July 02, 2018

 

By Sally M. Handmaker

After Comcast Corp. v. Behrend (133 S. Ct. 1426 (2013)), plaintiffs have looked to new methods of calculating classwide damages. In that case, the U.S. Supreme Court held that the plaintiffs’ damages model failed to establish that damages could be measured on a classwide basis because the model did not measure damages resulting from the particular alleged antitrust injury. Courts have subsequently required class action plaintiffs’ damages models to “measure only those damages attributable to [the defendant’s conduct],” as noted in Comcast.

One method of calculating damages to meet this standard is through conjoint analysis, a market research tool used to measure customer preferences, such as their willingness to pay for specific product features or combinations of features. Respondents are shown a set of product profiles containing multiple product features and asked to select the profile that they prefer. Marketing experts then use a regression analysis to compare the values of certain features—for example, vacation package options or a particular add-on service—to estimate the relative value of each feature.

Through conjoint analysis, you can determine the difference in value between what product owners thought they were receiving and what they actually received based on the nondisclosed defect or the false advertising.

Conjoint analysis can be helpful when plaintiffs must demonstrate expectation damages in consumer protection and breach-of-warranty claims. A market researcher can use conjoint analysis to determine how much consumers in the appropriate market value an attribute of or a representation made about a particular product. An economist can then use that value to determine how much of the purchase price, if any, consumers should be refunded. There are two specific types of cases in which this analysis is particularly useful.

The full article can be accessed here.