IN RE CAPACITORS ANTITRUST LITIGATION

Background

Six direct-action plaintiffs—companies that opted out of the direct-purchaser class—were pursuing their antitrust claims separately. Five of those plaintiffs jointly retained Dr. Leslie M. Marx as an economics expert. She used multiple regression analyses to estimate whether alleged collusion among capacitor suppliers raised prices, and concluded that the plaintiffs experienced overcharges ranging from 16.4% to 18.9% during the relevant period.

Defendants moved under Rules 104(a) and 702 of the Federal Rules of Evidence and Daubert v. Merrell Dow Pharmaceuticals, Inc. to exclude Dr. Marx’s opinions and testimony entirely. They argued that her econometric model was unreliable and invalid. After the motion was briefed, the court held a joint expert proceeding involving Dr. Marx and defendants’ experts, followed by supplemental briefing.

Court’s Analysis

Rule 702 permits qualified experts to testify when their specialized knowledge will help the factfinder, their testimony rests on reliable methods, and they reliably applied those methods to the facts. Under Daubert, the court must screen expert evidence for relevance and reliability, but the inquiry is flexible. General acceptance and peer review may be considered, but neither is automatically required or decisive. Weak but admissible evidence can be tested through cross-examination, opposing evidence, and instructions about the burden of proof.

The court found Dr. Marx qualified to offer antitrust economics opinions, and defendants did not challenge her qualifications. The principal dispute concerned her use of a chained Fisher price index as the dependent variable in her regression analysis. Defendants’ experts preferred panel-data methods and argued that Dr. Marx’s approach was not generally accepted or adequately supported by economics literature.

The court concluded that defendants had not shown Dr. Marx’s use of the Fisher price index was so far outside accepted practice that it should be excluded. The court relied on materials presenting time-series methods alongside panel regression methods, other sources supporting price-index and time-series approaches, and evidence that defendants’ own experts had used or recognized similar methods. The court held that Dr. Marx’s analysis was sufficiently reliable and valid for admission under Rule 702 and Daubert.

Defendants also challenged the sensitivity of Dr. Marx’s results to the month selected as the start of the annual cartel indicator. The court treated that dispute as substantially overlapping with the price-index dispute and declined to exclude the opinions for the same reasons. The court also found that criticism of Dr. Marx’s use of a lagged dependent variable concerned the weight of her evidence rather than its admissibility, particularly because she showed that the model remained workable after removing that variable. A separate argument about the direction of monthly overcharges was not developed sufficiently and was not a basis for exclusion.

Excluded Testimony and Disposition

The court distinguished between Dr. Marx’s economic analysis and her discussion of alleged cartel conduct. The court was not troubled by her use of background facts supplied by counsel as context for her analysis. But it held that opinions about collusion, violations of antitrust law, and anticompetitive actions allegedly undertaken by defendants and non-parties were outside her expertise. Those opinions were excluded under Rule 702 and because they could confuse or mislead the jury under Rules 402 and 403.

The court denied the request to exclude Dr. Marx’s opinions, with some limited exceptions. It permitted her economic analysis to be presented at trial but barred the specified legal and factual opinions about collusion and antitrust violations. Judge Donato signed the order on November 18, 2021.