In the 568 Cartel Antitrust litigation, the district court officially certified a class of students who received financial aid from 18 elite universities. The case has drawn national attention, having been profiled on the cover of the Wall Street Journal when the complaint was originally filed.

The class certification decision was predicated on the economic impact model developed by Econ One’s managing director, Hal Singer. Dr. Singer employed a regression model to establish a causal nexus between the alleged price fixing conspiracy and suppressed financial aid offers. His team built a database containing financial aid offers made by defendant universities over the past two decades, as well as granular data about the applicant. The regression model showed that, controlling for other factors such as the student’s financial capacity, defendant universities were able to suppress financial aid offers to students in years during which the school was a member of the 568 Cartel.

Defendants had previously sought to exclude Dr. Singer’s model, but the court rejected their critiques in its Daubert Opinion, concluding that “the Court is not persuaded by defendants’ arguments for exclusion of all or parts of Dr. Singer’s opinions and analysis. After a thorough review of his report, multiple briefs, and an evidentiary hearing, the Court is persuaded that Singer has employed reliable methodologies in a reliable fashion to reach the conclusions in his report.”

In its Summary Judgment Opinion, the court also relied extensively upon Dr. Singer’s analysis of the relevant market, crediting his impact model as direct evidence of defendants’ collective ability to dictate prices.

“The universities argue that Singer’s regression does not serve the same functions as an HMT because it neither ‘analyze[s] how students would react if [the universities] raised prices’ nor performs any ‘statistical test of cross-elasticity of demand,’ i.e., product interchangeability. For purposes of summary judgment, the Court disagrees. Singer’s regression observes that the universities in fact inflated their prices while in the 568 Group over a two-decade period. According to Singer, his regressions show ‘that a not-so hypothetical collection of universities exercised market power . . . in the form of significant artificial price inflation.’ The universities do not elaborate on why that interpretation is unreasonable. A jury reasonably could infer from that evidence that the students could not defeat the price increase because products outside the candidate market were not sufficiently interchangeable.”

This marks the 17th time a federal or state court has certified a class around an impact model developed by Dr. Singer.

Dr. Singer was supported by Madeleine Bowe, Jacob Linger, and Ted Tatos.