Source: https://www.bvresources.com/products/daubert-challenges-the-courts-raise-the-bar
Timestamp: 2019-04-24 00:14:18+00:00

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Financial experts working in litigation today have to prepare for a Daubert challenge. For attorneys seeking to attack the other party's financial evidence, Daubert motions have become one of the most used weapons in their litigation arsenal. Besides depositions, the motions represent a pre-trial opportunity to test the strength of the opponent's evidence and may encourage or mandate an early resolution of the case. To steel experts for what's to come, BVR is excited to offer Daubert Challenges: The Courts Raise the Bar.
This special report equips practitioners with case law, sample motions, practice tips, and check lists. In the report's nearly 350 pages, financial experts and lawyers share their unique insights into what it means to face a Daubert challenge and what it takes to survive one. No expert hoping to excel in the litigation arena can afford to be without this unique practice tool.
Is a Daubert Exclusion a Career Stopper?
Federal Court confirms that the Butler-Pinkerton Calculator passes the Daubert standard.
Alaska Rent-a-Car, Inc. v. Avis Budget Group, Inc.
Court accepts expert damages calculation for breach of contract based on DCF methodology, including growth rate and discount rate assumptions, but precludes terminal value calculation that violated non-assignment clause.
U.S. Court in Maine excludes expert testimony because, despite his extensive experience and effort, he did not have specific experience valuing personal guarantees.
Court confirms admission of expert’s damages calculations, despite their reliance on only five months of pre-contract sales data.
Tax Court rejects charitable easement appraisal under Daubert, finding the appraisers ignored the before and after method and rejected relevant facts in favor of those that exaggerated value.
Court declines to exclude expert’s value of shares in publicly traded company, finding the expert adequately considered Rule 144 “time and quantity” restrictions.
District court strike’s expert event study, purporting to support a “fraud on the market theory,” for “flouting” accepted methodology, including “cherry-picking” the event dates and failing to account for confounding factors.
Calloway Golf Co. v. Acushnet Co.
Court denies Daubert challenge to patent damages expert, holding that financial proof of lost profits need not create “fantasy” world, only a “but for” world.
Compania Embotelladora del Pacifico, S.A. v. Pepsi Cola Co.
Court excludes plaintiff’s financial and marketing experts at trial for failing to support lost profits damages evidence with reliable market sales data.
Expert challenged under Daubert for market cap approach to valuing public company stock in economic damages case.
Court admits testimony of lost profits expert under Daubert, despite his overly simplistic analysis, including an alleged failure to consider such basic factors as incremental costs and intervening economic factors.
Court emphasizes the importance of accurate calculations in assessing damages, lost profits.
In a malpractice action against a real estate appraiser, district court excludes valuation of leasehold interest by plaintiff’s financial expert for failing to comply with any professional standards, and for unreliability under Daubert.
Floorgraphics, Inc. v. News America Marketing In-Store Services, Inc.
Two appraisers testify to lost profits and lost business analysis, defend against Daubert attack. Court examines search for comparables.
Supreme Court holds that appeals court must review trial court’s exclusion of expert testimony pursuant to Daubert under abuse of discretion standard and district court in case did not err in finding testimony irrelevant and unreliable.
Guang Dong v. ACI International, Inc.
In the absence of actual data, expert relies on emails and depositions to arrive at lost profits value.
Court upholds the alternative investment method used by ESOP expert to support claims that plan trustee breached its fiduciary duty by imprudently investing in stocks it knew to be artificially inflated by accounting improprieties.
Ho Myung Moolsan, Co. Ltd. v. Manitou Mineral Water, Inc.
Court strikes expert’s $133 million lost profits damages for lack of any documentary evidence regarding actual sales made by the plaintiff.
In re Houston Drywall, Inc.
Bankruptcy expert goes “above and beyond” insolvency test to value major asset (municipal reimbursement/receivables) of troubled land development company.
Tenth Circuit confirms summary dismissal of securities litigation for lack of reliable expert evidence showing a direct causal link between the parent company’s alleged fraud and the subsidiary’s (a telecom company) substantial loss of market value.
Insignia Systems, Inc. v. News America Marketing In-Store, Inc.
Federal district court denies Daubert challenge to plaintiff’s lost profits expert, finding his reliance on optimistic management projections and comparable companies were better suited for cross-examination rather than exclusion.
Jack Tyler Engineering Co. v. Colfax Corp.
On plaintiff’s third attempt to prove damages due to defendant’s breach of contract, Sixth Circuit permits expert to present lost business value based primarily on discounted cash flow analysis.
IRS expert defends Daubert attack by focusing on key elements of market approach, "misapplication" of data.
Court considers whether an expert can rely on valid but aged report after routine destruction of underlying workpapers, and also whether the expert can supplement the report with information not available at the time of the original.
Lyman v. St. Jude Medical S.C., Inc.
The need for independent verification of data and appraiser objectivity is stressed by the U.S. District Court, in a case where the two appraisers took notably different approaches.
Marine Travelift, Inc. v. Marine Lift Systems, Inc.
MDG International v. Australian Gold, Inc.
Court excludes an otherwise “supremely qualified” expert for flaws in his experience and his expert report, including accepting attorney-provided data without independent verification.
Metro Tech Corp. v. TUV Rheinland of N.A.
Court limits damages to breach of contract to those that can be ascertained with reasonable certainty, and qualifies first-time lost profits plaintiff’s expert to testify re: same.
Multimatic, Inc. v. Faurecia Interior Systems, USA, Inc.
Court upholds $10 million in lost profits damages against automaker supplier, based on letter of intent, confidentiality agreement, and single price quote; but confirms exclusion of $28 million in additional damages based on speculation.
Court qualifies plaintiff’s expert under Daubert to testify regarding lost value of customer accounts based on review of the accounts, a prior valuation report, and a revenue multiplier derived from existing accounts.
Court upholds $1.6 million damages award for lost value of lost customer accounts, rejecting defendants’ argument that according to applicable law, the proper and exclusive measure of damages is lost future profits.
Nordetek Environmental, Inc. v. RDP Technologies, Inc.
Federal court dismisses expert’s damages calculation of under Daubert for incorrectly applying the diminution of value approach to a recovered business, and for assuming a disputed IP license had no value.
Popovich v. Sony Music Entertainment, Inc.
Court weighs in on the "hypothetical market" standard to determine logo's worth.
Court strikes lost profits calculations for new energy drink distributor because the expert, an industry consultant/investment banker, failed to use scientific methods, market surveys, or reliable benchmark data.
Miss. appellate court confirms “bright line” rule that all goodwill, whether enterprise or personal, of a professional or retail firm, is excluded from the valuation of a business in divorce.
RMD, LLC v. Nitto Americas, Inc.
Federal district court finds plaintiff’s expert’s Crystal Ball and Holt Winters methodology to project lost profits admissible under Daubert; method proved reasonable when subsequently tested with regression analysis tool.
Rosvold v. LSM Systems Engineering, Inc.
Court excludes proposed BV expert for failing to have appropriate credentials, experience, and clear methodology.
Court dismisses as “meritless” a Daubert challenge to a $2.7 million business valuation under the income approach, which claimed the expert incorrectly assumed that there was actually a buyer for the company at this amount.
Court denies Daubert motion against plaintiffs’ expert, finding he applied the correct formula for calculating breach of contract damages for failing to register stock under Delaware law.
System Development Integration, LLC v. Computer Sciences Corp.
Court disallows expert theory of “lost opportunity cost” damages for breach of contract, but admits his “standard” lost profits analysis, including reliance on agreed-upon forecasts and an Ibbotson-derived the discount rate.
The Citrilite Co. v. Cott Beverages, Inc.
Court upholds regression analysis of cumulative data sets under Daubert, but strikes portions of expert’s damages calculations that project lost profits beyond stated contract term.
Tidwell Industries, Inc. v. Diversified Home Products, Inc.
Court considers whether lost profits expert may rely on client financial information and customer interviews.
Truman Arnold Companies v. Hammond and Consultants Enterprises, Inc.
Court vacates future lost profits award based on lack of reliable expert evidence regarding future sales, beyond contract term.
U.S. Salt, Inc. v. Broken Arrow, Inc.
Lost profits calculations, based exclusively on management projections, called into question by U.S. District Court.
U.S. Securities and Exchange Commission v. St. Anselm Exploration Co.
Comprehensive expert evidence, including statistical event study, required for government to prove causation in criminal securities fraud case.
Unleashed Magazine, Inc. v. Orange Co., Fla.
Experience but uncertified expert in licensing loses standing to testify in aggressive deposition questions regarding support for royalty rate calculations.
Court qualifies expert’s 20% growth rate in lost profits calculation under Daubert.
Victory Records, Inc. v. Virgin Records America, Inc.
Court denies music industry expert under Daubert for failing to verify plaintiff’s internal sales projections; for using only a single comparable; and for failing to consider alternative causes for lost profits.
Court considers difference between professional/commercial goodwill in valuing plaintiff’s litigation law firm with large, contingency fee work.
Court considers Daubert challenge that would preclude DCF in valuing beer distribution rights, based on alleged flaws and the superiority of market multiple approach.
Willis v. TRC Companies, Inc.
CEO with thirty years in business (but no BV credentials) survives Daubert challenge.

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