Dow Chemical corporate headquarters in Midland, Michigan.
Dow Chemical corporate headquarters in Midland, Michigan. (mgreason/Wikimedia Commons)

Following a long afternoon of opening statements in a trial against The Dow Chemical Co., a federal judge in Kansas City, Kan., took the lawyers to task for boring the jury. One juror, according to a court transcript, was reduced to tears. “About halfway through the plaintiffs’ opening statement, those people tuned out,” U.S. District Judge John Lungstrum said. “Other people literally went to sleep for awhile.”

The plaintiffs’ lead trial counsel, Joseph Goldberg — who did not deliver opening statements — did more than redeem the case. On Feb. 20, 2013, following a month of trial, the jury awarded more than $400 million to his three clients, who represented a class of about 2,400 companies that purchased the chemical urethane, used in everything from mattress pads to car seats. Lung­strum trebled that amount, as required under the federal antitrust law.

The $1.2 billion verdict was the largest of The National Law Journal affiliate VerdictSearch’s Top 100 Verdicts of 2013.

“A monthlong trial is a big-deal trial, and getting a jury to award $400 million, and getting a judge to enter a judgment of over $1 billion — I’ll remember this,” said Goldberg, a senior shareholder at Freedman Boyd Hollander Goldberg Urias & Ward in Albuquerque.

Dow’s lead counsel, David Bernick of Boies, Schiller & Flexner, now a partner at Dechert in New York, declined to comment.

“Dow has always denied plaintiffs’ allegations of price fixing,” Dow spokeswoman Louise Adhikari wrote in an emailed statement to the NLJ. “Dow has strong appeal positions based on errors at the trial and Dow is confident of a favorable outcome in the appeal.”

SECRET MEETINGS

Since 2004, when the lawsuit was filed, several additional defendants reached settlements totaling $139.3 million. The remaining defendant, Dow, took its chances at trial.

The plaintiffs introduced evidence that the company, faced with declining profits, hatched a plan with its competitors to fix the price of urethane between 1999 and 2003. The trial involved testimony about secret meetings and executives who ducked into private rooms. One executive purchased a calling card at a gas station to make it harder to tie telephone calls involving the scheme to his Dow counterpart, Goldberg said.

Dow denied the allegations, but Gold­berg had a powerful witness: A high-ranking Dow executive who “testified she sat through these meetings of her boss and counterpart who talked repeatedly about having conversations with their competitors about fixing prices and reaching agreements to fix prices.”

The jury rejected the plaintiffs expert’s damages estimate of $1.1 billion — which was based on arguments that the plaintiffs’ claims should be exempted from the statute of limitations. They also settled on an amount less than the $496 million the plaintiffs’ damages expert had estimated taking into account the statute of limitations, which fell four years before the suit was filed, Goldberg said.

Lungstrum has since lowered the final judgment to $1.06 billion after offsetting the settlements with the other defendants, and Dow has appealed the outcome to the U.S. Court of Appeals for the Tenth Circuit.

The appeal has brought in some notable practitioners — for the plaintiffs, former U.S. solicitor general Paul Clement of Washington’s Bancroft and, for Dow, Carter Phillips, Sidley Austin’s chairman.

In a Dec. 6 brief, Phillips challenged class certification in the case, citing last year’s holding in Comcast Corp. v. Behrend, which involved the same plaintiffs expert’s “flawed models,” Phillips said. The U.S. Chamber of Commerce has filed an amicus brief in Dow’s support.

Contact Amanda Bronstad at abronstad@alm.com.