An economics expert in Montana advises on a case involving real estate brokers who are seeking damages for alleged brokerage service anti-competition. Plaintiffs are a class of real estate brokers who allege that a brokerage company imposed policies that prevented innovative member brokers from fairly competing with traditional member brokers reliant on full-service listings. They allege the defendant colluded with shareholders, officers and members to interfere with the innovative member brokers to publicize discount listings through the brokerage’s service, preventing the general public from being exposed to such listings. This exposure would have provided those selling homes in the service area with more competitively-priced options, and in the process, placed downward pressure on the prices charged by traditional brokers in the region, including those charged by the defendant’s member brokers, the plaintiffs allege.
The alleged conspiracy allowed defendants to fix, raise, maintain, and stabilize prices of commissions and other real estate brokerage services charged to plaintiffs and the class members, and caused plaintiffs and the class members to pay higher prices for commissions and other real estate brokerage services for which they directly contracted with brokerage defendants, the plaintiffs claim.
Question(s) For Expert Witness
- 1. Would all members of the proposed class have been injured as a result of the defendants' alleged misconduct because they paid more for the real estate brokerage services they purchased?
- 2. What was the amount of damages suffered by the proposed class?
Expert Witness Response
Based on my market research into the real estate brokerage services in the region and my analysis of prices paid for real estate brokerage services in that market, as well as my training and experience in economics, I have concluded, based on evidence and methods common to the proposed class as a whole, that the alleged misconduct artificially inflated the prices paid for real estate brokerage services for all proposed class members above the level that would have prevailed in the absence of that misconduct, and that no proposed class members could have avoided the effects of those artificially inflated prices.
Certain characteristics of the market for real estate brokerage services in the region are such that, in the absence of any anticompetitive conduct, more vigorous price-based competition between members of the brokerage service would have occurred. Such price-based competition would have reduced the commission rates paid by all proposed class members.
I utilized multiple regression and geographic yardstick analyses to measure damages on a class-wide basis without resorting to individualized inquiry. These analyses indicate that proposed class members paid overcharges of a specified amount.
The expert is a principal of an economic and business consulting group. He has been an economist for more than 20 years and has opined numerous times on class-wide economic issues.