Page 39 - Economic Damages Calculation

one court, the judge may rule that a damages expert is allowed to assume causation. Based on this rul-
ing, the damages expert would have been well within her right to prepare damage calculations assuming
that any sales declines should be attributable to the actions of the plaintiff. Another court, however, may
exclude this expert for failing to consider how the expiration and loss of an important patent would have
impacted the plaintiff’s sales. Still other courts may be persuaded by testimony offered by lay or other
expert witnesses to address these causation issues.

The following sections contain an analysis and a discussion of case law, specifically in regard to how the
issue of causation has been addressed by experts and ruled upon by courts. These cases are intended to
be illustrative and should not be thought of as authoritative or necessarily having any precedent setting
value, as the merits and requirements of any case should be based upon its own specific facts and cir-
cumstances.

Cases Allowing the Expert to Assume Causation

As previously noted, it is the plaintiff’s burden to establish the causal linkage between the alleged mis-
conduct by the defendant and the resulting damages sustained. Clearly, the plaintiff and the plaintiff’s
damages expert have a shared need to ensure that the causal linkage is ultimately proven, fn 6 but it is not
necessarily the case that the plaintiff’s damages expert has the specific task of establishing that linkage.
For this reason, in certain situations it is appropriate for the plaintiff’s damages expert to assume causa-
tion exists. Or, stated differently, in certain situations, it is appropriate for the plaintiff’s damages expert
to rely on the fact that the plaintiff will be able to establish the existence of the causal link. However, a
key consideration by experts is how much work, if any, is necessary to form a reasonable basis to apply
a particular assumption to a particular case.

In each of the following cases, the plaintiff’s damages expert was allowed to testify despite not having
directly addressed issues of causation in performing the damage calculations. The courts were clear in
their rulings, however, that the causation-related challenges raised by the defendants would ultimately
need to be addressed and established at trial by the plaintiff.

Harris Wayside Furniture, Co. v. Idearc Media Corp.

In this case, the plaintiff alleged that it suffered damages as a result of the defendant’s failure to publish
its ads in a local Yellow Pages directory. In a Daubert challenge, the defendants argued that the plain-
tiff’s expert:

[S]imply assumed causation — that [defendant] was responsible for causing any lost profits" . . .
without considering other factors that could have caused plaintiffs' damages, including a declin-
ing real estate market, the overall state of the economy, and other changes in plaintiffs' advertis-
ing methods. fn 7

fn 6 In many instances, the admissibility of the damages expert’s testimony will be challenged prior to trial through either a Daubert
motion or other form of motion in limine arising under FRE 702. Thus, the plaintiff may not have had the opportunity to have proven
causation at that time.

fn 7 Harris Wayside Furniture Co. v. Idearc Media Corp., Civ. No. 06-cv-392-JM, 2008 WL 7109357, *4 (D.N.H. Dec. 22, 2008).

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