Page 57 - Acertaining Economic Damages Calculation

The Eleventh Circuit noted that Advanced BodyCare cross-examined Thione’s expert "at length about
the data he relied upon," and called its own expert to criticize Thione’s expert’s opinions. fn 82 Thus, the
Eleventh Circuit agreed with the district’s explanation for its denial of Advanced BodyCare’s motion
that the Advanced BodyCare’s arguments "went not to admissibility but to ‘the weight to be attributed to
[the] testimony.’" fn 83

Another issue that courts consider is to what extent a practitioner’s methodology or conclusions, or both,
regarding costs can be reconciled with the historical practices and conclusions of the company. This is-
sue arose in Polaroid Corp. v. Eastman Kodak Co., discussed earlier in this chapter, as well as in
Schneider (Eur.) AG v. Scimed Life Sys. Inc., 852 F. Supp. 813 (D. Minn. 1994). In Schneider, the dis-
trict court found one expert’s analysis lacking. Separate non-litigation analyses conducted by both plain-
tiff and defendant treated certain expenses differently than under plaintiff’s expert’s methodology. In re-
jecting plaintiff’s expert’s calculated incremental profit margins, the court pointed to this inconsistency
and the inflationary impact on the margins and net lost profits calculations presented by the expert at tri-
al, among other criticisms:

[T]he Court finds that the fixed nature of costs for large changes in volume, as contemplated by
[Schneder’s expert], is inconsistent with non-litigation analyses done by both Schneider and
SciMed. The profit margins set forth by [Schneider’s expert] are much higher than those con-
templated by Schneider in a non-litigation context. fn 84

Conclusion

This chapter has discussed courts’ treatment of the identification of the appropriate avoided costs to in-
clude in a lost profits analysis. As is apparent from reading these case excerpts, there is no one checklist
that can be provided to address the unique facts and circumstances of each case. What these cases
demonstrate is that courts are focused on the extent to which the practitioner has analyzed and calculated
the avoided costs necessary to estimate the lost net profits of the injured party. In particular, courts have
been receptive to a practitioner’s identification of avoided costs when the record indicates that the prac-
titioner has investigated the nature of such costs and engaged in a reasoned analysis for deducting, or
failing to deduct, these from a lost profits calculation.

fn 82 Advanced BodyCare, 615 F.3d at 1364 n.26.

fn 83 Id. at 1364.

fn 84 Schneider, 852 F. Supp. at 847.

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