Economics Expert Witness Testimony Allowed

Plaintiff sued defendant related to competition in the modem chip industry.  Defendant hired an Economics Expert Witness to provide testimony. Plaintiff filed a motion to exclude this testimony.  The court denied the motion to exclude.

Facts:  This case (Federal Trade Commission v. Qualcomm Incorporated – United States District Court – Northern District of California – December 17th, 2018) involves a complicated interaction between cellular communications standards, standard essential patents (“SEPs”), and the market for baseband processors, or “modem chips”.   The defendant has hired Dr. Edward Snyder (Economics Expert Witness) to provide testimony on their behalf.  The plaintiff has filed a motion to exclude the expert witness testimony of Dr. Snyder.

Discussion:  Dr. Snyder is a professor of economics and management at Yale University.  The defendant has retained him to address the plaintiff’s allegation that the defendant’s conduct had deleterious consequences on the modem chip industry.

The plaintiff alleges that Dr. Snyder’s opinion on the three factors that affect the performance of modern chip suppliers is not grounded in reliable theory or methodology.  Also, the plaintiff argues that Dr. Snyder’s opinion on modem chip supplier performance is not helpful to the court.  Last, the plaintiff argues that Dr. Snyder’s opinion that industry performance directly contradict’s the plaintiff’s hypothesis is not relevant or reliable.

The plaintiff alleges that Dr. Snyder’s three factor test is not reliable because this theory has not been peer-reviewed.  In addition, the plaintiff’s claim that there isn’t evidence that economists apply the same three factors to analogous industries.  The defendant argues that Dr. Snyder’s methodology is reliable.  The court sides with the defendant on this issue stating that Dr. Snyder’s overview of industrial organization principles shows how models of competition vary across agencies and cites numerous academic articles in support of his opinion.  The court also opines that the plaintiff focuses only on the final step of Dr. Snyder’s analysis.

The plaintiff’s other argument that Dr. Snyder’s methodology is not reliable is that his opinions are not quantifiable.  The court opines that district courts have not allowed attempts to exclude expert economic testimony because such testimony relied on qualitative factors.  The curt opines that Dr. Snyder’s testimony is based on reliable methodology and is not junk science.  In addition, the court opines that Dr. Snyder’s theory is testable.  Last, the court states that this argument is best suited at cross-examination.

The plaintiff also contends that Dr. Snyder is not qualified to testify as an expert in this case because he doesn’t have special experience in modem chips.  The court opines that Dr. Snyder does not need to be an expert in modem chips to opine on the performance of modem chip suppliers, as long as he applies reliable economic methodology.

Conclusion:  The motion to exclude the expert witness testimony of Dr. Snyder is denied.