damages expert excluded for failing to discredit compelling alternative explanations

Thermal Design, Inc. v. Guardian Bldg. Products, Inc., 2013 WL 1647791 (E.D. Wis.)

Previously, the court held that Thermal couldn’t seek money damages on its false advertising claims because it didn’t produce evidence of damage from actual consumer reliance on the challenged statements, then reversed itself because it had failed to note an expert report by Robert Bero.  Now, it granted Guardian’s motion to strike Bero’s report as unreliable, reinstating the earlier holding that Thermal hadn’t shown evidence of damages and wasn’t entitled to a jury.

Guardian advertised that its building fabric liner system provided OSHA-compliant leading edge fall protection for workers, and there was a genuine issue of material fact on falsity.  Bero’s report said that Guardian’s sales increases during the period of the allegedly false advertising weren’t attributable to market growth, since the market was relatively depressed, but rather to the fall protection version of the system.  The fabric liner system market was a two-supplier market during the relevant period, meaning that increased Guardian sales would be lost Thermal Design sales.

The court agreed, however, that the opinion should be excluded for failing to account for obvious alternative explanations.  When Guardian introduced its system, it simultaneously stopped selling Thermal Design’s, and Bero didn’t explain why that wouldn’t account for Guardian's increase in market share. Plus, sales increased for both parties, indicating a growing market. Bero explained that the increase in the market wouldn’t necessarily account for Guardian's increase in market share, but he didn’t rule it out as a contributing factor.

Plus, Guardian’s system was significantly cheaper than Thermal Design’s, and Bero agreed that a number of sales were lost becaues of price, since the lowest bidder usually wins.  He conceded that sales were lost for reasons unrelated to fall protection; Thermal Design’s own employees noted a customer’s response that fall protection “isn't worth anything.” Thus, Bero's opinion didn’t provide a reliable basis for establishing that Thermal Design was damaged by Guardian's advertisements.