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By Jonathan Stempel
(Reuters) - A federal appeals court rejected Dow Chemical Co's (N:DOW) bid to throw out a $1.06 billion (653.52 billion pounds) verdict imposed after customers accused it of conspiring to artificially inflate polyurethane prices, saying enough evidence supported the class action award.
The 10th U.S. Circuit Court of Appeals in Denver on Monday said new U.S. Supreme Court limits on class actions did not require Dow customers to sue individually, even if some could have avoided price hikes by negotiating or using rival products.
Dow is "extremely disappointed" in the decision and will appeal, including to the Supreme Court if necessary, the Midland, Michigan-based company said in a statement on Tuesday.
The decision shows that large class actions can still be sustained even after the Supreme Court, in 2011 and 2013 decisions favouring Wal-Mart Stores Inc (N:WMT) and Comcast Corp (O:CMCSA), made it harder to show that common questions predominated and damages could be readily determined.
Polyurethanes are chemical products used to make consumer and industrial goods such as car seating, footwear, insulation and mattress foam.
Several companies including Dow had been accused in a 2005 lawsuit of conspiring to fix prices of urethane chemicals in the preceding six years.
Dow was the only defendant not to settle, only to be found liable in February 2013 by a federal jury in Kansas City, Kansas, for $400 million of damages.
That sum was tripled under antitrust law to $1.2 billion, and then reduced to $1.06 billion because of other settlements.
Writing for a unanimous three-judge 10th Circuit panel, Circuit Judge Robert Bacharach said jurors "could have inferred" from the evidence that a conspiracy caused polyurethane prices to be higher than they would have been absent collusion.
In upholding the class action, he wrote that "price-fixing affects all market participants, creating an inference of class-wide impact even when prices are individually negotiated," permitting liability to be determined "in a single stroke."
The panel also rejected Dow's argument that there was no basis for the $400 million award, saying an expert witness for the plaintiffs had estimated even greater damages and that jurors had discretion to impose a lesser amount.
In its statement, Dow said the U.S. Department of Justice closed its own probe into alleged price-fixing in December 2007, without bringing charges.
"Dow has always denied plaintiffs' allegations of price fixing and will continue to vigorously defend this litigation," it said.
Roberta Liebenberg, a lawyer for the plaintiffs, did not immediately respond to requests for comment.
Defendants that previously settled included Germany's BASF SE (DE:BASFn) and Bayer AG (DE:BAYGn), and Huntsman International LLC. None admitted wrongdoing.
The case is Dow Chemical Co v Seegott Holdings Inc et al, 10th U.S. Circuit Court of Appeals, No. 13-3215.
(Reporting by Jonathan Stempel in New York; editing by Matthew Lewis)