Economics Expert Witness’ Conclusions Regarding Lost Profits Damages Admitted

In this action, the Frazier Parties alleged that the Eagle Air Parties lacked probable cause to sue them for defamation and other similar claims in an underlying lawsuit that concluded in 2020 (the “Underlying Action”). The Frazier Parties claimed that the Underlying Action damaged Sentinel’s existing or prospective client relationships, resulting in lost profits of at least several million dollars.

Defendants Eagle Air Med Corporation and Valley Med Flight, Inc. filed a motion to exclude the testimony of proposed expert witness Dr. Ronald Luke, who was retained by Plaintiffs Jeffrey Frazier and Sentinel Air Medical Alliance, LLC under Fed. R. Evid. 702.

Economics Expert Witness

Ronald T. Luke has developed Research & Planning Consultants as an inter-disciplinary firm providing economic, financial, and public policy studies. As President and owner, he supervises RPC’s professional staff and maintains high standards for the firm’s work products. Also, he has been accepted as an expert in economics, socioeconomic impact analysis, and policy analysis by state and federal courts, and state administrative agencies.

Get the full story on challenges to Ronald Luke’s expert opinions and testimony with an in-depth Challenge Study. 

Discussion by the Court

To begin with, Defendants’ motion primarily addressed the reliability of Luke’s expert testimony and did not challenge the qualifications of Luke. Defendants argued that (1) “Luke’s opinions regarding Sentinel’s lost profits damages are unreliable and inadmissible under Rule 702[,]” and (2) “any opinion [Luke] might try to offer on the litigation-related damages would be unhelpful and inadmissible.”

Also, Defendants argued that “Luke’s lost profit opinions rests on unreasonable assumptions that are unsupported by the record” and “Luke failed to properly account for other factors that might affect the amount and existence of Sentinel’s alleged lost profits.” According to Defendants, Luke did not use a discount rate that accounted for certain risk factors in his calculations that other experts use in similar analyses, and he used a ten-year time period for his calculations.

The Court held that the fact that Luke’s opinion and analysis take into account facts that are still in dispute does not justify exclusion of his expert testimony and report.

As for the litigation expense damages, Defendants sought to exclude Luke’s inclusion of the litigation expense damages because he did not calculate, analyze, or offer expert opinion related to these damages. There is no indication in the report that Luke himself calculated the litigation expense damages; rather, he merely included the previously calculated litigation expenses in his lost profits analysis based on the other information in the record. Defendants did not dispute that there is evidence in the record supporting the litigation expenses. Therefore, Defendants did not provide grounds for the exclusion of litigation expenses in Luke’s report at that point.

The Court reviewed Luke’s expert report and found that he had a reasonable basis for reaching his conclusions regarding Sentinel’s lost profits damages.

Held

The Court denied Defendants’ motion to exclude the testimony of Plaintiffs’ proposed expert Ronald Luke.

Key Takeaway:

• Exclusion is not warranted just because Luke’s opinion and analysis take into account facts that are still in dispute

• Luke’s inclusion of the litigation expense damages was not excluded due to evidence in the record supporting the litigation expenses. 

Please refer to the blog previously published about this case: Law And Legal Expert Witness’ Testimony as to the Existence of Probable Cause Excluded

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