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Tuesday, August 03, 2021

New Tennessee Supreme Court Case: The Economic Loss Doctrine Clarified; Jury Verdict for Plaintiff Overturned, Etc.

The Tennessee Supreme Court has released its opinion in Milan Supply Chain Solutions, Inc. v. Navistar, Inc., No. W2018-00084-SC-R11-CV (Tenn. Aug. 8, 2021).  The syllabus from the slip opinion reads:

We granted permission to appeal primarily to consider how, if at all, the economic loss doctrine, which generally precludes recovery for purely economic losses in tort actions, applies in Tennessee to claims of fraudulent inducement. We hold that when, as here, a fraud claim seeks recovery of only economic losses and is premised solely on misrepresentations or nondisclosures about the quality of goods that are the subject of a contract between sophisticated commercial parties, the economic loss doctrine applies. Accordingly, we affirm the judgment of the Court of Appeals holding that the economic loss doctrine bars the plaintiff’s fraudulent inducement claim. We also affirm the judgment of the Court of Appeals holding that the plaintiff’s claim under the Tennessee Consumer Protection Act (“TCPA”) is barred as a matter of law because the trucks at issue are not “goods” as that term is defined by the portion of the TCPA on which the plaintiff relied. Tenn. Code Ann. § 47-18-104(b)(7) (2013 & Supp. 2020). We, therefore, set aside the plaintiff’s award of attorney’s fees and costs based on the TCPA. In all other respects, we affirm the judgment of the Court of Appeals on the separate grounds stated herein. 

Here is a link to the opinion:

NOTE: As a matter of full disclosure, I represented some of the amici in this case.  This opinion clarifies the law in Tennessee concerning the economic loss doctrine, which was unclear till now.    

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