Issue Date: November 17, 2014
Dow Hit With $1.1 Billion Price-Fixing Conviction
Dow Chemical says it will appeal a $1.1 billion polyurethane raw material price-fixing conviction to the U.S. Supreme Court after an appeals court refused to rehear the case.
The U.S. Court of Appeals in Denver rejected Dow’s appeal of the class-action suit at the end of September, but Dow asked for a rehearing. Dow argued that its conviction conflicted with rulings in recent Supreme Court cases setting standards for class-action certification that were different than those applied to its case. “The judgment should be vacated based on the established law,” Dow says.
The case dates back to 2005 when customers complained that Dow, BASF, Huntsman Corp., Bayer, and LyondellBasell Industries attempted to fix prices of methylene diphenyl diisocyanate, toluene diisocyanate, polyols, and urethane systems sold between 1999 and 2003.
Polyols and isocyanates are combined to form polyurethanes for applications such as furniture cushions, auto paints, and insulation. The other alleged conspirators settled their cases out of court for a total of $139 million.
Dow was the only defendant not to settle the case and has always denied the allegation of price-fixing. Last year Dow was found liable and told to pay plaintiffs $400 million. The figure was trebled to $1.2 billion under antitrust law and then reduced by a judge to $1.1 billion.
Dow notes that the Department of Justice had closed an inquiry into the price-fixing allegations in 2007 without bringing charges. “Consistent with the outcome in this DOJ investigation, Dow should not be held liable in the civil case,” the firm says.
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