Failed as an Expert Witness? Try the White House
Just because your methodology and procedures are ruled "fundamentally flawed", your data and results found "unreliable" and your expert witness report rejected, don't fret; you may have a future as the next Counselor to the President of the United States.
In FTC v. Whole Foods Market, Inc, and Wild Oats Markets, Inc., 502 F.Supp.2d 1 (2007), the Federal Trade Commission (FTC) sought a preliminary injuction blocking the proposed merger of Whole Foods and Wild Oats, arguing that the merger would violate federal antitrust laws. The FTC contended that the price and non-price benefits of competition between Whole Foods and Wild Oats would be lost in twenty-one geographic markets where they were each other's closest competitors.
The FTC found internal company emails and public blog posts showing that Whole Foods wanted to acquire Wild Oats because it competed with Whole Foods and held a monopoly in some markets.
To defend its merger plans, Whole Foods hired David T. Scheffman, PhD, an economist and the former head of the FTC Bureau of Economics experienced in analyzing the competitive and efficiency benefits of mergers, including the supermarket industry. Whole Foods also hired Ms. Kellyanne Conway to design a survey to back Scheffman's claims.
Fundamental to the FTC's antitrust claims was that the premium natural and organic food supermarket (PNOS) was relevant product market. Scheffman argued that Whole Foods' and Wild Oats' main competitors are other supermarkets, not just each other, making the relevant product market all supermarkets.
The FTC took issue with Scheffman's conclusion that there was "no systematic pattern in pricing among Whole Foods and Wild Oats stores based on the presence or absence of PNOS competition," as Scheffman based his conclusion on only one-day's register prices. The court rejected the FTC's criticizm of the Scheffman's limited data, but did remark that it would have been preferable to have more data.
Whole Foods and Wild Oats commissioned Conway "to conduct a survey that would support Dr. [sic] Scheffiiian's report and would corroborate his analysis." The FTC retained Kent Van Liere, PhD, to review Conway's survey. Van Liere, a sociologist, had specific expertise in the use of surveys, sampling and statistics.
Van Liere fount that Conway's "survey methodology and procedures were fundamentally flawed, which rendered her data and results unreliable." The court agreed, but noted that Scheffman had not relied on Conway's report for any of his opinion.
The court denied the FTC's motion for a preliminary injuction, but after nearly two more years of litigation, on March 6, 2009, the FTC announced a settlement with Whole Foods. Under the consent order, Whole Foods agreed to sell 32 stores, about 12% of the total number of stores Whole Foods and Wild Oats held before the merger.
Perhaps this is another case of "alternative facts."