Page 49 - Economic Damages Calculation

alysts and provided a sufficient standard to support the experts' testimony concerning lost profits.
The expert testimony, when combined with the economic studies, was clearly sufficient to raise a
jury question. Accordingly, the trial court erred by excluding testimony on lost profits. fn 38

Here, one of the key financial issues identified by the courts was that the respondent’s damages expert
had identified appropriate yardsticks to identify expected occupancy rates. Further, the data source for
the damages analysis was pre-litigation projections. As discussed in chapters 2 and 4, the damages ex-
pert’s reliance on data with these attributes appears to be a positive factor weighted by the courts in as-
sessing whether reasonable certainty has been established.

Observations

In most instances, damages experts who express an opinion on causation should expect the opposing
party may vigorously challenge that opinion. The previously mentioned cases illustrate that common
challenges to expert opinions on causation include the following:

• The expert is not qualified to testify on the issue of causation because the expert does not pos-
sess, for example, relevant industry experience.

• There is not testimony or other evidence directly from customers to support an opinion that the
plaintiff lost transactions due to the defendant’s misconduct.

• The plaintiff is unable to identify specific customers or transactions that were lost as a result of
defendant’s alleged misconduct.

• Causation does not exist at all or that the expert failed to account for other causes of the loss.

Factors that appear to have influenced the court’s decision to allow the expert to testify on causation in-
clude the following:

• The expert was qualified to testify because the expert had sufficient experience with the issues
presented. In these instances, courts looked to factors such as whether the expert personally pos-
sessed the experience, or relied on the expertise of others. fn 39

• The expert calculated damages using multiple methodologies such as a yardstick method plus a
before-and-after method. The damages expert then reconciled the various calculations to ascer-
tain whether the causation theory was supported. fn 40

• The expert undertook an examination of alternative causes of loss. Having done so, the expert ei-
ther ruled out other causes or accounted for such other identified causes in the analysis.

fn 38 Id.

fn 39 For example, see Arista Records LLC v. Lime Group LLC, 2011 U.S. Dist. LEXIS 47416 (S.D.N.Y. May 2, 2011).

fn 40 For example, see Conwood Co. v. U.S. Tobacco Co., 290 F.3d 768 (6th Cir 2002).

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