state law antitrust, restraint of trade, and consumer protection 

claims under the laws of Massachusetts, Michigan, Florida, New York, California, and Hawaii. 

AIPC ¶¶ 191-210.

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Samyang Korea may not have highlighted these allegations in its prior argument, but the 

same allegations were included in the original indirect purchaser complaint. See Dkt. No. 62 ¶¶ 

152, 154. They do not render indirect purchaser plaintiffs’ allegations against Samyang Korea 

implausible. Like the original indirect purchaser complaint, the amended complaint asserts that 

Samyang Korea conspired with the other Korean defendants to raise factory-level prices of its 

noodles in Korea, that it imported its already price-fixed noodles to the United States where they 

were sold to class members, and that the prices of Samyang’s Korean noodles in the United States 

increased as a result of the conspiracy. AIPC ¶¶ 27, 107, 139, 150, 151. Samyang Korea’s lack of 

control over Sam Yang USA has no bearing on indirect purchaser plaintiffs’ allegation that 

Samyang Korea shipped price-fixed noodles to the United States. 

The allegations on which Samyang Korea relies merely state that it was “important” for the 

defendants to maintain the pricing relationships between the Korean and U.S. pricing of the 

noodles and that this required coordination between the Korean defendants and their U.S. 

affiliates. I do not read this to mean that indirect purchaser plaintiffs allege that the conspiracy 

required each Korean defendant to control its American distributor. It is sufficient that Samyang 

Korea conspired to raise prices, did in fact raise prices, and shipped its price-fixed goods to the 

United States where they were purchased by members of the class. As I noted previously, whether 

plaintiffs can prove that this occurred is not the question now. It may well be that the facts, once 

developed, will contradict the allegations, but that is a determination for a different day. See 

Twombly, 550 U.S. at 556 (“Asking for plausible grounds to infer an agreement does not impose a 

probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable 

expectation that discovery will reveal evidence of illegal agreement. And, of course, a wellpleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is 

improbable, and that a recovery is very remote and unlikely.”) (internal quotation omitted). 

At oral argument, counsel for Samyang Korea argued that the antitrust claims against 

Samyang Korea fail because indirect purchaser plaintiffs did not allege that any plaintiff 

purchased noodles whose prices had actually risen as a result of the price-fixing conspiracy. I 

disagree. Indirect purchaser plaintiffs allege that Samyang Korea increased factory-level prices in 

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2001, 2002, 2004, 2005, 2007, and 2008 and that the price increases were reflected in the prices of 

noodles exported for sale in the United States. AIPC ¶¶ 75, 84, 95, 98, 107, 114, 131, 139. 

Indirect purchaser plaintiffs further allege that named plaintiffs An and Kang purchased Samyang 

Korea’s noodles in the United States regularly from 2001 (An) or 2007 (Kang) to the present. 

AIPC ¶¶ 14, 17. Those allegations are sufficient to draw the reasonable inference that indirect 

purchaser plaintiffs purchased price-fixed noodles. See Iqbal, 556 U.S. at 678 (“A claim has facial 

plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable 

inference that the defendant is liable for the misconduct alleged.”) (citing Twombly, 550 U.S. at 

556).

I also reject Samyang Korea’s argument that indirect purchaser plaintiffs cannot bring 

claims under the antitrust laws of Hawaii, Michigan, and New York because plaintiffs did not 

allege that anyone within those states purchased Samyang Korea’s noodles. Indirect purchaser 

plaintiffs allege that plaintiffs purchased price-fixed Korean noodles in Hawaii, Michigan, and 

New York from Samyang Korea’s co-conspirators. AIPC ¶¶ 11, 13, 20-22, 24. As an alleged coconspirator, Samyang Korea is liable for those sales; it does not matter that no named plaintiff in 

those states purchased Samyang Korea’s noodles. See, e.g., Paper Sys. Inc. v. Nippon Paper 

Indus. Co., 281 F.3d 629, 634 (7th Cir. 2002) (“If Nippon Paper participated in a cartel of thermal 

fax paper (something that remains to be determined) then it is jointly and severally liable for the 

cartel’s entire overcharge. That plaintiffs did not buy from Nippon Paper directly, or at all, does 

not matter.”); In re TFT-LCD (Flat Panel) Antitrust Litig., 820 F. Supp. 2d 1055, 1059 (N.D. Cal. 

2011) (“A defendant who joins a conspiracy is jointly and severally liable for any actions taken in 

furtherance of the conspiracy.”).

II. NATIONWIDE CLASS ACTION UNDER CALIFORNIA LAW

Indirect purchaser plaintiffs allege a cause of action under California’s Cartwright Act5on 

behalf of a nationwide class defined as “[a]ll persons and entities that purchased Korean Ramen 

 

5

The Cartwright Act generally prohibits conspiracies that unreasonably restrain trade. Cal. Bus.

and Prof. Code § 16700 et seq.

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Noodle Products indirectly from one or more Defendants in the United States for their own use 

and not for resale from May 2001 to the present.” AIPC ¶ 36(a). Samyang Korea contends that a 

nationwide class under the law of a particular state is constitutional only if both (1) the chosen 

state’s law does not conflict with the laws of other states that have an interest in the case and (2) 

the chosen state has significant contact or a significant aggregation of contacts to claims asserted 

by each member of the plaintiff class. Dkt. No. 142 at 9-10 (citing Phillips Petroleum Co. v. 

Shutts, 472 U.S. 797, 821-22 (1985); In re Graphics Processing Units Antitrust Litig., 527 F. 

Supp. 2d 1011, 1028 (N.D. Cal. 2007)). Samyang Korea argues that the proposed nationwide 

class fails to meet either prong because California law conflicts with the laws of non-California 

class members’ home states and indirect purchaser plaintiffs have not alleged that California has 

sufficient contacts with the non-California class members’ claims.

I disagree with Samyang Korea’s analysis. As an initial matter, Shutts does not provide 

that a nationwide class under a particular state’s law is only constitutional if there is no conflict of 

law and the state has significant contacts with the claims of all class members. Rather, Shutts

teaches that there is no injury in applying out-of-state law if there is no conflict between the laws 

at issue. Shutts, 472 U.S. at 816 (“We must first determine whether Kansas law conflicts in any 

material way with any other law which could apply. There can be no injury in applying Kansas 

law if it is not in conflict with that of any other jurisdiction connected to this suit.”); see also In re 

St. Jude Medical, Inc., 425 F.3d 1116, 1120 (8th Cir. 2005) (“There is, of course, no constitutional 

injury to out-of-state plaintiffs in applying Minnesota law unless Minnesota law is in conflict with 

the other states’ laws. Therefore, we must first decide whether any conflicts actually exist.”)

(citing Shutts, 472 U.S. at 816). Similarly, in In re Graphics Processing, the Court only analyzed 

contacts between California and the claims of non-California class members after determining that 

the laws at issue conflicted. In re Graphics Processing, 527 F. Supp. 2d at 1027-28.

Accordingly, the second step—determining whether the forum state has sufficient contacts 

with the claims—is only relevant if the laws at issue are in conflict. If the forum state has 

sufficient contacts with the claims, the nationwide class may be maintained even if the laws 

conflict. Assuming sufficient contacts, the parties cannot be surprised by the application of the 

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forum state’s conflicting law. See, e.g., Allstate Ins. Co. v. Hague, 449 U.S. 302, 318 n.24 (1981) 

(“There is no element of unfair surprise or frustration of legitimate expectations as a result of 

Minnesota's choice of its law. Because Allstate was doing business in Minnesota and was 

undoubtedly aware that Mr. Hague was a Minnesota employee, it had to have anticipated that 

Minnesota law might apply to an accident in which Mr. Hague was involved.”).

Just because I can constitutionally apply California law to non-residents does not mean 

that I should. I must still consider California’s choice-of-law analysis to determine whether 

application of California law is appropriate in this case. See In re Graphics Processing, 527 F. 

Supp. 2d at 1027 (“The Shutts test, however, deals with whether the application of a certain state’s 

law to a nationwide class violates due process and the full faith and credit clause, while a choiceof-law analysis is a nonconstitutional question under the common law of the state, here 

California.”). If the class action proponent meets its initial burden of showing that California has 

sufficient contacts to the claims of each class member, “the burden shifts to the other side to 

demonstrate that foreign law, rather than California law, should apply to class claims.” Mazza v. 

Am. Honda Motor Co., 666 F.3d 581, 589-590 (9th Cir. 2012) (internal quotations omitted). 

“California law may only be used on a class-wide basis if the interests of other states are not found 

to outweigh California’s interest in having its law applied.” Id. at 590. 

California courts apply a three-step governmental interest test to determine whether the 

interests of other states outweigh California’s interest:

First, the court determines whether the relevant law of each of the 

potentially affected jurisdictions with regard to the particular issue 

in question is the same or different.

Second, if there is a difference, the court examines each 

jurisdiction's interest in the application of its own law under the 

circumstances of the particular case to determine whether a true 

conflict exists.

Third, if the court finds that there is a true conflict, it carefully 

evaluates and compares the nature and strength of the interest of 

each jurisdiction in the application of its own law to determine 

which state's interest would be more impaired if its policy were 

subordinated to the policy of the other state, and then ultimately 

applies the law of the state whose interest would be more impaired if 

its law were not applied.

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Id. (citing McCann v. Foster Wheeler LLC, 48 Cal.4th 68, 81–82 (Cal. 2010)). 

While it is sometimes appropriate to determine at the pleadings stage whether a plaintiff 

can maintain a nationwide class under California law, this question is more appropriately 

addressed here in connection with the class certification process. See, e.g., Mazza, 666 F.3d at 

589-94 (applying California choice-of-law analysis on motion for class certification to determine 

whether plaintiff could maintain nationwide class under California consumer protection laws). 

First, the motion to dismiss is improper procedurally since Samyang Korea does not dispute that 

indirect purchaser plaintiffs may assert a Cartwright Act claim on behalf of California residents. 

See Dkt. No. 151 at 11 (stating that “Samyang does not dispute that a court sitting in California 

may apply California law to California residents or individuals injured in California.”). Second, 

whether indirect purchaser plaintiffs’ Cartwright Act claim may extend to claims of residents of 

other states is better resolved at class certification when the parties know (i) which other states are

at issue, (ii) what the laws of those states are, and (iii) what the contacts between the claims of 

plaintiffs from those states and California are. 

Relatedly, if indirect purchaser plaintiffs meet their burden of establishing sufficient 

contacts, the burden shifts to Samyang Korea to demonstrate that California’s governmental 

interest test directs that foreign law, rather than California law, should apply to those claims. See 

Mazza, 666 F.3d at 589-90 (citations omitted). The governmental interest test was not developed 

to any extent in the briefs.6 Finally, given that indirect purchaser plaintiffs have stated a 

nationwide Sherman Act claim, Samyang Korea’s counsel conceded at oral argument that if I 

defer resolution of the scope of the Cartwright Act class until class certification it will have no 

practical impact on discovery or the cost of the litigation. 

Defendants may challenge indirect purchaser plaintiffs’ nationwide Cartwright Act class in 

connection with the class certification briefing. I will not dismiss this claim now. 

III. HAWAII AND MASSACHUSETTS UNJUST ENRICHMENT CLAIMS

Indirect purchaser plaintiffs allege a cause of action for unjust enrichment on behalf of the 

 

6

Indirect purchaser plaintiffs only raised the governmental interest test in their reply brief.

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Hawaii and Massachusetts subclasses. AIPC ¶¶ 211-214. Samyang Korea moves to dismiss these 

claims on the grounds that indirect purchaser plaintiffs have not alleged that any members of the 

class purchased Samyang Korea’s noodles in those states. But indirect purchaser plaintiffs allege 

that named plaintiffs purchased defendant Nongshim’s noodles in Hawaii and Massachusetts. 

AIPC ¶¶ 10, 23-24. That is sufficient to state an unjust enrichment claim against Samyang Korea 

because, as noted previously, Samyang Korea is liable for the conduct of its co-conspirators, 

including their sales in those states. See, e.g., Paper Sys, 281 F.3d at 634; In re TFT-LCD (Flat 

Panel) Antitrust Litig., 820 F. Supp. 2d at 1059.

CONCLUSION

Samyang Korea’s motion to dismiss the amended consolidated indirect purchaser 

complaint is DENIED. Dkt. No. 142.

IT IS SO ORDERED.

Dated: March 30, 2015

______________________________________

WILLIAM H. ORRICK

United States District Judge

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