Page 44 - Economic Damages Calculation

The court, given the specific facts and circumstances of this case, made a point to document the thresh-
old that it believed must be met by the plaintiff in order to establish economic causation.

Nebula Glass Int'l., Inc. v. Reichhold, Inc.

The plaintiff filed a lawsuit, alleging that a resin purchased from the defendant and used by the plaintiff
to manufacture its Safety Plus 1 branded hurricane impact resistant glass was defective. fn 21 The plain-
tiff's damages expert calculated future lost profits based upon losses resulting from the difference be-
tween projected sales and actual sales less profits earned from the plaintiff’s mitigation efforts. In its
motion to exclude the testimony of the plaintiff’s damages expert, the defendant claimed that the expert
had failed to establish any causation that could be used to proximately link the plaintiff’s purported lost
profits to the defective resin, arguing the following:

• That only nine of its many customers could be linked to a problem with the defective resin.

• That only two customers testified that they stopped doing business with the plaintiff as a result of
the product defect.

• That the plaintiff's expert did not attempt to quantify the lost profits suffered by these two cus-
tomers.

• That two other customers that testified about problems continued to do business with Glasslam,

• That the plaintiff could not identify any other customers that ceased doing business with
Glasslam as a result of the product defect.

Nevertheless, the jury found in favor of the plaintiff, awarding $6.56 million in lost profits. The defend-
ant appealed the jury verdict to the 11th Circuit. As the Appellate Court’s decision reads, the defendant
specifically argued the following:

[The Plaintiff] failed to prove causation or the amount of lost profits with reasonable certainty.
[The Defendant] argued that [the Plaintiff]'s expert improperly calculated lost profit damages by
including in his calculations [1] customers who stopped doing business with [the Plaintiff] for
reasons unrelated to the nonconforming resin, [2] customers who continued to purchase from
[the Plaintiff] despite having resin problems, and [3] customers who never experienced a prob-
lem with the resin. fn 22

The Appellate Court, however, agreed that sufficient causation existed between the defective product
and the resulting damages to allow for a claim of lost profits, specifically commenting:

• "The lost profit damages in this case were not speculative simply because [the Plaintiff] did not
present evidence of every customer’s reason for not buying Safety Plus 1 glass." fn 23

fn 21 Nebula Glass Int'l., Inc. v. Reichhold, Inc., 454 F.3d 1203 (11th Cir. 2006).

fn 22 Id. at 1210.

fn 23 Id. at 1215.

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