Background
DirecTV subscribers brought a Sherman Act class action against the NFL, its teams, and related entities over Sunday Ticket, an out-of-market NFL game package. They alleged that the NFL’s agreements pooling teams’ telecast rights, licensing in-market broadcasts to CBS and Fox, and exclusively licensing out-of-market broadcasts to DirecTV suppressed competition and caused subscribers to pay inflated Sunday Ticket prices.
A jury found for residential and commercial subscriber classes and awarded about $4.61 billion and $96.9 million, respectively. After the verdict, the district court excluded the subscribers’ economic experts under Federal Rule of Evidence 702, entered judgment as a matter of law for the NFL, and conditionally ordered a new trial on damages.
The Court’s Holding
The Ninth Circuit held that the district court abused its discretion by excluding the testimony of economists Daniel Rascher and Douglas Zona. The court concluded that the district court went beyond Rule 702’s gatekeeping function by weighing impeachable aspects of the experts’ conclusions rather than assessing whether their methods were reliable and supported by sufficient facts.
Because the judgment as a matter of law rested on those erroneous exclusions, the court reversed it and directed the district court to reinstate the jury’s liability verdict. But the court affirmed the conditional order for a new damages trial: the jury’s figures showed it had calculated damages from the difference between Sunday Ticket’s list price and an estimated actual price, a discount rather than the required antitrust overcharge, and failed to account properly for commercial pricing.
Key Takeaways
- Rule 702 does not permit a court to exclude otherwise reliable expert economic testimony merely because it is vulnerable to cross-examination.
- Whether a comparator market is sufficiently similar for a yardstick analysis is generally a jury question when the expert supplies a reasonable factual foundation.
- The subscribers’ liability verdict must be reinstated, but damages must be retried because the jury used an unsupported damages calculation.
Why It Matters
The decision reinforces the line between judicial gatekeeping and jury factfinding in complex antitrust cases relying on counterfactual economic models. Courts may exclude speculative or methodologically unreliable testimony, but may not resolve disputes over the persuasiveness of competing expert conclusions under Rule 702.
It also illustrates that a supported liability verdict does not save a damages award when the verdict itself reveals that the jury did not calculate injury according to the evidence and instructions.