Accounting Expert Testifies Re: Lost Profits

In Brand Marketing Group, LLC v. Intertek Testing Services, N.A., Inc., the jury found Intertek liable to Brand for negligent misrepresentation and awarded Brand more than $6 million in total damages—$1,045,000 in compensatory and $5 million in punitive damages. Brand relied on an accounting expert witness who testified regarding future lost profits. He testified that the amount that Brand had lost due to Intertek’s misrepresentations was somewhere between $439,000 and $1 million over the next decade.  Brand used Intertek in testing its vent free heaters to ensure they met U.S. safety standards. However, sales in the US were halted permanently after Ace Hardware Corp. reported that the Thermablasters did not meet ANSI standard Z.21.11.2b.

Intertek appealed to the United States Court of Appeals, Third Circuit.  On September 10, 2015, the higher court affirmed the order of the District Court, denying Intertek’s post-trial motion.  The court wrote:

To summarize, Intertek knew that its testing was critical to the economic welfare of manufacturers and the health of consumers. It knew that its testing process had holes, and it knew that problems had arisen in the past as a result. It knew that it had not yet tested to ANSI Z.21.11.2b, a standard Curkeet helped author. And it knew that its Chinese engineers might have difficulties understanding the standard because it was written in English. In the face of these compounding risks, Intertek chose to proceed without instituting additional precautions or process redesigns. In other words, the company subjectively knew of, and consciously disregarded, a risk of harm to Brand.

 

 

 

About Karen Olson

Information Professional with twenty years experience in legal, public record, and business research. Fifteen years law firm experience.

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