Summary Judgment Granted in Mayer Laboratories v. Church & Dwight

Josh Wright —  25 April 2012

Judge Edward Chen in the Northern District of California granted Church & Dwight’s motion for summary judgment as to Mayer Laboratories antitrust claims involving Church & Dwight’s shelf space agreements with retailers in the condom market.  Church & Dwight is the manufacturer of Trojan brand condoms.  Specifically, Mayer argued that Church & Dwight’s shelf space share discounts with retailers — all units discounts triggered upon the retailer committing a specified percentage of its condom shelf space to Trojan products — prevented Mayer from competing by denying it access to retailer shelf space and thus allowed Church & Dwight to unlawfully monopolize the condom market.

Judge Chen’s opinion is available here (and at 2012 WL 1231801).  Judge Chen’s opinion is lengthy and correspondingly thorough; summary judgment was granted on a number of independent grounds, including lack of antitrust injury, failure to demonstrate substantial foreclosure, and insufficient evidence of monopoly power.  I was the economic expert witness for Church & Dwight in the case (along with my colleague at Charles River Associates, Serge Moresi, who filed a rebuttal report) and am obviously quite pleased with the outcome and that Judge Chen relied upon my analysis in reaching these conclusions.

Notwithstanding my private interest in the case, I suspect our readers will find the opinion interesting both respect to the handling of economic evidence, but also with respect to the analysis of shelf space share discounts, which have been the focus of some recent speeches by agency economists.  Judge Chen’s opinion also directly addresses both traditional foreclosure based analysis of allegedly exclusionary agreements as well as the more novel “tax effect” theories.  While I cannot comment on the case directly, I thought some of our readers might be interested in seeing the opinion.

Professor Wright, a recognized authority on vertical contractual arrangements at the George Mason University School of Law, filed expert and rebuttal reports in anticipation of trial. Serge Moresi, CRA’s Director of Competition Modeling, filed a rebuttal report in response to the claims of Mayer Laboratories’ economic experts. Professor Wright and Dr. Moresi explained why, both factually and conceptually, the opposing experts’ claims were substantially flawed. Relying extensively on the evidence and analysis presented by CRA’s economic experts, the Court granted summary judgment in Church & Dwight’s favor with regard to each of the antitrust claims raised in this case.

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