Opinion ID: 733
Heading Depth: 3
Heading Rank: 1

Heading: Dr. Basi's Damages Report

Text: Expert testimony is admissible if it is reliable and will help the jury understand the evidence or decide a fact in issue. Hartley v. Dillard's, Inc., 310 F.3d 1054, 1060 (8th Cir.2002); see also Fed. R.Evid. 702. Although the factual basis of an expert's opinion is generally an issue of credibility rather than admissibility, an expert's opinion should be excluded if it `is so fundamentally unsupported that it can offer no assistance to the jury.' Bonner v. ISP Techs., Inc., 259 F.3d 924, 929-30 (8th Cir.2001) (quoting Hose v. Chicago N.W. Transp. Co., 70 F.3d 968, 974 (8th Cir. 1996)). The district court found Dr. Basi's testimony inadmissible because his report relied on incorrect factual premises and contained speculative calculations. A district court enjoys wide discretion in ruling on the admissibility of proffered evidence, and evidentiary rulings should only be overturned if there was a clear and prejudicial abuse of discretion. US Salt, Inc. v. Broken Arrow, Inc., 563 F.3d 687, 689-90 (8th Cir.2009) (internal quotations and citations omitted). Upon review, we hold that the district court did not abuse its discretion in finding that Dr. Basi's report was flawed both factually and methodologically. To begin, Dr. Basi's report is factually flawed, rendering it of little to no assistance to the jury. See Bonner, 259 F.3d at 929-30. Principally, Dr. Basi assumed that Cole lost its ability to make sales of Farm Pro equipment when Homier terminated the Distributorship Agreement. Thus, when calculating Cole's damages, Dr. Basi categorized as lost Cole's profits as both a distributor and a dealer. The termination letter, however, explicitly stated that it did not apply to [Cole's] status as a dealer of Homier Farm Pro product lines. Homier would still encourage you to be an authorized Farm Pro dealer. Further, the record indicates that Cole recognized that its status as an authorized Farm Pro dealer had not been terminated. Also, Cole had Farm Pro tractors in stock available for sale, and Homier did not prevent Cole from purchasing tractors from Homier in a dealership capacity. [5] Dr. Basi's report indicates that he was either unaware of or disregarded these facts. Thus, his lost-profit analysis takes into account income stemming from Cole's ability to sell Farm Pro in a dealer capacity, which could not have been lost as a result of Homier's termination of the Distributorship Agreement. Cole criticizes the district court's order for focusing on factual errors in Dr. Basi's opinion, rather than on whether it was based upon valid accounting methods. Cole argues that these are questions for a jury, going to credibility or weight rather than admissibility. But where, as here, the expert's analysis is unsupported by the record, exclusion of that analysis is proper, as it can offer no assistance to the jury. Alternatively, the district court properly excluded Dr. Basi's report because his report failed to rise above the level of speculation. The district court found that Dr. Basi's report was speculative because, among other things, the report used a twenty-five year computation period based on Gregory Cole's retirement age and qualification for government benefits. In reaching this conclusion, the district court cited our decision in Structural Polymer Group, Ltd. v. Zoltek Corp., 543 F.3d 987 (8th Cir.2008), in which we stated, Under Missouri law, `[l]ost profits related to a breach preventing performance are recoverable provided the loss is . . . ascertainable with reasonable certainty, is not speculative or conjectural, and was within the contemplation of the parties when the contract was formed.' Id. at 997 (quoting Farmers' Elec. Coop., Inc. v. Mo. Dep't of Corr., 59 S.W.3d 520, 522 (Mo. 2001)). The district court also cited our decision in Tipton v. Mill Creek Gravel, Inc., 373 F.3d 913 (8th Cir.2004), in which we noted the exacting requirement for proof of lost-profit damages under Missouri law. Id. at 918 (quoting Ozark Employment Specialists, Inc. v. Beeman, 80 S.W.3d 882, 897 (Mo.Ct.App.2002)); see also Coonis v. Rogers, 429 S.W.2d 709, 714 (Mo.1968) (noting the stringent requirements for lost-profit damages). Cole argues that the standard applied by the district court was too demanding, and that the Missouri Supreme Court has subsequently relaxed its requirements in regard to lost-profit damages. We are not convinced that this is correct. As in earlier cases, e.g., Coonis, 429 S.W.2d at 713-14, current Missouri cases, while not requiring exact calculations, have maintained that the amount of lost-profit damages cannot rest upon mere speculation, see Gateway Foam Insulators, Inc. v. Jokerst Paving & Contracting, Inc., 279 S.W.3d 179, 185-86 (Mo.2009); Wandersee v. BP Prods. N. Am., Inc., 263 S.W.3d 623, 633-34 (Mo.2008); Ameristar, 155 S.W.3d at 54-55. Here, Dr. Basi's lost-profit forecast extends for twenty-five yearsa figure that has nothing to do with the continuation of Cole's contractual relationship with Homier. The Distributorship Agreement expressly states that it may be terminated, by either party, for cause, giving at least 90 days written notice. The notion that performance under this contract would continue for twenty-five years is too speculative for us to find that the district court abused its discretion. See Meterlogic, Inc. v. KLT, Inc., 368 F.3d 1017, 1019 (8th Cir.2004) (finding exclusion of expert testimony warranted, in part, because the expert predicted financial results ten years into the future even though the parties' contract extended only two years and allowed for termination at any time.). We recognize that at least one court, applying Missouri law, has not been troubled by such predictions. See Tri State HDWE, Inc. v. John Deere Co., 532 F.Supp.2d 1102, 1108-09 (W.D.Mo.2007). However, given our highly deferential standard of review, we cannot find that the district court erred by taking issue with Dr. Basi's twenty-five year forecast in this case. For the same reason, the fact that the agreement in this case requires cause for termination and extends indefinitely does not alter our decision. There are simply too many future uncertainties for us to say that the district court abused its discretion by excluding as overly speculative a twenty-five year forecastbased solely on age and ability to qualify for government benefitseven if the Distributorship Agreement required cause for termination. We do not disagree with Cole that lost profits often defy exactitude and that an adequate basis for estimating lost profits with reasonable certainty is sufficient. See Wandersee, 263 S.W.3d at 633. However, in a spectrum ranging from speculation to exactitude, Dr. Basi's report is too close to the former for us to find that the district court abused its discretion. Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039, 1057 (8th Cir.2000) (Expert testimony that is speculative is not competent proof and contributes `nothing to a legally sufficient evidentiary basis.') (quoting Weisgram v. Marley Co., 528 U.S. 440, 454, 120 S.Ct. 1011, 145 L.Ed.2d 958 (2000)). Accordingly, we affirm the district court's decision to exclude Dr. Basi's report.