Blaming “uncertainties” on the U.S. Supreme Court, alluding to the death of Justice Antonin Scalia, Dow Chemical has agreed to a class settlement instead of pursuing its appeal. Dow faced a $1 billion judgment for price-fixing urethenes. The settlement agreement will total $835 million. Dow Chemical had asked the Tenth Circuit for a full-panel rehearing of the court’s decision to affirm a $1.06 billion jury verdict in a customer class action that accused the company of fixing prices on its polyurethanes. The appeals court declined that request for rehearing in November 2014, prompting the company to appeal the Supreme Court. In a statement provided to Law360, Dow said:
Growing political uncertainties due to recent events within the Supreme Court and increased likelihood for unfavorable outcomes for business involved in class action suits have changed Dow’s risk assessment of the situation. Dow believes this settlement is the right decision for the company and our shareholders.
The litigation, which was consolidated in 2008, accused chemical companies Dow, Bayer AG,BASF SE, Huntsman International LLC and Lyondell Chemical Co. of orchestrating a scheme to fix prices of polyether polyol products that are used to manufacture urethane foam.
Dow had argued the Plaintiffs didn’t pass the test for class certification because they couldn’t prove both a conspiracy and injury to the class members through common evidence. Relying on the Supreme Court case Dukes v. Walmart, Dow said the realities of the urethane foam components market mean that prices are based on multiple factors, including supply and demand, bargaining power and available substitutes, which vary for each buyer, and thus liability can’t be established on a classwide basis.
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