Miami Products & Chemical Co. v. Olin Corporation

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

_____________________________________

MIAMI PRODUCTS & CHEMICAL CO.,

On Behalf of Itself and All Others Similarly

Situated, et al.,

DECISION AND ORDER

Plaintiffs,

1:19-CV-00385 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

AMREX CHEMICAL CO., INC.,

On Behalf of Itself and All Others Similarly

Situated,

Plaintiff,

1:19-CV-00386 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

MIDWEST RENEWABLE ENERGY,

LLC, On Behalf of Itself and All Others

Similarly Situated,

Plaintiff,

1:19-CV-00392 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

_____________________________________

MAIN POOL AND CHEMICAL CO.,

INC., On Behalf of Itself and All Others

Similarly Situated,

Plaintiff,

1:19-CV-00393 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

PERRY’S ICE CREAM COMPANY, INC.,

On Behalf of Itself and All Others Similarly

Situated,

Plaintiff,

1:19-CV-00403 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

INTRODUCTION

Plaintiffs Miami Products & Chemical Co. (“Miami Products”), Amrex Chemical

Co., Inc. (“Amrex”), Main Pool and Chemical Co., Inc. (“Main Pool”), Midwest

Renewable Energy, LLC (“Midwest Renewable”), Perry’s Ice Cream Company, Inc.

(“Perry’s”), and VanDeMark Chemical, Inc. (“VanDeMark”) (collectively “Direct

Purchaser Plaintiffs” or “DPPs”) allege that defendants Olin Corporation (“Olin”), K.A.

Steel Chemicals, Inc. (“K.A. Steel”), Occidental Chemical Corporation (“OxyChem”),

Westlake Chemical Corporation (“Westlake”), Shintech Incorporated (“Shintech”), and

Formosa Plastics Corporation, U.S.A. (“Formosa USA”) (collectively, “Defendants”) have

violated Section 1 of the Sherman Act, 15 U.S.C. § 1, by entering into a combination or

conspiracy to artificially reduce or eliminate competition for the pricing of caustic soda

sold to purchasers in the United States. (Dkt. 51). In DPPs’ words, they “allege an

industry-wide cartel involving the five largest U.S. producers of caustic soda (and their

predecessors) to increase prices through parallel price increase announcements from

August 2015 through December 2018.” (Dkt. 667 at 12).1

DPPs seek class certification (Dkt. 474) and have also moved to strike and exclude

certain opinions offered by Defendants’ expert witness, John H. Johnson IV, Ph.D. (Dkt.

570). By contrast, Defendants contend that this matter is not suitable for class certification

and have jointly moved to exclude certain opinions offered by DPPs’ expert witness,

Russell L. Lamb, Ph.D. (Dkt. 573). Formosa USA and Shintech have separately filed

motions to strike portions of Dr. Lamb’s testimony. (Dkt. 567; Dkt. 572).2

For the reasons that follow, the Court denies DPPs’ motion for class certification.

The Court resolves the parties’ motions to strike expert testimony only to the extent

1 When referencing the page number(s) of docket citations in this Decision and Order,

the Court cites to the CM/ECF-generated page numbers that appear in the upper righthand

corner of each document and not to the original pagination.

2 DPPs have submitted motions for preliminary approval of proposed settlement

agreements with Formosa USA, Westlake, and Shintech. (Dkt 702; Dkt. 710; Dkt. 720).

The Court advised the parties on November 27, 2023, that it would not consider the

adequacy of these proposed settlements until it had resolved the pending class certification

motion.

necessary to enable it to resolve the class certification motion, as described below, and

otherwise denies those motions as moot.

BACKGROUND

I. Factual Background

A. Caustic Soda Manufacturing and Sales

Caustic soda, also known as sodium hydroxide or lye, is a commodity chemical sold

in solid and liquid forms. (Dkt. 51 at ¶ 42). It is used by customers in a variety of industries,

including: paper, pulp, and cellulose; chemical production; soaps and detergents;

aluminum; food processing; water treatment; textiles; mineral oils; recycling; and

pharmaceuticals. (Id.). Caustic soda is a globally traded chemical, and the majority of

worldwide production occurs outside the United States. (Dkt. 625-7 at ¶ 29).

Caustic soda is a co-product of chlorine—meaning that it cannot be produced

without also producing chlorine—and is manufactured in a “chlor-alkali manufacturing

process.” (Id. at ¶ 79). There are various forms of this manufacturing process—diaphragm

cell, membrane cell, and mercury cell—which produce different forms and grades of

caustic soda. (Dkt. 51 at ¶ 42). Chlorine is more volatile and toxic than caustic soda and

is accordingly harder to store and transport. (Dkt. 625-7 at ¶ 81). Thus, as a practical

matter, chlor-alkali producers’ ability to produce caustic soda is limited by their ability to

use or sell the co-produced chlorine.

DPPs estimate that Defendants “produce at least 90% of the domestic supply of

Caustic Soda.” (Dkt. 51 at ¶ 45). During the proposed class period (October 1, 2015,

through December 31, 2018), “the total volume of commerce in the market for caustic soda

in the United States accounted for by Defendants was approximately $9.81 billion.” (Dkt.

624-2 at ¶ 54).

According to DPPs, there is a “unique process for determining prices” in the

domestic caustic soda industry. (Dkt. 667 at 15). Caustic soda is generally sold pursuant

to contract, “with limited amounts sold under freely negotiated ‘spot’ sales.” (Dkt. 624-2

at ¶ 49). Caustic soda contracts may employ different pricing mechanisms—for example,

the parties may agree upon a fixed price and a volume target for a period of time, they may

tie the price formulaically to a pricing index or indices3, or they may enter into long-term

contracts for fixed prices, “linked to changes in underlying cost factors, priced on an ECU

[electrochemical unit] basis, or based on a ‘market basket.’” (Id.). Contracts tied to a

“market basket” are priced based on the average selling price realized from some other set

of agreed-upon contracts. (Id. at ¶ 49 n. 131).

“Contracts between caustic soda producers and their customers often can involve

detailed and complex terms.” (Dkt. 625-7 at ¶ 28). Because of the manner in which caustic

soda prices are negotiated, “customers paid a variety of prices for both diaphragm and

membrane caustic soda” during the proposed class period. (Id. at ¶ 26). As an example,

in October of 2015, prices per dry short ton (“DST”) of diaphragm grade caustic soda

3 “Buyers and sellers of caustic soda utilize services of third-party consultants and

reporting agencies to access information about caustic soda prices and market activity.”

(Dkt. 624-2 at ¶ 50). Agencies including IHS, Argus Media, and ICIS regularly publish

reports on the caustic soda market that include price reporting. (Id.). IHS in particular

publishes “three different price indices that were widely used among producers and buyers

of caustic soda in the U.S.” (Id. at ¶ 51).

ranged from $210 to approximately $626, while membrane grade caustic soda cost between

$275 and $675 per DST. (Id.).

During the relevant time period, Defendants would periodically send out price

increase announcements—that is, letters notifying their customers that they desired to

increase the price of caustic soda. (Id. at ¶ 46). “Contract terms frequently dictated that

Defendants must make a price increase announcement in advance of any proposed changes

in prices.” (Id.). A price increase announcement would not automatically result in an

increase in customer prices, but would instead trigger negotiations between the seller and

the buyer. (Id. at ¶ 47). “Customers’ price movements following price increase

announcements varied across Defendants, across products, and across announcements.”

(Id. at ¶ 54). DPPs contend that there is a causal chain from price increase announcements

to increased “spot prices or prices under freely negotiated contracts” to the “indices used

to set caustic soda prices formulaically for a majority of the industry[.]” (Dkt. 667 at 15).

B. Alleged Anticompetitive Behavior

In the consolidated complaint, DPPs allege that Defendants “conspire[d] and

combine[d] to restrict domestic supply; to fix, raise, maintain, and stabilize the price at

which Caustic Soda was . . . sold; and to allocate customers in violation of Section 1 of the

Sherman Act, 15 U.S.C. § 1.” (Dkt. 51 at ¶ 3). “In sum, Defendants [allegedly] entered

into an agreement or understanding to increase prices of Caustic Soda and not to compete

on price for the business of each other’s customers.” (Id.). DPPs allege Defendants acted

as “a collegial, cooperative cartel to limit supply to domestic customers and have

misleadingly justified price increases,” and that they engaged in price increase

coordination, co-producer agreements, price index manipulation, customer and market

allocation, and information exchanges. (Id. at ¶ 88-103).

In their motion for class certification, DPPs argue that Defendants engaged in the

following anticompetitive behavior: “announcing and implementing very similar and, at

times, nearly identical price increases using pretextual justifications; raising prices in a

period of relatively flat demand, flat or declining costs, and excess supply; limiting supply

and putting customers on order control or allocation when inventories of Caustic Soda were

abundant; and maintaining stable market shares” between October 1, 2015 and December

31, 2018 (the proposed class period). (Dkt. 622 at 24). DPPs contend that “the alleged

cartel was effective in raising Caustic Soda prices generally by 9.6% above the level that

would have existed absent the alleged cartel.” (Id. at 24-25).

In their reply, DPPs state that the core issue raised by their class certification motion

“is whether common evidence will be relied upon to prove or disprove Plaintiffs’

allegations that the 14 price increase announcements issued in close proximity by

Defendants across a three-year period were the product of collusion and against each

Defendant’s individual self-interest, and that those price increases succeeded in elevating

prices class wide, causing harm to all or virtually all class members.” (Dkt. 643 at 13).

They disclaim any allegation of a supply restraint conspiracy (Dkt. 643 at 17), stating that

they “allege an agreement among Defendants to fix, raise, stabilize, and maintain caustic

soda prices. This agreement was effectuated through coordinated price increase

announcements and other anti-competitive conduct designed to support price increases and

stabilization, such as through information exchanges and re-marketing agreements which

involved extensive communications among Defendants regarding the supply of caustic

soda.” (Id.).

In their post-hearing brief, DPPs describe the alleged anticompetitive conduct as

“an industry-wide cartel involving the five largest U.S. producers of caustic soda (and their

predecessors) to increase prices through parallel price increase announcements from

August 2015 through December 2018.” (Dkt. 667 at 12).

C. Defendants

Olin is a “leading vertically-integrated global manufacturer and distributor of

chemical products and a leading U.S. manufacturer of ammunition.” (Dkt. 624-2 at ¶ 35).

Olin acquired K.A. Steel, a privately-held distributor of caustic soda and other chemicals,

in August of 2012. (Id.).

OxyChem is a wholly-owned subsidiary of Occidental Petroleum Company, and

produces and markets basic chemicals and vinyls. (Id. at ¶ 40).

Westlake is an international manufacturer and supplier of basic chemicals, vinyls,

polymers, and building products. (Id. at ¶ 43).

Formosa USA is a vertically-integrated supplier of plastic resins and

petrochemicals. (Id. at ¶ 45).

Shintech is a wholly-owned subsidiary of Shin-Etsu Chemical Co., Ltd., which is

the largest manufacturer of polyvinyl chloride (“PVC”) in the world. (Id. at ¶ 47).

D. The Direct Purchaser Plaintiffs

Miami Products is a manufacturer of swimming pool cleaning products and water

treatment chemicals. (Dkt. 625-7 at ¶ 103). It primarily purchases caustic soda and

chlorine to manufacture bleach. (Id.). During the proposed class period, K.A. Steel was

the only defendant who sold liquid caustic soda to Miami Products, with sales amounting

to $320,254. (Id.).

Amrex is a wholesale chemical distributor that buys and then resells caustic soda to

customers. (Id.). During the proposed class period, K.A. Steel was the only defendant who

sold liquid caustic soda to Amrex, with sales amounting to $448,336. (Id.).

Main Pool is a distributor of water treatment chemicals and equipment, which

markets chemicals to wastewater treatment plants, water companies, commercial

swimming pool operations, and other industrial businesses. (Id.). During the proposed

class period, K.A. Steel was the only defendant who sold liquid caustic soda to Main Pool,

with sales amounting to $238,909. (Id.).

Midwest Renewable is an ethanol producer that uses caustic soda to clean the tanks

and equipment used during the distillation process. (Id.). During the proposed class period,

K.A. Steel was the only defendant who sold liquid caustic soda to Midwest Renewable,

with sales amounting to $535,529. (Id.).

Perry’s is a manufacturer of ice cream and a distributor of frozen foods. (Id.). It

did not directly purchase caustic soda from any defendant, but is “the assignee of antitrust

claims arising from Perry’s purchase of Caustic Soda through plaintiff Amrex Chemical

Co, Inc., which purchased Caustic Soda directly from one or more Defendants during the

[proposed] Class Period.” (Dkt. 51 at ¶ 23).

Vandemark is phosgene chemical manufacturer. (Dkt. 625-7 at ¶ 103). During the

proposed class period, it purchased caustic soda from OxyChem and Olin. (Id.). OxyChem

sales amounted to $2,120,149, and Olin sales amounted to $51,079. (Id.).

DPPs collectively “account for 0.04 percent of the class period commerce of the

entire [proposed] class.” (Id.).

E. Dr. Lamb

DPPs have engaged Dr. Lamb to provide expert testimony in this matter. Dr. Lamb

is the president and founder of Monument Economics Group, a consulting firm that

“provides economic research and quantitative and statistical analyses to clients[.]” (Dkt.

624-2 at ¶ 1). Dr. Lamb is a graduate of the University of Tennessee, Knoxville, and holds

a master’s degree in economics from the University of Maryland and a Ph.D. in economics

from the University of Pennsylvania. (Id. at ¶ 2).

Dr. Lamb has opined, among other things, that: (1) common evidence demonstrates

that the structure of the caustic soda industry is conducive to the formation and operation

of the alleged cartel; (2) common evidence and methods demonstrate that the alleged cartel

artificially inflated the prices that all or nearly all members of the proposed class paid for

caustic soda; and (3) there is a common, reliable standard economic methodology that may

be used to calculate damages on a classwide basis, and by applying that methodology, he

has “determined that aggregate class-wide damages suffered by Class members during the

Class Period (from October 1, 2015, to December 31, 2018) are $861 million.” (See Dkt.

624-2 at ¶¶ 17-22).

A key part of Dr. Lamb’s expert report is his performance of a multiple regression

analysis to purportedly demonstrate that caustic soda prices were artificially inflated during

the alleged class period. (See id. at ¶ 171). “Multiple regression analysis is a statistical

tool used to understand the relationship between or among two or more variables. Multiple

regression involves a variable to be explained—called the dependent variable—and

additional explanatory variables that are thought to produce or be associated with changes

in the dependent variable.” (Dkt. 625 at 6 (citation omitted)). Dr. Lamb’s overcharge

regression model purports to show that “the prices paid by members of the proposed Class

were 9.6 percent higher during the Class Period than during the competitive Benchmark

Period (January 1, 2012 – September 30, 2015 and July 1, 2019 – December 31, 2019) after

controlling for demand and supply factors, as well as other factors shown to contribute to

variation in caustic soda prices.” (Dkt. 624-2 at ¶ 171). In constructing his overcharge

regression model, Dr. Lamb claimed to control for global caustic soda demand by including

monthly global alumina4 production (excluding North America) as an independent

variable. (Id. at ¶ 184). Dr. Lamb further used new privately-owned housing starts in the

United States as a proxy for domestic chlorine demand.5 (Id. at ¶ 186).

In his reply report, Dr. Lamb performed a price increase announcement regression

analysis, purporting to measure the impact of Defendants’ price increase announcements

4 One use of caustic soda is to refine bauxite (a type of sedimentary rock) into alumina

(a crystalline substance that is used as a starting material for the smelting of aluminum

metal).

5 Dr. Lamb used housing starts as a proxy because chlorine is used to make PVC and

“PVC demand is largely driven by home construction.” (Dkt. 624-2 at ¶ 186).

made during the proposed class period. (Dkt. 624-3 at ¶ 124). This analysis “found that

announced price increases effective during the Class Period raised prices on average by

2.6% above what would be expected based on supply and demand factors alone, while the

price increase announcements effective in the Benchmark Period resulted in prices that

were on average 1.7% lower than would be expected based on supply and demand factors

alone.” (Id).

F. Dr. Johnson

Defendants have engaged Dr. Johnson to provide expert testimony in this matter.

Dr. Johnson is the Chief Executive Office of Edgeworth Economics, LLC, a “consulting

firm that provides clients with objective expert economic and financial analysis for

complex litigation and public policy debates.” (Dkt. 625-7 at ¶ 13). Dr. Johnson holds a

B.A. in economics from the University of Rochester and a Ph.D. in economics from the

Massachusetts Institute of Technology (“MIT”). (Id. at ¶ 14). Dr. Johnson’s areas of

specialization at MIT were labor economics and econometrics (the application of statistics

to economics). (Id.).

As relevant to the instant motions, Dr. Johnson has provided an expert report and a

sur-reply expert report wherein—among other things—he responds to and critiques Dr.

Lamb’s opinions. To briefly summarize, Dr. Johnson has argued that: (1) Dr. Lamb’s

regression model is fundamentally flawed because Dr. Lamb failed to reliably identify the

transactions to be included therein; (2) Dr. Lamb’s regression model fails to account for

major world events that affected global supply of caustic soda and increased demand for

U.S.-produced caustic soda, and thus suffers from omitted variable bias; (3) Dr. Lamb’s

regression model inappropriately uses new privately-owned housing units started in the

United States as a proxy for domestic chlorine demand rather than more direct data; (4) Dr.

Lamb’s regression model is fundamentally unreliable because it relies upon a classwide

average overcharge instead of a customer-specific average overcharge; and (5) Dr. Lamb’s

price increase announcement regression model is directly in conflict with his conclusion of

a common overcharge. (See Dkt. 541-1; Dkt. 625-7).

As part of his critique of Dr. Lamb’s regression model, Dr. Johnson ran his own

multiple regression analysis wherein he added “multiple measures of export prices” (that

is, spot export prices from various regions of the world) to Dr. Lamb’s model. (Dkt. 625-

7 at ¶ 44). Dr. Johnson ran eight additional regressions, in each of which he added one

measure of export prices (contemporaneous and three-month lagged). (Id.). In seven of

eight cases, he found no overcharge. In the eighth, the overcharge was statistically

insignificant. (Id.). Dr. Johnson further performed multiple regression analyses wherein

he used PVC prices (both contemporaneous and one-month lagged) as a proxy for U.S.

chlorine demand, rather than housing starts. (Id. at ¶ 133). These regressions showed no

overcharge. (Id.).

II. Procedural Background

The instant actions were referred for the handling of non-dispositive pretrial matters

to United States Magistrate Judge Michael J. Roemer (Dkt. 42), who entered a scheduling

and case management order consolidating the cases for pretrial purposes (Dkt. 49). Judge

Roemer further appointed Cera LLP and Kaplan Fox Kilsheiner LLP (“Kaplan Fox”) as

interim co-lead class counsel and Rupp Baase Pfalzgraf Cunningham LLC (“Rupp Baase”)

as interim liaison counsel. (Id.). The operative pleading is the consolidated complaint

filed on May 22, 2019. (Dkt. 51).

DPPs seek to certify a class with the following definition:

All persons and entities who purchased in the United States directly from one or

more of the Defendants (or from any of Defendants’ predecessors, subsidiaries, or

affiliates) liquid forms of membrane or diaphragm grade Caustic Soda at any time

between October 1, 2015 and December 31, 2018 (the “class”). Excluded from the

class are Defendants, their predecessors, parents, subsidiaries, and affiliates, and all

government entities, agencies, and instrumentalities. For purposes of this exclusion,

“predecessors” includes The Dow Chemical Company, whose chlor-alkali business

was acquired by Olin effective October 5, 2015, and Axiall Corporation, which was

acquired by Westlake effective August 31, 2016. Also excluded are purchases

under: (i) long-term fixed-price contracts that predate October 1, 2015, (ii) cost-

based contracts (such as cost-plus contracts) with no component of price based on a

Caustic Soda index, and (iii) contracts that are priced on an ECU (electrochemical

unit) basis with no component of price based on a Caustic Soda index.

(Dkt. 474 at 1). DPPs further ask the Court to appoint them as class representatives and to

appoint Cera LLP and Kaplan Fox as co-lead class counsel and Rupp Baase as liaison

counsel. (Dkt. 474-1 at ¶¶ 101-105). Defendants oppose class certification. (Dkt. 632).

DPPs and Defendants have also filed motions to strike and/or exclude certain

opinions offered by Drs. Johnson and Lamb, respectively. (Dkt. 570; Dkt. 573). These

motions are opposed. (Dkt. 577; Dkt. 583). In addition to Defendants’ joint motion,

Shintech and Formosa USA have each filed individual motions to strike and/or exclude

certain of Dr. Lamb’s opinions. (Dkt. 567; Dkt. 572). DPPs also oppose these individual

motions. (Dkt. 579; Dkt. 581).

The Court held a two-day evidentiary hearing on the instant motions in June of 2023.

(Dkt. 650; Dkt. 651). Drs. Lamb and Johnson testified at the evidentiary hearing and were

questioned at length by the Court and by counsel. (Dkt. 652; Dkt. 654). The parties further

submitted post-hearing briefing (Dkt. 667; Dkt. 669),6 and the Court heard post-hearing

oral argument on August 4, 2023, at which time it reserved decision (Dkt. 703).

DISCUSSION

I. Motions to Exclude Expert Testimony

A. Legal Standard

Pursuant to Federal Rule of Evidence 702, a proposed expert witness must possess

“scientific, technical, or other specialized knowledge [that] will help the trier of fact to

understand the evidence or to determine a fact in issue.” Fed. R. Evid. 702(a). In

accordance with this rule, a court considering the admissibility of expert testimony must

consider whether (1) “the testimony is based upon sufficient facts or data”; (2) “the

testimony is the product of reliable principles and methods”; and (3) “the expert’s opinion

reflects a reliable application of the principles and methods to the facts of the case.” Fed.

R. Evid. 702(b), (c), (d).

In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), the

Supreme Court explained that a trial court has a “gatekeeping” duty under Rule 702, and

must ensure that proposed expert testimony “both rests on a reliable foundation and is

6 The undersigned’s individual preferences state that “[c]itations to legal authority

should be included in the text of the memoranda of law—not footnotes.” United States

District Court for the Western District of New York, Hon. Elizabeth A. Wolford, Chief

United States District Judge, https://www.nywd.uscourts.gov/content/hon-elizabeth-

wolford-chief-united-states-district-judge (last accessed Dec. 19, 2023). DPPs’ reply and

post-hearing brief fail to comply with this instruction, and place citations to legal authority

in footnotes. (See Dkt. 643; Dkt. 667). In all future filings in this case, the Court expects

that the parties will include citations to legal authority within the text of any memoranda

of law.

relevant to the task at hand.” Id. at 597; see also Kumho Tire Co. v. Carmichael, 526 U.S.

137, 147 (1999) (“In Daubert, this Court held that Federal Rule of Evidence 702 imposes

a special obligation upon a trial judge to ensure that any and all scientific testimony is not

only relevant, but reliable.”) (quotation and alteration omitted).

“Per Daubert and its progeny, a court’s Rule 702 inquiry involves the assessment

of three issues: (1) the qualifications of the expert, (2) the reliability of the methodology

and underlying data employed by the expert, and (3) the relevance of that about which the

expert intends to testify.” Washington v. Kellwood Co., 105 F. Supp. 3d 293, 304

(S.D.N.Y. 2015). “Ultimately, the party proffering the expert has the burden to

demonstrate by a preponderance of the evidence that its expert witness satisfies these

criteria.” Id. (quotation and alteration omitted). “As the courts and Advisory Committee

have made clear, ‘the rejection of expert testimony is the exception rather than the rule.’”

M.B. ex rel. Scott v. CSX Transp., Inc., 130 F. Supp. 3d 654, 665 (N.D.N.Y. 2015) (quoting

Fed. R. Evid. 702, Advisory Committee’s Note).

“The Supreme Court has not definitively ruled on the extent to which a district court

must undertake a Daubert analysis at the class certification stage,” but it has “offered

limited dicta suggesting that a Daubert analysis may be required at least in some

circumstances.” In re U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108, 129 (2d Cir.

2013). “[C]ourts in the Second Circuit regularly ‘subject expert testimony to Daubert’s

rigorous standards insofar as that testimony is relevant to the Rule 23 class certification

analysis.’” Bowling v. Johnson & Johnson, No. 17 Civ. 3982 (AJN), 2019 WL 1760162,

at *7 (S.D.N.Y. Apr. 22, 2019) (quoting Scott v. Chipotle Mexican Grill, Inc., 315 F.R.D.

33, 55 (S.D.N.Y. 2016)).

Here, the Court’s resolution of DPPs’ class certification motion, as set forth below,

relies in part on Dr. Johnson’s opinions. Accordingly, the Court has resolved DPPs’

challenges to the admissibility of those opinions below. However, even assuming

arguendo that all of Dr. Lamb’s opinions are admissible under Rule 702 and Daubert, the

Court still does not find class certification warranted. Accordingly, the Court need not, at

this juncture, resolve the various challenges to Dr. Lamb’s opinions. See, e.g., In re 5-

Hour Energy Mktg. & Sales Pracs. Litig., No. ML132438PSGPLAX, 2017 WL 2559615,

at *5 (C.D. Cal. June 7, 2017) (“Because the issue of whether [the plaintiffs’ expert] has

put forward a workable model to assess damages on a class-wide basis is closely

intertwined with the Rule 23(b) predominance analysis, the Court declines to address the

reliability of [the expert’s] methodologies in a Daubert motion, and instead accepts [the

expert’s] expert report and testimony for the limited purpose of deciding the predominance

issue.”). Instead, the Court denies the motions seeking to strike Dr. Lamb’s opinions and

testimony as moot.

B. Admissibility of Dr. Johnson’s Opinions

DPPs ask the Court to find that Dr. Johnson’s multiple regression analyses are

inadmissible because they “suffer from endogeneity or simultaneity bias. . . . This

statistical result means Dr. Johnson’s regressions are biased and inconsistent and, therefore,

not reliable.” (Dkt. 625 at 5). As explained above, a multiple regression analysis seeks to

understand the relationship between two or more variables. An explanatory variable is

endogenous if it is jointly determined with the dependent variable.

DPPs argue that spot export prices and domestic caustic soda prices are driven by

many of the same factors and that Dr. Johnson’s multiple regression analyses have

accordingly introduced endogeneity by including Northwest Europe, Northeast Asia, or

U.S. Gulf Coast spot export prices. (See Dkt. 625 at 12-13). DPPs further argue that the

use of PVC prices as a proxy for U.S. chlorine demand introduces endogeneity because

PVC prices measure the equilibrium between PVC supply and demand. (Id. at 13-14).

The Court explored this issue at the evidentiary hearing. With respect to spot export

prices, Dr. Johnson testified that there was no endogeneity problem, because foreign

markets are driven by global forces different from those that drive the U.S. market. (Dkt.

652 at 37-38). Dr. Johnson also explained that he had used both contemporaneous and

lagged prices in the challenged multiple regression analyses precisely to confirm that there

was no endogeneity problem. According to Dr. Johnson, because endogeneity is

fundamentally an issue of causation—that is, it occurs where the dependent variable and

the explanatory variable arise from the same underlying factors—an economist can control

for endogeneity by using a time-lagged explanatory variable. (Id.).

Dr. Lamb disagreed with Dr. Johnson, testifying that the data shows that global

export prices are endogenous, because the results of Dr. Johnson’s multiple regression

analyses do not make economic sense. More specifically, Dr. Lamb explained (as he had

in his reply report) that the coefficients on the explanatory variables7 set forth in Dr.

Johnson’s multiple regression analyses “become not statistically significant, or they

reverse the signs so that they have a perverse interpretation.” (Dkt. 652 at 43). According

to Dr. Lamb, this is evidence of endogeneity, because if an endogenous variable is

introduced into a multiple regression analyses, it “is going to take up the role of explaining

all of the variation, and the other market factors are going to become not statistically

significant or have perverse signs.” (Id. at 46-47).

Dr. Johnson testified that he “would be concerned . . . if the signs didn’t change,

that might tell me that I have an endogeneity problem,” and that the reasons the coefficients

changed was because “the regression model that omitted the additional explanatory

variables likely is misspecified, and its results are biased and unreliable.” (Id. at 60-65).

Dr. Lamb again disagreed, testifying that the prices all moved together “because they are

all tracking the same forces.” (Id. at 70).

As this discussion shows, DPPs “ask[] the Court to take sides in a dispute between

experts about the intricacies of econometric modeling.” In re Vitamin C Antitrust Litig.,

No. 05-CV-0453, 2012 WL 6675117, at *8 (E.D.N.Y. Dec. 21, 2012). However, “[t]hat is

not the proper function of a Daubert motion. This is not a case in which an expert is unable

to articulate a rationale for his methodology; nor is it a case where the proffered rationale

is patently flawed or unreasonable.” Id. To the contrary, the Court was able to follow Dr.

7 In a multiple regression analysis, “the magnitude of the impact of a given economic

factor on the dependent variable is typically summarized by a parameter or coefficient that

can be estimated from the available data.” (Dkt. 625 at 6 (citation omitted)).

Johnson’s explanation, and found it reasonable and persuasive, for reasons discussed more

fully below. Accordingly, there is no basis for the Court to strike or exclude Dr. Johnson’s

opinions under Rule 702, and DPPs’ motion seeking that relief is denied. See In re Nat’l

Prescription Opiate Litig., No. 1:17-MD-2804, 2019 WL 3934597, at *10 (N.D. Ohio Aug.

20, 2019) (“the significance of endogeneity relates to the weight, not the admissibility, of

[an expert’s] report and testimony”); In re Air Cargo Shipping Servs. Antitrust Litig., No.

06-MD-1175 JG VVP, 2014 WL 7882100, at *21 (E.D.N.Y. Oct. 15, 2014) (finding “no

basis for believing” that “disagreement between experts” regarding whether inclusion of

particular variable may lead to endogeneity “goes to anything other than the weight of the

evidence”), adopted, 2015 WL 5093503 (E.D.N.Y. July 10, 2015).

II. Motion for Class Certification

A. Legal Standard

“In determining whether class certification is appropriate, a district court must first

ascertain whether the claims meet the preconditions of [Federal] Rule [of Civil Procedure]

23(a). . . .” Teamsters Loc. 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d

196, 201-02 (2d Cir. 2008). Specifically, the Court must determine whether the proposed

class meets the following requirements:

(1) the class is so numerous that joinder of all members is impracticable;

(2) there are questions of law or fact common to the class;

(3) the claims or defenses of the representative parties are typical of the

claims or defenses of the class; and

(4) the representative parties will fairly and adequately protect the

interests of the class.

Fed. R. Civ. P. 23(a). If all these requirements are met, the Court may grant class

certification where one of the scenarios set forth under Rule 23(b)(1)-(3) is satisfied. In

this matter, DPPs seek certification under Rule 23(b)(3) (see Dkt. 622 at 7-8), which

provides that class certification is appropriate if: (i) common questions of law or fact

predominate over questions affecting only individual class members; and (ii) class

treatment is superior to other methods for adjudicating the controversy.

The Second Circuit has also “recognized an implied requirement of ascertainability

in Rule 23, which demands that a class be sufficiently definite so that it is administratively

feasible for the court to determine whether a particular individual is a member.” In re

Petrobras Sec., 862 F.3d 250, 260 (2d Cir. 2017) (quotations omitted). “A class is

ascertainable when defined by objective criteria that are administratively feasible and when

identifying its members would not require a mini-hearing on the merits of each case.”

Brecher v. Republic of Argentina, 806 F.3d 22, 24-25 (2d Cir. 2015) (citation omitted).

Rule 23 “does not set forth a mere pleading standard. Rather, a party must not only

be prepared to prove that there are in fact sufficiently numerous parties, common questions

of law or fact, typicality of claims or defenses, and adequacy of representation, as required

by Rule 23(a). The party must also satisfy through evidentiary proof at least one of the

provisions of Rule 23(b).” Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013) (quotations

and citations omitted). “[T]he preponderance of the evidence standard applies to evidence

proffered to establish Rule 23’s requirements.” Teamsters Loc. 445, 546 F.3d at 202.

B. DPPs Cannot Satisfy the Predominance, Typicality, or Ascertainability

Requirements

Defendants oppose DPPs’ class certification motion on numerous grounds,

including: (1) DPPs do not adequately represent the proposed class; (2) DPPs’ claims are

not typical of the proposed class; (3) individual issues will predominate because DPPs have

no common means of proving classwide antitrust impact; (4) individual issues will

predominate on damages; (5) individual issues will predominate on Defendants’ defenses;

(6) DPPs cannot show that a class action is superior to individual actions; and (7) DPPs’

proposed class is not objectively ascertainable. (See Dkt. 632). Having carefully

considered the voluminous record, the Court agrees with Defendants that neither the

typicality nor the predominance requirements have been satisfied. The Court further agrees

that the proposed class is not ascertainable. Because these conclusions require the denial

of DPPs’ class certification motion, the Court need not and does not reach Defendants’

other arguments.

1. Predominance

Predominance “tests whether proposed classes are sufficiently cohesive to warrant

adjudication by representation.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623

(1997). “Determining whether common questions of law or fact predominate requires

specifically evaluating the elements of the underlying cause of action.” In re Namenda

Indirect Purchaser Antitrust Litig., 338 F.R.D. 527, 550 (S.D.N.Y. 2021) (quotation

omitted). The general elements of an antitrust claim are “(1) a violation of the antitrust

laws; (2) injury caused by that violation; and (3) measurable damages.” Id.

In Comcast, the Supreme Court explained that:

[A]t the class-certification stage (as at trial), any model supporting a

plaintiff’s damages case must be consistent with its liability case, particularly

with respect to the alleged anticompetitive effect of the violation. And for

purposes of Rule 23, courts must conduct a rigorous analysis to determine

whether that is so.

569 U.S. at 35 (quotations and citations omitted); see also Passman v. Peloton Interactive,

Inc., __ F. Supp. 3d __, No. 19-CV-11711 (LJL), 2023 WL 3195941, at *5 (S.D.N.Y. May

2, 2023) (“The Supreme Court in Comcast Corp. v. Behrend held that Rule 23(b)(3)

requires that the proposed methodology for calculating damages be consistent with the

class’s theory of liability and capable of measuring these damages on a classwide basis.”).

As another district court in this Circuit has explained, post-Comcast:

[W]here an expert’s model is the basis for a plaintiff’s claim of classwide

impact and causation, a court is obliged to rigorously examine the soundness

of that model at the class certification stage. A court may certify a class under

these circumstances only where the Court finds the model methodologically

sound. That is so notwithstanding that, if the class is certified, the finder of

fact, too, would be called upon at trial to evaluate the soundness and

persuasiveness of the expert’s model.

In re Aluminum Warehousing, 336 F.R.D. 5, 46-47 (S.D.N.Y. 2020). Courts applying the

standards articulated in Comcast have “uniformly recognized that where an expert’s model

of classwide injury fails, absent alternative common proof of class impact, such

deficiencies will preclude class certification under Rule 23(b)(3).” Id. at 49. In other

words, “[w]ithout common proof of injury and causation, antitrust plaintiffs cannot

establish predominance.” Id. at 45 (citation and original alteration omitted).

DPPs proffer as common proof of classwide injury: “the characteristics of the U.S.

market for caustic soda; the pricing mechanisms across the industry, including the use of

price increase announcements; a market-wide pricing structure; and Dr. Lamb’s overcharge

regression.” (Dkt. 667 at 14). The Court agrees with Defendants that Dr. Lamb’s

regression model is not methodologically sound, for multiple reasons. The Court further

concludes that DPPs’ other proffered common proof is insufficient to demonstrate antitrust

injury on a classwide basis, for the reasons that follow.

a. Failure to Accurately Classify Transactions

A fundamental error in Dr. Lamb’s expert opinions relates to the class definition.

As set forth above, the class that DPPs ask the Court to certify excludes “purchases under:

(i) long-term fixed-price contracts that predate October 1, 2015, (ii) cost-based contracts

(such as cost-plus contracts) with no component of price based on a Caustic Soda index,

and (iii) contracts that are priced on an ECU (electrochemical unit) basis with no

component of price based on a Caustic Soda index.” (Dkt. 622 at 8 n.4). This highly

specific class definition is necessary because DPPs’ theory of liability hinges on “the trier

of fact . . . draw[ing] an inference that each purchaser was impacted by price increase

announcements[.]” (Dkt. 667 at 15). In other words, the class cannot include purchases

made under contracts with pricing formulas that were not even possibly impacted by price

increase announcements.

Because the class definition is necessarily crafted in this highly specific fashion, a

reliable methodology for determining whether a particular purchase should be excluded is

a prerequisite to assessing whether there has been classwide injury. Such a methodology

must be capable of accurately determining whether a particular transaction was made

pursuant to a contract and, if so, the terms of that contract. Absent that information, there

is no reliable way to determine whether a purchase is included within the class definition,

and thus no reliable way to determine the impact of Defendants’ alleged anticompetitive

conduct on the class as a whole.

In his expert report, Dr. Lamb explained that as part of the discovery in this action,

Defendants provided “transaction data” containing “over 3.3 million observations

containing information with regard to quantity, form of caustic soda sold, price, and

customer.” (Dkt. 624-2 at ¶ 190). “In order to use Defendants’ transaction data in [his]

analysis,” Dr. Lamb and “staff working under [his] direction” had to “first process and

clean some of the fields included in the datasets produced.” (Id. at ¶ 192). Part of this

processing and cleaning consisted of “identification and assignment of contract type to

customers where data are available.” (Id.).

Specifically, Dr. Lamb and his staff assigned each transaction one of the following

contract types: “FORMULA”; “NEGOTIATED”; “OTHER”; and “MARKET BASKET.”

(Id. at ¶ 192 n. 554). Contracts designated “OTHER” included “long-term contracts under

fixed prices, cost-based contracts, [and] ECU price contracts that do not have an index

component to pricing.” (Id.) Transactions that could not be assigned a contract type were

designated as “N/A.” “Contract types were able to be applied to approximately 65% of

observations.” (Id.).

Dr. Lamb and his staff did not review individual contracts in order to make these

designations—instead, Dr. Lamb’s reply report indicated that they relied on the following:

(1) for Olin, “Olin customer-contract databases that contain contract and pricing detail”;

(2) for OxyChem, “internal documents and databases that identified ECU customers and

pricing terms for contracts”; (3) for Westlake, “internal documents and databases . . . that

identified ECU customers and pricing terms for contracts”; (4) for Shintech, “internal

databases that listed customers and pricing terms of contracts, as well as Shintech’s

interrogatory responses that identified contracted customers”; and (5) for Formosa USA,

“internal documents that identify customers that purchase under contract and those that

make spot purchases.” (Dkt. 624-3 at ¶ 73).

In his expert report, Dr. Johnson identified two examples of contracts that had been

included in Dr. Lamb’s overcharge regression model despite meeting the definition for

“OTHER” contracts. (Dkt. 625-7 at ¶ 107). Dr. Johnson further observed that more than

one-third of all the transactions at issue had been designated “N/A,” including: 33% of

Olin’s transactions; 50% of OxyChem’s transactions; 30% of Westlake’s transactions; 73%

of Formosa USA’s transactions; 16% of Shintech’s transactions; and 25% of KA Steel’s

transactions. (Dkt. 625-7 at ¶ 108). According to Dr. Johnson, “Dr. Lamb simply assumed

all these N/A contracts met the class definition and included them in his model,” but

without looking at individual contracts, “there is no way to know whether these contracts

should have been properly excluded from the class or should have been classified in one

of the other contract buckets.” (Id.).

In his reply report, Dr. Lamb did not dispute that the two contracts identified by Dr.

Johnson were improperly included, but argued that they represent only “1.2% of the Class

sales during the Class Period I reported in Table 1.” (Dkt. 624-3 at ¶ 74). Dr. Lamb’s reply

report further stated without citation that the excluded types of contracts are “rare” and that

“to the extent that there are more contracts that I failed to properly classify and exclude

from my analysis, it would likely have a de minimis effect on the results I reported in the

Lamb [Expert] Report.” (Id.). Additionally, Dr. Lamb argued in his reply report that the

sales in the “N/A” category represented sales made without contracts, and that Dr. Johnson

“fails to note that almost 75% of net sales during the class period were assigned a contract

type.” (Dkt. 624-3 at ¶ 75 and n.224).

This issue was explored in depth at the evidentiary hearing. The Court asked Dr.

Lamb what data he was relying on in asserting that the excluded contract types were rare,

and Dr. Lamb replied that it was based on his analysis, which was “all contained in

paragraph 73” of his reply report. (Dkt. 652 at 117-18). Dr. Johnson then explained in

detail why he believed that Dr. Lamb’s review of the transaction data was “completely

inadequate” to allow him to conclude that the excluded contract types were rare. (Id. at

119). Dr. Johnson walked through examples of contracts, illustrating their complexity. For

example, one contract that Dr. Johnson discussed provided for different prices over

different times periods, sometimes relying on indices, sometimes relying on different types

of ECUs, and sometimes relying on other measures. (Id.). Dr. Johnson explained that this

level of detail was not captured in the databases and other documents on which Dr. Lamb

and his staff relied in assigning contract values. (Id. at 120-21).

On re-direct examination, Dr. Lamb explained that his analysis started with “what

are essentially databases, limited databases that list customers and contract types,” and that

it was not necessary to look at every contract, but it was “necessary to look at certain

contracts.” (Dkt. 654 at 106-07). Dr. Lamb gave an example of “one class member that

Defendants identified that they said should be excluded based on being an ECU based

contract,” and stated that while it was not “clear whether it was true for the caustic soda

part of that contract or the chlorine part,” he had excluded that purchaser “in an abundance

of caution after looking at the contract.” (Id. at 107).

On cross-examination of Dr. Lamb, defense counsel identified 17 OxyChem

customers whose transactions Dr. Lamb had labeled “N/A” despite the fact that they had

contracts in place during the relevant time period. (Id. at 19-21). Dr. Lamb conceded that

he would have to look at these customers’ contracts to know the terms under which they

had purchased caustic soda from OxyChem. (Id.).

The Court agrees with Defendants that the methodology employed by Dr. Lamb

cannot accurately determine whether a particular transaction falls within an exclusion to

the class definition. The Court found Dr. Lamb’s explanation regarding the manner in

which he and his staff assigned contract values unpersuasive with respect to its reliability.

Dr. Lamb failed, upon direct questioning by the Court, to provide any cogent explanation

for how he had determined that the large percentage of “N/A” sales was consistent with

Defendants’ sales patterns. Dr. Lamb’s assumption that “N/A” transactions generally

represent sales made without contracts is unsupported by the evidence of record and by his

own expert report.

Formosa USA’s sales neatly illustrate this point. Dr. Lamb designated 73% of

Formosa USA’s transactions as “N/A.” (Dkt. 625-7 at ¶ 108). In other words, Dr. Lamb’s

regression model assumes that nearly three-quarters of Formosa USA’s transactions were

not made pursuant to contract. The only evidence of record that Dr. Lamb pointed to in his

reply report to purportedly support this conclusion is that a Formosa USA representative

testified that

.8 This statement provides no meaningful information about the percentage of

Formosa USA’s sales made without a contract.

Furthermore, the evidence presented at the evidentiary hearing showed that there

were transactions designated “N/A” that in fact were made pursuant to a contract. DPPs’

argument that a subsequent review of the contracts for the 17 OxyChem customers

identified at the evidentiary hearing “revealed no contract that should have been excluded

by DPPs’ class definition” (Dkt. 667 at 37) misses the point. Regardless of whether those

particular contracts ultimately should have been excluded, their existence: (1) directly

contradicts Dr. Lamb’s assumption that the transactions within the “N/A” category

represent sales made without a written contract; and (2) illustrates the shortcomings in the

methodology used by Dr. Lamb in ascertaining what category to assign to particular

8 Certain information has been redacted from the publicly filed version of this

Decision and Order because it is currently under seal. Within 21 days of entry of this

Decision and Order, the Court intends to file an unredacted version of its Decision and

Order, unless any party comes forward with an updated, specific showing of why the

information at issue should continue to be maintained under seal. The Court will enter a

separate text order reflecting this deadline.

transactions. Further, the fact that DPPs had to review these contracts individually to

ascertain whether or not they should have been excluded is fully consistent with the

arguments made by Dr. Johnson and Defendants.

The Court is further unpersuaded by DPPs’ argument that “[d]espite the best efforts

of defendants—with full access to both the record evidence and their own knowledgeable

employees—there has been no evidence presented that the excluded contract types were

not adequately tracked in business records and identifiable from centralized sources that

are common to the Class.” (Dkt. 667 at 37). DPPs’ argument reverses the applicable

burden of proof. As the parties seeking class certification, DPPs bear responsibility for

showing the soundness of Dr. Lamb’s methodology—i.e., that the excluded contract types

were adequately tracked in business records and identifiable from centralized sources that

are common to the class. They have failed to meet their burden. As Defendants point out

in their post-hearing brief, these “databases” are largely “Excel worksheets that Dr. Lamb’s

team pulled from the Defendants’ various document productions,” and “say nothing about

how contracts changed over the alleged class period, including whether new contracts were

negotiated or whether existing contracts continued under evergreen provisions, were

allowed to expire, or were renegotiated.” (Dkt. 669 at 11-12).

In addition, and contrary to DPPs’ argument, Dr. Johnson testified that the databases

relied upon by Dr. Lamb did not capture the information necessary to determine whether a

particular purchase had been made pursuant to one of the excluded contract types, and

supported that opinion by showing examples of complex contracts that were not accurately

recorded in those databases. Further, the record before the Court contains specific

examples of cases in which the terms of contracts changed from what was recorded in the

databases relied upon by Dr. Lamb and his staff. (Id. at 12).

Additionally, Dr. Johnson’s identification of two contracts that were initially

improperly included by Dr. Lamb despite meeting the definition for exclusion is evidence

that the sources relied upon by Dr. Lamb were inadequate to allow for accurate assignment

of contract values. DPPs make much of the fact that Dr. Johnson identified only two

examples, but they again ignore the fact that they bear the burden of proof at the class

certification stage. The crux of Dr. Johnson’s argument is that one would have to review

each and every contract individually to ascertain whether or not purchases made pursuant

thereto should be excluded and that this is an unmanageable task on a classwide basis. It

is not an answer to that argument to say that Dr. Johnson did not individually review every

contract to identify each one that was wrongly included in Dr. Lamb’s overcharge

regression model. It is DPPs’ burden to explain why the admitted failure to properly

characterize the examples identified by Dr. Johnson does not call into question the

reliability of the classification process. They have failed to do so. Instead, Dr. Lamb has

simply speculated that “to the extent that there are more contracts that I failed to properly

classify and exclude from my analysis, it would likely have a de minimis effect on the

results I reported in the Lamb Report.” (Dkt. 623-4 at ¶ 60).

The Court further found persuasive Dr. Johnson’s testimony regarding the

complexities of the contracts at issue. Dr. Johnson explained that when one actually looks

at exemplars of the individual contracts, they do not necessarily contain straightforward

formulas or references to indices. Dr. Johnson walked through an example of a contract

that had

.

(Dkt. 654 at 231-34). Dr. Lamb’s own testimony underscored the nuances at issue when

he identified an example of a contract where it was not even clear if the ECU-based pricing

was for “the caustic soda part of that contract or the chlorine part.” (Id. at 107).

The complexity of the contractual pricing mechanisms used in the caustic soda

industry makes it infeasible to accurately categorize the transactional data without

reviewing the individual contracts. This is also problematic because, as was discussed at

oral argument, the coefficients are different for each category of contracts included in Dr.

Lamb’s analysis. (See Dkt. 709 at 13). DPPs’ counsel conceded that mischaracterization

of contract types (as distinct from improper inclusion or inclusion of particular purchases

within the proposed class definition) could have some effect on Dr. Lamb’s calculations.

(Id. at 16-17). While DPPs’ counsel tried to argue that any such effect would be de minimis,

that argument appeared to be based simply on speculation that “there are just not enough

transactions that were misclassified as N/A” to have a significant effect. (Id. at 17). Again,

there is no reliable way of knowing how many transactions were misclassified without

performing a contract-by-contract analysis, because the databases and documents relied

upon by Dr. Lamb and his team simply lack sufficient information to capture the

complexity of the contractual terms at issue.

“If individualized questions as to membership in the proposed class predominate

over common questions, class certification is precluded.” Calvo v. City of New York, No.

14-CV-7246 (VEC), 2018 WL 1633565, at *7 (S.D.N.Y. Apr. 2, 2018); see also Vogel v.

City of New York, No. 14 CIV. 9171 (RMB), 2017 WL 4712791, at *5 (S.D.N.Y. Sept. 19,

2017) (“If, as here, too much individual inquiry is required to determine whether someone

is a member of the class, then a court could find that class issues do not predominate over

individual issues.” (quotations omitted)). Because membership in the proposed class could

not reliably be determined without reviewing the individual contracts pursuant to which

purchases were made, individual questions would predominate over common questions in

this case.

b. Failure to Account for Global Demand for U.S. Produced-

Caustic Soda

Another fundamental error in Dr. Lamb’s overcharge regression model is the failure

to appropriately account for global demand for U.S.-produced caustic soda. Again, this is

an issue discussed in-depth in the expert reports and explored at the evidentiary hearing.

The dependent variable in Dr. Lamb’s regression model is “the caustic soda price

charged by the Defendants and paid by the [proposed] Class members.” (Dkt. 624-2 at

¶ 181). The independent variables include “demand variables,” “co-product demand

variables,” “supply variables,” and “categorical variables.” (Id. at ¶ 182). As to demand

variables, Dr. Lamb explained that “[t]o measure the effect of demand for caustic soda on

caustic soda prices, I needed to measure U.S. and export demand for caustic soda.” (Id. at

¶ 183). To measure export demand—that is, global demand—for U.S.-produced caustic

soda, Dr. Lamb “used data on monthly global alumina production, excluding North

America, from the International Aluminum Institute.” (Id. at ¶ 184).

Dr. Johnson’s expert report heavily criticized Dr. Lamb’s use of global alumina

production as a proxy for global demand for U.S.-produced caustic soda. Dr. Johnson

contended that global alumina production fails to account for events that did not affect the

overall global demand for caustic soda, “but resulted in shifts in the demand in favor of

U.S.-produced caustic soda because they led to a decrease in the global supply for caustic

soda.” (Dkt. 625-7 at ¶ 41). Dr. Johnson identified “several major industry events”

occurring during the proposed class period that he argued affected demand for U.S.-

produced caustic soda, including a phasing out of mercury-cell caustic soda production in

Europe, the enactment of stricter environmental regulations in China, and government

embargoes placed on an alumina refinery in Brazil. (Id. at ¶ 35). Dr. Johnson concluded

that “Dr. Lamb’s sole export demand control variable fails to appropriately measure the

change in foreign demand for U.S-produced caustic soda on domestic caustic soda.” (Id.

at ¶ 41).

As described above, Dr. Johnson also ran his own multiple regression analyses

wherein he added spot export prices from various regions of the world to Dr. Lamb’s

model. (Id. ¶ 44). These regressions showed no overcharge. (Id.). As the Court explained

in its discussion of DPPs’ Daubert motion, Dr. Lamb contends that the use of spot export

prices inappropriately introduced endogeneity into the regression model. (See Dkt. 624-3

at ¶ 24).

At the evidentiary hearing, Dr. Lamb testified that “[g]lobal alumina production

measures . . . global demand for U.S. exports of caustic soda. About 74 percent of U.S.

exports according to the Defendants’ data.” (Dkt. 652 at ¶ 25). However, upon cross-

examination by defense counsel, Dr. Lamb clarified that the 74% statistic applied only to

cases “where the end use [of the exported caustic soda] could be identified.” (Dkt. 654 at

73). Dr. Lamb was unable to state the percentage of exported caustic soda for which he

had been able to identify an end use. (Id.). He could not rule out the possibility that it was

as much as 75 percent. (Id.). Dr. Johnson testified that his recollection was that end uses

could not be identified for “something like 35 percent” of U.S. exports. (Id. at 223). He

further testified that he was not able to accurately calculate what percent of U.S. caustic

soda exports was used to produce alumina because there was a “huge set” for which there

was “no characterization.” (Id. at 221). In their post-hearing brief, Defendants state that

“[b]ased on the data in [Dr. Lamb’s] turnover, only 48.1% of Defendants’ exported caustic

soda went to alumina production, 34.5% went to unknown end-uses, and 17.3% went to

non-alumina customers.” (Dkt. 669 at 23).

DPPs have not shown that it is methodologically sound to use global alumina

production as the sole proxy for global demand for U.S.-produced caustic soda. Dr.

Lamb’s contention that global alumina production measures global demand for U.S.

exports of caustic soda is based on his conclusion that 74 percent of U.S. exports of caustic

soda is used to produce alumina. However, that conclusion is not reliable. It is undisputed

that there was a substantial subset of U.S. caustic soda exports for which no end use could

be identified. While neither expert could state with precision what percent of U.S caustic

soda exports had an unidentified end use, Dr. Lamb could not—at least at the evidentiary

hearing—rule out the possibility that it was as much as 75 percent. If that were the case,

then the 74 percent statistic relied on by Dr. Lamb would actually represent only 18.5

percent of total U.S. caustic soda exports.9 Accepting the 35 percent estimate offered by

Dr. Johnson and reiterated by Defendants in their post-hearing brief would mean that

alumina production potentially accounted for less than half (approximately 48 percent) of

demand for U.S. caustic soda exports.

This is a significant and fundamental error in Dr. Lamb’s regression model. As both

Dr. Lamb and Dr. Johnson testified at the evidentiary hearing, global demand for U.S.-

produced caustic soda plays a significant role in determining the price that Defendants can

charge their customers. The failure to include a reliable proxy for global demand for U.S.-

produced caustic soda in the regression model is accordingly a fatal flaw. DPPs have not

demonstrated that the use of a proxy that accounts for less than half of global demand for

U.S. produced caustic soda is methodologically sound.

The Court further agrees with Defendants that Dr. Johnson’s additional multiple

regression analyses, wherein he included spot export prices as an independent variable,

demonstrate the unsoundness of Dr. Lamb’s model. The Court was not persuaded by Dr.

Lamb’s argument that Dr. Johnson had improperly introduced endogeneity into the model

by including spot export prices. Dr. Johnson reasonably explained that export prices are

determined by supply and demand factors in their respective markets, not by supply and

demand factors within the United States. (Dkt. 652 at 37-38). The arguments that Dr.

Lamb offered in opposition to this explanation—including in his reply report—were not

persuasive. For example, in his reply report, Dr. Lamb stated that “the cost to produce

9 Interestingly, it is undisputed that alumina production represents 17 percent of

overall global demand for caustic soda. (See Dkt. 654 at 49-50).

caustic soda” is a factor that impacts both spot export prices and domestic prices. (Dkt.

624-3 at 30). However, Dr. Lamb offers no corroboration for the proposition that the cost

to produce caustic soda is uniform globally.

Further, and as Defendants correctly point out in their post-hearing brief (see Dkt.

669 at 28), Dr. Lamb’s arguments are internally inconsistent. In his reply report, he argued

that Europe “is not a significant participant in the export market” and has an insignificant

effect on caustic soda prices within the United States. (Dkt. 624-3 at ¶¶ 13-15). If this is

the case, it is difficult to see how European export prices could be determined by the same

factors as domestic caustic soda prices, and Dr. Lamb has offered no explanation for this

discrepancy.

Dr. Lamb’s argument regarding the purportedly nonsensical nature of the results

when spot export prices were added to the analysis was also unpersuasive. As Dr. Johnson

explained, his additional multiple regression analyses were not intended to be an accurate

model, which is what Dr. Lamb’s argument assumes. (See Dkt. 652 at 45 (“Those kinds

of results that we saw in Dr. Johnson’s table and that Plaintiffs have highlighted in their

table are nonsensical, and they indicate a fatal error in his analysis that renders it unreliable

and, frankly, something that I as an econometrician, in my experience, wouldn’t use to try

and understand in this market at all.”)). Instead, Dr. Johnson’s additional multiple

regressions analyses are intended to test whether Dr. Lamb’s model adequately accounts

for all factors. (Id. at 61).

Dr. Lamb’s regression model purports to contain independent variables that control

for factors that affect domestic caustic soda prices. (See Dkt. 624-2 at ¶ 182). If that is

true, then the addition of another independent variable controlling for one of those same

factors should not cause the coefficients to changes. (See Dkt. 652 at 60; see also Dkt. 669

at 26 (“If the model properly captures all non-conspiratorial factors, then adding additional

explanatory variables will have no effect on the model’s overcharge estimate (since

whatever new explanatory variable is added will have already been accounted for by the

model’s original controls.”)). On the other hand, “[i]f the[] additional explanatory

variables turn out to be statistically significant, and the coefficient estimates on the

previously included explanatory variables change substantially when the additional

variables are added, then the regression model that omitted the additional explanatory

variables likely is misspecified and its results are biased and unreliable.” (Dkt. 625-7 at 35

n.107 (citation omitted)).

In other words, Dr. Johnson does not contend that that the addition of spot export

prices as an additional explanatory variable fixed every flaw in Dr. Lamb’s regression

model, such that the results of his additional multiple regression analyses should be

expected to make perfect economic sense. Instead, the addition of spot export prices as an

additional explanatory variable resulted in significant changes to the coefficient estimates

on the previously included explanatory variables, thus indicating that the model is

misspecified. This misspecification is another basis for concluding that Dr. Lamb’s

methodology is insufficiently sound to satisfy the requirements of Rule 23. See Bickerstaff

v. Vassar Coll., 196 F.3d 435, 450 (2d Cir. 1999) (affirming district court’s decision to

“accord[] the regression analysis no probative weight” where it “failed to account for the

major factors” relevant to analysis).

Defendants have identified a number of other purported flaws in Dr. Lamb’s

regression model, including the use of housing starts as a proxy for chlorine demand, the

used of a pooled overcharge model, and the alleged inability of the model to isolate the

impact of an individual theory of antitrust harm. The Court need not and does not reach

these additional arguments, because it concludes that the methodological flaws identified

above render Dr. Lamb’s regression model unsound and insufficient to serve as common

proof of antitrust injury.

c. Other Purported Common Proof of Class Impact

The Court next considers whether DPPs have presented “alternative common proof

of class impact” sufficient to satisfy Rule 23(b)(3)’s predominance requirement. In re

Aluminum Warehousing Antitrust Litig., 336 F.R.D. at 49. In addition to Dr. Lamb’s

overcharge regression model, DPPs identify the following “common proof”: “the

characteristics of the U.S. market for the caustic soda; the pricing mechanisms across the

industry, including the use of price increase announcements; [and] a market-wide pricing

structure[.]” (Dkt. 667 at 14).

The Court agrees with Defendants that this alleged common proof is not sufficient

to prove classwide impact without Dr. Lamb’s overcharge regression model. Before

considering the specifics of DPPs’ arguments, it is important to recall DPPs’ theory of how

the alleged classwide injury occurred. According to DPPs, Defendants conspired to issue

coordinated price increase announcements, which led to artificially increased “spot prices

or prices under freely negotiated contracts.” (Dkt. 667 at 15). Those artificially increased

negotiated prices were then allegedly incorporated into the broad variety of pricing indices

referenced in the proposed class members’ contracts. (Id.).

Thus, while DPPs frequently refer to this case as involving a straightforward

horizontal price-fixing conspiracy, it is more complex than the paradigmatic case in which

competitors secretly agree upon a price and then simply charge that agreed-upon price to

their customers. Cf. Aluminum Warehousing, 336 F.R.D. at 45-46 (contrasting

“paradigmatic or ‘traditional’ price fixing conspiracy” with alleged conspiracy in which

there was “a more elongated causal chain”). With respect to the large number of proposed

class-members whose pricing structures were based on indices, antitrust injury can be

shown only by proof that artificially increased negotiated prices caused by the Defendants’

alleged conspiracy were in fact incorporated into the specific indices referenced in those

contracts.

With this background in mind, the Court finds that the pricing mechanisms within

the domestic caustic soda industry are not common proof of classwide antitrust injury. Dr.

Lamb’s price increase announcement regression—which was introduced in his reply

report—purports to show “how transaction level prices changed following each price

increase announcement after controlling for supply and demand factors, as well as

customer, Defendant, product, contract type, shipping mode, and shipping origin and

destination.” (Dkt. 624-3 at ¶ 124). Dr. Lamb’s price increase announcement regression,

like his overcharge regression, relies on the accurate assignment of contract values to the

transaction data. Accordingly, the Court’s earlier discussion regarding the unreliability of

Dr. Lamb’s contract characterization process applies with full force with respect to the

price increase announcement regression, which is also methodologically unsound.

Further, the price increase announcement regression is fundamentally inconsistent

with the overcharge regression, which the Court finds demonstrates the unreliability of

both models. The price increase announcement regression purports to show that caustic

soda prices were, on average, 1.7 percent below what supply and demand factors predicted

after price increase announcements during the benchmark period (despite the fact that price

increase announcements should have had no impact on prices during this time period) and,

on average, 2.6 percent above what supply and demand factors predicted after price

increase announcements during the proposed class period (despite the fact that Dr. Lamb’s

overcharge regression purports to show an average overcharge of 9.6 percent during the

proposed class period). (See Dkt. 624-2 at ¶ 171; Dkt. 624-3 at ¶ 124).

At the evidentiary hearing, Dr. Lamb did not dispute that the results of the price

increase announcement regression and the overcharge regression were inconsistent, but

instead argued that the inconsistency did not matter, because the purpose of the price

increase announcement regression was not to measure an overcharge. This explanation

was entirely unpersuasive. As Dr. Johnson explained in his sur-reply report, the difference

between Dr. Lamb’s overcharge regression and his price increase announcement regression

is that he replaced the single overcharge indicator variable with different indicator variables

for each of Defendants’ price increase announcements. (Dkt. 541-1 ¶ 10). Given this fact,

Dr. Lamb offered no cogent explanation for why his price increase announcement

regression could not be compared to his overcharge regression for consistency, or for why

the patent inconsistency between these two models does not demonstrate that they are both

methodologically unsound.

Separate from his price increase announcement regression, Dr. Lamb opined that

Defendants’ price increase announcements caused members of the proposed class whose

pricing was tied to pricing indices to pay inflated prices because those indices “are based

on transaction[s] subject to the allegedly anticompetitive price increase announcements.”

(Dkt. 624-2 at ¶¶ 21, 216-17; see also Dkt. 624-3 at ¶ 87 (“The widespread use of indices

in the caustic soda industry means that price negotiations and spot sales would be anchored

by the alleged Cartel and result [in] artificially inflated prices paid by members of the

proposed class.”)). However, that assertion is unsupported by the evidence of record. Dr.

Lamb testified at his deposition that he did not know which customers’ negotiated prices

were reported to IHS10 in any month during the proposed class period. (Dkt. 632-6 at 29).

He further performed no analysis to determine whether the prices published by IHS, Argus,

or ICIS accurately reflected actual negotiated prices for any month in the proposed class

period. (Id. at 30). The record before the Court is also devoid of any other evidence

regarding the manner in which particular negotiated prices from particular customers are

incorporated into the variety of indices used by the class.

In other words, DPPs’ theory for how price increase announcements caused injury

to members of the proposed class with index-based pricing relies entirely on assumption

10 As noted earlier this Decision and Order, IHS, Argus, and ICIS are agencies that

publish price information regarding the caustic soda industry, with IHS publishing three

price indices (Dkt. 624-2 at ¶ 50).

and conjecture. There is no actual proof in the record—much less common proof—that

any allegedly artificially inflated negotiated price was actually incorporated into an index,

and that a member of the proposed class then paid an artificially inflated price based on

that index. “[T]heory is not sufficient to satisfy Rule 23(b)(3)’s requirements. [DPPs]

must provide properly analyzed, reliable evidence that a common method of proof exists

to prove impact on a class-wide basis.” In re High-Tech Emp. Antitrust Litig., 289 F.R.D.

555, 570 (N.D. Cal. 2013) (quotation and citation omitted and alteration in original); see

also In re Flash Memory Antitrust Litig., No. C 07-0086 SBA, 2010 WL 2332081, at *8

(N.D. Cal. June 9, 2010) (“[A]ntitrust claims predicated on negotiated transactions, as

opposed to purchases based on list prices, often entail consideration of individualized proof

of impact.”).

The cases cited by DPPs do not contradict the Court’s conclusion. (See Dkt. 622 at

34-35; Dkt. 667 at n.17). In the in-Circuit case of In re Ethylene Propylene Diene Monomer

(EPDM) Antitrust Litig., 256 F.R.D. 82 (D. Conn. 2009), the court observed that “where

other methods of common proof exist to show classwide impact such as lock-step increases

of national price lists in an oligopolistic market, comparing ‘but-for’ prices with actual

transaction prices is not the only way for plaintiffs to succeed in a motion for class

certification.” Id. at 88; see also Olean Wholesale Grocery Coop., Inc. v. Bumble Bee

Foods LLC, 31 F.4th 651,670 (9th Cir. 2022) (noting “the Tuna Suppliers’ use of price lists

for their products”); In re Broiler Chicken Antitrust Litig., No. 16 C 8637, 2022 WL

1720468 (N.D. Ill. May 27, 2022) (“the allegation here is that Defendants fixed a market

price that was the starting point for negotiations across the market” (emphasis added)).

However, no such lock-step increases or national price lists exist in this case. To the

contrary, the record before the Court shows that Defendants charged different prices to

different customers and adjusted their pricing at different times and by different amounts.

Moreover, and as discussed above, many members of the proposed class paid prices based

on formulas related to indices, and there is no common proof that any of those indices were

impacted by the alleged price-fixing conspiracy, much less that they all were.

The out-of-Circuit cases cited by DPPs also do not support their contentions. In

Kleen Products LLC v. Int’l Paper Co., 831 F.3d 919 (7th Cir. 2016), in addition to

evidence of market characteristics, the plaintiffs’ expert had “constructed a regression

model to estimate the overcharges made possible by the conspiracy[.]” Id. at 924. The

Seventh Circuit rejected the defendants’ argument that it was “not enough for [the

plaintiffs] to prove aggregate injury and one aggregate overcharge, without allocating how

much of that overcharge was paid by each individual class member.” Id. at 927. No such

argument has been presented by Defendants in this case. Additionally, the plaintiffs’ expert

in Kleen Products had reviewed every contract produced by the defendants and determined

that 96% of them contained provisions tying pricing to a single index, which index had a

“tight correlation” to price increases by the defendants. Id. at 926, 928. The proffered

common proof of antitrust impact in Kleen Products was very different from the evidence

presented by DPPs.

The same is true of In re Capacitors Antitrust Litig. (No. III), No. 14-CV-03264-

JD, 2018 WL 5980139 (N.D. Cal. Nov. 14, 2018), wherein the defendants, like the Kleen

Products defendants, argued that the plaintiffs had to “prove that each and every putative

class member was harmed before certification can be granted.” Id. at *7. Again, that is

not the issue in this case. The Capacitors plaintiffs had presented a multiple regression

analysis that the court found to be acceptable common proof of antitrust impact. Id. In

addition, the record in that case included “guilty pleas in which defendants admitted their

participation in a price-fixing conspiracy that had a substantial and intended effect in the

United States.” Id. at *8. Similarly, the court in In re Chocolate Confectionary Antitrust

Litig., 289 F.R.D. 200 (M.D. Pa. 2012), was presented with a multiple regression analysis

based on which one could “reasonably conclude[] that all products sold by Defendants

were subject to collusive price increases.” Id. at 221; see also In re Polyurethane Foam

Antitrust Litig., 314 F.R.D. 226, 250-67 (N.D. Ohio 2014) (rejecting challenges to the

plaintiffs’ expert’s statistical analyses).

Turning to the specifics of the other alleged common proof identified by DPPs, Dr.

Lamb has opined that there is a “pricing structure” in the domestic caustic soda industry.

(Dkt. 624-2 at ¶ 200). “A pricing structure means that prices paid by purchasers for the

same product from a single seller, or for interchangeable products from different sellers,

tend to move together over time in response to common economic forces.” (Id.). However,

Dr. Lamb acknowledged at his deposition that “the pricing structure and the correlation of

prices . . . would exist in the absence of the [alleged] cartel,” because they simply “reflect[]

how the market works for caustic soda.” (Dkt. 632-26 at 10). As Dr. Lamb explained, the

pricing structure is “offered as evidence that if the cartel existed and raised prices, those

prices would have been paid by all or nearly all class members.” (Id. (emphasis added)).

In other words, in the absence of common proof of a mechanism whereby the alleged cartel

could have raised prices on class members with index-based contract terms, the existence

of a pricing structure cannot demonstrate classwide antitrust injury.

The same is true of the characteristics of the domestic caustic soda market. Dr.

Lamb has opined that factors such as “the domination of the market by the defendants,

barriers to entry, fungibility of the same grade and concentration of caustic soda across

producers, a lack of substitutes, and inelastic demand . . . facilitate the formation and aid

in the maintenance of a conspiracy” and “are part of the common proof that a cartel would

impact all or nearly all proposed Class members.” (Dkt. 667 at 14-15). The Court does

not disagree that this evidence could potentially be considered on a classwide basis in

considering whether the alleged cartel had the ability to enforce price increases classwide.

However, it cannot—in the absence of Dr. Lamb’s statistical analysis—show on a

classwide basis that the cartel actually was successful in artificially increasing prices,

which is necessary for a showing of antitrust injury. See Cordes & Co. Fin. Servs. v. A.G.

Edwards & Sons, Inc., 502 F.3d 91, 106 (2d Cir. 2007) (“[T]he second element of an

antitrust cause of action—‘antitrust injury’—poses two distinct questions. One is the

familiar factual question whether the plaintiff has indeed suffered harm, or ‘injury-in-

fact.’”). After all, and as Defendants correctly point out in their opposition papers, “[e]ach

of the identified market characteristics [also] existed in one or both benchmark periods”

(Dkt. 632 at 55), and no inflated prices are alleged to have existed during those time

periods. See In re Air Cargo Shipping Servs. Antitrust Litig., No. 06-MD-1175 JG VVP,

2014 WL 7882100, *49 (E.D.N.Y. July 10, 2015) (“Because it only permits a debatable

inference, . . . the court agrees with the defendants that [the plaintiff’s expert’s] market

analysis does not establish the fact of each plaintiff’s impact on its own.” (internal

quotation marks omitted)).

In sum, DPPs have failed to demonstrate by a preponderance of the evidence that

common questions will predominate over individual questions with respect to their

proposed class. DPPs have not come forward with common proof sufficient to allow a trier

of fact to conclude that all or most members of the class suffered antitrust injury as a result

of the alleged cartel. Class certification would not be appropriate under these

circumstances.

2. Typicality

In addition to failing to demonstrate predominance, DPPs also have not shown that

their claims are typical of the proposed class. “Typicality . . . requires that the claims of

the class representatives be typical of those of the class, and is satisfied when each class

member’s claim arises from the same course of events, and each class member makes

similar legal arguments to prove the defendant’s liability.” Marisol A. v. Giuliani, 126

F.3d 372, 376 (2d Cir. 1997) (quotation omitted); see also Dover v. Brit. Airways, PLC

(UK), 321 F.R.D. 49, 55 (E.D.N.Y. 2017) (“Typicality is satisfied when the named

plaintiffs bring claims for the same type of injury under the same legal theory as the rest of

the class.” (quotation omitted)).

Defendants argue that DPPs’ claims are not typical of the proposed class because

the record demonstrates that the three largest members of the proposed class

did not have the same price negotiation strategy as DPPs

and did not seek to pay the lowest available price for caustic soda. These putative class

members have testified that:

. (See, e.g., Dkt. 680-10

at 9; Dkt. 680-53 at 10).

DPPs significantly oversimply Defendants’ typicality argument in their reply,

contending that “Defendants . . . argue that typicality is defeated here because some large

class members may have factored into their purchasing decisions their need to preserve

relations with their suppliers.” (Dkt. 643 at 56). But, as set forth above, that is not what

Defendants have argued. Instead, Defendants have pointed out that: (1) DPPs’ theory of

the case is that the entire proposed class was injured because the members thereof

universally sought to pay the lowest possible price for caustic soda, and that lowest possible

price was artificially inflated by Defendants via price increase announcements; and (2) the

three largest members of the proposed class have all testified that they do not fit within that

theory and were not injured in that manner. DPPs have failed to meaningfully address this

argument and have accordingly not demonstrated typicality.

3. Ascertainability

Finally, the Court concludes that DPPs’ proposed class does not satisfy the implied

requirement of ascertainability, which requires that “a class be defined using objective

criteria that establish a membership with definite boundaries.” In re Petrobras Sec., 862

F.3d 250, 264 (2d Cir. 2017). “Where any criterion is subjective . . ., the class is not

ascertainable.” Flores v. Anjost Corp., 284 F.R.D. 112, 122 (S.D.N.Y. 2012).

Defendants argue that the proposed class is not ascertainable because DPPs’

proposed class definition “uses vague and ambiguous terms” such as “long-term fixed-

price contracts” and “cost-based contracts.” (Dkt. 632 at 71-72). Defendants further argue

that DPPs’ “definition excludes certain purchases as opposed to purchasers, which means

that a single customer may have purchases under one contract that are in the class, and

other purchases under a different contract that are not” and “[t]he only way to distinguish

between qualifying and non-qualifying purchases would be to look at the contract terms.”

(Id. at 72).

In reply, DPPs do not meaningfully engage with Defendants’ arguments. Instead,

they say:

Seven hundred sixty-one (761) class members have been ascertained based

on Defendants’ data. There is no ascertainability issue here. Defendants’

records also identify the entities whose purchases may be excluded from the

class definition—those that made purchases pursuant to the terms of long-

term fixed-price contracts predating Oct. 1, 2015, cost-based contracts with

no reference to an index, and contracts priced on an ECU basis with no

reference to an index. In other words, any purchaser-purchase combinations

within Defendants’ data that are excluded from the class definition are not

only objectively identifiable, they have been identified to the extent

practicable at this time.

(Dkt. 643 at 61).

Nothing in DPPs’ reply addresses the fact that their class definition provides no

objective criteria for determining what constitutes a long-term, fixed-price contract that

predates October 1, 2015. The proposed class definition neither defines “long-term” nor

offers any explanation for how to determine whether a contract with pricing terms that vary

over time predates October 1, 2015. To give an example of why this lack of clarity is

problematic, the record before the Court contains several examples of contracts that have

provisions that cause them to automatically renew from year to year unless cancelled by

the parties. Is such a contract “long-term”? If it was entered into in 2012, does it “predate”

October 1, 2015, or does each annual automatic renewal re-date it? And what if it provides

for fixed prices for purchases in one location but for an index-based pricing formula for

purchases in a second location? The lack of any objective answer to these questions renders

the proposed class insufficiently ascertainable. This is an additional reason why the

proposed class fails to satisfy Rule 23’s requirements.

CONCLUSION

For the reasons set forth above, the Court denies DPPs’ motion for class certification

(Dkt. 474); denies as moot Shintech’s motion to exclude certain of Dr. Lamb’s opinions

(Dkt. 567); denies DPPs’ motion to strike and exclude certain of Dr. Johnson’s opinions

and proposed testimony (Dkt. 570); denies as moot Formosa’s motion to exclude certain

of Dr. Lamb’s opinions (Dkt. 572); and denies as moot Defendants’ joint motion to exclude

certain of Dr. Lamb’s opinions and proposed testimony (Dkt. 573). The Court’s denial of

the parties’ motions to strike/exclude shall not preclude the parties from raising any issues

related to the admissibility of expert testimony in motions in limine filed pursuant to a pre-

trial order entered at a later stage of this case.

SO ORDERED.

<BY-TH A, WOKFORD/

Chief Judige

United States District Court

Dated: December 28, 2023

Rochester, New York

-51-