This case arises out a contractual dispute between Plaintiff Steelray Consulting, LLC (“Steelray”) and Defendant Overstock.com, Inc. (“Overstock”). Steelray alleged that it developed a “web scraping” technology that acts as a search engine for online vehicle sales and that it sold this technology to Overstock at a steep discount as part of a profit-sharing arrangement. Steelray further alleged that the parties built a business, Overstock Cars, around this technology. Plaintiff claimed that Defendant violated the parties’ agreements relating to Overstock Cars and now seeks damages arising out of breach of contract and breach of the implied covenant of good faith and fair dealing.
Steelray hired Dr. Jonathan Hochman as an expert witness to help support some of its claimed damages. Hochman’s report discusses the value of certain digital marketing rights that Steelray claims were contractually owed, specifically Overstock’s alleged obligations to include Steelray in three marketing emails per month for five years and to include Overstock Cars on a tab on Overstock’s website.
Overstock argued that Steelray cannot establish these claimed damages because expert testimony is needed to establish the market value of the rights and that Hochman’s opinion should be excluded under Daubert.
Internet Marketing Expert Witness
Dr. Jonathan E. Hochman has more than 30 years of experience in online marketing, advertising, search engine optimization (“SEO”) and Internet technology. He has four degrees in computer science from Yale University, demonstrating both foundational knowledge and cutting-edge expertise in digital systems.
Discussion by the Court
On September 2, 2016, the parties entered into a Consulting Agreement and a Statement of Work (“SOW”) Agreement. Section 11(h) of the SOW provides for certain “continuing benefits” to Overstock Cars for five years following a split-off, including “a continued presence on Overstock’s website” and inclusion in Overstock’s customer emails “no less than three times a month.”
Hochman calculated the “fair market replacement value” of these marketing rights to be $50,298,526.
In this case, Overstock did not contend that Hochman’s methods were unreliable. Instead, it argued that his testimony is irrelevant because the $50 million figure he calculated did not describe the value of the marketing rights in a way that is legally permissible to calculate damages.
Analysis
Overstock described the marketing rights as an “income-producing asset” and argued that loss of such an asset can only be compensated by an award of the market value of the asset at the time of the contractual breach.
Utah law does not specifically address damages in terms of income-producing assets, but it does incorporate the basic principle that general damages for breach of contract claims “are measured by ‘the market value of the very thing promised, at the time of performance.’” The parties did not dispute Overstock’s assertion that loss of the marketing rights “is properly compensated only by an award of the market value of the asset at the time of the breach.” Instead, they disagreed about whether Hochman’s analysis described the market value.
Considering the testimony as a whole, Hochman’s determination that the marketing rights mentioned in § 11(h) of the SOW would be bought or sold at a certain value is consistent with a description of market value. This is not nullified by his further statements that Steelray would have to spend the same amount to purchase similar marketing benefits elsewhere.
Overstock also argued that Hochman’s description of the marketing rights based on the value of likely impressions did not describe market value because Hochman “performs no analysis of how many of those impressions would result in visits to Overstock’s Cars tab, how many of those visits would result in purchases, and how many of those purchases would result in profits.”
In this case, the Court does not believe that a market value analysis of the marketing rights must necessarily consider prospective profits that could arise from those rights.
In sum, the Court held that Hochman’s testimony may be found to describe market value and thus would be helpful in describing damages considerations to the jury.
Held
The Court denied Defendant’s Daubert motion to partially exclude the testimony of Jonathan Hochman.
Key Takeaway
Logically, the price that a business is willing to pay for a marketing presence or for marketing impressions naturally factors in the business’ determination about whether its marketing investment will turn a profit.
Essentially, if the marketing rights’ market value is based on the impressions and views that they can produce, and if those impressions already have a determinable value on the market, then admissibility does not require an expert to look at the speculative profits that could result from those rights.
Case Details:
| Case Caption: | Steelray Consulting LLC V. Overstock.Com |
| Docket Number: | 2:23cv530 |
| Court Name: | United States District Court for the District of Utah |
| Order Date: | May 04, 2026 |
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