Full opinion text
MEMORANDUM OPINION, FINDINGS OF FACT, AND CONCLUSIONS OF LAW ON REMAND JOHN W. OLIVER, Senior District Judge. The parties agreed that ten major issues were presented by the various motions and voluminous briefs and appendices filed after the Court of Appeals' remand. After the Court had read and considered all the post-remand briefs that had been filed, nine of those major issues were the subject of three days of oral argument. The parties waived oral argument to the tenth issue and agreed that it should be decided on the briefs that had been filed. After oral argument the parties presented an agreed order directing further proceedings in regard to each of the ten major issues presented. The paragraphs of that post-oral argument order were designed to track with the order in which the various issues had been orally argued. This memorandum opinion, which will serve as our findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, will track with the paragraphs of the post-oral argument order. During the course of this memorandum opinion we will frequently refer to the counterclaim plaintiff as “NFO” and to the counterclaim defendants as “defendants.” Our consideration of the arguments of the parties required that we study the entire transcript of the testimony of all the witnesses and exhibits adduced on the issue of damages. We were also required to study a substantial portion of the testimony of a substantial number of other witnesses and other exhibits adduced on questions other than damages during the trial of the entire case. In addition, we have reviewed and considered the handwritten notes we made during the trial of the case which, in accordance with our established practice in non-jury cases, included our contemporaneously recorded reaction in regard to the credibility of the various witnesses as they testified and of the various exhibits as they were adduced in evidence at trial. It is, of course, impossible for the Court to comply with the mandate of Rule 52(a) that “judgment shall be entered pursuant to Rule 58” at this time. For, as will be apparent from our determination of the various issues, a number of those issues are not in procedural posture for the entry of a final judgment. A number of interlocutory orders will, however, be entered during the course of this memorandum opinion in regard to particular issues. Appropriate procedures will be directed under which final judgments may be simultaneously entered in regard to the interlocutory orders entered in regard to those issues and in regard to the orders that will later be entered in regard to all ten of the issues presented after remand. We turn now to the first issue presented after remand. ISSUE NO. 1 — STANDING—DEFENDANTS’ RENEWED JOINT MOTION TO DISMISS After remand, defendants CMPC, AMPI, and Mid-Am, filed a renewed joint motion to dismiss NFO’s damage claims for lack of standing. That renewed motion was based primarily on the defendants’ view of Associated General Contractors v. Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) and their view of the Eighth Circuit’s application of the principles stated in that case in McDonald v. Johnson & Johnson, 722 F.2d 1370 (8th Cir.1983). Defendants contended at oral argument that the granting of the renewed motion to dismiss for lack of standing would end the need for further inquiry in regard to any other question that might be presented on remand in that such a ruling would constitute a determination that NFO would not be able to recover any damages in this ease. (Oral Argument: p. 51-52). The Court of Appeals accepted the defendants’ argument that “NFO cannot recover its asserted ‘price reduction’ damages.” Alexander v. National Farmers Organization, 687 F.2d 1173, 1208 (8th Cir.1982). However, that court expressly rejected “defendants attempt to bootstrap from this price reduction issue to deny NFO standing to recover any damages.” Id. at 1209. The Court of Appeals made a number of specific factual findings in the course of its discussion of the standing question. It found that NFO transacted business through the NFO Dairy Trust; that NFO cannot be considered in isolation from the NFO Dairy Trust; that NFO and the NFO Dairy Trust were not a mere conduit for monies to pass from buyers to producers; that buyers of NFO milk arranged purchases through NFO, and not through individual farmers; that buyers, terminating purchases in the face of defendants’ harassment, sent notice of such termination to NFO and not to individual farmers; that buyers dealt with NFO as a single entity; that buyers viewed the trust arrangement, if at all, as a bookkeeping matter; that the trust fund was not a mechanical pass through device; that NFO reblended the proceeds of its marketing efforts through the trust; that NFO determined the actual pay price to producers; that NFO deducted marketing expenses from the trust proceeds; that NFO’s marketing program was in direct competition with the defendant co-ops; that NFO, as a competitor, was a direct target of the unlawful conspiracy; that NFO was not an indirect or derivative victim of actions aimed at individual farmers; that NFO earned net revenues in the form of membership dues and check-off fees; and that NFO’s losses of dues and fees represent direct injury to its business or property. Many of the findings of fact made by the Court of Appeals are inconsistent with any number of the findings of fact proposed by defendants in the appendix attached to the defendants’ pending standing motion. We are satisfied that the parties and this Court must accept the findings of fact made by the Court of Appeals. We are equally satisfied, contrary to defendants’ basic contention, that the Supreme Court did not make any substantial change in antitrust law when it handed down AGC. Nor did the Eighth Circuit when it decided McDonald v. Johnson & Johnson. We shall therefore enter an interlocutory order denying defendants’ renewed motion to dismiss NFO’s damage claims for lack of standing. Accordingly, it is ORDERED (1) that defendants renewed joint motion to dismiss NFO’s damage claims for lack of standing should be and the same is hereby denied. ISSUE NO. 2 — NFO’S RULE 37 MOTION FOR MONETARY SANCTIONS AGAINST DEFENDANTS I. NFO’s Rule 37 motion, filed solely against AMPI, prays for an order awarding NFO the following monetary sanctions: 1. NFO’s costs, fees and expenses incurred in connection with uncovering AMPI’s suppression and destruction of evidence in an amount to be determined; 2. NFO’s costs, fees and expenses incurred in connection with pursuing relief under Rule 37, in the amount of $182,942.53; 3. NFO’s costs, fees and expenses incurred in connection with defending the claims brought by AMPI in Phase III of this litigation, in an amount to be determined; 4. An additional amount equal to one percent of AMPI’s 1982 gross revenues; and 5. Such other amounts as this Court may deem just and proper. NFO’s suggestions in support of that motion accurately state that this Court determined in November of 1978 that NFO’s Rule 37 motion against AMPI would be granted and that the imposition of sanctions would be deferred until after the appeals in this case were resolved. NFO argues that “this Court’s determination that Rule 37 sanctions should be imposed has been emphatically endorsed and even broadened by the Court of Appeals, leaving only the question of the particular sanctions that should be imposed in order to achieve the purposes of Rule 37.” NFO therefore contends that at least two considerations support its request that sanctions should be imposed in an amount not less than $26,347,780; namely “(1) AMPI’s conduct was properly labeled by the Court of Appeals as ‘egregious’ and ‘outrageous’ and cannot be characterized as merely negligent or inadvertent; it was rather deliberate, pervasive, carried out at the highest levels of AMPI and involved not just delay but irretrievable destruction of evidence. It thus presents this Court with a record of wrongdoing which surpasses anything in the annals of Rule 37” and “(2) [mjany of the forms of sanctions available under Rule 37 — e.g., claim preclusion, costs of pursuing the Rule 37 motion, striking of pleadings, etc. — would be futile here because NFO has already won on the merits of its claim, and on AMPI’s counterclaim, and NFO is already entitled to attorneys’ fees and costs, as the prevailing plaintiff in an antitrust case; accordingly, many of the customary forms of sanctions would not materially serve the compensatory and deterrent purposes of the Rule.” (NFO’s Sugg, in Support at 5-6). NFO suggests that this Court (a) determine that NFO “is entitled to the fees and expenses incurred in uncovering AMPI’s suppression and destruction of evidence and in pursuing this Rule 37 motion.” (Id. at 6-7). Specifically, NFO requests that this Court “endorse the principle that NFO is entitled to compensation for the expenditures and for the hours devoted to the Rule 37 effort.” (Id. at 7). NFO adds that “[ujpon the receipt of such a ruling, the parties may then confer in an effort to arrive at an agreed-upon figure.” (Id. at 7). NFO also requests that compensation for this and all other sanction items be calculated at “the higher billing rates in effect today, in order to adjust for inflation and to avoid rewarding delay.” (Id. at 8). In a similar manner, NFO proposes that “this Court endorse the principle that NFO is entitled to compensation for items, such as the San Antonio Grand Jury costs— again at current rates — and leave the specific allocation task to the efforts of counsel, at least in the first instance.” (Id. at 10). NFO directs attention to the Court of Appeals’ statement that “the district court properly could have imposed the most severe sanctions upon AMPI — dismissal of its claims and default judgment against it on NFO’s claim.” (Alexander v. NFO, supra, 687 F.2d at 1205; see NFO’s Sug. at 12.) NFO contends that the “remedial purposes of the Rule would thus be served if this Court requires AMPI to compensate NFO for all its costs and fees incurred in defending AMPI’s Phase III claim.” (Id. at 12). NFO again suggests that “the Court adopt this sanction in principle at this time.” (Id. at 13). And finally, NFO, with primary reliance upon Litton Systems, Inc. v. American Telephone & Telegraph Co., 700 F.2d 785 (2d Cir.1983), requests that this Court impose a fine of at least $26,347,780 on AMPI for the reason that such a sanction is “the only available sanction which could advance the deterrence goal” of Rule 37. (NFO Sugg, in Support at 14, NFO’s emphasis). II. AMPI argues that “NFO is seeking a windfall” (AMPI’s Suggestions in Opposition, p. 2); that “[t]o award NFO additional relief on top of the adverse inferences already drawn by the Court of Appeals ... would be unjust” and that “NFO has failed to demonstrate any reason why it should be accorded any relief beyond that which already has been bestowed upon it by the appellate court.” (Id. at 2); that “NFO has failed to show any prejudicial impact resulting from the challenged conduct”; that “NFO engaged in document suppression and destruction of its own” (Id. at 3); that “NFO’s proposals are grossly overreaching”; and that “[gjranting NFO’s requests would constitute a miscarriage of justice under the circumstances.” (Id. at 10). AMPI further argues that “[i]f this Court decides to award additional, monetary sanctions, such a deflator [as that applied by the Court of Appeals], applied to both hours and hourly rates, is appropriate here.” (Id. at 12). AMPI, as did NFO, made appropriate recognition of this Court’s letters of August 12 and August 25, 1983 (which directed attention to the Supreme Court’s admonition in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1982), that “an application for attorney’s fees should not and need not result ‘in a second major litigation’ ”) and stated that “[i]n accordance with this Court’s admonition, the parties will confer in good faith about fees when and if this Court determines that compensation for particular activities is appropriate.” (Id. at 13). III. It is apparent from what we have stated above that both NFO and AMPI indicated in their respective briefs that they were willing to confer in good faith in regard to the amount of any attorneys’ fees and expenses that might be awarded by way of Rule 37 sanctions. That willingness was confirmed at oral argument. The agreed post-oral argument order provided: 2. SANCTIONS — Rule 37 NFO Motion Against AMPI. The parties shall meet, confer, and attempt to reach agreement on those portions of NFO’s motion for costs, Appendix A, totalling $167,717 in attorneys fees and $15,225 in disbursements, together with items NFO is claiming in relation to the San Antonio grand jury proceeding. Commencing June 4, 1984, NFO shall make available to counsel for the counterclaim defendants all underlying records to substantiate those claims for Rule 37 attorneys fees and costs. Commencing June 14, 1984, NFO shall likewise make available to counsel for counterclaim defendants all underlying records to substantiate its claims for costs and fees relating to the San Antonio grand jury matter. On or about June 25, 1984 counsel shall submit to the Court a report indicating which items of Rule 37 and San Antonio grand jury costs and fees are agreed and those which remain in dispute. Agreement by the counterclaim defendants that any particular costs were incurred by NFO shall not constitute an admission, or a waiver of any argument by counterclaim defendants that the agreed upon expenditure was reasonably or necessarily incurred or is recoverable as a matter of law. In conjunction with its Rule 37 motion NFO has also claimed attorney fees and costs in defense of Phase III of the litigation. Because the Phase III costs and fees overlap, at least in part, the same category of fees and costs claimed by NFO in its Cost petition, and because resolution of the issue will necessarily entail a direct apportionment of those costs, NFO’s Rule 37 request for Phase III attorney’s fees and costs shall be handled in conjunction with the resolution of this issue in the context of NFO’s Cost petition and in the manner set forth in Paragraph 10 below. Mr. Donohoe’s June 29, 1984 letter and Mr. Barnes’ sequel letter of July 10, 1984 both advised the Court that NFO’s and AMPI’s negotiations pursuant to .paragraph 2 of this Court’s May 31, 1984 order have been unsuccessful. IV. The transcript of the proceedings held November 20, 1978 shows that this Court refused to impose the sanction of default or dismissal against AMPI because it believed that to have done so would have been contrary to the construction placed on Rule 37 by several then recent decisions of our controlling Court of Appeals. Pages 12,214 and 12,215 of the transcript reflect our citation of the then most recently decided Eighth Circuit case of Schleper v. Ford Motor Co., Auto Div., 585 F.2d 1367 (8th Cir.1978). We also directed attention to Edgar v. Slaughter, 548 F.2d 770 (8th Cir.1977) which, as did Schleper, had cited Fox v. Studebaker-Worthington, 516 F.2d 989 (8th Cir.1975), with approval. We further noted that Edgar had quoted Judge Van Oosterhout’s statement in Fox to the effect that “[t]here is a strong policy favoring a trial on the merits and against depriving a party of his day in court.” Edgar, supra, 548 F.2d at 772. (Tr. 12,-215). The Note entitled “The Emerging Deterrence Orientation in the Imposition of Discovery Sanctions,” 91 Harv.L.Rev. 1033, accurately reflected that the Eighth Circuit’s policy as expressed in Fox was consistent with the views expressed by most courts until the Supreme Court handed down its brief per curiam opinion in National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976). While that Note urged a “[t]ougher use of Rule 37 sanctions, and of dismissal and default judgments in particular” (id. at 1055), it conceded that “[t]he view of discovery sanctions reflected in National Hockey League and other recent cases has not yet been fully developed” and chat “[sjeveral questions pertaining to the way in which sanctions will be administered under this view remain unanswered” (id. at 1047). National Hockey League was, of course, on the books at the time the Eighth Circuit in Edgar reiterated its Rule 37 policy favoring a trial on the merits rather than the imposition of a default or dismissal sanction under Rule 37. And the Court of Appeals cited Fox to support its conclusion that this Court did not abuse the discretion vested by Rule 37 when it elected to follow the policy stated by the Court of Appeals in that 1975 case. The Court of Appeals, however, in this case emphatically stated its view that “[w]e can only describe AMPI’s conduct as outrageous.” Alexander v. NFO, supra, 687 F.2d at 1205. While the Court of Appeals did not cite Roadway Express, Inc. v. Piper, 447 U.S. 752, 100 S.Ct. 2455, 65 L.Ed.2d 488 (1980), it is clear to this Court that the Court of Appeals had in mind the Supreme Court’s admonition in that ease which, quoting National Hockey League, stated that “Rule 37 sanctions must be applied diligently both ‘to penalize those whose conduct may be deemed to warrant such a sanction, [and] to deter those who might be tempted to such conduct in the absence of such a deterrent.’ ” Roadway Express, supra, 447 U.S. at 763-64, 100 S.Ct. at 2462-63. In short, we are satisfied that the Court of Appeals has implicitly directed this Court to penalize AMPI for conduct which the Court of Appeals characterized as “egregious” and “outrageous” and also to impose sanctions which will deter others who might be tempted to such conduct in other cases. Judge Conner’s district court imposition of sanctions was affirmed by the Second Circuit in Litton Systems, Inc. v. American Tel. & Tel. Co., 700 F.2d 785 (2d Cir.1983). As did this Court, Judge Conner first ruled the merits of the defendant’s Rule 37 motion but deferred his decision on the sanctions to be imposed until after the conclusion of the trial. See Litton Systems, Inc. v. American Tel. & Tel. Co., 90 F.R.D. 410, 421 (S.D.N.Y.1981). Judge Conner’s opinion imposing sanctions is reported in 91 F.R.D. 574 (S.D.N.Y.1981). That opinion shows that the defendant was insisting upon the extreme sanction of dismissal because of plaintiff’s failure to comply with discovery orders rather than the imposition of a lesser sanction. Judge Conner, in reliance upon both Roadway Express, Inc. v. Piper and National Hockey League held that: Our adversarial system of civil justice rests upon access of all parties to all evidence bearing on the controversy between them, including that in the control of adverse parties. This, of course, requires the absolute honesty of each party in answering discovery requests and complying with discovery orders. Destruction or concealment by a party of relevant documents in its files threatens the viability and public acceptance of the system. Litton Systems, supra, 91 F.R.D. at 576. Judge Conner added that: “Among the factors to be considered in determining what sanction is appropriate for a willful failure to make discovery are the importance of the information sought; the offending party's record of cooperation in other respects; whether and in what circumstances it ultimately produced the information; the extent of prejudice occasioned by the delay in its production; and public policy aspects of the litigation.” (Id. at 576). Judge Conner concluded that apart from the conduct which he discussed in both of his district court opinions, that “the discovery conduct on both sides in this case has been generally good.” (Id. at 577). We find that the same thing was generally true in this case. In Litton all the documents that were withheld were ultimately produced. Except for the relatively small number of the unknown documents that were destroyed, the same thing is true in this case. Furthermore, no one has attempted to make the untenable argument that any of the destroyed documents could have in any way related to the amount of damages which NFO claims in this case. We have carefully weighed the factors which control the imposition of sanctions as above discussed, including but not limited to public policy considerations, and conclude that NFO is entitled to an order imposing sanctions as generally prayed for in its Rule 37 motion with one exception. We do not believe it is either proper or appropriate to impose an additional amount of monetary sanctions equal to one percent of AMPI’s 1982 gross revenues as prayed for in paragraph 4 of NFO’s Rule 37 motion. The interlocutory orders to be entered, of course, cannot state specific amounts because the hope that the parties would be able to agree on those amounts has not been realized. Because of that factor we also defer ruling the question of whether NFO’s counsel should be compensated at the higher billing rates in effect today as specifically prayed for in paragraph 2 of its motion and generally prayed for in regard to paragraphs 1 and 3 of its motion. For the reasons stated, it is ORDERED (1) that this Court endorses the principle that NFO is entitled to compensation for the efforts devoted to its Rule 37 motion. The parties are accordingly directed again to confer in an effort to arrive at an agreed figure. It is further ORDERED (2) that this Court also endorses the principle that NFO is entitled to the compensation in connection with the San Antonio grand jury proceeding. The parties are accordingly directed to confer in the same manner in that regard. It is further ORDERED (3) that this Court endorses the principle that NFO is entitled to be compensated for at least some of its costs and fees incurred in defending AMPI’s Phase III claim. The parties are accordingly directed again to confer in the same manner in that regard. The extent to which the total costs and fees incurred in defending AMPI’s Phase III claim will be determined after review of NFO’s claim in that regard, and after review of the agreement, if any, of the parties in that regard. It is further ORDERED (4) that it would be unjust under all the circumstances for this Court to exercise its discretion in favor of NFO’s prayer stated in paragraph 4 of its motion that AMPI, in effect, be fined the sum of $26,347,780, the alleged equivalent of one percent of AMPI’s gross annual revenues. That portion of NFO’s Rule 37 motion should be and the same is hereby denied. ISSUE NO. 3 — AMPI’S MOTION AGAINST NFO FOR SANCTIONS I. Following remand, AMPI filed a memorandum and suggestions in further support of (1) its April 18, 1975 Motion For Order For NFO To Show Cause Why It Should Not Be Held in Contempt and a Motion for Order Compelling Discovery and (2) in support of its April 21, 1976 Motion For Order Declaring NFO In Contempt. The relief sought by those motions requested dismissal of NFO’s market penetration claims as a sanction for the alleged “cleanout” of NFO’s home office in anticipation of document production and for NFO’s alleged failure and delay in producing various documents in a timely manner. NFO’s memorandum in opposition points out that all of the exhibits attached to AMPI’s memorandum and suggestions were earlier filed with the Court of Appeals. NFO therefore argues that AMPI implicitly submitted to the Court of Appeals the issue as to whether this Court erred in not granting AMPI’s motions. Indeed, AMPI argues that the Court of-Appeals necessarily considered and ruled upon AMPI’s motions for sanctions for the reason that the Court of Appeals did not impose any sanctions on NFO. NFO argues that the Eighth Circuit’s mandate puts AMPI’s motions “out of the reach of this Court on remand” and that “this Court is foreclosed and relieved from ruling upon them now.” AMPI’s reply to that argument suggests that the very principles espoused by NFO in opposing AMPI’s motion for sanctions would be directly applicable to NFO’s Rule 37 motion for sanctions and that NFO, having received the sanctions it requested from the Court of Appeals, must be deemed to have abandoned any claim for the monetary sanctions for which they now contend on remand. We conclude that an order should be entered consistent with paragraph 3 of this Court's May 31, 1984 order which was agreed to by all parties. II. Examination of Exhibit F, AMPI’s January 24, 1977 narrative based on then existing discovery in support of AMPI’s motions, and Exhibit G-l, which was the February 22, 1977 NFO answer to that narrative statement, establish that NFO’s admissions, standing alone, establish, at the very least, that substantial delay was involved on the part of NFO in its production of particular documentary evidence in this case. NFO’s outright denials of particular paragraphs of AMPI’s narrative and NFO’s guarded and qualified admissions of other paragraphs establish the existence of a substantial conflict in the testimony of particular witnesses whose depositions were eventually taken. AMPI’s April 19, 1977 reply to NFO’s suggestions in opposition to AMPI’s motion emphasized that the obvious conflict in the testimony “can only be resolved by an evidentiary hearing in open court where credibility and demeanor can be assessed by the trier of the fact.” {Id. at 2. See similar statements to that effect on pages 8 and 18). The parties, however, in the agreed order of May 31, 1984, stated the following in regard to the issues presented by AMPI’s motion for sanctions against NFO: 3. SANCTIONS — AMPFs Motion Against NFO — The record on this issue is closed, it has been fully briefed and argued. The counterclaim defendant AMPI has sought adverse inferences and an as yet unquantified amount of attorney’s fees and expenses as sanctions in conjunction with its motion. If the Court rules the motion in AMPI’s favor, counterclaim defendant AMPI shall be’ permitted to submit, within a reasonable period of time, a cost petition setting forth the precise fees and costs it claims. Exhibit D attached to AMPI’s memorandum and suggestions is a copy of AMPI’s April 27, 1976 response to a reply brief filed by NFO in regard to one of AMPI’s motions for an order declaring NFO in contempt. On page 3 of that April 27,1976 response AMPI candidly stated that “it is fair to say that if there had been no NFO Rule 37 motion AMPI might have been more willing to follow Mid-Am counsel’s course when it learned of the ‘clean-out’ from them for the first time in early 1974, and might not have followed this matter up with as much vigor.” AMPI added, we think quite properly, that: “Nevertheless AMPI’s motion should be judged on its substance and merits.” As noted above, paragraph 3 of the agreed order of May 31, 1984 advised the Court that the parties consider that the record on the issue presented by AMPI’s motion for sanctions against NFO is “closed.” On the basis of the present record, however, we are satisfied that although AMPI certainly made an appropriate showing of untimely, and in some narrow instances, a total failure of document production on the part of NFO, discretion should not be exercised in favor of AMPI to the extent that we enter an order that NFO’s market penetration claims should be dismissed. We recognize, of course, that the Court of Appeals took an extremely dim view of what it described as AMPI’s “egregious” and “outrageous” conduct in connection with its treatment of what it called “the suppression and destruction of evidence by AMPI.” Alexander v. NFO, supra, 687 F.2d at 1205. We must also recognize that the Court of Appeals, unlike this Court, apparently was not in the least concerned with whether, after all was said and done, NFO suffered any real prejudice as a result of the delay, for example, of the production of the San Antonio grand jury documents. We cannot, however, believe that the Court of Appeals intended to lay down any general rule that the most severe sanction of dismissal or default should routinely be imposed, regardless of the nature of the documents involved and regardless of their relevance or materiality to a particular case. While the Court of Appeals apparently was not concerned about the relevancy of all the documents involved in NFO’s Rule 37 motion, we cannot ignore the fact that we know enough about the documents involved in AMPI’s motion for sanctions to conclude that in our judgment, subject to what the Court of Appeals may later have to say, AMPI should be entitled to its costs and attorneys fees for deposing the witnesses listed on page 6, footnote 5, of AMPI’s memorandum and suggestions filed in this Court after remand. Those costs and attorney’s fees, of course, would be limited to the depositions taken, or the parts of other depositions taken, solely on the issue of NFO’s alleged concealment and destruction of documents. Accordingly, it is ORDERED that AMPI shall, within a reasonable period of time to be established by the Court on recommendation of the parties, prepare, serve and file a cost petition setting forth the precise fees and costs it claims in accordance with what we have above stated. ISSUE NO. 4 — PRECLUSION OF NFO’S EXPERT WITNESS ISSUE NO. 5 — CAUSATION ISSUE NO. 6 — DAMAGES MEASUREMENT I. All three of the issues stated in the above heading are directly related and will be so treated. In the course of our discussion we shall set forth the basic arguments made in the various briefs filed by the parties in sufficient detail so that it will be understood that we have given those arguments appropriate consideration in making our determination of the questions presented in regard to all three issues. II. NFO’s Motion for Damages The Court of Appeals in Alexander v. National Farmers Organization, supra, 687 F.2d at 1210, remanded this case with directions that this Court, “in its discretion, conduct such further proceedings and make such new findings as may be appropriate to ensure that the determination of damages and other relief can be made consistent with this opinion.” Following that remand, NFO and the NFO class claimants filed a motion for an order of this Court that would award them damages against AMPI, Mid-Am and CMPC as follows: (1) NFO market-penetration damages in the amount of $12,947,034, trebled to $38,841,102, and (2) NFO claimant price-reduction damages in the amount of $1,075,383, trebled to $3,226,149. Although afforded the opportunity to do so, NFO elected not to adduce any new or additional evidence. Plaintiffs expressly stated on page 1 of their brief in support of their motion for damages that “plaintiffs have not introduced any new damage evidence nor new damage theories, but instead rely upon the evidence adduced and the theories originally advanced at trial.” Compliance with the Court of Appeals’ directions on remand has been an extremely difficult task for the reason that the parties radically disagree in regard to how the opinion of the Court of Appeals should be read. NFO stated that its brief in support of its motion was “submitted to aid the Court in quantifying the recoverable damages by indicating the impact of the Eighth Circuit’s decision ... and by providing a ‘road map’ (Appendix A attached hereto) which outlines and condenses the damage proofs already presented.” (NFO’s Brief in Support of Mot. for Damages at 1). Describing the Eighth Circuit’s opinion in 687 F.2d 1173, NFO stated that “[t]he Eighth Circuit held that assessment of damages may be based on inferences drawn ‘from the circumstances and evidence as a whole.’ Id. at 1210.” NFO then stated that “the evidence shows, and the Eighth Circuit found, that the defendants were the ‘major marketers of milk produced in the Midwest,’ id. at 1192, and that, among other findings, ‘NFO’s marketing efforts became a serious problem for Mid-Am, AMPI and CMPC.' Id. at 1194;” that “ ‘NFO and AMPI were in full scale competition,’ id. at 1189, and ‘Mid-Am viewed NFO as a substantial threat.’ Id.”', and that “[t]hese ‘major marketers’ engaged in a ‘broad pattern,’ id. at 1200, of concerted predation throughout a ‘ten state region,’ id. at 1193, specifically intended to ‘eliminate NFO as a competitor.' Id.” (NFO's Brief in Support at 1). NFO further stated that “[t]he Eighth Circuit found that ‘the fact of injury is unmistakable on this record’ and specifically instructed this Court that it has ‘broad latitude in assessing the amount of damages which NFO shall recover.’ Id. at 1210 (emphasis added [by NFO])” and that “[i]n light of this instruction, and in view of the ‘circumstances and evidence as a whole,’ only one inference can be drawn: NFO, virtually from the beginning in ‘full scale competition’ with the defendant ‘major marketers,’ had the potential to achieve a substantial share of the ten state milk market.” Id. at 2. ■ Based on that reading of the Court of Appeals’ opinion, NFO argued that “[t]he only substantive antitrust issue that remains in this proceeding under Section 4 of the Clayton Act is the quantification of damages suffered by the plaintiffs” and that “[u]nder the Eighth Circuit’s decision, NFO is entitled to the marketing fees and membership dues it would have received had there been no antitrust violation.” Id. at 2-3. In support of its claim for damages NFO relies on the same market structure theory and the same test market theory which it presented at trial through the testimony of Dr. Robert A. Nathan (Nathan). The first theory, according to NFO, would be established by paragraphs 2268-74 and paragraphs 2331-58 of NFO’s proposed findings of fact and by pages 9635-54 of Nathan’s direct examination. NFO states that its second theory would be established by paragraphs 2261-67 and paragraph 2275-2330 of NFO’s proposed findings of fact and pages 9585-93 of Nathan’s direct testimony. NFO states that the price-reduction damages now claimed on behalf of “the NFO class claimants,” is supported by an analysis prepared by NFO counsel, and is based on paragraphs 2018-62 of the findings of fact proposed by NFO at trial. NFO argues that the Court of Appeals recognizes “that these price reduction damages belonged to the individual NFO dairy farmers.” NFO cites and relies upon the familiar antitrust cases of Zenith v. Hazeltine Research, Inc., 395 U.S. 100, 123-34, 89 S.Ct. 1562, 1576-82, 23 L.Ed.2d 129 (1969); Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264, 66 S.Ct. 574, 579, 90 L.Ed. 652 (1946); Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 561-66, 51 S.Ct. 248, 250-52, 75 L.Ed. 544 (1931); and Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 377-79, 47 S.Ct. 400, 404-05, 71 L.Ed. 684 (1927), and the progeny of those cases. NFO, however, has directed attention to a relatively small number of its proposed findings of fact or to the portions of the record which they contend would support those proposed findings of fact. Rather, NFO quoted the latter portion of a sentence of the Court of Appeals’ opinion which stated that; “It was error, however, [for the district court] not to draw factual inferences adverse to AMPI on matters undertaken in or through offices and individuals involved in the destruction of documents.” NFO therefore argued that “NFO is at least entitled to the very strongest adverse inferences that can be drawn from the wholesale destruction” of the Little Rock documents and that “[a] reasonable adverse inference is that the destroyed evidence would have reinforced the admission that when the defendants honestly analyzed NFO’s potential, they too concluded that NFO was capable of becoming a major milk pooling firm, and would do so unless they conspired to force it out of the market.” (NFO’s Brief in Supp. of Mot. for Damages at 16-17.) III. Defendants filed two separate briefs in opposition to NFO’s motion for damages, one brief directed to the question of “causation”; the other brief directed to the question of “measurement of damages.” IV. Defendants’ Causation Brief Defendants' causation brief, as did NFO’s brief in support of its motion for damages, focused on particular portions of the Court of Appeals’ opinion to support its reading of that opinion. Defendants make reference to a substantial number of statements in the Court of Appeals’ opinion to support their argument that a “ ‘threshold factual issue [of] causation’ [687 F.2d at 1208] is very much alive.” (Brief in Opposition: Causation at 2.) For example, defendants noted that the Court of Appeals, after holding that NFO was not entitled to recover any alleged “price-reduction” damages stated that “[l]osses of such dues and fees, to the extent attributable to the defendants’ unlawful conduct, represent direct injury to NFO in its ‘business or property.’ Id. at 1209 (emphasis added by defendants)” and that the Court of Appeals added in a footnote that “[u]nder these circumstances, lost membership dues are not indirect injuries and NFO is entitled to recover such dues to the extent such losses are reasonably shown to be caused by the antitrust conspiracy. Id. at 1209 n. 42 (emphasis added by defendants).” (Brief in Opp: Causation at 2-3). Defendants argue that the Court of Appeals “defined the standard” to be applied on remand “for the third time” when it stated that “... NFO has a right to recover the fees and dues that it reasonably shows it would have derived in such markets but for the effect of the unlawful conduct. Id. at 1210 (emphasis added and footnote omitted by defendants).” (Brief in Opp. at 3). Defendants contend that the Court of Appeals “provided guideposts for application of the standard” which defendants contend is applicable on remand in connection with its discussion of specific overt acts which the Court of Appeals found to be in violation of the antitrust laws. Id. at 3. Defendants point to the Court of Appeals discussion of Gandy Dairy, located in San Angelo, Texas, (in connection with which NFO presently claims no damages), and to the footnote appended to the discussion of that dairy’s refusal to purchase NFO milk which stated that “ ‘[o]f course, in assessing damages, the district court may consider the extent to which NFO’s harm is attributable to AMPI’s conduct.’ 687 F.2d at 1196 n. 21 (emphasis added by defendants).” (Brief in Opp. at 4). Defendants also directed attention to another footnote to the Court of Appeals’ discussion of defendants’ litigation and threats of litigation against actual or potential customers of NFO which stated that “[implicit in the [district court’s] findings may be determinations as to the extent to which NFO was harmed by this aspect of defendants’ conduct. Such questions can be fully considered on remand. Id. at 1203 n. 35 (emphasis added by defendants).” (Brief in Opp. at 4). Defendants further contend that the Court of Appeals made clear that it anticipated that factual questions might be presented on remand in connection with certain of the defendants’ mergers and acquisitions. Defendants note that after the Court of Appeals concluded that it could not say that “it was clearly erroneous for the district court to reject findings that the acquisitions, mergers and related milk pooling practices were part of an unlawful conspiracy,” (Alexander v. NFO, supra, 687 F.2d at 1206) it went on to say that: In instances where acquisitions of independent dairies resulted in actual displacement of preexisting NFO sales, however, the district court, on remand, should consider whether such conduct following acquisition reflects an intent to block NFO rather than a legitimate business decision based upon price, quality or similar factors. Where post-acquisition terminations of NFO sales are found to be part of a scheme to eliminate NFO, such lost sales would form a basis for NFO’s damage claim. Id. at 1206-07 (emphasis added by defendants).” (Brief in Opp. at 4-5) Defendants concede that the Court of Appeals’ determination that NFO could not recover “price reduction damages ” did not completely remove the “price reduction issue ” from factual consideration on remand. Defendants directed attention to the fact that after the Court of Appeals determined that “NFO’s net revenues were ... tied to the volume of its marketing, not to the price it earned,” the Court of Appeals stated that “[t]he price reduction issue may be relevant to NFO’s damages in that, by virtue of selling at lower prices, NFO may have lost members or, in turn, marketing volume. The measure of such harm, however, would be the lost fees and dues from those who stopped marketing through NFO, not the price differential. 687 F.2d at 1208-09 (emphasis added by defendants).” (Brief in Opp. at 7). Defendants contend that under the directions provided by the Court of Appeals as above quoted, NFO must not only prove it lost sales to handlers such as Beatrice, Gandy, Wanger and Foremost, but that it has the burden of proving that NFO thereby lost “member milk marketings and members” of NFO. (Brief in Opp. at 7). Defendants contend that such “particularized proof” is mandated by the Court of Appeals’ conclusion that: Here, there is no doubt that the unlawful conspiracy was the material cause, for example, of Beatrice’s cutoff decision in March of 1971 and of Foremost’s subsequent rejection of the same shipments, [citations omitted]. The extent to which rejections of NFO milk by these dairies in other periods (or by other dairies in the face of similar conduct) were also due to defendants’ conspiracy is a factual question for the district court. Id. at 1210 (emphasis added by defendants). (Brief in Opp. at 7-8). Defendants further pointed to what it described as “the appellate court’s repeated admonitions concerning the effect of NFO’s mismanagement and bungling upon the ‘harm’ sustained by NFO, Inc.” (Brief in Opp. at 11). Defendants noted that the Court of Appeals quoted with apparent approval this Court’s observation, In re Midwest Milk Monopolization Litigation, 510 F.Supp. 381, at 420 (1981), which stated that “the record would come closer to supporting a set of findings that NFO became a victim of its own propaganda and that its ignorance and inexperience in the dairy field required it to experiment with one unsound idea after another____ Id. at 1188.” (Brief in Opp. at 11). Defendants’ causation brief also directed attention to that portion of the Court of Appeals’ opinion which stated that: The defendants also attack NFO’s right to recover membership dues and checkoff fees on the ground such damages are speculative, present impossible tracing problems, and ultimately reflect self-inflicted harm rather than damage causally linked to defendants’ unlawful conduct. These arguments largely raise factual questions for the district court, but the fundamental legal guidelines are clear. 687 F.2d at 1209 (emphasis added by defendants). (Brief in Opp. at 11-12). And finally, in the same regard, defendants quote the following passage of the Court of Appeals: We also recognize that NFO’s entry into the business of milk marketing was not conceived or managed as effectively as the efforts of the co-ops and that NFO cannot recover for losses clearly attributable to its own failures. On the other hand, NFO correctly argues that “defendants are really trying to clip NFO’s wings and then escape liability on the grounds that NFO ‘cannot fly.’ ” [citations omitted] We note only that the district court must weigh these factors, mindful that the legal standard permits recovery where defendant’s unlawful conduct is “a material cause of injury; a plaintiff need not exhaust all possible alternative sources of injury in fulfilling his burden of proving compensable injury.” [citation omitted] 687 F.2d at 1210 (emphasis added by defendants). (Brief in Opp. at 12). Defendants state that the voluminous findings of fact proposed in Appendix A attached to defendants’ causation brief to NFO’s motion to award damage “clearly establishes” that: o NFO’s “dragnet” damage theory, indiscriminately attributing all of NFO’s alleged losses to defendants’ conduct, fails to account for the effects on NFO of lawful competition by defendants and third parties. It is therefore fatally defective as a matter of law. o NFO’s milk quality problems were monumental, unprecedented and caused NFO to be unattractive to customers and members, o NFO’s reputation as a militant, radical organization and its misguided policies and gross mismanagement caused losses of customers and members alike. o NFO’s experimentation with one unsound marketing “gimmick” after another and incessant appeals (“crisis drives”) for money alienated dairy farmers. o NFO’s internal record-keeping, particularly its financial records, were in such disarray that reasoned management decision-making was impossible; NFO could not even determine whether the dairy program was losing money. o NFO’s sales “efforts” were feeble indeed. NFO failed to even contact a number of potential customers in the “damage” area. Even when NFO representatives made pro forma “get-acquainted” calls and received indications of handler interest, NFO did not follow up. o NFO’s mismanagement was not confined to the Midwest but permeated NFO’s dairy program throughout the country. Indeed, NFO’s performance was better in the area allegedly subject to conspiratorial conduct than it was in the “non-conspiracy” areas, o NFO’s ineffectiveness was not confined to its dairy program. NFO’s blunders in other commodities, such as the cull cow program, and millions of dollars of losses in its grain program caused widespread membership defection. o NFO repeatedly imposed one mandatory deduction after another on dairy farmers marketing through NFO until its dairy deductions became the highest in the industry. This tactic alienated existing as well as potential members. o NFO’s asserted “loyal” membership base was illusory. NFO’s own records indicate that scores of those “die-hard” members hadn’t paid their dues for years. Indeed, NFO carried on its books millions of dollars of unpaid dues, a significant portion of which had been delinquent for over 10 years. (Brief in Opp. at 13-14). In addition, defendants contend that NFO has ignored the fact that this Court has rejected any number of findings of fact which NFO proposed at the time of trial and the fact that the Court of Appeals did not disturb those rejected findings on appeal. The defendants, for example, state that “this Court has already rejected NFO’s proposed findings of its alleged capability in dairy marketing and its alleged ability to draw dairy farmers” and direct attention to this Court’s treatment of those particular paragraphs in 510 F.Supp. at 454, which shows rejection of paragraphs 346-47, 349-50, 352, and 354 of NFO proposed findings of fact. (Brief in Opp. at 20). We shall illustrate the thrust of defendants’ argument in the next section of this memorandum opinion. V. To understand the present significance of this Court’s rejection of particular findings of fact proposed by NFO at trial, we set forth all of the paragraphs which NFO proposed that we should have found in regard to “NFO’s Recruiting Efforts”. NFO proposed findings of fact in that regard were stated in paragraphs 345 to 354 in its trial proposed findings of fact: 345. Once NFO decided in 1958 to alter its purpose and start bargaining instead of protesting, NFO began soliciting dairy, meat and grain farmers to sign the NFO membership agreement. 346. [Rejected] Dairy farmers were as interested in joining NFO as were meat and grain farmers. 347. [Rejected] NFO solicited new-members at meetings by focusing on the primary commodities that they produced. 348. From 1958 to 1965, NFO’s primary activity was soliciting farmers to join NFO. 349. [Rejected] The percentage of all NFO members in an area who are dairy farmers generally corresponds to the percentage of all farmers in that area who are dairy farmers. 350. [Rejected] Most of the farmers that NFO enrolled as members in Minnesota and Wisconsin were dairy farmers. 351. NFO is the only farm organization in the United States that markets milk, meat and grain. 352. [Rejected] NFO’s multi-commodity program was attractive to farmers. 353. NFO emphasized its cull-cow program when it attempted to enlist dairy farmers to market milk through NFO. 354. [Rejected] Generally, farmers received more money for cows marketed through the NFO cull-cow program than they did for those sold through local auctions. Examination of our treatment of those ten proposed findings of fact on 510 F.Supp. at 454 shows that we adopted only paragraphs 348 and 351 as proposed. Paragraphs 345 and 353, were modified in accordance with our view of the weight of the credible evidence. In considering the significance of this Court’s determination at trial that NFO had not adduced sufficient credible evidence to support NFO’s proposed findings of fact as contained in paragraphs 346, 347, 349, 350, 352, and 354, as above quoted, it must be understood that paragraph 2215 of NFO’s proposed damage finding of fact, (which would reflect an acceptance of the data reflected in NFO Exhibit No. 1023) is based on the assumption that NFO was, in fact, entitled to all five findings of fact proposed in paragraphs 345-50 of its proposed findings of fact. The thrust of defendants’ argument in regard to the impact of this Court’s rejection of NFO’s proposed findings of fact is thus made clear when it is understood that this Court expressly rejected paragraph 349 of NFO’s proposed findings of fact which stated: “349. The percentage of all NFO members in an area who are dairy farmers generally corresponds to the percentage of all farmers in that area who are dairy farmers.” NFO contended at trial that its proposed finding of fact in paragraph 349 was supported by the following cited testimony: “Staley, Tr. at 1651-59; Berkhahn, Tr. at 6468-70; Scott, Tr. at 2541-43, 3076.” Although a small number of the pages of the testimony of Staley, Berkhahn or Scott were included in Appendix G which NFO filed in support of its motion for damages, the particular pages cited in support, of paragraph 349 were not reproduced for inclusion in that appendix. Examination of the conclusory testimony of each of those three witnesses in the complete transcript of their testimony establishes the reasons why this Court eoncluded that NFO had not adduced sufficient credible evidence to support the finding of fact as proposed in paragraph 349. In regard to Staley’s testimony, for example, the pages cited by NFO to support paragraph 349, Tr. at 1651-1659, show that Staley was permitted to testify in response to leading questions, subject, however, to the defendants’ objections, that NFO’s recruiting efforts established that “the breakdown of farmers who joined NFO on the basis of commodity produced was the same as for all farmers in that state” (Tr. 1655-56). On page 1860 of the transcript the Court noted that Staley’s testimony on direct examination in regard to NFO membership had been given “in very, very conclusory language, based upon no factual data that I know anything about” and that “I am at a complete loss of knowing what actual membership, so far as milk participation is concerned, that NFO has any place in the United States up to this point.” Berkhahn testified on direct examination that NFO membership “tended to parallel very closely the type of agricultural production that was produced in that area” (Tr. 6468) and that he thought he could “estimate how many dairy producers you had who were interested in marketing through NFO” (Tr. 6470). When cross-examined about the testimony he had given on direct examination he conceded that neither he nor any one he knew had any idea about how many dairy farmers in the United States were members of NFO. Berkhahn was being specifically examined about his testimony given on page 6470 of his direct examination, see Tr. 6687, when he gave the following testimony on cross-examination at Tr. 6689: Q (By Mr. Park) Mr. Berkhahn, in the year 1970, how many dairy farmers in the United States were members of the NFO? A I don’t know. Q Do you know who knows? A No, I don’t. Q Do you know whether that figure is ascertainable from within NFO’s records? A No, I do not. Q If I were to ask you the same question for every year for 1971, 1972, and 1973, and 1974, would your answer be the same? A Yes, it would. Q Are you aware of any system or procedure within the NFO today from which one could ascertain how many of the total NFO membership are dairy farmers? A No, I am not aware of any. Scott testified on direct examination on the pages cited by NFO to support the proposed finding stated in paragraph 349 that “if the dairy farmers in the area, the majority of them were dairy farmers, then we tended to have a majority of our members as dairy farmers” (Tr. 2541); that “in that area [Southwest Missouri] there were a lot of dairy farmers and we had a high percentage of the dairy farmers in that area as members of NFO” (Tr. 2542); and that “the membership tended to break down the same way wherever [he had] worked for NFO” (Tr. 2543). Defendants’ cross-examination of Scott, however, established that his conclusion that “about fifty percent of the producers in Southwest Missouri were members of the National Farmers Organization” was based on what “someone had told” him and that he had only been told that those producers “had signed at some time and paid their dues at some time” (Tr. 3074). Tr. 3077 of Scott’s cross-examination shows that he confirmed the testimony he had given at a damage deposition in October 1975 that he knew of no way that he could determine the number of NFO members who were dairy farmers by checking any NFO record. Scott further testified, Tr. 3081, that the following testimony given at his October 1975 damage deposition was true and correct at the time of trial: “Q As a matter of fact, from what you know in the way of NFO records, it will be impossible to do it, wouldn’t it, as far as you know? “A As far as I know, yes. “Q Now, how about the State of Oklahoma, do you have any opinion as to the total number of dairy farmers who are members of NFO in the State of Oklahoma? “A No, sir. “Q Again, based on your knowledge, would it be impossible from NFO records to determine the number of dairy farmers in the State of Oklahoma or who were members of NFO at any point in time? “A To get a complete list, yes. “Q The same question with regard to the State of Kansas, do you have any judgment or opinion as to the total number of dairy farmers who are members of NFO who are physically located in the State of Kansas? “A The same answer, I would not be able to say.” “Q Do you know the number of members in the State of Missouri? “A No, not — I couldn’t give you the specific number of members.” Scott further testified that: “Q And you have never known the number of NFO members for any period of time, is that right? “A That is correct. “Q So that if I were to ask you, Mr. Scott, sitting here today to make some kind of a comparison between, say, NFO’s membership as of December 31, 1974 and December 31st of any other year, you would just be wholly incapable of doing that, isn’t that right? “A That is correct. “Q Because the basic data, the underlying percentage, just doesn’t exist on which you can form an opinion, is that right? “A That is right.” The problem created by NFO’s election to stand on the findings of facts it proposed at trial and its attempted reliance upon proposed findings of fact which have been expressly rejected by this Court is not confined to paragraph 349 which we used as an example and which we have discussed in detail. For it is clear, again by way of example, that NFO’s proposed findings of fact in paragraphs 2298 to 2312 in regard to “NFO’s minimum performance, absent restraints” is based on the assumption that all of the findings of fact proposed by NFO in paragraphs 128-340 and paragraphs 469-2017 were, in fact, supported by the greater weight of the credible evidence. A glance at NFO’s “[Rejected]” proposed findings of fact in 510 F.Supp. at 443 to 454 and 458 to 501 in regard to those particular paragraphs will show the large number of proposed findings of fact which this Court concluded were not supported by the greater weight of the credible evidence. VI. Defendants’ Measurement Brief Defendants’ measurement brief filed in opposition to NFO’s motion for an order to award damages was solely directed toward the propriety of NFO’s measures of damages for alleged lost membership dues and checkoff fees. Defendants argued that “NFO’s damage evidence is even more speculative and inadmissible on this remand than it was at the trial, inasmuch as NFO has failed to prevail on most of the acts of alleged illegality which it asserted at the trial as the predicate for its damage theories and computations.” (Brief in Opp.: Measurement of Damages at 5.) Defendants contend that the “Eighth Circuit affirmed this Court’s findings of the legality of many of the acts and practices challenged by NFO on appeal, including charges relating to mergers and acquisitions of independent cooperatives (687 F.2d at 1206); pool loading (Id.); standby pools (ARSPC) (Id. at 1206-07); alleged bad faith litigation (Id., at 1200); attempts to. block NFO’s USD A qualification (Id. at 1199); and the alleged conspiracy with AMDI (Id. at 1.199). (Measurement Brief at 5-6).” Defendants further argue that the “only unlawful conduct found by the Court of Appeals — all occurring in 1970-71 — related to certain specific handlers, Gandy Dairy, Wanzer Dairy, Beatrice-Fort Worth, and Foremost-Dallas, threats of suits against handlers that could be shown to have resulted in the rejection of NFO milk, and the acquisition of independent proprietary dairies insofar as they were designed to, and did, foreclose NFO milk. (687 F.2d at 1196-1204, 1206-07)” and that “the appellate court specifically directed this Court on the remand to weigh and consider the extent to which NFO was injured and ‘harmed’ thereby.” (Measurement Brief at 6-7). Defendants argued that Dr. Nathan’s opinions are not credible because those opinions were based on unsupported assumptions given him by NFO and because he lacked the expertise required by Rules 702 and 703 of the Federal Rules of Evidence. Defendants contend that “Rule 702 imposes two threshold requirements for the admissibility of expert testimony: (1) the testimony must be helpful to the trier of fact to understand the evidence or to determine a fact in issue, and (2) the expert must be qualified to express opinions that are relevant to the inquiry.” (Measurement Brief at 13). Defendants further argued that Rule 703 must be given appropriate consideration for the reason that the “purpose of Rule 703 is to make certain that the expert’s opinion has sufficient basis without reference to unsupported assumptions and theoretical speculation.” (Measurement Brief at 15). On the facts, defendants argued in their measurement brief that “[a]t the trial, Nathan admitted that he was not, and did not purport to be, an expert in the dairy marketing industry. (Nathan, Tr. 10314, 10317, 10712-22, 10740, 10760-61, 11135; DF.l).” (Measurement Brief at 18). Defendants contend, on the facts, that Nathan disclaimed having any expertise in the dairy industry or in raw milk marketing and that he relied almost entirely upon assumptions provided by NFO counsel without investigation or knowledge of that validity of the assumptions which had been given him by counsel. The questions of whether Nathan could properly assume that NFO had the capabilities to be what Nathan described as a “major” marketer of raw milk and whether NFO could have penetrated each of the ten “damage” orders but