The Dow Chemical Company Obtains Victory Before the Second Circuit Court of Appeals

May 24, 2010

Cleary Gottlieb won a victory for The Dow Chemical Company in the U.S. Court of Appeals for the Second Circuit on May 24. The Court affirmed in all respects the favorable trial verdict that Cleary Gottlieb had obtained for The Dow Chemical Company before the Honorable Alvin K. Hellerstein of the U.S. District Court for the Southern District of New York. The case arose out of Dow’s divestiture of its ethanolamines plant in Plaquemine, Louisiana to the chemical company Ineos Oxide at the time of Dow’s merger with Union Carbide in 2000. Ineos claimed that Dow breached a 35-year agreement under which Dow supplies ethylene oxide to Ineos for use at the ethanolamines plant. Contending that Dow failed to offer Ineos an opportunity to participate in an alleged capacity expansion project at Dow’s ethylene oxide plant, Ineos sought tens of millions of dollars in damages and additional supply of product at below manufacturing cost for the 25 plus years remaining on the contract. Following a ten-day bench trial in June 2009, Judge Hellerstein ruled that Ineos was entitled to only nominal damages of $100 and no additional product. The Court of Appeals affirmed Judge Hellerstein’s decision in its entirety, holding that Ineos suffered no monetary damages and rejecting Ineos’ claim to specific performance.