Page 54 - Economic Damages Calculation

damages that would have made the plaintiff more than whole by attributing losses to the defendant that
had nothing to do with the defendant’s bad acts.

Sigur v. Emerson Process Mgmt.

This case involved the purported distribution of defamatory materials by the defendant to the plaintiff’s
customers. fn 52 The defendant filed a motion to exclude the opinions of the plaintiff’s damages expert,
who assumed that any decline in the plaintiff’s sales were caused by the defamatory materials. The
plaintiff, a distributor of remanufactured valves, argued that its damages expert was hired to calculate
economic losses that resulted from its decreased sales, not to determine the cause of such losses. The
court, however, found that there was little evidence to link these materials to a decline in sales, stating,
"[The Plaintiff] again fails to present any competent evidence supporting the causal assumption upon
which [the Plaintiff’s expert’s] opinion relies, i.e., that the conduct of the defendants was the cause of
[the Plaintiff’s] alleged decline in sales. "

Further, the court questioned the plaintiff’s ability to demonstrate causation at all:

As noted in the Court's prior ruling on this motion, [the Plaintiff’s] sales to the only five compa-
nies which he has identified as receiving the defamatory material in question actually increased
during the time period in question, and [the Plaintiff’s expert] agreed that, if those five compa-
nies were the only clients considered, then [the Plaintiff] did not sustain any damages as a result
of the alleged conduct of the [D]efendant. fn 53

Finally, the court clarified its expectations regarding the factors that the damage calculation had failed to
account for:

In particular, the Court noted that [the Plaintiff] failed to present any evidence indicating that the
impact of market factors, such as Hurricanes Katrina and Rita, the cyclical nature of "turnaround
operations" in the industry, or the impact of competition, were considered in the underlying
causal analysis. In addition, even if such market factors were not considered in determining cau-
sation, [the Plaintiff] did not offer any explanation as to why, under generally accepted method-
ology, it was permissible for [the Plaintiff’s expert] to assume that such factors did not affect [the
Plaintiff’s] sales. fn 54

The court went on to state that the plaintiffs failed to provide any evidence in support of causation that
could be reasonably relied upon by its expert.

The only competent evidence before the Court on the issue of whether the Defendants' alleged
conduct caused a decline in [the Plaintiff’s] business has been presented by the [D]efendants, and

fn 52 Sigur v. Emerson Process Mgmt., 492 F. Supp. 2d 565 (M.D. La. 2007).

fn 53 Id. at 569 n.5.

fn 54 Id. at 567 n.2.

52 © 2020, Association of International Certified Professional Accountants