Page 26 - Economic Damages Calculation

but who instead "relied on" the party's own internal financial projections "without knowing ... the
validity of the underlying data and assumptions upon which the [projections] were based." fn 14

The court then related those cases to this instant case, stating the following:

This is particularly so where, as here, the proposed expert offered no basis in the two-page narra-
tive portion of his expert report...or at his deposition...for concluding that Victory's internal pro-
jections provide an acceptable foundation for an expert's opinion in his field. Thus, while opinion
testimony regarding damages founded on a party's internal projections might be permissible
when delivered by a lay witness under Federal Rule 701, it may not be delivered by a witness
with the gloss of expertise under Rule 702. fn 15

The court ruled that, because the plaintiffs had failed to satisfy its burden of showing that its expert’s
testimony satisfied FRE 702, the testimony was excluded.

Ariens Co. v. Woods Equip. Co.

This case involved claims and counterclaims for damages arising from asserted breaches of an agree-
ment related to the manufacture and sale of lawnmowers. fn 16 The defendant purchased and resold riding
lawnmowers manufactured by the plaintiff. In May 2004, the defendant issued an order to the plaintiff,
which it subsequently sought to cancel, leaving the plaintiff with approximately $1 million in inventory.
As a consequence, the plaintiff sought recovery from the defendant. The defendant, in turn, filed a coun-
ter claim, alleging that the plaintiff failed to provide it with design improvements and upgrades, and
sought lost profits for its inability to sell mowers with design upgrades that were allegedly withheld, and
lost profits from the sale of certain mowers that were allegedly withheld.

The plaintiff (counter-defendant) attacked the lost profits claim, alleging that the calculation was nothing
more than a "shell game." In an attempt to bolster the expert analysis following the attack, the defendant
(counter-claimant) filed a declaration from one of its product managers supporting projections that were
provided to the expert. In evaluating the admissibility of the declaration, the court stated the following:

Because [Defendant/Counter-Claimant] has no expert opinion supporting these sales projections,
which [Defendant-Counter-Claimant] concedes, the question is whether Robert Buzzard, a lay
witness, may provide the sales projections that underlie [the expert’s] calculations. For example,
[the expert] notes that ‘Robert Buzzard stated that he had no doubt that [Defendant/Counter-
Claimant] would have maintained its 2001 and 2002 market share if it had access to the design
improvements and feature upgrades denied by [Plaintiff/Counter-Defendant].’ In other words,
can a corporate executive testify to lost profits — as a lay witness — when those profits are
based not on existing data but on projections of future sales? The answer, I conclude, is no. fn 17

fn 14 Id. at *2.

fn 15 Id.

fn 16 Ariens Co. v. Woods Equip. Co., 2006 U.S. Dist. LEXIS 6894 (E.D. Wis. Sept. 9, 2006).

fn 17 Id. at *6.

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