Quantifying Damages

Pages87-102
CHAPTER 4
QUANTIFYING DAMAGES
Once a private antitrust plaintiff has shown that it has sustained
antitrust injury, the law tends to be less demanding with respect to the
damages methodology a plaintiff uses to quantify its damages. In practice,
courts have applied a “reasonableness” standard which accommodates the
reality that the quantification of damages is necessarily subject to greater
uncertainty than simply proving the fact of injury. This chapter will
discuss the standard of proof for antitrust damages, the but-for premise
that underlies antitrust damage analysis, quantification methodologies,
and mitigation.
A. The Standard of Proof for Proving Antitrust Damages
Before being entitled to damages, the private antitrust plaintiff must
establish that a violation of the antitrust laws occurred, that the plaintiff
sustained antitrust injury, and that the plaintiff has “standing” under the
antitrust laws to seek monetary damages.1 Throughout this chapter, and
the remainder of this handbook, the discussion will assume that these bars
have been met and will refer to “violations” rather than “alleged
violations.” Damages experts likewise assume liability for the purpose of
analysis, often before liability is in fact established. The damages analysis
will come into play if and only if liability is established. While proving the
existence of antitrust injury may be an exacting task, “a lesser level of
proof is needed to support the amount of damages[.]”2
The “level of proof” needed to prove the quantum of antitrust damages
suffered by a plaintiff was set in a trio of cases decided by the Supreme
Court in the first half of the twentieth century: Eastman Kodak Co. v.
1. Associated Gen. Contractors v. Cal. State Council of Carpenters (AGC),
459 U.S. 519, 536 (1983) (only certain “part[ies] injured by an antitrust
violation may recover treble damages”). For a fuller discussion of antitrust
injury and which plai ntiffs may recover da mages, see AMERICAN
ANTITRUST INSTITUTE, PRIV ATE ENFORCEMENT OF ANTITRUST LAW IN
THE UNITED STATES 64-94 (2012).
2. Los Angeles Mem’l Coliseum Comm’n v. NFL, 791 F.2d 1356, 1360 (9th
Cir. 1986). See also In re Scrap Metal Antitrust Litig., 527 F.3d 517, 533
(6th Cir. 2008) (“Once liability is established . . . a plaintiff's proof of
damages is evaluated under a more lenient standard.”).
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88 Proving Antitrust Damages
Southern Photo Materials Co.,3 Story Parchment Co. v. Paterson
Parchment Paper Co.,4 and Bigelow v. RKO Radio Pictures.5 They remain
the leading cases on this point.6 In Eastman Kodak, the Court was
unmoved by defense contentions that “plaintiff’s damages were purely
speculative” and “not of an amount susceptible of expression in
figures[.]”7 The Court reasoned that “a defendant whose wrongful conduct
has rendered difficult the ascertainment of the precise damages suffered
by the plaintiff, is not entitled to complain that they cannot be measured
with the same exactness and precision as would otherwise be possible.”8
The Court held that “[d]amages are not rendered uncertain because they
cannot be calculated with absolute exactness. It is sufficient if a reasonable
basis of computation is afforded, although the result be only
approximate.”9
The Court echoed its Eastman Kodak holding in Story Parchment,
observing that “it would be a perversion of fundamental principles of
justice to deny all relief to the injured person, and thereby relieve the
wrongdoer from making any amend for his acts.”10 Thus, while “damages
may not be determined by mere speculation or guess, it will be enough if
the evidence shows the extent of the damages as a matter of just and
reasonable inference, although the result be only approximate.”11
In Bigelow, the Court added: “[a]ny other rule would enable the
wrongdoer to profit by his wrongdoing at the expense of his victim.”12 To
avoid the injustice of allowing the defendant to improperly retain its illicit
profits, a jury is allowed to make a “just and reasonable” estimate of
damages based on either direct or inferential proof.13
Given these circumstances, damages may be awarded despite
imperfect proof. Judges must “observe the practical limits of the burden of
3. 273U.S. 359 (1927).
4. 282 U.S. 555 (1931).
5. 327 U.S. 251 (1946).
6. The Supreme Court ha s recently reaffirmed this line of precedent,
observing in the antitrust context that damages “calculations need not b e
exact.” Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1433 (2013) (citing
Story Parchment, 282 U.S. at 563).
7. Eastman Kodak, 273 U.S. at 378.
8. Id. at 379.
9. Id. (internal quotes omitted).
10. Story Parchment, 282 U.S. at 563.
11. Id.
12. Bigelow, 327 U.S. 251, 264 (1946).
13. Id.

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