Economics Expert’s Lost Sales Analyses Deemed Reliable
Posted on December 22, 2025 by Expert Witness Profiler
Plaintiff Serra Chevrolet, Inc. (“Serra”) sued Defendant General Motors, LLC (“GM”) for breach of contract, violations of Alabama’s Motor Vehicle Franchise Act, negligence, wantonness, and violations of the federal Dealer’s Day in Court Act.
Serra retained Patrick L. Anderson to provide an expert report on lost sales and lost profits in this matter. GM filed a motion to exclude the testimony of Anderson.
Economics Expert Witness
Patrick L. Anderson founded Anderson Economic Group in 1996, and currently serves as the company’s principal and chief executive officer.
Anderson is a graduate of the University of Michigan, where he earned a Master of Public Policy degree and a Bachelor of Arts degree in political science. He is a member of the National Association for Business Economics and the National Association of Forensic Economists. The Michigan Chamber of Commerce awarded Anderson its 2006 Leadership Michigan Distinguished Alumni award for his civic and professional accomplishments.
Anderson has written over 100 published works, including the Economics of Business Valuation from Stanford University Press.
Discussion by the Court
I) Helpfulness and Qualification
First, GM did not argue that Anderson’s testimony will not assist the trier of fact, and, after thorough review, the Court found that it will.
Second, although GM did not explicitly argue that Anderson is not qualified to act as an expert in this case, GM did state that Anderson merely “purports” to be an economic expert, is not an accountant, and “only holds degrees in ‘public policy.'” This called Anderson’s qualifications into question. The Court found that Anderson is qualified to act as an expert witness in this case.
Anderson’s training, education, and experience all qualify him as an expert: his undergraduate and graduate degrees involved extensive coursework in economics, he worked as an economist for multiple employers, he founded and serves as CEO of Anderson Economic Group, he has published multiple journal articles on economic topics, and he has been recognized by professional economics societies.
Anderson Economic Group has previously done work for numerous automotive manufacturers, including GM, and in the first few months of 2025, several major news outlets cited Anderson Economic Group regard to automotive economic issues. Anderson’s expert testimony regarding damages has been admitted in multiple automotive cases.
II) Reliability
GM did challenge the reliability of Anderson’s opinions and methodology. However, Anderson’s lost sales and lost profits analyses are sufficiently grounded in GM’s own metrics and industry data. He used GM’s Retail Sales Index and Planning Volume projections—metrics that GM itself uses to gauge expected dealer performance—as well as comparisons to similar dealerships’ market penetration. These provide an objective basis for estimating how many more vehicles Serra would have sold if not constrained by GM’s allocations. While GM criticizes Anderson for assuming Serra would sell every additional vehicle allocated, this assumption aligns with evidence that dealers typically sell whatever inventory they receive over time.
GM also argued that Anderson improperly ignored Serra’s actual (poor) profitability and instead applied an average profit per vehicle from other regional dealers. However, Anderson explained that Serra’s own financials were abnormally low because GM’s failure to allocate enough inventory made Serra unprofitable.
Indeed, the entire point of a lost profits analysis is to determine what profits would have been in the absence of the allegedly harmful conduct. Constraining Serra’s lost profit calculation by requiring it to consider its own depressed profits when considering what its profits should have been would run counter to this goal. And using the regional average gross profit per new vehicle provides a reasonable estimate of what Serra could have earned if it, like other dealers, had adequate inventory.
The Court held that any gaps or debatable assumptions in Anderson’s opinion (such as not conducting a customer survey or perfectly allocating sales among competing dealers) are points that GM can attack on cross-examination.
III) Legal Conclusions
Finally, GM raised concerns that Anderson made legal conclusions throughout his report. Specifically, GM is concerned about Anderson’s conclusions that GM’s allocation process is “arbitrary,” “inconsistent with their contract,” “not consistent with the Alabama statute,” and the “proximate cause” of Serra’s damages.
A) Arbitrariness
GM argued that Anderson may not testify that GM’s allocation system is “arbitrary” because whether GM’s allocation system is arbitrary is a question of fact for the jury. GM also argued that because Anderson’s finding of arbitrariness permeates his entire report, Anderson should not be allowed to testify at all.
Because in testifying that GM’s allocation system is arbitrary Anderson would indeed be substituting for the court in charging the jury regarding the applicable law, the Court agreed that Anderson may not testify that GM’s allocation system is arbitrary.
However, it did not follow that Anderson’s entire testimony should be excluded. Instead of saying that a part of GM’s allocation process is “arbitrary,” Anderson can simply use a different word, such as “unexplained” or “discretionary,” and leave it to the jury to determine if such unexplained and discretionary decisions constitute arbitrary behavior. This simple change in word choice is sufficient to bring Anderson’s testimony in line with Rule 702.
B) Contractual Interpretation
GM also argued that Anderson may not opine that GM’s allocation process is “inconsistent with their contract.” Such testimony from Anderson would entail first testifying as to the meaning of contractual provisions and then testifying that GM breached those contractual provisions.
The Court held that Anderson may not testify that the contract between GM and Serra requires GM to consider Serra’s sales requirements and sales potential, because such testimony by Anderson would simply constitute a reiteration of Serra’s interpretation of the contract. This type of testimony is properly excluded regardless of whether it is “within the scope of [the expert’s] undisputed knowledge, training, and qualifications.” Once the Court has found a contract provision to be ambiguous, what an expert witness may provide is extrinsic evidence—such as that of trade usage or industry meaning—to guide the jury’s interpretation of the provision. Thus, although Anderson may not interpret the contract himself, he may provide extrinsic evidence to help the jury interpret the contract.
As to the second issue—whether Anderson may testify that GM breached the contract—the answer is no. Thus, Anderson may not testify that GM breached its contract with Serra.
C) Statutory Interpretation
GM also argued that Anderson may not state that GM’s allocation process is “not consistent with the Alabama statute.”
The Court properly excluded such testimony because stating that GM’s allocation system is not consistent with the Alabama statute did no more than offer expert opinion in the form of legal conclusions, risking confusing, prejudicing, or misdirecting the jury.
D) Proximate Cause
Finally, GM argued that Anderson may not state that GM’s allocation process is the “proximate cause” of Serra’s losses because to state the existence of proximate cause is to make an improper legal conclusion.
The more salient issue is whether Anderson’s testimony as to proximate cause will be helpful to the trier of fact.
Stripped to its core, the causal chain is one that a layperson can easily grasp: a reduction in vehicle allocations necessarily produces a reduction in inventory, which in turn yields fewer sales and lower profits. But this causal chain is heavily contested. Throughout Anderson’s report, he delves into the finer points of how exactly GM’s allocation system caused Serra financial harm.
These are issues on which the opinions of an expert economist who is familiar with the automotive industry would be helpful to the trier of fact.
Held
The Court granted in part and denied in part GM’s motion to exclude the testimony of Patrick Anderson.
Key Takeaway
GM claimed that Anderson’s opinions are unsupported ipse dixit, but this assertion is contradicted by the record. Anderson’s report explicitly lays out how he reconstructed GM’s allocation process from internal documents, identified nine arbitrary aspects of that process (e.g., unexplained use of tiers, inconsistent time frames for sales data, lack of criteria for discretionary allocations), and then used GM’s own sales potential metrics to quantify lost sales. And he did not simply assert in a vacuum that Serra lost sales due to GM’s allegedly unlawful allocations; he tied each lost sale estimate to data points GM itself calculated for Serra’s market. This kind of analysis is not ipse dixit because it is “‘supported by appropriate validation—i.e., ‘good grounds,’ based on what is known.'”
Case Details:
| Case Caption: | Serra Chevrolet Inc V. General Motors LLC |
| Docket Number: | 2:23cv1675 |
| Court Name: | United States District Court, Alabama Northern |
| Order Date: | December 19, 2025 |
