Dec

09

Posted by : Matthew Wild | On : December 9, 2009

On November 25, 2009, the court in In re Static Random Access Memory Antitrust Litig., No. C 07-01819 CW, 2009 WL 4263524 (N.D. Cal. Nov. 25, 2009), certified 28 indirect purchaser classes – one nationwide class for injunctive relief under section 16 of the Clayton Act and 27 separate indirect purchaser damages classes under the laws of Arizona, Arkansas, California, Florida, Hawaii, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Mexico, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Washington, West Virginia, Wisconsin, Puerto Rico and the District of Columbia.
Injunction: the court certified the class under Rule 23(b)(2). It rejected the standing challenge holding “Plaintiffs have alleged sufficient facts to establish Article III standing for their nation-wide injunctive relief class. IP Plaintiffs allege that Defendants and their co-conspirators entered into a continuing conspiracy in restraint of trade artificially to raise prices for SRAM in the United States. They further allege that these market-wide overcharges were then passed through the chains of distribution, and that they were injured by paying supra-competitive prices when they indirectly purchased Defendants’ products.” The court also rejected defendants’ argument “because IP Plaintiffs seek to certify a nation-wide injunctive class from November 1, 1996 through December 31, 2006, they have impliedly alleged that the conspiracy ended in 2006. However, a finite proposed class period does not defeat certification of a class under Rule 23(b)(2). See, e.g., Jaffe v. Morgan Stanley & Co., 2008 WL 346417, at *3 (N.D.Cal.) (certifying injunctive-relief class for settlement affecting persons employed by the defendants “at any time between October 12, 2002 and December 3, 2007). Further, IP Plaintiffs allege that the same market conditions that facilitated the conspiracy from 1996 to 2006 continue today. They allege that Defendants’ price-fixing resulted from a systematic, repeated pattern of sharing sensitive competitive information which was greatly facilitated by the cross-competitor business relationships that still exist. Thus, there is alleged a significant risk that the conspiracy will persist or reform in the future.”
Individual state damages classes: the court certified 27 different classes based on individual state law. The court rejected “Defendants[’] … concern[] that [it] will be unable to manage state-law claims from twenty-seven state classes” holding “there is no qualitative difference between a federal district court considering class certification of state claims under that state law and a federal court serving as a multi-district litigation forum performing the same task for many federal courts. Moreover, courts frequently certify classes under the laws of multiple jurisdictions. See, e.g., Norvir Anti-Trust Litig., 2007 WL 1689899, at *8 (N.D.Cal.) (certifying class under the common law of forty-eight states); In re Pharm. Indus. Average Wholesale Price Litig., 233 F.R.D. 229, 230-31 (D.Mass.2006) (certifying multi-state defendant subclasses under the consumer protection laws of forty-one states).” In holding that the individual issues predominated over the individual issues, the court held that “there [wa]s a reasonable method for determining on a class-wide basis whether and to what extent that overcharge was passed on to each of the IP Plaintiffs at all levels of the distribution chain.”
Experts: the court rejected each parties’ challenge to the other parties’ expert holding that the appropriate standard is “whether the expert evidence is sufficiently probative to be useful in evaluating whether class certification requirements have been met.” The court made short shrift of the challenges holding “Although each side presents myriad valid challenges to the other’s expert, the Court concludes that these challenges are of the type that go to the weight of the evidence, not the admissibility. … The parties’ motions to exclude reflect disagreement with the opposing parties’ position; however, this disagreement does not warrant exclusion.”

Oct

06

Posted by : Matthew Wild | On : October 6, 2008

The United States Court of Appeals for the Second Circuit recently held that Major League Baseball’s licensing of team logos was subject to rule of reason review under Section 1 of the Sherman Act.  The court affirmed summary judgment in favor of MLB because the appellant did not challenge the licensing program under that rule.  Major League Baseball Properties, Inc. v. Salvino, Inc., No. 06-1867 (2d Cir. Sept. 12, 2008) (attached MLB Properties v. Salvino).  The baseball clubs give (with a few exceptions) exclusive licensing rights to a single entity.  According to the MLB’s expert Frank Fisher (a world renowned economist), this system offers many efficiencies including allowing MLB licensing to compete better with other sports licensing; offering one-stop shopping to licensees; centralized management on matters such as quality control, intellectual property rights enforcement and negotiations and sales to licensees.  According to Fisher, these efficiencies should result in lower licensing fees.  The appellant had offered an expert report from economist Mr. Louis A. Guth, a Special Consultant for NERA, who disputed these efficiencies and asserted that the MLB licensing entity functioned as a cartel unresponsive to demand.  The Second Circuit affirmed the exclusion of Guth’s report under Daubert v. Merrell Dow because (unlike Fischer’s report) it was unsupported by evidentiary citations or empirical analysis.  The Second Circuit held that the rule of reason and not the per se rule or “quick look” analysis applied because the “arrangement might plausibly be thought to have a net precompetitive effect, or possibly no effect at all on competition.”  Through different reasoning, the Second Circuit in this case reached the same result as the Seventh Circuit did in a challenge to a nearly identical licensing program by the NFL.  See American Needle Inc. v. Nat’l Football League, No. 07-4006, 2008 WL 3822782 (7th Cir. Aug. 18, 2008) discussed in the Post of September 4, 2008.  In that case, the Seventh Circuit held that the NFL teams were incapable of conspiring with themselves under the Copperweld doctrine in these particular circumstances.  In this case, the Second Circuit did not address the Copperweld doctrine, but it did observe that the relevant market should include licenses for other professional sports.  Therefore, it would be unlikely for the MLB’s licensing activities to have an effect on competition.  This case should prove useful for practitioners for its discussion of when the per se rule, rule of reason or quick look analysis applies, the tests used under these analyses and the pitfalls of an inadequate expert report.

May

16

Posted by : Matthew Wild | On : May 16, 2008

In In re Scrap Metal Antitrust Litig., No. 06-4511, 2008 WL 2050820 (6th Cir. May 15, 2008), the Sixth Circuit affirmed the $20 million jury verdict.  The Sixth Circuit rejected defendants’ Daubert challenge premised on the claim that plaintiffs’ expert relied on unreliable data.  The court characterized this type of attack as one directed to the results and not the methodology and therefore should not be excluded under Daubert.  Rather, “vigorous” cross-examination should be sufficient to reveal to the jury these flaws.  Notably, the defendants’ expert conceded that even use of the flawed data should not affect the results because those data moved in parallel to the defense expert’s data.  This decision illustrates the importance of showing in a  Daubert challenge that any flaws were actually material to the result.  “Pitfalls to Avoid in Proving Price-Fixing Damages,” Antitrust Litigator (Spring 2006) — linked in the Articles page above — examines strategies to pursue in Daubert challenges.  The Sixth Circuit also affirmed class certification holding that the predominance requirement was satisfied because there was a class-wide method to prove damages

Feb

25

Posted by : Matthew Wild | On : February 25, 2008

January 7, 2008.  In Kentucky Speedway, LLC v. Nat’l Ass’n of Stock Car Auto Racing, Inc., Civil Action No. 05-138 (WOB), 2008 WL 113987 (E.D.K.y. Jan. 7, 2008), the district court granted summary judgment dismissing plaintiff’s Section 1 and 2 claims.   Kentucky Speedway sued because NASCAR refused to sponsor a NEXTEL race at its track.  The Court considered it a “jilted distributor” case.  It found that Kentucky Speedway failed to come forward with sufficient proof of relevant product market — an essential of element of both its Section 1 and 2 claims.   It rejected the proposed relevant markets of a sanctioning market for the NEXTEL race and a hosting market for the same race.  It granted NASCAR’s Daubert motion to exclude Kentucky Speedway’s expert because he did no study to determine the cross-elasticity of demand between NEXTEL races and other potential substitutes such as sporting events in general.  Rather, Kentucky Speedway’s expert assumed only that a Bush NASCAR race event was a potential substitute.