Wednesday, March 02, 2016

Dow settlement signals impact of Scalia death on class actions

By Lawrence Hurley
Feb. 27, 2016

Dow Chemical Co's agreement to pay $835 million to settle a price-fixing dispute provides evidence that Justice Antonin Scalia's death is a blow to businesses that have had success recently in challenging class action cases at the U.S. Supreme Court.

Dow (DOW.N), in the process of merging with Dupont (DD.N), on Friday settled the decade-long dispute rather than risk its fate being decided by a shorthanded, eight-justice court missing, in Scalia, a reliable vote in support of companies in class action cases.

The Dow dispute, in which it was accused of conspiring to artificially inflate polyurethane prices, had been on hold at the high court pending the outcome of another case.

Following Scalia's Feb. 13 death, the court's conservative wing lacks the five votes needed "to make dramatic new rules that curtail class actions," said Paul Bland, executive director of consumer advocacy group Public Justice.


With Scalia joining the four other conservative justices in the majority, the court in recent years had issued a series of rulings curbing class-action litigation against businesses. These included significant victories for Wal-Mart in 2011 and Comcast Corp (CMCSA.O) in 2013.

In those two cases, Scalia wrote the majority opinion for the court. The Comcast ruling was 5-4. The Wal-Mart decision was 5-4 on one aspect and unanimous on another.

Scalia's absence may influence the court's decisions on which new cases to hear. Four of the eight remaining justices must agree in order for the court to take up a case.


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