Page 57 - Economic Damages Calculation

them. The plaintiff’s president acknowledged that, other than the fact that the plaintiff was given "the
cold shoulder" by certain customers, he had no specific proof that any losses were attributed to the al-
leged disparaging statements. Several of the customers identified by the plaintiff denied that the dispar-
agement had any impact on their dealings — some had never previously done business with the plaintiff
and others continued to purchase product after the disparagement. As such, the court concluded that the
plaintiff failed to demonstrate that any decisions made by the twenty-two customers or potential custom-
ers to avoid or limit doing business with the plaintiff could be attributed to the alleged disparagement.

Despite the fact that the plaintiff’s expert was being offered to prove both causation and damages, the
plaintiff’s expert repeatedly testified that he not only assumed that the disparagement occurred, but that
it also impacted the plaintiff’s customers in the marketplace. At his deposition, the plaintiff’s expert also
testified that he knew neither when the first alleged act of disparagement took place nor how long it had
lasted. As such, the court ruled that the testimony of the plaintiff’s expert would not be considered for
causation. With no other testimony to provide a causal link between purported bad acts and damages, the
plaintiff’s expert was excluded.

Observations

Ultimately, the previously mentioned cases illustrate that, when assuming causation, the principal risks
for damages experts are that causation does not exist at all or that other factors contributed to the plain-
tiff’s alleged loss. In either of these circumstances, the damages expert might evaluate what portion of
the alleged loss can be attributed to the defendant’s alleged misconduct. In this sense, it might be helpful
for the expert to be mindful of the post hoc ergo propter hoc fallacy ("after this, therefore because of
this"). If the defendant later demonstrates that unaccounted-for factors influenced the amount of the loss,
the credibility of the plaintiff’s expert’s damages analysis may be jeopardized. As a result, even in situa-
tions in which the damages expert is instructed to assume causation, to the extent that data is available,
the damages expert may consider testing the causation element of the damages analysis by taking steps
such as interviewing the plaintiff and conducting independent research for information related to the
plaintiff, the defendant, the industry, or any peer entities. Experts who take such measures will be more
informed when deciding the amount of the loss that can be attributed to the alleged cause.

Cases Excluding Expert for Failing to Sufficiently Consider Alternative Causes of Loss

Many of the following highlighted cases illustrate that a failure to consider other obvious causes of the
plaintiff’s loss can result in the exclusion of the expert. The key word appears to be "obvious" as it is of-
ten not practical or cost effective to identify, much less quantify, all of the possible causes of the loss.
Indeed, the "obvious" phrase is found directly in the explanatory notes to FRE 702. Specifically, in
2000, FRE 702 was amended to clarify factors that courts use to determine whether expert testimony is
sufficiently reliable to be considered by the trier of fact. fn 63 One of these factors is whether the expert
failed to consider other obvious causes for the plaintiff’s loss.

Whether the expert has adequately accounted for obvious alternative explanations. See Claar v.
Burlington N.R.R., 29 F.3d 499 (9th Cir. 1994) (testimony excluded where the expert failed to
consider other obvious causes for the plaintiff's condition). Compare Ambrosini v. Labarraque,
101 F.3d 129 (D.C. Cir. 1996) (the possibility of some uneliminated causes presents a question

fn 63 Fed R. Evid. 702, available at www.law.cornell.edu/rules/fre/rule_702.

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