Death of judge sees Dow settle price-fix case

DOW CHEMICAL has agreed to pay US$835m to settle a long-running lawsuit alleging it had fixed prices for urethanes, after the death of a US Supreme Court judge made victory less likely.

The death of conservative Supreme Court Justice Antonin Scalia earlier this month left Dow facing eight judges – four conservative and four liberal. Confronted with the risk that a deadlocked decision would cause the judgment to revert to an earlier lower court ruling for more than US$1bn, the company chose to settle.

Dow said the growing political uncertainties following the death of Scalia had “increased the likelihood for unfavourable outcomes” adding that the settlement was the right decision for the company and shareholders. Dow maintains that “it was not part of any conspiracy [to fix prices for chemicals]” and that the lower court ruling from 2013 violated class action law.

Dow was one of a number of firms named in a 2005 lawsuit alleging a conspiracy to fix urethane prices, including Bayer, Huntsman and BASF, but it was the only company not to settle. In 2013, Dow went to trial and was ordered to pay US$400m. It then challenged for the verdict to be overturned but the request was denied by a federal judge who – using antitrust law – then tripled the charge to US$1.06bn.

Last year, Dow and DuPont agreed a mega-merger valuing the pair at more than US$130bn, with plans to divide the combined company into three separate businesses.