A federal jury in Kansas City, Kan., has slapped the Dow Chemical Co. with a $400 million verdict in a urethane price-fixing class action; it could be trebled to $1.2 billion under the Sherman Act.
The February 20 verdict in the District of Kansas in In Re Urethane Antitrust Litigation was for $400,049,039 for a conspiracy that ran from 1999 through 2003.
Plaintiffs filed the case in 2004 on behalf of a class of direct purchasers of chemicals used to make polyurethane, a form of plastic.
They fingered four other companies besides Dow, all of which settled before trial. Bayer A.G. settled in 2006 for $55.3 million, followed by 2011 settlements by BASF S.E. for $51 million and Huntsman International LLC for $33 million. Lyondell Chemical Co., which is in bankruptcy proceedings, settled in 2011 without paying damages.
The plaintiffs claimed the defendants cooked up the conspiracy in 1999 because their businesses were hampered by excess capacity. The result was nearly lockstep price hikes during the scheme.
Dow claimed that there was no direct evidence of any agreement by Dow or the four other chemical producers to fix prices for the four urethane product categories at issue in the case.
Dow also argued that the chemicals at issue declined in price during the alleged conspiracy years because of purchasers’ bargaining power and that most of the companies’ announced price hikes didn’t stick.
Further, Dow claimed that the defendant companies collaborated only on legal matters such as potential joint ventures and to address industry issues such as environmental concerns and plant security following the September 11, 2001 terror attacks.
The plaintiffs’ co-lead trial counsel, Joe Goldberg, a senior partner at Freedman Boyd Hollander Goldberg Urias & Ward in Albuquerque, N.M., said the verdict "was a fair determination of the overcharges to the people injured by the price fixing."
Goldberg said the class includes some 2,400 customers of the chemical companies.
Mike Guzman, a partner at Washington’s Kellogg, Huber, Hansen, Todd, Evans & Figel who also represented the plaintiffs, said the verdict amount reflects the large volume of sales involved in the case: "We were pleased with the verdict. We thought it represented justice for our clients."
Cohen Milstein Sellers & Toll of Washington and Fine Kaplan & Black of Philadelphia were co-lead class counsel.
Dow’s lead lawyer, David Bernick, a partner at Boies, Schiller & Flexner in New York, said Dow plans to renew it’s motion to decertify the class and file a motion for judgment in Dow’s favor.
The plaintiffs’ only conspiracy claim was for a five-year conspiracy, which was noted in the jury instructions, he said. But a note the jury sent to the judge and their verdict form reflected that "they did not find a conspiracy for almost two of the five years," Bernick said. "We don’t believe the verdict can stand."
Paul Hastings also represented the company, joined by Stinson Morrison Hecker of Kansas City, Mo, as local counsel.
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