When Expert Opinions Meet Reasonable Certainty: Lessons from a Louisiana Case
The Huntsman International v. Praxair case demonstrates the tension between legal standards of reasonable certainty and the practical realities of damages calculations. When a jury awarded $93 million based on counsel's arguments rather than the expert's $37 million floor estimate, Louisiana's Supreme Court intervened, suggesting experts may be forced to claim greater certainty than their data supports.
Business valuations often require us to draw conclusions from incomplete data. We build our damage calculations on the difference between what should have happened and what actually occurred. But what happens when the evidence only allows you to establish a floor, not a precise number? A recent Louisiana Supreme Court decision suggests the answer may be more complicated than you think.
The Case Background
Praxair supplied industrial gases to Huntsman's Louisiana chemical plant through a direct pipeline connection. Between 1970 and 1998, the companies entered into four contracts requiring Praxair to deliver specific daily amounts of carbon monoxide and hydrogen gas. Huntsman used these gases to manufacture aniline and methylene diphenyl diisocyanate (MDI), chemicals used in products ranging from blue jean dye to polyurethane foam.
The dispute arose when Huntsman claimed that from 2004 to 2013, Praxair repeatedly failed to deliver the contractual amounts. This supply shortage prevented Huntsman from producing an estimated 98 million pounds of MDI and 32.1 million pounds of aniline. About two-thirds of Huntsman's production went to contract customers at fixed prices with calculable margins. The remaining third went to spot market customers at volatile, higher-margin prices.
The Valuation Challenge
Here's where it gets interesting for valuation professionals. The gas shortage didn't prevent Huntsman from fulfilling its obligations to contract customers. All the lost sales were spot market sales at prices that varied and couldn't be precisely determined. Making matters worse, Huntsman's sales records didn't distinguish between contract and spot sales.
Huntsman's expert faced a data problem many of us encounter: incomplete information that prevents a precise calculation. The expert's solution was to establish a floor. Since spot sales typically commanded higher margins than contract sales, any calculation using the average margin across all sales would represent the minimum damages, not the actual amount. Using this methodology, the expert calculated $37 million in damages.
During closing arguments, Huntsman's counsel suggested a different approach. If two-thirds of sales were lower-margin contract sales and one-third were higher-margin spot sales, why not apply the margin from the top third of all sales to the lost production? The jury found this reasoning persuasive and awarded $93 million in damages.
The Appeals Journey
Praxair appealed, arguing that without definite proof of lost sales and their margins, no damages could be awarded. The Court of Appeals for the Fourth Circuit of Louisiana rejected this argument, finding it unreasonable to expect Huntsman to maintain records of sales that never occurred. The appeals court affirmed the jury's decision, finding a reasonable factual basis for the $93 million award.
The Louisiana Supreme Court saw things differently. In a 4-3 decision, the majority found that counsel's method for determining profit margins lacked reasonable support from the evidence. Without proof of demand for products at those margins when each breach occurred, the approach failed to prove lost profits with reasonable certainty and relied on speculation.
The dissenting justices argued there was sufficient evidence for the jury to accept the lost profits formula while adjusting components. They noted that including contract sales in calculating the appropriate margin "downwardly skewed the calculation" and that expert testimony cannot override the factfinder's role when conclusions are based on reasonable certainty.
The Implications for Valuation Professionals
Sometimes we can provide specific opinions with reasonable certainty. Other times, we can only establish goalposts indicating damages fall between a minimum and maximum. These "Goldilocks" calculations acknowledge that one set of inputs produces a figure too low, another too high, with the true answer somewhere in between.
In Huntsman, the expert could only calculate one goalpost: the lower bound. The expert left it to the jury to determine the actual damages based on that floor, other evidence, and the arguments presented. The Supreme Court of Louisiana rejected this approach.
This decision creates a concerning precedent. If only a lower goalpost exists, does the court expect damages to equal that lower bound? Conversely, if only an upper goalpost exists, should damages equal that ceiling? When both goalposts exist and create a range, what guidance does the factfinder receive?
As valuation professionals, we testify only about opinions of which we are reasonably certain. We advocate for our opinions, not for any particular party's position. In this case, Huntsman's expert knew damages were at least $37 million and appropriately left the final determination to the jury. The court's decision may inadvertently pressure experts to claim certainty that doesn't exist in the data.
Key Takeaways
• Expert testimony must balance reasonable certainty with honest acknowledgment of data limitations, particularly when records cannot distinguish between different types of sales or when market conditions prevent precise pricing.
• The Huntsman decision suggests courts may prefer conservative floor estimates over jury discretion when evidence supports only a minimum damages figure, potentially limiting the factfinder's traditional role in weighing evidence.
• Valuation professionals should carefully document the reasoning behind floor or ceiling calculations and clearly communicate to clients and counsel when data limitations prevent more precise estimates, as overstating certainty may undermine credibility.
• undermine credibility.
Conclusion
The Huntsman case reminds us that reasonable certainty exists on a spectrum. While the Supreme Court of Louisiana may have had additional information not reflected in the published opinion, the decision as written raises concerns about whether it inadvertently pressures experts to claim greater precision than their data supports. As we navigate similar situations, we must remain committed to honest, transparent testimony about what we can and cannot know with reasonable certainty. Your clients deserve nothing less than that intellectual honesty, even when it complicates the path to resolution.
Source: Willamette Management Perspectives, October 2025