Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Chamber of Commerce amicus brief supports Dow Chemical’s appeal of $1B judgment, (Oct 22, 2014)

By Jody Coultas, J.D.

The Chamber of Commerce of the United States of America, a nonprofit corporation, filed an amicus brief in the U.S. Court of Appeals in Denver, supporting Dow Chemical Company’s appeal of a jury’s $1.06 billion judgment against it in an antitrust suit (In re Urethane Antitrust Litigation, October 21, 2014, Bacharach, R.).

On September 29, the court held that industrial purchasers of polyurethane products were properly granted class certification of antitrust claims against Dow Chemical and the other chemical producers over an alleged conspiracy to fix prices for chemicals used in the manufacture of polyurethane products. The court held that a price-fixing conspiracy created an inference of class-wide injury, even when prices are individually negotiated, and held that the price-fixing conspiracy predominated over any individualized damages issues.

The Chamber of Commerce argued that the court’s decision allowed any plaintiff alleging an antitrust conspiracy to invoke Federal Rule of Civil Procedure 23 and put the defendants at risk of potentially ruinous liability—even if buyers in the relevant market negotiate prices individually and in practice often avoid price hikes.

Specifically, the Chamber of Commerce argued that the decision would permit any conspiracy to be certified as a class action, which significantly expands the scope of class liability and conflicts with a Supreme Court decision and the decisions of numerous other circuits. The courts have determined that class actions cannot be used to abridge, enlarge, or modify any substantive right, that due process allows parties an opportunity to present every available defense, and that class action defendants are entitled to litigate their statutory defenses to individual claims. By approving class treatment for antitrust conspiracies, the Chamber of Commerce believes that the court’s decision would deprive defendants of the right to show that some consumers avoided any overcharges at all.

Also, the Chamber of Commerce argued that the decision would increase dramatically the costs of class actions for businesses and consumers. If allowed to stand, the decision would result in “staggering” class judgments and higher litigation costs. Because the decision allows virtually any antitrust conspiracy to be prosecuted as a class action, the Chamber of Commerce argued that the Tenth Circuit would be used by plaintiffs to threated nationwide class liability to pressure defendants into settling baseless claims. The ruling would preclude those defendants from raising individualized defenses. The decision could also allegedly be applied to any conspiracy, including those under RICO.

The case is No. 13-3215.

Attorneys: Steffen N. Johnson (Winston & Strawn LLP) for Chamber of Commerce of the United States of America.

Companies: Dow Chemical Company; Seegott Holdings, Inc.; Industrial Polymers, Inc.; Quabaug Corporation

News: Antitrust