Evidence Commons^™

Antitrust Harm And Causation, Herbert J. Hovenkamp

All Faculty Scholarship

How should plaintiffs show harm from antitrust violations? The inquiry naturally breaks into two issues: first, what is the nature of the harm? and second, what does proof of causation require? The best criterion for assessing harm is likely or reasonably anticipated output effects. Antitrust’s goal should be output as high as is consistent with sustainable competition.

The standard for proof of causation then depends on two things: the identity of the enforcer and the remedy that the plaintiff is seeking. It does not necessarily depend on which antitrust statute the plaintiff is seeking to enforce. For public agencies, enforcement …

Power And Statistical Significance In Securities Fraud Litigation, Jill E. Fisch, Jonah B. Gelbach

All Faculty Scholarship

Event studies, a half-century-old approach to measuring the effect of events on stock prices, are now ubiquitous in securities fraud litigation. In determining whether the event study demonstrates a price effect, expert witnesses typically base their conclusion on whether the results are statistically significant at the 95% confidence level, a threshold that is drawn from the academic literature. As a positive matter, this represents a disconnect with legal standards of proof. As a normative matter, it may reduce enforcement of fraud claims because litigation event studies typically involve quite low statistical power even for large-scale frauds.

This paper, written for …

The Logic And Limits Of Event Studies In Securities Fraud Litigation, Jill E. Fisch, Jonah B. Gelbach, Jonathan Klick

All Faculty Scholarship

Event studies have become increasingly important in securities fraud litigation after the Supreme Court’s decision in Halliburton II. Litigants have used event study methodology, which empirically analyzes the relationship between the disclosure of corporate information and the issuer’s stock price, to provide evidence in the evaluation of key elements of federal securities fraud, including materiality, reliance, causation, and damages. As the use of event studies grows and they increasingly serve a gatekeeping function in determining whether litigation will proceed beyond a preliminary stage, it will be critical for courts to use them correctly.

This Article explores an array of …

Error Costs, Legal Standards Of Proof And Statistical Significance, Michelle Burtis, Jonah B. Gelbach, Bruce H. Kobayashi

All Faculty Scholarship

The relationship between legal standards of proof and thresholds of statistical significance is a well-known and studied phenomena in the academic literature. Moreover, the distinction between the two has been recognized in law. For example, in Matrix v. Siracusano, the Court unanimously rejected the petitioner’s argument that the issue of materiality in a securities class action can be defined by the presence or absence of a statistically significant effect. However, in other contexts, thresholds based on fixed significance levels imported from academic settings continue to be used as a legal standard of proof. Our positive analysis demonstrates how a …

The Importance Of Being Dismissive: The Efficiency Role Of Pleading Stage Evaluation Of Shareholder Litigation, Lawrence A. Hamermesh, Michael L. Wachter

All Faculty Scholarship

It has been claimed that the risk/reward dynamics of shareholder litigation have encouraged quick settlements with substantial attorneys’ fee awards but no payment to shareholders, regardless of the merits of the case. Fee-shifting charter and bylaw provisions may be too blunt a tool to control agency costs associated with excessive shareholder litigation, and are in any event now prohibited by Delaware statute. We claim, however, that active judicial supervision of public company shareholder litigation at an early stage reduces the costs of frivolous litigation to shareholders by separating meritorious from unmeritorious litigation before the full costs of discovery are incurred. …

Expert Mining And Required Disclosure, Jonah B. Gelbach

All Faculty Scholarship

No abstract provided.

Vertical Restraints, Dealers With Power, And Antitrust Policy, Herbert J. Hovenkamp

All Faculty Scholarship

The Supreme Court’s Leegin decision has now brought the rule of reason to all purely vertical intrabrand distribution restraints. But the rule of reason does not mean per se legality and occasions for anticompetitive vertically imposed restraints may still arise. Of all those that have been suggested the most plausible are vertical restraints imposed at the behest of a powerful dealer or group (cartel) of dealers.

Although a vertical distribution restraint resembles a dealer cartel in that both limit intraband competition, a manufacturer restraining the distribution of its product shuns the excess dealer profits a dealer cartel would seek. Accordingly, …

The Distortionary Effect Of Evidence On Primary Behavior, Gideon Parchomovsky, Alex Stein

All Faculty Scholarship

In this Essay, we analyze how evidentiary concerns dominate actors’ behavior. Our findings offer an important refinement to the conventional wisdom in law and economics literature, which assumes that legal rules can always be fashioned to achieve socially optimal outcomes. We show that evidentiary motivations will often lead actors to engage in socially suboptimal behavior when doing so is likely to increase their likelihood of prevailing in court. Because adjudicators must base decisions on observable and verifiable information—or, in short, evidence—rational actors will always strive to generate evidence that can later be presented in court and increase their chances of …

Does Anyone Get Stopped At The Gate? An Empirical Assessment Of The Daubert Trilogy In The States, Eric Helland, Jonathan Klick

All Faculty Scholarship

The Supreme Court’s trilogy of evidence cases, Daubert, Joiner, and Kumho Tire appear to mark a significant departure in the way scientific and expert evidence is handled in federal court. By focusing on the underlying methods used to generate the experts’ conclusions, Daubert has the potential to impose a more rigorous standard on experts. Given this potential, some individuals have called for states to adopt the Daubert standards to purge “junk science” from state courts. However, there is relatively little empirical support for the notion that Daubert affects the quality of expert evidence. Using a large dataset of state court …

The Evidentiary Theory Of Blackmail: Taking Motives Seriously, Mitchell N. Berman

All Faculty Scholarship

No abstract provided.