Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

After Scalia's death, Dow Chemical opts for $835M class-action settlement


Dow Chemical is settling a pending Supreme Court case for $835 million, citing concerns that the court will be less business-friendly without the late Justice Antonin Scalia.

The Michigan-based chemical giant is in talks to merge with DuPont. They'd asked the high court to review a class-action decision alleging they'd engaged in price-fixing.

Now, Dow will cut its losses and settle that appeal, rather than risk an unfavorable decision from the eight remaining justices. Without the often pro-business Scalia, the court is split evenly along ideological lines.

UD corporate governance expert Charles Elson says the settlement amount is significant, even for a big company like Dow -- "that'll knock you out a quarter," he says.

But it might have been the cheaper exit route:

"Businesses do, in deciding whether to settle a tough case, take a calculated risk in settling," he says. "[They] evaluate in their calculations whether to settle or not what they think the odds [of winning the case] may be, and certainly, makeup of the court has something to do with that."

He says the company might also be using the reshuffling on the high court to clean house ahead of its merger with DuPont.

"You want to have the new company going forward to not be saddled with distractions of those kind of litigations," he says. "So many times when you see a large-scale corporate merger like this, they will try to clean up those cases on both sides, because neither wants to come to the marriage, if you will, with a potential problem that will affect the marriage going forward."

Lawyers in the midst of another class-action case against DuPont have speculated the Delaware company might take that approach as well.  

DuPont is set to be in court for decades of its use and dumping of a toxic non-stick chemical. The spin-off Chemours now oversees the division that made that product, and makes its replacement for use in Teflon.

Lawyers for the neighbors of DuPont's Washington Works plant, where the chemical was dumped in the water supply for decades, say the already struggling Chemours could take the fall if the  class-action suit doesn't go DuPont's way or becomes too much of a financial burden.


Related Content