Dow Chemical 2015 Annual Report Download - page 31

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conferences. The Company has been advised that this means that the Supreme Court is withholding further consideration of the
Company's Writ Petition while it considers the Tyson Foods case on the merits. As a result, the Company does not expect any
further action on its Writ Petition until sometime in 2016. The Company believes that the Supreme Court has accepted Tyson
Foods for the compelling reasons also advanced by the Company in its Writ Petition and that the Supreme Court will issue an
opinion in Tyson Foods that is favorable to the Company's case. Accordingly, on August 14, 2015, the Company filed an
amicus brief in Tyson Foods supporting Tyson Foods’ position. The Tyson Foods oral argument occurred before the Supreme
Court on November 10, 2015. The Company expects a decision from the Supreme Court on Tyson Foods in the first half of
2016, after which, depending on the result, the Supreme Court likely will consider the Company's Writ Petition. The Company
has concluded it is not probable that a loss has been incurred and, therefore, a liability has not been recorded with respect to this
matter. While the Company believes it is not probable a loss will occur, the existence of the jury verdict, the Court of Appeals'
opinion, and subsequent denial of the Company's Rehearing Petition indicate that it is reasonably possible that a loss could
occur.
Shortly after the July 2008 class certification ruling, a series of "opt-out" cases were filed by a number of large volume
purchasers who elected not to be class members. These opt-out cases are substantively identical to the class action lawsuit, but
expanded the period of time to include 1994 through 1998. On September 30, 2014, the opt-out cases, which had been
consolidated with the class action lawsuit for purposes of pre-trial proceedings were remanded from the District Court to the
U.S. District Court for the District of New Jersey. A consolidated trial of the opt-out cases is set to begin on March 7, 2016. As
with the class case, the Company denies plaintiffs' allegations of price fixing and maintains that the opt-out plaintiffs cannot
prove a compensable injury. As a result, the Company has concluded it is not probable a loss has been incurred and, therefore, a
liability is not recorded with respect to these cases.
In addition to the matters described above, there are two separate but inter-related matters in Ontario and Quebec, Canada. In
March 2014, the Superior Court of Justice in London, Ontario, ruled in favor of the plaintiffs’ motion for class certification.
The Company filed its Notice of Motion for Leave to Appeal in March 2014, which was subsequently denied. This matter is
currently in the pretrial stage, but no trial date has been set. The Quebec case has been stayed pending the outcome of the
Ontario case. For the same reasons stated above, a liability has not been recorded with respect to either Canadian matter.
Environmental Compliance: The costs of complying with evolving regulatory requirements could negatively impact the
Company's financial results. Actual or alleged violations of environmental laws or permit requirements could result in
restrictions or prohibitions on plant operations, substantial civil or criminal sanctions, as well as the assessment of strict
liability and/or joint and several liability.
The Company is subject to extensive federal, state, local and foreign laws, regulations, rules and ordinances relating to
pollution, protection of the environment, greenhouse gas emissions, and the generation, storage, handling, transportation,
treatment, disposal and remediation of hazardous substances and waste materials. At December 31, 2015, the Company had
accrued obligations of $670 million ($706 million at December 31, 2014) for probable environmental remediation and
restoration costs, including $74 million ($78 million at December 31, 2014) for the remediation of Superfund sites. This is
management's best estimate of the costs for remediation and restoration with respect to environmental matters for which the
Company has accrued liabilities, although it is reasonably possible that the ultimate cost with respect to these particular matters
could range up to approximately two and a half times that amount. Costs and capital expenditures relating to environmental,
health or safety matters are subject to evolving regulatory requirements and depend on the timing of the promulgation and
enforcement of specific standards which impose the requirements. Moreover, changes in environmental regulations could
inhibit or interrupt the Company's operations, or require modifications to its facilities. Accordingly, environmental, health or
safety regulatory matters could result in significant unanticipated costs or liabilities.
Chemical Safety: Increased concerns regarding the safe use of chemicals in commerce and their potential impact on the
environment as well as perceived impacts of plant biotechnology on health and the environment have resulted in more
restrictive regulations from local, state and federal governments and could lead to new regulations.
Concerns regarding the safe use of chemicals in commerce and their potential impact on health and the environment and the
perceived impacts of plant biotechnology on health and the environment reflect a growing trend in societal demands for
increasing levels of product safety and environmental protection. These concerns could manifest themselves in stockholder
proposals, preferred purchasing, delays or failures in obtaining or retaining regulatory approvals, delayed product launches,
lack of market acceptance, continued pressure for more stringent regulatory intervention and litigation. These concerns could
also influence public perceptions, the viability of the Company's products, the Company's reputation and the cost to comply
with regulations. In addition, terrorist attacks and natural disasters have increased concerns about the security and safety of
chemical production and distribution. These concerns could have a negative impact on the Company's results of operations.
Local, state and federal governments continue to propose new regulations related to the security of chemical plant locations and
the transportation of hazardous chemicals, which could result in higher operating costs.