OurHouse, Inc., alleged that United NewVentures breached a contractual obligation to grant OurHouse, for an up-front fee, the right to send weekly e-mail promotions to MyPoints members.
Retained by Mayer Brown
United NewVentures, a subsidiary of UAL Corporation, acquired MyPoints.com, an online loyalty program. OurHouse, Inc., sued, alleging that United NewVentures breached a contractual obligation to grant OurHouse, for an up-front fee, the right to send weekly e-mail promotions to MyPoints members. OurHouse claimed damages in excess of $90 million.
Cornerstone Research and Professor Ward Hanson of Stanford University were retained on behalf of United NewVentures to evaluate OurHouse’s damages claim. Cornerstone Research analyzed the MyPoints membership database, e-mail prices, and the Internet marketing industry environment at the time of the MyPoints acquisition, and showed that marketing rights were worth less than the consideration OurHouse was to have paid for them. Professor Hanson submitted an expert report, was deposed, and testified at trial.
The case was adjudicated as part of the UAL bankruptcy proceedings. In his ruling, the judge disallowed OurHouse’s damages claim, finding that “OurHouse’s damage analysis does not meet the standard of reasonable certainty, and fails to establish any amount of damages suffered by OurHouse.” The judge also indicated that “with more appropriate values for email volumes, message prices, and the discount rate, a sale of the marketing rights in question (assuming a willing buyer) would have taken place at a price in the range of $3 to $3.5 million,” an amount less than the up-front fee OurHouse was to have paid for the marketing rights.