Page 41 - Economic Damages Calculation

RMD, LLC v. Nitto Ams., Inc.

The plaintiff alleged that, by selling audio products to companies that competed directly against the
plaintiff, the defendant breached an exclusive distributorship agreement entered into by the parties. fn 12
The plaintiff retained a damages expert, who calculated damages resulting from (a) sales infringement;
(b) overcharging of the plaintiff by the defendant; (c) past and future lost profits, which the plaintiff’s
expert projected out for 70 years; and (d) other out-of-pocket costs.

The defendant argued that, among other things, the plaintiff’s expert’s methodology was flawed because
his opinions were dependent upon the very assumptions that his testimony was intended to prove. In es-
sence, the defendant argued that instead of determining what portion of sales made to the competing
companies would have been made by the plaintiff (if any), the plaintiff’s expert calculated damages by
simply assuming that all sales made to these competing companies would have been made by the plain-
tiff at the higher prices being charged by the plaintiff.

The court ruled that the plaintiff’s damages expert was not a causation expert and, therefore, could as-
sume causation for purposes of his damage analysis. The court, however, did acknowledge that to recov-
er lost profits, a plaintiff must show "but for the alleged infringing sales, plaintiff would have sold the
product." fn 13

LG Elecs. U.S.A., Inc. v. Whirlpool Corp.

In this tort case involving false advertising, fn 14 the plaintiff argued a product name change instituted by
the defendant was false and misleading, and offered a damages expert who calculated lost profits of ap-
proximately $33.3 million. The defendant challenged the plaintiff’s expert, arguing, among other things,
that the plaintiff’s expert simply assumed causation between the allegedly false advertisements at issue
and the plaintiff’s lost sales.

In response, the plaintiff argued that its damages expert relied upon the defendant’s own pre-litigation
documents, which forecast a 21% increase in sales as a result of the name change. The plaintiff’s expert
opined that these documents established a causal link between the defendant’s false advertising and
damages sustained by the plaintiff. The court appeared to be persuaded by the plaintiff’s expert’s reli-
ance on the defendant’s own documents, which included pre-litigation surveys performed by the defend-
ant.

[The Plaintiff’s expert] used [Defendant’s] documents as the factual underpinning for his damag-
es opinions. As described above, [the Plaintiff’s Expert] testified at length regarding the [De-
fendant] documents he reviewed, the factual content of those documents, and the means by
which he drew conclusions from those documents. Significantly, [the Plaintiff’s expert] relies on
documents from [the Defendant’s], not from [the Plaintiff’s] files.

fn 12 RMD, LLC v. Nitto Ams., Inc., No. 09-2056-JAR-DJW, 2012 WL 5398345, at *1 (D. Kan. Nov. 5, 2012).

fn 13 Id. at *10.

fn 14 LG Elecs. U.S.A., Inc. v. Whirlpool Corp., No. 08 C 242, 2010 WL 3397358, at *1 (N.D. Ill. Aug. 24, 2010).

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