In this purported class action commenced by indirect purchasers of x86 microprocessors as part of desktop or mobile personal computers, Special Master Vincent J. Poppiti recommended the court deny the plaintiffs’ motion for class certification, and grant defendant Intel’s Daubert motion to exclude testimony by plaintiffs’ expert witness.
Addressing first Intel’s motion to exclude testimony by plaintiffs’ expert witness, the Special Master concluded that the testimony was inadmissible under Fed. R. Evid. 702 on multiple grounds. The Special Master found that the expert’s regression analyses, proffered to establish the amount of the alleged overcharge to consumers, were fundamentally flawed. He concluded that the expert’s testimony should be excluded under the Daubert/Kumho standard, because it was not based upon the “methods and procedures of science.” Instead, it rested upon unreliable analyses that failed to measure accurately the alleged overcharge, and did not “regress out” important factors.
Turning to the class certification issue, the Special Master initially concluded that enterprise customers should be excluded from the class, because the class representatives were individual consumers whose claims were not typical of the claims of enterprise customers. The Special Master next considered whether the class definition was sufficiently precise, objective, and ascertainable. He concluded that the class failed to meet this standard because it included members who suffered no injury or who actually benefitted from Intel’s allegedly anti-competitive acts, as well as purchasers of foreign market downstream products who should have been excluded from the class under an earlier decision by the court in this case. The Special Master further found that the class plaintiffs failed to meet the “predominance” standard for a damages class, as set forth in Fed. R. Civ. P. 23(b)(3). Specifically, they did not show that antitrust impact was capable of proof through evidence common to the class. Rather, individual analysis was required to determine whether particular consumers benefitted, were unaffected, or were injured by the monetary concessions that Intel provided to its customers, who manufactured personal computers.
The Special Master also rejected the class plaintiffs’ argument that the court should apply California law to the claims of each member of a nationwide class. He determined that the Due Process Clause and the Full Faith and Credit Clause of the United States Constitution preclude such a broad application of California law, and in addition, that application of California law to the claims of class members from other states was inappropriate under choice of law principles. The Special Master also ruled that plaintiffs’ alternative request for certification of 26 separate state classes would present “insurmountable manageability concerns,” and therefore should be denied. Finally, the Special Master rejected class plaintiffs’ request for certification of a nationwide injunctive class under Section 16 of the Clayton Act and Fed. R. Civ. P. 23(b)(2), because class plaintiffs could not satisfy the prerequisites for certification of such a class set forth in Rules 23(a) and 23(b)(2).