Cases that deal with linear regression are not particularly exciting except to a small brand of “quant” lawyers who see such things “differently.” Judge Posner, the author of several books, including Economic Analysis of Law (8th ed. 2011), is a judge who sees things differently as well.
In a case decided late last year, Judge Posner took the occasion to chide the district court and the parties’ legal counsel for failing to assess critically a regression analysis offered by an expert witness on the quantum of damages in a contract case. ATA Airlines Inc. (ATA), a subcontractor of Federal Express Corporation, sued FedEx for breaching an alleged contract to include ATA in a lucrative U.S. military deal.
Remarkably, the contract liability was a non-starter; the panel of the Seventh Circuit reversed and rendered the judgment in favor of the plaintiff. There never was a contract, and so the case should never have gone to trial. ATA Airlines, Inc. v. Federal Exp. Corp., 665 F.3d 882, 888-89 (2011).
End of Story?
In a diversity case, based upon state law, with no liability, you would think that the panel would and perhaps should stop once it reached the conclusion that there was no contract upon which to predicate liability. Anything more would be, of course, pure obiter dictum, but Judge Posner could not resist the teaching moment, both for the trial judge below, the parties, their counsel, and the bar: Continue reading