Federal judge in KCK orders Dow Chemical to pay $1.2 billion in price-fixing case

Dow Chemical Co. was ordered by a federal judge to pay a $1.2 billion judgment in a urethane price-fixing case after losing its bid to undo a jury’s verdict that it colluded with competitors.

U.S. District Judge John W. Lungstrum in Kansas City, Kan., on Wednesday rejected Dow Chemical’s request to overturn the $400 million February jury verdict. Lungstrum tripled the damages under U.S. antitrust law, making the award the biggest U.S. verdict this year. Dow said it would appeal.

Lungstrum rejected the company’s challenge to the verdict on grounds that the purchaser plaintiffs alleged a conspiracy spanning from 1999 to 2003 and were unable to prove its existence before November 2000.

“The absurdity of its premise – that Dow could escape liability for an illegal antitrust conspiracy because plaintiffs alleged a longer conspiracy than found by the jury — convinces the court that it should not create new law by adopting Dow’s position,” the judge said in a 30-page ruling.

The case started in 2005 with allegations that Dow plotted with BASF SE, Huntsman International LLC and Lyondell Chemical Co. in violation of federal law. Only Dow didn’t settle.

At the heart of the suit were urethane-based products used in the automotive, construction, appliance and furniture industries.

Dow denied the price-fixing allegations, maintaining there were legitimate business reasons for the evidence the plaintiffs cited as proof of their claims.

“Dow will appeal the judgment entered against it,” said Rebecca Bentley, a spokeswoman for the Midland, Mich., company. “We believe that the jury’s findings required that judgment should have been entered in Dow’s favor.”

A U.S. Justice Department investigation of the matter was closed in 2007 with no charges being filed, Bentley said.