The Witness Box

Commenting on expert evidence, economic damages, and interesting developments in injury, wrongful death, business torts, discrimination, and wage and hour lawsuits

Sunday, January 27, 2008

Economic damages in wrongful termination cases

Damages in wrongful termination (WT) cases are different from those arising in personal injury and wrongful death cases. Generally, there a number of questions that arise in WT cases that are simply not present in PI and WD cases. In particular,

Has the plaintiff following the termination conducted an adequate job search for replacement employment?

- What did he/she do to search for a job?
- What does the average person do?
- Does it look like the plaintiff has stopped searching for replacement employment
- Becoming self employed may suggest that the plaintiff expects that self employment will be as lucrative as previous job position?

Are there openings in which he is qualified for?

What does labor market data such as BLS show? Monster?

What does the labor data shows about job openings in related occupational openings?

Are the claims for back pay and front pay supportable?

In terms of back pay or past damages, are there reliable estimates of loss? Are there tax returns? Does self employment picture suggest a higher income opportunities?

What does industry data say about unemployment time and economic damages?

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Tuesday, January 22, 2008

What not to say in a deposition about your spouse...

Below is an excerpt from an economic expert's deposition in a wrongful death case. At this point in the depo, the economist is discussing the role of family income on the calculation of personal consumption.

Q. [By attorney] Did the issue of the amount of the deceased wife, was that relevant to any of your -- any of your calculations?

A. [By economist] It would have been. But I didn't get any idea of what her earnings were. If I had had some idea, it would have impacted (the analysis)... Normally, when people are living together, part of the spouse's income would be consumed by the decedent. In this case, though, they weren't living together.

And the extreme example of that would be if my wife died, economically I would be better off. She doesn't work. She wouldn't be consuming any of my income. That's the extreme view of it. But, again, I saw nothing in her (deceased's wife) deposition indicating how much she worked, how much she made, anything like that to where I could take that into account.

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Thursday, January 17, 2008

Measuring objectivity in selecting a portfolio

New Research:

Risk-Adjusted Performance as a Rigorous Approach to Removing Subjectivity from Expert Assessments of Suitability

Abstract:

A broker has an obligation to ensure that his client incorporates suitable assets into his portfolio. Greater objectivity can be brought to assessments of suitability by comparing the performance of the aggrieved investor's portfolio to a benchmark portfolio using the Modigliani & Modigliani risk-adjusted performance measure. The applicable counterfactual benchmark could be either a ``market" portfolio or a suitable alternative portfolio. The calculation of confidence intervals associated with the measured difference in risk-adjusted returns is demonstrated. Castaneda-like standards can be used as criteria for whether defendant's actions negatively impacted portfolio performance rather than outside events.

Recommended Citation
Rodriguez, A. E. and Shapiro, Steven J. (2007) "Risk-Adjusted Performance as a Rigorous Approach to Removing Subjectivity from Expert Assessments of Suitability," Journal of Business Valuation and Economic Loss Analysis: Vol. 2 : Iss. 2, Article 3. Available at: http://www.bepress.com/jbvela/vol2/iss2/art3

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Monday, January 07, 2008

Court allows statistical survey evidence

(thanks Dauberttracker.com!)

In Merisant Co. vs. McNeil Nutritionals, LLC ( 4/12/2007), CIVIL ACTION NO. 04-5504, Pennsylvania, Eastern District (GENE E.K. PRATTER, United States District Judge.)

Case Summary:

Plaintiff, Merisant Company, Inc., filed a case against defendant McNeil Nutritionals, LLC, and McNeil PPC, Inc. under the Pennsylvania common law of unfair competition. The plaintiff alleged that defendant had engaged in false and misleading advertising with respect to Splenda No Calorie Sweetener.

The defendant proffered the statistical survey evidence. The plaintiff sought to exclude the survey and all related testimony and opinion.

The plaintiff argued that the defendant's survey did not meet the "fit" and "reliability" elements required by Daubert. The plaintiff further argued that the defendant's survey was neither relevant nor reliable with respect to the issues of this case. While expressing some reservations, the court nonetheless denied the motions to exclude.

This is an interesting case because the court goes into much detail and provides detailed analysis about what is required for a survey to be admissible. The court states:

In order for a survey to be admitted, its design must "fit" the issues to be decided in this case. In J&J Snack Foods Corp. v. Earthgrains Co., 220 F. Supp. 2d 358, 370 (D.N.J. 2002), the court state that: Above all, the survey's design must fit the issue which is to be decided by the jury, and not some inaccurate restatement of the issue, lest the survey findings inject confusion or inappropriate definitions into evidence, confounding rather than assisting the jury. Only if the expert testimony and related survey are useful, reliable, and have probative value after all their deficiencies are taken into account is the evidence admissible. Id. In addition, the court noted that it was "essential to consider whether the population and terms were properly defined, whether the design, questionnaires, and interviews met objective standards, whether data was accurately collected and reported, whether data was properly analyzed, whether the questions asked were unrelated to the material issues of the case, whether questions were unfairly leading, and whether questions were confusing." Id. at 369. J&J Snack Foods addressed a dispute arising in the trademark context, where a survey was submitted to show the trademark should be classified as "suggestive" instead of "generic" or "descriptive." However, the survey did not properly define any of the classifications, and, consequently, the court found that the survey had "no bearing on the issue it was submitted for." Id. at 370. The court noted that "the flawed definition permeated the entire survey to make its finding completely untrustworthy and unreliable." Id. at 370-71.

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