Review of Case Decision: Fail-Safe LLC v. A.O. Smith Corporation
An anonymous expert witness recently posted a review of the case decision for Fail-Safe LLC v. A.O. Smith Corporation. The expert writes:
The decision is highly instructive on two issues: 1) reasons to preclude expert testimony regarding damages when an expert relies upon an insufficiently-validated management projection and 2)rejection of an unsupported subjective risk premium in the discount rate.
The Fail-Safe LLC v. A.O. Smith Corporation decision is noteworthy for business valuation and lost profit expert witnesses as it concerns a claim for lost revenues nearing $2.5 billion. As the case summary notes:
Plaintiff manufactured electric motors, some of which are used to drain water from swimming pools and spas. Plaintiff sued defendant for using its technology to disengage a motor when, possibly, a bather was trapped by the drain suction. Plaintiff offered two experts on damages (Warren Keegan and Shawn Fox).
The review by the expert witness goes on to describe the decision and even quotes a few notable phrases by the court. Click below to read some harsh criticism the court had for the plaintiff’s expert witnesses.