Page 40 - Economic Damages Calculation

The court, however, ruled that these issues "go to the weight of the proffered testimony, not to its admis-
sibility." fn 8 In doing so, the court reiterated the plaintiff’s burden to prove that the "failure to publish
the advertising caused their damages before the amount of those damages is measured by either the
yardstick method or the before and after method." fn 9 In other words, the damages expert was allowed to
assume that the plaintiff would be able to prove causation.

The court also reminded the defendants that the expert could be cross-examined regarding other factors
that may have impacted the plaintiff’s profits. It further ruled that "'These matter (sic) are for the jury,
not for the court. This is as it should be; the district court’s gatekeeping function ought not to be con-
fused with the jury's responsibility to separate wheat from chaff.'" fn 10 Thus, the court allowed the jury
to evaluate whether the plaintiff’s expert’s calculation was reasonably certain as to the amount of the
damages specifically attributed to the failure to publish the advertising.

Pharmacy, Inc. v. American Pharm. Partners

The plaintiff sued the defendant for breach of contract in connection with the purchase of the intellectual
property rights for three pharmaceutical devices in which the defendant agreed to use "commercially
reasonable best efforts and commercially reasonable resources, personnel and financing to market and
sell the Products." fn 11 The plaintiff’s expert calculated a range of damages based upon alternate as-
sumptions regarding market penetration, which were similar to pre-litigation models contemporaneously
prepared by the defendant.

The defendant argued in its motion for summary judgment that the plaintiff’s expert did not analyze
whether it was the defendant’s alleged failure to use "best efforts" or other factors that led to lack of suc-
cess in the market. The plaintiff’s expert, however, testified that he had been instructed to assume causa-
tion. The court accepted this approach. As in Harris Wayside Furniture Co., whether the lost sales were
caused by the defendant’s failure to use "best efforts" or to other factors was a question of fact that need
not be specifically addressed by the damages expert.

This decision was consistent with the court’s ruling pertaining to the plaintiff’s expert’s damage calcula-
tion, which relied upon the defendant’s pre-litigation projections. "Any flaws in that calculation or the
assumptions on which the calculation is based, go to the weight to be given to that calculation, an issue
not appropriate for summary judgment." While each case should be considered based upon its own spe-
cific facts and circumstances, as discussed in McGlinchy v. Shell Chem. Co., Sigur v. Emerson Process
Mgmt.,Pharmanetics, Inc. v. Aventis Pharm., Inc. and other cases discussed in the information that fol-
lows, other courts have demonstrated a willingness to evaluate and, if appropriate, exclude the testimony
of a damages expert who relied upon what was determined to be flawed assumptions.

fn 8 Id. (citations omitted).

fn 9 Id.

fn 10 Id. (citations omitted).

fn 11 Pharmacy, Inc. v. Am. Pharm. Partners, 511 F. Supp. 2d 324, 326 (E.D.N.Y. 2007).

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