Infotech Consulting Provides Expert Testimony and Analysis in Long-Awaited Opioid Trial

Infotech Consulting Provides Expert Testimony and Analysis in Long-Awaited Opioid Trial

by | Apr 11, 2022 | Case Updates

May 2022 Update: Four years of work on the monumental opioids case ended on May 4, 2022 as Walgreens settled in the middle of trial for $683 million, bringing the State of Florida’s total recovery to nearly three billion dollars. This was one of our teams’ most difficult cases, both from an analytical and emotional perspective. You can read more about our experience in the trial on Dr. Jim McClave’’s blog article.

For more than two decades, the opioid epidemic has wreaked havoc on our country, killing hundreds of thousands of Americans, destroying lives, splitting families, and costing taxpayers billions upon billions of dollars. Among the thousands of legal actions being fought against opioid manufacturers and distributors, the State of Florida is finally having its day in court with the trial of its claims originally brought in 2018 commencing the week of April 5. Through it all, Infotech Consulting has been part of a team of experts retained by the State to examine the economic impact of the opioid epidemic in Florida and ensure that the Defendants (in this case, 12 major manufacturers and distributors) do not profit from the opioid crisis. 

As trial begins against the sole remaining defendant, Walgreens, Infotech Consulting will be the first team to present damages estimates to a jury. Dr. Jim McClave, CEO and Expert Statistician/Econometrician, and Dr. Rob Kneuper, Expert Economist, are expected to testify as expert witnesses on behalf of the State of Florida. Infotech Consulting is proud to be part of a large and dedicated trial team, working to hold accountable those who contributed to the opioid crisis. 

According to its Amended Complaint against the opioid manufacturers and distributors, the State of Florida alleged, “Defendants cooperated to sell and ship ever-increasing quantities of opioids into Florida. To create newfound demand for opioids, Defendants used unfair and misleading marketing- including the use of front groups, paid “opinion leaders,” and Continuing Medical Education courses (“CMEs”) – to convince both doctors and patients that opioids could safely be prescribed for common ailments that cause chronic pain. To meet the artificially inflated demand, Defendants sold, shipped, and dispensed opioids in quantities that could not possibly have been medically justified and in the face of clear evidence that opioids were being diverted for illegitimate uses. Defendants’ plan succeeded, and they recorded multibillion-dollar profits as a result.” 

Infotech Consulting experts Dr. Jim McClave and Dr. Rob Kneuper were hired in this case to analyze two distinct economic impacts of the Opioid Epidemic: damages to the State of Florida and profits made by the defendants as a result of the opioid crisis. Dr. McClave’s analysis, which worked to quantify the historical damages to Florida as a result of the defendants’ alleged misconduct, covered a variety of costs inflated as a result of the opioid crisis, including healthcare costs, criminal justice costs, child welfare costs, drug treatment costs, and lost tax revenue. Dr. Kneuper analyzed Defendants’ profits resulting from their sale and distribution of opioids. The Infotech Consulting team spent the last several years preparing these detailed analyses.

The State of Florida has reached settlements with 11 of the 12 Defendants to date. Recently, Florida reached agreements totaling $870 million with defendants CVS, Allergan, and Teva. The State previously had secured $1.6 billion from other defendants as part of a previous nation-wide settlement.

Seven Years: Life During Capacitor Class Action Litigation

Seven Years: Life During Capacitor Class Action Litigation

by | Feb 28, 2022 | Blog

The superstition that a broken mirror brings seven years of bad luck stems from the Ancient Roman belief that the body renews itself every seven years and that any misfortunes would be remedied after that period of time had passed. I Googled to see if there was anything on the flip side of that coin – was there anything that might bring seven years of good luck? So far I’ve struck out.

Seems that maybe for seven years of good luck you need a combination of comradery, intellect, grit, hard work, integrity, great relationships with colleagues and clients, and one heck of a support staff at work and at home. And this is exactly the recipe that was behind our success in the Capacitors Class Action litigation.

In 2015, Infotech Consulting was first hired by Direct Purchaser Plaintiffs to determine whether capacitor prices were elevated to the direct purchasers, and if so, by how much and how persistently across the class (say that three times fast). I was a Project Manager with Infotech at that time – with no major leadership responsibilities outside of raising my three kids who were 15, 11 and 7 at the time. Seven years later, at the conclusion of the case, I am now President of Infotech Consulting, and my kids have let me know that my leadership “expertise” is no longer needed thankyouverymuch because they are wise citizens of the world at 22, 18 and 14 years old.

In the time that we worked on Capacitors, Infotech Consulting doubled our experts, with the addition of Ph.D. economists Rob Kneuper and Kevin Caves. We increased our staff by 50 percent. We had retirements, kids graduate from high school and college, marriages, and new babies. We’ve become good friends with clients who were once strangers. In short: a whole lot of life happened while we worked on Capacitors.

Seeing that case from pre-discovery through class certification, two trials, and final settlements has been a team achievement for which we will forever be proud. There isn’t one person on our team who didn’t bang their head in frustration work incredibly hard on our database creation, research, and multivariate analysis for Capacitors. Twenty Defendant databases; 100s of 1000s of product codes in need of a secret decoder ring to decipher; 10s of 1000s of data files, most in need of translation, many with missing information that wouldn’t allow us to move forward; all told, our team spent over 30,000 hours to provide analysis and four reports, two depositions, hot tub testimony, and testimony and support during two trials, the first interrupted by a very pesky and persistent pandemic. So much of our work was like that 1000 piece puzzle you worked on over the holidays only to find that the dog ate the last 3 pieces. Or that the pieces from 20 different puzzles had been mixed together. But we sorted it all out. Patiently. Carefully. And put the puzzle together in a way that would withstand 13 opposing experts’ critiques, cross examination from some of the most respected attorneys in Antitrust law, and scrutiny from one very tough but fair Federal Judge.

So what was behind the successful outcome of this intense litigation? Seven years of good luck? Maybe. We for sure had our share. But I’d say our dedication to integrity, our never-give-up attitude, and the synergy that happens when you put top legal minds together with top econometric minds had something to do with it. It is rare we have the opportunity to be involved in every step of a litigation. It was an honor and a pleasure to do so here. I hope we have many more chances in the future.

Landmark Settlements in Global Capacitors Price-Fixing Case Secured

Landmark Settlements in Global Capacitors Price-Fixing Case Secured

by | Jan 20, 2022 | Case Updates

Just before the holidays, Infotech Consulting and its clients celebrated the successful conclusion to the sprawling In Re Capacitors Litigation, with the parties announcing a final settlement had been reached with Nippon Chemi-Con (“NCC”). This was the last of more than 20 defendants accused of participating in a global conspiracy to fix the prices of capacitors. Plaintiffs alleged that price-fixing in this multibillion-dollar market began as far back as 2002 and continued for over a decade. The conspiracy spanned hundreds of thousands of capacitor products of various size, capacitance, and materials. Even before the NCC settlements, other defendants had agreed to settlements totaling $439.6 million. With the NCC settlements, all defendants have agreed to refund over $600 million in overcharges.

So, what exactly is a capacitor? Well, you’ve likely relied on them every day without ever noticing it (including right now as you read this on your computer or phone). A capacitor is a device that stores electrical energy in an electric field. They range in size from miniscule (fitting into a phone) to extremely large (think jet engines). They are essential components of electrical systems like TVs, smart phones, cameras, appliances, cars, medical devices, lighting, computers, and so much more. And yes – there are numerous capacitors in one product. Trillions of them are manufactured each year.

The rigorous statistical basis for the damages and impact analysis resulting in the extraordinary settlements came from Dr. Jim McClave, Dr. Jamie McClave Baldwin, Dr. Allison Zhou and the work of the entire Infotech Consulting team, backed by extensive research, data analysis, consulting, and expert testimony spanning a period of over seven years. These efforts culminated in multiple expert reports, two depositions, and expert testimony in both a concurrent expert witness proceeding (“hot tub”) and, finally, at trial. “Hot tubbing” is a process that some courts are adopting in which judges hear sworn testimony from opposing experts simultaneously (think live debate), rather than the traditional direct and cross examination of each expert separately.

The trial was originally scheduled for March 2020, but was suspended due to the emerging pandemic. Fast forward 20 months later, and the parties were back in the courtroom for trial. Dr. Jamie McClave Baldwin worked tirelessly alongside our clients during the (over two week) trial, providing expertise, research and support at every turn and twist of the trial proceedings.

In announcing the landmark settlements reached, representatives from Joseph Saveri Law Firm stated, “We strongly believe these ground-breaking settlements will deter this type of collusive behavior in the future, to the benefit of us all.”

Infotech Consulting celebrates this win, not only for our clients but for the numerous consumers affected by the global conspiracy of manufacturers to fix, raise, and maintain prices of capacitors at an elevated level.

“This win represents what our team does best – use our expertise, knowledge, and passion to fight for what is right,” shared Dr. Jamie McClave Baldwin, Expert and President of Infotech Consulting. “We are proud to have been involved in this case from the beginning of discovery, through class certification and both trials – over seven years of work. Other firms came and went, but our team never backed down from the challenge. It was this dedication and effort that helped produce outstanding results for our extraordinarily talented clients and the class of direct purchasers.”

Re Capacitor Antitrust Litigation (2017) Case No. 3:17-md-02801, U.S. Dist. Ct. N. Dist. California.

Infotech Consulting’s Expert Analysis helps Geico Insurance battle Auto Glass Shops

by | Sep 30, 2021 | Case Updates

Florida has a unique auto insurance law that allows those insured to have the windshield of their vehicle repaired or replaced without triggering their deductible.  In other words, insured drivers can get their windshield replaced with no out of pocket cost. There are only four other states with this unique provision: Arizona, Kentucky, Massachusetts and South Carolina. This has created a unique market whereby those insured are not involved financially in the transaction, leaving just the insurance company and the auto glass shop.  Auto glass shops have the insured assign their benefits to the glass shop upon completion of the installation or repair, which allows the auto glass shop to pursue any litigation against the insurance company without involving the insured.

Why is that important?  Why would the auto glass shop need to litigate against the insurance company over a windshield replacement?  Because auto glass shops in Florida are claiming insurance companies are not paying the full amount on the invoice.  Suit after suit by auto glass shops allege that insurance companies, like GEICO, are underpaying on the invoices for windshield replacements by relying on a reduced retail rate.  This issue has increased dramatically with about 400 Assignment of Benefit (AOB) lawsuits filed against multiple auto insurers statewide in 2006 to a peak of about 24,000 in 2017.  There was a reduction in the number of cases filed in 2018 and 2019 – with around 17,000 filed each year – but that is still quadruple the number filed a few years back.  

In 2018, Infotech was hired by GEICO to analyze GEICO’s windshield replacement prices throughout the state of Florida to determine if GEICO was paying auto glass shops the prevailing competitive price. In GEICO’s auto insurance agreements, there is a limit of liability provision stating, “Although you have the right to choose any repair facility or location, the limit of liability for repair or replacement of such property is the prevailing competitive price, which is the price we can secure from a competent and conveniently located repair facility.” Over the last five years, Dr. Jim McClave has testified in numerous cases that the GEICO transaction data show GEICO was regularly able to secure its price from glass shops throughout Florida.  

The crux of these cases come down to whether GEICO pays a prevailing competitive rate for windshield replacement or whether the invoice amount from the glass shops represent the prevailing competitive price.  Infotech analyzed over 140,000 GEICO windshield replacement transactions between 2013-2018 involving over 1,200 auto glass shops in Florida. After analyzing the data, Dr. McClave and the Infotech Consulting team determined the claims data reveal GEICO’s payments for windshield replacements are consistent with prevailing competitive prices.  In every year of analysis, a majority of glass shops are commonly charging a rate at or near the agreed-upon GEICO price.

Dr. McClave has offered his expert opinion in nearly 100 cases on this issue.  In each instance thus far, Dr. McClave and his team have analyzed the invoiced prices submitted by the glass companies for the claims at issue and found that they were out of line with the prevailing competitive price charged in the market.  He has testified in multiple depositions and several trials, with the most recent trials last spring.  In fact, the GEICO trials in April 2021 represented Infotech’s return from a year-long hiatus of trial appearances due to Covid-19.  In the trial on April 13th and 14th of 2021, Superior Auto Glass argued that GEICO did not fully pay Superior’s invoiced amount for a windshield replaced on an insured car in 2015.  The jury returned a verdict in favor of the Defense, finding that GEICO paid a prevailing competitive price and that the auto shop had knowledge of the GEICO rate before accepting the work and invoicing GEICO far in excess of that rate. 

As Infotech Consulting President Dr. Jamie McClave Baldwin recently said, “When the jury came back with a finding in favor of our client, it confirmed the effectiveness and irreplaceable value of in-person court appearances. How gratifying it was to see our client get a favorable result in a case that has been litigated since 2016 and has gone up and down the appeals circuit.”

Until there is Florida legislative action or higher court authority on this matter, the Infotech Consulting team will continue to provide statistical analysis to this evolving market of litigation.

1 Florida Statute §627.7288 (2021)

Petroleum Marketing Practices Act – Violation Damages Proved Unreliable

by | Jul 1, 2020 | Uncategorized

Infotech Consulting’s Expert Economist Dr. Rob Kneuper was hired by counsel for the Defendant, Southeast Petro, a gasoline distributor for Motiva Enterprises, a Shell affiliate, to evaluate the damages methodology and estimates produced by the Plaintiff’s expert. Plaintiff LLB Convenience and Gas, Inc. brought suit against Southeast Petro in the U.S. District for the Middle District of Florida, claiming a violation of the Petroleum Marketing Practices Act and a breach of contract. 

Dr. Kneuper and the Infotech Consulting team reviewed the damages analysis put forth and conducted their own detailed econometric analyses using the Plaintiff’s financials. Through a report and deposition in fall 2019 and testimony at trial in February 2020, Dr. Kneuper identified substantial flaws in the work of the Plaintiff’s expert. In June 2020, District Court Judge Paul G. Byron ruled in favor of Southeast Petro, echoing Dr. Kneuper’s findings that the Plaintiff’s expert’s methodology was unreliable. 

LLB Convenience & Gas, Inc. v. Southeast Petro Distributors, Inc., In the United States District Court for the Middle District of Florida, Case No.: 6:18-cv-00914-PGBTBS