Postpichal v. Cricket Wireless, LLC

Background

Jamie Postpichal and Ursula Freitas alleged that, from 2012 to 2014, Cricket Wireless, LLC advertised 4G wireless service and sold 4G-capable phones in markets where Cricket did not actually provide 4G coverage. They presented the allegations as a RICO claim, asserting that Cricket and its retailers formed an enterprise that carried out the alleged fraudulent scheme.

The case originally included more than a dozen claims and multiple plaintiffs. By the third amended complaint, only a RICO claim and a California Consumers Legal Remedies Act claim remained. The California claim was later dismissed, one plaintiff withdrew, and the case proceeded with Postpichal and Freitas asserting the RICO claim. A class was later certified with Freitas as the sole class representative, but the class was eventually decertified because the plaintiffs’ final damages model did not isolate the portion of any price premium attributable to alleged misrepresentations about 4G coverage.

After class decertification, Cricket renewed its motions to exclude the plaintiffs’ damages experts, Keith Mallinson and Steve Browne, and for summary judgment on the individual plaintiffs’ RICO claim.

Expert evidence

Cricket sought to exclude the experts’ reports under Rule 702 of the Federal Rules of Evidence. Rule 702 requires expert testimony to be helpful, based on sufficient facts or data, the product of reliable methods, and reliably applied to the case. The court explained that it evaluates the reliability of an expert’s methodology rather than deciding whether the expert’s ultimate conclusion is correct.

The court found Mallinson’s analysis unreliable and inadmissible. The damages model did not control for other variables that could affect the prices of phones and plans. Instead, it treated the entire price difference between comparison products or price points as attributable to Cricket’s alleged misrepresentations. The court characterized this as a fundamental mismatch with the plaintiffs’ theory, which required isolating the price premium attributable only to the alleged 4G-coverage misrepresentations.

The court also excluded Browne’s report. The plaintiffs said Browne accepted Mallinson’s conclusions and calculated damages from them. They conceded that if Mallinson’s conclusions could not be presented at trial, Browne would lack a foundation and ability to calculate damages. Because Mallinson’s report was excluded, Browne’s report was irrelevant and inadmissible under Rule 402.

The court rejected the plaintiffs’ argument that the model was merely imprecise but still admissible. It also rejected their assertion that discovery problems caused the model’s shortcomings, finding that the experts’ own statements and the plaintiffs’ earlier representations undermined that explanation.

Summary judgment

Cricket moved for summary judgment on two grounds: that the individual plaintiffs lacked competent evidence of RICO injury and that they could not show that Cricket and its dealers formed the required RICO enterprise. Summary judgment is appropriate when no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law.

The court focused on the injury requirement. After excluding the damages experts, the plaintiffs had no other admissible evidence showing that either individual plaintiff suffered an injury. The court noted that the plaintiffs could potentially have submitted declarations about the fact of injury, but they did not do so. The court therefore found that the record contained nothing supporting the injury element required to sustain their sole RICO claim.

Disposition

Judge William Alsup granted Cricket’s motions to exclude the plaintiffs’ experts Mallinson and Browne and for summary judgment. The order stated that final judgment would be entered accordingly.