Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Wis.: Direct purchaser plaintiffs’ expert opinion could support class certification motion, (Feb 29, 2016)

By Jody Coultas, J.D.

Jui Li Enterprises Company, Ltd. was denied exclusion of an expert opinion offered to support class certification in an action alleging a price-fixing conspiracy in aftermarket sheet metal products. The expert’s methodologies were sufficient, and the opinion was relevant and will assist the trier of fact, according to the federal district court in Milwaukee (Fond du Lac Bumper Exchange, Inc. v. Jui Li Enterprise Company, Ltd., February 26, 2016, Adelman, L.).

Direct and indirect purchasers of aftermarket sheet metal products filed antitrust class actions against Jui Li. In support of a motion for class certification, the direct purchaser plaintiffs asked Dr. Russell Lamb to analyze whether evidence common to the class could demonstrate that all members of the class would have been injured as result of a price-fixing conspiracy for aftermarket sheet metal parts, and whether damages could be measured on a class-wide basis. Dr. Lamb concluded that a multiple regression analysis could be used to calculate damages on a class-wide basis by measuring the percent by which class members were overcharged. Jui Li moved to exclude Dr. Lamb’s testimony.

Expert testimony is admissible only if (1) the witness is qualified by knowledge, skill, experience, training, or education; (2) the witness’s specialized knowledge will help the factfinder understand evidence or determine a fact issue; (3) the opinion is based on sufficient facts or data; and (4) the expert has reliably applied principles and methods to the facts of the case.

Dr. Lamb’s methodologies were admissible, according to the court. Jui Li argued that the expert testimony was based on the flawed assumptions that the misconduct alleged in the complaint occurred and that no anti-competitive activity occurred during a certain time period. These assumptions did not render the expert report inadmissible at the class certification stage because they were based on economics. Dr. Lamb was not asked to determine whether Jui Li engaged in anti-competitive conduct, and thus Dr. Lamb did not assume the question he was asked to prove. Even if the benchmark period contained some anticompetitive conduct, it would only render the overcharge estimate conservative.

Jui Li also argued that Dr. Lamb did not account for all non-competitive factors that could explain a price correlation, pointing specifically to the fact that Dr. Lamb did not explain a gradual decrease in prices from 2004 to 2009. However, an economist need not account for every possible variable in order for a regression analysis to be admissible. Failure to account for the alleged price decrease did not render the regression analysis so incomplete as to be inadmissible. Whether there was such a decrease and whether that decrease required the application of a trend variable was a fact question and did not bear on admissibility.

The court rejected Jui Li’s argument that the methodology Dr. Lamb used to conclude that a price structure exists in the aftermarket sheet metal industry was flawed. The argument was directed at Dr. Lamb’s conclusion that a price structure exists, rather than the methodology used.

Dr. Lamb’s conclusions were based on market characteristics, his regression analysis, and his conclusion that a price structure existed in the aftermarket sheet metal industry. This was sufficient to pass the Daubert standard. Dr. Lamb also adequately accounted for obvious alternative explanations, and exercised a great deal of care in conducting his analysis.

The parties failed to show good cause to keep documents associated with the motion to exclude Dr. Lamb’s opinion under seal, according to the court.

The cases are No. 09-cv-0852, 13-cv-0946, 13-cv-0987, and 13-cv-1061.

Attorneys: Andrew M. Purdy (Joseph Saveri Law Firm), Benjamin D. Brown (Cohen Milstein Hausfeld & Toll) and Christopher M. Burke (Scott + Scott LLP) for Fond Du Lac Bumper Exchange, Inc. Daniel R. Karon (Goldman Scarlato Karon & Penny PC) and Kevin P. Caraher (Cozen O'Connor) for Fireman's Fund Insurance Co. Alfredo A. Bismonte (Beck Bismonte & Finley LLP) for Jui Li Enterprise Co. Ltd.

Companies: Jui Li Enterprises Company, Ltd.

Cases: Antitrust WisconsinNews