Justice wieghts and gavel

Matters involving anti-trust litigation are a highly complex area of litigation, for several reasons. First, the subject matter and parties involved in anti-trust litigation are ever expanding, partly due to advances in technology. Second, depending on the particular matter, anti-trust matters may involve state and/or federal law. Third, and most intriguing, are the controversial issues that anti-trust litigation presents in evidentiary matters related to expert testimony from economist in the post-Daubert era. It is the intent of this article to focus on this third area, in light of the available data, which demonstrates an overwhelming amount of evidentiary challenges.  There are disparities between Plaintiffs and Defendants in both the quantity of challenges and the frequency of exclusion.   We will examine the resulting effects such judicial determinations have had on anti-trust litigation outcomes.

A study conducted by Dixon and Gill, which evaluated the post-Daubert effect of expert challenges, revealed that challenges in anti-trust matters account for approximately 4% of all challenges to experts. This figure is alarming given that between 2000 and 2008, anti-trust cases accounted for approximately .3% of all civil cases litigated in United States Courts. The post-Daubert disproportion in antitrust matters is further delineated when considering only challenges to financial and economist experts. In Daubert and Other Gatekeeping Challenges of Antitrust Experts, authors Langenfeld and Alexander provide a comparison of data obtained from the Daubert Tracker for the elven year period following Daubert (2000-2011), and data from PriceWaterhouseCoopers (PcW) for the same period, which revealed that challenges to the experts employed as economic or financial experts in anti-trust matters represent between 8% and 18% of all economist related expert challenges.

Additionally, the study conducted by PcW, which “summarized several trends seen in exclusions of expert opinions by accountants, economists, statisticians, finance professors, financial analysts, appraisers, and business consultants,” found that the most commonly challenged type of financial experts were “economists, accountants and appraisers.” Given that (1) financial experts are nearly always required in antitrust litigation, and (2) more so following the decisions in Daubert, Kunho, Joiner, and Concord, and more recently in Twinko and Twably, and (3) coupled with advances in technology further serving to complicate financial issue related to damages and liability, the selection of an expert witness can dramatically effect outcomes in anti-trust matters. This notion is further validated by the often high financial stakes at risk for the parties involved in antitrust matters, and also in consideration of the expense involved in the employment of an expert.

Studies also reflect a post-Daubert trend in the frequency of expert challenges between Plaintiffs and Defendants. Comparing data from Dixon and Gill, D. Michael Risinger, Daubert Tracker, PcW, and independent evaluation, Langenfeld and Alexander determined that “81 to 85 percent of these challenges were against experts testifying for plaintiffs (including experts offering evidence on class certification), resulting in a full or partial exclusion rate of 40 percent for plaintiff’s experts based on Daubert grounds.”

There have been many reasons offered which attempt to explain the post-Daubert incongruences between the challenges and decisions regarding financial experts in antitrust matters amongst opposing parties, as well as the disproportionately higher frequency of challenges in the area of antitrust in general.  From a defense point of view challenges to Plaintiff’s financial experts under Daubert may be viewed as more worthwhile given that (1) such challenges have a higher rate of success; (2) defense may have more resources available to entertain such pre-trial challenges; and (3) defense may be able to secure an expert with a higher level of expertise when choosing amongst experts more willing to testify for defense without risk of tarnishing the expert’s record through exclusion.

From a Plaintiff’s point of view, challenges may be viewed as an expense, in additional to the potential need to provide expert expenses in class certification issues, and then during defense of pre-trial motions that are certain to occur, followed by presentation at trial, typically on both issues of liability, and damages.
As provided by their 2011 findings, Langenfeld and Alexander:

“[T]he courts’ decisions in particular suggest that both defendants’ and plaintiffs’ experts should be: (1) given adequate resources to be sure they can perform economically sound and well-supported analyses; (2) asked to explicitly address information that may be interpreted as contradictory to their conclusions; (3) asked to apply well-accepted methodologies in ways already recognized by courts when possible; (4) given clear instructions on the limits of their testimony; (5) selected and given assignments so that the successful challenge to one expert would not compel the rejection of the testimony of other experts on the same side; and (6) able to explain clearly the link between the conclusions expressed and the economic theory and evidence that are the foundations of those conclusions.”

The available post-Daubert research appear to propose, at a very minimum, that parties on both sides should be sure to conduct careful, informed decision-making regarding the selection of financial experts in antitrust matters. Additionally, ample resources should be available for both the expert services, as well as for challenges to, and defense of challenges to, such expert testimony. Thus, consideration of the disastrous consequences that can occur from exclusion of a key expert witness during antitrust litigation, may, for wise attorneys, be more appropriate at the initial stages of such litigation.

By: Alicia McKnight, J.D.