United States District Court, Southern District of New York
November 30, 1999
ESPN, INC., PLAINTIFF,
OFFICE OF THE COMMISSIONER OF BASEBALL, DEFENDANT.
The opinion of the court was delivered by: Scheindlin, District Judge.
OPINION AND ORDER
On October 15, 1999, ESPN, Inc. ("ESPN") and the Office of the
Commissioner of Baseball ("Baseball") moved in limine to preclude
the admission of certain evidence and argument at their
forthcoming trial. Ten separate motions — five by ESPN and five
by Baseball — were fully submitted on October 29, 1999. Six of
the motions were resolved by opinion dated November 22, 1999.
Three of the motions were resolved from the bench during a
hearing on November 23, 1999. The final motion, ESPN's motion in
limine to preclude damages evidence, is the subject of this
Opinion and Order.
I. ESPN's Motion in Limine to Preclude Damages Evidence
In my November 22 opinion, I ruled that ESPN breached its 1996
telecasting agreement ("1996 Agreement") with Baseball when it
preempted six baseball games scheduled for Sunday nights in
September 1998 and September 1999 without the prior written
approval of Baseball. See ESPN, Inc. v. Office of Commissioner
of Baseball, 1999 WL 1063241, 99 Civ. 3225, slip op. at 38-39
(S.D.N.Y. Nov. 23, 1999).*fn1 ESPN broadcast NFL football games
rather than the previously scheduled baseball games on those six
Baseball claims that it has been damaged in an amount "believed
to exceed millions of dollars" as a result of ESPN's breach of
the 1996 Agreement. See Baseball's Objections and Responses to
ESPN's First Set of Interrogatories, Ex. A to 10/15/99 Affidavit
of Eric J. Lobenfeld, counsel for ESPN, in Support of Motion to
Preclude Damages Evidence ("Lobenfeld Aff."), at 7. Baseball
attributes its damages to an alleged loss of:
(1) national television exposure;
(2) promotional opportunities and ratings;
(3) value of the "Sunday Night Baseball" television
(5) potential sponsorships; and
(6) the future value of all of Baseball's national
Id. at 7-8. Because Baseball received full payment from ESPN
under the contract, it may only seek extra-contractual damages
stemming from the six preemptions.
By its motion, ESPN seeks to preclude Baseball from introducing
testimony or other evidence of its alleged monetary damages. ESPN
contends that "there is no factual basis to support any claim for
monetary damages arising from these perceived injuries, and that
such claims are the product of speculation and guesswork." ESPN's
Memorandum in Support of Its Motion in Limine to Preclude Damages
Evidence ("ESPN MIL") at 2. Baseball argues that it has made the
"requisite showing of damage" and therefore it is "entitled to
have the opportunity to prove its damages at trial." Baseball's
Response to Plaintiff's Motion to Preclude Damages ("BB Op.") at
II. Legal Standard
It is well-settled under New York law that
[a] plaintiff seeking compensatory damages has the
burden of proof and should present to the court a
proper basis for ascertaining the damages [it] seeks
to recover. They must be susceptible of ascertainment
in some manner other than by mere conjecture or
Dunkel v. McDonald, 272 A.D. 267, 70 N.Y.S.2d 653, 656 (1st
Dep't 1947), aff'd, 298 N.Y. 586, 81 N.E.2d 323 (1948). See
also Contemporary Mission, Inc. v. Famous Music Corp.,
557 F.2d 918
, 926 (2d Cir. 1977) (finding that under New York law, "[w]hen
the existence of damage is uncertain or speculative, the
plaintiff is limited to the recovery of nominal damages"); V.S.
Int'l, S.A. v. Boyden World Corp., 862 F. Supp. 1188, 1197
(S.D.N.Y. 1994) ("[I]t is well-established under New York law,
that a plaintiff must prove the existence of damages with
certainty in order to recover for breach of contract."). Although
it is true that "[w]hen the existence of damage is certain, and
the only uncertainty is as to its amount, the plaintiff will not
be denied recovery of substantial damages," but even then the
plaintiff must show "a stable foundation for a reasonable
estimate" of damages. Contemporary Mission, Inc., 557 F.2d at
926. See also Wolff & Munier, Inc. v. Whiting-Turner Contracting
Co., 946 F.2d 1003
, 1010 (2d Cir. 1991) ("Although a party is
not to be denied damages when they are necessarily uncertain, New
York law does not countenance damage awards based on
`[s]peculation or conjecture.'") (quoting Berley Indus. v. City
of New York, 45 N.Y.2d 683, 687, 412 N.Y.S.2d 589,
385 N.E.2d 281 (1978)).
With respect to damages for loss of goodwill, business
reputation or future profits, the proof requirements are much
more stringent. See Toltec Fabrics, Inc. v. August Inc.,
29 F.3d 778, 781-782 (2d Cir. 1994). Not only must the claimant
prove the fact of loss with certainty, but the "loss must be
`reasonably certain in amount.'" Id. at 781 (quoting Robert T.
Donaldson, Inc. v. Aggregate Surfacing Corp., 47 A.D.2d 852,
366 N.Y.S.2d 194, 196 (2d Dep't 1975)). "In other words, the damages
may not be merely possible speculative or imaginary but must be
reasonably certain and directly traceable to the breach, not
remote or the result of other intervening causes." Beeland
Interests, Inc. v. Armstrong, 1999 WL 813266 at *17, 95 Civ.
8132 (S.D.N.Y. Oct. 12, 1999) (dismissing claim for lost profits
where plaintiff failed to prove "both the fact and amount of lost
profits with reasonable certainty").
III. Baseball's Proffered Damages Evidence
During discovery, ESPN served Baseball with interrogatories
regarding its claims for monetary damages. Among
other things, ESPN asked Baseball to "state the amount of
monetary damages you seek in this action and explain the basis
for the computation of your claim." ESPN Interrogatory No. 6, Ex.
A to Lobenfeld Aff. at 7. Baseball responded as follows:
Baseball has not quantified the amount of damages it
has sustained by reason of ESPN's willful refusal to
carry [baseball] games as required by the 1996
Agreement. A quantification of those damages, however
real, is extremely complex and for that reason
Baseball insisted, and ESPN agreed, in the 1996
Agreement that ESPN would produce and distribute the
telecasts and that its failure to do so could be
specifically enforced, without regard to the need for
Baseball to prove irreparable harm. At its essence
the damages, believed to exceed millions of dollars,
are attributable to [loss of national television
exposure; promotional opportunities and ratings;
value of the "Sunday Night Baseball" television
package; prestige; potential sponsorships; and the
future value of all of Baseball's national telecast
Id. at 7-8.*fn2 Nowhere in its response does Baseball set
forth any specific dollar amount of monetary damages other than
its estimate that damages are "believed to exceed millions of
dollars." Nor does Baseball set forth any method of calculating
its alleged damages.
As the following excerpts demonstrate, Baseball's 30(b)(6)
witness on the topic of damages, Baseball's President Paul
Beeston, was equally speculative and vague regarding the alleged
harm caused by ESPN's breach.
Q: Has Baseball quantified any of the damages it
alleges in this case?
A: No, we have not quantified it to the extent of a
specific dollar, no.
Q: Has Baseball made any calculations as to any
specific element of its alleged damages?
A: We have not.
Q: Is there a reason why Baseball has not done any
calculation of its damages in this case?
A: No. We just believe it's significant. We believe
that the case speaks for itself at the present
time, and we have not worked out what the dollars
are of the damages.
9/27/99 Deposition of Paul Beeston ("Beeston Dep.") at 6-7.
Q: [W]hat's the basis for your belief that Baseball's
alleged damages exceed millions of dollars?
A: Based on what we have right here and what we've
said what we've [g]ot here going forward. I don't
have anything specific, as I said.
Q: [I]f somebody suggested to you that they believed
you're right, Baseball was damaged but it's only a
hundred thousand dollars, would you be able to
point me to anything to say it's not a hundred
thousand dollars, it's a million dollars?
A: Specifically I won't be able to say this is what
it is, try this calculation and that's the way it
works out, no.
Id. at 28.
Q: Can you point to anything specific as evidence
that ESPN's [breach] has made Baseball less
valuable in any way?
A: "Specifically, no if you're asking for one example
that I could give you. . . ."
Q: You say you think it probably hurt you. Are you
able to point to us specifically —
A: No, I said I cannot.
Id. at 10-11. Not once during his deposition did Beeston offer
a concrete example of harm or monetary loss stemming from ESPN's
breach. Baseball's expert witness, Robert J. Wussler, was
similarly unable to cite specific examples of loss. During his
deposition, Wussler testified as follows:
Q: Are you aware of any money that Baseball lost as a
result of those three games?
A: No I'm not.
Q: And the same thing is true in '99, same question
with respect to '99?
A: They've lost in perception. It's very hard to
evaluate dollars and perception.
Q: I'm not going to ask you about perception. You are
not aware of any dollars lost, correct?
A: I'm not.
10/15/99 Deposition of Robert J. Wussler at 92-93.
Q: Again, just so I'm clear, are you aware of 5 cents
of advertising revenue that Baseball lost as a
result of the three games being [not shown on ESPN]
A: No I'm not.
Id. at 107.
Q: I take it you are not aware of any lost sponsors
or lost advertisers; is that correct?
A: That is correct.
Id. at 108.
Finally, on November 23, this Court held oral argument on
ESPN's motion to preclude damages evidence. During that argument,
this Court specifically asked counsel for Baseball whether
Baseball had any "concrete proof of monetary harm." See
Transcript of 11/23/99 Hearing ("11/23/99 Tr.") at 23. In
response, counsel for Baseball merely reiterated the entirely
subjective and speculative assertion that Baseball "feel[s] this
was very dilatory [sic] to our position and denigrated our
product and cost us in the marketplace and otherwise." Id. at
28. Counsel for Baseball was unable to show "any loss of
sponsorship, any loss of advertising, [or] any loss of ancillary
sales or ticket sales." Id. at 36. As counsel for Baseball
conceded: "We have not shown specific losses your Honor, we agree
with you there. What we have said is we believe it did affect
As the above-quoted testimony and answers to ESPN's
interrogatories demonstrate, there can be no question that
Baseball has failed to adequately demonstrate either the fact of
damages or the amount
of damages. Put simply, Baseball's subjective belief that the
amount of damages is "significant" — no matter how fervent — does
not meet any of the required proofs set forth under New York law.
Baseball has not cited a single lost promotional opportunity,
sponsor or advertising dollar stemming from ESPN's breach. Nor
has Baseball set forth any evidence of a decrease in ratings or
box office ticket sales. Although damage to Baseball's prestige
and future value are difficult to prove, such difficulty does not
allow Baseball to proceed with speculative claims of damages. To
the contrary, under New York law, a claim of damages for loss of
reputation and future profits must be "reasonably certain." See
Toltec Fabrics, 29 F.3d at 781-82; see also Schonfeld v.
Hilliard, 62 F. Supp.2d 1062, 1081-82 (S.D.N.Y. 1999).
Baseball's damages claim is based on nothing more than its own
vague assertions that it was "hurt." Baseball cites no specific
examples of monetary damage, nor does it proffer a method for
calculating such damages. The proffered unsupported allegations
are simply inadequate to sustain a claim for damages under New
York law, and therefore ESPN's motion to preclude damages
evidence is granted.
V. Nominal Damages and Materiality
Although Baseball is not entitled to an award of money damages,
it may still receive nominal damages. "[I]t is a well-settled
tenet of contract law that even if the breach of contract caused
no loss or if the amount of the loss cannot be proven with
sufficient certainty, the injured party is entitled to recover as
nominal damages a small sum fixed without regard to the amount of
the loss, if any." Hirsch Elec. Co. v. Community Servs., Inc.,
145 A.D.2d 603, 536 N.Y.S.2d 141, 142-43 (2d Dep't 1988); see
also Contemporary Mission, 557 F.2d at 926 (when the existence
of damage is speculative "plaintiff is limited to the recovery of
nominal damages").*fn4 Accordingly, I will instruct the jury
that if Baseball proves its breach of damages claim, it is
entitled to an award of nominal damages.*fn5
Baseball's ability to recover only nominal damages does not
impede its ability to present testimony and evidence regarding
the materiality of ESPN's breach. Materiality goes to the essence
of the contract. That is, a breach is material if it defeats the
object of the parties in making the contract and "deprive[s] the
injured party of the benefit that it justifiably expected."
Farnsworth, Contracts § 8.16 (3d ed. 1999). Materiality does not
depend upon the amount of provable money damages, it depends upon
whether the nonbreaching party lost the benefit of its bargain.
Thus, although Baseball is only entitled to nominal damages, it
may still present evidence and argument to the effect that ESPN's
breach was material. Cf. Chronister Oil Co. v. Unocal Refining &
Marketing, 34 F.3d 462 (7th Cir. 1994) (Posner, J., awarding
nominal damages where breach was material).
Because I am precluding Baseball from offering damages evidence
to the jury, the parties proposed experts, Don Ohlmeyer and
Robert Wussler, are similarly precluded from offering testimony
as to damages. Moreover, because I previously ruled that Wussler
is precluded from testifying on any of the other topics set forth
expert report, Wussler may not testify as an expert witness at
For the reasons set forth above, Baseball is precluded from
presenting damages evidence at trial and is only entitled to seek
an award of nominal damages.