The cost of Scalia’s death to business

The death of Antonin Scalia has cost Dow Chemical corporation about a billion dollars. As David Dayen explains:

Supreme Court Justice Antonin Scalia was worth billions of dollars to corporate America, if a Dow Chemical settlement made public Friday is any indication.

Dow was in the midst of appealing a $1.06 billion class-action antitrust ruling, after a jury found that it had conspired with other chemical companies to fix prices for urethane, a material used in furniture and appliances.

But because of Scalia’s death and the sudden unlikelihood of finding five votes on the Supreme Court to overturn the case, Dow decided to settle for $835 million, the bulk of the original award.

This is because Dow had lost in the Appeals Court and had been confident of a 5-4 win at the Supreme Court overturning the lower court verdict. But with Scalia’s death, they clearly anticipated a 4-4 tie which would have let the lower court ruling against them stand.

Lyle Denniston goes into more detail about the Dow case and another similar one Tyson Foods v. Bouaphakeo that had already been heard on November 10 but where the opinion had not been issued, that threatened the ability of people to bring class actions lawsuits.

For the past several years, the Court’s majority led by Scalia has grown increasingly skeptical of class-action lawsuits, lamenting that they often deprive the companies sued in such cases of the opportunity to defend themselves against individual claims, and that they frequently force companies into settling cases even if they believe they have strong arguments against the claims, in order to avoid the heavy costs of litigation.

The Dow case (Dow Chemical Co. v. Industrial Polymers, Inc., docket 14-1091) was filed at the Court in March of last year, but presumably the Court has been holding onto it until it had decided the Tyson Foods cases. In both cases, the Court is being asked to decide whether a lawsuit class could be approved in federal court if not all members of the class had suffered an injury, and if the effect the challenged conduct in the case had on the class members could be measured by some form of statistical modeling, rather than by evidence related to each individual entity in the class.

Just before the Dow case went to trial, as a class action, the chemical company’s lawyers sought to have the class de-certified. That did not happen, and the trial resulted in the billion-dollar damages award. Both that verdict and the class approval were upheld by the U.S. Court of Appeals for the Tenth Circuit, leading Dow to move on to the Supreme Court.

While we have focused a lot on Scalia’s role in decisions involving social issues, his presence on the court was worth billions of dollars to big business.


  1. Hank Tholstrup says

    “they frequently force companies into settling cases even if they believe they have strong arguments against the claims, in order to avoid the heavy costs of litigation.”

    You mean, just like plea bargaining operates for poor or powerless people? How terrible for these poor put-upon multinationals…

  2. moarscienceplz says

    Inasmuch as class action suits seem to be mainly a mechanism for funnelling money from rich corporations to rich lawyers, I am also rather skeptical of them. That said, the power disparity between individual consumers and gigabuck corporations should seem obvious to anyone, and especially to Scalia, who appeared on the PBS series, The Italian-Americans, which had the mistreatment of powerless immigrants at the hands of the establisment as a major theme.

Leave a Reply

Your email address will not be published. Required fields are marked *