When does the expert’s conjuring leave you seeing stars?

In an antitrust case, the plaintiff claimed that one of defendant’s plants was not efficient and was pricing below average variable cost. An important component of variable cost was transportation expense, measured by transport time of delivery trucks. A computerized transmitter had been installed in each truck so that the home station could receive transport times. Monthly summaries were produced for each plant as part of the regular reporting schedule.

The defendant’s economist failed to examine both deposition testimony and underlying trip tickets to discover that the transmissions from the subject plant were unreliable due to its distance from the plant to the home station. Transmissions were frequently lost or incomplete. When transmissions were incomplete, the computer recorded zero time for the trip. The monthly summaries used by the economist included the zero-time tasks, giving the mistaken impression that the subject plant was even more efficient as the other plants with complete reporting. These monthly summaries formed the economist’s proof that price was not below average variable cost. The economist’s credibility was lost due to a failure to carefully examine the underlying data. Much of the evidence used by the economist suggested that, at the subject plant, trucks could move at the speed of light.