Page 51 - Economic Damages Calculation

Before the district court granted summary judgment, [Plaintiff] did not make a showing suffi-
cient to establish the amount, causation, or fact of damages. . . . [Plaintiff] made no showing at
all about causation or fact of damages. . . . [I]n this case [Plaintiff] submitted no specific facts on
which a finder of fact could reasonably conclude that [Plaintiff] actually suffered damages,
caused by [Defendants], in any quantifiable amount. The district court properly granted summary
judgment in favor of [Defendants]. fn 44

Earlier cases discussed in this chapter identified damages experts that courts allowed to testify who
simply assumed causation without performing any independent analysis. In this case, the plaintiff’s fail-
ure to present any evidence or testimony that could be relied upon by its damages expert addressing cau-
sation proved to be a significant factor in the exclusion of the expert’s opinions.

Fashion Boutique of Short Hills v. Fendi USA, Inc.

This case involved allegations of slander and disparagement. fn 45 The plaintiff, a retail store that exclu-
sively sold Fendi products, sued the defendants, a competing Fendi retail store and its parent company,
for lost profits arising in connection with purported false statements. The false statements had purported-
ly been made by the defendants to the plaintiff’s customers pertaining to the inferior quality goods sold
by the plaintiff. The plaintiff's damages expert was instructed to assume causation existed. The trial
court recognized this as a limitation to the plaintiff’s expert’s testimony:

Any opinions regarding causation based on what [the Plaintiff’s expert] was told by [the Plain-
tiff] are outside of his expertise. The Plaintiff is not proffering [the Plaintiff’s expert] as an ex-
pert in causation, but rather as an expert on damages. However, [the Plaintiff’s expert’s] exper-
tise in valuation is only helpful to the trier of fact if it is applicable to the facts of this case. His
expertise is not helpful to the extent that it is based upon a causation assumption that Plaintiff
cannot prove. fn 46

A key component of the plaintiff’s evidence supporting its disparagement claim was the fact that nine
undercover investigators it hired had heard disparaging remarks regarding the plaintiff’s store from em-
ployees of the defendant’s store. But, the defendant’s employees had not initiated any of the related con-
versations about the plaintiff’s store. Prior to the demise of the plaintiff’s store, a total of 11 of its cus-
tomers were identified who had been told that the plaintiff’s store sold inferior products. These events
can be compared to the approximately 8,000 customers on Fashion Boutique’s mailing list prior to the
time it went out of business.

Based on the assumption that a "campaign of disparagement" caused the plaintiff to go out of business,
the plaintiff’s expert calculated damages based upon the entire $15.4 million value of the plaintiff’s
business. The trial court rejected this assumption as follows:

[The Plaintiff’s expert’s] testimony is premised on his assumption that the sharp decline in Plain-
tiff's sales beginning in December 1989 was caused by a "campaign of disparagement" by

fn 44 Id. at 808–809.

fn 45 Fashion Boutique of Short Hills v. Fendi USA, Inc., 75 F. Supp. 2d 235 (S.D.N.Y. 1999), aff'd, 314 F.3d 48 (2d Cir. 2002).

fn 46 Id. at 238.

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