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.
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Questions this testimony turns on
- 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.
- Late or disguised rebuttal reports. A rebuttal report that only supports the case in chief, or a supplemental report with new calculations after discovery closes, can be struck. In Chicago Joe's Tea Room v. Village of Broadview the Seventh Circuit affirmed excluding both.
What the public record shows
Courts have filed at least 11 opinions since 2015 that discuss this class of testimony and cite Daubert or Rule 702, as of October 4, 2026. 8 rulings that show how courts handle this class of testimony:
| Outcome | Case | Court | Year | Why |
|---|---|---|---|---|
| Admitted | ZipBy USA LLC v. ParzychNos. 24-1494, 24-1500, 24-1586 | 1st Cir. | 2026 | The First Circuit held it was not an abuse of discretion to admit an expert's lost-profits estimate for a corporate opportunity that relied on pre-pandemic projections the company later missed, reasoning that the acquirer could have exploited synergies and that the weaknesses were for cross-examination. |
| Admitted | Crabar/GBF, Inc. v. Wright142 F.4th 576 | 8th Cir. | 2025 | The Eighth Circuit affirmed admitting a trade-secret plaintiff's lost-profits expert, who treated a competitor's sales as diverted sales, holding that reliance on assumptions does not mandate exclusion where they are not fundamentally unsupported and the record supported them. |
| Excluded | McAlister v. Loeb & Loeb, LLPNo. CV-24-0048-PR | Ariz. | 2025 | After the trial court excluded a damages expert's model of more than $100 million in lost licensing profits for a new venture as speculative, a ruling the court of appeals affirmed, the Arizona Supreme Court held the plaintiffs had not proved lost profits from prospective licensing deals with reasonable certainty. |
| Excluded | Chicago Joe's Tea Room, LLC v. Village of Broadview94 F.4th 588 | 7th Cir. | 2024 | The Seventh Circuit affirmed excluding a business that never opened from offering its owner's lost-profits estimates as lay opinion and barring its damages expert, whose rebuttal report only repeated the owner's figures and whose supplemental report of $15 million to $35 million came six years after discovery closed. |
| 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. |
| Admitted | S&H Farm Supply, Inc. v. Bad Boy, Inc.25 F.4th 541 | 8th Cir. | 2022 | The Eighth Circuit affirmed admitting a dealer's lost-profits expert who projected sales from the business's lowest historical growth rate, holding that his failure to account for competition and weather went to weight, since every model relies on assumptions. |
| 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.
In federal court: amended Rule 702
In federal court, 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.
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Updated October 4, 2026. How this page is built: rulings are found by searching court opinions on CourtListener. The summaries are written by AI working from the full text of each opinion, and every citation and link is checked automatically. 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. Spotted an error? Tell us.