Kramer Levin Secures Exclusion of Plaintiffs’ Damages Expert in Lanham Act False Advertising Case

Following a two-day evidentiary hearing, on May 9, 2018, U.S. District Judge P. Kevin Castel of the Southern District of New York granted Kramer Levin client TrueCar, Inc.’s motion to exclude the report and testimony of a damages expert in a Lanham Act false advertising lawsuit seeking more than $77 million in damages from TrueCar. 

The Plaintiffs, 108 individual car dealers across the country selling vehicles made by a range of manufacturers, alleged they were injured by TrueCar’s advertising that it provides a car-buying experience without “haggling” or negotiation. Plaintiffs’ only evidence of damages was the report of their expert, Patrick Anderson, who “opined that from 2009 to the first half of 2016, the plaintiff dealers lost a total of 48,184 auto sales to TrueCar-affiliated dealers” and that the challenged TrueCar advertising was the cause of every purported lost sale. Relying on a nationwide average profit figure for all U.S. car dealers, the expert concluded that each alleged lost sale cost each Plaintiff dealer $1,602. 

The Court held that Mr. Anderson’s  analysis had “several serious flaws related to the causation between TrueCar’s advertisements” and the purported “resulting lost sales” to the Plaintiffs. The Court agreed with TrueCar’s argument that his report was unreliable because it simply assumed that the challenged advertising caused every purported lost sale. The Court observed that “[a]t the center of Anderson’s lost-sales analysis is his unsupported conclusion that all 48,184 purchases made through TrueCar, rather than a plaintiff-dealer in the buyer’s geographic area, were motivated by the ‘no-haggle’ claim, to the exclusion of any other factor.” The Court agreed with TrueCar that Mr. Anderson’s analysis was further undermined by his conclusion that “each sale by a TrueCar-affiliated dealer was necessarily a sale lost by a plaintiff, as opposed to some other dealer.” The Court also accepted TrueCar’s argument that the expert’s use of the $1,602 average profit figure was inappropriate, concluding that “[t]he absence of an individualized assessment in a case in which 108 unique plaintiffs seek recovery weighs heavily against the reliability and relevance of Anderson’s opinion.”