## Facts

- Purchasers of aluminum phosphide fumigant products brought a consolidated class action alleging manufacturers and distributors conspired to fix prices for pellets and tablets in the United States from 1988 through 1992, in violation of Sherman Act § 1.
- Aluminum phosphide products are sold primarily as pellets and tablets and compete in a market that experienced increased entry and competition after patent protection for a leading product expired around 1980.
- Plaintiffs and defendants agreed in general that a “before-and-after” approach could be used to estimate damages by comparing conspiracy-period prices to prices that would have prevailed absent collusion.
- Plaintiffs’ expert, Dr. Richard C. Hoyt, estimated “but-for” prices for 1988–1992 by treating prices from the first ten months of 1993 as the competitive benchmark.
- Defendants moved in limine to exclude Dr. Hoyt’s expert report and testimony under Federal Rules of Evidence 104(a), 403, 702, and 703; the court held an evidentiary hearing with testimony from both sides’ economists.

## Issues

1. Whether Dr. Hoyt’s antitrust damages opinions were admissible under Rules 702 and 703 as interpreted by Daubert, including whether his benchmark selection and assumptions were reliable and fit the case facts.
2. Whether using early-1993 prices as a normative baseline, while largely discounting pre-conspiracy price data, reflected a sound before-and-after methodology.
3. Whether the model adequately accounted for market conditions such as downward price trends, entry and increased competition, and changing demand.
4. Whether applying different benchmark prices across defendants was consistent with the expert’s treatment of the products as fungible.

## Decision

- The court granted defendants’ joint motion in limine.
- The court excluded Dr. Hoyt’s expert report and testimony.
- The court found the proffered before-and-after implementation unreliable and insufficiently tied to market facts, and also found a risk of jury confusion and unfair prejudice given the centrality of damages testimony.

## Legal Principles

- Under Rule 702 and Daubert, the court must act as gatekeeper to ensure expert testimony rests on reliable methods and will assist the trier of fact by fitting the case facts.
- Antitrust damages opinions are subject to Daubert scrutiny; labeling an approach “before-and-after” does not excuse unsupported choices of baseline periods or failure to account for observable market forces.
- A before-and-after damages model must justify the competitive benchmark and address relevant market trends and conditions; selective use of a short post-period window may be unreliable when contrary trend and pre-period data are available.
- Under Rule 703, an expert’s reliance on data must reflect the type of data use reasonably accepted in the discipline; ignoring substantial portions of relevant pricing history can indicate methodological unreliability.
- Internal inconsistencies in an expert’s theory (e.g., treating products as fungible while using divergent defendant-specific benchmarks without adequate explanation) can support exclusion for lack of reliability and fit.
- Rule 403 supports exclusion where flawed economic testimony in a complex antitrust case is likely to mislead the jury or cause unfair prejudice.

## Conclusion

The court excluded plaintiffs’ principal damages expert because his benchmark selection and assumptions did not reliably implement a before-and-after model, failed to account for established price trends and market conditions, and contained internal inconsistencies, rendering the opinions inadmissible under Rules 702–703 and Daubert, with added concerns under Rule 403.


In re Aluminum Phosphide Antitrust Litig., 893 F. Supp. 1497 (D. Kan. 1995)