Northeast Savings v. United States

Compass Lexecon’s Daniel R. Fischel was retained by the U.S. Department of Justice to rebut a nine figure lost profits damage claim brought by a savings and loan following the decision by the U.S. Supreme Court in U.S. v. Winstar. At trial, Professor Fischel demonstrated that plaintiff’s lost profits damage claim was conceptually flawed because it incorrectly equated increased size with increased profitability when the reverse was more likely to be true under the facts and circumstances of the case. Professor Fischel further demonstrated that the key assumptions underlying plaintiff’s expert’s analysis about size, composition of assets, and the profitability of those assets were speculative, implausible, and contradicted by the relevant economic evidence. Professor Fischel concluded that Northeast suffered no lost profits damages and, if anything, was benefitted by the government’s breach. Judge Mary Ellen Williams of the Federal Court of Claims rejected plaintiff’s lost profits damage claim in its entirety and awarded no damages. Judge Williams’ decision was based in substantial part on Professor Fischel’s trial testimony which she discussed extensively and cited favorably in her opinion. Judge Williams also relied on and quoted from earlier Winstar cases where other courts similarly relied on Professor Fischel’s testimony in reaching favorable results for the government. Professor Fischel was assisted by David Ross, Jessica Mandel and others in Compass Lexecon's Chicago office.