Expert Article Library

Case Name: Margolies v. McCleary, Inc., (Click here for the full text of the case)

Court: 8th Circuit Court of Appeals

Date: May 19, 2006

Expert: Certified Public Accountant. Ed Crumm

Issue: Whether Crumm’s expert opinion was unreliable based on multiple assumptions woven into his damages estimate?

Summary of case: A snack food company entered into an exclusive distributorship agreement with a distributor for a multi-state area. Snack food company sued for breach of contract when the distributor failed to make steps to enter into a St Louis market.

Role of the expert: Ed Crumm was to forecast the damages in the form of lost profits that the snack food company had lost due to the breach of contract.

Challenges to the Expert's testimony: Distributor pointed out eight separate instances where the expert used assumptions in his damages analysis. However, these assumptions resulted due to the distributor’s breach, and they were based on more than “mere conjecture.” They were carefully made estimates based on a variety of factors. The Court of Appeals stated that the factual basis of an expert’s opinion generally goes to weight of their testimony, rather than the admissibility of the expert. The factual basis of an expert opinion only becomes a problem when it is “fundamentally unreliable.” The District Court properly admitted the testimony.

Summary prepared by M. Lanzone, Student, University of California, Hastings College of Law