Friday, April 12, 2013

Epstein on Comcast

I want to point out that Richard Epstein just posted a nice column on Comcast v. Behrend, which can be found here.  In the column Epstein puts nicely one of the points I tried to make in my last post on Comcast: 

The ultimate question in these cases is whether the price increase was attributable to the added concentration, and for that question the regressions have to be admitted because they apply to the class as a whole. The information on the four possible sources of the increase should not be looked at in the alternative; if examined at all, the theories should be treated at most as cumulative descriptive evidence that is weaker in kind than the quantitative evidence in the regression itself. It is therefore a plus that the regression is not tied to the overbuilding theory. If this analysis is correct, it is mistaken to insist that the harms suffered by the plaintiff class do not derive from the distinctive overbuilding theory put forward by the plaintiff. Instead, the numbers tell the key story, as each of the four theories mentioned could offer a partial explanation as to the subsidiary question of how the antitrust injury came to pass.

The whole thing is worth a read!

SJC

 

April 12, 2013 | Permalink | Comments (0) | TrackBack (0)

Monday, April 8, 2013

Comcast Puzzles

Hi everyone.  It has been a while since I rapped at ya.  I recently did an opinion analysis of Comcast v. Behrend for SCOTUSBlog (see here).  I have been puzzling over the opinion ever since, and I was wondering what you guys think about the opinion.

Here is what confuses me. A majority concluded that the plaintiffs-respondents failed to satisfy the "predominance" standard of Rule 23(b)(3). Specifically, the majority found that an expert model used to determine damages was insufficient because the model did not set out to isolate the one antitrust theory (out of four) certified by the district court. From what I can tell, the model was basically a simple comparison between the actual prices in the Philadelphia area and what the prices would have been "but for" the antitrust violation.  The "but for" market was constructed to reflect a competitive market.  

As I understand it, this is a standard method of determining an overcharge in an antitrust case.  Moreover, I am not sure it makes sense to isolate one antitrust violation to determine the "but for" price. As put by the dissent, the majority ignores the fact that if an antitrust violator is successful, then it would deter not only existing competitors from entering the market, but potential ones as well, making the competitive market the logical "but for" comparator. 

So here is my first question: If this method of determining antitrust damages is generally accepted, then isn't predominance always satisfied?  Doesn't this method show that damages in antitrust cases are always capable of proof on a common basis?  I recognize that there may be exceptions, such as the individual contracting found in Hydrogen Peroxide, but in Comcast and in many other consumer antitrust cases the prices are not usually subject to a great deal of negotiation.  People usually pay according to the same price schedule, which lends itself to an overcharge analysis like the one proposed by the plaintiffs in Comcast.

Another weird thing about the case is that the plaintiffs conceded that they had to show they could determine damages on a common basis.  That has not been the case for antitrust class actions, where bifurcation has been an accepted method of distributing damages.

So here is my second question: If bifurcation is always an available method of distributing damages, then does it matter that the plaintiffs conceded that they could prove damages on a common basis?  In other words, if the plaintiffs fail, then the court simply could bifurcate away the damages issue.  Accordingly, the issue of whether damages can be assessed on a common basis seems to me to be a red herring.

Why do I wonder about these two questions?  I am worried that the majority may be interpreted to have held that (1) plaintiffs are now required to prove damages on a common basis to show "predominance" and, (2) plaintiffs cannot fall back on bifurcation if they cannot.  These two propositions seem like a logical extension of Wal-Mart, but is in some conflict with Amgen.  What do you guys think?  Am I overreading Comcast?

SJC

April 8, 2013 | Permalink | Comments (0) | TrackBack (0)