Antitrust Law Daily Wrap Up, ANTITRUST—D. Colo.: Expert report addressing monopolization in conspiracy to monopolize suit not irrelevant, (Jan 6, 2015)

By Jody Coultas, J.D.

The federal district court in Denver has denied a motion to strike an initial expert report as irrelevant and insufficient in an action brought by an off-campus student housing operator against another apartment complex for conspiring to monopolize collegiate student housing at a Colorado university. A supplemental expert report was, however, stricken as untimely (Auraria Student Housing at the Regency v. Campus Village Apartments, LLC, January 5, 2015, Martínez, W.).

The University of Colorado, Denver (UCD) contacted Campus Village Apartments, LLC to construct student housing near the campus. Campus Village and UCD entered into an agreement whereby UCD would institute a residency requirement for most full-time students to live at Campus Village during the first two semesters of enrollment.

Auraria Student Housing at the Regency, which operates an apartment complex that provides off-campus housing for students attending UCD, filed suit against Campus Village for allegedly conspiring to monopolize. Specifically, Auraria alleged that it lost business from new students who would have chosen to live at Auraria’s apartment complex if there were no residency requirements.

In January 2014, Auraria’s motion for summary judgment was denied. In September, the court also rejected Campus Village motion for summary judgment. Auraria now moves to exclude an initial expert report submitted by Campus Village and strike as untimely and improper a supplemental expert report.

Initial report. The federal rules governing the admissibility of expert testimony did not require the court to exclude the initial report. Auraria argued that the Initial Report should be excluded because it addressed monopolization, rather than Auraria’s conspiracy to monopolize claim. Specifically, Auraria argued that the opinions about monopoly power in a relevant market are pertinent to a monopolization claim, but have no relevance to a conspiracy claim. Campus Village argued that the expert opinion was relevant to the conspiracy to monopolize claim because it would allow a jury to infer whether Campus Village had a specific intent to monopolize, and thus whether the agreement had the purpose of creating a monopoly. The Initial Report opined that the alleged agreement failed to give either of the co-conspirators any ability to create a monopoly, which would permit a jury to infer that the agreement was not a conspiracy to monopolize, and that neither alleged co-conspirator intended to create a monopoly. Indirect evidence is permissible, and often necessary, to prove such elements of a claim.

Auraria failed to show that the Initial Report or the opinions therein must be excluded, according to the court. In its motion to strike, Auraria argued the Initial Report should be excluded because it contained opinions that relied on insufficient facts or data, and that did not result from reliable application of economic principles and methods. However, each of the cited opinions had some basis in facts or data and was rooted in the expert’s economic expertise. Auraria’s arguments were more appropriately directed toward challenging the weight of those opinions on cross-examination.

Supplemental report. The supplemental report was dismissed as untimely by the court. A supplement to an expert report “must be disclosed by the time the party’s pretrial disclosures under Rule 26(a)(3) are due.” In this case, supplements to expert reports were required to be disclosed in the parties’ proposed final pretrial orders. Campus Village could not show that the failure to meet the deadline was justified or harmless. The supplemental report’s tardiness results in prejudice and surprise that cannot be cured without significant disruption to the impending trial. Auraria was prejudiced and surprised by the supplemental report’s disclosure of new evidence on the subjects of tying and tied product markets, and that such prejudice can only be cured by reopening discovery to permit Auraria to rebut such testimony, requiring a continuance of the trial date.

The case is No. 10-cv-02516-WJM-KLM.

Attorneys: Thomas P. McMahon (Jones & Keller, PC) for Auraria Student Housing at the Regency, LLC. Sarah Levine Hartley (Bryan Cave LLP) for Campus Village Apartments, LLC.

Companies: Auraria Student Housing at the Regency; Campus Village Apartments, LLC

Cases: Antitrust ColoradoNews