Page 90 - Acertaining Economic Damages Calculation
P. 90
Executive Orders. As a result, plaintiffs filed a lawsuit alleging conspiracy to procure shipments of
chemical warfare and nerve agent chemicals to Libya. They further alleged that, but for Barbouti’s plan
to use TK-7 as a source of chemicals to Libya, TK-7 would have generated profits in excess of $7 mil-
lion in connection with two proposed joint ventures that it was pursuing at or around the time of the ac-
quisition.
The trial court issued a directed verdict in favor of Barbouti, finding that there was insufficient evidence
to sustain a claim for damages, a ruling that was appealed by the plaintiffs.
TK-7’s damages expert was, however, allowed to testify to TK-7’s lost profits that he claimed would
have been earned on the second of the two joint ventures, which involved the sale of products in Great
Britain. This testimony almost exclusively relied upon a market study authored by an individual who
TK-7 failed to have testify before the court about the market study itself, a fact that the court was highly
critical of:
[TK-7] discount[s] those portions of the record showing that [Expert] did not make an independ-
ent projection of the sales that TK-7 was likely to achieve through the joint venture in Great
Britain and that he did not have the expertise to make such a projection.
...
...[T]he plaintiff failed to present evidence tending to establish the sales assumed by [Expert].
The fact that [Expert] relied upon the report in performing his calculation of lost profits did not
relieve the plaintiffs from their burden of proving the underlying assumptions contained in the
report...
...
[Expert] professed no expertise with regard to projecting sales in Britain. He clearly adopted the
projections of [Market Study Author]. But there is no indication in the record that [Expert] had
any familiarity with the methods or reasoning used by [Author] in arriving at his projections...
...
By assuming the sales projections made by [Author], [Expert] in essence assumed the very mat-
ter at issue on which he was called to express his opinion.
...
[T]he expert failed to demonstrate any basis for concluding that another individual's opinion on a
subjective financial prediction was reliable, other than the fact that it was the opinion of someone
he believed to be an expert who had a financial interest in making an accurate prediction. [Ex-
pert’s] lack of familiarity with the methods and the reasons underlying [Author’s] projections
virtually precluded any assessment of the validity of the projections through cross-examination
of [Expert].
...
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