Know the difference between proving fact of damage and amount

BVWireIssue #169-2
October 12, 2016

An economic damages case sets out the different standard of proof that applies in tort actions for showing there were lost profits as opposed to quantifying the loss. Knowledge of the applicable burden of proof is a cornerstone of a successful damages analysis.

Certainty vs. approximation: The plaintiff, a national transportation company, sued the defendant, which owned websites that advertised open driver positions, after it found out the defendant kept using the plaintiff’s information without the plaintiff’s authorization. Drivers who were unaware of the broken down relationship between the parties kept applying, but the defendant discarded their applications.

The plaintiff claimed trademark infringement, unfair competition, unauthorized use of identifying information, and tortious interference with prospective contractual relationships. Its damages theory was that, by withholding over 5,000 applications from drivers, the defendant deprived the plaintiff of knowledge about drivers seeking work at a time of driver shortage. Historically, the plaintiff hired a certain percentage of applicants. Instead, it ended up turning down jobs that additional hires could have performed. It suffered some $4 million in lost profits.

The jury awarded $1.25 million in actual damages, which the court reduced to $500,000. In post-trial motions, the defendant argued the award was based on speculation. In tort actions, case law distinguishes “between proving the fact of damage and the amount,” the court explained. The fact of damage must be proved to a certainty, whereas the amount need only be a “reasonable approximation.” Here, the defendant seemed unclear about the difference, but the court read its briefs to argue the plaintiff did not show the defendant’s conduct caused any losses. The court disagreed.

Even if it “is not necessarily believable” that all 5,000-plus applicants to the defendant’s websites would have applied to the plaintiff directly or through some other job board had they been aware of the defendant’s misconduct, some of them would have, the court said. Given the plaintiff’s hiring record and the driver shortage, it was reasonable for the jury to infer some applicants would have been hired. Drivers meant jobs meant profit, the court said.

The case is Marten Transp., Ltd. v. Plattform Adver., Inc., 2016 U.S. Dist. LEXIS 97754 (July 26, 2016). A case digest and the court’s opinion will be available at BVLaw.

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