## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N os. 08

- 1097& 08

- 1227 A DVE R T I S I NG S PE CIA LTY I NST IT UTE, P la intif f-A pp ella nt/C ross A pp ellee, v. H ALL -E R I CK S ON, I NC ., d /b/a T HE M OT I VAT I ON S H OW, AND N ATI ONA L P R E MI U M S H OW, I NC ., d /b/a T HE M OT I VAT I ON S H OW,

D efend a nts-A pp ellees/Cro ss A pp ella nts.

A pp ealsfr o m the United S t ates Di strictC our t fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 03 C8780

—Jo hn F. G rady, Judge .
A RG UE D S EP TE MBE R 21, 2009

— D ECI DE D A PRI L 7, 2010

Befo re C UDAH Y, W OO D , a nd T INDER, C ircu it Judges. C UD AHY, C ircu it Judge. In 2 0 0 1 , Adv e r t i s i ngS pe c i a l ty I nsti tute ( A SI ) and T he M oti vati on S how ente re d i nto a contr act that pu rpor ted to f or m a “str ate gi c al l i ance” to “pro m ote the profess i on al use o fpro m oti onalpro du cts an d d istribu tors.” T he p arties agreed to p rov id e “ A SI2 N os. 08

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P ro m otio na l pr od u cts inclu d e cor p or ate a p p are l, trop hies, 1 aw ard s, m u g s, p en s, T -shirts, lig hte rs, flashligh ts, Po st- It no tes, Co ach- le ather good s, barbequ e g ri lls and other i tem s thatcan di s pl ay the na m e or l ogo ofa c om pany . w i th the r i ght o ffi rs t r efusalco n c erni ng anyact i vi ty, al l i ance, o r opportunity c oncer ni ng the pro m oti onal pr o duct/ adv er ti singsp ec i al tyi ndus tr y . ” The pr es en t di spu te a r i se s f r o m The M o ti va ti o n S ho w ’ s co - l o ca ting a t ra de show in C hi cago with Pr om oti onalPro du cts A sso ci ati on Inter nati on al (PPA I ) , wh i ch i s ASI ’ s cl ose co m pet i to r . Th e d i st r i ctc o ur t f o und tha t, i n do i ngs o , the defe nd an ts (co llec tiv ely , “T h e M oti vati on Show ”) br eached th e ir c ont ract w ith A SIby fai li ng to hon or the latter’s r i g hto ffi r str efus al

. Howev er, i n l i g hto fASI ’ s f ai lure to p rove d am ages w ith reason able certaint y, th e cou rt aw ar d ed n om in al d am ag es in t h e a m o u n t o f on e d oll ar . A SIco ntends thatthe dist ri ct c ourtcom m i tte d cl ea r e r r or i n fi ndi ngi ns uffi ci en t pr o o fo fda m ag es . The M oti vati on S how cr oss - appeal s the di str i ct c ourt ’ s l i ab i l i t y d e t e r min a t i o n . F o r th e r e a s o n s th a t f o l l o w , we affi rm the hol ding ofthe dist ri ct c ourti n al l r espect s.

I . B AC KGR OUND A SIi s a tr ade- i nfo rm ati on p ubl i sherthatf aci l i tat es the me e t i ngo fp ur v e y o r s a nd p ur c ha s e r s o fc o r po ra te prom oti onalpro du cts. A SIh as app ro xi m ate l y 2 1, 000 1 distribu to r m em b er s a n d 3,30 0 s u p p lier m em b er s. Through i t s a ffi l i at e , th e AS IS h o w, AS Ih o l d s r o u g h l y 8 0 s h o ws per yea r thro ughout the U ni ted S tat es . O f thes e, fi veN os. 08

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ar e “ m aj or, ” o r m ult i

- day, sho w s that a re hel d i n Chicag o, Dall as, Las Veg as, N ew Yor k a nd Orl ando. The Chic ago show has bee n hel d i n M ay orJ ulyev er y y earsince 19 99. Bo thASIa nd Th e A SI Sh o w ar e o wned b y the Co hn f am i l y. M atthew Cohn ( M r. Cohn) i s the vi ce c hai rm an o fAS Ia n d p r e s i d e n to fth e AS IS h o w. T h e p re se n t c as e in vo lve s A S I’ s r ela tio n sh ip w ith H allEr i ck so n a nd Nat i o na l Pr emi um S ho w, I nc . ( N PS ) , the l a t t e r o f wh i c h d o e s b u s i n e s s a s T h e Mo t i v a t i o n S h o w. Ha l l

- E r i c k s o n i s th e e x h ib i t i o n ma n a g e r f o r th i s sh o w, w hi ch i s hel d annuall y in the f al l atM cCorm i ck Pl ace i n Chi ca g o . Peter E r i ck so n ( M r . Er i ck so n) i s th e pr es i den t and s ole shareho l der o fH al l

- Eri ckso n. H e i s a l so vi ce p reside nt and sole sh areh older of N PS. On Febr uary6, 2001 , The M oti vati on S how ente re d i nto an ag re em en t w ith A SI th at p u rp or te d t o c re at e a “s tr at eg ic al l i ance. ” The co ntra ct c re ate d a thr ee- yea r oblig ati on on the par ti es j oi ntl y t o oper ate a pro m oti onal

- products pavi l i on withi n The M oti vati on S how

. A SIso ught t o benefi t i ts m em ber s byexp osing the m to end-b uyer s, as w el l as to pro m oti on a nd adver ti si ng ag enci es. Fo r i ts part, The M oti vati on S how st oo d “ to gai n additi onal ex hibi to r s an d b o o th s r epr es en tingdi st r ibut o r s an d s up pl i e r s . . . t o s e l l p r o du c t s t o e nd

-b uy e r s . ” P a r a g r a ph ni ne o fth e a g r ee m en t, whi chb es to wed upo n AS I“ th e ri ght o ffi rs t r efusalco ncer ni ng anyact i vity, al l i ance, o r o pp o r t un i t y c o nc e r ningthe p r o mot i o na l p r o du c t/ a dver ti si ng speci al ty i nd ustr y, ” i s o fcent ral i m port ance t o t h e p re se n t a p p ea l. T h e c on tr ac t p ro vid ed th at it w ou ld be s ubj ect to Pennsyl vani a l aw . Par agr aph ei ght s tat ed4 N os. 08

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- 1227 that the a gr eem ent woul d “n ot be exte nd ed to any othe r pr o m o ti o na l pr o duct s as so ci at i o n, t r ade s ho w, or co nfer en c e (i. e., P P A I).” A s no te d , P P A I i s a clo se riva l of A SI. The pa r ti es di ffermar k edl y i n h o w the yc o ns tr ue the eve nts l eadi ng up to the prese nt dispute. A SI co n tends, and the di str i ct c ourtag re ed, thatM r. Eri ckso n “solicit ed an d i nv i te d” PPAI t o c o - l o ca te i ts t r ade sh o w w i thThe M oti vati on S how atM cCorm i ck Pl ace i n Ch ica go . Thi s, th e di st r i ct co ur t f o und, vi o l at ed par ag r aph ni ne o fthe co nt r ac t be ca us e The M o ti va ti o n S ho w fail ed t o g r an t A SIa ri gh t of fi rst refusal over this co-l ocat ion op p ortu ni ty, whi chthe c o ur t det er m i ne d t o b e i n the prom oti onal

- product/ advert i si ng- speci al ty i nd ustr y. The di s t r i c tc o ur tde t e r mi ne d tha tT he Mo t i v a t i on Sh ow liter ally be n t o ve r b ac kw ar d s “ t o m a k e c lea r to all at te n d ee s a t b ot h sh ow s t h at th is w as a j oin t e n d ea vo r,” w hi ch w as the a tt ra cti ve quali ty that enti ced PPA Ito th e c o - l o c a t i o n . T r . a t7 3 6
. J u d g e G r a d y fu r th e r f o und th at M r. Erickson and Th e M otivation Sho w ’s spon sorshi p w as c en tr alto PPA I ’ s s uccess i n obt ai ni ng appro val f ro m the Ch i cago Conventi on a nd T ou ri sm Bureau ( C C T B ) t o l e a s e s p a c e i n Mc C o r mi c kP l a c e i n S e p t e mber 2003

. Th e d istri ct cou rt also h e ld th at M r. Erickson ’s “fa ilu re to ad vis e A SI of h is c o o p e r a tio n w ith P P A I .
. . w as d eliberat e and w as d esigned to conc eal from A SI th e fac t t h at th er e w as an op p or tu n ity in t h e o ffin g.” Jud ge G rad y con clud ed that M r Er ic k s on “kn ew that A SI w oul d be i nter ested , and he had ev er y r eas on t o b e lie ve th at ha d he offered th e op p ortu nity to A SI, A SI woul d ha ve b ee n l i k ely t o a cc ept it. ” I nde ed, he f o undN os. 08

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- 1227 5 that A SIwould have accepte d such an o ffer, had i t be en f or thcom i ng. U nsurpri si ngl y, A SIfull y s up ports these fin d in gs on ap p ea l. H al l

- Er i ck so n a nd NPS pr es en t a m o r e i nno cu ous acc o unt
. The y appe al pr i m ar i l y to th e te st i m o ny o fM r. Er i ck so n, who s ta te d tha t he r ec ei ve d a n i nd ep enden t co ur te syc al l fr o m M r . S l ag l e, pr es i den t an d c hi effi na nci alo ffi cero fPPA I, wh o supp ose dlysa i d that P P A Iwas l oo ki ng to m ove i ts tr ade sho w to a post- LaborDay p e r i o d th a two u l d b e nea r T h e Mo t i v a t i o n S h o w. He obs er ved thatsho w s with si m i l araudien c es can i m pact ea cho th erne g at i ve l y, a s at te nde es wi l l g o t o o ne , b ut not to both. Based o n thi s per cei ved f act, and g iven that PPA Iw as apparent l y intent on co m i ng, M r. Eri ckso n tes ti fi ed that any d etr i m entali m pact co uld be el i m i nated by ste er i ng PPA Ito The M oti vati on S how

. I nd eed, by per su adingPP AI t o c o m e to M cCo r m i ckPl ac e o n the sam e d ates, he asse rted t h a t “ th ere cou ld be a very p ositi ve i m pac t f o r The M o ti va ti o n S ho w and f o r the A SI pa vi l i o n. ” Tr
. a t 37 6- 77
. He fur th ers ta te d tha t he provi ded t h e C CT B, at PPA I ’ s r equest, with info rm ati on that The M oti vati on S how and PPA Iwere not com peti ti ve. Id. at38 0. Thi s was i nfo rm ati on that the CCT B deem ed re l evanti n deter m i n in g w hetherPPA Iwas enti tl ed to a perm i t. M r. Eri ckso n concl ud ed that he did n ot bel i eve that anythi ng he had done br ea c h ed The M oti vati on Sh ow ’s a gr ee m en t w ith A SI. The d i str i ct c ourtr ej ecte d M r. Eri ckso n’s te sti m ony, chara cter i zi ng i t a s “j ust re gr et tabl y f al se” and furtherl abe l i ngc er ta i n o fhi s ex pl an at i o ns a s “c o m pl et ely unt r uth-6 N os. 08

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- 1227 ful. ” J ud ge Grady r eadi l y c oncl ud ed that the co- l oca ti on w as an “o pp or tuni ty” f orthe pu rpos e o fpara gr ap h ni ne. The dis tr i ct courtthus found that The M oti vati on S how h ad vio lat ed its co n tr ac t b y fa ilin g to m ak e a va ilab le to A SI th e o p p or tu n ity to ex er c ise its righ t o f first refu sa l. H ow ever, desp ite conc lud ing tha t the de fen d a n t s w ere in breach of con tra c t, th e d istri ct cou rt found thatA SI had fai l ed to pro ve dam age s with re aso nabl e ce rt ai nty. Altho ug h i t r ea ch ed th i s conclusi o n wi th o uta ddr es sing th e fa c tu al re c or d in g re at d ep th , th e d ist ric t c ou rtd id note that“i n vi ew of [ i ts] at ti tude to w ar d the defendants’ b re ac h, [i t] w ou ld n otbe relu c ta n t t o m ak e a re a s on ab le es tim at e o f d am ag es if [it] b elie ve d th at [it] co u ld d o s o.” I n the p r e s e nta pp e a l, AS Ic o nt e nd s tha tthe di s t r i ct cour t com m i tte d c l ear er ro r i n fi nd i ng that d am age s ha d no t be enprov en wi thr ea so nabl e ce r ta i nty . The M oti vati on S how cr oss - appeal s J ud ge Grady’ s l i abi l i ty det er m i na ti o n.

I I . DI S C US S I ON A . Th e D ef end ants’ D eci si on N otTo I nvit e AS I To CoL o c a t e T he 2 0 0 3 Mot i v a t i o n S ho w Co ns t i t ut e d A Br each O fContr act The M o ti va ti o n S ho w adv an ce s f o urunc o nv i nc i ng ar gum ents w hy i t di d not br each i ts contr act w i th ASI
. I n the fi r stpl ac e, i t co nt en ds th ati t ha d ne i th erthe author i ty nor the abi l i ty to contr ol the i ssuance ofd at es atM cCo r m i ck P l ac e. Thu s, The M o ti va ti o n S ho w co ntends, i t co uld nothave o ffer ed A SIa ri gh t of fi rs t r efusalN os. 08

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as a matt ero fl aw. S econd , i t ar g ue s th ati t ha d no contr olo verPPA I’s d ec i si on t o re l oca te. Thi rd, i t s ubm i ts th atASIc o ul d not have a cc ept ed ano ffert o puto n a tr ade sho w . Last, i t a rgues that the r i ght- of

- fi rs tre fus alpr o vi si o n i n the c o nt r ac t di d no t appl y t o the pr o duct i o n o ft r ade s ho ws. None o fthe se c o nt en ti o ns has m er i t. A s t o the fi rs t point, i t m ay b e tr ue thatthe defe nd ants l acke d an abso l ute l ega l r i ght t o dict ate t h e issuance o f d at es b ythe CCTB. Butthe r ec o r d r ev ea l s th atthe de fen d an ts ha d signif ic an t, d e facto i nfluen ce over th e C C T B ’s i ssui ng PPA Ia S ep tem berdate i n 200 3 t o co- l oca te w i th th e M ot iva tio n Sh ow . Th e d ist ric t c o u rtd id n otcle ar ly er r in finding“a s a f act that the s uccess o fPPA Ii n obtai ni ng a Se ptem berdate i n 200 3 t o c o-locate with The M otivati o n S ho w w as due , i n l ar g e par t, t o the s po nsorsh ip of M r. Er ic k s o n an d Th e M otivation Sho w . ” Tr. at 737. I t also prop erly foun d tha t “ w ithou t tha t sp ons orsh i p, w i th o uttha t co o per at i o n, i t i s no t ata l l c l ea r tha t th e burea u orthe bui l ding w oul d have app ro ved a Septe m ber date for P P A I
. ” Id. Sin c e t h at sa m e in flu en c e c ou ld h av e b ee n em p loy ed for A SI’s be n e fit, an d w ou ld su re ly ha v e r e s ul t e d in the CC TB ’ s s i mi l a r l y a pp r o v i nga co l o ca ti o n f o r ASI, the di st r i ctc o ur t di d no t er r i n h o l di ng tha tthe r i g ht

- o f

- fi r s t
- r e fus a l p r o v i s i o n i n the c o nt r a ct w as tr i gge re d by the co

- l oca ti on o pp or tuni ty. The defe nd ants’ second ar gum ent i s that PPA Ial one had c o nt r o l o v e r i t s de c i s i o n t o mov e i t s 2 0 0 3 e v e nt t o c o i nc i de wi th The M o ti va ti o n S ho w. The defen dan ts r ely on th e tes ti m ony ofM r. Eri ckson, wh o sta ted thathe c oul d not preve nt PPA Io r any ot h er trade s how fro m m oving to8 N os. 08

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- 1227 M cCo r m i ckPl ac e. W e no te a t th e fi r sti ns ta nc e th atthe di st r i ctc o ur t f o und h i s te st i m o ny t o b e “e nt i r ely l ac k i ng in cr ed ibilit y,” “ c om p let ely u n tr u th fu l” a n d “re gr et ta b ly f al se. ” Tr
. at73 7, 74 2. W e a re e speci al l y defer enti alto w i tness
- cre dibi l i ty deter m i nati ons by dist ri ct c ourt s, si nce they enj oy a superi or set ti ng i n w hi ch to m ake su c h find in gs . Se eU ni t e d S t at e s v. Gonzal ez-M e ndoz a , 58 4 F.3d 72 6, 73 0 (7th C ir. 2 0 09 ); U nite d State s v. G arci a , 66 F. 3d 8 51 , 85 6 ( 7th Ci r. 19 95)
. I n any eve nt, the i dea that PPA Ico uld ac t ind ependentl y o fThe M oti vati on Sh ow in s ec u rin g d at es a t M c C or m ick P lac e is in it se lf i rr el evant
. The di str i ct found that without The M oti vati on S how ’ s “coopera ti ve eff or t, ” PPA I“would nothave been i nter est ed i n any co- l oca ti on. ” Tr
. at73 7. U l ti m ate l y, the di s t r i c tc o ur tdi d n o tc l e a r l y e r r i n fi nd i ngtha t M r. E ric ks on “s olic ite d an d inv ite d ” P P A I to a v a il itse lf of t h e o p p or tu n ity
. Id. The de fend an ts’ pr es en t ar g um en t th atPP AI ’ s dec i si o n t o c o - l o ca te was a n i nde pen den t ac tio n is in c on sis te n t w ith th e d i s tr ict co u rt ’s re as on ab le f act fi nd i ngs a nd cr edibi l i ty deter m i nati ons. The M oti vati on S how next subm i ts that A SI, the si gnat o r y t o the c o nt r a c t, do e s n o thol d orp r o du c e t r a de sh ow s and therefore cou ld n ot acc ep t a co-l ocat ion offer. This ar gum ent i s bo rder l i ne fri vol ous. There i s no r eas on w hy a prom i see cannot avai l of an opportunity t o w hi ch i t i s co ntrac tu allyenti tl ed by contr acting i n turn w i th a th i r d pa r ty, m ost obvi o us l y The ASIS ho w i n the prese nt ca se. Tr. at25 8- 59. Las t, we ful l y a g r e e wi th the di s t r i c tc o ur t ’ s de t e r mi na ti o n tha t par ag r aphni ne o fthe c o nt r ac t appl i ed to the pr o duct i o n o ft r ade sh o ws. The defen dan ts a r g ue tha t “theN os. 08

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- 1227 9 parti es coul d not hav e int ended” that thi s pro vi si on c ou ld h av e e x te n d e d “ to an yt h in g b ey on d th e a m b it ofThe M oti vati on S how

. ” But Pennsyl va n ia l aw pro vi des tha t, wher e th e te r m s o fa c ont r ac t ar e cl ea r a nd unam bi guous, the i ntent of the parti es i s t o be a scer tai ned fro m th e d oc u m en t it se lf. Se eIns uranc eAdj us t m e nt Bur e au, Inc
. v. A l l s t at eIns . Co. , 905 A
. 2d 462, 468 (Pa
. 2006); C he n v . C hen , 8 93 A. 2d 87, 9 3 ( Pa
. 2 00 6)
. Re vi ewi ngthe c on tr ac t d e n ov o, w e c on c lu d e t h at p ar ag ra p h n in e is cl e a r a n d u n a mb i g u o u s wh e n r e a d i n l i g h t o f the c o ntr act as a w hol e. The defe nd ants’ ar gum ent that p aragr ap h n in e is lim ite d to a c t i vit ies ta kin g p lac e w ith in the a m bi t o fThe M oti vati on S how i s ba sed o n the f act that othe r provi si ons i n the contr act ar e s i m i l ar l y l i m i ted b y t h eir ex p licitte rm s. B u t t h e d i s tr ict co u rtco rre c tly no t e d tha tthe ab s e nc e o fs uc h l a ngua g e in p a r a g r a ph ni ne i s hi ghl y instr ucti ve. That par agr aph’s provi si on that A SIi s e nti tl ed to a ri ght o ffirs t re fu sal w i th r espect to “ an y a ct i vi ty, a l l i an ce , o r o pp or tu ni tyc o nc erni ngthe prom oti onalpro du cts/ advert i si ng spec i al ty i nd ustr y” cl ea r l y c aptur es the c o - l o ca ti o n o ppo r tu ni tytha t The M otivation Sho w prov ided to A SI ’s cl o se com p etitor. W e a gr ee w i th t h e di str i ct c ourtthati t “ w oul d do vi olence to the con tract to interp ret it in any other w ay.” Tr. at 733.

B . T h e D is tric t C ou rt D id N ot C om m it C lea r Erro r In D et erm i ning That A SI Fail ed To Pro ve D am age s W it h R eas on ab le Certainty The dis tr i ct c ourtcon c lu ded i n no uncer tain ter m s that A SI h ad failed to es ta b l ish d am ag es w ith rea so n ab le10 N os. 08

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cer tai nty. A l though i ts fi nd i ng was not cl ear l y e rr one ou s, w e a re co ncer ned that the c ourtm ay have ove rs tat ed the inadequ acy ofthe p roffer ed evi dence. H avi ng r evi ew ed the re cor d, w e be l i eve th at the questi on wh ether A SIhas m ade a suffi ci ent s how i ng o fdam age s i s a cl ose o ne . Nev er th el es s, g i ve n o urc l ea r - er r o r r evi ew , the qu es tio n i s no t what w e would fi nd were w e s i tting at th e t ria l lev el. Se eLe ve rv. N o rthw es t e r n Univ
. , 97 9 F
. 2d 55 2, 55 3

- 54 (7t h C ir. 19 92 ); Jone s v. Ham e l m an , 86 9 F
. 2d 1023 , 10 31 ( 7th Ci r. 19 89)
. W e m ust a ffi rm i fthe dist ri ct c ou rt ’s a c c ou n t o f th e ev id en c e is p lau sib le v iew ed in ligh t o f th e rec or d in its en tir et y. Se ei d. Sin c e a rea so n ab le tr i ero ff act coul d c oncl ud e that the pro ffer ed evi dence f al l s s hor t o f proving dam age s w i th r eas onabl e s peci fi ci ty, we a ffi r m. W e b eg in by n ot in g t h at th e d ist ric t c ou rtco rre c tly i denti fi ed re l evantPennsyl vani a l aw , w hi ch pro vi des that contr act “dam age s . . . ar e no t r ecov erabl e f orl oss beyo nd an a m ount that the ev i dence perm i ts to be e stabl i shed w i th r eas onabl e ce rt ai nty. ” Span g & Co. v. U
. S. St e el Corp. , 54 5 A.2 d 861, 86 6 ( Pa. 19 88) ( re l yi ng o n Rest at ement( S ec o nd) o fCo nt r ac ts § 3 52 )
. In co ns i der i ng w hetherthe dist ri ct courtcl ear l y e rr ed i n fi nd i ng tha t AS If a i l e d t o p r o v e d a ma g e s wi th r e a s o n a b l e c e r t a i n t y, we note that Pennsyl vani a l aw ge nera l l y r eso l ves doubts ag ain stt h e b re ac h in g p ar ty
. Id. at 867 ( ci ti ng Rest ate m ent, § 352). W e note too the P en ns ylvania Su p rem e C ou rt’s pronouncem ent in 197 9 th at “ m er e uncer tai nty a s t o th e a m ou n t o f d am a g e s w ill no t b ar rec ov er y w h er e itis cl ea r tha t damag es wer e th e certain re su l t o fthe de fen dant’s co nd uct. ” P ug h v . Ho lm es , 405 A
. 2d 897, 90 9- 10 ( Pa.N os. 08

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- 1227 11

Becau se ASI appe al s on l y the di s t ri c tc our t ’ s ho l di ng c on- 2 cern ing lost p ro fit s fro m the d en ied op p o r t u n ity to co-loca te w i th T h e M o t i v a t i o n S h o w , w e d o n o tc o n si d e r th e c o u r t ’s s epa ra t e hol di ng thatASI ha d f ai l ed t o pr ove dam age s fro m diversi on of bu si ness from i ts M ay 2003 show to the co- locat ed show thatw as in f acthel d late r that year. 1979 )
. N otwithstandi ng thi s l anguage , wh i ch m i ght b e re ad to re l i eve vi cti m s o fco ntra ctualbr each ofthe obl i gation of iden t ifying actu al dam ages w ith reason able certa in ty , so lon g a s t h ey ca n d em o n s t r a te th at th ey w er e in f acti nj ur e d, “ the l a w s t i l lr e qu i r e s a p l a i nt i fft o p ro du ce evi dence w hi ch es tabl i shes, with a f ai r degre e o fpro babi l i ty, a basi s f oras ses si ng dam age s. ” Wuj i ckv. Yorkt owne D ent al Associ ates, Inc. , 701 A
. 2d 581, 584 (Pa
. Sup er. 1997). W e proce ed by disc ussi ng the di str i ct c ourt ’ s a nal ysi s o f th e r e l e v a n tt e s t i mo n y a n d e x p l a i n i n gs o me o fo u r c o ncer ns. I n parti cul ar, w e questi on the cour t’ s char acte ri za-

2 ti o n o fM r . Co hn’ s t esti m o ny, whi chpr o vi ded th e pl ainti ff’ s pr i m ar y e vi den ce f o r e st ab l ishingda m ag es . The c o ur tde c l a r e d: Ido know thatM r. Cohn’s te sti m ony, wh i ch r anges f r o m a ha l fmil l i o n t o a mil l i o n do l l ar s wi th ou t an y speci fi cati on w h at ever as to w hat would ac count for a d iffer en c e b et w ee n a h alf m illion an d a m illion, is com ple tel y s pecula ti ve and i s no t s om ethi ng th at the Cour t co uld r el y upon f oran a w ar d ofdam age s. Tr. at74 4. W e be l i eve thatthr ee i ssues m er i t di scussi on her e. Fi rs t, havi ng r evi ew ed the tr anscr i pt ofM r. Cohn’s te st im ony,12 N os. 08

- 1097& 08

- 1227 i t i s ind eed tr ue thatthe w i tness ’ s e sti m ati on o fda m age s ra nge d fr o m $ 5 0 0 , 0 0 0 t o $ 1 , 0 0 0 , 0 0 0 a nd e v e n b e y o nd

. Mr
. C o h n o r i g i n a l l y m a i n t a i n e d th a tth e r e l e v a n td a mage s’ r ange w as $500 , 000 to $800 ,00 0. Tr. at14 2, 15 3- 54, 215. Thi s, being a n ar row erband, m ay have been l ess trou bl i ng to the dist ri ct c ourt
. N eve rthel ess , i n l i ght o f the t est i m ony ofD av id Kordecki

— a f or m erem plo yee o f th e C C TB

— M r . C oh n su b se q u en tly co n c lu d ed th at h is or igin al, es tim a t ed ran ge w as “e x tr em ely co n se rv at ive .” Id. at 692- 94. On cro ss- exam i nati on, M r. Cohn cl ar i fi ed that the ra nge of dam age s w as l i nked to the n u m b er o f booths ASIwoul d ha ve s o l d a t th e co - l o ca te d e ve nt wi thThe M o ti va ti o n S ho w. He t es ti fi ed th at5 00 b o o th s w oul d have y i el ded a profi t o fhal f

- a- m i l l i on dol l ar s. H e al so e xpl aine d tha t 80 0 bo o th s would c o r r es po nd to ov er a m illion d olla rs ’ p ro fit. Id. at69 5. For this reason, w e are t r o u b le d by the district cou rt’s ass er ti on that M r. Cohn f ai l ed to pro vi de “any speci fi cati on wh ate ver ” to e xplai n the ra nge o fes ti m ate d dam age s. H i s t est i m ony m ade cl earthattha t range depend ed on th e co ur t’ s estim at e as t o the l i k ely numbe r o fb o o th s that A SIwould have sol d. M r. Cohn a lso i nd i cate d that the l ow-end fi gure was base d on the l owest l eve l o f p r o fi tth a tA S Ih a d e v e r e nj o y e d w h e n i ts o l d th e s a me num bero fbo oths thatPPA Idi d at the co

- l oca ted ev ent. H e t est ifi ed that A SI ’ s 2 006 show in Phil adel phia, w hi ch w as a 6 00-boo th sho w , yi eld ed m or e than $50 0, 000 i n profi t. Tr. at14 3. H e then expl ai ned that “fra nkl y, w e would have done b et te r than that[ i n the co- l oca ted ev en t with The M oti vati on Show ] bec ause w e wou ld have had share d cost s t h at w e would nothave neededN os. 08

- 1097& 08

- 1227 13 to spend the m oneyo n. ” Id. at14 3- 44. H e t est i fi ed that A SIwould not need t o have spent as m uch m oneyo n a k eyno te speake r and that the $1 91, 000 i t s pent on educatio n in P h ilad elp h ia “ m os tly w ou ld h av e b ee n sa v e d .” Id. at14 4. Re vi ewi ngthe t r an sc r i pt, we do no t unde r st an d the d ist ric t c ou rt ’s c on c lu sio n th atM r. C oh n ’s t es tim on y d id no t pr o vi de “a ny s pec i fi ca ti o n wha tever” abo utthe r an g e o fda m ag es . Its ee m s cl ea r t o us tha t M r . Co hn bel i eve d that $ 500, 000 w as an “e xtre m el y c onse rv ati ve” m i ni m um and that a m or e a ccurat e e sti m ate o fdam age s w oul d be g re ate r. Tr. at69 3. Ou r seco nd concern i s that the r eco rd sugg est s a ( sl i ght) possibi l i ty that the di str i ct c ourtm ay have deci ded that M r. Coh n’s testim ony on d am ages w as sp ecu lative before i t e nter tai ned the e vi dence. W e d ire ct o ur a tte nti on t o thi s par ti cul arexchange duri ng th e d i re ct e xam i nati on ofM r. Cohn, wh en the questi on o fquanti fyi ng dam age s wa s fi r s tb r o a c he d: Q. W h at w ou l d you hav e e xpected A SIto pro fi t had i t be en gi ven an o p portunity t o conduct a co- l oca ted show al ongs i de ofThe M oti vati on S how i n 200 3? M r . K o l m a n : Obj ec tio n, Yo u r H o n o r. T h at ’s c om p let ely specul ati ve. The Court: Iag re e that i t i s, r eal l y, but Iam go i ng to l et hi m answer, and Iwil l ta ke i t f orwh ate veri t m ay be w or th. But Iconcede yo ur poi nt. I t’ s v er y s pecula ti ve. Tr. at14 2.14 N os. 08

- 1097& 08

- 1227 M r. Cohn w as the vi ce chai rm an of A SIand pre si dent of T he A SIS ho w and ha d c o ns i der ab l e ex per i en ce i n the i nd ustr y. U nl i ke M r. E ric kson, hi s t est i m ony w as not foun d to be fal se or un tru th ful. I n sh o r t, M r. Coh n’s tes ti m ony w as l i kel y t o be a n i m port ant s ourc e o fev i dence on A SI’s d am ag es . See Re st at ement( S ec o nd) o fCo ntr acts § 352, Com m ent b ( expla i ni ng that“[ e] vi dence of p as t p er for m an c e w ill form t h e ba sis for a rea so n ab le predi cti on as to the future” and e xplai ni ng further that, i fthe busi ness i s a new one, “dam age s m ay b e establi sh ed w ith reason able certaint y w ith th e aid of exp ert te st im ony” )
. W e s ee no r eas on wh y hi s t est i m ony on thi s s ubj e c t wo ul d ne c e s s a r i l y b e “ v e r y s pe c ul a t i v e . ” N or do we be l i ev e th ati t tu r ne d out to b e. Hi s su bs eque nt expla nati on o fwh y ASI ’ s l os t pr ofi t was be tw een $ 5 0 0 , 0 0 0 a nd p o s s ib l y mo r e tha n a mi l l i o n do l l a r s was n e i th e r a rb i t r a r y n o r u n s u p p o r t e d

. S i n c e AS Ia n d P P AI ar e in the sam e m ar ketand have m em ber shi ps that ove rl ap t o som e e xtent, i t i s no t whol l y unre aso nabl e t o pres ume tha tthe t wo c o mpa ni e s wo ul d h a v e s o l d a com parabl e num bero fbo oth s. H ad they done so , M r. Cohn’s te sti m ony re veal s that i t would hav e y i el ded a m i n i m u m p ro fit of $ 50 0,0 00 . A n d , in fac t, it w ou ld l i kel y have yi el ded m or e, du e to Ch i cago ’ s hi gher p ro fi tabi l i ty and the va ri ous c ostsa vi ngs a sso ci ate d w i th co

l oca ted ev ents. O ur th ird, an d final, con c e r n i s tha t the district cou rt f ai l ed to a ddr es s ev i den ce o fASI ’ s pr o fi tabl y ho ldi ng m aj orsho w s in the past a nd o fthe si gni fi cant cos t s avi ngs that co- l oca ti on would have pro vi ded

. S uch ev idence w ei ghed on the questi on o fdam age s a nd sho uld have f o r m ed par t o fthe di st r i ctc o ur t’ s o pi ni o n.N os. 08

- 1097& 08

- 1227 15

AS I a r gu e d b e f or e the di s t r i c tc ou r ttha ti t s da m a ge s c ou l d b e 3 det er m i ne d by the f act th ati t s r eve nue an d pro fi t s fro m the (co n tin u ed ...) N o twi th st an di ng th e di st r i ct co ur t’ s r athe r c ur so r y, a nd att i mes i na c c ur a t e , a s s e s s men to fMr
. Co hn ’ s t e s t i m ony, w e c an n otfin d t h at its u ltim at e c on c lu sio n w as cle ar ly errone ou s. First, w e take th e d is trict court at i ts w ord when i t st at ed th ati t woul d he arM r . Co hn’ s te st i m o ny an d t ake it f or w ha tever it w as w orth. I n ad d iti on, there ar e f acts i n the re cor d that r end er a dir ect com pari son be twe enthe numbe r ofb o o th s th atPP AI s o l d a nd th e n u m b er th at A S I w ou ld h av e s old so m ew h at u n re lia b l e . S p e c i fi c a l l y, A S Ih a d n e v e r h e l d t w o m aj o r s h o ws i n the s ame c i tya nd i n the s ame y ea r b ef ore, a nd o ne c a n o n l y s p e c u l a t e a s t o wh a tth e e ffe c to fh o l d i n gt wo such eve n ts w i thi n f our m onths w oul d be o n the re specti ve d em ands f orea ch eve nt. The uncer tainty inj ecte d by thi s f act re nd er s a fi nd i ng o fcl earer ro r diffi cul t. Specific al l y, i fthe co- l oca ted ev ent woul d have be en as a t t r a c t i v e t o AS I ’ s me mb e r s a s A S Ic o n t e n d s , th e n p r e s u mabl y the dem and fo r that eve nt would have r educed dem and fo r i ts M ay 200 3 s how

. I nd eed, so m e s uch effect woul d s ur el y ha ve o cc ur r ed, g i ve n th e ev i den ce i n the r ec o r d tha t m an y di st r ibut o r s an d s uppl i er s wi l l a tt en d one tr ade sho w i n a c er tai n ci ty i n a y ear, but not m or e. I n c a lculating d am ages for Th e M otivation Sho w ’s w ro ngl y denying ASI the co- l oca ti on o pp or tuni ty i n 200 3, the dam age s a w ar ded f orthatdeni alwould have to be re du ced by the pr ofi t t hat would o ther w i se have been l ost by the dil uted dem and fo r the M ay 2003 sho w . W e ca n 316 N os. 08

- 1097& 08

- 1227

(
. . . c on t i nu e d) 3 M ay 2003 s h o w w er e redu ced by the off se tt ing dem and generat ed by the e ven tc o- l oc at ed by PPAI and Th e M otivat i on Sh ow f ou r m on th s la ter. AS I ha s elected no t to p u rsu e this arg u m en t on ap p eal. A s exp lain ed ab ov e, altho u g h ev id en ce t h a t P P A I sold 4 bet ween50 0 an d 6 00 booths i s c er t ai nl y i l l um i nat i ve on the que s t i on ofho w m any b ooth s ASI woul d have s ol d, i ti s by n o (co n tin u ed ...) do no m or e than specul ate as t o w h at the eco nom i c r el at i o ns hi p b e t we e n the s e t wo e v e nt s wo ul d h a v e b e e n. And , as Pennsyl van ia law m ake s cl ear, such s pecula ti on i s a n in ad eq u a t e b as is for es tim at in g d am ag es . Se eSp ang, 545 A
. 2d at 866. This shor tc om i ng i s co m pound ed by a num bero fo ther defi ci enci es. Fi rs t, A SIdi d not i d enti fy c om panie s th atwoul d ha ve a tt en ded a co - l o ca te d e ve nt w ith The M ot iva tio n Sh ow in 2 00 3. Su c h te st im on y fro m sp ec ific c om p an ies w ou l d h av e b ee n h elp fu l, es p ec ially if it cou ld h ave be en eli cited from those of A SI ’s m em bers th atdi d no t attend A S I ’ s M ay2 00 3 sh o w. ASIpo i nt s o ut that 21 perce nt o fi ts supp l i erm em ber s a tte nd ed i ts M ay2 00 3 sh o w, s o i t woul d hav e ta r g et ed th e r emai ni ng 79 p ercen t for th e co-prom o t e d even t later that year. S p e c i fi c e v i de nc e th a tc e r t a i n o fth e l a t t e r g r o u p o fme mb er s w ou ld h av e a tt en d ed a c o-lo c at e d s h ow in t h e fa ll of20 03 w oul d have be en hi ghl y relevant. A bsent such evi dence, so m e degr ee of s pecula ti on would be r equi re d as to th e n u m b er of bo ot h s t h at A SI w ou ld h a v e s o l d in a 2 0 0 3 c o - p r o mo t i o n wi th T h e Mo t i v a t i o n S h o w. 4N os. 08

- 1097& 08

- 1227 17

(
. . . c on t i nu e d) 4 m e a n s d e t e r mi n a t i v e . I tw o u l d a p p e a r th a tth e l a s tt i me P PAI had h e l d a s h o w i n C h i c a g o wa s t wo y e a r s b e f o r e th e 2 0 03 c op ro m ote d ev en t. T ha t b eing the ca se, it is certa inly p ossib le tha t PP A I s o l d m or e b oo ths tha n A SI w ou ld ha v e, especia lly w he n th e latter co m p an y ha d held an oth er larg e sho w on ly fou r m on ths p rev iou s. A SI s ought the re l eva nt doc um en t s f ro m PPAI thr ough a 5 s ubpo e n a th a t i s s u e d f r o m th e U. S
. Di s t r i c t C o u r t f or t he N or the rn D istrict of Texa s. H ow ev er, that co u rt refused to gr ant a m ot i ont o c ompe l c ompl i a nc e by P PAI wi th the s ub

poena. ASI d id not appeal this refusal to the U nit ed Stat es C ou rt of A p p eals for the Fifth C ircu it. Se c on d , th e a p p ella n t/ c ro s s - ap p elle e d id n otob ta in f i n a n c i a l d a t a fr o m P P AIc o n c e r n i n gth e l a t t e r ’ s r e ve nue an d pr o fi ts from the c o - pr o m o te d e ve nti t he l d wi thThe M oti vati on S how i n 200 3. S uch i nfo rm ati on co uld have 5 be enhe l p fuli n c r aftinga r ea so nabl e es ti m at e o fthe damag es . Thi r d, ASIdi d no t i nt rod uce ev i den ce o fthe i denti ti es ofthe speci fi c com panie s that a ctual l y a tte nd ed P P A I’s c o-p ro m ot ed ev en t i n 2 00 3. Su c h ev id en c e w ou ld have enabl ed the di str i ct c ourtto cal cul ate dam age s w i th gr eat er speci fi ci ty. Four th, had Th e M oti vati on Sh ow o ffer ed A SIa ri ght o ffi rs t r efusal, PPA Im i ght s till h av e h eld a se p ar at e s h ow in Ju ly 2 00 3. T h is w ou ld have re sul ted i n thr ee m aj or shows bei ng hel d i n Chicag o w i thi n four m onths, wh i ch co m pli cate s the pro ofo f d am ages ev en furt he r. One i nevi tabl y s ym pat h ize s with A SI, wh i ch has been w ro nged by a co m pany w i th wh i ch i t ho ped to e nj oy a18 N os. 08

- 1097& 08

- 1227

In h old ing tha t the d istrict cou rt d id no t clearly err in its 6 ina d equ ate-p ro of-of- d am ag es d eterm ina tion , w e affi rm its aw ard of nom inal dam ages. W e note f or com plet ion’ s sake, ho w ev er, that A SI’s con ten tion tha t it i s entitled to lost p ro fit s for five y ear s is w itho u t m e r i t
. A s th e d istrict cou rt ap tly no ted , T he M o t i v a tion Sh ow exercised its rig ht to term ina te the a g re em en t, whi c h i twas e nt i t l ed t o do. M or eo ver, it w ou ld b e hi ghly specul ati ve to i nf er that M cCorm ic k Place wou l d h a ve g rante d AS I ’ s r e q ue s tt o ho l d t wo maj ort r a de sho w s f or fiv e y ear s. f r ui tful, s tr at eg i c r el at i o ns hi p. Pr o vingda m ag es fr om the im p ro p er d en ial of a fu tu re op p or tu n ity is a d i f f icu lt en dea vo r, ho wev er, a nd A SImake s th e st r o ng es t ar g um en ts i t ca n wi ththe e vi den ce i n th e recor d. Buti n l i g ht o fth e p r e c e d i n gs h o r t f a l l s i n th e p r o ffe r e d e vi d e n c e , we c a n n o t c on c lu d e t h at th e d ist ric t c ou rtcle ar ly er re d . Th is hol ds tr ue ev en wh en the ev i dence i s r ead i n a m anner f avo rabl e t o the no nbrea chi ng par ty
. S e eA TA CS C o rp . v. Trans World Com m unica ti o n s, Inc. , 15 5 F
. 3d 659, 66 9 ( 3d Cir
. 19 98)
. A s e x p lained , o ur r evi ew o fthe f actual fin d in gs of th e d ist ric t c ou rtis h igh ly d efe re n t i a l. E ve n if w e would have bee n in c li ned to fi nd so m e m eas ure of dam age s r eas onabl y c er tai n i n the prese nt cas e, thi s f act alone d o e s not allow us to reverse the d istri ct cou rt’s f actualdeter m i nati on t o the c ontr ar y. 6

I I I . C ONC L US I ON The M oti vati on S how co m m i tt ed a fl agr ant br each o f contr act w hen i t f ai l ed to pro vi de A SI w ith a r i ght o ffi rs tN os. 08

- 1097& 08

- 1227 19

re fusalr ega rdi ng the 20 03 co- l oca ti on o pp or tuni ty at M cCorm i ck Pl ace. A l though ASIundersta nd abl y l am ents th e di st r i ctc o ur t’ s awar d o fno m i na l damag es , c o nt en di ng that i t s er ves to abso l ve the b re achi ng p ar ty ofthe conse que nc e o fi ts ne f ar i o us c o nduc t, th e la w pl ac es the burden ofpro vi ng dam age s o n the p lai nti ff

. A hos t o f relevan t inform ation bearing on su ch i njury i s abse nt
. A SI fail ed to o btain i nfo rm ati on fro m PPA Iabo ut the profit re aliz ed by the co- l oca ted ev ent. I t f ai l ed to i ntro du ce ev id en c e t h at c e r t ain of its sp ec ific m em b er s w ou ld have att ended a co- l oca ted ev ent with The M oti vati on Sh ow , ha d s u c h a n op p or tu n ity be en av aila b le. N or d id AS I p r o ffe r e v i d e n c e r e v e a l i n g th e i d e n t i t i e s o f th e c o mpan i es tha t di d i n f ac t at tend PP AI ’ s co - l o ca te d e ve nt w i th the M oti vati on S how

. It d id not intro du ce for m al sta ti sti calanal ysi s that would s up porta re aso ned est i m ate of l ost profi ts. A part f ro m the evidence supp l i ed by i ts vi ce c hai rm an, M r. C ohn, A SIo m i tte d e xp e r tt e s t i mon y o n the n a t ur e o fthe p r om oti o na l

- pr o ducts m ar ketthatwould al l ow the j ud ge to est i m ate l ost profi ts. A nd w h at l i ttl e e vi dence as was i ntro du ced by M r. Cohn w as at l eas t s om ew hat s pecula ti ve. Of c ours e, i t i s no t the ca se that A SIf aile d to i ntro du ce an y pe r tine nte vi d en ce. I t i s su r ely r el ev an t th atthe p lai nt iff ha s m ad e a profit in ex cess of o ne m il li on d oll ars ev er y t im e i t h as h eld an ev en t in C h ica go . I t is n ot ab le to o tha t PPAI c o m pet es in th e same mar k eta s th e pl ainti ffand that the for m er ’ s m em ber shi p ove rla p s to a s i gni fi cant extent w i th the l att er ’ s. S i nce these enti ti es can be c o mpa r e d a l o n gc e r t a i n l i ne s, i ti s p e r t i n e n tth a tP P AI so l d 5 00

- 60 0 bo o th s atthe c o - l o ca te d e ve nt w i thThe20 N os. 08

- 1097& 08

- 1227 M otivation Sho w . A nd there is som e f o r c e to A SI ’s observati on th at t he l eas t pr ofi t i t has ev erm ade se l l i ng tha t m any b oo ths i s s l i ghtl y o verhal f

- a- m i l l i on dol l ar s. B ut althou gh there is som e basis for inferri ng that PP A I ’s sal e o f50 0- 600 boo ths would have r esul ted in pro fi ts of approxi m ate l y hal f

- a- m i l l i on dol l ar s f orA SI, a num ber o f factors serv es to un d erm ine our con fi d en ce in th is inferen ce. In p articu lar, t h e r e i s scan t evide nc e in the record th at sp ea ks to th e e ffec t t h at h av in g t w o m ajor s h ow s in the s am e ci ty w i thi n f our m onths w oul d h av e on dem an d . E ven a ssum i ng tha t a co - prom ote d event w i th The M oti vati on S how would be suffi ci entl y a ttr acti ve to A SI ’ s m em ber s that the pl ai nti ffwould have sol d as m any or m or e bo oths than PPA I, the re cor d does no t in d ica te h ow en h an c ed d em an d f o r t h at ev en t w ou ld dil u te a tte nd ance a t ASI ’ s pri or, m aj orev ent in Chicag o i n 200 3. The enhanced dem and fo r the c o- l oca ted sho w w ou ld pr es um ab l y de tr ac t f r o m mem be r s’ i nt er es t i n the yea r’ s e ar l i er, m aj orshow

. L ostp ro fi ts f ro m the co- l oca ted ev en t, ca u se d by T h e M ot iva t ion Sh ow ’s b re ac h, w ou ld have to be a dj usted acc or dingl y. Y et the e vi dence gr ants us no m ean s by w hich to cond uc t t h is calcu lus. M ore fund a men t a l l y s t i l l, s i nc e PP AI ’ s 2 0 0 3 s ho w a pp e a r s t o b e t h e firs t ith ad h e ld in C h ica go in t w o ye ar s, it is e nt i r e l y p o s s ib l e tha tAS Iwo ul d h a v e f a i l e d t o have s o l d a s ma nyb o o ths a s i t s r i v a l u l t i mat e l ydi d. I n l i ght o fthese am bi gui ti es and gaps i n cr uci alev i dence, w e ca nnot co ncl ud e that the di str i ct c ou rt ’ s dete rm i nati o n was c l ea r l y e r r o ne o us . W e do no t be l i ev e th ato ur r ul i ngwi l l r es ul t i n ca r t eb l anc hef orpro m i sor s who m ayN os. 08

- 1097& 08

- 1227 21

see k o pp or tuni sti cal l y t o b re ach co ntra cts w hen they bel i eve thatany re sul ti ng har m wil l be i nd ete rm i nate. W ro nged part i es need m er el y in tr oduce ev i dence that i s s uffi ci ent t o al l ow the co urt to asce rt ain the degr ee of i nj ur y wi th r ea so nabl e ce r ta i nty . S uch ev i den ce is abs en t in th e re c or d h er e, th ou gh it sh o u l d h av e b ee n w ith in the c apaci ty of A SIto unear th and br i ng be f or e the co urt. T he j ud gm en t of th e d istri ct cou rt i s the refore A FFI RMED .

4- 7- 10