Category: Economics Expert Witnesses

Nutrition Expert Not Allowed to Opine on FTC Compliance
This putative class action involves claims that a manufacturer falsely marketed its pediatric nutrition beverage as helping children grow taller. Joanne Noriega sued Abbott Laboratories (“Abbott”), claiming that the packaging and marketing of its beverage, PediaSure Grow & Gain (“PediaSure”), has thus misled consumers. Noriega claimed that she purchased PediaSure for her grandson based on Abbott’s representation that PediaSure is “Clinically Proven to Help Kids Grow (the “challenged statement”). That claim, she alleged, allowed Abbott to charge a price premium for the product.

Abbott filed motions to exclude the testimony of Dr. Gita Johar (as to consumer perception of the challenged statement), Dr. Daniel Hoffman (as to scientific studies of PediaSure’s effects on growth), and Dr. William Ingersoll (as to the price premium attributable to the challenged statement). Noriega filed motions to exclude the testimony of Dr. Ran Kivetz (as to the materiality of the challenged statement) and Dr. Melvin Heyman (as to scientific studies).

Marketing Expert Witnesses

Dr. Gita V. Johar is a professor at Columbia Business School, where she has taught classes on marketing, branding, and research methods since 1992. She earned her PhD in marketing from the New York University School of Business. She has served as a fellow and president of the Society for Consumer Psychology, and as an editor of the Journal of Consumer Research, Journal of Marketing, and Journal of Consumer Psychology. Johar has published papers on topics including deceptive advertising, corrective advertising, refutation of false beliefs formed based on advertisements, effectiveness of disclosures in advertising, and inferences and false beliefs based on advertising claims.

Get the full story on challenges to Gita Johar’s expert opinions and testimony with an in-depth Challenge Study.

Dr. Ran Kivetz is a marketing professor at Columbia Business School, where he teaches courses related to marketing strategy, consumer acquisition and retention, and behavioral economics. He earned his PhD in business from Stanford Graduate School of Business and a master’s degree in psychology from Stanford University. His research focuses on buyers’ purchasing behavior, survey design, and the effect of product characteristics on purchase decisions. He has published numerous articles on topics related to consumer behavior and decision-making.

Kivetz has achieved recognition for his contributions to consumer research, including from the Journal of Marketing Research and Society of Consumer Psychology. He serves on the editorial boards of three journals, evaluating marketing research surveys for publication.

Want to know more about the challenges Ran Kivetz has faced? Get the full details with our Challenge Study report.

Nutrition Expert Witness

Dr. Daniel J. Hoffman is a professor in the Department of Nutritional Sciences at Rutgers University, where he has taught for the last 25 years. He earned his PhD in human nutrition from Tufts University, a certificate in epidemiology from the World Health Organization, and a master’s degree in cell biology from The Catholic University of America. Between 2012 and 2022, in addition to teaching, he served as director of the Center for Childhood Nutrition Research at the New Jersey Institute for Food, Nutrition and Health.

Discover more cases with Daniel Hoffman as an expert witness by ordering his comprehensive Expert Witness Profile report.

Economics Expert Witness

Dr. William Robert Ingersoll is an associate professor and chair of business and entrepreneurship at Azusa Pacific University, where he teaches courses in industrial organization, econometrics, and microeconomic theory. He earned a PhD and master’s degree in economics from the University of Arizona. He represents that he has testified as an economic damages expert in a variety of state and federal cases.

Get the full story on challenges to William Ingersoll’s expert opinions and testimony with an in-depth Challenge Study.

Pediatrics Expert Witness

Dr. Melvin Bernard Heyman is a professor in the Department of Pediatrics at the University of California, San Francisco School of Medicine (“UCSF”). He earned his medical degree from the University of California, Los Angeles (“UCLA”); completed a residency in pediatrics at Los Angeles County-University of Southern California Medical Center; and completed a fellowship at UCLA in pediatric gastroenterology and nutrition. Since 1981, he has worked in pediatric health and medicine, conducting thousands of clinical visits during his career, many of which addressed children’s nutritional needs. Between 1990 and 2016, Heyman served as chief of UCSF’s pediatric gastroenterology division and organized nutritional support services for pediatric patients. He has held leadership roles on local and national committees, including the American Board of Pediatrics and the American Academy of Pediatrics Committee on Nutrition, and has served as editor-in-chief of the Journal of Pediatric Gastroenterology and Nutrition.

Gain a comprehensive understanding of Melvin Heyman’s qualifications and casework history with his Expert Witness Profile report.

Discussion by the Court

Gita Johar

Johar was retained by Noriega to opine on whether the PediaSure label and commercials would lead a reasonable consumer to believe that the product is clinically proven to help kids grow in height.

Johar’s expert report assesses whether the PediaSure label and commercials would lead a reasonable consumer to believe that the product is clinically proven to help kids grow in height. Based on her assessment of the PediaSure label and commercials, Johar opined that Abbott has misled consumers to believe that PediaSure has been clinically proven to help kids grow in height.

a. Reliability of Johar’s Methodology

Abbott argued that Johar’s methodology is unreliable because she did not undertake an empirical consumer survey, which it contended departed both from “accepted practice” in the field and from Johar’s own academic research practices.

The Court held that Johar’s education and experience, taken together with the relevant academic literature on which she relied, supplied an adequate basis for the testimony she proposed to give.

Abbott noted that Johar lacked specific expertise as to children’s nutrition drinks. Given her extensive experience in consumer product marketing, however, that fact, though fair game for cross-examination, did not support precluding her as unqualified to testify here.

b. Relevance of Johar’s Consumer Perception Opinions

Abbott argued that Johar’s testimony would not be helpful to the jury because “her opinions are purely subjective.”

The Court found that Johar’s testimony would be helpful to the jury. Notwithstanding Abbott’s portrait of her testimony, she did not propose to set out her personal beliefs, as a consumer, about the meaning of the challenged statement on the label. Instead, she proposed to opine, as a marketing professor, based on her experience and research, about how a reasonable consumer would view and process the challenged statement in the context of PediaSure’s packaging.

Daniel Hoffman

Hoffman was retained by Noriega as a nutrition and growth expert to opine as to whether PediaSure has been—as the challenged statement represents—clinically proven to help kids grow.

Hoffman addressed Abbott’s claims substantiation guidance (“CSG”)—an internal manual that addresses health benefit claims, the evidence necessary to substantiate such claims, and the claims development process. He opined that the CSG “sets mandates to be followed” by Abbott and is not “merely aspirational.”

a. Opinions About the CSG

Abbott sought to preclude Hoffman’s testimony about the CSG on the grounds that he is unqualified to opine on an internal Abbott document and cannot properly opine on Abbott’s state of mind.

To begin with, the Court found that Hoffman is not an expert in marketing, claims substantiation, or Abbott’s internal practices. When asked at his deposition what qualified him to interpret the CSG, he answered his “research education.”

Moreover, the CSG’s guidance, if relevant at trial, would not be “beyond the ken of the average juror” to grasp.

Finally, Hoffman’s proposed opinion testimony that Abbott failed to comply with the CSG’s ostensibly mandatory guidance is not the province of an expert.

b. Reliability of Hoffman’s Analysis of Abbott’s Studies

Abbott argued that Hoffman employed an unreliable methodology in finding Abbott’s studies of PediaSure unsound.

A fair-minded review of Hoffman’s report supported the reliability of his methodology in evaluating Abbott’s studies. He drew upon his experience (both as a researcher in the field of pediatric growth and nutrition, and as an editor of scientific journals) and academic articles about standards applicable to clinical studies, randomized trials, and medical research involving human subjects.

c. Relevance of Hoffman’s Opinions on Abbott’s Studies

Abbott next argued that Hoffman’s opinions as to the scientific rigor of Abbott’s studies are irrelevant because they are based on “academic publication standards.”

However, the Court found that Hoffman’s report sets out standards that must be satisfied for a study to be considered “transparent,” “objective,” “scientifically vetted,” “scientifically rigorous,” and “unbiased.”

Few of the 36 journal articles on which Hoffman relied in support of those standards appear to relate to “academic publishing,” and even those appear to be generally applicable.

That Hoffman’s analysis of Abbott’s studies tracks analyses he conducted in his editorial roles is no impediment to the admissibility his testimony.

d. Opinions Not Stated in Expert Report

Abbott sought to preclude Hoffman’s opinions related to (1) Abbott’s compliance with Federal Trade Commission (“FTC”) health claims guidance and (2) how a reasonable consumer would interpret the challenged statement.

It was in his deposition that Hoffman articulated for the first time his opinions about Abbott’s compliance with FTC guidance and consumers’ perceptions of the challenged statement.

Noriega did not contend that these opinions were disclosed earlier or justify the failure to do so. The Court thus cannot find their non-disclosure substantially justified.

Moreover, Hoffman’s education and experience is in “nutritional sciences and growth,” he is therefore unqualified to opine on FTC compliance or consumer perception.

Because Noriega failed to timely disclose Hoffman’s opinions on FTC compliance and consumer perception, and because they are independently inadmissible, the Court excluded such testimony.

William Ingersoll

Noriega’s expert, Ingersoll, proposed to opine that: (1) products bearing the label “Clinically Proven to Help Kids Grow” are on average “more favorably viewed” than ones that state, “Helps Kids Grow”, or that make no statement about growth; and (2) consumers are willing to pay more—in the amounts above—for the product bearing the challenged statement than the growth-only statement or no statement.

a. Relevance of Ingersoll’s Survey Results

Abbott argued that Ingersoll’s survey failed to calculate a price premium keyed to Noriega’s theory of consumer deception.

Because Noriega’s theory is that the challenged statement misled consumers to believe that PediaSure promotes height growth, Abbott argued, the survey, to be helpful, needed to “isolate a price premium traceable to Abbott’s purported misrepresentation about height.”

Ingersoll’s survey tested the premiums attributable to the label statements, “Clinically Proven to Help Kids Grow,” and “Helps Kids Grow.” But on their faces, those statements do not exclusively concern height. Their references to growth can also—or alternatively—be read to encompass other forms of growth (e.g., weight, body composition, and/or muscular development).

As a result, the Court held that Ingersoll’s survey aimed at quantifying price-premium damages did not “fit” Noriega’s theory of liability.

Ingersoll could have tested the price premium traceable to a hypothetical height-growth-specific statement. Or he could have tested the value that respondents place on various promised health benefits (e.g., height growth compared to weight gain). Either approach might have enabled him to isolate the price associated with the alleged misrepresentation about height. Ingersoll’s failure to do so resulted in a broad conclusion—that consumers are willing to pay more when PediaSure contains the challenged statement—that is not tailored to Noriega’s theory of the case nor helpful to a jury tasked with isolating the damages (via a price premium theory) attributable to a misrepresentation about height. This flaw is sufficiently fundamental to require exclusion of his proposed testimony.

b. Reliability of Ingersoll’s Survey Methodology

Abbott argued that Ingersoll’s conclusions are separately irrelevant because the survey he used showed a “truncated version of the challenged statement” which excluded the footnote disclaimer.

The Court found that Ingersoll’s failure to test the disclaimer undermined the reliability of his conclusions as to the price premium attributable to the challenged statement. As Abbott noted, the disclaimer supplied context for the statement’s claim of clinical proof: a person who read and understood the disclaimer could be alerted to the fact that the evidence of PediaSure’s growth benefits “came not in studies of all children but rather those who were ‘at risk of malnutrition.’”

More broadly, Ingersoll’s election not to address the disclaimer in his report is strong evidence of motivated reasoning—that his analysis was not “reliable at every step,” but instead was result-driven.

Ran Kivetz

Kivetz was retained by Abbott to assess whether the challenged statement, as modified by the disclaimer, was a driver of consumers’ decisions to purchase and/or pay a price premium for PediaSure.

Kivetz conducted an empirical consumer materiality survey to test the effect of the challenged statement on consumers’ likelihood of purchasing and willingness to pay for PediaSure, and to ascertain the reasons and motivations driving consumers’ purchase of the products.

He drew two conclusions based on the survey’s results. First, Kivetz concluded that the challenged statement did not drive consumers to purchase PediaSure. Second, Kivetz concluded that consumers are not willing to pay more for PediaSure when the challenged statement is present compared to when it is absent.

a. Reliability of Kivetz’s Survey Design

Noriega argued that, for three reasons, the design of Kivetz’s consumer survey was unreliable.

First, Noriega argued that Kivetz erred in conducting a between-group, rather than within-group, study. Even if a within-group study would have been more effective for assessing materiality, the Court held that Kivetz’s decision to conduct a between-group study did not render his survey unreliable.

Second, Noriega claimed that Kivetz’s study “suffers from . . . the ceiling effect.” Because approximately 90% of individuals in both the test and control groups stated that they were probably or definitely likely to purchase PediaSure, Noriega argues, there was “no room” to perceive the effect of the challenged statement. That his survey might have been better designed, however, does not render it unreliable.

Third, Noriega argued that Kivetz’s use of open-ended questions “produced incorrect and unreliable data.”

The survey asked consumers why they were definitely/probably likely or unlikely to buy the product, and instructed respondents to “be specific and include details.” It then asked for “any other reason or reasons” for their purchase likelihood, and again instructed them to be specific. Respondents were thus prompted to provide a fulsome explanation for their purchase decision—not just the first reason that occurred to them. The survey also asked respondents closed-ended questions in addition to the two open-ended questions. Respondents were asked about their purchase likelihood (which required choosing between six answer choices) and willingness to pay (which required a numeric response). Accordingly, the questions here do not come close to requiring exclusion of the survey.

b. Reliability of Survey Coding

Noriega next argued that Kivetz’s methodology for coding the survey responses was unreliable, and that the responses did not support his conclusions. She argued that Kivetz failed to provide instructions to anonymous assistants, who made “highly subjective” coding decisions, and to keep data that would allow Noriega to determine how each response was coded. But Kivetz provided the coders with a “coding frame,” which contained a list of specific categories in which the responses could be classified. And Noriega did not dispute that Abbott produced the raw survey data, which was also attached to Kivetz’s report. Noriega accordingly could have, based on the raw data, coding frame, and results, reconstructed how responses were coded. The Court found her objections on this basis unavailing.

c. Opinions Based on Caselaw

Noriega argued that Kivetz’s testimony should be excluded insofar as it “offers legal conclusions.” Kivetz references caselaw once in his report.

In support of his statement that the survey he conducted is “routinely used in academic, industry, and litigation settings,” he cited cases that accepted his consumer surveys and found that they “conclusively showed that the challenged claims were not material.” It should be noted that an expert’s testimony on issues of law is inadmissible.

Melvin Heyman

Abbott’s expert Heyman opined that there is ample clinical support for a claim that PediaSure helps kids grow, including in both height and weight.

a. Qualifications to Opine on Height Growth

Noriega argued that Heyman is unqualified to opine on pediatric height growth because he lacked specialized training or experience in the field.

Although Heyman did not appear to have expertise in pediatric height growth specifically, that does not render his qualifications inadequate. Courts admit testimony of experts who have “educational and experiential qualifications in a general field closely related to the subject matter in question,” but lack expertise in “the specialized areas that are directly pertinent.”

b. Reliability of Heyman’s Methodology

Noriega argued that Heyman’s analysis is unreliable due to a lack of textual support for his assessment of Abbott’s studies. The Court held that Heyman’s testimony is reliable because he has shown how his experience led to his conclusion. Although Heyman’s failure to cite relevant authority might undermine the strength of his conclusions, it does not invalidate them.

Second, Noriega argued that Heyman’s analysis is unreliable because he failed to rely on the CSG, which constitutes “considerable contradictory evidence.” As noted, however, the CSG is an internal Abbott document that supplies guidance for substantiating marketing claims. It was unnecessary for Heyman to consider it in analyzing the findings of Abbott’s studies, or whether the studies were scientifically rigorous.

Heyman also addressed the AL-48 study, which he opined was a “scientifically rigorous clinical study that affirms . . . the height-related findings of prior PediaSure studies.” Noriega argued that Heyman’s analysis is unreliable because it is premised on the AL-48 study, which is “unfinished, unwritten, and unpublished.”

The Court found the AL-48 study was not relevant, because it was completed after the time period on which Noriega’s claims are based (and after the proposed class period). Accordingly, the Court excluded Heyman’s testimony insofar as it references or relies on that study.

c. Relevance of Opinions About Non-Height Growth

Noriega argued that Heyman’s testimony would be unhelpful to jurors because he “avoids opining on height growth specifically,” instead addressing other forms of growth that are “wholly irrelevant” to Noriega’s claims.

The Court found this argument unavailing because Heyman did opine on height growth. His conclusions as to the height findings of Abbott’s studies are central to his proposed testimony.

d. Relevance of Opinions About L.V ‘s Medical Records

Noriega argued that Heyman’s testimony related to L.V.’s medical records is irrelevant. The Court agreed.

Even taking as true Heyman’s assessment that L.V. grew while he consumed PediaSure, such would not make it more likely that PediaSure helps kids grow. There are myriad reasons why L.V. might have grown during the relevant period, such as his genetics, age, diet, sleep, and physical activity. Heyman did not opine that PediaSure caused L.V.’s height growth, nor could he responsibly do so.

If L.V. grew during the relevant period, that fact would be fair game to use to impeach that aspect of Noriega’s testimony. But a medical expert is not necessary to establish it. L.V.’s medical records, which reflect the weight and height recorded at his appointments in July 2021 and March 2023, are comprehensible to a layperson. Abbott has not contended that expert testimony is needed to decode them on this point. Accordingly, such testimony would be improper.

Held
- The Court denied in full Abbott’s motion to exclude Dr. Gita Johar’s testimony.
- The Court granted in part and denied in part Abbott’s motion to exclude Dr. Daniel Hoffman’s testimony.
- The Court granted in full Abbott’s motion to exclude Dr. William Ingersoll’s testimony.
- The Court granted in part and denied in part Noriega’s motion to exclude Dr. Ran Kivetz’s testimony.
- The Court granted in part and denied in part Noriega’s motion to exclude Dr. Melvin Heyman’s testimony.
Key Takeaway

Trial courts serve as gatekeepers, responsible for ‘ensuring that an expert’s testimony both rests on a reliable foundation and is relevant to the task at hand.

Whether a witness is qualified as an expert is a threshold question that precedes the Court’s relevance and reliability inquiries. It is critical that an expert’s analysis be reliable at every step. To ensure relevance, the Court must assess whether the expert’s testimony fits the facts of the case.

Case Details:

Case Caption: Noriega V. Abbott Laboratories

Docket Number: 1:23cv4014

Court Name: United States District Court, New York Southern

Order Date: June 04, 2026
June 5, 2026

Economics Expert Witness’ Testimony Admitted Despite His Use of Spot Export Prices

Plaintiffs The Tripp Plating Works, Inc. (“Tripp”) and Finch Paper, LLC (“Finch”) (collectively referred to as “Indirect Purchaser Plaintiffs” or “IPPs”) alleged that Defendants Olin Corporation (“Olin”), K.A. Steel Chemicals, Inc. (“K.A. Steel”), Occidental Chemical Corporation (“OxyChem”), Westlake Chemical Corporation (“Westlake”), Shintech Incorporated (“Shintech”), and Formosa Plastics Corporation, U.S.A. (“Formosa USA”) (collectively, “Defendants”) conspired to artificially reduce or eliminate competition for the pricing of caustic soda sold in the United States. IPPs claimed that Defendants colluded to fix caustic soda prices, forcing purchasers to pay inflated, supracompetitive prices.

In response, Shintech and Formosa USA separately moved to strike portions of the testimony provided by IPPs’ expert witness, Dr. Gareth Macartney, Ph.D. Additionally, all Defendants jointly moved to exclude certain opinions offered by Macartney. IPPs, in turn, have also moved to strike and exclude certain opinions offered by the Defendants’ expert witness, John H. Johnson IV, Ph.D.

Economics Expert Witnesses

John H. Johnson IV, Ph.D, is the Chief Executive Officer of Edgeworth Economics, LLC, a consulting firm that provides clients with objective expert economic and financial analysis for complex litigation and public policy debates. He holds a B.A. in Economics from the University of Rochester and a Ph.D. in Economics from the Massachusetts Institute of Technology (MIT), where he specialized in labor economics and econometrics. Johnson leverages his expertise to deliver analytical clarity and strategic insights to clients facing high-stakes legal and policy challenges.

Get the full story on challenges to John H Johnson IV’s expert opinions and testimony with an in-depth Challenge Study.

Gareth Macartney is the Senior Economist, Director of Competition, and Chief Executive Officer at OnPoint Analytics, Inc., an economic and statistical consulting firm. He holds a Ph.D. in Economics from University College London. Macartney specializes in providing rigorous economic and statistical analysis, particularly in matters related to competition and complex litigation.

Want to know more about the challenges Gareth Macartney has faced? Get the full details with our Challenge Study report.

Discussion by the Court

a. Class Certification

On December 28, 2023, the Court denied a motion for class certification filed by the Direct Purchaser Plaintiffs (DPPs), including Miami Products & Chemical Co., Amrex Chemical Co., Inc., Main Pool and Chemical Co., Inc., Midwest Renewable Energy, LLC, Perry’s Ice Cream Company, Inc., and VanDeMark Chemical, Inc. The Court now addresses a similar request by the Indirect Purchaser Plaintiffs (IPPs) to certify two classes under Federal Rule of Civil Procedure 23. The Court assumes familiarity with the DPP Class Certification Decision and Order and prior proceedings in this matter.

IPPs adopted the factual background from the DPPs’ motion for class certification. The Court incorporated by reference the detailed summary of Defendants’ alleged manipulation of the caustic soda market, which purportedly caused customers to pay supracompetitive prices. The allegations focused on Defendants’ price increase announcements and their impact on the caustic soda market.

The IPPs argued that common issues predominated, justifying class certification. However, the Court found that IPPs failed to meet the requirements of Rule 23(b)(3). Their damages model, prepared by Macartney, relied on flawed data from Dr. Russell Lamb, who misclassified contract types by not reviewing individual contracts. This error undermined the model’s ability to demonstrate class-wide injury. Additionally, Macartney’s assumption that price increase announcements influenced index-based pricing was speculative and lacked evidentiary support. He failed to show how inflated prices were incorporated into price indices, a critical component for proving class-wide injury.

The pass-through model, based on data from only three distributors out of more than 155, was not representative of the proposed class. This limited dataset did not capture the complexities of the supply chain, leading to individualized issues that overshadowed common questions. Therefore, the Court concluded that IPPs did not provide a reliable method for proving class-wide injury and damages, and denied class certification.

b. John H Johnson IV

Johnson has provided an expert report responding to and critiquing Macartney’s opinions. Johnson argues, among other things, that: (1) Macartney’s assessment of the impact of Defendants’ price increase announcements is disconnected from economic evidence, in part because pricing for caustic soda is individually negotiated between each supplier and distributor, and the pricing mechanisms and terms vary substantially across distributors, Defendants, and over time; (2) the overcharge regression fails to account for global supply and demand conditions that impact the domestic price of caustic soda; (3) the overcharge regression improperly calculates an average overcharge for distributor and non-distributor purchasers, rather than customer-specific overcharges; (4) the pass-through model relies on data from only three distributors to estimate pass-through rates for 155 distributors, with no statistical tests to support the conclusion that the purchases and sales associated with these three distributors are representative of those excluded from the analysis; and (5) the pass-through model oversimplifies the caustic soda supply chain.

As part of his critique of the regression model, Johnson conducted his own multiple regression analysis, adding various export price measures. He ran six additional regressions, each incorporating one measure of export prices (contemporaneous and three-month lagged). These additional tests yielded an estimate of the purported overcharge that was negative or statistically insignificant.

Admissibility of Johnson’s Opinions

IPPs argue that Johnson’s overcharge regression analyses, and his opinions and testimony based on them, are unreliable because they are prone to endogeneity and fail to reliably control for global supply and demand for caustic soda. More specifically, IPPs contend that Johnson committed a fundamental error by using spot export prices as a variable, asserting that such prices are not reliable indicators of international prices or demand in their respective localities. IPPs acknowledge that DPPs raised a similar argument regarding Johnson’s opinions during their class certification motion and similarly seek exclusion of his spot export price analyses.

Previously, the Court considered and rejected the argument that Johnson’s use of spot export prices rendered his analysis and testimony unreliable. The Court found Johnson’s explanation of his methodology reasonable and persuasive. Nothing in the IPPs’ submissions provides a basis for the Court to reconsider its prior finding that there is no justification under Rule 702 to strike or exclude Johnson’s opinions. Accordingly, the Court denies IPPs’ motion to strike Johnson’s opinions and testimony.

c. Gareth Macartney

Macartney has opined, among other things, that: (1) common evidence demonstrates that the structure of the caustic soda industry is conducive to anticompetitive behavior; (2) common evidence and methods demonstrate that Defendants engaged in collusive behavior that artificially increased the price of caustic soda; and (3) a common, reliable standard economic methodology may be used to calculate damages on a classwide basis. Applying that methodology, he has estimated class-wide damages of $155 million for the State Antitrust Class.

Macartney has further opined that class-wide damages for the Unjust Enrichment Class can also be calculated using common evidence, amounting to $712 million in revenue terms, $355 million in gross profit terms, and $348 million in net profit terms.

A key part of his opinion is the performance of a reduced-form pricing regression analysis to demonstrate that caustic soda prices were artificially inflated during the alleged class period. To conduct this analysis, Macartney used a standardized database of Defendants’ transaction data received from Russell Lamb, DPPs’ expert economist. His model shows an overcharge of 11.61% for all of Defendants’ customers and a 16.37% overcharge for distributor customers. He then applied a regression model to estimate the proportion of Defendants’ price increases passed through to distributor customers. This model provides an estimate of passthrough at a rate of 81%.

The Court denies the Defendants’ motions to strike Macartney’s opinions and testimony as moot.

Held

The Court denied Shintech’s and Formosa’s motions to exclude certain opinions and proposed testimony of Gareth Macartney as moot and denied Defendants’ joint motion to exclude his opinions and testimony. The Court also denied IPPs’ motion to strike and exclude portions of John H. Johnson IV’s opinions and proposed testimony.

Key Takeaways:

When the opponent contended that Johnson’s use of spot export prices constitutes a true error that requires his analyses to be excluded because the spot export prices are not indicators of international prices or demand in their respective localities, the Court held that Johnson has explained his methodology in a way that was both reasonable and persuasive.

Case Details:

Case Caption:	Miami Products & Chemical Co. V. Olin Corporation Et Al
Docket Number:	1:19cv385 ; 1:19cv975
Court:	United States District Court for the Western District of New York
Order Date:	December 16, 2024

December 18, 2024

Economics Expert Witness Theory on Investment Performance Admitted

Plaintiff Joanna P. Mattson filed a legal action, both individually and on behalf of the Milliman, Inc. Profit Sharing and Retirement Plan, along with a class of participants and beneficiaries affected by the alleged misconduct of the Milliman Defendants. The lawsuit is based on a claim of breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA). The named Defendants include Milliman, Inc., the Board of Directors of Milliman, Inc., “the Investment Committee” responsible for selecting investment options for the Plan and its members, as well as “the Administrative Committee” in charge of Plan administration and its members (collectively referred to as “Milliman” or “Milliman Defendants”).

The Plaintiff asserted that three Wealth Preservation Strategy Funds (the “WPS Funds” or “Funds”) should not have been used in the Milliman, Inc. Profit Sharing and Retirement Plan (the “Plan”). These funds, managed by Unified Trust Company (“Unified”), included the Milliman Managed Risk Strategy (MMRS), an equity risk management approach. Unified, as the investment manager, opted to invest the WPS Funds’ underlying assets in exchange-traded funds (ETFs) representing different segments of equity markets (i.e., small-cap, mid-cap and large-cap, international and emerging market) and various fixed-income products (i.e., bonds and government obligations). Subsequently, Unified engaged Financial Risk Manager (FRM) as a sub-advisor to implement MMRS, which aimed to manage volatility and preserve capital. MMRS comprised two distinct components: a volatility management component using futures contracts to adjust exposure to underlying equity investments and moderate volatility, and a capital protection component utilizing futures contracts to replicate a five-year rolling put option, creating a cash cushion to offset significant market losses.

To conclude, Plaintiff Joanna Mattson only worked at Milliman, Inc. (“Milliman”) from 2002 to 2004. She enrolled in the Milliman, Inc. Profit Sharing and Retirement Plan (the “Plan”), a 401(k) plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). Despite having
not worked for Milliman for nearly two decades, she commenced this action claiming that three Wealth Preservation Strategy Funds (“WPS Funds” or “Funds”) should have been removed from the Plan before 2016.

The Defendants sought to exclude the opinions and testimony provided by the Plaintiff’s experts, Horacio A. Valeiras and Arthur B. Laffer.

Finance Expert Witness

Horacio A. Valeiras is the CEO and Co-Founder of Frontier Global Partners LLC, an entity specializing in managing private funds and separate accounts, including multi-asset and retirement accounts. As an SEC-registered investment adviser, he holds a Master of Business Administration degree with a focus on Finance from the University of California, Berkeley, and a Master’s Degree in Chemical Engineering from the Massachusetts Institute of Technology. With a wealth of experience spanning 31 years, Valeiras has been actively engaged in the management of large investment portfolios for institutional money managers. His expertise includes the evaluation and selection of investment products for multi-asset accounts.

Economics Expert Witness

Arthur B. Laffer holds the position of Chairman and Chief Economist at Laffer Associates, an economic research and consulting firm he founded. Graduating from Yale University in 1963, he furthered his education by obtaining a Master of Business Administration and a Ph.D. in Economics from Stanford University. Laffer’s expertise in fiduciary responsibility stems from his advisory roles for governments, extensive service on various boards of trustees, boards of directors for both private and publicly traded companies, and his leadership as Chairman and Chief Economist of Laffer Investments.

Discussion by the Court

The Defendants contested the reliability of Horacio Valeiras’ damages opinions and anticipated testimony on two grounds.

The Defendants argued that Valeiras’ damages calculations and testimony regarding the Plan were not reliable, asserting that his damage models were not tailored to the only component of MMRS that he challenged, the capital protection component. They maintained that damages should be tailored to the accumulation phase of retirement savings. In response, the Plaintiff argued that Valeiras had incorporated both the capital protection and volatility management components into his calculations, as the Defendants had used both components of the overall overlay of MMRS simultaneously. The Plaintiff further contended that Valeiras’ damages calculations could be considered reliable, as he integrated the overlay into his calculations in a manner consistent with how the Defendants might have employed it in practice. Despite Valeiras expressing concerns about the volatility management component, the Plaintiff asserted that his testimony was not necessarily unreliable, as he contended that the overlay as a whole adversely affected the Plan. Valeiras stated that the overlay’s attempts to manage volatility were costly and ineffective. The Plaintiffs argued that Valeiras’ testimony remained reliable, as they contended that his inclusion of the volatility management component of the overlay in his damages calculations did not necessarily undermine its reliability.

The Defendants contested Valeiras’ inclusion of the Funds’ investors who were in the draw down phase in his damages calculations. In response, the Plaintiffs argued that Valeiras’ opinion was relevant as ERISA damages encompassed all damages incurred by the Plan. The Court determined that the “returns of the Plan as a whole” were a reasonable approximation of losses to the plan, asserting that the Defendants’ challenges to Valeiras’ testimony pertained to weight and not admissibility. The Court concluded that the amount of damages, if any, would be best determined after considering the evidence at trial.

The Defendants’ motion aimed to exclude the opinions and testimony of Arthur Laffer, focusing on four specific issues.

The Defendants sought to exclude Laffer’s testimony regarding the removal of the three Wealth Preservation Strategy Funds from the Milliman, Inc. Profit Sharing and Retirement Plan before January 2016, arguing that the performance history was not sufficiently long for him to opine on such a decision. The evaluation of ERISA breach of fiduciary duty claims is fact intensive. Despite other Courts rejecting ERISA claims based on only three years of performance data, the Court stated that this challenge addressed the weight of Laffer’s testimony rather than its admissibility, as the factual nature of the inquiry warranted consideration of the evidence at trial.

The Defendants sought to exclude Laffer’s testimony on any conduct predating January 2016, including the alleged “seeding” of the Funds with Plan money in 2012, citing ERISA’s statute of repose which barred it. The Plaintiff argued that such testimony should be admissible, contending that the Defendants’ conduct constituted a singular, ongoing breach. According to 29 U.S.C. § 1113(1), any ERISA action brought more than six years after “the date of the last action which constituted a part of the breach or violation” is barred. The Court acknowledged that the duty to exercise prudence in selecting investments at the outset of the Plan exists “separate and apart from” from the duty to prudently monitor Plan investments and remove underperforming investments, as established in Tibble v. Edison Int’l, 575 U.S. 523, 529, 135 S. Ct. 1823, 191 L. Ed. 2d 795 (2015). While recognizing that the selection and retention are not a continuous breach, the Court decided not to exclude Laffer’s testimony about the Defendants’ selection of the Funds. Defendants’ selection of the Funds, regardless of whether such selection was prudent or not, is distinct from the Plan’s retention of the Funds. ERISA fiduciaries were obligated to continually monitor their plan’s investments, with the specific requirements dependent on various factors such as the plan’s nature, investments, and the plan sponsor. In the present case, the process employed by the Plan in selecting the Funds could shed light on whether the subsequent decision to retain the Funds was prudent. Consequently, Laffer’s testimony regarding the initial investment in the Funds was deemed relevant, and the Plaintiff was permitted to present it to support the claim that the Defendants acted imprudently in retaining the Funds.

The Defendants argued that Laffer’s opinions on the Plan’s investment policy statement (IPS) were legally unsound. Laffer was presented as an expert to assess whether the Defendants demonstrated an appropriate level of prudence and fiduciary responsibility toward managing the Plan and its participants. The Court acknowledged that Laffer’s testimony regarding the Plan’s IPS could be beneficial in assessing whether the Defendants fulfilled their fiduciary duties. Furthermore, since the case would be a bench trial, the Court reasoned that there was no prejudice risk as there was no jury to potentially give undue weight to Laffer’s testimony.

The Defendants contended that Laffer’s remaining opinions lacked proper support and were characterized as mere ipse dixit. They argued that Daubert and the Federal Rules of Evidence do not mandate a district court to admit opinion evidence solely supported by the expert’s assertion without a connection to existing data.The Court, exercising its discretion in assessing the analytical gap between data and opinions, noted that for non-scientific testimony, reliability rested heavily on the expert’s knowledge and experience rather than a specific methodology or theory. Given Laffer’s substantial expertise in evaluating investments and advising retirement plans and their fiduciaries, as well as other trusts, the Court deemed his knowledge and experience appropriate to provide a sufficiently reliable basis for his expert testimony. The Defendants argued that Laffer’s opinions lacked reliability as he did not cite specific surveys, studies, or documentation supporting his views. The Court deemed this argument as pertaining to the weight of his testimony rather than its admissibility. Similarly, the Defendants’ claim that Laffer’s experience with other types of retirement plans and fiduciary investors was insufficient went to the weight of his testimony. As Laffer based his opinions on extensive experience in the investment industry and as a fiduciary advisor, the Court concluded that these opinions could not be excluded before trial.

Held

The Court denied both of the Defendants’ motions to exclude the opinions and testimony of Plaintiffs’ experts Horacio A. Valeiras and Arthur B. Laffer.

Key Takeaways

In the legal proceedings involving Plaintiff Joanna P. Mattson and the Milliman Defendants, the Court addressed key issues related to the expert testimonies of Horacio A. Valeiras and Arthur B. Laffer. The Plaintiff’s claims were centered around the contention that three Wealth Preservation Strategy Funds should have been removed from the Milliman, Inc. Profit Sharing and Retirement Plan before January 2016. The Court considered challenges to the reliability of Valeiras’ damages opinions, with the Defendants arguing that his calculations did not address the capital protection component of MMRS adequately. The Court ruled that these challenges pertained to the weight of the testimony, not its admissibility. Similarly, the Court addressed Laffer’s opinions on the Plan’s investment policy statement (IPS) and other issues, ruling that the objections raised by the Defendants went to the weight of his testimony rather than its admissibility. The Court highlighted Laffer’s extensive experience and knowledge in the investment industry as a basis for deeming his expert testimony sufficiently reliable. Ultimately, the Court denied the Defendants’ motions to exclude the expert testimonies, allowing them to be presented at trial.

Case Details

Case Caption	Mattson v. Milliman, Inc.
Docket Number	2:22cv37
Court	United States District Court, Washington Western
Citation	2024 U.S. Dist. LEXIS 16413
Order Date	January 30, 2024

February 2, 2024

Market Research Expert Witness Opinions on Deceptive Labeling Rejected

Tom’s a wholly-owned subsidiary of Tom’s of Maine Holdings, Inc., which, in turn, was a wholly-owned subsidiary of Colgate. Tom’s specialized in manufacturing personal care products, such as toothpaste and deodorant. The company marketed numerous toothpaste flavors and deodorant varieties as “natural”, which included 34 toothpaste flavors and 17 deodorant varieties, all of which were promoted as “natural” on their respective packaging. The packaging of each toothpaste and deodorant product featured a representation claiming the product’s “natural” nature.

Anne De Lacour, Andrea Wright, and Loree Moran, individually and on behalf of all others similarly situated (collectively, Plaintiffs), argued that the use of the word “natural” by the Colgate-Palmolive Co., and Tom’s of Maine Inc. (collectively, Defendants) on these products was false and misleading. They contended that the products in question contained ingredients, such as aluminum chloralhydrate, glycerin, propylene glycol, sodium lauryl sulphate, sorbitol, and xylitol, which were deemed “synthetic and/or highly chemically processed.” The Plaintiffs asserted that they suffered harm as a result of relying on Tom’s “natural” representations, as they were led to purchase the products at a premium price.

The Plaintiffs sought damages on behalf of themselves and three distinct classes – the “California Class,” the “Florida Class,” and the “New York Class.” Their claims were based on various legal provisions, including California’s Consumer Legal Remedies Act (“CLRA”), False Advertising Law (“FAL”), and Unfair Competition Law (“UCL”). In addition, the lawsuit invoked Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”), New York’s General Business Law (“NYGBL”), and a claim for breach of express warranty.

After the discovery phase concluded, the Defendants filed motions for summary judgment, motions to exclude the Plaintiffs’ experts, Dr. Zhaohui Zhou, Brian M. Sowers, J. Michael Dennis and Colin B. Weir, and a motion for class decertification.

Market Research Expert Witness

Brian M. Sowers is a Principal at Applied Marketing Science, Inc. (AMS), a distinguished market research and consulting firm. With a career spanning since 1996, he has amassed extensive expertise in market research. Prior to AMS, Sowers held research positions at the Forbes Consulting Group. Throughout his career, he personally designed and executed numerous market research surveys across diverse modalities and populations. Sowers holds a Bachelor of Arts in History from Roanoke College and earned a Master of Business Administration from the University of Colorado.

Chemistry Expert Witness

Zhaohui Sunny Zhou holds a Bachelor of Science degree in Organic Chemistry from Peking University, Beijing, China, and a Ph.D. in Bioorganic Chemistry from The Scripps Research Institute, California. Zhou is currently serving as a Professor in the Department of Chemistry and Chemical Biology at Northeastern University, and also holds positions as Faculty Fellow of the Barnett Institute of Chemical and Biological Analysis and Affiliated Faculty of Bioengineering and Biology. With expertise in chemistry, biochemistry, and chemical biology, Zhou conducts research and teaches various aspects of chemistry related to natural products and derivatives.

Political Science Expert Witness

J. Michael Dennis holds a B.A. and an M.A. in Government from the University of Texas. He then earned his Ph.D. in Political Science from the University of Chicago. Dennis is currently the Senior Vice President at NORC and is also the President and Owner of JMDSTAT Consulting Inc. Prior to this, Dennis held the position of a Managing Director at GfK Custom Research LLC. With over 25 years of experience, Dennis specializes in designing and conducting surveys focused on the opinions, perceptions, attitudes, preferences, and values of consumers, voters, members of association, and citizens.

Economics Expert Witness

Colin B. Weir holds an MBA with honors from Northeastern University and a Bachelor of Arts degree in Business Economics from the College of Wooster. Weir has provided consulting expertise on diverse consumer and wholesale products cases, specializing in calculating damages for various product categories such as food, household appliances, herbal remedies, health/beauty care products, electronics, furniture, and computers. Weir is currently serving as the President at Economics and Technology, Inc., his work involves a range of economic analyses, including econometric and statistical analysis, multiple regression, surveys, statistical sampling, micro- and macroeconomic modeling, and accounting.

Discussion by the Court

Plaintiffs asserted that Tom’s labeling of its toothpaste and deodorant products as “natural” was deceptive, alleging the inclusion of synthetic or highly chemically processed ingredients. They sought damages under various legal provisions. To succeed, Plaintiffs had to prove that a “reasonable consumer” would likely be misled by Tom’s use of “natural.” The reasonable consumer standard required a probability that a significant portion of the public could be misled. In their evidence, Plaintiffs relied on an expert report, governmental guidance, definitions by Named Plaintiffs, internal documents, and Tom’s employees’ testimony. The admissibility and sufficiency of this evidence were challenged in the context of Tom’s Motion for Summary Judgment.

Expert Sowers, responsible for designing surveys on toothpaste and deodorant, aimed to assess consumer perceptions of Tom’s “natural” claims. Respondents viewed products with the contested labeling and answered a series of questions, focusing on whether the term “natural” conveyed the presence of “only natural ingredients,” “some natural and some artificial ingredients,” or “no natural ingredients” (only artificial). However, criticisms arose concerning the flaw in Sowers’s approach. He defined “natural” and “artificial” solely in relation to each other and failed to provide clear definitions, rendering the terms ambiguous. This lack of clarity undermined the meaningful interpretation of respondents’ answers, leading to the exclusion of Sowers’s report and testimony in the litigation.

Plaintiffs engaged Expert Zhou to opine on the “scientific merit” of Tom’s use of the word “natural” in describing its toothpastes and deodorants. Defendants contended he lacked the expertise to assess whether toothpaste and deodorant ingredients were “natural.”

Experts Dennis and Weir were engaged by the Plaintiff to provide evidence of classwide injury. Dennis conducted two surveys, one for Tom’s toothpastes and another for Tom’s deodorants. Based on those surveys, Dennis contended he could isolate a “price premium,” or portion of the market price consumers paid, that was attributable to the “natural” claim at issue. Weir, in turn, endorsed Dennis’s analysis and then used simple multiplication to calculate Plaintiffs’ claimed “price premium damages” (price premium x units sold) and “statutory damages” ($550 x units sold). Defendant argued that Dennis’ conjoint analysis suffered from numerous fatal defects and alleged that Dennis doctored the respondents’ answers. Defendant also added that Weir’s opinions were inadmissible on account of the lack of a specialized
degree in the field of retail pricing.

Firstly, in their attempt to illustrate a reasonable consumer’s perception of “natural,” Plaintiffs cited governmental guidance, Named Plaintiffs’ definitions, Tom’s internal documents, and the testimony of Tom’s employees. However, this evidence fell short of establishing that a reasonable consumer interpreted Tom’s use of “natural” as an assurance that its products lacked synthetic or highly chemically processed ingredients. Instead, the evidence indicated diverse interpretations of the term “natural.”

There was no governmental guidance specifically addressing the use of “natural” labeling on personal care products, as acknowledged by Plaintiffs. The most relevant guidance pertained to food products, with differing interpretations from various agencies. In 1982, the United States Department of Agriculture defined “natural” for meat and poultry products as free of artificial flavors, colorings, chemical preservatives, and not more than minimally processed. The United States Food and Drug Administration (FDA) around 1988 stated that “natural” meant nothing artificial or synthetic had been included or added to the product beyond normal expectations. In 2015, the FDA sought public comments on the use of “natural” on food product labeling, receiving over 7,000 comments reflecting diverse interpretations, including “organic,” “minimally processed,” “chemical-free,” “hormone-free,” “non-GMO,” and “not ‘artificial’/’synthetic.’” Despite the comments, the FDA did not establish a formal definition for the term.

Given the absence of governmental guidance specifically addressing the use of “natural” labeling on personal care products and the lack of a consistent definition for “natural” in food products, Plaintiffs were unable to rely on governmental guidance to establish a reasonable consumer’s understanding of the term. This limitation was noted in a similar case, In re Kind, 627 F. Supp. 3d at 284, where it was emphasized that Plaintiffs could not depend on an objective, regulatory definition of “All Natural” to demonstrate a reasonable consumer’s understanding due to the nonexistence of such a definition.

Secondly, Plaintiffs’ reliance on Named Plaintiffs’ testimony to establish a reasonable consumer’s understanding of “natural” was deemed inadequate. The Named Plaintiffs failed to provide evidence indicating that their perspectives on the term aligned with those of a reasonable consumer, as opposed to reflecting their individual subjective beliefs. Citing Hughes v. Ester C Co., 330 F. Supp. 3d 862, 872 (E.D.N.Y. 2018), the Court concluded that the Plaintiffs’ “conclusory allegations and ‘anecdotal’ testimony” were insufficient to create a genuine issue of material fact regarding deception.

Thirdly, Plaintiffs’ reliance on Tom’s internal documents and the testimony of Defendants’ employees to substantiate their theory of deception was rejected. Tom’s internal documents did not offer a foundation for determining a reasonable consumer’s understanding of “natural.” The statements made by Defendants’ employees were deemed reflective of individual views rather than representing the collective understanding of a reasonable consumer regarding the term “natural.”

Plaintiffs’ failure to present evidence supporting the claim that a reasonable consumer interprets “natural” as alleged resulted in the absence of a triable issue of fact regarding deception. Consequently, Defendants were deemed entitled to summary judgment concerning Plaintiffs’ claims under CLRA, FAL, UCL, FDUTPA, NYGBL, and breach of express warranty.

The remaining motions to exclude the reports and testimony of the experts Zhaohui Sunny Zhou, Colin B. Weir and J. Michael Dennis were denied as moot.

Defendants sought to decertify the classes, emphasizing the district Court’s obligation to monitor class decisions as the evidentiary record evolves. The Court may decertify a class if Rule 23 requirements are not met. A crucial Rule 23(b)(3) requirement is that common questions of law or fact must predominate over individual ones. Through the course of discovery, it became evident that Plaintiffs lacked support for their claim that reasonable consumers understood Tom’s use of “natural” to imply the absence of synthetic or highly chemically processed ingredients. The absence of generalized proof of deception led to a lack of common issues of fact, prompting the Court to decertify the classes.

Held

The Court issued a final ruling on January 04, 2024 granting Tom’s motion for summary judgment. Defendants’ motion to exclude the opinions of Sowers was also granted. Furthermore, Defendants’ motion to decertify the classes was granted. Lastly, any remaining motions by Defendants, including the motions to exclude Zhaohui Zhou, J. Michael Dennis and Colin B. Weir were denied as moot, implying that these motions were no longer relevant or necessary for consideration.

Key Takeaway

In the legal proceedings against Tom’s and Colgate, the expert testimony of Brian M. Sowers played a pivotal role in assessing consumer perceptions of the “natural” labeling on toothpaste and deodorant products. Sowers designed surveys to gauge how consumers understood the term “natural,” and his conclusions were challenged during the litigation. The Court ultimately excluded Sowers’s report and testimony, highlighting flaws in his approach. The Court found that Sowers defined “natural” and “artificial” solely in relation to each other, leading to ambiguity in respondents’ answers. This lack of clarity undermined the reliability of Sowers’s findings, contributing to the Court’s decision to grant summary judgment in favor of the Defendants. The exclusion of Sowers’s expert testimony reinforced the importance of clear definitions and methodologies in expert reports to establish a meaningful understanding of consumer perceptions in deceptive labeling cases.

Case Details

Case Caption	Lacour v. Colgate-Palmolive Co.
Docket Number	1:16cv8364
Court	United States District Court, New York Southern
Citation	2024 U.S. Dist. LEXIS 1227
Order Date	January 3, 2024

January 18, 2024

Court admits Expert Testimony on the Value of NIL Rights in Broadcasts in this Antitrust Lawsuit

Consolidating separate cases involving student-athletes Sedona Prince, Grant House, and Tymir Oliver, the litigation contested National Collegiate Athletic Association (“NCAA”) regulations limiting student-athletes’ NIL (name, image, likeness) compensation. Plaintiffs alleged antitrust violations, asserting that these rules restrained fair compensation and artificially suppressed NIL prices. In June 2021, the Court dismissed some of Oliver’s claims seeking injunctive relief but denied the rest of the motions to dismiss. Following the consolidation approval in July, the Plaintiffs, through the Consolidated Amended Complaint (“CAC”) submitted on July 26, 2021, broadened their accusations by incorporating details about an interim NIL policy implemented by the NCAA on July 1, 2021.

The CAC contended that the interim policy, although seemingly easing restrictions, still hindered NIL opportunities for student-athletes. It highlighted that while some prohibitions were temporarily suspended, rules preventing institutions from compensating student-athletes for NIL use and restricting NIL compensation tied to athletic participation remained intact. Moreover, the NCAA reserved the right to reinstate all suspended NIL limitations at any time.

Plaintiffs argued that these NCAA rules, even in their suspended state, constituted anticompetitive behavior, violating Section 1 of the Sherman Act. They alleged that these regulations artificially depressed compensation levels for student-athletes’ NIL and stifled their ability to capitalize on commercial opportunities while participating in Division I teams. In the absence of these nationwide constraints, the Plaintiffs contended that Division I conferences and schools would have engaged in competitive practices, allowing student-athletes to exploit NIL opportunities and share in the economic benefits arising from their names, images, and likenesses.

The CAC elaborated on a scenario where, without the contested rules, conferences and schools would have sought to enhance the value of athletes’ personal brands by redirecting funds from extravagant facilities and coaching salaries towards marketing and educational resources. This strategic reallocation aimed to foster opportunities for co-marketing student-athletes’ NIL with the school’s brand, further benefiting the athletes commercially.

In seeking legal recourse, the Plaintiffs pursued similar relief as their initial complaints, including injunctions, declaratory judgments, damages, and attorneys’ fees. These claims persisted despite the new allegations about the interim NIL policy, asserting that the NCAA’s regulations, whether suspended or not, unfairly restricted student-athletes’ ability to profit from their NIL.

Defendants filed a motion to exclude under Federal Rule of Evidence 702 certain opinions of Edwin S. Desser, Plaintiffs’ expert on sports media and broadcasting rights, and Daniel A. Rascher, Plaintiffs’ economics expert.

Broadcasting Industry Expert Witness

Edwin S. Desser has worked in the sports media industry since 1977 and has decades of experience in negotiating and valuing professional sports broadcast agreements. He spent 23 years as a media executive for the National Basketball Association (NBA), negotiating major broadcast agreements with ESPN, Turner, and NBC. He now serves as President and Owner of Desser Sports Media, Inc. – a sports media consulting firm where he advises clients on rights negotiations and valuations. He has strong academic credentials including a B.A. in Economics from the University of California, Los Angeles and an M.B.A. focused on Marketing from the USC Marshall School of Business.

Economics Expert Witness

Dr. Daniel A. Rascher holds an academic appointment as a Professor and Director of Academic Programs for the Master of Science in Sport Management at the University of San Francisco. Additionally, he serves as a Partner at OSKR, LLC, an economic consulting firm, and is the President and Founder of SportsEconomics, LLC. He received his Doctor of Philosophy degree in Economics from the prestigious University of California, Berkeley. 

Discussion by the Court

Desser undertook the task of assessing the estimated value of student-athletes’ broadcast NIL (BNIL) in major collegiate sports like Power Five Football Bowl Subdivision (FBS) games, men’s Division I basketball, and women’s Division I basketball. His conclusion posited that around ten percent of the revenue generated from broadcast rights for these sports could be attributed to the inclusion of student-athletes’ NIL within the broadcasts. This determination was based on his extensive background in negotiating professional sports broadcast agreements and an analysis that incorporated data, including royalty rates from professional sports group licensing.

Additionally, Desser was tasked with estimating the allocation of revenue per sport within Defendants’ multi-sport broadcast agreements. He determined an approximate breakdown wherein seventy-five percent of the revenue was allocated to football, fifteen percent to men’s basketball, five percent to women’s basketball, and the remaining five percent distributed among all other sports covered by these agreements. This allocation opinion stemmed from his wealth of experience in negotiating sports media deals, conversations with numerous network and college conference executives, and a comprehensive review of pertinent evidence, such as audited financial statements, various broadcast contracts for college sports, and publicly available information indicating the popularity of different collegiate sports.

Defendants sought to exclude Desser’s ten percent opinion, arguing its unreliability based on several grounds. They claimed that the opinion lacked a factual basis due to the absence of any prior separate valuation of student-athletes’ NIL in broadcasts, asserting the absence of a “real-world” market or data for reliable valuations. Additionally, Defendants contended that Desser’s industry experience wasn’t sufficient as he hadn’t specifically negotiated college sports broadcast rights.

In opposition to the motion, Plaintiffs argued that professionals like Desser, with expertise in negotiating broadcasting rights, often rely on their experience to estimate the worth of various components within these rights. They highlighted Desser’s detailed explanation of how his extensive industry background supported the ten percent opinion. Moreover, Plaintiffs asserted that Desser substantiated this opinion by examining comparable data points, such as the royalty rates for professional football and basketball players’ NIL in merchandise and video games. Lastly, Plaintiffs pointed out that the absence of concrete real-world data regarding the value of student-athletes’ NIL in broadcasts was a consequence of Defendants’ limitations on student-athlete compensation.

In his report, Desser outlined his methodology for estimating that at least ten percent of the value of Defendants’ broadcast agreements could be attributed to student-athletes’ NIL in FBS football and Division I men’s and women’s basketball broadcasts. He drew upon his extensive experience in negotiating professional sports media rights, estimating that roughly half of the total value of sports broadcasts was due to athletes’ contributions, encompassing both their athletic performance and NIL. From his experience, Desser deduced that the majority of this value stemmed from athletic performance, with a minority—approximately twenty to thirty percent—attributed to their NIL. Consequently, he conservatively concluded that ten percent was a plausible estimate for the value of student-athletes’ NIL in these specific broadcasts.

Furthermore, Desser supported this estimation not only through his experience but also by examining royalty rates in group licensing agreements for merchandise and video games utilizing professional athletes’ NIL. He underscored the relevance of video game royalty rates, deeming them highly indicative as video games emulate real-life sporting scenarios without involving athletes’ actual performance, isolating the value of their NIL. Given Desser’s comprehensive explanation rooted in his expertise and the relevance of the royalty data he analyzed, the Court deemed his ten percent opinion reliable and not subject to exclusion.

Defendants attempted to discredit Desser’s opinion by arguing that the concept of valuing NIL rights in broadcasts was fabricated solely for this litigation and lacked a real-world market due to the absence of separate valuations of student-athletes’ NIL in past college sports broadcast agreements. They contended that this absence invalidated the factual basis for attributing value to student-athletes’ NIL and suggested that, as a result, Desser’s estimation lacked credibility.

However, the Court dismissed this argument, highlighting the disagreement between the parties regarding the existence of value for student-athletes’ NIL in broadcasts. It clarified that the dispute over whether student-athletes’ NIL possess value didn’t warrant exclusion of Desser’s opinion. The Court emphasized that the determination of Desser’s opinion’s reliability rested on its foundational basis rather than the specific conclusion it reached. Additionally, it underscored the different standards applicable to damages calculations in antitrust cases compared to those in patent cases, indicating that the relaxed standard for antitrust cases acknowledges the necessity of drawing inferences or assumptions due to the nature of the conduct being scrutinized.

Desser’s opinion on the value of student-athletes’ NIL in broadcasts was backed by a comprehensive explanation despite the absence of separate valuations in previous broadcast contracts. He acknowledged the lack of standalone valuation for NIL in existing contracts, noting that broadcast agreements typically bundle rights without isolating specific components unless a distinct business reason necessitates it.

Desser emphasized the inherent value of student-athletes’ NIL within sports broadcasts, highlighting their significance in enhancing viewer interest. He asserted that omitting NIL—such as players’ faces or names—would diminish the appeal of sports broadcasts to audiences and consequently reduce attractiveness to advertisers. Moreover, Desser pointed to the actions of media companies securing rights to student-athletes’ NIL within broadcast agreements, underscoring their insistence on contractual assurances from entities like the Power 5 conferences or the NCAA. These assurances were deemed necessary by broadcast partners to ensure the usage rights of athlete NIL across the country, despite any legal assertions by the NCAA regarding these rights.

The Court recognized that while these opinions might be novel, they were supported by Desser’s thorough explanations, validating the assertion that student-athletes’ NIL indeed hold value within broadcasts. Additionally, Desser’s specific estimation of at least ten percent of Defendants’ broadcast revenues being attributed to student-athletes’ NIL was deemed adequately substantiated based on the aforementioned reasoning. The Court emphasized that the novelty of these opinions wasn’t a sufficient reason for their exclusion, given their substantial support.

Defendants raised concerns about Desser’s lack of experience in negotiating college sports media agreements as a basis for questioning the reliability of his ten percent opinion. However, Desser provided a thorough rationale explaining the relevance of his extensive background in negotiating professional sports media contracts. He highlighted the substantial similarities between professional and college sports broadcasting deals, emphasizing the commonalities in media license agreements, networks involved, production teams, equipment used, sponsorships, distribution methods, and viewer demographics.

Moreover, Desser’s involvement as a consultant in college media rights further supplemented his expertise in this domain. The Court noted that challenges to Desser’s experience mainly addressed the weight to be assigned to his opinion rather than its admissibility.

Defendants also contested the validity of the professional sports group licensing royalty rates that Desser relied upon to support his ten percent opinion. They argued that these rates weren’t suitable comparators for estimating the value of student-athletes’ NIL in broadcasts as they pertained to products like apparel and video games, not sports broadcasts themselves. However, the Court deemed these challenges as matters affecting the weight of Desser’s opinion rather than its admissibility. Desser adequately justified his reliance on these group licensing royalty rates, explaining their relevance in estimating the value of student-athletes’ NIL within broadcasts.

Defendants sought to exclude Desser’s allocation opinion regarding the distribution of broadcast revenues across various sports in multi-sport contracts, citing concerns about its reliability. They argued that Desser’s reliance on his experience lacked sufficient explanation, doubted the consistency of allocation ratios of multi-sport broadcast revenue to various sports across conferences, and pointed to evidence contradicting his allocation opinion, such as disparities in allocations within the Southeastern Conference and the increasing popularity of women’s sports.

In response, Plaintiffs defended Desser’s allocation opinion as reliable, emphasizing its foundation in his extensive experience in sports media deal negotiation, discussions with industry executives, and analysis of relevant evidence, including audited financial statements and broadcast contracts for college sports. Desser’s rationale centered on the dominance of FBS football as the primary revenue driver due to its widespread popularity compared to other sports. He reasoned that men’s basketball, while popular, significantly trailed football in value contribution, while women’s basketball, less popular than its male counterpart, held even less value. Other sports collectively contributed the least due to minimal popularity, often relegated to streaming platforms or conference networks.

Defendants disputed the validity of Desser’s allocation opinion, claiming it lacked foundation as they interpreted it to imply uniform allocation percentages across all conferences, which they argued was unrealistic. However, Desser clarified that his opinion represented an “overall average allocation” applicable across multi-sport broadcast agreements for all Defendants involved in the case. This opinion did not propose a conference-specific, season-specific, or school-specific allocation but aimed to offer a reasonable allocation to apply across the multi-sport college broadcast agreements. The Court dismissed Defendants’ misinterpretation of Desser’s opinion as insufficient grounds for exclusion.

Moreover, Defendants raised concerns about the need for specific, annual revisions in allocating revenues due to variations across schools, conferences, and years. Desser, however, justified his “overall average allocation” by explaining that any such variations were already factored into the final rights fees received by Defendants. He asserted that his allocation opinion accounted for these variations, as it was applied to the final rights fees after considering the diverse factors at play. The Court concluded that criticisms regarding the specifics of Desser’s approach affected the weight of his opinion rather than its admissibility.

Defendants also criticized the evidence Desser relied upon, arguing that he cherry-picked supportive aspects while disregarding contradictory elements in the documents. However, the Court deemed these criticisms as impacting the weight given to Desser’s allocation opinion rather than challenging its admissibility.

Rascher was tasked with developing methodologies to estimate injury and damages for alleged harm suffered by certain members of proposed classes related to broadcast NIL (BNIL) injury and damages, as well as third-party NIL injury and damages.

For BNIL injury and damages estimation, Rascher constructed a methodology centered on the absence of rules prohibiting conferences and schools from paying student-athletes for their NIL in broadcasts, while other NCAA rules regarding payment for athletic performance remained intact. He envisioned a hypothetical scenario where Power Five Conferences would compete to attract student-athletes by offering payments for their NIL in broadcasts, maximizing conference broadcast revenues. Rascher posited that this competition would prompt conferences to engage in group-licensing agreements with incoming FBS football and Division I basketball student-athletes, providing equal payments for their NIL in broadcasts.

To estimate the economic value conferences would have paid the proposed class members, Rascher combined Desser’s ten percent opinion with his own analysis of relevant data, including professional sports group licensing royalty rates. He estimated the collective value of proposed class members’ broadcast NIL as around ten percent of the revenues received by Power Five Conferences from broadcasting contracts for FBS football and Division I basketball. Additionally, Rascher relied on Desser’s allocation opinion and his own assessment of data to determine the allocation of revenues from multi-sport contracts to specific sports.

Next, Rascher calculated the student-athlete share of each conference’s broadcast revenues for each sport by multiplying the total revenues of each conference by ten percent, representing the value of student-athletes’ NIL compared to broadcast contracts. He then divided this share by the number of proposed class members in each conference, year, and sport to estimate the individual payment each member would have received annually in the absence of the challenged rules. These estimations are preliminary, with final adjustments planned upon completion of discovery.

Rascher developed a “before-and-after” methodology to estimate third-party NIL injury and damages for eligible members of proposed classes affected by the challenged NCAA rules. This method focused on estimating third-party NIL payments student-athletes would have received if the rules prohibiting such payments had not been in place.

The “after period” considered payments made after July 1, 2021, when the NCAA suspended the rules prohibiting third-party NIL payments until the date of class certification. Rascher used these “after period” payments as a baseline to estimate the potential third-party NIL payments that would have occurred in the “before period,” ranging from the 2016-2017 academic year to July 1, 2021, in the absence of the challenged rules.

Rascher deemed the “after period” payments as reliable estimates of the economic value of third-party NIL payments, capturing effects based on individual student-athletes’ identities, sports, positions, and schools. To calculate a preliminary estimate for the “before period,” Rascher used one year of “after period” payments, acknowledging data limitations. He utilized reported third-party NIL payment information from student-athletes to estimate these payments in the “after period,” excluding individuals who did not receive such compensation during this period.

Rascher plans to refine his estimates in the forthcoming merits report, considering supply and demand variations between the “before and after periods” for each student-athlete. These adjustments would account for factors like transfers between schools or conferences, changes in the athlete’s role impacting NIL compensation, and the pandemic’s impact on demand for Division I college sports during the “before period.” Rascher intends to use available data, including school records or publicly available information, to make these adjustments, showcasing the methodology’s reliability in measuring third-party NIL compensation while considering significant supply and demand differences.

Defendants aimed to exclude Rascher’s BNIL methodology, alleging its unreliability due to multiple reasons. First, they asserted that Rascher’s reliance on Desser’s ten percent opinion was speculative and unsupported. Additionally, Defendants claimed that the assumption of equal broadcast NIL payments for all proposed class members contradicted economic theory and failed to consider variations in conferences’ broadcasting revenues. Lastly, they argued Rascher’s approach overlooked legal factors post-July 2021 that might prohibit NIL payments.

However, the Court rejected these grounds for exclusion. It determined that Rascher’s BNIL methodology wasn’t solely reliant on Desser’s ten percent opinion but also incorporated Rascher’s analysis of group licensing royalty rates for professional athletes’ NIL, validating the ten percent estimate. Rascher’s analysis was deemed reasonable and adequately supported.

Regarding the equal payments assumption, Rascher justified this by arguing that in the absence of the challenged rules, rational economic behavior by conferences would entail equal NIL payments to student-athletes. He emphasized that unequal payments would not align with economic rationality at a conference level, potentially placing less elite schools at a recruiting disadvantage.

The Court found Rascher’s argument compelling, citing real-world evidence of professional athletes sharing licensing revenue equally and explained that Rascher’s methodology was founded on economic principles and evidence. Rascher’s response to criticisms, backed by economic reasoning, supported the conclusion that equal payments for broadcast NIL were rational within the context of conference-level competition.

Rascher defended his BNIL methodology by highlighting that paying higher amounts based on athletes’ superstar status would essentially constitute compensation for their athletic performance, which is prohibited by NCAA rules. His methodology operated on the assumption that the NCAA’s restrictions on performance-based compensation would persist, as these were not challenged by the Plaintiffs in the legal action. The Court determined that Defendants’ objections to Rascher’s assumptions were more about the weight given to his opinions rather than questioning their admissibility.

Defendants argued against the reliability of Rascher’s BNIL methodology, claiming it was flawed due to the assumption that each conference would pay ten percent of its broadcast revenue to recruit student-athletes in football and basketball. They contended that this assumption was economically unsound and could disadvantage conferences with lower broadcasting revenue. However, the Court disagreed with this assertion, noting that Rascher provided reasoning for the economic viability of this assumption in his constructed scenario, emphasizing that existing revenue differences among conferences already influenced investment levels in various aspects impacting athletes’ decisions.

Defendants also challenged Rascher’s but-for world, claiming it was impossible as it didn’t account for Title IX concerns, diversity and equity considerations, or state laws implemented in July 2021, which allegedly prohibited NIL payments to student-athletes. However, the Court found these objections insufficient to deem Rascher’s BNIL methodology unreliable. It concluded that disagreements over Rascher’s considerations in constructing the scenario were issues related to the weight of his methodology, not its admissibility.

Defendants sought to exclude Rascher’s third-party NIL methodology, claiming it was unreliable because it supposedly overlooked critical factors that could influence the market for student-athletes’ NIL between the before and after periods. They argued that Rascher’s method presumed uniformity in NIL values across periods without considering changes in athlete popularity, performance, or alterations in the NIL market.

However, the Court rejected this argument. It found that Rascher’s methodology wasn’t based on a simplistic assumption that NIL values remained constant across time. Instead, it used the observed NIL values in the “after period” as a starting point to estimate values in the “before period.” Rascher accounted for potential variations by adjusting the baseline for factors like athlete transfers, changes in roles, and the pandemic’s impact on sports demand. Additionally, Rascher tested this methodology with specific class members, demonstrating its ability to calculate third-party NIL payments while considering various factors affecting the market.

The Court concluded that Rascher’s approach wasn’t unreliable due to Defendants’ objections. It emphasized that challenges to Rascher’s failure to adjust for certain factors impacted the weight of his methodology, not its admissibility.

Held

The Court denied Defendants’ motion to exclude certain opinions by Edwin S. Desser and Daniel A. Rascher. The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.

Key Takeaway

In the case, expert witnesses Desser and Rascher employed methodologies and formed opinions crucial to estimating the value of student-athletes’ Name, Image, and Likeness (NIL) in broadcast agreements. Desser’s estimation of around ten percent of broadcast revenues being attributed to student-athletes’ NIL was supported by his negotiation expertise and an analysis of relevant data, despite challenges regarding the absence of standalone valuations in previous college sports broadcast contracts. Rascher’s methodologies, particularly in estimating Broadcast NIL (BNIL) injury and damages, faced objections from Defendants questioning the assumptions of equal payments and overlooking post-July 2021 legal factors. However, the Court defended the reliability of both Desser and Rascher’s methodologies, highlighting their foundations in economic principles, real-world evidence, and expert analyses despite challenges to specific elements of their approaches.

December 7, 2023

Case Caption:	Noriega V. Abbott Laboratories
Docket Number:	1:23cv4014
Court Name:	United States District Court, New York Southern
Order Date:	June 04, 2026

Category: Economics Expert Witnesses

Nutrition Expert Not Allowed to Opine on FTC Compliance

Marketing Expert Witnesses

Nutrition Expert Witness

Economics Expert Witness

Pediatrics Expert Witness

Discussion by the Court

Gita Johar

a. Reliability of Johar’s Methodology

b. Relevance of Johar’s Consumer Perception Opinions

Daniel Hoffman

a. Opinions About the CSG

b. Reliability of Hoffman’s Analysis of Abbott’s Studies

c. Relevance of Hoffman’s Opinions on Abbott’s Studies

d. Opinions Not Stated in Expert Report

William Ingersoll

a. Relevance of Ingersoll’s Survey Results

b. Reliability of Ingersoll’s Survey Methodology

Ran Kivetz

a. Reliability of Kivetz’s Survey Design

b. Reliability of Survey Coding

c. Opinions Based on Caselaw

Melvin Heyman

a. Qualifications to Opine on Height Growth

b. Reliability of Heyman’s Methodology

c. Relevance of Opinions About Non-Height Growth

d. Relevance of Opinions About L.V ‘s Medical Records

Held

Key Takeaway

Case Details:

Economics Expert Witness’ Testimony Admitted Despite His Use of Spot Export Prices

Economics Expert Witnesses

Discussion by the Court

a. Class Certification

b. John H Johnson IV

Admissibility of Johnson’s Opinions

c. Gareth Macartney

Held

Key Takeaways:

Case Details:

Economics Expert Witness Theory on Investment Performance Admitted

Finance Expert Witness

Economics Expert Witness

Discussion by the Court

Held

Key Takeaways

Case Details

Market Research Expert Witness Opinions on Deceptive Labeling Rejected

Market Research Expert Witness

Chemistry Expert Witness

Political Science Expert Witness

Economics Expert Witness

Discussion by the Court

Held

Key Takeaway

Case Details

Court admits Expert Testimony on the Value of NIL Rights in Broadcasts in this Antitrust Lawsuit

Broadcasting Industry Expert Witness

Economics Expert Witness

Discussion by the Court

Held

Key Takeaway