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

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

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.

Landmark Settlements in Global Capacitors Price-Fixing Case Secured

Landmark Settlements in Global Capacitors Price-Fixing Case Secured

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

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

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)

Infotech Businesses Aid in $101.35 Million Settlement for West Virginia DOT

Infotech Businesses Aid in $101.35 Million Settlement for West Virginia DOT

Infotech houses two distinct operating businesses, Systems and Consulting. However, both businesses were born out of one request by the Florida Attorney General 42 years ago: can computerized statistical techniques be developed to detect bid rigging in public procurement?  The answer was yes, and Systems has been working with individual states ever since to make the highway construction industry more efficient and competitive while Consulting has been successfully helping states estimate damages when bid rigging is detected. This collaboration between businesses is still making an impact today, most recently in West Virginia. 

In 2014, the Assistant Director of the West Virginia Department of Highways felt there were significant issues in their bidding process. After a preliminary analysis in 2015, Infotech began a thorough analysis of West Virginia AASHTOWare Project BAMS/DSS™ data going back to 1996. Infotech also obtained comparison data with cooperation from surrounding states including Ohio, Kentucky, Virginia, Pennsylvania and Maryland. 

Data revealed that certain parts of the state were not competitive and, as a result, the West Virginia Attorney General and the Department of Transportation filed suit in 2017 against big name asphalt companies. Defendants attacked the reliability of the BAMS/DSS data and the subsequent analysis, but expert statistical consultant and Infotech co-founder Dr. Jim McClave, and Jeff Derrer, Infotech Senior Business Analyst, vigorously defended the data through multiple depositions and held steadfast in their knowledge that the data could only be explained by collusive behavior. After years of litigation, the case settled for $103,500,000, the largest antitrust settlement in West Virginia history. This was a victory for West Virginia and for both businesses of Infotech.

State of West Virginia, ex rel. Patrick Morrisey, Attorney General and Paul A. Mattox, Jr. in his Official Capacity as Secretary of Transportation and Commissioner of Highways, West Virginia Department of Transportation, v. CRH Plc, Oldcastle Inc, et al. Case No. 17-C-41, Cir. Ct of Kanawha County, WV (2017)

Petroleum Marketing Practices Act  – Violation Damages Proved Unreliable

Petroleum Marketing Practices Act – Violation Damages Proved Unreliable

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

Infotech Consulting Upholds Statistical Standards in Construction Defects Sampling

Infotech Consulting Upholds Statistical Standards in Construction Defects Sampling

Infotech Consulting was retained on behalf of Beazer Homes in a class action suit filed by Heritage Commons Townhome Association alleging breach of implied warranty, violation of Florida building codes, and negligence in construction of an 89-unit townhome project in Seminole County, Florida. Plaintiffs maintained that defects observed in their homes’ exteriors, windows, and architectural elements were due to systematic issues in the original design and construction of the buildings. The class claimed that as a direct and proximate result of Beazer’s negligence, large sums of money would be required to repair the defects and deficiencies and to maintain the property and buildings going forward.

The Plaintiffs retained a statistical expert who collected the results from the destructive testing performed on the buildings in the townhome project, then designed a sampling methodology and performed analyses intended to determine the likelihood of systemic defects contributing to the observed defects, as well as the need for repair or replacement. Dr. Jamie McClave Baldwin was hired by the Defendant to evaluate the methodology employed and conclusions drawn by the Plaintiff’s expert. Dr. McClave Baldwin conducted a rigorous review of the opposing expert’s sampling methods and thoroughly evaluated the data used in his calculations of confidence intervals and estimated defect rates. Infotech Consulting’s attention to statistical standards of reproducibility and reliability demonstrated that the Plaintiffs’ expert analyses were biased and not based on sound statistical principles, thus rendering his conclusions unreliable. The case was settled in a manner favorable to defendants in February 2020 for an undisclosed amount.

Heritage Commons Townhome Association, Inc v. Beazer Homes Corp., No. 2016-CA-002447-11E-W (Circuit Court for the Eighteenth Judicial Circuit in and For Seminole County, Florida)