Blawgletter's friend Sam Simon asked us to visit this morning with the Class Action Committee of the New York State Bar's Antitrust Section, and the chair — whom we also count as a friend — Hollis Salzman gave her okay.

You can see below the remarks we wrote out (plus a Q&A at the end to reflect some of the things that happened during the back-and-forth with CAC members):.

Good morning. You are very kind to let me talk with you about the Behrend v. Comcast case. And I thank my friends Sam Simon and your chair Hollis Salzman for granting me this privilege.

Sam asked me to cover a couple of things with you and at the same time urged me to urge all of you to make comments and ask questions any time you want. We'll get the most out of our time if we make it a back and forth, not just with me but also with your colleagues on the Class Action Committee.

I'll start with a sketch of the dynamics of the Comcast case, which we call Cable Antitrust, and of the proceedings before Judge Padova in Philadelphia and then give an overview of the Third Circuit's ruling. Again, please chime in if you have a point you'd like to make or a question you want to ask.

The dynamics of a case that is now almost eight years old have of course changed since the day in December 2003 when we filed it.

The case has always alleged that Comcast violated sections 1 and 2 of the Sherman Act by pursuing a strategy of "clustering" its cable assets in certain metropolitan areas. It executed the strategy largely by gobbling up other cable providers and systems that furnished cable service in the metropolitan areas that Comcast wanted to dominate.

The result of the decade-long process was that Comcast dominated some areas while its erstwhile competitors dominated others and that the fortresses they thus created enabled them to fend off head-to-head competition from overbuilders.

An overbuilder, as you may know, builds a cable system on top of or beside an existing system, enabling the overbuilder to compete for the incumbent's existing cable subscribers.

The Behrend lawsuit challenged Comcast's conduct in three areas — Boston, Chicago, and Philadelphia.I'll talk only about Philadelphia today. The Boston and Chicago parts of the case have been stayed pending the result of the Philadelphia piece.

The first several years involved dealing with preliminary matters, starting with a motion to compel arbitration, which led to two trips to two different courts of appeals; we ultimately won [see Kristian v. Comcast Corp., 446 F.3d 25 (1st Cir. 2006)], and Comcast agreed to withdraw its demand for individual, case-by-case arbitration.

We also responded to a pre-Twombly motion to dismiss and then a post-Twombly motion for judgment on the pleadings. Judge Padova wrote strong opinions rejecting the motions.

We moved for class certification, and Judge Padova granted the motion in 2007. After Hydrogen Peroxide came out at the end of 2008, he partly decertified the class because he concluded he had not made express findings on two issues, both relating to predominance under Rule 23(b)(3) — antitrust impact and methodology of damages — specifically, whether the class could prove those elements using evidence common to the class.

We felt the court didn't need to conduct an evidentiary hearing, but Comcast said the opposite. As a result, Judge Padova heard live testimony over four days in the fall of 2009, culminating in a half-day of final argument.

If that isn't a mini-trial, I don't know what is. But I believe Judge Padova wanted to make sure he fully and scrupulously satisfied the Hydrogen Peroxide standard. He issued his opinion in January 2010.

Comcast asked the Third Circuit to take an appeal under Rule 23(f), and the court granted the petition in June 2010. The parties briefed the appeal and argued it in January of this year.

We had a total of five judges who for awhile at least were on our panel. Judge Rendell, who signed the order granting the 23(f) appeal, recused herself a week or two before the hearing. Judge Jordan replaced her. Judge Ambro presided at the oral argument. He recused himself a week after the argument; Senior Judge Aldisert took his spot.

The reconstituted panel did not request further oral argument. Their opinion came out on August 23, 2011, with Judge Aldisert writing the majority opinion for himself and Judge Fisher and Judge Jordan concurring in part and dissenting in part. [Behrend v. Comcast Corp., — F.3d —, 2011 WL 3678803 (3d Cir. Aug. 23, 2011)]. The court declined rehearing en banc on September 14.

In brief, the majority held that Judge Padova did not abuse his discretion or clearly err in finding and concluding that we met our burden of showing a plausible theory of antitrust injury and a plausible damages methodology and citing evidence common to the class in support of the plausible theory and plausible methodology.

On antitrust impact, the majority ruled that expert reports, government and academic studies, and Comcast's own documents and testimony supported a finding that the clustering strategy in Philadelphia enabled Comcast to stop an overbuilder, RCN, from building a system in the Philadelphia area and that the deterrence of overbuilding competition allowed Comcast to charge supra-competitive prices for cable service throughout the area, not just in the five counties where RCN announced plans to overbuild.

A lot of the discussion dealt with whether we'd shown a plausible basis for defining the relevant geographic market as the Philadelphia Designated Market Area, which roughly corresponds to the Philadelphia metropolitan area. The panel said we had made the necessary showing because the evidence indicated that cable subscribers in the DMA faced similar competitive choices — meaning that they overpaid for cable because Comcast quashed overbuilding and jacked up prices throughout the DMA.

Judge Jordan concurred with the conclusion that Judge Padova didn't err in dealing with the question of class-wide antitrust impact, but he got there by a different route. He wrote that the geographic market doesn't really matter so long as there's evidence that the members of the class all sustained antitrust impact. And he agreed with the majority that we'd presented evidence of common impact of the anticompetitive conduct across the class.

On the damages methodology, the majority rejected Comcast's criticisms of our expert's analysis. Dr. McClave used screens to create an econometric analysis of the difference between the prices that Comcast actually charged and the prices it would have charged in the absence of its anticompetitive behavior. Comcast's critique was wide-ranging but to some extent focused on the fact that Judge Padova rejected three of four theories we presented of anticompetitive conduct.

The surviving theory alleged that clustering deterred overbuilding and that the deterrence of overbuilding allowed Comcast to charge supra-competitive prices. Comcast argued that it just couldn't be so that Dr. McClave's analysis could withstand the loss of the other three grounds of liability. Judge Jordan agreed in dissent. But the majority did not. They instead ruled that Judge Padova acted within his discretion and did not clearly err in accepting Dr. McClave's explanation that his methodology isolated truly anti-competitive conduct and therefore provided an accurate estimate of what prices would have been in the more competitive but-for world.

The main significance of Behrend v. Comcast is in saying that class certification in a large antitrust case can be done, that perfection isn't the standard, that plausibility is the key. That "plausibility" thing seems to echo Twombly's plausibility test for pleading but doesn't expressly adopt it.

The panel shunned the idea of having mini-trials on class certification, and that may be true in some cases. But it's hard to imagine that in a complex antitrust case you will not have live testimony at least of experts. In the Chocolate case just yesterday, in fact, Judge Connor set a three-day evidentiary hearing in November. That, I suspect, will be the norm in antitrust cases, at least until we see the courts of appeals allow less elaborate proceedings before certification.

That is what I had prepared to say. Please let me know if you have any questions.

Qs and As:

  • Do you now have to have evidentiary hearings before class certification? It depends. In some cases, maybe not. In complex cases, including most antitrust actions that involve heavy expert work, you may not be able to avoid presenting live testimony.
  • What happens next in Behrend v. Comcast? Today the Third Circuit issued its mandate, which will have the effect of sending the case back to Judge Padova. Comcast may ask for Supreme Court review, but that won't stay the case in the trial court. We expect supplemental briefing on narrower summary judgment issues and a trial setting, we hope in the next six to 12 months.
  • Didn't all those proceedings cost class counsel a lot? Yes. On the other hand, the process, and especially the result of the appeal, reduced the uncertainty that plaintiffs have and has gotten us ready to try the case without a great deal of additional expenditure of time and money.
  • How can you manage the amount of effort you have to put into class certification? Behrend v. Comcast will likely represent the gold standard of class certification proceedings. Judge Padova prudently and scrupulously followed, met, and exceeded the requirements the Third Circuit set in Hydrogen Peroxide. The question now is, how much less can a district court do while still meeting the Hydrogen Peroxide standard? We'll need to litigate some more to get more guidance on what steps short of what we did in Behrend v. Comcast will suffice.
  • Where did you get your phrase "I'm not telling the cow how to eat the cabbage" from the oral argument? The court tells you in advance who will sit on the panel, and I saw that two of the three members of the Hydrogen Peroxide panel were going to serve also on the Behrend v. Comcast panel. So I tried to think of a way to say what I thought Hydrogen Peroxide required without sounding presumptuous. And that's what occurred to me. [You can get an idea of why the phrase would bloom in the mind of a lawyer who grew up in the piney woods of East Texas here.]
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Photo of Barry Barnett Barry Barnett

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck…

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck Redden).

Barnett is a Fellow in the American College of Trial Lawyers, and Lawdragon has named him one of the top 500 lawyers in the United States three years in a row. Best Lawyers in America has honored him as “Lawyer of the Year” for Bet-the-Company Litigation (2019 and 2017) and Patent Litigation (2020) in Houston. Based in Texas and New York, Barnett has tried complex business disputes across the United States.

Barnett’s background, training, and experience make him indispensable to his clients. The small-town son of a Texas roughneck and grandson of a Texas sharecropper, Barnett “developed an unusual common sense about people, their motivations, and their dilemmas,” according to former client Michael Lewis.

Barnett has been historically recognized for his effectiveness and judgment. His peers chose him, for example, to the American College of Trial Lawyers and American Law Institute. His decades of trial and appellate work representing both plaintiffs and defendants have made him a master strategist and nimble tactician in complex disputes.

Barnett focuses on enforcement of antitrust laws, the “Magna Carta of free enterprise,” in Supreme Court Justice Thurgood Marshall’s memorable phrase. “Barry is one of the nation’s outstanding antitrust lawyers,” according to Joseph Goldberg, a member of the Private Antitrust Enforcement Hall of Fame. Named among Texas’s top ten antitrust lawyers of 2023, Business Today calls Barnett a “trailblazer” among the “distinguished legal minds” who “dedicate their skill and expertise to the maintenance of healthy competition in various sectors” of the Lone Star State’s booming economy. Barnett is also adept in energy and intellectual property matters and has battled for clients against a Who’s Who list of corporate behemoths, including Abbott Labs, Alcoa, Apple, AT&T, BlackBerry, Broadcom, Comcast, Dow, JPMorgan Chase, Samsung, and Visa.

Barnett commands a courtroom with calm and credibility and “is the perfect lawyer for bet the company litigation,” said Scott Regan, General Counsel of former client Whiting Petroleum. His performance before the Supreme Court in Comcast Corp. v. Behrend prompted the Court to withdraw the question on which it had granted review. The judge in a trial involving mobile phone technology called Barnett “one of the best” and that his opening statement the finest he had ever seen. Another trial judge told Barnett minutes after a jury returned a favorable verdict against the county’s biggest employer that he was one of the two best trial lawyers he’d ever come across—adding that the other one was dead.

A versatile trial lawyer, Barnett knows how to handle a case all the way from strategic pre-suit planning to affirmance on appeal. He’s tried cases to verdict and then briefed and argued them when they went before appellate courts, including the Second, Third, Fifth, and Tenth Circuits, the Supreme Court of Louisiana, and (in the case of Comcast Corp. v. Behrend) the Supreme Court of the United States.

Barnett is a sought-after public speaker, often serving on panels and talking about topics like the trials of antitrust class actions and techniques for streamlining complex litigation. He also comments on trends in commercial litigation and the implications of major rulings for outlets such as NPR, Reuters, Law360, Corporate Counsel, and The Dallas Morning News. He’s even appeared in a Frontline program about underfunding of state pensions, authored chapters on “Fee Arrangements” and “Techniques for Expediting and Streamlining Litigation” (the latter with Steve Susman) in the ABA’s definitive treatise on Business and Commercial Litigation in Federal Courts, 5th, and commented on How Antitrust Enforcers Might Think Like Plaintiffs’ Lawyers.

Clients and other hard graders have praised Barnett for his courtroom skills and legal acumen.

A client in a $100 million oil and gas case, which Barnett’s team won at trial and held on appeal, said Barnett and his team “presented a rare combination of strong legal intellect, common sense about right and wrong, and credibility in the courtroom.” David McCombs at Haynes and Boone said Barnett “has a natural presence that goes over well with juries and judges.”

Even former adversaries give Barnett high marks. Lead opposing counsel in a decade-long antitrust slugfest said “Barry is a highly skilled advocate. He understands what really matters in telling a narrative and does so in a very compelling manner.”

Barnett relishes opportunities to collaborate with all kinds of people. At the Center for American and International Law (CAIL), founded by a former prosecutor at Nuremberg in 1947 and headquartered in the Dallas area, he has served on the Executive Committee, co-chaired the committee that produced CAIL’s first-ever strategic plan, supported CAIL’s Institute for Law Enforcement Administration and other development efforts, and proposed formation of a new Institute for Social Justice Law. CAIL’s former President David Beck said “Barry is extremely bright” and is “very well prepared in every lawsuit or professional task he undertakes.”

Barnett is also a Trustee of the New-York Historical Society, a Sterling Fellow at Yale, a member of the Yale University Art Gallery’s Governing Board, a winner of the Class Award for his work on behalf of his college class, and a proud contributor to the Yellow Ribbon Program at Harvard Law. Barnett’s pro bono work includes leading the trial team representing people who are at greatest risk of severe illness and death as a result of being exposed to the novel coronavirus SARS-CoV-2 while being detained in the Dallas County jail—work for which he received the NGAN Legal Advocacy Fund RBG Award.

At Susman Godfrey, Barnett has served on the firm’s Executive Committee, Employment Committee, and ad hoc committees on partner compensation, succession of leadership, and revision of the firm’s partnership agreement. He also twice chaired the Practice Development Committee.

Barnett understands that clients face many pressures. Managing the stress is important, especially in matters that take years to resolve. He encourages clients to call him whenever they have a question or concern and to keep the inevitable ups and downs in perspective. He wants them to know that he will do his level best to help them achieve their goals. He also strives to foster trust and to make working with him a pleasure.

Cyrus “Skip” Marter, the General Counsel of Bonanza Creek in Denver and a former Susman Godfrey partner and client, said Barnett is “excellent about communicating with clients in a full and honest manner” and can “negotiate for his clients from a position of strength, because he is not afraid to take a case through a full trial on the merits.” Stacey Doré, the President of Hunt Utility Services and a former client, said that Barnett is “an excellent trial lawyer and the person you want to hire for your bet-the-company cases. He is client focused, responsive, and uniquely savvy about trial and settlement strategy.” A New York colleague said, “Barry is a joy to work with as co-counsel. He tackles complex procedural and factual hurdles capably, efficiently, and without drama.”

Barnett’s wide-ranging experience and calm, down-to-earth approach enable him to connect with clients, judges, jurors, witnesses, and even opposing counsel. He grew up in Nacogdoches, Texas. He co-captained his high school varsity football team as an All-East Texas middle linebacker while also serving as the Editor of Key Club’s Texas-Oklahoma District, won the Best Typist award, took the History Team to glory, and sang in the East Texas All Region Choir. As Dan Kelly of client Vistra Corp. put it, Barnett is “a great person to be around.”

Barnett is steady and loyal. He has practiced at Susman Godfrey his entire career. He and his wife Nancy live in Dallas and enjoy spending time in Houston and New York. Their daughter works for H-E-B in Houston, and their son is a Haynes and Boone transactions lawyer in Dallas.

As a member of Ivy League championship football teams in his junior and senior years at Yale and a parent of two Yalies, Barnett has no trouble choosing sides for “The Game” in November. And he knows how important fighting all the way to the end is. On his last play from scrimmage, in the waning minutes of The Game on Nov. 22, 1980, he recovered a Crimson fumble.

Yale won, 14-0.