Auction House Sues Ex-Employee Over Libelous Statements

    Auction Expert WitnessThis case stems from a negligence and fraud suit, where a large antiques auction house in Rhode Island was successfully awarded millions of dollars by a software firm. The software company, which had been initially sued over its unsuccessful conversion of the auction house’s digital cataloging system, decided to lay off employees to recoup from the lawsuit. However, one the ex-employees created a twitter page and multiple other social media platform accounts to denounce the antiquities auction house. After gaining access to the auction house’s client database, the contractor emailed thousands of clients and donors, even using filtering applications to override client spam filters to criticize the auction house and its services. The auction house consequently lost multiple opportunities to gain and sell rare artifacts and memorabilia, as many clients chose to cut ties with them after receiving the email. Someone with exposure to trade libel, able to discuss the effects of negative social media and the derogatory email campaign, was asked to assess any consequent damage to the auction house’s profits.

    Question(s) For Expert Witness

    • 1. Would you be able to comment on the company business’ damages?
    • 2. Can you discuss the quantitative effect of the negative social media and negative email outreach?

    Expert Witness Response E-060178

    Based on the description provided in this case, it appears the damages may include lost profits and loss of business value. I have experience analyzing both types of losses and have testified on these matters. As a forensic economist I routinely evaluate and opine on economic losses, including lost corporate profits. This would involve evaluating the auction house’s financial statements by controlling other general economic factors which could affect profitability and analyzing sales both before and after the social media smear. I have worked on similar cases in the past, having been retained in two different instances to assess the lost profits of a construction company and an insurance agency after social media defamation.

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