United States District Court, E.D. Pennsylvania
IN RE BLOOD REAGENTS ANTITRUST LITIGATION THIS DOCUMENT RELATES TO ALL ACTIONS MDL No. 09-MD-2081
these consolidated antitrust actions, plaintiffs allege that
the two leading producers of blood reagents- Ortho Clinical
Diagnostics, Inc. (“defendant” or
“Ortho”), and Immucor, Inc.(“Immucor”)-conspired to
unreasonably restrain trade and commerce in violation of
§ 1 of the Sherman Antitrust Act, 15 U.S.C. § 1.
Presently before the Court is Ortho's Motion to Exclude
the Expert Testimony and Reports of John C. Beyer, Ph.D. The
Court previously rejected several Daubert challenges
to Dr. Beyer's testimony as part of its October 19, 2015,
Memorandum and Order recertifying the present class. For the
reasons that follow, Ortho's Motion to Exclude is denied.
relevant facts are set forth in detail in the Court's
Memoranda of August 22, 2012, and October 19, 2015,
certifying and recertifying the Class,  and the
Court's Memorandum of July 19, 2017, granting in part and
denying in part Ortho's Motion for Summary Judgment. In
this Memorandum, the Court only includes the facts necessary
to explain its decision.
Court held a hearing on plaintiffs' initial Motion for
Class Certification on July 26, 2012. Ortho's economics
expert, Dr. Peter Bronsteen, testified at the hearing.
Plaintiffs' economics expert, Dr. John C. Beyer, was
unable to attend the July 26th hearing, but his testimony was
presented to the Court by video, recorded on August 6, 2012.
The Court granted plaintiffs' initial motion for class
certification by Order dated August 22, 2012. Ortho
petitioned the United States Court of Appeals for the Third
Circuit for leave to appeal pursuant to Federal Rule of Civil
Procedure 23(f), and that petition was granted on October 25,
granting of plaintiffs' initial Motion for class
certification was based on the Third Circuit's class
certification opinion in Behrend v. Comcast
Corporation, which was thereafter reversed by the United
States Supreme Court. Based on that reversal, the Third
Circuit vacated this Court's class certification opinion
and directed this Court on remand to “decide in the
first instance which of [defendant's] reliability
attacks, if any, challenge those aspects of plaintiffs'
expert testimony offered to satisfy Rule 23 and then, if
necessary, to conduct a Daubert inquiry before
assessing whether the requirements of Rule 23 have been
met.” In re Blood Reagents Antitrust Litig.,
783 F.3d 183, 188 (3d Cir. 2015).
26, 2015, the parties submitted post-remand briefing. The
Court held a hearing on the post-remand class certification
issues on July 21, 2015. After a lengthy and thorough inquiry
of the testimony of plaintiffs' expert Dr. Beyer, the
Court rejected Ortho's Daubert challenges to his
testimony. The class, consisting of “all individuals
and entities who purchased traditional blood reagents in the
United States directly from defendants [Immucor] and [Ortho]
at any time from November 4, 2000 through the present,
excluding defendants, and their respective parents,
subsidiaries and affiliates, as well as any federal
government entities, ” was recertified on October 19,
2015. Pursuant to Case Management Order No. 4 dated January
26, 2016, Ortho filed its Motion to Exclude the Expert
Testimony and Reports of John C. Beyer, Ph. D., and its
Motion for Summary Judgment. For the reasons stated below,
Ortho's Motion to Exclude is denied.
Rule of Evidence 702 provides that:
If scientific, technical, or other specialized knowledge will
assist the trier of fact to understand the evidence or to
determine a fact in issue, a witness qualified as an expert
by knowledge, skill, experience, training, or education, may
testify thereto in the form of an opinion or otherwise, if
(1) the testimony is based upon sufficient facts or data, (2)
the testimony is the product of reliable principles and
methods, and (3) the witness has applied the principles and
methods reliably to the facts of the case.
with a proffer of expert scientific testimony . . . the trial
judge must determine . . . whether the expert is proposing to
testify to (1) scientific knowledge that (2) will assist the
trier of fact to understand or determine a fact in
issue.” Daubert v. Merrell Dow Pharms., 509
U.S. 579, 592 (1993). This gatekeeping function extends
beyond scientific testimony to testimony based on
“technical” and “other specialized”
knowledge. Kumho Tire Co. v. Carmichael, 526 U.S.
137, 141 (1999).
702 has “a liberal policy of admissibility.”
Pineda v. Ford Motor Co., 520 F.3d 237, 243 (3d Cir.
2008) (quoting Kannankeril v. Terminix Int'l.,
Inc., 128 F.3d 802, 806 (3d Cir. 1997)). As such, the
“rejection of expert testimony is the exception and not
the rule.” Fed.R.Evid. 702 advisory committee's
note. “Rule 702 embodies three distinct substantive
restrictions on the admission of expert testimony:
qualifications, reliability, and fit.” Elcock v.
Kmart Corp., 233 F.3d 734, 741 (3d Cir. 2000);
Daubert, 509 U.S. at 597. The party offering the
expert opinion must prove each of these requirements by a
preponderance of the evidence. In re TMI Litig., 193
F.3d 613, 663 (3d Cir. 1999).
the reliability and fit restrictions of Daubert are
at issue in this case. The reliability requirement
“means that the expert's opinion must be based on
the ‘methods and procedures of science' rather than
on ‘subjective belief or unsupported speculation';
the expert must have ‘good grounds' for his or her
belief.” In re Paoli R.R. Yard PCB Litig., 35
F.3d 717, 742 (3d Cir 1994).
test of reliability is “flexible” and “the
law grants a district court the same broad latitude when it
decides how to determine reliability as it enjoys in
respect to its ultimate reliability determination.”
Kumho Tire, 526 U.S. at 141-42. In determining
whether the reliability requirement is met, courts examine
the following non-exclusive list of factors:
(1) whether a method consists of a testable hypothesis; (2)
whether the method has been subject to peer review; (3) the
known or potential rate of error; (4) the existence and
maintenance of standards controlling the technique's
operation; (5) whether the method is generally accepted; (6)
the relationship of the technique to methods which have been
established to be reliable; (7) the qualifications of the
expert witness testifying based on the methodology; and (8)
the non-judicial uses to which the method has been put.
United States v. Mitchell, 365 F.3d 215, 235 (3d
Cir. 2004) (citing In re Paoli, 35 F.3d at 742 n.8).
These factors are neither exhaustive nor applicable in every
case. Kannankeril, 128 F.3d at 806-07.
the Daubert reliability prong, parties “do not
have to demonstrate to the judge by a preponderance of the
evidence that the assessments of their experts are
correct, they only have to demonstrate by a
preponderance of evidence that their opinions are
reliable.” In re Paoli, 35 F.3d at 744.
“The evidentiary requirement of reliability is lower
than the merits standard of correctness.” Id.
“As long as an expert's scientific testimony rests
upon good grounds, based on what is known, it should be
tested by the adversary process-competing expert testimony
and active cross-examination-rather than excluded from
jurors' scrutiny for fear that they will not grasp its
complexities or satisfactorily weigh its inadequacies.”
Mitchell, 365 F.3d at 244 (citations and internal
quotation marks omitted).
expert testimony to meet the Daubert
“fit” requirement, it must “help the trier
of fact to understand the evidence or to determine a fact in
issue.” Fed.R.Evid. 702. “This condition goes
primarily to relevance. Expert testimony which does not
relate to any issue in the case is not relevant and, ergo,
non-helpful.” Daubert, 509 U.S. at 591
(citations and internal quotation marks omitted).
“‘Fit' is not always obvious, and scientific
validity for one purpose is not necessarily scientific
validity for other, unrelated purposes.” Id.
Motion, Ortho seeks to exclude the expert testimony and
reports of plaintiffs' economics expert, Dr. Beyer. The
Court notes at the outset that Dr. Beyer's reports are
not admissible evidence. For purposes of this Motion, the
Court considers Dr. Beyer's opinions as expressed in both
his testimony and reports.
Court addresses the Daubert arguments as presented
by the parties without considering the impact of its ruling
on summary judgment on Dr. Beyer's testimony. The Court
considers its conclusion on liability at summary judgment,
specifically its conclusion that the 2005 and 2008 price
increases were not the product of collusion, to be separate
from a determination of the damages period. As Ortho states
in its Reply Memorandum in support of its Motion for Summary
Nor is it sufficient for Plaintiffs to argue that the 2001
price increases had an effect that persisted throughout the
class period. While that argument, if credited, might address
the class certification issues of common impact and damages,
it does not resolve the distinct liability issue of whether
there was any unlawful price coordination beyond 2001.
Summ. J. Reply Br. at 9. As Judge Baylson observed in
Domestic Drywall, “[t]he parties should not
confuse this [conspiracy period] window with the possibly
different time period for the calculation of damages. It is
possible that [plaintiffs] may be able to prove damages for a
broader time period than the scope of discovery and
liability.” In re Domestic Drywall Antitrust
Litig., No. 13-2437, 2016 WL 3453147, at *4 n.5 (E.D.
Pa. June 22, 2016).
offer Dr. Beyer's opinions on evidence of collusive
behavior and antitrust impact and damages. Ortho raises
numerous challenges, many of which were previously addressed
by this Court in its opinion granting plaintiffs' second
Motion for class certification, to Dr. Beyer's testimony
and reports, which can be grouped into five main categories.
Ortho argues that (1) Dr. Beyer's opinions on damages and
liability are inconsistent; (2) Dr. Beyer's opinion on
the 2004 Group Purchasing Organizations (GPOs) contract
cancellations is unreliable; (3) Dr. Beyer's
“Operation Create Value” (OCV) benchmark is
unreliable and lacks fit with the facts of this case; (4) Dr.
Beyer's proposed benchmarks for prices after 2005 are not
reliable; and (5) Dr. Beyer's use of one annual but-for
price is incompatible with price dispersion in the actual
world. The Court addresses each of Ortho's challenges in
Whether Dr. Beyer's Opinions on Damages and
Plaintiff's Liability Case Are Inconsistent
challenges Dr. Beyer's testimony on the ground that his
opinions on damages are inconsistent with his opinion on
liability. That is not an issue for Daubert
purposes. The correct inquiry on a Daubert challenge
is whether or not Dr. Beyer's opinions on damages align
with plaintiffs' liability case. In opining on damages,
Dr. Beyer accepted plaintiffs' “allegations of the
conspiracy in the Complaint to be true, ” as Ortho
notes. Ortho Mot. to Exclude the Expert Testimony of Dr.
Beyer 5; Mot., Ex. 2, Tr. of Apr. 22, 2016, Dep. of Dr. John
Beyer (“Beyer Apr. Dep.”), 65:9-16. Ortho also
states that the Complaint alleges a “continuing
conspiracy.” Mot. 5; Mot., Ex. 3, Consolidated Am.
Class Action Compl. (“CAC”), Feb. 16, 2009,
¶¶ 132-133. In an effort to establish alleged