A Galveston jury awarded over $57 million to polyvinyl chloride producer Shintech following a two-week trial, finding Olin Corporation and Blue Cube Operations breached its supply contract.
“It’s been three years that the client has sort of been waiting for this day,” Porter Hedges partner David Salton told The Texas Lawbook.
Porter Hedges partner Stephanie Holcombe delivered the opening statement to the jury, which required her to break down complicated chemistry terms in an easily understandable way.
“We’re talking about it in the context of multibillion dollar companies on both sides that ultimately rely upon stability, which is why these are long-term contracts,” she said. “They negotiate years in advance, and so they rely upon those contracts being honored and executed.”
Shintech negotiated for a 10-year contract with Olin Corporation to receive vinyl chloride monomer, which Shintech’s Freeport plant then uses to produce different grades of polyvinyl chloride resin. The contract began in January 2021.
The VCM is used to make PVC, which is used to create things like pipes, window frames and flooring.
Shintech claimed that Olin demanded a price increase and refused to supply VCM in accordance with the contract. In January 2023, Shintech requested a $2.4 million credit note because it was not receiving the contracted amount of the product.
Shintech invoked the dispute resolution procedure in March 2023 and, in April 2023, brought this federal lawsuit, asking the court for injunctive relief that would force Olin to resume providing the VCM. In May 2023, U.S. District Judge Jeffrey Brown denied that motion, finding irreparable harm was not shown.
That same month, Shintech paid $18 million to Olin, under protest, in order to expedite the VCM supply within 24 hours. However, the supply did not resume due to issues with Olin’s plant, according to court documents. By that point, the dispute resolution period had ended.
By June 2023, Olin had resumed sending Shintech some VCM but at a reduced rate until July.
The jury deliberated for more than three hours before returning its $57,542,805 award for Shintech. Part of the award includes the $18 million Shintech paid to Olin.
Holcombe said Olin’s main argument at trial was that the issues at the plant that caused the supply issues were out of its control. Olin also focused on the force majeure clause in its contract. The jury found it didn’t prove it was excused from not supplying VCM to Shintech in May 2023.
Jonathan Pierce, Sean McChristian, Elizabeth Eoff, Elliott Deese and Christopher Wawro of Porter Hedges, Andrew Bender and Sharon McCally of Andrews Myers, and Fred Raschke of Mills Shirley also represented Shintech Incorporated.
Carson Bartlett, Matthew Butler, Seth Kruglak, Yasser Madriz, Alfred Huebinger, Brian Riopelle, Davis Walsh, Edwin Brooks, Gregory DuBoff, Matthew Fender, Reeny Philip, Richard Cromwell, Robert Redmond, Ryan Park and Shannon Kasley of McGuireWoods represented the defendants. They did not immediately respond to a request for comment.
The case is Shintech Incorporated v. Olin Corporation and Blue Cube Operations LLC, 3:23-cv-112.