Antitrust Law Daily Wrap Up, TOP STORY—DMd: One of Plaintiffs' Proposed Experts in Titanium Dioxide Price Fixing Class Action Excluded on Reliability Grounds, (May 2, 2013)

By Jeffrey May, J.D.

In a price fixing class action against producers of titanium dioxide, the federal district court in Baltimore has granted the producers' motion to exclude the testimony of one of the complaining purchasers' proposed experts as unreliable. However, the court refused to exclude the testimony of two expert economists challenged by the defending producers (In Re: Titanium Dioxide Antitrust Litigation, May 1, 2013, Bennett, R.).

The suit was brought against market leaders in the production of titanium dioxide—E.I. du Pont de Nemours & Co., Huntsman International LLC, Kronos Worldwide Inc., and Millennium Inorganic Chemicals, Inc.—by purchasers of the product, including Haley Paint Company and Isaac Industries, Inc. Titanium dioxide is a chemical powder used as a pigment in paints and other coatings.

The defendants sought to exclude the proposed testimony of the three proposed experts on two grounds:

(1) the testimony was improperly directed to the ultimate legal issue in the case—whether the defendants were members of a price fixing cartel; and

(2) the opinions were based on principles or methods that were neither scientific nor reliable.

In response to the defendants' first argument, the court explained that experts could, based on their economic analyses, opine that the defendants’ behavior was "consistent with collusion and inconsistent with competition." However, the experts could not testify that the defendants violated the Sherman Act or that particular actions that the defendants took were a pretext for collusive behavior.

With respect to the second argument, the court found unreliable the proposed testimony of a professor of law and economics at Yale Law School who opined that the defendants’ conduct was more consistent with collusion than with competition. The plaintiffs intended to offer this expert's testimony to rebut the testimony expected to be offered by the defendants that certain titanium dioxide price increases did not occur simultaneously, and that any similarity could be attributed to unilateral action.

The defendants argued that this proposed expert had to be excluded because he offered only legal opinions under the guise of economic testimony and because the testimony was not based on any discernible methodology. According to the court, the professor was "not the proper source to testify that the conduct of the Defendants was more consistent with collusion than with competition." He was not an economist and was "not qualified to opine reliably on the economic evidence presented in this case." Moreover, the professor's testimony would not help the jury determine the factual issues regarding the defendants’ alleged cartel activity.

The plaintiffs' two other proposed experts—both Ph.D. economists—were not excluded as unreliable. The defendants argued that their testimony was not based on reliable statistical or empirical analysis. In the court's view, the methodology was reliable. The defendants' challenges to one economist's opinions on both liability and damages also were rejected. The defendants would be able to cross-examine these experts at trial, the court explained.

The case is RDB-10-0318.

Attorneys: Michael C. Dell Angelo (Berger and Montague PC) for Haley Paint Co. Darin P. McAtee (Cravath Swaine and Moore LLP) for E.I. du Pont De Nemours and Co.

Companies: E.I. du Pont de Nemours & Co.; Huntsman International LLC; Kronos Worldwide Inc.; Millennium Inorganic Chemicals, Inc.

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