Some lawyers and clients over-focus on the liability aspect of cases and they short-change the damages side. Almost all civil litigation is about money — it’s ultimately about the damages — but liability — “who’s at fault?” — is more graspable and sometimes it is the better handled part of litigation.
In U.S. Salt, Inc. v. Broken Arrow, Inc., the plaintiff was awarded summary judgment on liability for breach of contract with damages to be tried before a jury (before Judge Kyle, D. Minn.). Plaintiff’s damages expert was a prominent local damages expert who first estimated the damages at $1.8 million. In deposition, he admitted that he had started his analysis only two to three days before his report was filed; that the primary factual bases for his first report were the assumptions and estimates he was provided by a witness (a non-expert); and that he did not do any independent analysis of the local market to determine profit margins and the like. A few days later, U.S. Salt’s expert filed a supplemental expert report adjusting his opinion to be that US Salt had suffered damages in the range of $677,000 to $1,060,000.
The Trial Court judge excluded testimony from Plaintiff’s damages expert. The Court found the expert had conducted no analysis of the relevant salt market and had relied “almost exclusively”–and without verification–on a witness’ unsupported assumptions and estimates. Plaintiff U.S. Salt was given another chance to provide evidence of damages. The Trial Court found that it failed to come forward with any persuasive evidence of damages. The court dismissed US Salt’s breach of contract claim for failure to submit admissible evidence to prove damages and the Eighth Circuit affirmed.
U.S. Salt, Inc. v. Broken Arrow, Inc., Civ. Nos. 08-2423/2465 (8th Cir., April 20, 2009).