In the recent case of HUNTSMAN INTERNATIONAL, L.L.C. VS. PRAXAIR, INC., Supreme Court of Louisiana 2025, the role of the Lost Profits Expert Witness was pivotal in determining the outcome of a high-stakes commercial dispute. This matter arose from a breach of contract between Huntsman International, LLC, a global chemical manufacturer, and Praxair, Inc., a supplier of industrial gases.
Background and Parties
Huntsman International, LLC operated a chemical plant in Geismar, Louisiana, relying on Praxair, Inc. to supply hydrogen and carbon monoxide under a contractual agreement. Huntsman alleged that Praxair failed to deliver the agreed quantities, resulting in production shortfalls and lost sales of methylene diphenyl diisocyanate (MDI) and aniline—key chemical products with significant market value. Huntsman sought damages for lost profits and additional costs incurred to secure replacement gas from other suppliers.
Expert’s Role and Methodology
The central figure in the damages phase was Rebecca Szelc, the only expert witness to testify on lost profits. Szelc employed a rigorous methodology, analyzing monthly production and sales data to quantify the financial impact of Praxair’s alleged breach. Her approach involved:
– Calculating the difference between actual sales and projected sales had the contract been fulfilled.
– Applying historical profit margins to the lost sales volume.
– Accounting for variable costs and market fluctuations to ensure the damages estimate reflected net lost profits, not gross revenue.
Szelc’s expert report concluded that Huntsman’s lost profits attributable to Praxair’s breach totaled $37,522,291. This figure was grounded in detailed financial records and industry-standard analytical techniques, providing the court with a reliable basis for assessing economic damages.
Court’s Reliability and Daubert Analysis
The Supreme Court of Louisiana conducted a thorough review of the expert testimony and the jury’s damages award. The court emphasized the necessity for lost profits to be established with “reasonable certainty,” a standard rooted in both Louisiana law and broader Daubert principles governing expert evidence.
The court scrutinized Szelc’s methodology, finding it met the reliability threshold:
– Her calculations were based on actual business records and recognized accounting practices.
– She provided transparent assumptions and reconciled her projections with historical performance.
– The analysis distinguished between net profits and gross revenues, ensuring that only true economic losses were considered.
However, the jury deviated from Szelc’s expert opinion, adopting an alternative calculation proposed by Huntsman’s counsel. This method averaged the profit margins of the top-third most profitable transactions, inflating the lost profits award to $88,117,405—more than double the expert’s estimate. The Supreme Court found this approach speculative and unsupported by the evidence, noting that it failed to account for the variability in transaction profitability and lacked a foundation in the actual business operations.
Impact of Expert Testimony on the Outcome
The Supreme Court’s decision underscores the decisive influence of the Lost Profits Expert Witness in complex commercial litigation. By rejecting the jury’s speculative methodology and reinstating the expert’s calculation, the court reaffirmed the centrality of reliable, methodologically sound expert analysis in proving lost profits. The judgment was amended to award Huntsman $37,522,291 in lost profits, as calculated by Szelc, and $4,991,473 in cover damages.
This case serves as a definitive example of how courts rely on expert witnesses to navigate intricate financial disputes, ensuring that damages awards are grounded in evidence rather than conjecture. The Supreme Court’s rigorous Daubert analysis and insistence on reasonable certainty set a clear precedent for the admissibility and weight of lost profits expert testimony in future commercial cases.