Scalia's Death Changes Corporate Responses To Lawsuits
ERIC WESTERVELT, HOST:
The death of Justice Antonin Scalia has already had a big impact on one case before the Supreme Court. It's caused Dow Chemical to settle a class-action lawsuit for $835 million. As NPR's Nathan Rott reports, other corporations may settle, too, instead of waiting around for a divided court to rule.
NATHAN ROTT, BYLINE: Dow Chemical Company is one of the largest chemical manufacturers in the country. It sells tens of billions of dollars of product every year. But the Michigan-based company ran into trouble a few years ago.
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UNIDENTIFIED MAN: Dow was one of several companies - chemical companies named in a class-action lawsuit alleging conspiracy to fix urethane chemical prices.
ROTT: It was news after a federal jury ruled against Dow, and the company decided to challenge that decision. That challenge made it to the Supreme Court, where it's sat until yesterday, when the company put out this press release saying it has agreed to settle the case for $835 million. The reason - quote, "growing political uncertainties due to recent events with the Supreme Court and increased likelihood for unfavorable outcomes or business involved in class-action suits."
ROBERT PECK: It means the passing of Justice Scalia changed all their calculations.
ROTT: This is Robert Peck, the president of the Center for Constitutional Litigation in Washington. He says that corporations facing class-action lawsuits like Dow Chemical generally viewed Scalia as a friend. He consistently voted on their side of the equation in a very divided Supreme Court. So losing his vote is a blow to corporations. And it was particularly bad for a corporation like Dow Chemical that had already lost in a lower court because given Republican opposition to appointing a successor, there's a good chance of a split 4-4 vote on any case coming to the Supreme Court. And that would mean that the lower court's order - in this case a more than a billion-dollar judgment - would stand.
PECK: So they obviously made the calculation that a more than $100 million discount on that judgment was worth it.
ROTT: The question is whether other corporations will start making a similar decision. There are a handful of other big cases involving the likes of Tyson Foods, search website Spokeo and Microsoft on the Supreme Court's docket. And Erik Gordon, a professor at the University of Michigan's business and law school, says that in all them, corporations might be feeling nervous.
ERIK GORDON: The attorneys in most of the high-profile cases are sitting down with their clients and asking their clients to reassess the risk. That's responsible lawyering.
ROTT: An attorney representing Microsoft says that his group did have a discussion after they learned of Scalia's death. But they're not sure yet what impact it might have. So he says for now, they'll likely proceed as planned. Erik Gordon says it's that kind of uncertainty though that leads to settlements.
GORDON: It's uncertainty that gets cases settled. If you're very certain of your position, you don't settle. So we may see a stream of settlements that otherwise we would not have seen.
ROTT: We'll know as the cases get closer to being heard in the coming months. Nathan Rott, NPR News. Transcript provided by NPR, Copyright NPR.