## Facts

- Advertising Specialty Institute (ASI) is a trade-information publisher and trade-show operator in the promotional products industry, with many distributor and supplier members and recurring major shows, including a long-running Chicago show.
- Hall-Erickson, Inc. managed an annual Chicago trade show known as The Motivation Show.
- In 2001, ASI and The Motivation Show entered a written “strategic alliance” agreement intended to advance professional use of promotional products and distributors.
- The agreement granted ASI a broad right of first refusal for “any activity, alliance, or opportunity” concerning the promotional product/advertising specialty industry.
- In 2003, The Motivation Show arranged to co-locate its Chicago event with Promotional Products Association International (PPAI), a close competitor of ASI.
- The Motivation Show did not offer ASI an opportunity to exercise its right of first refusal before finalizing the co-location arrangement with PPAI.
- ASI sued for breach and sought lost-profit damages, relying in part on expert testimony estimating losses roughly between $500,000 and over $1,000,000, but without concrete support such as identified likely exhibitors, attendance effects, or PPAI’s actual co-location revenues.
- The district court found a breach but awarded only $1 in nominal damages because ASI did not prove damages with reasonable certainty; ASI appealed the damages ruling, and The Motivation Show cross-appealed the liability finding.

## Issues

1. Whether co-locating The Motivation Show with PPAI without first offering ASI the contractual right of first refusal breached the parties’ agreement.
2. Whether ASI proved lost-profit damages with reasonable certainty such that more than nominal damages were required.

## Decision

- The Seventh Circuit affirmed the judgment in all respects.
- The court upheld the finding that The Motivation Show breached the contract by failing to honor ASI’s right of first refusal regarding the PPAI co-location.
- The court upheld the award of nominal damages only, concluding the district court did not clearly err in finding ASI’s lost-profit evidence too speculative to satisfy the reasonable-certainty requirement.

## Legal Principles

- A broadly drafted right of first refusal covering “any activity, alliance, or opportunity” in a defined industry can include a co-location arrangement with a direct competitor, and proceeding without offering the right-holder the first refusal can constitute breach.
- Contract damages for lost profits must be proven with reasonable certainty; estimates resting on unsupported assumptions about market behavior, attendance, exhibitors, or revenue allocation are insufficient.
- Expert testimony on lost profits must be grounded in concrete data (such as identified customers/exhibitors, comparable events, historical performance, or reliable revenue figures) to move the factfinder beyond conjecture.
- Where breach is established but damages are not proven with reasonable certainty, nominal damages are an appropriate remedy.

## Conclusion

The Seventh Circuit held that the defendants’ co-location agreement with ASI’s competitor fell within the contract’s broad right-of-first-refusal clause and therefore breached the agreement, but affirmed only nominal damages because ASI failed to prove lost profits with reasonable certainty.


Advertising Specialty Inst. v. Hall-Erickson, Inc., 601 F.3d 683 (7th Cir. 2010)