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Will Dow Settlement in Wake of Scalia’s Death Lead to Other Accords?

March 3, 2016, 12:58 AM

Last week, Dow Chemical struck an $835 million settlement in an antitrust case that had been slated for arguments in front of the U.S. Supreme Court, with the company citing “growing political uncertainties” and a new risk assessment after the death of Justice Antonin Scalia.

That’s prompted questions about whether a wave of settlements are just around the corner.

Curt Cutting, a partner at Horvitz & Levy who specializes in arguing punitive damage appellate cases, said that after reviewing the upcoming Supreme Court docket, he believes the Dow settlement was an “anomaly.”

“You really have to look at the particular issue involved and the position the justices have taken on the issue in order to predict what the court might do with a particular case,” Cutting said. “There really are not likely to be many cases going the way Dow did.”

Each case has its own facts and it’s not always clear how a certain justice will vote, he said.

For example, Cutting said Scalia was viewed as a pro-business justice. But he consistently voted against business interests in certain cases, writing that the Constitution does not impose any restrictions on the amount of punitive damages that can be awarded, said Cutting.

There is one case that has caught Cutting’s interest: The case, Philip Morris USA Inc. v. Schwarz, deals with fair procedures for awarding punitive damages.

Other lawyers said they expect Scalia’s absence will give pause to any party with a case scheduled for arguments.

“The uncertainty ... has to prompt parties to review their Supreme Court strategy, their lower-court strategy and whether settlement makes sense,” said Thomas Lorenzen, a partner at Crowell & Moring.

In the Dow case, the giant chemical maker had challenged a jury’s finding that it colluded with four other chemical makers to fix urethane prices. It asked the Supreme Court to consider the class-action case on appeal and Scalia had voted to reduce the reach of such group suits in other cases.

In a news release, Dow said it was settling because of “growing political uncertainties due to recent events with the Supreme Court and increased likelihood for unfavorable outcomes for business involved in class-action suits have changed Dow’s risk assessment.”

Deciding whether to go to the Supreme Court or to settle is always a strategic choice, said Erwin Chemerinsky, dean of the University of California Irvine School of Law, who expects more parties will “absolutely” opt for settlements in the immediate wake of Scalia’s death.

But just because a party cites Scalia’s death and the politics surrounding it as a reason for settlement doesn’t mean that’s why it actually settled, said Chemerinsky.

“It may be that they would have settled the case anyway,” he said. “We’ll never know.”

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