Page 63 - Economic Damages Calculation

In this case, the plaintiff’s underlying technology was considered to be "novel," which appears to have
heightened the trial court’s scrutiny of the damages analysis. For example, the trial court "found Enox
was a novel technology and determining future sales was not made on the basis of established past sales
of this or similar technologies." Id. In any event, where, as here, "uncontested evidence showed that
multiple sources caused or would cause lost sales," the courts appear willing to exclude a damages ex-
pert that fails to present a damages model that adjusts the damages calculation to take into consideration
losses attributed to factors that cannot be attributed to the actions of the defendant. Id.

First Savs. Bank, FSB v. U.S. Bancorp

The plaintiff, a savings bank, sued the defendant, a bank holding company, for acquiring a competing
bank in the plaintiff’s geographic area and renaming it in a manner that could allegedly create consumer
confusion with the plaintiff’s bank (that is, First Savings Bank versus First Bank). fn 73 The plaintiff’s
damages expert attributed all identified lost profits to this cause. Specifically, the plaintiff’s expert as-
sumed that the confusion caused by the name change reduced plaintiff’s ability to gather deposits and
originate loans, resulting in lost profits caused by the savings bank’s decline in market share.

In excluding the plaintiff’s expert, the district court held as follows:

Although the [D]efendant has asserted other grounds for exclusion of [the Plaintiff’s expert’s]
testimony, the court finds two to be controlling: that [the Plaintiff’s expert] based his opinion on
an assumption of the very fact that his report is intended to prove, and that he improperly at-
tributed all of Plaintiff's losses to the [D]efendants' allegedly illegal acts, despite the presence of
significant other factors. fn 74

Although the plaintiff’s damages expert acknowledged the importance of considering other factors that
may have impacted the plaintiff’s profitability, the only alternative factor that he actually considered in
establishing "but for" deposits was changes in interest rates. In reaching his opinions, the court identified
the following factors not considered by the plaintiff’s expert, among others:

• Plaintiff had been operating under a cease-and-desist order or other restrictions (or both) in the
six years leading up to defendant’s actions.

• Plaintiff received the lowest possible financial rating available to a non-liquidating financial in-
stitution.

• Plaintiff lost a contract and a lawsuit against a large public university, which plaintiffs asserted
could have led to $15 million to $20 million in lost deposits.

• Plaintiff lost millions of dollars on bad real estate loans.

• Plaintiff closed its sole branch in Marysville.

• Plaintiff had a history of deposit losses.

fn 73 First Sav. Bank, F.S.B. v. U.S. Bancorp, 117 F. Supp. 2d 1078 (D. Kan. 2000).

fn 74 Id. at 1084.

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