$1B Jury Award in Dow Urethane Price-Fixing Class Action Upheld

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On Monday, the 10th U.S. Circuit Court of Appeals ruled to hold up the $1 billion jury verdict in the class action lawsuit accusing Dow Chemical Corp. of price-fixing polyurethane products used to make soft foams, like cushions used in furniture upholstery, car seats and mattresses, and hard foams used in insulation for roofing and appliances, as well as in wood products.

Lead plaintiffs, including Globe Rubber Works, Foam Supplies Inc. and others, commenced the class action lawsuit nearly eight years ago accusing Dow of conspiring with other companies to fix the price of urethane foam.

The case went to trial in January 2013 after four other defendants had successfully removed themselves from the multidistrict litigation (MDL), including Bayer Corp., BASF Corp. and Huntsman International LLC who agreed to a nearly $140 million class action lawsuit settlement, and Lyondell Chemical Co., who settled without paying damages because it was under bankruptcy protection.

Dow was the last remaining company fighting the urethane antitrust class action lawsuit, and in February of 2013, Dow lost that case when a Kansas federal jury awarded the class $497 million in damages. After the trial, U.S. District Court Judge John W. Lungstrum trebled the jury’s damages and deducted the amounts paid by other defendants who settled out of the case, then ordered Dow to pay $1.06 billion.

In February, Dow subsequently appealed the award to the 10th Circuit arguing there was no evidence to support the award of damages because the plaintiffs’ expert had recommended a different award. The 10th Circuit disagreed with Dow, ruling that juries have the option to reduce an expert’s calculation.

Dow also contested the class action verdict, arguing the Class should be disqualified because the alleged price-fixing did not affect all Class Members equally. Again, the 10th Circuit disagreed finding, “Under the prevailing view, price-fixing affects all market participants, creating an inference of classwide impact even when prices are individually negotiated.”

“The inference of classwide impact is especially strong where, as here, there is evidence that the conspiracy artificially inflated the baseline for price negotiations,” explained the 10th Circuit in their order.

In 2004, antitrust lawsuits accusing urethane makers of price-fixing began surfacing in response to the admission of a chemical company, Chemtura Corp., known at the time as Crompton Corp., that it fixed the price of rubber products. The company agreed to pay a $50 million fine as part of a plea agreement with the U.S. Department of Justice. Then, following the filing of numerous private lawsuits alleging related antitrust claims, the U.S. Judicial Panel on Multidistrict Litigation consolidated the cases into an MDL before U.S. District Judge John W. Lungstrum.

The plaintiffs are represented by Bancroft PLLC, Morris Laing Evans Brock & Kennedy Chtd., Fine Kaplan & Black RPC,Cohen Milstein Sellers & Toll PLLC, Kellogg Huber Hansen Todd Evans & Figel PLLC and Freedman Boyd Hollander Goldberg Urias & Ward PA.

The Dow Urethane Price-Fixing Appeal is In re: Urethane Antitrust Litigation, Case No. 13-3215, in the 10th U.S. Circuit Court of Appeals.

The Dow Urethane Price-Fixing MDL is In re: Urethane Antitrust Litigation, Case No. 2:04-md-01616, in the U.S. District Court for the District of Kansas.

UPDATE: The Dow Urethane Price-Fixing Class Action Settlement is now open! Click here to file a claim.