Qwest Communications was alleged to have engaged in anticompetitive behavior as a provider of local telephone service. The plaintiffs filed a complaint asking the US District Court for the District of Colorado to certify a broad class consisting of all local service subscribers across eight states, and seeking damages to the members of the class under provisions of the Sherman Act and the Federal Communications Act.

NERA analyzed the plaintiffs’ economic arguments in support of their motion for class certification. In an expert report and subsequent deposition, NERA explained that the economic models and proposed methodologies used to support the argument for class certification were unsound and unworkable because they were based on overly broad assumptions and because the aggregate data relied on by the plaintiffs’ expert would not reflect actual competitive conditions in local telephone markets in the eight states. NERA concluded that differences among the class members in their characteristics (e.g., consumers versus businesses) and locations (e.g., urban versus rural), as well as differences in the regulatory environments and competitive alternatives available to class members, would require individualized inquiries regarding impact and damages.

On 10 September 2007, Judge Richard P. Matsch for the District of Colorado denied class certification. In its order, the Court cited weaknesses in the plaintiffs’ economic models and methodologies as a key factor in their failure to establish that classwide injury could be demonstrated with proof common to the class. Specifically, the Court ruling said that the plaintiffs’ “modeling is flawed by the failure to correspond to the economic realities of the marketplace and the use of assumptions that are merely speculative.”