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What the U.S. Supreme Court without Antonin Scalia Means for Corporate America!

Dear Commons Community,

Since Justice Antonin Scalia passed away on February 13th, there has been praise for him and his work on the Supreme Court.  There has also been speculation about the power struggle that will occur when President Obama nominates his successor.  However, his death is already having reverberations in the legal world especially for corporations who viewed the Supreme Court as friendly to their interests.  Here is a short piece from the Associated Press reporting on how Dow Chemical has decided to settle a price-fixing lawsuit for $835 million rather than go forward before a Supreme Court without Scalia.

“Dow Chemical Co., one of America’s largest chemical manufacturers, agreed on Friday to settle a price-fixing lawsuit for $835 million in the wake of Justice Antonin Scalia’s death.

The company had challenged a $1 billion judgment in a high-stakes, class-action case. But without Scalia, it appears the new reality at the high court was too big a gamble for the company to continue with the litigation.

Growing political uncertainties due to recent events within the Supreme Court and increased likelihood for unfavorable outcomes for business involved in class action suits have changed Dow’s risk assessment of the situation,” the company said in a statement.

Dow said a case the Supreme Court heard last year but hasn’t yet decided, Tyson Foods v. Bouaphakeo, was the reason its own case was still on hold at the court. Both cases present common questions of law that may limit class-action liability — an area where the Supreme Court of late has been friendly to business interests.

Stunningly, Dow’s statement singled out two major cases in which Scalia wrote the majority opinions — 2011’s Wal-Mart v. Dukes and 2013’s Comcast v. Behrend — essentially conceding that, without Scalia, the company no longer had any prospects of winning. Both of those cases were decided 5 to 4, with conservatives ruling for the corporations.

Given the new eight-justice court, Dow called its decision to end the litigation “the right decision for the company and our shareholders.” As is usual with settlements, the company maintained its innocence.

“While Dow is settling this case, it continues to strongly believe that it was not part of any conspiracy and the judgment was fundamentally flawed as a matter of class action law,” the company said.

A jury in 2013 had found Dow Chemical liable in a price-fixing scheme with four other companies for chemicals used to produce urethane, a compound used infoam upholstery for furniture and plastic walls in refrigerators, according to Bloomberg. About 2,400 businesses that bought the chemicals from Dow joined in a class action against the industrial giant.

Friday’s settlement is just another example of the shifting landscape at the Supreme Court — and why it matters who fills the now-vacant seat.”

Tony

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