Dow Chemical was hoping the US Supreme Court would dismiss a $1.06 billion judgment against the company.
But on Friday the company announced that it is settling the case for $835 million.
And the firm actually had an interesting reason why: It didn’t think that things would go its way in light of Supreme Court Justice Antonin Scalia’s death.
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 lawsuit was brought by plaintiffs who claimed the company artificially inflated polyurethane prices in the late 1990s and early 2000s. “The class action lawsuit alleged that Dow and other companies overcharged clients by colluding to set prices for certain materials,” the WSJ reported.
Meanwhile, Scalia was “a strong supporter of limiting class action lawsuits against companies,” according to Quartz. Even if Dow secured a 4-4 tie in Scalia’s absence, the lower court decision against Dow would have remained in place.
So, the big takeaway form all of this is that the settlement reflects just how things might change going forward for other businesses after the Scalia’s death.
Dow’s statement also added that the settlement does not imply it did anything wrong but, given the absence of Scalia on the bench, its case would have met a less-receptive Court:
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. Further, the judgment covered alleged legacy activity between 2000 and 2003. Dow cooperated with an extensive investigation by the U.S. Department of Justice, which closed its investigation in 2007 without taking any or proposing any action against Dow. Dow’s position at the U.S. Supreme Court is that the judgment violates class action law in multiple ways, notably with respect to the Supreme Court’s Walmart decision of 2011 and the Comcast decision of 2013, both authored by Justice Scalia.
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