Rebotix Repair LLC v. Intuitive Surgical, Inc.

Filing 182

ORDER: Defendant Intuitive Surgical, Inc.'s Daubert Motion to Exclude the Opinions of Dr. Russell Lamb (Doc. # 114) is DENIED. Signed by Judge Virginia M. Hernandez Covington on 8/10/2022. (SGM)

Case 8:20-cv-02274-VMC-TGW Document 182 Filed 08/10/22 Page 1 of 23 PageID 36709

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
REBOTIX REPAIR, LLC,
Plaintiff /
Counterclaim Defendant,
v.

Case No. 8:20-cv-2274-VMC-TGW

INTUITIVE SURGICAL, INC.,
Defendant /
Counterclaim Plaintiff.
______________________________/
ORDER
This matter comes before the Court upon consideration of
Defendant

Intuitive

Surgical,

Inc.’s

Daubert

Motion

to

Exclude the Opinions of Dr. Russell Lamb. (Doc. # 114).
Plaintiff Rebotix Repair, LLC has responded. (Doc. # 145).
For the reasons that follow, the Motion is denied.
I.

Background
The Court and the parties are well familiar with the

background facts and claims in this case, and the Court will
not belabor them here. Suffice it to say that this is an
antitrust suit initiated by Rebotix, a company that offers a
service whereby it “repairs” the EndoWrist surgical implement
originally
parties

designed

hotly

and

contest

manufactured
the

relevant

1

by

Intuitive.

antitrust

The

market

Case 8:20-cv-02274-VMC-TGW Document 182 Filed 08/10/22 Page 2 of 23 PageID 36710

definition,

Intuitive’s

anticompetitive

alleged

effects

of

monopoly

Intuitive’s

power,

and

the

actions

on

the

relevant market. Rebotix offers the testimony of Dr. Lamb in
connection with those issues.
Dr. Lamb is the president and co-founder of an economics
consulting firm that provides clients with economic research
and quantitative and statistical analyses. (Doc. # 114-2 at
1). He has a Ph.D. in economics and has studied the economics
of markets and prices for 30 years. (Id.). In his report, Dr.
Lamb reached the following conclusions:
(1)

The

market

surgical

for

robots

minimally
(“MIST

invasive

robots”)

soft

tissue

constitutes

a

“relevant antitrust product market.” The market for
MIST robots is the “tying market.”
(2)

“The

EndoWrist

Repair

and

Replacement

Market

constitutes a relevant antitrust product market.” 1
The EndoWrist Repair and Replacement Market is the
“tied market.”
(3)

Intuitive

possessed

monopoly

power

in

the

U.S.

market for MIST robots and in the EndoWrist Repair
In addition, Dr. Lamb posits that the United States
constitutes the relevant geographic market with respect to
both identified product markets. Intuitive does not dispute
this point.
1

2

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and Replacement Market during the relevant period.
Furthermore, Intuitive used its monopoly power in
the market for MIST robots to maintain a monopoly
in the related EndoWrist Repair and Replacement
Market.
(4)

Intuitive’s

alleged

“anticompetitive

and

misconduct
resulted

here
in

harm

was
to

competition in that hospitals had little choice but
to

pay

higher

prices

for

replacement

EndoWrist

surgical instruments from Intuitive in order to use
their da Vinci surgical robots than they otherwise
would have had they been able to repair their
EndoWrist surgical instruments through third-party
repair companies such as Rebotix.”
(Id. at 5).
Now, Intuitive seeks to exclude Dr. Lamb’s testimony.
(Doc. # 114). Rebotix has responded (Doc. # 145), and the
Motion is ripe for review.
II.

Discussion
Federal Rule of Evidence 702 states:
A witness who is qualified as an expert by
knowledge,
skill,
experience,
training,
or
education may testify in the form of an opinion or
otherwise
if:
(a)
the
expert’s
scientific,
technical, or other specialized knowledge will help
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the trier of fact to understand the evidence or to
determine a fact in issue; (b) the testimony is
based on sufficient facts or data; (c) the
testimony is the product of reliable principles and
methods; and (d) the expert has reliably applied
the principles and methods to the facts of the case.
Fed. R. Evid. 702.
Implementing Rule 702, Daubert v. Merrell Dow Pharms.,
Inc., 509 U.S. 579 (1993), requires district courts to ensure
that all scientific testimony or evidence admitted is both
relevant and reliable. See Id. at 589–90. The Daubert analysis
also applies to non-scientific expert testimony. Kumho Tire
Co. v. Carmichael, 526 U.S. 137, 147 (1999). District courts
must

conduct

this

gatekeeping

function

“to

ensure

that

speculative, unreliable expert testimony does not reach the
jury under the mantle of reliability that accompanies the
appellation ‘expert testimony.’” Rink v. Cheminova, Inc., 400
F.3d 1286, 1291 (11th Cir. 2005).
The Eleventh Circuit “requires trial courts acting as
gatekeepers to engage in a ‘rigorous three-part inquiry.’”
Hendrix v. Evenflo Co., 609 F.3d 1183, 1194 (11th Cir. 2010).
The district court must assess whether:
(1) the expert is qualified to testify competently
regarding the matters he intends to address; (2)
the methodology by which the expert reaches his
conclusions is sufficiently reliable as determined
by the sort of inquiry mandated in Daubert; and (3)
the testimony assists the trier of fact, through
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the application of scientific, technical, or
specialized expertise, to understand the evidence
or to determine a fact in issue.
Id. The proponent of the expert testimony bears the burden of
showing,

by

a

preponderance

of

the

evidence,

that

the

testimony satisfies each of these requirements. Id.
Here,

Intuitive

does

not

challenge

Dr.

Lamb’s

qualifications or whether his testimony would be helpful to
the trier of fact. It instead focuses on the reliability of
his methodology and its arguments that certain of his opinions
are contrary to law.
Turning to reliability, then, the Court must assess
whether the expert’s methodology is reliable. “Exactly how
reliability is evaluated may vary from case to case, but what
remains constant is the requirement that the trial judge
evaluate the reliability of the testimony before allowing its
admission at trial.” United States v. Frazier, 387 F.3d 1244,
1262 (11th Cir. 2004) (citing Fed. R. Evid. 702, Advisory
Committee Notes (2000)). There are four recognized, yet nonexhaustive,

factors

a

district

court

may

consider

evaluating reliability:
(1) whether the expert’s methodology has been
tested or is capable of being tested; (2) whether
the technique has been subjected to peer review and
publication; (3) the known and potential error rate
of the methodology; and (4) whether the technique
5

in

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has
been
generally
scientific community.

accepted

in

the

proper

Seamon v. Remington Arms Co., 813 F.3d 983, 988 (11th Cir.
2016) (citations omitted). A district court can take other
relevant

factors

into

account

as

well.

Id.

(citations

omitted).
“If the [expert] witness is relying solely or primarily
on

experience,

witness

must

then,”

explain

in
how

establishing
that

reliability,

experience

leads

to

“the
the

conclusion reached, why that experience is a sufficient basis
for the opinion, and how that experience is reliably applied
to

the

facts.”

Frazier,

387

F.3d

at

1261

(citation

and

internal quotation marks omitted). The Court’s analysis as to
reliability “focus[es] ‘solely on principles and methodology,
not on the conclusions that they generate.’” Seamon, 813 F.3d
at 988 (citation omitted).
Intuitive challenges all of Dr. Lamb’s four opinions
outlined above. The Court will address each argument in turn.
1.

Relevant antitrust product market for MIST robots

“Defining the market is a necessary step in any analysis
of market power[.]” U.S. Anchor Mfg., Inc. v. Rule Indus.,
Inc., 7 F.3d 986, 994 (11th Cir. 1993). “Defining a relevant
product market is primarily a process of describing those

6

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groups of producers which, because of the similarity of their
products, have the ability — actual or potential — to take
significant amounts of business away from each other.” Id. at
995 (citation and internal quotation marks omitted). Eleventh
Circuit precedent requires an antitrust plaintiff to proffer
expert testimony to establish a relevant product market. Am.
Key Corp. v. Cole Nat’l Corp., 762 F.2d 1569, 1579 (11th Cir.
1985)

(holding

lay

testimony

insufficient

to

establish

relevant antitrust market).
One of Dr. Lamb’s challenged conclusions is that the
market for MIST robots is a relevant antitrust product market.
In his report, Dr. Lamb stated that:
[T]here are no economic substitutes for minimally
invasive soft tissue surgeries performed with MIST
Surgical Robots and that MIST Surgical Robots are
a
necessary
input
in
performance
of
those
surgeries. In particular . . . other forms of
minimally invasive soft tissue surgery (such as
traditional laparoscopic surgery) and non-MIST
robotic surgeries are not economic substitutes for
robotically assisted minimally invasive soft tissue
surgeries. Therefore, because there are no economic
substitutes for robotically assisted minimally
invasive soft tissue surgeries, which are defined
by the use of the MIST Surgical Robot (of which da
Vinci is the dominant type during the Relevant
Period), there are no economic substitutes for MIST
Surgical Robots.
(Id. at 18). In reaching this conclusion, Dr. Lamb considered
whether other types of surgery – such as laparoscopic or open

7

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surgery

–

could

be

economic

substitutes

for

minimally

invasive soft tissue surgeries performed with MIST robots,
and he determined that they were not. Dr. Lamb reached this
conclusion because: (1) there is testimony from a hospital
representative that a 5-10% increase in the price of the da
Vinci surgical robot would not lead hospitals to perform more
traditional nonrobotic surgeries because opting to forego a
MIST robot would cause surgeons to leave, patients to go
elsewhere, and the hospital to lose revenue; (2) Intuitive
has acknowledged that it did not view traditional surgeries
as competition for surgeries performed by MIST robots; (3)
MIST robots possess different features and offer different
benefits to surgeons and patients compared to traditional
surgeries; and (4) there are non-clinical benefits to using
the MIST robots, such as hospitals being able to attract top
surgeons and market their use of the MIST robots to drive
revenue. (Id. at 19-29).
Not only that, but in Dr. Lamb’s opinion surgical robots
that do not perform the same types of surgical procedures as
the MIST robots are not functional or economic substitutes.
(Id. at 29-30). Intuitive executives have testified that no
other surgical robots have FDA clearance to perform all the
same surgical procedures as the da Vinci. (Id.). Two products
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compete with da Vincis in the relevant market: the Senhance
surgical robot sold by TransEnterix and the Flex surgical
robot sold by Medrobotics. (Id. at 30 n.119; Doc. # 114-3 at
90-91). According to Dr. Lamb’s research, these two other
surgical robots have only a de minimis share of the market
for MIST robots. (Doc. # 114-2 at 50). An Intuitive executive
testified that “in 2020 in the U.S., Intuitive’s da Vinci had
an installed base between 3,500 and 4,000; TransEnterix’s
Senhance had an installed base of 15 or less; and Medrobotics’
Flex had an installed base between seven and ten.” (Id.).
Relying on the companies’ SEC filings, Dr. Lamb concluded
that in 2020, Intuitive’s da Vinci robot had a 99.5% market
share in the U.S. market for MIST surgical robots, with
TransEnterix

and

Medrobotics

together

accounting

for

the

other 0.5%. (Id. at 51).
With

this

background

in

mind,

the

Court

turns

to

Intuitive’s argument. Here, Intuitive argues that Dr. Lamb’s
opinion defining a relevant antitrust product market for MIST
robots should be excluded because he failed to properly employ
his chosen methodology – the small but significant and nontransitory increase in price (“SSNIP”) test. (Doc. # 114 at
2-3).

9

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To begin, the SSNIP test measures whether increasing a
product’s price by a relatively small amount – usually by
five to ten percent – results in a substantial number of
consumers purchasing an alternative product. F.T.C. v. Whole
Foods Market, Inc., 548 F.3d 1028, 1038 (D.C. Cir. 2008). As
Dr. Lamb explains in his report, “[i]f the hypothetical
monopolist

is

able

to

permanently

(that

is,

in

a

‘non-

transitory’ way) raise prices for a product or group of
products by a ‘small but significant’ amount . . . without
losing so much in sales volume that the increase in price is
unprofitable,

then

that

product

or

group

of

products

constitutes a relevant antitrust product market.” (Doc. #
114-2 at 17 n.73 (citing “Horizontal Merger Guidelines,” U.S.
Department

of

Justice

and

the

Federal

Trade

Commission,

August 19, 2010, at § 4.1.1)).
When asked about whether he performed a SSNIP test, Dr.
Lamb replied that:
Well, I conducted a form of SNNIP analysis based on
practical indicia. I did not conduct the kind of
analysis that sometimes — econometric analysis
that’s sometimes done in which one looks at
econometric measures of cross-price elasticity
based on a regression. I did not conduct that. It
wasn’t necessary to do so in order to define the
relevant antitrust product market for the tying
product, for the da Vinci surgical robots, but I
did talk about the practical indicia with respect
to a SNNIP analysis of the relevant market in which
10

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the da Vinci surgical robot was bought and sold in
the United States.
(Doc. # 114-3 at 92).
In his expert report, Dr. Lamb wrote that: “Even when
the evidence necessary to perform the hypothetical monopolist
test

quantitatively

is

not

available,

the

conceptual

framework of the test provides a useful methodological tool
for gathering and analyzing evidence pertinent to customer
substitution and to market definition.” (Doc. # 114-2 at 17
n.73). Elaborating on this, Dr. Lamb testified that he used
a “nonquantitative approach” to a SSNIP analysis that looked
at “practical indicia of economic substitutability, price
base substitutability, or the lack thereof.” (Doc. # 114-3 at
93).
Intuitive

argues

that,

while

SSNIP

is

an

accepted

methodology, “Dr. Lamb did not perform the accepted version
of the test, but instead performed his own version based on
‘practical indicia’ instead of actual pricing data.” (Doc. #
114 at 6).
But Rebotix points out that where the market is dominated
by one company – as Intuitive does here by holding a 99
percent market share in MIST robots – and that company does
not frequently change its prices, sufficient price change

11

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data is often unavailable. (Doc. # 145 at 1). It is for this
reason that Dr. Lamb conceded he did not include any analysis
of

pricing

data

or

any

calculations

regarding

cross-

elasticity of demand or supply, because “it wasn’t necessary
to do so.” (Doc. # 114-3 at 93-95). Dr. Lamb testified that:
[S]tudies on cross-price elasticity of demand as an
approach to performing quantitative versions of the
SNNIP
analysis
are
fraught
with
problems,
particularly when you have a firm with a large
degree of monopoly power such as Intuitive has in
the market for MIST surgical robots. Those kinds of
analyses are often subject to something we call the
Cellophane Fallacy, which is that they are
measuring a world which is already monopolypricing, and so trying to tease out what would
happen to the equilibrium when you’re already at
monopoly equilibrium is problematic. But it wasn’t
necessary and is not necessary to do a cross price
elasticity econometric study to apply a SNNIP
framework by looking at practical indicia, as I
quoted a few moments ago from Footnote 73 in my
report, citing the merger guidelines, and as I talk
about it in my report itself.
(Id. at 94).
While Intuitive takes issue with how Dr. Lamb applied
(or misapplied) the typical SSNIP test, it appears to the
Court that Dr. Lamb did not use a typical SSNIP test because
the market at issue did not call for one. As the Eleventh
Circuit has explained, while measures of supply and demand
elasticities are the “most accurate estimates of relevant
markets . . . it is ordinarily quite difficult to measure

12

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cross-elasticities

of

supply

and

demand

accurately.

Therefore, it is usually necessary to consider other factors
that can serve as useful surrogates for cross-elasticity
data”. U.S. Anchor, 7 F.3d at 995; see also McWane, Inc. v.
F.T.C., 783 F.3d 814, 829 (11th Cir. 2015) (explaining that
econometric

analysis

of

relevant

markets

is

not

“always

required” and “courts routinely rely on qualitative economic
evidence to define relevant markets”). Thus, in addition to
the

cross-elasticity

Circuit

has

long

of

looked

demand
to

and

the

supply,

factors

the

(or

Eleventh

“practical

indicia”) set forth by the Supreme Court in Brown Shoe Co. v.
United

States,

370

U.S.

294,

325

(1962),

in

defining

a

relevant market or submarket: “industry or public recognition
of the submarket as a separate economic entity, the product’s
peculiar

characteristics

and

uses,

unique

production

facilities, distinct customers, distinct prices, sensitivity
to price changes, and specialized vendors.” U.S. Anchor, 7
F.3d at 995.
Here, Dr. Lamb used the SSNIP analytical framework from
which to build his opinions based on other evidence, like
testimony and business records (the “practical indicia” cited
in his testimony). And the facts Dr. Lamb considered align
with the factors enunciated in U.S. Anchor. For example, Dr.
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Lamb considered customers’ “sensitivity to price changes”
when he looked at testimony from hospital administrators that
a 5-10% increase in price would not lead them to substitute
non-robotic surgeries for surgeries conducted using the da
Vinci

robot.

He

also

considered

MIST

robots’

distinct

characteristics and uses, including the increased dexterity
and precision enjoyed by surgeons using MIST robots and the
benefits to patients, which include less scarring and a
quicker recovery time.
Changing tactics, Intuitive next argues that Dr. Lamb’s
analysis of “practical indicia” is “devoid of evidentiary
support,” because Dr. Lamb has no evidence to support his
contention that the da Vinci’s competitors – the MIST robots
made by two other companies – are able to “discipline pricing”
for the da Vinci.
As explained above, antitrust plaintiffs must define a
relevant product market, which must “encompass the product at
issue as well as all economic substitutes for the product.”
Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038, 1045
(9th Cir. 2008). Including economic substitutes ensures that
the

relevant

product

market

encompasses

the

sellers

or

producers who have the actual or potential ability to deprive
each other of significant levels of business. Pistacchio v.
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Apple Inc., No. 4:20-cv-07034-YGR, 2021 WL 949422, at *1 (N.D.
Cal. Mar. 11, 2021).
Here, Dr. Lamb identified several potential economic
substitutes for surgeries performed with MIST robots – such
as traditional laparoscopic surgeries and non-MIST surgical
robots – but rejected them for various reasons. As detailed
in his report, only two other surgical robots (TransEnterix’s
Senhance robot and Medrobotics’ Flex robot) currently have
FDA

approval

to

perform

minimally

invasive

soft

tissue

surgeries in the United States. (Doc. # 114-2 at 30 n.119).
And neither of these competitors are FDA approved “for all
the same indications” as the da Vinci. (Id.). Even including
the Senhance and Flex within the relevant product market, the
da Vinci still holds a 99.5% market share in the MIST robot
market.

(Id.

at

50-51).

Dr.

Lamb

explained

during

his

deposition that when there is a “dominant firm in the market
with more than 99 percent market share, it’s going to take
some period of time before the behavior of a new competitor
can discipline the prices that dominant firm is going to
charge.” (Doc. # 114-3 at 124-26, 129-32). And because the
Flex and Senhance are still “nascent competitors” with “very
little

market

penetration,”

“their

ability

to

discipline

[prices] . . . has not yet developed.” (Id. at 110-11, 121).
15

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Still, he included the Senhance and Flex robots within the
relevant product market definition because those competitors
“are attempting to enter that market and . . . I would expect,
if they were able to enter the market and overcome the
barriers to entry that are significant there, that they would
be able to discipline pricing.” (Id. at 108).
The

Court

finds

Dr.

Lamb’s

methodology

sufficiently

reliable. Any alleged flaws in Dr. Lamb’s methodology should
be addressed in cross-examination. See Maiz v. Virani, 253
F.3d 641, 666 (11th Cir. 2001) (“Vigorous cross-examination,
presentation of contrary evidence, and careful instruction on
the burden of proof are the traditional and appropriate means
of attacking [debatable] but admissible evidence.” (citations
and internal quotation marks omitted)).
2.

Relevant
antitrust
product
EndoWrist Repair and Replacement

market

for

Intuitive argues that Dr. Lamb’s opinion defining the
EndoWrist Repair and Replacement Market should be excluded
because

(1)

defining

this

market

from

the

supplier’s

(Rebotix’s) point of view is contrary to law; and (2) he
relied on the opinions of two other experts – Dr. T. Kim
Parnell and Mr. J. Lawrence Stevens – whose own opinions are
allegedly inadmissible. (Doc. # 114 at 3-4, 11-13).

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In his report, Dr. Lamb concluded that the market for
EndoWrist repair and replacement – which Rebotix claims is
unlawfully tied to the sales of da Vinci surgical robots – is
itself a relevant antitrust product market that is distinct
from the market for MIST surgical robots. (Doc. # 114-2 at
32-33).

Dr.

Lamb

concluded

that

because

there

are

no

functional substitutes for the repair and replacement of
EndoWrist

surgical

instruments,

there

are

therefore

no

economic substitutes either. (Id. at 33). In reaching this
conclusion, Dr. Lamb relied on the following evidence: (1)
third-party repairs of EndoWrist instruments were viewed by
Intuitive and other market participants as a competitive
threat to Intuitive’s sale of replacement EndoWrists; and (2)
in response to the competitive threat posed by third-party
repairs, Intuitive investigated the possibility of selling
refurbished

EndoWrists

at

a

discount

from

the

cost

of

replacement EndoWrists. (Id. at 33-37).
First, Intuitive’s argument that the market must be
defined from the perspective of the supplier is incorrect for
the reasons explained in the Court’s contemporaneous Order on
the parties’ cross motions for summary judgment. Furthermore,
in defining the relevant market from the perspective of the
hospital customers, Dr. Lamb relied on multiple, unchallenged
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bases to support this opinion: (1) Intuitive and third parties
viewed “repair” businesses like Rebotix as a competitive
threat to Intuitive’s sales of replacement EndoWrists; (2)
Intuitive

at

one

point

considered

selling

refurbished

EndoWrists to edge repair companies out of competition; and
(3) only da Vinci EndoWrists are compatible with da Vinci
surgical robots. (Doc. # 114-2 at 32-40).
The Motion is denied as to this point, but Intuitive may
raise its challenges to Dr. Lamb’s methodology during crossexamination.
3.

Whether Intuitive has possessed and
monopoly power in the relevant markets

exercised

A monopolization claim under Section 2 of the Sherman
Act is comprised of two elements: “(1) the possession of
monopoly power in the relevant market and (2) the willful
acquisition or maintenance of that power as distinguished
from growth or development as a consequence of a superior
product,

business

acumen,

or

historic

accident.”

Morris

Commc’ns Corp. v. PGA Tour, Inc., 364 F.3d 1288, 1293-94 (11th
Cir. 2004) (quoting United States v. Grinnell Corp., 384 U.S.
563, 570-71 (1966)). “The first element, monopoly power, is
the power to control prices in or to exclude competition from

18

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the

relevant

market.”

Id.

at

1294

(internal

citation

omitted).
In his report, Dr. Lamb explains that “monopoly power
refers to the ability of a firm to persistently price at a
level

that

price.”

is

(Doc.

significantly
#

142-2

at

higher

46).

He

than

the

opines

competitive

that

Intuitive

possessed monopoly power in the “tying market” (the market
for MIST robots) and, thus, was able to set prices above
competitive levels. (Id. at 47). In support of this opinion,
he discussed how Intuitive “dominated” the market for MIST
robots in the United States, having a 99.5% market share.
(Id. at 50-51). In addition, Dr. Lamb cited “significant
barriers to entry” into the market for MIST robots, including
high costs for customers to switch robots and regulatory
hurdles. (Id. at 52). There are also high capital costs for
research and development and lengthy time requirements for
FDA

approval.

(Id.

at

53-54).

And

Intuitive’s

deep

penetration of the market means that many surgeons are trained
on, and feel most comfortable with, a da Vinci system. (Id.
at 55-56).
Importantly, Dr. Lamb also discussed how Intuitive’s
prices for da Vinci robots “exceeded marginal costs.” (Id. at
58). As he explained in his report, “[o]ne measure of market
19

Case 8:20-cv-02274-VMC-TGW Document 182 Filed 08/10/22 Page 20 of 23 PageID 36728

power is the ability of a firm to price in excess of marginal
cost” because, in a competitive market, price equals marginal
cost. (Id.). Dr. Lamb cited evidence that Intuitive enjoyed
“extremely high profit margins on da Vinci surgical robot
sales.” 2 (Id. at 60).
Dr.

Lamb

also

opined

that

Intuitive

possessed

and

exercised monopoly power in the “tied market” (the EndoWrist
Repair and Replacement Market), as supported by the fact that:
(1)

despite

in-roads

from

third

parties

like

Rebotix,

Intuitive retained a large market share in the EndoWrist
Repair and Replacement Market; (2) Intuitive prevented rivals
like

Rebotix

from

competing

effectively

in

this

market

through its use of restrictive contracts with customers and
cease

and

desist

letters;

(3)

the

prices

for

EndoWrist

surgical instruments which Intuitive supplied were set well
above marginal costs and at “supracompetitive” levels. (Id.
at 65-73).
Intuitive

argues

that

the

Court

should

exclude

Dr.

Lamb’s opinions with respect to Intuitive’s monopoly powers
in the relevant markets. According to Intuitive, Dr. Lamb’s
While Dr. Lamb provided precise profit margin percentages
in his report, the Court notes that the parties have chosen
to redact this information from their motions, and thus the
Court will also avoid using precise profit-margin numbers.
2

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Case 8:20-cv-02274-VMC-TGW Document 182 Filed 08/10/22 Page 21 of 23 PageID 36729

opinion that Intuitive exercised monopoly power by charging
“supracompetitive” prices is contrary to law in that Dr. Lamb
failed

to

consider

Intuitive’s

total

costs

(fixed

and

marginal costs). (Doc. # 114 at 4, 15-16).
Federal district courts are split on whether fixed (or
sunk) costs should be taken into account, especially in
innovation-intensive industries like pharmaceuticals or, as
here,

high-tech

medical

devices.

Compare

In

re

Solodyn

(Minocycline Hydrochloride) Antitrust Litig., No. CV 14-MD02503, 2018 WL 563144, at *11 (D. Mass. Jan. 25, 2018)
(finding that sunk costs “are relevant to the inquiry because
in a market with high fixed costs like the pharmaceutical
industry,

‘even

competitive

prices

may

exceed

marginal

cost’”) with In re Aggrenox Antitrust Litig., 199 F. Supp. 3d
662, 667 (D. Conn. 2016) (rejecting brand manufacturers’ sunk
costs argument because the fact that “brand manufacturers
incur enormous fixed costs developing and marketing new drugs
. . . does not mean that the price of the brand drug is not
supracompetitive,” and stating that the “generally accepted
economic means of analyzing the probability that given prices
are supracompetitive [is] using price and marginal cost”).
The Court need not take a stance on this issue in any
event, because Dr. Lamb testified that even taking into
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Case 8:20-cv-02274-VMC-TGW Document 182 Filed 08/10/22 Page 22 of 23 PageID 36730

account

additional

costs

like

research

and

development,

Intuitive’s profit margins are above 20 percent, which is
still “quite high.” (Doc. # 114-3 at 149-50). Any flaws in
his methodology may be explored on cross-examination. The
Motion is denied on this ground.
4.

Whether Intuitive’s challenged conduct has produced
anticompetitive effects

In his report, Dr. Lamb states that Intuitive’s alleged
misconduct (the agreements with hospitals prohibiting repair
of EndoWrists, the cease-and-desist letters, the threats to
discontinue

servicing)

“was

anticompetitive

because

it

resulted in higher prices for products in the (tied) market
than otherwise would have prevailed.” (Doc. # 114-2 at 45).
According to Dr. Lamb, “hospitals had little choice but to
pay

higher

prices

for

replacement

EndoWrist

surgical

instruments from Intuitive in order to use their da Vinci
surgical robots than they otherwise would have had they been
able to repair their EndoWrist surgical instruments through
third-party repair companies such as Rebotix.” (Id. at 5).
Intuitive

argues

that

Dr.

Lamb’s

opinion

that

Intuitive’s challenged conduct has caused anticompetitive
effects is contrary to law. Specifically, Intuitive claims
that the law requires Rebotix to prove that the combined price

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Case 8:20-cv-02274-VMC-TGW Document 182 Filed 08/10/22 Page 23 of 23 PageID 36731

for a da Vinci robot and EndoWrists was greater than it would
have been if they had been sold independently. Dr. Lamb did
not analyze this issue. Instead, he opined that some customers
would have paid less for Rebotix’s services in the “but-for”
world (i.e., without the alleged tying arrangement) than they
paid to buy new EndoWrists from Intuitive in the actual world.
(Doc. # 114 at 4-5).
The

Court

rejects

this

argument

for

the

reasons

explained in its accompanying summary judgment order.
Accordingly, it is hereby
ORDERED, ADJUDGED, and DECREED:
Defendant Intuitive Surgical, Inc.’s Daubert Motion to
Exclude the Opinions of Dr. Russell Lamb (Doc. # 114) is
DENIED.
DONE and ORDERED in Chambers in Tampa, Florida, this
10th day of August, 2022.

23