Page 65 - Acertaining Economic Damages Calculation

To calculate damages purportedly resulting from the breach (as opposed to losses from normal competi-
tion), Alaska Rent-A-Car's damages expert compared Budget’s operating results subsequent to its acqui-
sition by Avis to Alamo, a non-party with similar characteristics. The expert assumed that Budget would
have performed much like Alamo but for the purported breach and, although both Alamo and Budget
were similar, they differed in that Alamo’s corporate parent did not have an existing car rental operation,
as did Avis. As such, he assumed that Budget would have performed much like Alamo except for the
benefit of a unified Avis-Budget sales and marketing effort.

Budget’s lost market share rebounded much faster than Alamo, which plaintiff’s expert attributed to the
breach of the settlement agreement. To quantify lost profits, he used Alamo’s national rate of rebound as
a basis of comparison (reasoning that the rental car market is a national market that is not skewed by id-
iosyncratic local factors). Furthermore, the expert relied upon data obtained from the Juneau airport lo-
cation as a benchmark to apportion how much of Budget’s recovery came at the expense of Alaska-
Rent-A-Car vs. from other rental car companies. Accepting this testimony, the jury awarded plaintiff
$16 million, slightly more than his $15.8 million damage calculation.

On appeal, Avis challenged the expert's assumptions and comparisons, arguing that differences between
Alamo and Budget made Alamo an invalid comparison. It also argued that applying a national market
share comparison to Alaska overlooked very significant differences in how the national and Alaska mar-
kets worked, and that relying exclusively on the Juneau airport location to apportion losses ignored the
smaller market areas of the state.

In its ruling, 9th Circuit explained that although a trial court must assure that the expert testimony is rel-
evant and rests on a reliable foundation, it is not required to exclude expert opinions merely because
they are impeachable. In this case, Avis did not challenge Alaska Rent-A-Car's expert's general method-
ology but, rather, three aspects of the witnesses’ testimony: (1) using Alamo as the comparator, (2) using
the national, rather than the Alaska market, as a baseline, and (3) extrapolating from the Juneau market
to the entire Alaska market. None of these challenges made the district judge's decision to the testimony
of plaintiff’s expert an abuse of discretion. The court ruled that the claims challenge the weight of the
testimony and its credibility, not its admissibility.

As reflected by the jury’s decision to award plaintiff the full amount of the claimed damages, plaintiff’s
expert used contemporaneous market data as a benchmark, which the jury found to be credible, under-
standable, and persuasive.

Cruise Connections Charter Mgmt. 1, LP v. Attorney Gen. of Can., 55 F. Supp. 3d 156 (D.D.C. 2014)

This case involved a breach of contract brought forward by plaintiff Cruise Connections Charter Man-
agement 1, LP (CCCM). After a competitive bidding process, plaintiff was selected as the broker to ne-
gotiate charters for ships that would be used as floating hotels for security personnel during the 2010
Winter Olympic Games in Vancouver, British Columbia. After awarding the bid to CCCM, the defend-
ant, Royal Canadian Mounted Police (RCMP), changed its contracting representatives and terminated
the agreement with CCCM. The court found RCMP liable for the breach of contract, holding a bench
trial for damages.

Included in CCCM’s expert’s calculation for lost profits were amounts related to lost onboard revenues
that CCCM alleged would have been earned but for RCMP’s termination of the contract. Onboard reve-
nues included such activities as bars and lounges, restaurants, box lunches, laundry, internet, shore ex-
cursions, and shopping revenues. To project onboard revenues that would have been earned by CCCM,

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