EI News and Notes Summer 2016

CertainTeed Summary Judgment

U.S. District Judge Michael Baylson granted CertainTeed’s motion for summary judgment in a multi-district price-fixing litigation but ordered all other remaining drywall manufacturers to remain in the case. EI Chairman Barry C. Harris testified at deposition on behalf of CertainTeed. Plaintiffs alleged that beginning in 2011 the defendants conspired to raise prices by 35% and stop providing customers with job quotes. The opinion agreed with CertainTeed that it had independently followed pricing moves by its competitors. Dr. Harris’ analysis considered whether CertainTeed’s pricing actions were in its independent economic interest, which involved consideration of CertainTeed’s cost structure and product mix. EI economists Stephanie Mirrow and Su Sun also worked on the case. CertainTeed was represented by White & Case.

Jury Rejects Wage-Hour Classes’ Claims

EI President Jonathan L. Walker testified at trial on behalf of Taco Bell Corporation and Taco Bell of America, Inc. in Medlock v. Taco Bell et al. The matter involved alleged violations of California wage-hour laws. Dr. Walker’s testimony concerned liability to members of two classes of present and former Taco Bell employees. Plaintiffs had sought over $169 million in damages and penalties on behalf of these classes. A federal jury rejected both classes’ claims. The jury found in favor of a third class and awarded $496,000 in damages to its members. EI Senior Economists Erica Greulich and James Bono and Economist Anna Koyfman also worked on the case. Taco Bell was represented by Shephard, Mullin, Richter & Hamilton.

Study on Regulation of Business Broadband

EI Principal Hal J. Singer recently did a study for USTelecom of a proposal that the Federal Communications Commission begin to regulate the prices of business broadband services. He found no evidence of a lack of competition in the industry. To the contrary, business broadband prices have been declining, and the industry has been growing rapidly. Thus, there is no reason for regulation. Regulation is likely to slow the industry’s growth. Dr. Singer estimated that regulation would eliminate 43,560 jobs, cut economic output by $3.4 billion over a five-year period, and prevent 67,000 buildings from getting access to fiber.