The Role of Economics in Class Certification and Class-wide Impact

• Author: John C. Beyer
• Pages: 325-334

325

THE ROLE OF ECONOMICS IN CLASS

CERTIFICATION AND CLASS-WIDE

IMPACT

John C. Beyer*

A. INTRODUCTION

Civil litigation seeking recovery for purchasers in so-called price-fixing

conspiracies more often than not takes the form of a class action antitrust

lawsuit.1 In the United States, and increasingly in Canada, the initial step

of such litigation is to engage the court in the issue of whether or not to

certify the plaintiffs as a class. Economists have become central to two

issues the court addresses: (1) whether, if the anticompetitive action

alleged had actually taken place, all (or nearly all) of the direct purchasers

of the product or service in question would have been impacted (affected)

by paying more for the good or service than they would have otherwise

paid; and (2) identifying one or more methodologies by which damages

can be estimated on a class-wide basis. This article addresses these class

certification issues, drawing on my experience as an economist, over

twenty-five years, with numerous class action anti-trust civil suits.

B. THE IMPACT ISSUE

This issue is often the most demanding “class” issue for an economist.

The impact issue requires an understanding of the economics of the

industry (suppliers, purchasers, and the product or service) within a

framework of microeconomics and industrial organization. This under-

* Ph.D., President, Nathan Associates Inc., Arlington, Virginia.

1 I use the phrase “so-called” for two reasons: first, economists generally do not

concern themselves with “conspiracies,” but rather cartels, coordinated behav-

ior, or joint conduct; and second, such behavior may not, in the first instance,

focus on prices.