Antitrust Law Daily Evidence barred in upcoming urethane price fixing trial against Dow
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Tuesday, February 9, 2016

Evidence barred in upcoming urethane price fixing trial against Dow

By Jeffrey May, J.D.

In preparation for trial in a price fixing action brought against The Dow Chemical Company by purchasers of polyether polyol products (PPPs), the federal district court in Newark, New Jersey, has set limits on the evidence that can be introduced by the parties. Notably, the complaining PPP purchasers, who opted out of a successful price fixing class action lawsuit in the federal district court in Kansas City, Kansas, will not be permitted to introduce into evidence the verdict in the class trial. The court also granted Dow’s motion in limine to preclude evidence of the company’s compliance programs and to limit references to Dow’s alleged involvement in other price fixing conspiracies (In Re Urethane Antitrust Litigation, February 8, 2016, Martini, W.).

Class action case, verdict. The opt-out plaintiffs contended that they did not plan to affirmatively raise the class case or the class verdict during trial. In the class action, following the jury’s verdict in favor of the class plaintiffs, judgment was entered against Dow for $1,060,847,117. The judgment was upheld on appeal to the U.S. Court of Appeals in Denver. The opt-out plaintiffs did intend, however, to cross-examine Dow’s expert with the verdict in the class trial and have their own expert characterize the class verdict as a basis for her opinions. Dow’s expert planned to testify that the economic evidence was inconsistent with the existence of a conspiracy. Even assuming the class verdict was probative in that it may undermine Dow’s expert’s testimony, any probative value would be substantially outweighed by unfair prejudice and jury confusion.

Evidence of Department of Justice investigation. The plaintiffs were partially successful in their efforts to limit evidence relating to the Justice Department’s decision not to prosecute Dow following a criminal investigation into the company’s pricing conduct in the urethane market. Although the plaintiffs argued that the evidence should be categorically excluded on relevance and prejudice grounds, the court instead barred Dow from presenting evidence of the Justice Department’s investigation or its result as part of its case-in-chief. Dow would be able to introduce impeachment evidence of an agreement between the former head of another urethane producer who received prosecutorial immunity in exchange for cooperating with the government, so long as Dow did not refer to the investigation into Dow’s conduct.

Fifth Amendment invocation. At the plaintiffs’ request, the court also precluded Dow from introducing evidence related to the plaintiffs’ employees’ invocation of their Fifth Amendment rights at depositions. Dow contended that it was denied the opportunity to gather evidence relevant to its defense because of the Fifth Amendment invocations. However, Dow had received all of the discovery it was due, according to the court.

The case is No. 2:08-cv-05169-WJM-MF.

Attorneys: James E. Cecchi (Carella, Byrne, Cecchi, Olstein, Brody & Agnello, PC) for Carpenter Co., Carpenter Canada Co. and Burkart Foam, Inc. Lawrence S. Lustberg (Gibbons, PC) for Dow Chemical Co.

Companies: Carpenter Co.; Burkart Foam, Inc.; Dow Chemical Co.

MainStory: TopStory Antitrust NewJerseyNews

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