A California federal district court denied certification of two nationwide classes, each asserting a price-fixing conspiracy for optical disk drives (“ODD”), because the plaintiffs’ experts failed to provide a viable methodology for establishing class-wide antitrust injury.  The plaintiffs alleged that the defendants colluded to fix prices for ODDs, thereby preventing ODD prices from declining as quickly or as far as they would have absent the defendants’ anticompetitive agreements.  Based on those allegations, the plaintiffs sought to certify two nationwide classes: a class consisting of individuals and entities that purchased ODDs directly from the defendants (direct purchasers); and another class of individuals and entities that purchased ODDs indirectly from the defendants through a middleman (indirect purchasers).

In denying certification of the proposed classes, the court focused on Rule 23(b)’s predominance requirement.  For the direct purchaser class, the court found that the methodology for determining class-wide injury was flawed.  In doing so, the court explained that, while the standard by which courts judge expert testimony at the certification stage “has been evolving,” courts “must avoid engaging in a battle of expert testimony” when determining the propriety of a class action.  Thus, the court stated that the inquiry into expert testimony during the certification analysis “must be to determine if the proffered expert testimony has the requisite integrity to demonstrate class-wide impact.”  The court then found that the testimony of the direct purchasers’ expert lacked such integrity because his methodology failed to show that putative class members paid more for ODDs due to the alleged conspiracy.  Instead, the methodology simply showed a correlation between prices paid as a result of alleged bid-rigging and prices paid by other purchasers, while the expert admitted that such correlation would likely exist due to other market forces and absent a conspiracy.

The court found similar problems with the indirect purchasers’ expert.  While noting that his methodology was more complex than that of the direct purchasers’ expert, the court found that the indirect purchasers’ expert also failed to provide a viable basis upon which to find class-wide injury.  Specifically, the methodology offered by the indirect purchasers’ expert, like that of the direct purchasers’ expert, showed a strong correlation between the prices paid by different customers and for different ODDs, but failed to show that those prices resulted from a price-fixing agreement between the defendants.  Consequently, neither expert provided a viable method from which the plaintiffs could show through generalized evidence, as opposed to individualized proof, that putative class members “suffered damage as a result of the defendants’ alleged anti-competitive conduct.”  Thus, the court denied the plaintiffs’ motion to certify either the direct or indirect purchaser class.

In re Optical Disk Drive Antitrust Litig., No. 10-md-02143 (N.D. Cal. Oct. 3, 2014)