Page 36 - Economic Damages Calculation

• Rely on management representations that are made by client personnel who are qualified to make
the representations, as opposed to representations made by client personnel who are unqualified,
based upon their day-to-day responsibilities or background, to provide the information.

• Consider the underlying data and assumptions that go into management-provided information,
and consider further corroborating evidence.

• Use management-supplied projections that are prepared in the normal course of business, as op-
posed to projections that are prepared solely for litigation purposes.

In closing on this issue, experts may wish to consider the excerpts from the following two cases when
evaluating reliance on management-provided information.

Under Fed. R. Evid. 702, an expert's testimony, in order to be admissible, must, inter alia, be
"based upon sufficient facts or data" and be "the product of reliable principles and methods."
Thus, an expert's testimony must be excluded if it is "speculative or conjectural," or if it is "based
on assumptions that are so unrealistic and contradictory" that the testimony amounts, in essence,
to an "apples and oranges comparison." Similarly, "when an expert opinion is based on data, a
methodology, or studies that are simply inadequate to support the conclusions reached, Daubert
and Rule 702 mandate the exclusion of that unreliable opinion testimony." Moreover, an expert's
analysis must be "reliable at every step," and although "[a] minor flaw in an expert's reasoning . .
. will not render an expert's opinion per se inadmissible," exclusion is nevertheless warranted
whenever "the flaw is large enough that the expert lacks 'good grounds' for his or her conclu-
sions." fn 34

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The court starts with the helpful insight of the 3rd Circuit. In its analysis of a similar problem in
In re Paoli, the 3rd Circuit first noted that an expert who relies on, for example, animal studies
cannot characterize those studies as being his underlying data, "but rather the data that went into
the animal studies in the first place are his underlying data." The 3rd Circuit went on to explain
that ‘[t]here will be times when an expert's methodology is generally reliable but some of the un-
derlying data is not of a type reasonably relied on by experts." The 3rd Circuit then concluded
that, "[w]hen a trial judge analyzes whether an expert's data is of a type reasonably relied on by
experts in the field, he or she should assess whether there are good grounds to rely on this data to
draw the conclusion reached by the expert." fn 35

fn 34 Compania Embotelladora Del Pacifico, S.A. v. Pepsi Cola Co., 650 F. Supp. 2d 314, 318-19 (S.D.N.Y. 2009).

fn 35 ZF Meritor LLC v. Eaton Corp., 646 F. Supp. 2d 663, 667 (D. Del. 2009).

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