Business and Commercial Litigation Newsletter

By Paul McDonald and Dan Murphy

Our February recap highlights cases that address the settlement of Dow Chemical Co.’s class action following the death of U.S. Supreme Court Justice Scalia, pressure on Volkswagen to come up with an emissions fix for its diesel automobiles, and other news that will have an impact on business and litigation.

Dow Chemical Settles Class Action Suit, Citing “Political Uncertainties”

Dow Chemical Company has agreed to settle a major class action suit for $835 million following the death of U.S. Supreme Court Justice Antonin Scalia. In the underlying case, plaintiffs obtained a jury verdict of $1.06 billion based on claims that the chemical manufacturer engaged in price fixing in violation of the Sherman Act, 15 U.S.C. § 1, and the Clayton Antitrust Act, 15 U.S.C. § 15. Dow was alleged to have fixed prices for polyurethane, which is commonly used to make car seats, insulation, and footwear. At the trial court level, Dow sought to defeat class certification, arguing that each class plaintiff had to show individualized harm. The trial court rejected Dow’s arguments concluding, among other things, that common issues of law and fact applied to class members and that joinder of all members would be impracticable. Dow appealed the court’s rulings and jury verdict to the Tenth Circuit Court of Appeals, which rejected Dow’s challenged argument that the case was not susceptible to resolution on a class-wide basis. Taking comfort from more recent Supreme Court decisions, such as Wal-Mart v. Dukes, Dow appealed this decision to the U.S. Supreme Court to challenge the use of class action procedures. Most of the recent decisions from the U.S. Supreme Court that limited the use of class actions were 5-4 decisions, many of which were championed by Justice Scalia. Following the death of Justice Scalia, Dow was less confident that it could prevail in its appeal, resulting in a settlement totaling $835 million.

Read more about this development here and access the Tenth Circuit’s Opinion here.

Federal Judge Presses Volkswagen to Address Vehicle Emissions Fix

Volkswagen has been given less than one month to address the status of its proposed remedy to fix more than 600,000 U.S. vehicles that were affected by the diesel emissions scandal. Last week, U.S. District Court Judge Charles Breyer ordered that VW would have to disclose by March 24, 2016 whether the company has developed an emissions fix that U.S. regulators would accept. VW has admitted that it used software to selectively evade emissions limits, promoting “clean diesel” cars that actually emit up to 40 times the amount of acceptable limit of harmful emissions. At present, more than 500 lawsuits in the U.S. have been commenced against the company by VW owners, while the U.S. Department of Justice is seeking up to $46 billion in penalties against the car maker for environmental violations. More than 11 million vehicles worldwide are affected by the emissions defect.

Read more about this development here.

Appeals Court Overturns Apple’s $120 Million Verdict Against Rival Samsung

A unanimous panel of the U.S. Court of Appeals for the Federal Circuit has overturned Apple’s $120 million patent infringement jury verdict against Samsung. The Court ruled that two of Apple’s key patents – the so-called slide-to-unlock and autocorrect patents – on which the infringement verdict was based were invalid. As a result of this ruling, Samsung can continue using these smartphone features, and will not have to make any changes to older models.

Read more about this development here.

President Obama Considers Potential Nominees to U.S. Supreme Court

Speculation has increased over President Obama’s potential nominees to the U.S. Supreme Court following the death of Justice Antonin Scalia. Leaders from the Republican-led Senate have vowed to block any nomination provided by President Obama. Under Article II, Section 2, Clause 2 of the U.S. Constitution, the President, “by and with the Advice and Consent of the Senate,” shall appoint the justices of the U.S. Supreme Court. Although President Obama has publicly stated that his list is not final, he recently stated that Nevada Governor Brian Sandoval, a moderate Republican, was on his short list of candidates.

Read more about this development here and access an article describing potential nominees here.