A federal judge in Kansas City, Kan., has ordered the Dow Chemical Company (NYSE:DOW) to pay $1.2 billion in a long fought price-fixing conspiracy case.
U.S. District Judge John W. Lungstrum rejected Wednesday Dow's request to overturn a February verdict against it and, under U.S. antitrust law, tripled the $400 million in damages to $1.2 billion.
The case concerns prices for the chemical urethane, used to make foam products in cars, furniture and packaging. Dow and competitors BASF SE (ETR:BAS), Huntsman International LLC (NYSE:HUN) and Lyondell Chemical Co. (now LyondellBasell, NYSE:LYB) were among those named in a class-action lawsuit filed by purchasers of the chemicals in 2005 (In Re Urethane Antitrust Litigation, U.S. District Court, District of Kansas) that claimed the companies conspired to fix urethane prices. Dow was the only defendant that refused to settle.
Dow went to trial in Kansas City in January, and in February a federal jury came back with the $400 million verdict against the chemical giant, finding that it did conspire with competitors to fix prices of urethane and violated federal law. Dow still denied the charges and contended that the plaintiffs alleged a longer conspiracy than what the jury found.
Other competitors named in the case began settling a year after the case was brought. In 2006 Bayer AG (ETR:BAYN) settled and agreed to pay $55 million. In 2011 Huntsman International LLC agreed to pay $33 million, and BASF agreed to pay $51 million in the same year. In settling, none of the companies admitted any wrongdoing.
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David Bernick, an attorney for Dow, based in Midland, Mich., said the company will appeal the rejection, saying the statistical formula that an expert used to calculate the price-fixing was not reliable.
Dow stock was trading at $34.99 Thursday afternoon, down 1 percent.