Dow Chemical Co. (DOW) conspired with other companies to fix urethane product prices and must pay buyers of those products more than $400 million in damages, a federal jury said.
The plaintiffs in the case, buyers of urethane-derived products, asked for $1.125 billion in damages. The jury’s award was $400,049,039.
The jury of five women and two men in Kansas City, Kansas, returned the verdict yesterday after deliberating for parts of two days. The trial before U.S. District Judge John W. Lungstrum began on Jan. 23.
“The people of Kansas have administered justice based on the evidence,” plaintiffs’ lawyer Joseph Goldberg told reporters after the verdict was read.
The case started in 2005 with allegations that Dow plotted with BASF SE (BAS), Huntsman International LLC and Lyondell Chemical Co. in violation of federal law. Only Midland, Michigan-based Dow didn’t settle.
Claims from before November 2000 were rejected by the jury.
“After a four-week trial, the jury in this eight-year-old case has found liability against Dow but awarded plaintiffs $400 million --- less than the $1.125 Billion damages they sought,” Rebecca Bentley, a Dow spokeswoman, said by e-mail. “While Dow is disappointed that the jury found pricing fixing conduct during part of the time frame -- an allegation which Dow continues to deny -- we are pleased that the jury recognized that the class claim was not proven.
Dow is ‘‘evaluating all of our options, including appeal,’’ Bentley said.
At the heart of the suit were urethane-based products used in the automotive, construction, appliance and furniture industries.
Citing jurors’ rejection of the purchasers’ request for damages from 1999, the first of the five alleged years the conspiracy was active, Dow defense lawyer David Bernick asked Lungstrum to dissolve the buyers’ group status.
The judge didn’t rule on that request.
‘‘They charged conspiracy for a five year period of time and the jury didn’t find that five-year conspiracy existed,” the attorney said in a post-trial interview.
Dow, BASF, Huntsman and Lyondell were first sued in federal court in New Jersey. The case was transferred to a multidistrict docket in Kansas City as part of litigation involving more than 60 plaintiffs, some of whom later opted out of the group litigation.
Dow denied the price-fixing allegations, maintaining there were legitimate business reasons for the evidence the plaintiffs cited as proof of their claims.
“What Dow did was wrong,” Goldberg told the jury Feb. 19 in his closing arguments. “It colluded with its competitors and entered into a price-fixing conspiracy.”
Bernick disputed that claim in his own summation.
“What kind of cartel is it where everybody is doing exactly what they would be doing otherwise?” the Dow lawyer asked jurors.
“There’s a difference between a conversation and an agreement, this is key,” he said, denying his client ever made a price-fixing pact.
Bernick told the jurors in his closing that product purchasers included industrial companies.
“When they don’t want to raise prices and we want to raise prices, they tell us to pound sand,” he said, reiterating his client’s stance that no conspiracy existed.
The purchasers’ case was “empty of truth, empty of facts and empty of fairness,” said Bernick, a partner in New York- based Boies Schiller & Flexner LLP.
“An agreement can be just a wink and a nod,” Goldberg told the jury. He said such schemes aren’t agreed upon in corporate board rooms. They’re hatched in back rooms, on golf courses and over cocktails, he said.
“If it quacks like a duck and it walks like a duck, it can be a duck, even if you don’t see it,” the lawyer said. He called the evidence of a price-fixing conspiracy “overwhelming.”
The case is In re Urethane Antitrust Litigation, 04- md-1616, U.S. District Court, District of Kansas (Kansas City).
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