Dow Chemical Faces Trial in Urethane Price-Fixing Case

Dow Chemical Co. (DOW), the biggest U.S. chemical maker by revenue, faces a trial over claims it conspired with other makers of a chemical product used in the automotive, construction, appliance and furniture industries to fix prices in violation of federal law.

Jury selection in the case is set to start today in federal court in Kansas City, Kansas. Originally sued with Bayer AG (BAYN), BASF SE (BAS), Huntsman International LLC and Lyondell Chemical Co., Dow is the only company that hasn’t settled with the purchaser plaintiffs.

U.S. District Judge John W. Lungstrum last month denied a motion for judgment in Dow’s favor, ruling that the purchasers’ claims of a conspiracy from 1999 to 2003 were sufficient to allow the a jury to decide the case.

“Each piece of evidence supports the other, such that a reasonable jury could find that an agreement existed,” Lungstrum wrote in his ruling, citing testimony from Dow and Bayer executives.

Dow, BASF, Huntsman and Lyondell were first sued in federal court in New Jersey in 2005. The case was transferred to Kansas City that year as part of a multidistrict docket involving more than 60 plaintiffs, some of whom later opted out of the group litigation.

At the center of the case are polyether polyols, which the company describes on its website as a component in the making of polyurethane products for the automotive, construction, appliance and furniture industries.

Class Action

The class-action plaintiffs in the lawsuit seek unspecified money damages and for that award to be tripled because of the alleged antitrust violation, according to that 2005 complaint.

Dow, based in Midland, Michigan, has denied the price- fixing allegations, according to the court’s Dec. 18 ruling.

The company said executive meetings and communications during which the alleged scheme was discussed were “justified by legitimate business reasons,” Lungstrum said. Dow also said it provided proof that it and the other alleged conspirators actually engaged in competitive conduct.

The company’s motion papers and those submitted in opposition, were filed under seal.

The case is In re Urethane Antitrust Litigation, 04- md-1616, U.S. District Court, District of Kansas (Kansas City).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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