Dow wields SCOTUS amicus brief to erase $1.1 billion antitrust judgment

October 2, 2015

(Reuters) – Has Dow Chemical inserted itself into the U.S. Supreme Court’s review of the Tyson Foods wage-and-hour class action as part of a sophisticated strategy to wipe out a $1.1 billion antitrust judgment against Dow? That’s the accusation in an amicus brief filed this week in the Tyson case by urethanes purchasers who beat Dow in a 2013 trial in Kansas federal court.

To understand the purchasers’ assertion, you need a bit of background. Last March, a couple weeks before Tyson Foods asked the Supreme Court to take up a $6 million wage-and-hour judgment against it, Dow Chemical filed a petition of certiorari in the antitrust case. On their faces, the cases were quite different. The class action against Tyson involved donning-and-doffing claims by workers at a meat-processing plant in Iowa. Dow was found liable for conspiring with its ostensible competitors to fix prices for urethane chemicals. But the two cert petitions raised some similar questions about whether class action plaintiffs are entitled to rely on statistical averages to establish damages. The two companies also had the same counsel of record, Carter Phillips of Sidley Austin.

The Dow and Tyson cert petitions followed parallel tracks at the Supreme Court, but the justices ended up conferencing on Tyson before Dow. They granted review of the Tyson case on June 8. Three days later, at their June 11 conference, they considered Dow’s petition.

Then the Dow case took a strange swerve. Before the Supreme Court issued its order list on June 15, Dow and the plaintiffs filed an emergency motion, asking the justices to hold Dow’s cert petition. As my Reuters colleague Lawrence Hurley reported at the time, the two sides said they had reached a settlement agreement but that the agreement was conditioned upon the Supreme Court delaying its order on Dow’s bid for review. “The parties’ uncertainty concerning whether the court will grant, deny or hold the petition was a necessary ingredient to the parties’ ability to reach a settlement at this juncture, when earlier efforts at settlement had failed,” the letter said. “Thus, if this motion is not granted before the release of the orders list (without regard to whether the petition is listed on the orders list), the necessary conditions for settlement will be eliminated,” the letter motion said.

That motion was an unusually candid admission of how a cert petition can shape settlement discussions but a stranger development followed: Later that same day, before the justices acted on the motion, the parties withdrew it. Neither side offered an explanation.

After the hold motion was pulled, the Supreme Court could have granted or denied Dow’s petition for review or relisted the case for a subsequent conference. The justices, however, opted for none of the above. According to the Dow docket, nothing has happened in the case since last June.

Dow believes the justices are waiting to decide what to do with its case until they’ve ruled in Tyson. Or at least that’s what the company’s lawyers from Mayer Brown said in an amicus brief Dow filed last month in the Tyson case. (Dow’s counsel of record on its own cert petition, Sidley’s Phillips, presumably couldn’t represent Dow on the Tyson amicus brief because he is also Tyson’s lead lawyer.)

Dow’s amicus brief backed Tyson’s arguments about supposedly fatal errors in the meat workers’ trial – but it also re-argued Dow’s own petition for Supreme Court review. Like Tyson, Dow said, it had tried and failed to convince the lower courts that class members shouldn’t be lumped together in a “trial by formula” because their supposed damages weren’t the same. “The certification in Dow’s case of a class action that encompassed many uninjured class members, as well as the use of a damages model that ignored individual differences among class members, squarely implicate the questions presented in Tyson,” the brief said. Dow urged the court to overturn the judgment against Tyson and to grant cert in its antitrust case and send it back to the court below.

That brings us to the amicus brief the urethane purchasers’ filed this week, also in the Tyson case. Their counsel of record, Paul Clement of Bancroft, called Dow’s “unusual” Tyson amicus brief “a thinly veiled attempt to lay the foundation for a remand” if Tyson wins. I don’t even know why Clement bothered with “thinly veiled.” Dow’s brief seems downright naked to me.

The purchasers said Dow had drastically overstated the legal and factual similarities between their horizontal price-fixing case and the Tyson workers’ wage claims, arguing that the Supreme Court’s decision in Tyson won’t affect the judgment in their case. They also took the opportunity of the amicus filing to recount their evidence against Dow at considerable length, as if to tell Dow that two can play at the cert briefing re-argument game.

What will the justices make of all this? The Supreme Court already knows, thanks to last June’s joint motion by Dow and the purchasers, that negotiating postures on both sides of this case are contingent on Dow’s cert bid. That’s not unusual – as I said, the possibility of Supreme Court review drives settlement talks all the time – but you don’t often see parties come right out and tell the justices that they are a settlement lever. And then to use amicus briefs in another case to re-argue an undecided cert petition in yours? Very interesting tactics from some of the most experienced and successful Supreme Court litigators in the business.

Dow counsel Phillips of Sidley and Stephen Shapiro of Mayer Brown declined to comment, as did urethane purchasers’ lawyer Matthew Duncan of Fine Kaplan and Black.

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