Lost-profits damages expert
Expert class library · Commercial · Plaintiff side
Calculates the profits a business would have earned but for a breach, tort, or other wrongful act. Projects but-for revenues and costs and discounts them to present value.
What this expert is retained to answer
- What profits would the business have earned but for the defendant's conduct?
- Is the chosen base period or benchmark business a reliable predictor of but-for performance?
- What share of the decline is caused by the defendant rather than other factors?
- What is the present value of future lost profits?
Methods
- Before-and-after method
- Yardstick method
- Sales projection modeling
- Incremental cost analysis
- Present value discounting
How the testimony is attacked
- Benchmark not comparable. A yardstick is only reliable if the comparison business resembles the plaintiff. MM Steel accepted a closely matched benchmark, Kellwood rejected a demand that the yardstick be nearly identical, and Katz discussed a federal case excluding non-comparable branches.
- Unsupported base-year selection. In a before-and-after analysis, the choice of base year can drive the result. Katz upheld exclusion where that choice was a speculative judgment call.
- Failure to account for other causes. The model must separate losses caused by the defendant from losses caused by market or internal factors. Katz cited the failure to factor in confounding variables.
- Speculative projections. Forecasts not grounded in the business's own record or reliable data are vulnerable even when a companion method survives. Kellwood precluded the expert's market forecast analysis while admitting his yardstick analysis.
- No track record for a new business. New ventures have no 'before' period, so experts turn to yardsticks that defendants attack as speculative. MM Steel upheld a yardstick based on the founders' prior office for a newly formed company.
What the public record shows
A deliberately narrow CourtListener search, "lost profits" AND "yardstick" AND (Daubert OR "Rule 702"), returned 11 opinions filed since 2015, as of October 2, 2026; broader searches return more. Three that show how courts handle this class of testimony:
| Outcome | Case | Court | Why |
|---|---|---|---|
| Excluded | Katz, Abosch, etc., P.A. v. Parkway Neuroscience485 Md. 335 | Md. 2023 | Maryland's high court held the trial court did not abuse its discretion in excluding the plaintiff's lost-profits expert, whose before-and-after analysis rested on speculative judgment calls about the base year, the treatment of member draws, and confounding variables. |
| Limited | Washington v. Kellwood Co.105 F. Supp. 3d 293 | S.D.N.Y. 2015 | The court admitted the plaintiffs' expert's yardstick analysis comparing the plaintiff to a fast-growing apparel company, rejecting the argument that a yardstick must be nearly identical, but precluded his market forecast analysis. |
| Admitted | MM Steel, L.P. v. Reliance Steel & Aluminum Co.806 F.3d 835 | 5th Cir. 2015 | The Fifth Circuit found no abuse of discretion in admitting a yardstick lost-profits model for a newly formed distributor, holding the founders' prior office was a sufficiently similar benchmark. |
Each case links to the free opinion text on CourtListener.
Under amended Rule 702
Since December 1, 2023, Rule 702 says expressly that the party offering an expert must show the court it is more likely than not that the testimony meets each requirement: that it rests on sufficient facts or data, uses reliable methods, and reflects a reliable application of those methods to the case. Questions about the basis of an opinion are no longer automatically matters of weight for the jury. For how the circuits have applied the amendment, see the Rule 702 tracker, which follows each court of appeals; for what that means for preparing or attacking this class of expert, see the guide on amended Rule 702.
Related classes
Guides
Simulating this class on a matter
Supreme Mind simulates a class of expert, never a named individual, on your fact pattern and returns the likely opinion, the ranked cross-examination weaknesses, the Rule 702 attack surface and what it means for settlement. Read how it works, or book a demo.
Last reviewed October 2, 2026. How this page is built: rulings are found by searching court opinions on CourtListener, and each one is read in the opinion before it is summarised here; outcomes are labelled by what the court did with the expert's testimony. No individual expert is named. This page summarises public decisions for orientation and is not legal advice; read the opinion before relying on any ruling.