Background
DirecTV subscribers brought this class action against the NFL, its teams, and related entities under Sections 1 and 2 of the Sherman Act. They challenged three interlocking agreements that pooled NFL teams’ telecasting rights, licensed in-market games to CBS and Fox, and gave DirecTV exclusive rights to distribute out-of-market games through Sunday Ticket.
At trial, the subscribers used economic experts to contend that the arrangements reduced competition and caused Sunday Ticket purchasers to pay inflated prices. The jury found for the subscribers and awarded $4.61 billion to the residential class and $96.9 million to the commercial class. After the verdict, the district court excluded the experts’ testimony under Federal Rule of Evidence 702, entered judgment as a matter of law for the NFL, and conditionally ordered a new damages trial.
The Court’s Holding
The Ninth Circuit held that the district court abused its discretion by excluding the subscribers’ expert testimony. The court held that the district judge went beyond Rule 702’s gatekeeping function by weighing the persuasiveness of the experts’ conclusions and resolving factual disputes about their but-for models. The experts’ use of a college-football comparator and a direct-to-consumer model presented issues for the jury, not grounds for exclusion merely because the NFL could impeach them.
Because the judgment as a matter of law rested on the erroneous exclusions, the court reversed that judgment and directed the district court to reinstate the jury’s liability verdict. It nevertheless affirmed the conditional order for a new trial on damages. The district court permissibly inferred that the jury had calculated damages from the difference between Sunday Ticket’s list price and an estimated actual price—a discount rather than an overcharge—and had not properly applied the evidence or damages instruction.
Key Takeaways
- Rule 702 does not permit a court to exclude otherwise reliable expert testimony simply because its assumptions or conclusions are debatable.
- Whether a proposed comparator is sufficiently similar to support a yardstick analysis may be a jury question when the expert provides a sufficient factual foundation.
- The subscribers’ liability verdict must be reinstated, but damages must be retried because the jury’s award was not based on a proper overcharge calculation.
Why It Matters
The decision reinforces the boundary between judicial screening of expert methodology and the jury’s role in evaluating competing economic evidence, particularly in antitrust cases requiring a but-for pricing model.
It also shows that even where liability is supported by admissible expert evidence, a damages verdict remains vulnerable when the award itself reveals a calculation inconsistent with the court’s instructions and the trial proof.