Thursday, January 17, 2013

Dow prepares to defend itself in billion-dollar antitrust trial

NEW YORK (Reuters) - Dow Chemical Co is preparing to defend itself at trial against allegations it took part in a conspiracy to fix prices of chemicals used to make a wide range of foam products found in cars, furniture and packaging.

Dow was one of several chemical company defendants named in a class action lawsuit that started nine years ago. But Dow was the only defendant not to settle and is scheduled to go trial on Wednesday in federal court in Kansas City, Kansas.

The stakes are high. The plaintiffs, direct purchasers of the chemical products, estimate damages exceed $1 billion. Under federal antitrust law, damages are trebled so the final judgment against Dow could exceed $3 billion.

The lawsuit alleges that Dow, along with its competitors, began fixing prices for urethane chemicals no later than 1999 when the market was falling and the industry was plagued by excess demand. The conspiracy to keep prices high continued into 2003, according to the plaintiffs.

At trial, the plaintiffs plan to call at least five witnesses who they say will provide direct testimony supporting their case of a price-fixing agreement. Those witnesses include executives of the companies allegedly involved in the conspiracy. The class representatives are Seegott Holdings Inc, Industrial Polymers Inc and Quabaug Corp.

Dow has denied engaging in any price-fixing conspiracy. It has contended that no witness from any of the defendants in the case has testified that they actually entered into an agreement to fix prices.

Dow will be represented by David Bernick of Boies, Schiller & Flexner.

The plaintiffs will be represented by Joe Goldberg of Freedman Boyd Hollander Goldberg Urias & Ward; Michael Guzman of Kellogg, Huber, Hansen, Todd, Evans & Figel; and Kit Pierson of Cohen Milstein Sellers & Toll.

The trial is expected to last six to seven weeks.

Other defendants in the case have settled. In 2006 Bayer AG agreed to pay $55 million. In 2011 Huntsman International LLC agreed to pay $33 million and BASF Corp agreed to pay $51 million. In settling, none of the companies admitted any wrongdoing.

The case is In Re Urethane Antitrust Litigation, U.S. District Court, District of Kansas, 04-md-01616.

(Reporting by Andrew Longstreth; Editing by Howard Goller and Steve Orlofsky)

Source: http://news.yahoo.com/dow-prepares-defend-itself-billion-dollar-antitrust-trial-000603266--finance.html

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