Wholesale exclusion of expert testimony contravenes Daubert, 2nd Circuit says
One error in an extensive economic analysis does not automatically call into question the entire expert opinion, the 2nd Circuit Court of Appeals recently said in the context of a securities fraud lawsuit involving the drug giant Pfizer. With this pronouncement the appeals court resuscitated a class action that had died after the district court excluded the plaintiffs' loss causation and damages expert under Daubert based on errors in the expert's event study. Deprived of the testimony, the plaintiffs were unable to prove two critical elements of their claim.
RMS of Wisconsin, Inc. v. S-K JV
Court excludes damages opinion where expert relied on historical data from one construction project to calculate lost profits for subject project without establishing ...
Spencer Franchise Servs. of Ga. v. WOW Café & Wingery Franchising Account, LLC
Court declines to exclude rebuttal damages testimony, noting rebuttal expert’s professional background and qualifications were similar to that of principal expert and rebuttal opinion was helpful to jury in assessing principal expert’s damages calculation ...
Jafar v. Mohammed
In partnership dispute, appeals court affirms redemption award based on multiple-of-earnings valuation, finding valuation was reliable and admissible under state equivalent of Daubert and trial court had discretion to disregard other indicators of value.
Showers v. Pfizer, Inc. (In re Pfizer Inc. Sec. Litig.)
Second Circuit says district court “went astray” when, under Daubert, it excluded entire loss causation and damages testimony of plaintiffs’ expert instead of just eliminating unreliable part; appeals court ruling revives securities fraud class action.
Daubert Flexible as to Solvency Determination for Multiple Debtor Entities
Court finds Daubert centers on reliability, not persuasiveness, and can accommodate experts’ different approaches to determining solvency in case with multiple debtor entities; court rejects exclusion of expert opinion relying on GAAP-based financials.
Post-Confirmation Comm. for Small Loans, Inc. v. Martin
Court finds Daubert centers on reliability, not persuasiveness, and can accommodate experts’ different approaches to determining solvency in case with multiple debtor entities; court rejects exclusion of expert opinion relying on GAAP-based financials.
Bankruptcy Court Favors DCF to Value Dissociated Interest
Court finds debtor’s fraudulently conveyed interest represents a dissociated interest that is held by the estate; appropriate valuation date is date of trial, and DCF analysis, as modified by court, best captures value of the interest at that time.
Business Debt Renders Expert’s Lack of BV Credentials Inconsequential
Appeals court says trial court’s decision to admit opinion of seasoned CPA expert who was not a credentialed business valuator was not error because valuation was a “non-issue” where evidence showed the indebted company was no longer a going concern.
Court Decides Daubert Attack ‘Misses the Mark’
Court calls Daubert challenger’s attack on expert’s lost profits opinion “misguided”; it unduly focuses on expert’s familiarity with legal standards and fails to explain what is wrong with expert’s use of software program for projecting future damages.
Court Excludes Pro Forma-Based Economic Damages Analysis
Court excludes plaintiffs’ DCF-based damages calculation, finding it suffers from “garbage-in, garbage-out” problem; plaintiffs’ experts based cash flow analysis on defendant’s preliminary projections rather than subsequently available actual sales data.
Covol Fuels No. 4 v. Pinnacle Mining Co.
Court rejects defendant’s relevance attack on plaintiff expert’s opinion, noting under Daubert testimony need not “fit” a particular cause of action but is relevant where it assesses damages based on harm to plaintiff caused by defendant’s misconduct.
Practice tips for valuation experts from tax court insiders
Judge Laro reminded experts to guard against domineering attorneys who insist on reviewing draft opinions and seek to nudge an expert into achieving a predetermined result. Valuation experts need to know the discovery rules (Rule 26 of the Federal Rules of Civil Procedure) rather than assume that all of the attorney-expert communication is protected.
Destruction of financial evidence trips up guilty party's own experts
As a damages expert, what do you do when your own client has destroyed vital financial information? Two highly educated finance professionals working on a contract case solved this dilemma by relying exclusively on the opposing side's sales projections, only to see their analysis buckle under a Daubert challenge.
Hanckel v. Campbell (In re Hanckel)
Court finds debtor’s fraudulently conveyed interest represents a dissociated interest that is held by the estate; appropriate valuation date is date of trial, and DCF analysis, as modified by court, best captures value of the interest at that time.
Damages Opinion Reveals ‘Serious Misconception’ of Role of Expert
Court excludes most of rebuttal opinion under Daubert, saying it is not “the product of reliable principles and methods” owing to expert’s “serious misconception of his role and misreading of the authorities he cites,” particularly with regard to causatio ...
Bruno v. Bozzuto’s, Inc.
Court excludes plaintiffs’ DCF-based damages calculation, finding it suffers from “garbage-in, garbage-out” problem; plaintiffs’ experts based cash flow analysis on defendant’s preliminary projections rather than subsequently available actual sales data.
Deflecto, LLC v. Dundas Jafine Inc.
Court calls Daubert challenger’s attack on expert’s lost profits opinion “misguided”; it unduly focuses on expert’s familiarity with legal standards and fails to explain what is wrong with expert’s use of software program for projecting future damages.
Sternat v. Sternat
Appeals court says trial court’s decision to admit opinion of seasoned CPA expert who was not a credentialed business valuator was not error because valuation was a “non-issue” where evidence showed the indebted company was no longer a going concern.
Complex Facts Test Patent Experts’ Apportionment Skills
Court admits apportionment based on lines of infringing code and on value defendant places on product features in accused products but excludes apportionment using forward citation analysis for failure to show value of asserted patents in marketplace.
‘Blunderbuss of Objections’ Aims to Kill Loss of Goodwill Calculation
Defendant’s “blunderbuss of objections” to opposing expert’s valuation of loss of goodwill misses mark, 7th Circuit says; expert used a standard business valuation method and his reliance on company financials was justified under rules of evidence.
Expert Rebuttal Fails to Engage With Initial Valuation
Court excludes so-called rebuttal report where expert failed to review the initial expert report but instead contradicted the opposing party’s main contention; proponent’s attempt to append report to proper rebuttal valuation testimony is “gamesmanship.”
Uncritical Use of Royalty Rate Data Spoils Damages Opinion
Court excludes most of damages testimony under Daubert because expert based reasonable royalty calculation on data from IP databases and publications without subjecting information to rigorous analysis and establishing its relevance to case at hand.
Daubert Allows for Generous View on Yardstick Analysis
Court rejects bright-line reliability test for yardstick analysis, saying expert’s failure to find a “nearly identical” comparator did not render analysis unreliable and inadmissible under Daubert and finding companies were similar in material respects.