Index

  • ABC Trans National Transport, Inc. v. Aeronautics Forwarders, Inc., 173
  • Abercrombie and Fitch Co. v. Hunting World, 348
  • Abnormal returns
    • assumptions of normality, 388
    • damages shares number, 390
    • data availability, 389
    • decision rules, particular return value, 387–388
    • dual probability trading model, 390–391
    • enhanced market model, 388
    • equal trading probability model, 390
    • of event study methodology, 384–386
    • event window, defining, 389–390
    • examining variation in, 386–391
    • one‐period abnormal return, 385
    • proportional trading model, 391
  • Accountants, 1, 8–10, 24, 25, 27, 142, 147, 148, 199, 201, 212, 365, 461
    • costs measurement, 199
    • damages experts under Daubert, 24–25
    • loss profits analysis, 9
    • Ph.D. degrees, 10
    • relative strengths, versus economists, 9–10
  • Accounting, 1, 2, 5, 8, 11, 14, 15, 20, 22, 25, 98, 228, 230, 235, 238
    • activity‐based cost, 399
    • Daubert standard to, 22
    • economic versus, 147–148
    • Ph.D. in finance, 11
    • projections versus forecasts, 147–148
    • rules, 217, 299, 308, 503
    • treatment, 230
  • Accounting expert, 8, 212
    • qualifications on damages, 8
  • A.C. Nielsen, 130
  • Acquisition planning, 233
  • Activity‐based costing, 399
  • Activity ratios, 239, 298
  • Actual profits, 377
  • Adler, James, 142
  • Admiralty Law, 6
  • Admissibility standards, 21–25
  • Adversarial attorney, 11–12
  • Adversarial litigation process, 12
  • Adverse publicity, 71–72, 490
  • Advisory Commission to Study the Consumer Price Index, 107
  • Akaike Information Criterion (AIC), 169
  • Albrecht v. Herald Co., 290
  • Alcan Aluminum v. Carlton Aluminum of New England, Inc., 35
  • Aluminum Company of America (Alcoa) et al., United States v., 431–432
  • Aluminum Products Enterprises v. Fuhrmann Tooling, 19
  • American Economics Association, 2
  • American List Corp. v. U.S. News & World Report, 278
  • American Tobacco Co., United States v., 430
  • Annual reports, 131
  • Annual Survey of Manufacturers, 120, 125, 126
  • Anticompetitive behavior, 427–431, 442, 460
  • Antitrust cases, 61, 421, 427–428, 430, 437, 447, 457, 460
    • common types of, 447
    • economic analysis in, 427
    • fact versus amount of damages, 427–428
  • Antitrust enforcement, 419, 422–424, 429, 431–433, 435, 446, 461
    • 1950s–1960s, 431–432
    • 1970s–1980s, 432–433
    • 1990s, 433–434
    • basic concepts, 424
    • changing pattern of, 429–434
    • early cases, 430
    • horizontal mergers and acquisitions, 448–449
    • market concentration, 442–451
    • market definition and microeconomic analysis, 440
    • market power, 440–442
    • mergers and acquisitions (M&A), 447–448
    • monopolization, 436–440
    • new economy, 434–435
    • predatory pricing, 451
    • regulatory framework, 448
    • rule of reason and U.S. Steel case, 430–431
    • structure and Alcoa case, 431
    • vertical mergers, 449–451
  • Antitrust injuries, 427
  • Antitrust laws, 291, 421–425, 427, 429, 431, 433–435, 446, 453, 460, 461
    • Celler Kefauver Act, 423
    • Clayton Act, 1914, 422
    • evolution of application, 429–430
    • Federal Trade Commission Act, 422
    • Hart‐Scott‐Rodino Improvements Enforcement Act of 1976, 423
    • monopoly economics, 425–428
    • Sherman Act, 421–422
    • structure versus conduct, 429
    • violations, 37, 291, 424, 429, 431, 436, 447
  • Antitrust litigation. See individual entries
  • Appellate courts, 6
  • Areeda, Philip, 452
  • Asset acquisitions, 423
  • Asset‐oriented approaches, 300, 308
  • Assets, 69, 239, 295, 298–300, 308, 309, 314, 316, 492, 494–497
  • Associated Indemnity Co. v. CAT Contracting Inc., 34
  • Assumptions, 8, 18, 29, 51, 52–53, 426
  • Autotrol Corp. v. Continental Water Systems Corp., 207
  • Average costs, 201, 214, 333, 435, 441–442
  • Bain, Joseph, 446
  • Baker, W. Gary, Determining Economic Loss in Injury and Death Cases, 5
  • Base damages, 268
  • Basic, Inc. v. Levinson, 368–370
  • Baum factors, 4
  • Baumol, William, 174
  • Before and after method, 55–57, 59
    • challenges to use, 56–57
    • failing to give consideration, 55–56
    • macroeconomic and regional economic analysis, 115–116
  • Benchmarking, 311
  • Bendix Corp. v. Balax, Inc., 74
  • Bentham, Jeremy, 487
  • Berne Convention Implementation Act, 341
  • Betas, 264, 265, 275, 383, 385
  • Bettius & Sanderson, P.C. v. National Union Fire Insurance Co., 234
  • BIC Leisure Products, Inc. v. Windsurfing Int’l, Inc., 329
  • BMW of North America v. Gore, 468
  • BMW v. Gore, 494
  • Bob Willow Motors, Inc. v. General Motors Corp., 141
  • Bonding capacity, 43, 267, 268
  • Book value, 298–299, 308
  • Bork, Robert, 433
  • Boskin, Michael, 107
  • Boskin Report, 107
  • Brandon & Tibbs v. George Kevorkian Accountancy Corporation, 226
  • Breach of contract, 6, 27, 38, 39, 78, 184, 203, 207, 211, 226, 266, 288, 460
  • Broker raiding cases, 69, 394–400
    • account retention probability, 396
    • cost analysis, 397
    • discounting, 397
    • historical gross revenue, 398
    • loss period length, 396–397, 399
    • lost profits damages, standard elements, 395–397
    • lost profits determination, 400
    • lost revenues, projecting, 396
    • relevant costs with revenue stream, 399–400
    • revenue growth, 398
  • Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 452
  • Brookshire, Michael, Economic/ Hedonic Damages, 5, 22
  • Brown Shoe v. United States, 427
  • Bruks v. Sinclair Refining Co., 206
  • Brunswick Corp. v. Pueblo Bowl‐O‐Mat, 427
  • Brunswick v. Pueblo, 424
  • Buchan, Joseph, 143
  • Bureau of Economic Analysis, 89, 100, 107
  • Bureau of Labor Statistics, 98–99, 105–107
  • Bureau of the Census, 105, 120, 125
  • Business, 44–45, 77, 78, 82, 187, 288–292, 294, 296, 299, 300–301, 305
  • Business Cycle Dating Committee, 87
  • Business cycles, 85–86, 90, 95–99, 109
    • basic facts, 96–97
    • decline and expansion rates, 98–99
    • firms’ reactions to, 97
    • and GDP components movement, 90
    • international business cycles, 94–95
    • investment and, 93–94
    • responses across industries, 97–98
  • Business failure lawsuits, 287–289
  • Business interruption, 68, 69, 73–75, 77, 82, 143, 147–149, 155, 202, 204, 287, 294, 296
  • Business interruption case, 72–77
    • closed, open, or infinite loss periods, 72–73
    • disaggregating revenues, product line, 75–76
    • disaggregating revenues, spillover losses, 76–77
    • postinterruption and preinterruption growth, 73–75
  • Business interruption loss analysis, 4, 85–117
    • economic fluctuations and litigation, 85–86
    • economic growth and performance, 87–90
    • inflationary adjustments, 104–108
    • macroeconomic analysis, 86
    • recession, 86–87
  • Business Statistics of the United States, 120
  • Business valuations, 24, 271, 287, 289, 291–295, 297–299, 301–303, 305, 307, 309, 311, 313, 315, 460
    • asset‐oriented approaches, 300
    • basic framework, 292
    • book value, 299
    • capitalization of earnings, 300
    • commonly used methods, 300
    • comparable multiples, 300
    • discounted future cash flows, 300, 301–302
    • discount rate and risk, 303
    • economic factors, 296
    • enterprise value, 299
    • factors, 294
    • fair market value, 300
    • fair value, 300
    • financial analysis, 297–298
    • firm‐specific factors, 295–296
    • industry factors, 296
    • legal standard for, 287–289
    • liquidation value, 298
    • lost profits versus lost business value, 290–291
    • methods, 287, 293
    • net present value approach, 301–302
    • parameters, 294
    • public versus private companies, 293–294
    • purpose of, 294
    • Revenue Ruling 59–60 and factors, 294–298
    • theoretical value of, 292–293
    • valuation date, 294
  • “But for” revenues, 153
  • Cammer factors, 371–372, 383
  • Cargill, Inc. v. Monfort of Colorado, 452
  • Caribbean Petroleum Corporation (CAPECO), 288
  • Carter Products, Inc. v. Colgate Palmolive Company, 355
  • Case study
    • broker raiding, 397–398
    • cost analysis in business interruption, 204–206
    • discounted cash flow method of business valuation, 302–303
    • Lightning Lube, Inc. v. Witco, 187–188
    • multiples to determine enterprise value, 306–307
    • profits that are not really profits, 235–238
  • Cash flows, 230, 231, 235–238, 241, 269, 271, 295–297, 300–302
  • Cash flows versus net income, discounting process, 230–232
  • Causality, 51, 59–71, 82, 354, 438
    • disaggregating revenues, product line, 75–76
    • graphical sales analysis and, 69–70
    • and loss of customers, 68–69
    • multiple causal factors, 60–61
    • and special case of damages, 71–72
  • Cerillo, William, Proving Business Damages, 36
  • Certified fraud examiner (CFE), 8
  • Certified public accountant (CPA), 8, 9, 9, 15, 24, 24, 25, 211
  • Chen, Peng, 274, 376
  • Chow test, 166, 167
  • Churning, 407–415
    • average holding periods, trend, 412
    • elements, 408–409
    • holding periods and in‐and‐out trading, 412
    • investment services cost, 413–414
    • litigation, 407
    • measuring damages, 414
    • model and approach, 414–415
    • quantitative measures of, 409–414
    • turnover ratios, 410–411
  • Circuit courts, 6
  • Civil lawsuits, 6
  • Class action lawsuits, 365, 373, 375
  • Class action settlements, 365–366
  • Clayton Act (1914), 422, 427, 431, 447–450, 454, 457, 461
  • Coastal Fuels of Puerto Rico, Inc. v. Caribbean Petroleum Corporation, 288
  • Collateral transactions, 40
  • Commercial damages analysis, 1, 5, 8, 11, 13, 51, 66, 111, 130, 220, 238, 239, 247, 280, 282
    • cases, 70, 325, 327, 421
    • interdisciplinary nature of, 8–10
  • Commercial damages forensic analysis, 1
  • Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 468, 473
  • Cooper Liquor, Inc. et al. v. Adolph Coors Company, 77, 152
  • Copyright Act of 1909, 341
  • Copyright Act of 1976, 341
  • Copyrights, 319, 341–346
    • defendant’s profits, 345–346
    • economics of copyright law, 342–343
    • infringement, damages, 344–346
    • owner’s lost profits, 344–345
    • remedies for infringement, 342
    • statutory damages, 346
    • suits, defenses, 343–344
    • time periods, 341
  • Coronavirus pandemic, 115
  • Coronavirus crisis, 260, 396
  • Corporate defendant, 378, 475, 495
  • Corporate finance, 1, 9, 45, 81, 212, 233, 253, 259, 263–265, 269, 271, 276, 477
  • Corporations, 225, 226, 234, 252, 313, 323, 475–478, 486, 493, 501, 502, 508
  • Correlation analysis, 61, 66–67, 101, 136, 153, 438–439
  • Correlation coefficient, 61–64, 66, 98, 101, 116, 438, 439
  • Correlation scale, 62–67
  • Cost analysis, 199–241
    • burden of proof, demonstrating costs, 206–207
    • complications involving nonlinear costs, 216
    • costs of performance, 211–212
    • fixed versus variable costs, 207–212
    • gross profits and damages, 203–204
    • measures of, 201
    • nonlinear nature of, 213–217
    • presentation, company’s financial statements, 200
    • regression analysis for, 212, 216–217
  • Cost functions, 212, 214, 215, 223, 333
  • Cost of capital
    • components of, 263–269
    • debt cost, 263
    • element of damages, 266
    • preferred stock, 263–264
    • in public utility environment, 266–267
    • rate on equity, 264–265
    • sources of data, 265–266
  • Damage amounts, punitive, 499, 503
  • Damages, 37–46, 59–67, 71, 184, 223, 226, 231, 291, 339, 340, 350, 366, 378, 427, 428
  • Damages analysis, 36
    • before and after method, 55–57
    • assumptions, role of, 52–55
    • economic and financial assumptions, 53
    • factual assumptions, 52
    • hearsay, 53–54
    • inconsistent opinions, 54–55
    • methodological framework, 79–81
    • opinions of experts, 52–53
    • yardstick approach, 57–59
  • Damages awards, 34, 35, 38, 184, 186, 202, 228, 266, 269, 322, 381, 472, 483
  • Damages cases, 42
    • business torts, 45
    • construction‐related contract cases, 43–44
    • contract‐related damages, 43
    • contracts to services, 43
    • distributor, 42–43
    • franchisee relationships, 42–43
    • loss of “key man,” 45
    • lost profits, personal injury, 44–45
    • manufacturer’s representative, 42–43
    • noncompete agreement cases, 44
    • personal injury and corporate damages, 45
    • types of, 42–45
  • Damages claims, 21, 38, 52, 149, 174, 184, 460, 461
  • Damages experts, 11–12, 18–21, 24, 28, 36, 46, 52, 58, 71, 104, 107, 108, 132, 133, 148, 150, 151, 279, 351
    • appropriate risk premium, court position, 278–279
    • capitalization and future profitability stream loss, 280
    • capitalization rate and discount rate, 280
    • causality, role of, 71
    • as consultant, 20
    • economic damages, 19–21
    • errors in discounting, 276–282
    • Federal Rules of Evidence, 21
    • getting on board, 18
    • nominal versus real rates, discounting, 277–278
    • plaintiff’s discount rate assumptions, 279
    • using management as, 19–20
  • Damages testimony, 22, 33, 34, 51
  • Damages value, 273, 288
  • Data, labor market, 100, 109
  • Daubert challenges
    • accountants and economists, 27
    • exclusion rates, experts, 27
    • to financial experts, 25–27
    • reliability, 26–27
    • trends in, 25
    • types of cases, 27
  • Delcastor, Inc. v. Vail Assoc., Inc., 35
  • Deltrak, Inc. v. Advanced Systems, Inc., 345
  • Depositions, 18, 20, 28, 29, 32, 33, 35
  • Depreciation, 203, 206, 217, 222, 299, 305–308, 345, 496
  • Deterrence theory, 468, 473, 474, 487–493, 505, 508
    • changing litigation environment and, 487–490
    • gains and losses, 489–490
    • punishment and mergers and acquisitions, 491–493
    • and regulatory processes, 490–493
  • Diagnostic statistics, 161
  • Digital Analog Design Corporation v. North Supply Company., 10
  • Direct infringement, 324, 356
  • Disaggregating revenues
    • by product line, 75–76
    • spillover losses, 76–77
  • Discounted cash flow (DCF), 314
  • Discounted future cash flows, 300, 301–302
  • Discounting process, 230–232
  • Discount rate, 249, 269, 271, 275–280, 283, 300–304
  • Distributor, 42–43
  • District courts, 6, 23, 183, 266, 339, 368, 371, 372, 434, 440, 450, 451
  • Downturns, 67, 73, 86, 96, 97, 99, 116, 130, 272
  • Dual probability trading model, 390–391
  • Due diligence process, 116
  • Duff & Phelps Research, 275
  • Dunn, Robert L., 36, 221, 228
  • Durbin‐Watson Statistic, 160–162, 164
  • Earning quality, 230
  • Earnings before interest and taxes (EBIT), 201
  • Earnings before interest, taxes, depreciation, and amortization (EBITDA) multiples, 297, 305–307
  • Earnings, capitalization, 304–305
  • Easterbook, Judge Frank, 332
  • Economic Expert Testimony: A Guide for Judges and Attorneys, 3
  • Economic framework, 51, 53, 55, 57, 59, 61, 63, 65, 67, 69, 71, 73, 75, 77, 79
  • Economic growth rate data, 111
  • Ellipse Corp. v. Ford Motor Co, 335
  • Elzinga‐Hogarty analysis, 437
  • Empire Gas Company v. American Bakeries Co., 34
  • Employment litigation, 4, 60
  • Encyclopedia of Associations, 128
  • Enterprise value, 298–299, 302, 306, 479
  • Equal trading probability model, 390
  • Equipment markets, 433, 459
  • Equity, 262, 264, 292, 293, 298, 299, 312, 367, 410, 413, 476, 479, 496, 497
  • Event study model, 383–386
    • abnormal returns of, 384–386
    • confounding events, 393
    • limitations of, 391–394
    • longer‐term effects, 392
    • single‐firm models, 393–394
  • Expenditures, 76, 89, 93, 202, 231, 482
  • Experience losses, 82, 95
  • Expert curriculum vitae, 12–17
    • concluding comments, 15–16
    • credentials versus experience, 16–17
    • degrees, 13
    • litigation‐related analysis, 16–17
    • presentations, 15
    • published books, 13–14
    • refereed or peer‐reviewed journal articles, 14–15
  • Expert econometrician, 170, 194
  • Expert opinions, 5, 9, 30
  • Expert reports, 28–33
    • attorneys writing, 29–30
    • court‐appointed experts, 33
    • demonstrative exhibits, 31
    • draft reports and communications, 30
    • insufficient disclosure in, 29
    • knowledge, relevant facts, 32–33
    • level of detail in, 28–29
    • net opinions, 31
    • opining on issues, economics, 31–32
    • supplementary reports, 30–31
  • Experts, exclusion, 25
  • Expert testimony
    • Daubert standard, 22, 23
    • general acceptance, 22
    • known rate of error, 22
    • peer review and publication, 22
    • standards for admissibility of, 21–25
    • testing, 22
  • Exxon Shipping Company et al. Petitioners v. Grant Baker et al., 469
  • Fair market value, 300
  • Fair value, 300
  • Fama, Eugene, 383
  • Farmington Dowel Products Co. v. Forster Manufacturing Co, 289
  • Federal Rule of Evidence 706, 33
  • Federal Rules of Civil Procedure, 28
  • FFJR model, 383
  • Filtering, 178
  • Finance, disciplines, 10–11
  • Financial economics, 11
  • Financial leverage, 239
  • Financial markets, money market versus capital market, 247
  • Firm‐specific financial analysis, 238–240
  • Fisher effect, 253
  • Fisher equation, 252–254
  • Fisher, Franklin, 383
  • Fisher “Ideal” index, 106
  • Fisher, Irving, 252–254
  • Fixed costs (FC), 207
  • Floor value, 298
  • Florida Court of Appeals, 58–59
  • Forecasted values
    • confidence in, 167–169
    • lost sales, breach of distributor agreement, 180–181
    • sensibility check for, 180–181
    • sophisticated measures, 169
  • Forecasting process
    • graphical analysis, 148–153
    • graphical exhibits, evidence, 150–151
    • product line “spillover” effects, 152–153
    • revenue base for, 151–152
    • seasonality and, 177–179
  • Forecasts, 147–148
    • capacity constraints and, 179–180
  • Forensic accounting, 3–4
  • Forensic economics, 1
  • Forensic economist, 95
  • Forseeability, 39–40
    • rule, 39
  • Franchisee relationships, 42–43
  • Fraud‐on‐the‐market, 366–380
    • Basic, Inc. v. Levinson, 368–370
    • Cammer Factors, 371–372
    • class actions and reliance, 375–377
    • disgorgement, 377
    • Krogman Factors, 372
    • market efficiency, 368–370
    • out‐of‐pocket damages, 377–379
    • security and market returns, 379–380
  • Fruehauf Corp. v. FTC, 450
  • Frye test, 21
  • Frye v. United States, 21
  • Frymire‐Brinati v. KPMG Peat Marwick, 23
  • Full information price, 377
  • General Electric v. Joiner, 23
  • Georgia Pacific Corporation v. U.S. Plywood‐ Champion Papers, Inc., 336
  • Global slowdown, 115
  • Grabowski, Roger, 275
  • Granger causality, 65
  • Graphic Directions, Inc. v. Robert L. Bush, 71
  • Great Recession, 94, 96
  • Green v. Occidental Petroleum Corp., 378
  • Gross domestic product (GDP), 87–89
    • releases of, 94
  • Gross margin, 201
  • Guideline companies, 305
  • Hadley v. Baxendale, 39
  • Hannigan v. Sears Roebuck & Co., 203
  • Hanover Shoe, Inc. v. United Shoe Manufacturing Corp., 228
  • Hansen v. Alpine Valley Ski Area, Inc., 338
  • Hartford Fire Ins. Co. v. Pure Air on the Lake Ltd., 35
  • Hartness International, Inc. v. Simplimatic Engineering Company, 338
  • Hart‐Scott‐Rodino Improvements Improvement Act, 448
  • Herfindahl‐Hirshman Index (HHI), 445–446
  • H.K. Porter Co. v. Goodyear Tire & Rubber Co., 334
  • Hobart Brothers Co. v. Malcolm T. Gilliland, Inc., 158
  • Holt‐Winters exponential smoothing technique, 179
  • Horizontal mergers and acquisitions, 448–449
  • Ibbotson, Roger, 258
  • Incremental costs, 10, 201, 209, 212–213
    • profit margin, breach of distributor agreement, 218–220
    • unadjusted accounting data limitations, 217–220
  • Incremental profits, 326
  • Indu Craft, Inc. v. Bank of Baroda, 288
  • Industrial organization, 119
  • Industry analysis, 119
    • annual reports and 10Ks, 131
    • conducting an, 133–136
    • courts’ position, industry averages, 141–142
    • courts’ rejection, industry averages, 142–143
    • government data sources, 120–125
    • industry association data reliability, courts’ position, 143–144
    • industry data sources, 119–125
    • industry growth and industry life cycles, 134–136
    • industry publications, 130–131
    • North American Industry Classification System (NAICS), 125, 128, 129
    • private data sources, 128–130
    • regional industry data, 133
    • securities markets analysts reports, 131–132
    • standard industrial classification codes, 125
    • yardstick approach and, 141–144
  • Industry expert, retaining, 132–133
  • Industry factors, 138
    • competition, changing level, 138
    • new product innovations, 139
    • structural changes, 139–140
    • subsectors/subindustries, 140–141
  • Industry growth, 134–136
    • industry versus firm, 136–138
    • plaintiff’s growth and, 136–138
    • strength of association, 136–138
  • Industry life cycles, 134–136
  • Inflationary adjustments, 104–108
    • inflation statistics, overstatements, 105–108
    • price indices, background information, 105
  • In re Oil Spill by Amoco Cadiz, 174
  • Intellectual property
    • copyrights, 341–346
    • patents, 319–333
    • royalty arrangements, 333–341
    • trademarks, 347–352
    • trade secrets, 352–355
  • Interest coverage, 239
  • Interest rates
    • determinants of, 255–261
    • determination, 246
    • ex‐ante and ex‐post rates, 254–255
    • money market securities and, 247–249
    • rate of return, 257–260
    • real versus nominal, 250–252
    • risk and return, relationship, 255–257
    • risk‐free rate, 272–276
    • term structure of, 260–261
    • types, 246–247
  • International business cycles, 94–95
  • International Business Machines v. U.S., 457
  • International economic analysis, 111–112
  • Inverted yield curve, 260
  • Jackson v. Johns Manville Sales Corp., 495
  • Jefferson Parish Hospital District No. 2 v. Hyde, 434, 458
  • Jensen, Michael, 383
  • Jet Spray Cooler, Inc. v. Crampton, 355
  • Johnson Electric North America Inc., et al. v. Johnson Electric Industrial Manufactory, Ltd., et al., 175
  • Johnson Enterprises of Jacksonville, Inc. v. FPL Group, Inc., 211
  • Journal of Accountancy, 15
  • Journal of Corporate Accounting and Finance, 15
  • Journal of Forensic Economics, 2, 14
  • Journal of Legal Economics, 2, 14
  • Juengel Construction Co., Inc. v. Mt. Etna, Inc., 222
  • Katskee v. Nevada Bob’s Golf, 55, 56
  • Kaufman Co. v. Lantech, Inc., 330
  • King, David, 275
  • Kline v. Lorrilard, 15
  • Krogman Factors, 372
  • Krogman v. Sterrit, 372
  • Labor economics, 2
  • Lanham Act, 347
  • Lantec, Inc. v. Novel, Inc., 440
  • Larsen v. Walton Plywood Company, 19, 185
  • Laspeyres index, 105, 106
  • Lawn‐A‐Mat of Penn‐Jersey, Inc. v. Lawn‐A‐Mat Chemical & Equipment Corp. et al., 226
  • Leegin Creative Leather Products, Inc. v. PSKS, Inc. DBA Kay’s Kloset … Kay’s Shoes, 456
  • Lee v. Durango Music, 202
  • Legal damage principles, 36–42
    • collateral transactions, 40
    • contract‐related damages, 40–41
    • contractually related liability limitations, 41
    • covenant of good faith and fair dealing, 41–42
    • forseeability, 39–40
    • occurrence versus damages amount, 37–38
    • proximate causation, 37
    • reasonable basis, damages calculation, 38–39
    • reasonable certainty, 37
    • termination clauses, 41–42
    • warranty‐related damages, 42
  • Lehrman v. Gulf Oil Corp., 279
  • Lerner, Abba, 441
  • Lerner Index (LI), 441
  • Letter stock, 309
  • Leverage ratios, 239
  • Levin Bros v. Davis Manufacturing Co., 72 F2d 163 (8th Cir, 1934)., 327
  • Liccardi, 30
  • Life expectancy, 3
  • Lightning Lube, Inc. v. Witco Corp., 184, 187–188
  • Linear cost functions, 214
  • Liquidation value, 298
  • Liquidity ratios, 239
  • Lit‐Econ, 35
  • Litigation
    • correlation analysis in, 61–62
    • defense damages expert, 176–177
    • econometric analysis, lost profits analysis, 173–174
    • econometric and statistical expert opinions, 172
    • econometric techniques in, 169–177
    • economic fluctuations and, 85–86
    • economics, 2
    • misspecification, multiple regression model, 171–172
    • model’s sophistication, 175–176
    • multiple regression analysis in, 170–171
    • reasonableness, econometric results, 174–175
  • Litigation Economics Review, 14
  • Looper formula, 410
  • Losses, 67–68
  • Loss period length
    • breach of contract, 78–79
    • business interruption case, 72–77
    • plaintiff goes out of business, 77–78
  • Lost profits
    • changing cost conditions, 333
    • computation of, 326
    • copyrights owner’s, 344–345
    • personal injury, 44–45
    • price erosion damages, 332–333
  • Lost revenues
    • arithmetic versus geometric means, 156
    • base and growth rates, historical period, 156–157
    • basic growth rate extrapolation, 153
    • curve‐fitting methods, 158–161
    • economic versus accounting terminology, 147–148
    • forecasting process, 148–153
    • growth rate, 156
    • methods of projecting, 153–158
    • projected revenue growth rate, 155–156
    • projecting, 147–196
    • projections versus forecasts, 147–148
    • proper data selection, growth rate, 158
    • revenue base selection, 154–155
  • Louis Vuitton Malletier v. Dooney & Bourke, Inc., 349
  • Lump sum royalties, 334
  • Macroeconomics, 1
    • analysis, 80, 86
    • data, websites for, 101
    • framework, 117
  • Maher, J. Michael, 310
  • Major money market rates, 247–249
  • Mandelbaum factors, 312
  • Mandelbaum v. Commissioner, 311
  • Mankiw, Gregory, 94
  • Manning v. Crockett, 30
  • Manufacturer’s representative, 42–43
  • Marginal costs, 201, 440
  • Marketability discounts, 308–309, 314
    • private transactions, initial public offerings, 312–313
    • research, 309–310
    • restricted stock and pre‐IPO, 313
    • tax court decisions, 311–312
  • Market capitalization, 275, 497–502
    • finances of individuals, 501–502
    • reputation costs, 502
  • Market concentration, 442–451
    • concentration ratios, 443
    • concentration, structure, and efficiency debate, 446–447
    • Herfindahl‐Hirshman Index (HHI), 445–446
    • increased concentration and effects, 444–445
  • Market demand, 325
  • Market efficiency
    • Basic, Inc. v. Levinson and, 368–370
    • market conditions and, 370
    • semi‐strong form market efficiency, 374–375
    • strong form market efficiency, 375
    • tests of, 372
    • weak form market efficiency, 373
  • Market model, 383
  • Market share, 180
    • approach, 328–329
  • Martin, Gerald, 5
  • Massachusetts Bonding and Ins Co. v. Johnston & Harter, Inc., 343 Pa, 270, 279, 22 A.2d 709, 218
  • Master’s in Business Administration (MBA), 9
  • Matsushita Electrical Co. Ltd. v. Zenith Radio Corporation et al., 452, 453
  • The Maxwell Report, 130
  • Maxwell v. J. Baker, Inc., 336
  • McGlinchy v. Shell Chemical Co, 60
  • McKinsey, 99
  • Merger‐related damages, 400–405
    • deal cancellation, 404–405
    • disgorgement, 403–404
    • history, United States, 400–405
    • material adverse change clauses, 404–405
    • merger laws, 401–403
    • smaller closely held deals, 405
  • Merger wave, 400–401
  • Methodological framework, 79–81
    • firm‐specific analysis, 81
    • industry analysis, 80
    • lost profits measurement, 81
    • macroeconomic analysis, 80
    • regional economic analysis, 80
    • time value of money, adjustment, 81
  • Michel Cosmetics v. Tsirkas, 355
  • Microeconomics, 1
  • Micro Motion, Inc. v. Exac Corp., 216
  • Midland Hotel Corporation v. The Reuben H. Donnelly Corporation, 143
  • Midland Hotel Corp. v. Reuben H. Donnelly Corp., 142
  • Minority discounts, 313–314
  • Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 347
  • Mitigation of damages, 225–230
    • burden of proof, 226–227
    • doctrine of mitigation, corporations, 225–226
    • net income versus cash flows, 230
    • offsetting profits and, 227
    • tax effects, 227–229
  • Money market securities, 247–249
  • Monopolization, 436–440
    • existence of substitutes, 438
    • geographic market definitions, 436–437
    • market definition, 436
    • price and substitutability, 438
    • product market definitions, 437–438
  • Morningstar data, 275
  • Moroney, Robert, 310
  • Multicollinearity, 210
  • Multiple causal factors, 60–61
  • National Association of Attorneys General (NAAG), 490
  • National Association of Forensic Economics (NAFE), 2, 29
  • National Association of Securities Dealers (NASD), 394
  • National Bureau of Economic Research (NBER), 87, 104
  • Net margin, 201, 202
  • Net present value approach, 301–302
  • New business, lost sales, 181–185
    • business plans and prelitigation projections, 182–183
    • expert testimony in, 185
    • franchiser, limited track record, 184
    • legal precedent for damages, 183
    • litigation, newly established business, 184–185
    • modern new business rule, 183–184
    • prior new business rule, 183
  • New England Economic Indicators, 110
  • Newport Ltd. v. Sears Roebuck & Co, 23
  • Nominal GDP, 88
  • Nonlinear regression analysis, 214, 215
  • Northern Pacific Railway Co. v. the United States decisions, 434
  • NutraSweet Company v. X‐L Engineering Company, 31
  • Oleg Cassini, Inc. v. Electrolux Home Prods, Inc, 29
  • Olympia Express and Neotours Ltd v. Linee Aeree Italiane S.P.A., d/b/a Alitalia Airlines. 29, 176
  • One‐trader model, 390
  • Operating leverage, 213
  • Operating margin, 201
  • Out‐of‐pocket costs, 201
  • Overhead costs
    • capacity constraints, 223–224
    • deduction, legal authority, 221–222
    • fixed versus variable costs, 223–224
    • recoverable component of damages, 222
    • treatment of, 220–224
  • Over‐the‐counter (OTC) market, 293
  • Owens Corning Fiberglas Corporation v. Roy Malone et al., 503
  • Paasche index, 106
  • Pacific Mutual Life Insurance Co. v. Haslip, 468
  • Packaged Facts, 129
  • Palmer v. Connecticut Railway & Lighting Co., 78
  • Palmer v. Shultz, 259 U.S. App. D.C. 246, 815 F.2d 84, 101 (D.C. Cir. 1987)., 172
  • Panduit Corp. v. Stahlin Brothers Fiber Works, Inc., 325, 336
  • Panduit factors, 356
  • Paper Converting Machine Co. v. Magna‐ Graphics Co., 327
  • Paper profits, 377
  • Patents, 319–333
    • alleged patent infringers, 324
    • capacity considerations, 329
    • changing legal framework, 321
    • direct versus contributory infringement, 324
    • infringement, damages computation, 325
    • infringer’s profit, 327–328
    • legal requirements, lost profits, 325–333
    • lost profits and market share analysis, 328–329
    • lost profits computation, 326–327
    • patent data research trends, 321–323
    • patentee, remedies available, 324
    • patent time periods, 320–321
    • patent trolls, 323–324
    • price erosion damages, 329–333
    • time periods, 320–321
    • trade secrets versus, 354
  • Peltzman, Sam, 433
  • Percentage of sales forecasting, 200, 212
  • Performance ratios, 239
  • Perpetuities, 280
  • Personal Consumption Index (PCE), 107
  • Personal injury litigation, 4, 52, 277
  • Petruzzi’s IGA Supermarkets, Inc. v. Darling‐Delaware Company, Inc., 170
  • Philip Morris, 363, 469, 479, 481, 507
  • Philip Morris USA v. Williams., 469, 507
  • Pierce v. Ramsey Winch Company, 59, 75, 76
  • Plaintiffs
    • damages, 37, 351, 363, 428, 461
    • discount rate assumptions, 279
    • profitable business, 224–225
    • royalties and, 351
    • trademarks, 351–352
    • trade secrets and, 355
  • Polaris Industries v. Plastics, Inc., 143, 144
  • Polaroid Corporation v. Eastman Kodak Company, 174, 227, 331
  • Polaroid v. Kodak, 332
  • Polinsky, A. Mitchell, 487, 488
  • Posner, Richard, 342, 343, 348, 349, 433–435, 470
  • Powell, Jerome, 272
  • Predatory pricing, 432, 447, 451–454
    • Areeda and Turner’s marginal cost rule of, 452–461
    • claims, criticisms of economics, 453
    • credibility and alleged predation, 453–454
    • damages from tying, 460
    • distributor termination and antitrust, 460–461
    • horizontal price fixing, damages, 455
    • predatory “costing,” 454
    • price discrimination, 454
    • price fixing, 455
    • products are truly separate, 458–459
    • recouping of losses, 452–453
    • tying contracts, 457
    • vertical price‐fixing cases, 455–457
  • Preferred stock, 262–264, 371
  • Prejudgment losses, 261
    • appropriate rate selection, 261–263
    • patent infringement cases, 268
    • risk adjustment, 268–269
  • Price‐cost margin, 441
  • Price discriminating monopolist, 457
  • Price discrimination, 288, 454, 457
  • Price elasticity of demand, 332, 439–442, 449, 454, 484–486
  • Price erosion, 329, 331, 332
  • Price fixing, 424, 455, 456, 460
  • Price lines, 378, 379
  • PricewaterhouseCoopers, 321
  • Private companies, 233, 265, 293, 294, 308, 313
  • Private Securities Litigation Reform Act of 1995 (PSLRA), 362–364, 381, 382
  • P.R.N. of Denver v. A.J. Gallagher., 58
  • Producer price index, 100, 108
  • Product innovations, 139
  • Product lines, 75, 125, 151–153, 182, 204
  • Profitability, 199–241
    • for lost profits analysis, 202–203
    • profit margins and, 201–202
  • Profits analysis, 8
  • “Projected actual” profits, 45
  • Projected future profits
    • build‐up method, 272
    • discounting, 269–272
  • Projections, 147–148
  • Property right, 320
  • Proving Business Damages (Cerillo), 36
  • Proximate causation, 37
  • Proxy firms, 141, 181, 182, 185, 186, 305, 316, 455
  • Public companies, 2, 131, 233, 266, 272, 293, 308, 309, 371, 393
  • Punitive damages
    • apportionment and, 506–507
    • bondholder wealth effects, 480–481
    • in civil lawsuits, 475
    • compensatory versus, 474
    • consumers, 484–486
    • corporate governance, 475–476
    • corporations punishment, 475–487
    • criminal penalties and, 475
    • deterrence theory, 487–493
    • economics of, 467–508
    • equity stakeholders, 476–477
    • financial measures, 493–494
    • frequency and shadow effect, 471–472
    • frequency of, 470–471
    • government and public sector effects, 483–484
    • market capitalization, 497–502
    • net worth, 494–497
    • nonequity stakeholders, 478
    • purposes of, 473–474
    • regional economic effects, 481–483
    • shareholder wealth effects, 478–480
    • spillover effects, 476–487
    • states efforts to limit, 471
    • stock ownership, United States, 477
    • taxes, insurance, and incidence of, 472
    • uncertain litigation environment, 503–507
    • U.S. Supreme Court on, 467–469
    • wrongdoers, focusing, 486–487
  • Raffa, Fred, 211
  • Rancho Pescado v. Northwestern Mutual Life Insurance Co, 187
  • Rand Institute study, 470
  • Randy’s Studebaker Sales, Inc. v. Nissan Motor Corp., 38
  • Rate of return
    • calculating, 258
    • over historical periods, 259–260
    • sources of data, 257–258
  • Rational standard, 38
  • Real Business Cycle Theory, 95
  • Real GDP, 89
  • Real gross domestic product, 87
  • Real interest rates, 252, 277
  • Reasonable basis, 38–39
  • Reasonable certainty, 37, 38, 79, 202, 356, 428
  • Reasonable degree of certainty, 37
  • Reasonable degree of economic certainty, 167
  • Reasonable royalties, 334–336
  • Recasted profits, 232–234
    • professional corporations, 234
    • public versus private corporations, 232–234
  • Recessions, 86, 87, 93, 95, 96, 98, 99, 136
    • definition, 86–87
  • Recovery, 96
  • Recovery for Wrongful Death and Injury (Speiser), 5
  • Recovery of Damages for Lost Profits (Dunn), 36
  • Regional economic analysis, 79, 80, 85, 110, 115–116, 296
  • Regional economic data
    • quality and timeliness of, 109–111
    • regional data sources, 109–110
    • subregional analysis, 110–111
  • Regional Economic Digest, 110
  • Regional economic trends, 108–109
  • Regression analysis, 158, 161, 208, 210
    • break point or Chow tests, 166–167
    • common problems, 162–167
    • for cost analysis, 212, 216–217
    • incremental costs, 212–213
    • litigation damages, problems, 165
    • stationary time series, 163–165
    • statistical versus practical significance, 163
  • Relevant case law, 36
  • Reputation costs, 502
  • Respondent superior rule, 476
  • Restricted stock, 309–311, 313
  • Revenue Ruling 59–60, 294–298
  • Revenues. See individual entries
  • Risk‐adjusting forecasted future lost profits, 275
  • Rite‐ Hite Corporation v. Kelley Company, 339
  • RJ Reynolds Tobacco Holdings, 481
  • Robinson‐Patman Act, 9, 454
  • Roll, Richard, 190, 383
  • Rothe Dev. Inc v. DOD, 31
  • Royalties, 184, 188, 325, 333–338, 351, 355, 356
    • arrangements, 333–341
    • computer software, 340–341
    • entire market theory, 338–340
    • factors in determining, 336–337
    • fees, 333
    • lost profits versus, 338
    • plaintiff’s damages and, 351
    • simple rule of thumb, 338
    • types, 334
  • Rubinfeld, Daniel, 171
  • Rule of reason, 430, 431, 456, 457
  • Running royalties, 334
  • Sandler v. Lawn‐a‐Mat Chemical & Equipment Corp., 78
  • Sarbanes‐Oxley Act of 2002, 365
  • S.C. Anderson v. Bank of America., 267
  • Schwartz Information Criterion, 169
  • Scullin Steel Co. v. PACCAR, Inc, 222
  • Seasonal decomposition technique, 178
  • Seasonality, 177–179
  • Seck, Michael K., 5
  • Securities Act (1933), 249, 361–362
  • Securities and Exchange Commission (SEC), 249, 362, 407
  • Securities Exchange Act (1934), 250, 361, 362, 401
  • Securities markets analysts reports, 131–132
  • Securities‐related damages
    • broker raiding cases, 394–400
    • churning litigation, 407–415
    • class action lawsuits, 365
    • class action settlements, 365–366
    • client‐broker claims, 405–407
    • comparable index approach, 380–382
    • event study approach, 383–386
    • fraud‐on‐the‐market, 366–380
    • merger‐related damages, 400–405
    • securities laws, 361–366
    • securities litigation, damages, 366
  • Semi‐strong form market efficiency, 374–375
  • Seven‐figure loss, 67
  • Shareholder equity, 308
  • Shavell, Steven, 487, 488
  • Shearson American Express v. McMahon, 407
  • Sherman Antitrust Act (1890), 419, 421–422, 461
  • SIC (standard industrial classification) codes, 125, 169, 224, 266, 305, 423, 448, 505
  • Siegfried, John, 7
  • Sierra Wine & Liquor Co. v. Heublein, Inc., 227
  • Simple moving averages, 178
  • Sinquefeld, Rex, 258
  • Size premiums, 272, 275
  • S. Jon. Kreedman & Co. v. Meyers Bros. Parking‐Western Corp., 185
  • Slowdown, China, 115
  • Smith, Stan, 5
  • Smith Development Corp. v. Bilow, 186
  • Software, computer, 340–341, 434
  • Sons of Thunder, Inc. v. Borden, Inc., 41, 42
  • South Carolina Federal Savings Bank v. Thornton‐Crosby Development Co., 184
  • Speiser, Stuart, 5
  • Spirit Airlines v. Northwest Airlines, Inc, 452
  • Spurious regression, 164, 165, 191
  • Stakeholders, corporate, 476, 478, 481, 482, 484, 486, 487, 493, 501, 505, 508
  • Standard economic models, 426
  • Standard metropolitan statistical areas (SMSAs), 110
  • Standard Research Consultants, 310
  • State courts, 6
    • decisions, 6
    • judges, 6
  • State Industries, Inc. v. Mor‐Flo Industries, Inc., 326
  • Statistical Abstract of the United States and Business Statistics of the United States, 120
  • Statutory damages, 346, 356
  • Stocks, Bills, Bonds and Inflation (Morningstar), 257, 258
  • Stoneridge Invest. Partners v. Scientific‐Atlanta, 375
  • Story Parchment Co. v. Paterson Parchment Paper Co, 37
  • Strong form market efficiency, 375
  • Substitutability, 438
  • Sunk costs, 201
  • Superior courts, 6
  • Supply and demand globalization, 112–116
  • Survey data, 105, 474
  • Survival analysis, 396, 399
  • Systematic risk, 252, 264
  • Takeover premiums, 405
  • Tangible net worth, 495
  • Taylor v. B. Heller & Co., 234
  • TC Heartland LLC v. Kraft Food Group Brands, 323
  • Terrell v. Household Goods Carriers’ Bureau, 61, 224
  • Texaco v. Pennzoil, 33
  • Thomas J. Kline, Inc. v. Lorrilard, 9
  • Three‐factor model, 265
  • Time‐series analysis, 159, 240
  • Top‐down due diligence process, 80
  • Total costs (TCs), 201, 207
  • Total offset method, 277
  • Trade dress, 349, 356
  • Trademark Act (1946), 348
  • Trademarks, 319, 347–352, 355, 356
    • economics of, 348–349
    • infringement, damages, 350–351
    • plaintiff’s damages, infringement, 351–352
    • survey evidence, 349–350
    • time periods, 348
    • trade dress, 349
  • Trade secrets, 319, 352–356
    • customer lists misappropriation, plaintiff’s losses, 355
    • damages for misappropriation, 354–355
    • patents versus, 354
    • time periods and anticompetitive effect, 354
  • Transactions, collateral, 40
  • Transformed Fisher equation, 254
  • Trio Process Corp. v. L. Goldstein’s Sons, Inc., 334
  • Trout, Robert, 35, 36, 310
  • Tuf Racing Products v. American Suzuki Motor Corp., 24
  • Tuf’s accountant, 25
  • Turner, Donald, 452
  • Turnover ratios, 409–411
  • Two‐trader model, 391
  • TXO Production Corp. v. Alliance Resources Corp., 468
  • Tying contracts, 447, 457, 458
  • Ullman‐Briggs, Inc. v. Salton‐Maxim Housewares, Inc., 23
  • Unabsorbed overhead, element of damages, 223
  • Unavailability of noninfringing substitutes, 326
  • Uncertain litigation environment, 503–507
    • asbestos bankruptcies, economic effects, 505–506
  • Unestablished business, 181, 182, 186, 187
    • award of damages, legal precedent, 186
    • lost profits claims, defendants’ challenges, 186–187
    • projecting losses for, 186–188
  • Uniform Trade Secrets Act, 352
  • United Phosphorous, Ltd. v. Midland Fumigant, Inc., 7, 32
  • United States Football League v. National Football League, 428
  • United States Patent and Trademarks Office (USPTO), 319, 320
  • United States v. Microsoft Corp., 434
  • Universal Power Systems, Inc. v. Godfather’s Pizza, Inc., 221, 222
  • Unprofitable businesses, 224
  • Upjohn Co. v. Rachelle Laboratories, Inc., 182
  • Urban economics, 108
  • U.S. Court System, overview, 6
  • U.S. Industry and Market Outlook, 120
  • U.S. Industry & Trade Outlook, 120
  • U.S. Supreme Court, 6
  • Utilities, public, 213
  • Vickers v. Wichita State University, 39
  • Viscuisi, W. Kip, 489
  • Vuyanich v. Republic National Bank of Dallas, 173
  • White and White v. Ford Motor Company, 507
  • White v. Southwestern Bell Co., 173
  • Williamette Management Associates, 310, 312
  • William J. McGlinchy et al. v. Shell Chemical Co., 151
  • Williams Act (1968), 401, 403, 404, 448
  • Willred Co. v. Westmoreland Metal Manufacturing Co., 181, 218
  • W.L. Hailey & Co. v. County of Niagara, 38
  • Work‐life expectancy, 3
  • WorldCom, Inc. v. Automated Communications, Inc. et al., 165, 189–196
  • Wrongful death litigation, 2, 3, 5
  • Yardstick approach, 57–59, 141–144
    • challenges to use, 58
    • for newly established businesses, 58–59
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