Dow Chemical settles case citing Supreme Court uncertainty

Dow Chemical said Friday it will pay $835 million to settle a long-standing class action lawsuit, after the death of Justice Antonin Scalia decreased its chances of prevailing at the Supreme Court.

The announcement is an early indication of how corporations are shifting their legal strategy following the loss of the court’s 5-4 conservative majority.

“I think most corporations facing class actions regarded Justice Scalia as a friend,” said Robert Peck, president of the Center for constitutional Litigation in Washington. “He has been a thoroughly consistent vote on their side of the equation.”

Dow was found liable in 2013 by a Kansas jury of allegedly conspiring to fix prices for polyurethane, an industrial chemical used in everything from packaging to car interiors. The judgment dealt with alleged actions by Dow and several other companies between 2000 and 2003. Dow had petitioned the Supreme Court to reconsider the judgment.

But the company said Friday the court’s current lineup has “increased the likelihood for unfavourable outcomes for business involved in class action suits.”

Following Scalia’s death earlier this month, the Supreme Court is now evenly split 4-4 between justices who are usually conservative and those who are liberal. Split decisions revert to the lower court’s opinion, such as the federal court in Kansas which ruled against Dow.

Among many other business-friendly decisions, Scalia authored the majority opinion in a 2011 decision in favour of Wal-Mart, throwing out a sex discrimination lawsuit brought by some 1.5 million female employees.

President Barack Obama has said he will nominate a replacement to the bench, but Senate Republicans have vowed to neither hold hearings nor vote on his pick.

Dow, a conglomerate of industrial and agricultural chemical businesses, said the settlement would benefit shareholders.

“While Dow is settling this case, it continues to strongly believe that it was not part of any conspiracy and the judgment was fundamentally flawed as a matter of class action law,” the company said in a statement.

Shares of Dow Chemical Co. rose 64 cents, or 1.3 per cent, to close at $48.74. Its shares are down about 1 per cent over the past year.