The company agreed to pay $835m (Â£602m) - less than the $1.06bn a court in Kansas ordered it to pay in 2013.
Dow was hoping the Supreme Court would overturn the ruling, but the death of Justice Scalia left it evenly spilt between conservatives and liberals.
A split decision in the Supreme Court reverts to the lower court's ruling.
In a statement Dow said it settled because of the "increased likelihood for unfavourable outcomes".
The company said it still believed the original verdict was "fundamentally flawed," but felt settling was in the best interest of shareholders.
Last year, Dow announced plans to merge with competitor DuPont in a $130bn deal.

It will "be etched in my memory forever - quite an incredible feeling", said Peake, the first astronaut representing the UK to carry out a spacewalk.
He and US colleague Tim Kopra were outside the International Space Station (ISS) for almost five hours on Friday.
But the operation was cut short after water leaked into Col Kopra's helmet.
The pair had already replaced a failed electrical box, which was their main objective.
As it happened: Tim Peake's spacewalk
After they returned and were safely inside with the outer airlock hatch closed, Major Peake thanked mission controllers: "You guys did a great job."
Later on Friday night, he posted two tweets, two hours apart.
His first included three photographs and by Saturday morning it had had more than 9,000 retweets and 18,000 likes.
It included a selfie that showed his camera in the reflection of his helmet.
A later tweet from Maj Peake said: "Wrapping up today's spacewalk activities. Huge thanks to the ground teams who make it all possible & keep us safe out there - you guys rock!"
His colleague Tim Kopra also posted photos from the spacewalk, including one of him emerging from the airlock and another of him carrying out repairs on the end of the space station.
Maj Peake's parents later spoke of their excitement at watching their son fulfil a long-term ambition.
"We are absolutely thrilled. This is a proud day," his mother Angela said.
Before the spacewalk, the couple said they had watched the ISS fly over their home in the West Sussex village of Westbourne.
"It was a brilliant pass in clear blue skies... it seems quite surreal that your son is up there," his father Nigel Peake said.
Special report page: For the latest news, analysis and video
Guide: A day in the life of an astronaut
Explainer:  The journey into space and back
Test yourself: Do you have what it takes to be an astronaut?
Social media: Twitter looks ahead to lift-off
Timeline: How Tim Peake became a British astronaut
Quiz: How dangerous is life in space?
The spacewalk was expected to last more than six hours but was halted at 16:58 GMT on Friday when a water globule measuring a few inches across developed inside Col Kopra's helmet.
Nasa is under a ruling to terminate a spacewalk under such circumstances after an incident in 2013, when a European astronaut developed a significant helmet leak and nearly drowned.
A sample of water and absorption pads from inside the Col Kopra's helmet were collected by the crew as evidence for investigators to determine the cause of the leak.

The 29-year-old led Sarries to the Premiership and European Champions Cup titles last season while Hargreaves was sidelined through injury.
Barritt has made 171 appearances since joining Saracens in 2008 and has won 26 international caps for England.
Director of rugby Mark McCall said Barritt had shown "exceptional leadership qualities".
The Ulsterman continued: "He is ideally qualified to be our captain.
"Brad is someone who leads through example - through his actions, attitude and application. He is one of the most competitive players I have ever come across.
"He stepped in to the captaincy role last season in Alistair's absence with real aplomb."
Saracens begin their defence of the Premiership title against Worcester on Saturday, 3 September while the north London side have been drawn to face Toulon, Sale and Scarlets in the pool stage of the Champions Cup.
Dow Chemical agreed to settle a class action lawsuit after determining the death of Supreme Court Justice Antonin Scalia made victory less likely.
[NEXT_CONCEPT]
UK astronaut Tim Peake described his first walk in space as "exhilarating", as he posted photos - including a selfie - of the feat on Twitter.
[NEXT_CONCEPT]
Double winners Saracens have appointed centre Brad Barritt as captain, replacing Alistair Hargreaves.