Fifth Circuit: Damages Experts Cannot Assume Maximum Commissions; Untimely Rebuttal Disclosures Are Excluded

1. Introduction

Finite Utility Consulting, L.L.C. v. Tawa (5th Cir. Aug. 4, 2026) arises from a breakdown in a broker–client relationship in the energy-supply space. Finite Utility Consulting, L.L.C. (“Finite”), a Texas-based energy broker, sued various Tawa entities (“Tawa”), supermarket operators, alleging Tawa breached client-representation agreements (“CRAs”) by bypassing Finite and dealing directly with suppliers or other brokers. Tawa counterclaimed based on an earlier Massachusetts-store transaction, asserting Finite promised an “all-in” energy price and failed to deliver.

The appeal primarily presented three litigation-shaping issues: (i) whether Finite’s damages expert satisfied Daubert reliability when he assumed maximum commission rates and a fixed contract term without market analysis; (ii) whether Finite could introduce a late “amended” expert disclosure that functioned as rebuttal; and (iii) whether summary judgment was proper once those evidentiary exclusions left Finite without admissible proof of lost-commission damages. On cross-appeal, Tawa challenged summary judgment on its contract and quasi-contract counterclaims tied to Finite’s “Letter of Assurance” (“LOA”).

2. Summary of the Opinion

The Fifth Circuit (per curiam) affirmed in full:

  • Expert exclusion (Finite’s damages expert): The district court properly excluded Finite’s expert because the damages model was “fundamentally unsupported”—it selected maximum commission rates from a single agreement and a three-year term while ignoring market variables the expert admitted would control commissions and term.
  • Late rebuttal exclusion (Finite’s business principal): The district court properly excluded Finite’s amended expert disclosure as untimely rebuttal under Rule 26(a)(2)(D)(ii), and not “substantially justified or harmless” under Rule 37(c)(1).
  • Finite’s claims: Without admissible, non-speculative evidence of lost commissions, Finite could not survive summary judgment.
  • Tawa’s counterclaims: Summary judgment was proper because the LOA and emails did not amount to a guarantee of an all-in bill, reliance was unjustified in light of the written disclaimers/estimates, and Tawa failed to show recoverable damages (indeed, evidence suggested net savings).

3. Analysis

3.1. Precedents Cited

A. Expert admissibility and “fundamentally unsupported” opinions

  • Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and Watkins v. Telsmith, Inc., 121 F.3d 984 (5th Cir. 1997): The court applied the core Daubert gatekeeping framework—expert testimony must be relevant and reliable, and district courts must screen it.
  • In re Complaint of C.F. Bean L.L.C., 841 F.3d 365 (5th Cir. 2016): Provided the abuse-of-discretion standard for excluding expert testimony and later reappeared in the Rule 37 discussion.
  • Viterbo v. Dow Chem. Co., 826 F.2d 420 (5th Cir. 1987): Supplied the key doctrinal lever: although weaknesses in an expert’s factual basis often go to weight, not admissibility, exclusion is warranted when the source is “of such little weight” that it cannot assist the jury to reach an “intelligent and sound verdict,” i.e., when the opinion is “fundamentally unsupported.”
  • Gen. Elec. Co. v. Joiner, 522 U.S. 136 (1997) and Moore v. Ashland Chem. Inc., 151 F.3d 269 (5th Cir. 1998): Reinforced the bar on expert conclusions connected to data only by the expert’s ipse dixit; reliability requires more than assertion.
  • Jacked Up, L.L.C. v. Sara Lee Corp., 807 F. App’x 344 (5th Cir. 2020): Cited for the proposition (tracking Viterbo) that some sources are so weak that the jury should not hear the opinion at all.

B. Scheduling orders, rebuttal disclosures, and exclusion sanctions

  • Geiserman v. MacDonald, 893 F.2d 787 (5th Cir. 1990): Provided both the abuse-of-discretion review standard and the four-factor test for evaluating whether a Rule 26 violation is “substantially justified or harmless” under Rule 37.
  • Newsome v. Int'l Paper Co., 123 F.4th 754 (5th Cir. 2024): Emphasized the district court’s broad discretion in policing scheduling orders and assessing explanations for late disclosures.
  • Barrett v. Atl. Richfield Co., 95 F.3d 375 (5th Cir. 1996): Used to show that the “importance” of testimony cannot alone trump deadlines; if anything, importance heightens the need for compliance or timely relief.
  • Bradley v. United States, 866 F.2d 120 (5th Cir. 1989) (per curiam) and Sierra Club, Lone Star Chapter v. Cedar Point Oil Co. Inc., 73 F.3d 546 (5th Cir. 1996): Supported the conclusion that a continuance is not required where it would reward noncompliance and undermine enforcement/deterrence.

C. Summary judgment standards and proof requirements

  • Luna v. Davis, 59 F.4th 713 (5th Cir. 2023) (per curiam) and Westfall v. Luna, 903 F.3d 534 (5th Cir. 2018) (per curiam): Provided the de novo review standard and the “reasonable jury” framing for genuineness of disputes.
  • Brown v. City of Houston, 337 F.3d 539 (5th Cir. 2003): Supplied the admonition that unsubstantiated assertions and speculation cannot defeat summary judgment.
  • Little v. Liquid Air Corp., 37 F.3d 1069 (5th Cir. 1994) (per curiam): Anchored the “go beyond the pleadings” requirement and rejected assumptions that a party “could or would” prove missing facts without evidence.
  • Meaux Surface Prot., Inc. v. Fogleman, 607 F.3d 161 (5th Cir. 2010) (quoting Fairmont Supply Co. v. Hooks Indus., Inc., 177 S.W.3d 529 (Tex. App.—Houston [1st Dist.] 2005, pet. denied)): Recognized that expert testimony is not always required for damages, but did not relax the need for non-speculative proof.

D. Contract and quasi-contract principles on cross-appeal

  • Taylor v. Root Ins. Co., 109 F.4th 806 (5th Cir. 2024): Stated the elements of a Texas breach-of-contract claim.
  • Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d 882 (Tex. 2019): Provided the interpretive rule to read contracts as a whole and harmonize provisions.
  • Universal Truckload, Inc. v. Dalton Logistics, Inc., 946 F.3d 689 (5th Cir. 2020): Stated the elements of promissory estoppel under Texas law.
  • Jacked Up, L.L.C. v. Sara Lee Corp., 854 F.3d 797 (5th Cir. 2017): Cited for the “red flags” principle: reliance may be unjustified as a matter of law where warnings make reliance unreasonable.
  • Spicer, Tr. for Est. of Brady v. Maxus Healthcare Partners, LLC, 616 S.W.3d 59 (Tex. App.—Fort Worth 2020, no pet.): Clarified that promissory-estoppel recovery is limited to reliance damages.
  • Esty v. Beal Bank S.S.B., 298 S.W.3d 280 (Tex. App.—Dallas 2009, no pet.): Explained that promissory estoppel requires a definite promise, not speculation, hope, or opinion.
  • JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d 648 (Tex. 2018) (quoting Fed. Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439 (Tex. 1992)): Stated the elements of negligent misrepresentation and supported the court’s reliance analysis where written materials contradict alleged oral assurances.
  • Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671 (Tex. 2000): Provided the express-contract doctrine principle (though the Fifth Circuit ultimately avoided the choice-of-law fight by holding unjust enrichment failed under either state’s law).
  • Argyle Indep. Sch. Dist. ex rel. Bd. of Trs. v. Wolf, 234 S.W.3d 229 (Tex. App.—Fort Worth 2007, no pet.) and Metro. Life Ins. Co. v. Cotter, 984 N.E.2d 835 (Mass. 2013): Used to articulate the shared requirement (Texas and Massachusetts) that the benefit must be unjustly retained, not merely retained.

3.2. Legal Reasoning

A. The damages expert: ceilings are not expected values

The court’s core move was to treat Finite’s damages model as unreliable not because it used assumptions, but because the assumptions were untethered to the very drivers the expert conceded mattered. Ibanez used (i) Tawa usage estimates, (ii) a broker fee, and (iii) a three-year term; the “linchpin” was the broker fee. Yet Ibanez selected maximum commission rates (“up to $0.010 per kWh” and “up to $0.50 per DTh”) from a single, California-focused agreement with Direct Energy—concededly a ceiling rather than an expected commission—and did so without analyzing market pricing, supplier offers, customer demand, or comparable transactions.

That methodology triggered Viterbo v. Dow Chem. Co.’s “fundamentally unsupported” line and Gen. Elec. Co. v. Joiner’s ipse dixit caution: the model did not infer damages from market facts; it assumed the highest rate and a favorable term and then computed the result. The magistrate judge’s “asking price equals market value” analogy—adopted by the Fifth Circuit—captured the error: a maximum permissible commission is not evidence that the commission would likely have been earned.

B. The late “amendment”: purpose controls, not label or overlap

For Finite’s amended Lee disclosure, the court drew a practical boundary around Rule 26(a)(2)(D)(ii): the rebuttal clock runs from the other party’s expert disclosure, and what matters is the later opinions’ purpose—whether they are “intended solely to contradict or rebut” the opposing expert—rather than whether they share subject matter with an earlier, timely disclosure. The Fifth Circuit agreed that Finite’s May 23 amendment was rebuttal “by design,” repeatedly naming and targeting Patel’s methodology and conclusions, and thus was late (due May 2).

Applying Geiserman v. MacDonald, the court upheld exclusion under Rule 37(c)(1) because (1) Finite’s explanation was undermined by the disclosure’s text and timing; (2) although the testimony was important, importance heightens the need for timely disclosure (Barrett v. Atl. Richfield Co.); (3) Tawa was prejudiced because it had already deposed Lee and would need a second deposition to “gap-fill” the conclusory rebuttal; and (4) a continuance would reward delay and destabilize the schedule (Bradley v. United States; Sierra Club, Lone Star Chapter v. Cedar Point Oil Co. Inc.).

C. Summary judgment: no admissible, non-speculative damages evidence

The summary-judgment affirmance is an evidentiary domino effect. Under Little v. Liquid Air Corp. and Brown v. City of Houston, once Tawa identified the absence of proof on an essential element (damages), Finite had to point to specific, admissible facts enabling a reasonable calculation of lost commissions. Exclusion of Ibanez removed the only designated damages expert; exclusion of Lee’s late rebuttal opinions removed a potential alternative.

The court rejected Finite’s remaining references as insufficiently tied to the hypothetical “but-for” world: a redacted list of other customers’ commissions was not shown comparable (markets, terms, pricing, demand, services), and Patel’s statements about possible commission ranges did not establish what Tawa would have generated—especially given Patel’s opinion that Finite was entitled to no damages. The court thus treated “possible commissions” as conjecture, not proof.

D. Cross-appeal: disclaimers and “estimate” language defeat guarantee/reliance theories

On Tawa’s counterclaims, the court’s analysis was text-first. Applying Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., it harmonized the LOA’s “assure the energy supply rate” language with the LOA’s limiting provisions: Finite promised “best efforts” and expressly disclaimed any “guarantee of the contracted rate by the Supplier.” That architecture defeated the theory that Finite guaranteed an invariant “all-in” bill, especially where pre-LOA emails described total pricing as “an estimate only” and distinguished supply rate from “all other costs.”

The court also treated damages as independently fatal. Evidence in the record indicated net savings compared with prior rates, undercutting the claim that Tawa would have been better off. Alternative theories (e.g., “we wouldn’t have paid the commission”) were deemed speculative without evidence of a better available alternative or that Tawa would have rejected a cost-saving deal had it known the mandatory charges.

Those same writings created “red flags” making reliance unjustified (promissory estoppel and negligent misrepresentation), consistent with Jacked Up, L.L.C. v. Sara Lee Corp. (2017) and JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C.. Finally, unjust enrichment failed under both Texas and Massachusetts standards because the retained commission was not “unjustly” retained where Finite delivered cost savings and did not promise the mandatory charges could not change the estimate (Argyle Indep. Sch. Dist. ex rel. Bd. of Trs. v. Wolf; Metro. Life Ins. Co. v. Cotter).

3.3. Impact

  • Damages experts in commission-based industries: The decision underscores that “maximum” or “up to” contractual rates are not probative of expected earnings without market grounding. In broker/agent commission disputes, courts may demand comparator transactions, market pricing context, and evidence connecting assumptions to the deal at issue.
  • Disclosure discipline and “rebuttal creep”: The court’s focus on the purpose of amended expert opinions (rebuttal versus supplementation) strengthens district courts’ ability to enforce Rule 26 rebuttal deadlines and deter strategic late pivots after seeing the opposing expert report.
  • Summary judgment leverage after exclusion: The opinion illustrates a common litigation endgame: if damages are essential and the plaintiff’s damages proof is excluded, the merits may never reach a jury.
  • Contract drafting and “assurance” language: On the defense side, the LOA analysis highlights how disclaimers (“estimate,” “best efforts,” “no guarantee”) can defeat later attempts to recharacterize commercial discussions into price guarantees—particularly when the alleged “all-in” figure depends on third-party/regulated charges.

Although the panel noted the opinion is “not designated for publication,” its reasoning is likely to be cited persuasively in the Fifth Circuit on (i) when assumption-driven damages models become Viterbo-level “fundamentally unsupported,” and (ii) how courts should treat late “supplements” that are functionally rebuttal.

4. Complex Concepts Simplified

  • Daubert screening: Before a jury may hear expert testimony, the judge must ensure it is relevant and reliably derived from methods and data—not guesswork dressed as expertise.
  • Ipse dixit: Latin for “he himself said it.” In expert evidence, it refers to conclusions supported mainly by the expert’s say-so rather than an explained connection between data and opinion.
  • “Up to” rates vs. expected value: A ceiling in a contract shows what is permissible, not what will happen. Treating a maximum as the expected commission is akin to treating a listing price as the eventual sales price without checking comparable sales.
  • Rebuttal vs. supplementation (Rule 26): A “supplement” corrects or completes earlier disclosed opinions; “rebuttal” responds to an opposing expert’s report. Rebuttal has a strict 30-day deadline after the other side’s disclosure.
  • Rule 37(c)(1) exclusion: If a party misses expert disclosure rules, the usual consequence is automatic exclusion unless the party shows the lapse was substantially justified or harmless.
  • Reliance damages (promissory estoppel): If promissory estoppel applies, recovery is aimed at putting the claimant back where it was before relying on the promise—not giving the benefit of a bargain as if a full contract existed.
  • Unjust enrichment: It is not enough that someone benefitted; the benefit must be unfair to keep under equitable principles.

5. Conclusion

Finite Utility Consulting, L.L.C. v. Tawa reinforces two practical rules with case-dispositive force: (1) damages experts must tie commission assumptions and contract-duration assumptions to market realities and comparable evidence—maximal “up to” figures and favorable terms chosen without analysis may be excluded as ipse dixit; and (2) courts will enforce expert disclosure deadlines by focusing on the function of an “amendment” (rebuttal versus supplement), excluding late rebuttal opinions where delay prejudices the opposing party and a continuance would erode scheduling discipline. The cross-appeal further illustrates that “assurance” language does not create an all-in price guarantee when the same writing disclaims guarantees and characterizes total charges as estimates, and that counterclaims fail where damages and justified reliance are not supported by record evidence.