In re: National Collegiate Athletic Association Athletic Grant-In-Aid Cap Antitrust Litigation

Northern District of California, cand-4:2014-md-02541

RESPONSE to Question From Case Management Conference Regarding Dr. Elzinga by Pacific 12 Conference, National Collegiate Athletic Association, et al. Modified on 5/31/2018

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1 Sean Eskovitz (SBN 241877) Raoul D. Kennedy (SBN 40892) WILKINSON WALSH + ESKOVITZ LLP SKADDEN, ARPS, SLATE, MEAGHER & 2 11726 San Vicente Blvd., Suite 600 FLOM LLP Los Angeles, CA 90049 525 University Avenue, Suite 1100 3 Telephone: (424) 316-4000 Palo Alto, CA 94301 Facsimile: (202) 847-4005 Telephone: (650) 470-4500 4 seskovitz@wilkinsonwalsh.com Facsimile: (650) 470-4570 raoul.kennedy@skadden.com 5 Beth A. Wilkinson (pro hac vice) Alexandra M. Walsh (pro hac vice) Jeffrey A. Mishkin (pro hac vice) 6 Brian L. Stekloff (pro hac vice) Karen Hoffman Lent (pro hac vice) Rakesh N. Kilaru (pro hac vice) SKADDEN, ARPS, SLATE, MEAGHER & 7 WILKINSON WALSH + ESKOVITZ LLP FLOM LLP 2001 M Street NW, 10th Floor Four Times Square 8 Washington, DC 20036 New York, NY 10036 Telephone: (202) 847-4000 Telephone: (212) 735-3000 9 Facsimile: (202) 847-4005 Facsimile: (212) 735-2000 bwilkinson@wilkinsonwalsh.com jeffrey.mishkin@skadden.com 10 awalsh@wilkinsonwalsh.com karen.lent@skadden.com bstekloff@wilkinsonwalsh.com 11 rkilaru@wilkinsonwalsh.com Attorneys for Defendants NATIONAL COLLEGIATE ATHLETIC 12 Attorneys for Defendant ASSOCIATION and WESTERN ATHLETIC NATIONAL COLLEGIATE ATHLETIC CONFERENCE 13 ASSOCIATION [Additional Counsel Listed on Signature 14 Page] 15 IN THE UNITED STATES DISTRICT COURT 16 FOR THE NORTHERN DISTRICT OF CALIFORNIA 17 OAKLAND DIVISION 18 IN RE NATIONAL COLLEGIATE MDL Docket No. 4:14-md-02541-CW ATHLETIC ASSOCIATION ATHLETIC Case No. 4:14-cv-02758-CW 19 GRANT-IN-AID CAP ANTITRUST LITIGATION 20 DEFENDANTS' RESPONSE TO QUESTION FROM CASE MANAGEMENT 21 CONFERENCE REGARDING DR. ELZINGA 22 This Document Relates to: 23 ALL ACTIONS 24 25 26 27 28 DEFS.' RESPONSE TO QUESTION FROM CASE MANAGEMENT CONFERENCE MDL No. 4:14-md-02541-CW REGARDING DR. ELZINGA Case No. 4:14-cv-02758-CW 1 During the May 22, 2018 Case Management Conference, there was discussion about 2 whether the exclusion of Dr. Elzinga's affirmative testimony meant that he could not testify in 3 rebuttal to Plaintiffs' experts.1 Counsel for Defendants explained that "the difficulty [Defendants] 4 have is that the basis that the Court excluded him as a testifying witness regarding the relevant 5 market is a totally separate issue from responding to the Plaintiffs' expert witnesses,"2 and "that 6 the Plaintiffs did not even move with respect to this issue."3 Plaintiffs' counsel disagreed, 7 claiming both that "Plaintiffs moved to exclude the entirety of Dr. Elzinga's testimony as being 8 irrelevant," and that Defendants "provided no report rebutting Dr. Rascher."4 9 The Court told the parties that "we will just go back and look at it. If Plaintiffs didn't 10 move to exclude any portion of Elzinga, then I guess I couldn't grant a motion that wasn't made. 11 But if they did, and I think they did, I think I granted it. So you can take a look and see what you 12 find out."5 Defendants' counsel said that "[w]e would be happy to direct the Court to the portion 13 that we would be referring to."6 14 The actual facts are straightforward: Plaintiffs did not move to exclude the entirety of 15 Elzinga's affirmative expert opinion or any portion of his separately submitted May 16, 2017 16 Rebuttal Report ("Rebuttal Report") or June 21, 2017 Reply Report ("Reply Report").7 Dr. 17 Elzinga's Rebuttal Report has dedicated sections addressing "Dr. Rascher's Argument About the 18 Purported Absence of Procompetitive Benefits," id. at 40-52, as well as Dr. Rascher's contentions 19 1 20 May 22, 2018 Hr'g Tr. at 19:24-23:4. 2 Id. at 21:6-9. 21 3 Id. at 21:20-22. 22 4 Id. at 22:10-21. 5 23 Id. at 22:22-23:1. 6 Id. at 23:2-3. 24 7 Dr. Elzinga's Rebuttal Report was filed under seal as Exhibit 12 to the Declaration of Karen 25 Hoffman Lent in Support of Defendants' Motion for Summary Judgment and for Exclusion of Expert Testimony, and Opposition to Plaintiffs' Motion for Summary Judgment (Dkt. 704-1). Dr. 26 Elzinga's Reply Report was filed under seal as Exhibit 4 to the Declaration of Jeffrey A. Mishkin in Support of Reply in Support of Defendants' Motion for Summary Judgment, Reply in Support 27 of Defendants' Motions to Exclude Expert Testimony, and Opposition to Plaintiffs' Motions to Exclude Expert Testimony (Dkt. 748-1). 28 DEFS.' RESPONSE TO QUESTION FROM CASE MANAGEMENT CONFERENCE MDL No. 4:14-md-02541-CW REGARDING DR. ELZINGA Case No. 4:14-cv-02758-CW 1 regarding the "Existence of Less Restrictive Alternatives," id. at 52-62.8 In his Reply Report, Dr. 2 Elzinga addresses Dr. Noll's arguments about those same two prongs of the Rule of Reason 3 analysis. See id. at 16-27. 4 As set forth in the Plaintiffs' "Notice of Motion" portion of their Daubert motion, Plaintiffs 5 "move[d] the Court, under Daubert v. Merrell Dow Pharms. and Federal Rule of Evidence 702 to 6 exclude certain opinions of Defendants' expert, Dr. Kenneth G. Elzinga, regarding the definition of 7 the relevant antitrust market in this matter, and his opinion that Defendants lack market power 8 within that market."9 9 Plaintiffs' "Statement Of Issue To Be Decided" section in the Elzinga Daubert Motion is 10 similarly limited to Dr. Elzinga's opinions "concerning market definition and market power": 11 Defendants' economic expert, Dr. Kenneth G. Elzinga, opines that the relevant antitrust market in this case is a "multi-sided platform," and that Defendants lack market power 12 within that antitrust market. Dr. Elzinga's opinions concerning market definition and market power: (1) are not grounded in any scientific method or peer-reviewed literature 13 analyzing athletes as participants in a multi-sided market; (2) do not "fit" the economic theory on which he bases his opinions; and (3) are fundamentally inconsistent with long- 14 standing, peer-reviewed principles of economic analysis applicable to college sports (including by the NCAA's own economic experts) and legal findings that are counter to 15 Dr. Elzinga's opinions. 16 In light of this record, have the Defendants met their burden to establish the reliability of Dr. Elzinga's opinions regarding market definition and market power to be admissible 17 under Daubert and Rule 702?10 18 Plaintiffs' "Conclusion" section in the Elzinga Daubert Motion also limits Plaintiffs' 19 challenge to Dr. Elzinga's opinions on market power and market definition: 20 The opinions of Dr. Elzinga regarding the definition of the relevant antitrust market in this matter, and his opinion that Defendants lacked market power within that market must be 21 excluded under Rule 702 and Daubert, because they are contrary to accepted economic principles, fundamentally flawed, contrary to governing law, and unreliable.11 22 23 8 Although the Court questioned at the Conference whether there could be any need for "rebuttal" 24 testimony, May 22, 2018 Hr'g Tr. at 20:9-23, the material in Dr. Elzinga's Rebuttal Report and Reply Report directly counters the anticipated testimony of Plaintiffs' experts. 25 9 Mot. To Exclude Proposed Testimony of Dr. Elzinga (Dkt. 807) ("Elzinga Daubert Motion") at i 26 (emphasis added; footnote omitted). 10 Elzinga Daubert Motion at ii (emphasis added). 27 11 Elzinga Daubert Motion at 19 (emphasis added). 28 2 DEFS.' RESPONSE TO QUESTION FROM CASE MANAGEMENT CONFERENCE MDL No. 4:14-md-02541-CW REGARDING DR. ELZINGA Case No. 4:14-cv-02758-CW 1 The "Conclusion" in Plaintiffs' reply brief likewise asked to exclude only "[t]he opinions of Dr. 2 Elzinga regarding the definition of the relevant antitrust market in this matter, and his opinion that 3 Defendants lacked market power within that market."12 4 Plaintiffs' Daubert briefing did not move to exclude any part of—or ever even mention— 5 Dr. Elzinga's Rebuttal Report or Reply Report.13 And, neither those reports nor the fact that 6 Elzinga was rebutting Plaintiffs' experts was discussed at oral argument or in the Court's order on 7 the Elzinga Daubert Motion.14 Although the Court excluded Dr. Elzinga's affirmative testimony 8 on the grounds that all of it depends in some way on Dr. Elzinga's opinions on the relevant market 9 or market power (a position with which Defendants disagree),15 Defendants should still be allowed 10 to offer Dr. Elzinga to address issues other than the market definition and power in that market and 11 to rebut any affirmative testimony from Dr. Noll and Dr. Rascher. 12 13 14 15 16 17 18 19 12 Reply In Support Of Motions To Exclude Proposed Testimony or Dr. Kenneth G. Elzinga and Dr. James J. Heckman (Dkt. 808) at 24. Plaintiffs did not submit a proposed order on their 20 Elzinga Daubert Motion, see Civ. L.R. 7(c), so these statements from their pleadings provide the only notice to Defendants of the relief sought by Plaintiffs. 21 13 The Elzinga Daubert Motion attaches only three exhibits: Dr. Elzinga's merits expert report, his 22 deposition transcript from this case, and Dr. Noll's rebuttal expert report. Plaintiffs deposed Dr. Elzinga on April 27, 2017, weeks before his Rebuttal Report was served and nearly two months 23 before his Reply Report (his first opportunity to rebut Dr. Noll's opinions) was served. 14 See Jan. 16, 2018 Hr'g Tr. at 9:9-19, 72:21-76:4; Order on Motions to Exclude Proposed Expert 24 Testimony (Dkt. 815) at 4-7. 15 25 Defendants respectfully disagree with the Court's decision to exclude Dr. Elzinga's affirmative testimony on topics other than market definition and market power, see Order on Motions to 26 Exclude Proposed Expert Testimony (Dkt. 815) at 5-7, and reserve all rights to raise that issue on appeal. Through this filing, however, Defendants are not requesting that the Court reconsider its 27 prior order. Rather, Defendants seek only to correct the record in order to preserve their right to offer Dr. Elzinga's rebuttal testimony, which was not addressed in that order. 28 3 DEFS.' RESPONSE TO QUESTION FROM CASE MANAGEMENT CONFERENCE MDL No. 4:14-md-02541-CW REGARDING DR. ELZINGA Case No. 4:14-cv-02758-CW 1 Dated: May 30, 2018 Respectfully submitted, 2 3 WILKINSON WALSH + ESKOVITZ LLP SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 4 By: /s/ Beth A. Wilkinson By: /s/ Jeffrey A. Mishkin 5 Beth A. Wilkinson (pro hac vice) Jeffrey A. Mishkin (pro hac vice) Alexandra M. Walsh (pro hac vice) Karen Hoffman Lent (pro hac vice) 6 Brian L. Stekloff (pro hac vice) Four Times Square Rakesh N. Kilaru (pro hac vice) New York, NY 10036 7 2001 M Street NW, 10th Floor Telephone: (212) 735-3000 Washington, DC 20036 Facsimile: (212) 735-2000 8 Telephone: (202) 847-4000 jeffrey.mishkin@skadden.com Facsimile: (202) 847-4005 karen.lent@skadden.com 9 bwilkinson@wilkinsonwalsh.com awalsh@wilkinsonwalsh.com Raoul D. Kennedy (SBN 40892) 10 bstekloff@wilkinsonwalsh.com 525 University Avenue, Suite 1100 rkilaru@wilkinsonwalsh.com Palo Alto, CA 94301 11 Telephone: (650) 470-4500 Facsimile: (650) 470-4570 Sean Eskovitz (SBN 241877) raoul.kennedy@skadden.com 12 11726 San Vicente Blvd., Suite 600 13 Los Angeles, CA 90049 Attorneys for Defendants Telephone: (424) 316-4000 NATIONAL COLLEGIATE ATHLETIC 14 Facsimile: (202) 847-4005 ASSOCIATION and WESTERN seskovitz@wilkinsonwalsh.com ATHLETIC CONFERENCE 15 Attorneys for Defendant 16 NATIONAL COLLEGIATE ATHLETIC ASSOCIATION 17 18 19 20 21 22 23 24 25 26 27 28 4 DEFS.' RESPONSE TO QUESTION FROM CASE MANAGEMENT CONFERENCE MDL No. 4:14-md-02541-CW REGARDING DR. ELZINGA Case No. 4:14-cv-02758-CW 1 PROSKAUER ROSE LLP MAYER BROWN LLP 2 By: /s/ Bart H. Williams By: /s/ Britt M. Miller Bart H. Williams (SBN 134009) Andrew S. Rosenman (SBN 253764) 3 Scott P. Cooper (SBN 96905) Britt M. Miller (pro hac vice) Kyle A. Casazza (SBN 254061) 71 South Wacker Drive 4 Jennifer L. Jones (SBN 284624) Chicago, IL 60606 Shawn S. Ledingham, Jr. (SBN 275268) Telephone: (312) 782-0600 5 Jacquelyn N. Crawley (SBN 287798) Facsimile: (312) 701-7711 2049 Century Park East, Suite 3200 arosenman@mayerbrown.com 6 Los Angeles, CA 90067 bmiller@mayerbrown.com Telephone: (310) 557-2900 7 Facsimile: (310) 557-2193 Richard J. Favretto (pro hac vice) scooper@proskauer.com 8 1999 K Street, N.W. bwilliams@proskauer.com Washington, DC 20006 kcasazza@proskauer.com 9 Telephone: (202) 263-3000 jljones@proskauer.com Facsimile: (202) 263-3300 10 sledingham@proskauer.com rfavretto@mayerbrown.com jcrawley@proskauer.com 11 Attorneys for Defendant Attorneys for Defendant THE BIG TEN CONFERENCE, INC. 12 PAC-12 CONFERENCE 13 POLSINELLI PC ROBINSON BRADSHAW & HINSON 14 By: /s/ Leane K. Capps By: /s/ Robert W. Fuller 15 Leane K. Capps (pro hac vice) Robert W. Fuller, III (pro hac vice) Caitlin J. Morgan (pro hac vice) Nathan C. Chase Jr. (SBN 247526) 16 2950 N. Harwood Street Lawrence C. Moore, III (pro hac vice) Suite 2100 Pearlynn G. Houck (pro hac vice) 17 Dallas, TX 75201 Amanda R. Pickens (pro hac vice) Telephone: (214) 397-0030 101 N. Tryon St., Suite 1900 18 lcapps@polsinelli.com Charlotte, NC 28246 cmorgan@polsinelli.com Telephone: (704) 377-2536 19 Facsimile: (704) 378-4000 Amy D. Fitts (pro hac vice) rfuller@rbh.com 20 Mit Winter (SBN 238515) nchase@rbh.com 120 W. 12th Street lmoore@rbh.com 21 Kansas City, MO 64105 phouck@rbh.com Telephone: (816) 218-1255 apickens@rbh.com 22 afitts@polsinelli.com mwinter@polsinelli.com Mark J. Seifert (SBN 217054) 23 Seifert Law Firm Wesley D. Hurst (SBN 127564) 425 Market Street, Suite 2200 24 2049 Century Park East, Suite 2300 San Francisco, CA 94105 Los Angeles, CA 90067 Telephone: (415) 999-0901 25 Telephone: (310) 556-1801 Facsimile: (415) 901-1123 whurst@polsinelli.com mseifert@seifertfirm.com 26 Attorneys for Defendants Attorneys for Defendant 27 THE BIG 12 CONFERENCE, INC. and SOUTHEASTERN CONFERENCE CONFERENCE USA, INC. 28 5 DEFS.' RESPONSE TO QUESTION FROM CASE MANAGEMENT CONFERENCE MDL No. 4:14-md-02541-CW REGARDING DR. ELZINGA Case No. 4:14-cv-02758-CW 1 SMITH MOORE LEATHERWOOD LLP COVINGTON & BURLING LLP 2 By: /s/ D. Erik Albright By: /s/ Benjamin C. Block D. Erik Albright (pro hac vice) Benjamin C. Block (pro hac vice) 3 Gregory G. Holland (pro hac vice) One CityCenter 300 North Greene Street, Suite 1400 850 Tenth Street, N.W. 4 Greensboro, NC 27401 Washington, DC 20001-4956 Telephone: (336) 378-5368 Telephone: (202) 662-5205 5 Facsimile: (336) 433-7402 Facsimile: (202) 778-5205 erik.albright@smithmoorelaw.com bblock@cov.com 6 greg.holland@smithmoorelaw.com Rebecca A. Jacobs (SBN 294430) 7 Jonathan P. Heyl (pro hac vice) One Front Street 101 N. Tryon Street, Suite 1300 San Francisco, CA 94111-5356 8 Charlotte, NC 28246 Telephone: (415) 591-6000 Telephone: (704) 384-2625 Facsimile: (415) 591-6091 9 Facsimile: (704) 384-2909 rjacobs@cov.com jon.heyl@smithmoorelaw.com 10 Attorneys for Defendant Charles LaGrange Coleman, III (SBN 65496) AMERICAN ATHLETIC CONFERENCE 11 HOLLAND & KNIGHT LLP 50 California Street, Suite 2800 12 San Francisco, CA 94111-4624 Telephone: (415) 743-6900 13 Facsimile: (415) 743-6910 ccoleman@hklaw.com 14 Attorneys for Defendant 15 THE ATLANTIC COAST CONFERENCE 16 WALTER HAVERFIELD LLP BRYAN CAVE LLP 17 By: /s/ R. Todd Hunt By: /s/ Meryl Macklin 18 R. Todd Hunt (pro hac vice) Meryl Macklin (SBN 115053) Benjamin G. Chojnacki (pro hac vice) 560 Mission Street, 25th Floor 19 The Tower at Erieview San Francisco, CA 94105 1301 E. 9th Street, Suite 3500 Telephone: (415) 268-1981 20 Cleveland, OH 44114-1821 Facsimile: (415) 430-4381 Telephone: (216) 928-2935 meryl.macklin@bryancave.com 21 Facsimile: (216) 916-2372 rthunt@walterhav.com Richard Young (pro hac vice) 22 bchojnacki@walterhav.com Brent Rychener (pro hac vice) 90 South Cascade Avenue, Suite 1300 23 Attorneys for Defendant Colorado Springs, CO 80903 MID-AMERICAN CONFERENCE Telephone: (719) 473-3800 24 Facsimile: (719) 633-1518 richard.young@bryancave.com 25 brent.rychener@bryancave.com 26 Attorneys for Defendant MOUNTAIN WEST CONFERENCE 27 28 6 DEFS.' RESPONSE TO QUESTION FROM CASE MANAGEMENT CONFERENCE MDL No. 4:14-md-02541-CW REGARDING DR. ELZINGA Case No. 4:14-cv-02758-CW 1 JONES WALKER LLP 2 By: /s/ Mark A. Cunningham Mark A. Cunningham (pro hac vice) 3 201 St. Charles Avenue New Orleans, LA 70170-5100 4 Telephone: (504) 582-8536 Facsimile: (504) 589-8536 5 mcunningham@joneswalker.com 6 Attorneys for Defendant SUN BELT CONFERENCE 7 8 FILER'S ATTESTATION 9 I, Bart H. Williams, am the ECF user whose identification and password are being used to 10 file Defendants' Response to Question from Case Management Conference Regarding Dr. Elzinga. 11 In compliance with Local Rule 5-1(i)(3), I hereby attest that all signatories hereto concur in this 12 filing. 13 /s/ Bart H. Williams 14 15 CERTIFICATE OF SERVICE 16 I hereby certify that on May 30, 2018, I electronically filed the foregoing document with 17 the Clerk of the Court using the CM/ECF system which will send notification of such filing to the 18 e-mail addresses registered in the CM/ECF system, as denoted on the Electronic Mail Notice List. 19 20 /s/ Bart H. Williams 21 22 23 24 25 26 27 28 7 DEFS.' RESPONSE TO QUESTION FROM CASE MANAGEMENT CONFERENCE MDL No. 4:14-md-02541-CW REGARDING DR. ELZINGA Case No. 4:14-cv-02758-CW