Actava TV, Inc. v. Joint Stock Company "Channel One Russia Worldwide"

Background

The defendants asked the court to exclude the proposed testimony of Dr. William O. Kerr, the plaintiffs’ damages expert, under the rules governing expert evidence. They also asked the court to take judicial notice of five documents filed in other proceedings. The court had previously denied the parties’ summary-judgment motions with permission to renew them after deciding the expert-evidence motion.

Kerr prepared a report calculating Actava’s alleged lost profits at $9,257,264. His calculations included past damages of $3,860,573 and future damages of $5,396,691. He used a time-series regression analysis of Actava’s historical subscriber growth and other financial and market information to estimate the subscriptions, revenues, and costs Actava allegedly would have had without the defendants’ conduct.

Judicial Notice

The court granted the defendants’ motion for judicial notice. It took notice that the five documents had been filed in other proceedings and that the statements in those documents had been made. It did not take notice of the truth of the statements or treat the documents as establishing that the statements were factually correct.

Expert Testimony

The court found Kerr qualified to testify as an expert. The opinion states that he held a Ph.D. in economics and had more than 40 years of experience involving economic, financial, and statistical methods, including economic damages in litigation. The defendants did not challenge his qualifications.

The defendants argued that Kerr’s opinions were unreliable because they relied on hearsay, unauthenticated records, insufficient data, and a flawed methodology. They also argued that his regression analysis should have considered additional variables. The court rejected these arguments at the admissibility stage. It said many of the concerns went to the weight of the opinions rather than their admissibility and could be addressed through cross-examination and contrary evidence.

The court noted that the plaintiffs planned to have a corporate representative authenticate business records at trial and stated that the records would have to be authenticated at trial. The court also concluded that the affidavits from the plaintiffs’ former damages expert concerned the weight to give Kerr’s opinions, rather than whether those opinions were admissible.

Liability and Causation

The court agreed with the defendants that Kerr could not testify about liability. As a damages expert, he could assume that liability had been established. The court disagreed with the plaintiffs’ statement that Kerr offered no opinion concerning causation. Because his damages explanation would necessarily address how the defendants’ activities allegedly caused Actava’s business decline, the court allowed him to explain that causal connection or that the decline cost Actava money.

Disposition

The court denied in part and granted in part the defendants’ motion to exclude the plaintiffs’ expert testimony. It granted the defendants’ motion to take judicial notice. The court specifically ruled that Kerr could not give an opinion on liability, while allowing the challenged damages and causation testimony subject to the stated limitations. The Clerk was directed to terminate both motions.