United States v. H & R Block, Inc.
831 F. Supp. 2d 27
D.D.C.2011Background
- DOJ seeks to enjoin H&R Block from acquiring TaxACT in the Digital DIY Tax Preparation market.
- Market is concentrated; top firms hold about 90% with Intuit leading and Block/TaxACT as the next largest, making the merger potentially anti-competitive.
- TaxACT is characterized as a disruptive, low-cost competitor; merger could facilitate coordination between Block and Intuit.
- Defendants propose a broader market definition (all tax preparation methods) and argue merger would yield efficiencies.
- DOJ filed May 23, 2011; preliminary injunction hearing scheduled for Sept. 6, 2011; plaintiff moves to exclude the 2011 email survey evidence.
- Court defers ruling on the survey until the injunction hearing and allows the survey to be admitted for weight.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2011 email survey is admissible under Rule 702/703. | Survey is unreliable due to non-response bias, leading questions, and guessing. | Survey methodology is acceptable and within standard practice; data are reasonably relied upon by experts. | Survey admissible; weight to be assigned by court. |
| Whether the survey is relevant to market definition and competition between TaxACT and Block. | Survey fails to show diversion/replacement in context of price changes; may not establish competition. | Survey indicates TaxACT faces real alternatives; supports competition analysis under either market definition. | Survey is relevant; helps define competition and market boundaries. |
| Whether issues with the survey (response rate, closed-ended questions, lack of 'I don't know' option) render it inadmissible. | Defects render the survey unreliable for any evidentiary purpose. | Defects affect weight, not admissibility; other data points support conclusions. | Defects affect weight but do not render inadmissible. |
Key Cases Cited
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (U.S. 1999) (flexible gatekeeping for expert testimony under Rule 702)
- Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (U.S. 1993) (reliability and relevance of expert evidence; standard for admissibility)
- United States v. Dentsply Int'l Inc., 399 F.3d 181 (3d Cir. 2005) (on appeal, but discusses survey reliability in antitrust context)
- Miller v. Bill Harbert Int'l Constr., Inc., 608 F.3d 871 (D.C. Cir. 2010) (broad discretion in admitting expert testimony; limited gatekeeping)
- Whitehouse Hotel Ltd. Partnership v. Comm'r of Internal Revenue, 615 F.3d 321 (5th Cir. 2010) (gatekeeper role diminished in bench trials; concerns affect weight)