A federal district court judge recently tackled challenges to the testimony of experts for both parties to the Gumwood HP Shopping Partners v. Simon Property Group antitrust lawsuit. The judge’s opinion is highly instructive to all expert witnesses, not just economics professionals testifying as antitrust experts in tying cases.
At issue here is whether Simon Property Group used its national market power to compete unfairly with Gumwood, a local Indiana mall operator. Gumwood claims that retailers were forced to choose Simon’s mall in Indiana in order to retain space in Simon’s other malls.
Critical to these cases is an assessment of the accused’s market power. Both sides engaged economics experts to prepare a report on the ability of a party to control prices. Much of the battle involves competing views of the size of the market, the definition of the product, the competitors and the competitive products.
Once market power is established and the tie confirmed, experts weigh-in with calculations of economic harm.
All parties generally accept this as part of the process. However, the parties in this case took exception to the other party’s expanding the scope of the opinion outside of the realm of market power and damages. And the judge agreed. He limited the testimony of each side’s expert to areas where the trier-of-fact needs their expertise.
Gumwood claims that Simon improperly prevented retailers from leasing at Gumwood’s new shopping center, Heritage Square, which was poised to compete against Simon’s established University Park Mall and a new outdoor shopping area that was under construction at that mall.
Gumwood’s Expert Testimony
In furtherance of Gumwood’s claim, the plaintiff offered a professor of economics to offer expert testimony on liability and damages.
However, Simon protested the expert’s offering of “factual narratives about the parties’ negotiations with the retailers, and opining about what Simon did and said, what its intent was, and that it coerced the retailers.”
The court agreed. It didn’t help that the expert as much as admitted that these were matters of fact to be determined by a jury.
Though not necessary for the decision, the judge addressed Simon’s secondary argument for disallowing the expert’s opinion on these matters. Simon argued that the expert “relied on definitions of tying and coercion that are inconsistent with the law.”
Again, the court agreed that the expert failed to adhere to the proper legal standard when defining a tie. This is a clear caution to experts not to fall prey to adjusting standards to fit an opinion. Innocent or not, a slip-up casts a shadow over the credibility of the entire report.
Simon’s Expert Testimony
Simon’s expert, a former senior economist within the Federal Trade Commission, received the same treatment. To the extent that the expert attempted to define the legal standard, the judge excluded that opinion.
The defense was a little sneakier. They attempted to have their expert testify as to what necessary conditions Gumwood must establish in order for the tying arrangement to be considered anticompetitive.
However, the judge was not fooled. He correctly prevented Simon from shaping the questions for the jury before the trial ever started.
As an expert, stick to your expertise. Be resistant to becoming entangled in lawyer trickery lest your credibility get swept out along with the nonsense when the judge sees through it. Leaking your opinion into matters of fact or redefining legal standards runs the risk of disqualification. The judge in this case delivered a written admonishment but it’s highly more likely a judge would punish both counsel by throwing out the experts and making both suffer the expense of starting over.
Author: Chris Semones, CEO, Expert Witness Network.