13 / January 2014

In 'Manpower' district court overplayed gatekeeping role, says Seventh Circuit

Posted in: Business Valuation Law News Written by: Sylvia Golden
Categories: case law analysis daubert economic damages & lost profits expert testimony valuation experts
Tags: damages daubert financial expert testimony rule 702

Manpower, Inc. v. Ins. Co. of Pa., LLC, 2013 U.S. App. LEXIS 20959 (Oct. 16, 2013)

Cognizant that Daubert allows district courts considerable latitude in assessing expert testimony for reliability, appellate courts don't overturn lower court decisions lightly. But in an insurance dispute over the plaintiff's business interruption claim, the 7th Circuit recently found the district court had applied too much scrutiny when it decided to exclude the plaintiff expert testimony. By the lower court's own account, the expert was qualified and had followed the methodology the insurance policy prescribed for calculating the business interruption loss—"basic growth-rate extrapolation"—to project total revenues. What the court objected to was the expert's choice of data to estimate the growth rate.

 
By opining on the data the expert should have selected as the base for his projections, the district court went too far. According to the 7th Circuit, the decision on "the reliability of the data and assumptions used in applying a methodology" belongs to the jury; the court's role is limited to assessing the methodology of the expert's analysis. "The district court exercised its gatekeeping role under Daubert with too much vigor."
 
 
 

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