Two Economics’ Expert Witness Testimony Denied in Part and Granted in Part

The plaintiff sued for antitrust issues regarding shopping mall leasing.  Both parties hired economists to provide expert witness testimony.  The motions to exclude were denied in part and granted in part

Facts: This antitrust case (Gumwood HP Shopping Partners LP v. Simon Property Group Inc – United States District Court – Northern District of Indiana – South Bend Division – October 19th, 2016) involves two shopping plazas.  The plaintiff (Gumwood) argues that the defendant (Simon) improperly prevented retailers from leasing space at Gumwood’s shopping center in Heritage Square.  This new shopping center at Heritage Square was going to compete against Simon’s already established University Park Mall.  Both parties hired Economics Expert Witnesses to assist in their case.  Both parties have also filed motions to exclude these expert witnesses.

Discussion:  Gumwood hired Dr. H.E. Frech III to offer opinions related to Simon’s liability and damages.  Simon opines that he should not be allowed to offer opinions about tenant negotiations, tying and coercion, and opinions on Simon’s market power.

Simon says that Dr. Frech’s opinions that they coerced retailers not to sign leases with Gumwood should be excluded because they are outside his expertise, his testimony would not be helpful to a jury, and that he relied on insufficient facts in forming his opinions.   The court agreed that this testimony would not help the jury in understanding the evidence or determine at fact in issue.  Dr. Frech’s expertise as an economist does not offer assistance to the jury in deciding who to believe in this case.

In addition, Simon argues that Dr. Frech relied on defintions of tying and coercion that are not consistent with the law.  The court agreed and granted this part of the motion.

Also, Simon moves to exclude parts of Dr. Frech’s opinions relating to market power.  Dr. Frech opined that Simon has market power in the University Park market, as well as any market that Simon uses as leverage in it’s negotiations with retailers.  He based his opinions on two lines of analysis: A market structure analysis and direct effects evidence.  The court found that Dr. Frech did not articulate a reliable basis for his opinion that Simon has market power in the tying markets based on non-structural evidence or direct evidence.  Thus, the court denied this aspect of the Daubert motion in part.

Simon’s expert, Dr. Michael R. Baye, will offer various opinions on the subject of liability. Gumwood moves to exclude two aspects of his opinions:  His testimony about the requirements for an economic tie and his testimony about the relevant geographic markets.  Dr. Baye states that there are three requirements present for a tie to be anti-competitive, which he then proceeds to analyze whether they are present in this case.  Gumwood objects to this testimony by stating that this would interfere with the court’s duty to instruct the jury.  The court agreed and granted the motion in this respect.  In addition, the court denied the part of the motion related to relevant geographic markets.

Conclusion:  The motions to exclude the expert witness testimony of Dr. Frech and Dr. Baye was denied in part and granted in part.