Three years after household product manufacturer S.C. Johnson & Son Inc. made its entry into plastics with the purchase of Dow Chemical Co.'s DowBrands division, the company is suing Dow. S.C. Johnson of Racine, Wis., on May 3 asked a U.S. District Court in Wilmington, Del., to award the company a minimum of $20 million for what it alleges were misrepresentations and breech of promise.
A spokeswoman for S.C. Johnson said company policy is not to comment on pending litigation. But the firm's lawsuit claims Dow led S.C. Johnson to believe DowBrands had as much as $20 million in Latin American export sales.
S.C. Johnson also alleges that Dow failed to honor a promise to indemnify the company for any patent litigation brought by Tenneco Inc. involving Dow's Slide-Loc closeable plastic bags. Tenneco, now Pactiv Corp. of Lake Forest, Ill., filed such a suit.
Sue Breach, global media relations manager for Dow in Midland, Mich., said at the time of the agreement that DowBrands' Latin American sales were about $19 million — but the deal was not contingent upon DowBrands' Latin American exports.
"[Latin American business] was a very small piece of the business they were buying," she said, adding that Dow has not tracked DowBrand's Latin American sales since the transaction.
Breach further responded that no patent action was pending against Dow when the deal was made.
"The patent-infringement case that is the subject of this new lawsuit was filed by Tenneco against SCJ in May of 1998 after the close" of Dow's sale, Breach said in a May 19 telephone interview. "The Tenneco vs. SCJ lawsuit is still pending, and SCJ is arguing that there is no infringement."
When S.C. Johnson purchased DowBrands, S.C. Johnson had sales of more than $4 billion, and expected the deal to boost its sales by 20 percent.
The company — known for household products such as Pledge furniture polish, Windex window cleaner and Raid insect spray — inherited popular DowBrand products such as Saran Wrap and Handi-Wrap films and Ziploc-brand food-storage bags.
A trial date has not been scheduled for the S.C. Johnson vs. Dow case.