Friday, January 21, 2005

7th Circuit Upholds Exclusion of Testimony on Lost Profits

The Seventh Circuit has published a decision upholding the district court's exclusion of lost-profit testimony in a commercial dispute. A Puerto Rico digital television broadcaster contracted to purchase set-top boxes from Zenith, but the boxes Zenith supplied did not meet the digital video broadcast (DVB) standards prevalent at the time of sale. The broadcaster claimed it lost subscriptions as a result, but it came to grief in estimating lost profits. Its expert insisted that the Puerto Rico market was unique, and so he did not consult data from other markets or perform any regression analysis. "A witness who invokes 'my expertise' rather than analytic strategies widely used by specialists is not an expert as Rule 702 defines that term," said the Court of Appeals. If the expert "could or would not explain how his conclusions met the Rule's requirements, he was not entitled to give expert testimony. As we so often reiterate: 'An expert who supplies nothing but a bottom line supplies nothing of value to the judicial process.'"

See Zenith Elecs. Corp. v. WH-TV Broad. Corp., No. 04-1635 (7th Cir. Jan. 20, 2005) (Easterbrook, Kanne, & Evans, JJ.).
Fed. R. Evid. 702: If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.