In re Processed Egg Products Antitrust Litigation
2015 U.S. Dist. LEXIS 8329
E.D. Pa.2015Background
- Direct Purchaser Plaintiffs (putative class) allege major egg producers conspired to restrict supply and inflate egg prices (2000–2008); Plaintiffs offered economist Dr. Gordon Rausser as their class-certification expert.
- Defendants moved to exclude Rausser’s declaration, opinions, and testimony under Federal Rule of Evidence 702 and Daubert gatekeeping; Plaintiffs opposed.
- The motion focused on qualifications, reliability, and fit of Rausser’s work: (1) his use/interpretation of documentary record, (2) co-movement/averaging analyses, (3) a common-factors regression, and (4) a damages/overcharge (but‑for) model tied to alleged supply restraint.
- Court applied Daubert at the class-certification stage, acknowledging overlap between reliability inquiry and class predominance analysis but treating admissibility separately from the ultimate class‑certification merits.
- The court found Rausser qualified and concluded his Sections IV–V (market structure and whether documentary evidence is consistent with collusion) are admissible when offered as economic analysis, not legal conclusions or credibility findings.
- The court denied exclusion of Rausser’s co-movement, common-factors regression, and damages model, holding that methodological criticisms largely go to weight at class certification rather than Daubert inadmissibility.
Issues
| Issue | Plaintiff's Argument (Rausser / Plaintiffs) | Defendant's Argument | Held |
|---|---|---|---|
| Whether Daubert applies at class-certification stage | Daubert should be applied but expert admissibility does not decide class issues | Daubert applies and should exclude unreliable expert opinion now | Court: Daubert applies; conducted full inquiry but admissibility is distinct from class certification outcome |
| Use of factual record / documentary interpretations | Rausser may use record to form and test economic hypotheses; economists can opine whether conduct is consistent with collusion | Rausser improperly offers lay interpretations/legal conclusions and bolsters Plaintiffs’ narrative | Court: Sections IV–V admissible as economic analysis tying facts to economic theory; cannot usurp ultimate legal conclusions or witness credibility |
| Co-movement / use of averages to show common impact | Co-movement of prices supports nationwide market and common impact; averages are one of several indicia | Averages can mask heterogeneity; co-movement may be meaningless for individual impact | Court: Co-movement/averaging methodology admissible under Daubert; criticisms go to weight and class-certification challenge |
| Common-factors regression (model specification) | Regression identifies common price determinants; R‑squared supports common impact | Model omits demand/other variables (dietary trends, income, disease, legislation) and has odd population coefficient | Court: Regression reliable enough for Daubert; omitted variables speculative and rebuttable at class stage |
| Damages / but‑for model and fit to theory (supply reduction) | Price regression measures overcharge attributable to reduced supply given inelastic demand and documentary record of supply restraint | Model may attribute injury where none existed (long‑term contracts), is unstable on subsets, uses limited benchmark defendants, and does not model supply directly (Comcast concern) | Court: Damages model admissible for Daubert purposes; identified flaws affect weight and fit at class-certification, not admissibility |
Key Cases Cited
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993) (trial court must ensure expert evidence is relevant and reliable)
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) (Daubert gatekeeping extends beyond scientific testimony)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (class‑certification inquiry may overlap with merits; rigorous analysis required)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (damage model must measure damages resulting from the particular antitrust injury on which liability is premised)
- Elcock v. Kmart Corp., 233 F.3d 734 (3d Cir. 2000) (Rule 702 requires qualifications, reliability, and fit; limited circumstances permit credibility consideration)
- In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305 (3d Cir. 2008) (expert testimony does not automatically establish Rule 23 requirements; admissibility is distinct from weight)