Judges: “Gatekeepers” of “Speculative” Expert Witness Findings
“We conclude that the trial court has the duty to act as a ‘gatekeeper’ to exclude speculative expert testimony,” Justice Ming Chin wrote for the court. “Lost profits need not be proven with mathematical precision, but they must also not be unduly speculative.”
Case: Lost profits case brought on by dental implant developer Sargon Lazarof, against the University of Southern California. Lazarof entered into a contract with USC’s dental school for a five year clinical trial aiming to make dental crown installations faster. Issues arose with the clinical trial and Lazarof brought on a breach of contract lawsuit and was awarded $433,000.
“Speculative” Findings: The case was sent to retrial, where again an issue of proper lost profit calculations caused the judge to throw out the exert witness’s testimony.
Los Angeles County Superior Court Judge Terry Green rejected accountant James Skorheim’s testimony that the botched study cost Sargon somewhere between $220 million and $1.18 billion in lost profits.
The case moved up from the Second District Court of Appeal to the Supreme court. Once again the court threw out Skorheim’s calculations, finding the claim to be “unfounded”.
“If lost profits can be estimated with reasonable certainty, a court may not deny recovery merely because one cannot determine precisely what they would have been,” Chin wrote for the court. “But exactitude is not the problem here. Whether the actual profits could logically be estimated in the manner Skorheim claimed is the problem. As the trial court noted, a lost profit award of up to $1 billion may not be based on pure speculation.”
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