Page 84 - Economic Damages Calculation

cannot be recovered. Factors like these and others which make a business venture risky in pro-
spect preclude recovery of lost profits in retrospect. fn 72

Significantly, the court emphasized assessing the "activity which is alleged to have been damaged." fn 73
The court further explained that "[t]he focus is on the experience of the persons involved in the enter-
prise and the nature of the business activity, and the relevant market." fn 74 In looking at the underlying
business and product at issue, the court noted the following information:

[I]n the present case, a working model of the T-2000 never existed. Indeed, there is no evidence
that a thermostat like the T-2000 has ever been produced and sold by anyone. The very viability
of the product is in doubt in this case. The businesses in the former cases actually operated at a
profit, albeit for a short time; Teletron never did. Teletron’s expectations were at best hopeful; in
reality, they were little more than wishful. fn 75

Although Teletron argued that TI "thought its projections were reasonable," the Supreme Court rejected
this argument, along with Teletron’s evidence of a "strong" market for its products. fn 76

Teletron strenuously argues that even TI thought its projections were reasonable. The fact that TI
shared Teletron’s hopes adds no substance to them ... Teletron’s evidence that a strong market
existed for its unique thermostat at a moderate price is beside the point; no such product ever ex-
isted. fn 77

This case illustrates that the nature of the underlying product is also an important consideration for the
expert. Arguably, the thermostat industry was not new at this time and TI was an established company.
Even whether Teletron was established was not the ultimate question — it was whether the business ac-
tivity expected to create the "but for" profit stream was sufficiently established. Here, the fact that the
product could not ultimately be made by TI provided too much uncertainty as to whether the product
concept was viable and there was any reasonably certain quantifiable harm.

Delahanty v. First Pa. Bank

In Delahanty (also discussed earlier in this chapter), the plaintiffs had sued the defendant for its failure
to support adequately the plaintiffs’ entry into the retail automobile leasing business in 1973, with the
business failing within one year. fn 78 The new car leasing business targeted blue- and white-collar con-
sumers, on which the leasing industry had not previously focused.

fn 72 Id. at 279.

fn 73 Id. at 280.

fn 74 Id.

fn 75 Id.

fn 76 Id. at 280–81.

fn 77 Id.

fn 78 Delahanty v. First Pa. Bank, 464 A.2d 124390 (Pa. Super. Ct. 1983).

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