Dow Chemical settles case citing Supreme Court uncertainty

Should Congress succeed in its efforts, a new Supreme Court Justice would not be selected until 2017, leaving potential suits and appeals susceptible to a stalemate between the eight-member bench. “The class action lawsuit alleged that Dow and other companies overcharged clients by colluding to set prices for certain materials”, the WSJ reported.

Scalia’s death on February 13 changed that, at least temporarily.

The company said the settlement agreement is conditioned on the U.S. Supreme Court agreeing to hold Dow’s Petition for a Writ of Certiorari in abeyance and the subsequent approval of the class settlement by the U.S. District Court of Kansas.

The announcement is an early indication of how corporations are shifting their legal strategy following the loss of the court’s 5-4 conservative majority.

Dow Chemical Co’s agreement to pay $835 million to settle a price-fixing dispute provides evidence that Justice Antonin Scalia’s death is a blow to businesses that have had success recently in challenging class action cases at the U.S. Supreme Court. President Barack Obama said he will nominate a replacement, but Senate Republicans have said they will not hold hearings on his selection. Following this, the company filed that the decision reached by a federal jury was in violation of class action law, and used two rulings given by Justice Scalia as examples, that favored Wal-Mart in 2011 and Comcast in 2013, respectively. References to “Dow” or the “Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.

Though the settlement payment is high, uncertainty is just as unsettling, TheStreet’s Jim Cramer wrote in anAction Alerts PLUS article today.

That sum was tripled under antitrust law to US$1.2 billion, and then reduced to US$1.06 billion plus interest because of other settlements.

Dow appealed the liability finding and award to a federal appeals court in Denver, which rejected its challenges to urethane purchasers’ class-action claims in September 2014.

Richard A. Koffman and Donald Perelman, co-lead counsels for the plaintiffs in the case, said the settlement was “an excellent result”.

“While Dow is settling this case, it continues to strongly believe that it was not part of any conspiracy and the judgment was fundamentally flawed as a matter of class action law”, the company said in its Friday statement.

-With assistance from Margaret Cronin Fisk, Andrew Harris, Mike Dorning and Jack Kaskey.