Bucking the "Trend": The Uniform Commercial Code, the Economic Loss Doctrine, and Common Law Causes of Action for Fraud and Misrepresentation

Iowa Law Review

Volumn 84, Issue 5, 1999, Pages 875-940

  Tourek, Steven C ^a   Boyd, Thomas H ^a   Schoenwetter, Charles J ^a  

^a Winthrop and Weinstine   (United States)

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EID: 0033262060     PISSN: 00210552     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (341)

1. Schmucking v. Mayo, 235 N.W. 633, 634 (Minn. 1931).
2. U.C.C. § 1-102(2)(c) (1990) ("The underlying purposes and policies of this Act are . . . to make uniform the law among the various jurisdictions.").
3. See, e.g., Nelson Distrib., Inc. v. Stewart-Warner Indus. Balancers, 808 F. Supp. 684, 687-88 (D. Minn. 1992); ETM Graphics, Inc. v. H.B. Fuller Co., No. C2-91-2103, 1992 WL 61394, at *2 (Minn. Ct. App. Mar. 31, 1992).
4. See, e.g., Cooper Power Sys., Inc. v. Union Carbide Chems. & Plastics Co., 123 F.3d 675, 681-82 (7th Cir. 1997) (applying Wisconsin law); HTP, Ltd. v. Lineas Aereas Costarriceness S.A., 685 So. 2d 1238, 1239-40 (Fla. 1996); Huron Tool v. Precision Consulting & Eng'g Serv., 532 N.W.2d 541, 545-47 (Mich. Ct. App. 1995).
5. Budgetel Inns, Inc. v. Micros Sys., Inc., 8 F. Supp. 2d 1137, 1141 (E.D. Wis. 1998).
6. This article focuses on "fraud and misrepresentation" in the sense of intentional deceit and reckless misrepresentation, as opposed to negligent or innocent misrepresentation. See, e.g., Florenzano v. Olson, 387 N.W.2d 168, 177-79 (Minn. 1986) (Simonett, J., concurring) (discussing three types of misrepresentation); Paulson v. Kelnhofer, No. C1-97-422, 1997 WL 666058, at *2-3 (Minn. Ct. App. Oct. 28, 1997) (Davies, J., concurring) (arguing that four different types of misrepresentation exist). Other authors have addressed the U.C.C.'s compatibility with causes of action for negligent misrepresentation and innocent misrepresentation. See generally Alfred Hill, Damages for Innocent Misrepresentation, 73 COLUM. L. REV. 679 (1973); JoEllen Mitchell-Lockyer, Common Law Misrepresentation in Sales Cases - An Argument for Code Dominance, 19 FORUM 361 (1984).
7. This article focuses on "fraud and misrepresentation" in the sense of intentional deceit and reckless misrepresentation, as opposed to negligent or innocent misrepresentation. See, e.g., Florenzano v. Olson, 387 N.W.2d 168, 177-79 (Minn. 1986) (Simonett, J., concurring) (discussing three types of misrepresentation); Paulson v. Kelnhofer, No. C1-97-422, 1997 WL 666058, at *2-3 (Minn. Ct. App. Oct. 28, 1997) (Davies, J., concurring) (arguing that four different types of misrepresentation exist). Other authors have addressed the U.C.C.'s compatibility with causes of action for negligent misrepresentation and innocent misrepresentation. See generally Alfred Hill, Damages for Innocent Misrepresentation, 73 COLUM. L. REV. 679 (1973); JoEllen Mitchell-Lockyer, Common Law Misrepresentation in Sales Cases - An Argument for Code Dominance, 19 FORUM 361 (1984).
8. In Raytheon Co. v. McGraw-Edison Co., 979 F. Supp. 858 (E.D. Wis. 1997), the court contends that a "trend" is developing on this issue based upon cases that "come primarily from courts in Michigan and Florida." Id. at 870; see also Huron Tool v. Precision Consulting & Eng'g Serv., 532 N.W.2d 541, 544 (Mich. Ct. App. 1995). The indication of law in only two of the fifty states would seem insufficient to establish a "trend."
9. See infra pp. 3-10.
10. See infra pp. 10-20.
11. See infra pp. 20-37.
12. See infra pp. 37-39.
13. See infra pp. 39-41.
14. See infra pp. 41-43.
15. See infra pp. 43-51.
16. See infra pp. 51-62.
17. U.C.C. § 1-102(2)(a)-(c) (1990). "The Act should be construed in accordance with its underlying purposes and policies. The text of each section should be read in light of the purpose and policy of the rule or principle in question, including the Act as a whole, and the application of the language should be construed narrowly or broadly, as the case may be, in conformity with the purposes and policies involved." Id.
18. Notably, one prominent source of legal commentary has written, without citation or analysis, that "[t]he Uniform Commercial Code is generally regarded as the exclusive source for ascertaining when a seller is subject to liability for damages if the claim is based on intangible economic loss not attributable to physical injury to person or harm to a tangible thing other than the defective product itself." W. PAGE KEETON ET AL., PROSSER & KEETON ON THE LAW OF TORTS § 95, at 680 (5th ed. 1984) [hereinafter KEETON ET AL.] (emphasis added). However, this comment was made in the context of a discussion concerning common law negligence claims and was not intended to suggest that the U.C.C. precluded claims for intentional torts at common law, such as fraud and misrepresentation. Id. § 92, at 655-56.
19. U.C.C. General Comment of National Conference of Commissioners on Uniform State Laws and the American Law Institute, at 17 (14th ed. West 1996).
20. JAMES J. WHITE & ROBERT S. SUMMERS, HANDBOOK OF THE LAW UNDER THE UNIFORM COMMERCIAL CODE § 2, at 6 (2d ed. 1980) [hereinafter WHITE & SUMMERS]. For example, the U.C.C. does not bar or otherwise impair a party's right to pursue causes of action arising from consumer protection and/or anti-fraud statutes. The U.C.C. expressly provides that Article 2 shall not "impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers." U.C.C. § 2-102. While "consumerism" as a national development of high news priority came after the drafting of the Code, much consumer-oriented legislation was on the books long before the Code's drafting. The drafters of the Code, to their credit, were aware of that history and in full sympathy with its purposes. To that end, they designed the Code to defer to those developments.
21. THOMAS M. QUINN, QUINN'S UNIFORM COMMERCIAL CODE COMMENTARY AND LAW DIGEST ¶ 2-102[A][5] (1991 ed.) [hereinafter QUINN'S U.C.C.]. Section 2-102 provides: The Code rules on sales laws do not "impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers." So anyone who sees in the Code a shelter against the avalanche of legislation on products safety, warranties, disclaimers, trade practices, and the like has another - and painful - thought coming. Id.
22. Grant Gilmore, Article 9: What It Does for the Past, 26 LA. L. REV. 285, 285-86 (1996). See also WHITE & SUMMERS § 2, supra note 19, at 7.
23. WHITE & SUMMERS § 2, supra note 19, at 6-7. See QUINN'S U.C.C., supra note 19, ¶ 1-103[A][1] (stating that "[s]ection 1-103, one of the most important sections of the Code, provides that the 'principles of law and equity' have continued applicability except insofar as they are expressly 'displaced' by particular provisions of the Code")
24. U.C.C. § 1-103 (emphasis added). "[T]his section indicates the continued applicability to commercial contracts of all supplemental bodies of law except insofar as they are explicitly displaced by this Act . . . ." Id. at cmt. 1.
25. WHITE & SUMMERS § 5, supra note 19, at 19 (emphasis in original).
26. Id.
27. Robert S. Summers, General Equitable Principles Under Section 1-103 of the Uniform Commercial Code, 72 Nw. U. L. REV. 906, 908 (1978) (footnote omitted).
28. See Northern States Power Co. v. International Tel. & Tel. Corp., 550 F. Supp. 108 (D. Minn. 1982) (stating that "[m]isrepresentation is a distinct tort" that is different and distinguishable from the product liability "torts" of negligence and strict liability); Mike Steenson, A Comparative Analysis of Minnesota Products Liability Law and the Restatement (Third) of Torts: Products Liability, 24 WM. MITCHELL L. REV. 1, 63 (1998) (stating that fraud and misrepresentation "claims are separate and distinct from products liability claims based on design defect, failure to warn, or manufacturing flaws") (footnotes omitted).
29. Summers, supra note 25, at 914.
30. Robert S. Summers, "Good Faith" In General Contract Law and the Sales Provisions of the Uniform Commercial Code, 54 VA. L. REV. 195, 223 (1968).
31. U.C.C. § 1-103. See WHITE & SUMMERS, supra note 19, § 5, at 19; Summers, supra note 28, at 223.
32. See Johnson v. Land O'Lakes, Inc., 18 F. Supp. 2d 985, 1001 (N.D. Iowa 1998) (explaining that common law fraud is not displaced by the U.C.C.).
33. See, e.g., U.C.C. § 2-302 & cmt. 1 (stating that fraud is contrary to public policy and constitutes unconscionable conduct, and therefore violates U.C.C. § 2-302 which prohibits unconscionable behavior that is "contrary to public policy or to the dominant purpose of the contract"); U.C.C. § 2-403(3) (stating that an "extension of the concept of theft to include trick, particular types of fraud and the like is for the purpose of helping conviction of the offender; it has no proper application to the long-standing policy of civil protection of buyers from persons guilty of such trick or fraud"); U.C.C. § 2-721 (stating that "[r]emedies for material misrepresentation or fraud include all remedies available under this Article for non-fraudulent breach"); U.C.C. § 2-725(4) (explaining that the statute of limitations is tolled for actions relating to fraudulent concealment); Summers, supra note 25, at 914 (stating that "[f]raud is an exception to section 2-203 on parole evidence . . . even though that section does not specifically so provide") (footnote omitted).
34. U.C.C. § 1-203. See WHITE & SUMMERS, supra note 19, § 5, at 19-20; Summers, supra note 28, at 197-98. Section 1-201 of the U.C.C. defines "good faith" as "honesty in fact in the conduct or transaction concerned." U.C.C. § 1-201(19). The obligation of good faith imposed by U.C.C. section 1-203 mirrors the obligation of good faith imposed in contracts governed by the common law. See also RESTATEMENT (SECOND) OF CONTRACTS § 205 (1981).
35. U.C.C. § 2-721. See WHITE & SUMMERS, supra note 19, § 9-1, at 327 n.8 (explaining the same proposition).
36. Gary L. Monserud, Measuring Damages After Buyer's Affirmation of an Article 2 Sales Contract Induced by Fraud: A Study of Code Jurisprudence in Light of Section 2-721 and Pre-Code Conflicts in Remedial Theory, 1996 COLUM. BUS. L. REV. 423, 471 & n.211 (1996); Summers, supra note 28, at 223.
37. Monserud, supra note 34, at 472-73 & nn.211-13. According to Monserud, section 2-721 is designed as an equalizer, to make remedies for fraudulent and non-fraudulent breach coextensive. Under section 2-721, a buyer suing for fraud should not be awarded less than a buyer suing for non-fraudulent breach of warranty. Taking this equalizing principle at face value, it seems that the Code offers a deceived buyer as direct damages the same compensation as is allowable to a buyer aggrieved by breach of warranty. Id. at 472-73.
38. WHITE & SUMMERS, supra note 19, § 4-1, at 147. See generally Summers, supra note 25, at 908-13.
39. WHITE & SUMMERS, supra note 19, § 4-1, at 147.
40. RESTATEMENT OF CONTRACTS (SECOND) §§ 163, 164(1) (1981). See, e.g., Houlihan v. Offerman & Co., 31 F.3d 692, 695 (8th Cir. 1994) (applying Minnesota law); Roberg v. Cambridge Coop. Creamery, 79 N.W.2d 142, 146 n.2 (Minn. 1956); Shell Petroleum Corp. v. Anderson, 253 N.W.2d 885, 887 (Minn. 1934); MCC Invs. v. Crystal Properties, 415 N.W.2d 908, 911 (Minn. Ct. App. 1987); Carpenter v. Vreeman, 409 N.W.2d 258, 260-61 (Minn. Ct. App. 1987).
41. WHITE & SUMMERS, supra note 19, § 9-1, at 327.
42. Id. (footnote omitted).
43. Id. at 148.
44. Jerry J. Phillips, A Synopsis of the Developing Law of Products Liability, 28 DRAKE L. REV. 317, 319 (1978).
45. Id. at 325.
46. KEETON ET AL., supra note 17, § 92, at 655.
47. Id. at 656. Thus, "[t]he adoption of this particular device [i.e., the implied warranty] was facilitated by the peculiar and uncertain nature and character of warranty, a freak hybrid born of the elicit intercourse of tort and contract." William L. Prosser, The Assault Upon the Citadel (Strict Liability to the Consumer), 69 YALE L.J. 1099, 1126-27 (1960). If warranty is a matter of tort as well as contract, and if it can arise without any intent to make it a matter of contract, then it should need no contract; and it may arise and exist between parties who have not dealt with one another. Notwithstanding this ready-to-hand logic, however, the concept of warranty has involved so many major difficulties and disadvantages that it is very questionable whether it has not become rather a burden than a boon to the courts in what they are trying to accomplish. Id. at 1127.
48. KEETON ET AL., supra note 17, § 92, at 656.
49. See supra notes 16-46 and accompanying text; see also Summers, supra note 28, at 227-28.
50. See U.C.C. § 2-313 cmt. 8.
51. See U.C.C. § 2-721; Monserud, supra note 34, at 471 & n.211.
52. East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 866 (1986).
53. Id. at 866.
54. Amanda K. Esquibel, The Economic Loss Rule and Fiduciary Duty Claims: Nothing Stricter Than the Morals of the Marketplace?, 42 VILL. L. REV. 789, 791 (1997); see Sidney R. Barrett, Jr., Recovery of Economic Loss in Tort for Construction Defects: A Critical Analysis, 40 S.C. L. REV. 891, 897 & n.20 (1989). The term "Economic Loss Doctrine" is a misnomer. Accordingly, the term "can be somewhat confusing, if not understood in context." In Lloyd F. Smith Co. v. Den-Tal-Ez, Inc., 491 N.W.2d 11, 14 n.5 (Minn. 1992), the court concluded: Damages for loss of property and for consequential damages caused by a defective product are generally recoverable . . . either by a breach of warranty action or a tort action. When these damages are recoverable in a breach of warranty action, they are called an "economic loss" but when recovered in a tort action they are said to be non-economic damages. Thus the term "economic loss" is a useful shorthand phrase in the law of sales for contract damages, but it is no help in determining whether a contract or tort remedy should apply to a particular set of facts. Id. (citations omitted).
55. Amanda K. Esquibel, The Economic Loss Rule and Fiduciary Duty Claims: Nothing Stricter Than the Morals of the Marketplace?, 42 VILL. L. REV. 789, 791 (1997); see Sidney R. Barrett, Jr., Recovery of Economic Loss in Tort for Construction Defects: A Critical Analysis, 40 S.C. L. REV. 891, 897 & n.20 (1989). The term "Economic Loss Doctrine" is a misnomer. Accordingly, the term "can be somewhat confusing, if not understood in context." In Lloyd F. Smith Co. v. Den-Tal-Ez, Inc., 491 N.W.2d 11, 14 n.5 (Minn. 1992), the court concluded: Damages for loss of property and for consequential damages caused by a defective product are generally recoverable . . . either by a breach of warranty action or a tort action. When these damages are recoverable in a breach of warranty action, they are called an "economic loss" but when recovered in a tort action they are said to be non-economic damages. Thus the term "economic loss" is a useful shorthand phrase in the law of sales for contract damages, but it is no help in determining whether a contract or tort remedy should apply to a particular set of facts. Id. (citations omitted).
56. 207 A.2d 305 (N.J. 1965).
57. In Santor, the New Jersey Supreme Court stated: In this developing field of the law, courts have necessarily been proceeding step-by-step in their search for a stable principle which can stand on its own base as a permanent part of the substantive law. The quest has found sound expression, we believe, in the doctrine of strict liability in tort. Such doctrine stems from the reality of the relationship between manufacturers of products and the consuming public to whom the products are offered for sale . . . . [T]he great mass of the purchasing public has neither adequate knowledge nor sufficient opportunity to determine if articles bought or used are defective. Obviously they must rely upon the skill, care and reputation of the maker. It must be said, therefore, that when the manufacturer presents his goods to the public for sale he accompanies them with a representation that they are suitable and safe for the intended use . . . . The obligation of the manufacturer thus becomes what in justice it ought to be - an enterprise liability, and one which should not depend upon the intricacies of the law of sales. The purpose of such liability is to ensure that the cost of injuries or damage, either to the goods sold or to other property, resulting from defective products, is borne by the makers of the products who put them in the channels of trade, rather than by the injured or damaged persons who ordinarily are powerless to protect themselves. Id. at 311-12 (citations omitted).
58. Id. at 312-13.
59. 403 P.2d 145 (Cal. 1965).
60. Id. at 147-48.
61. Id. at 149.
62. Id. at 150.
63. Id. at 151.
64. Seely, 403 P.2d at 151.
65. Id. Chief Justice Traynor went on to hold that "[t]he law of warranty is not limited to parties in a somewhat equal bargaining position" because, in his view, "[s]uch a limitation is not supported by the language and history of the Sales Act and is unworkable." Id.
66. Id.
67. See Herbert Bernstein, Civil Liability for Pure Economic Loss Under American Tort Law, 46 AM. J. COMP. L. 111, 118-19 (1988) (stating that the Seely view is shared by a majority of jurisdictions); Esquibel, supra note 52, at 795 (same).
68. 476 U.S. 858 (1986).
69. Id. at 866.
70. Id. at 873-74 (citations omitted).
71. 520 U.S. 875 (1997).
72. Id. at 880 (citations omitted).
73. Reeder R. Fox & Patrick J. Loftus, Riding the Choppy Waters of East River: Economic Loss Doctrine Ten Years Later, 64 DEF. COUNS. J. 260, 262-63 (1997).
74. KEETON ET AL., supra note 17, § 92, at 656-57.
75. Seely v. White Motor Co., 403 P.2d 145, 151 (Cal. 1965).
76. East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 871 (1986).
77. Id. at 871-72 (citations omitted).
78. Fox & Loftus, supra note 70, at 264.
79. See Dakota Gasification Co. v. Pascoe Bldg. Sys., 91 F.3d 1094, 1099 (8th Cir. 1996); Thofson v. Redex Indus., Inc., 433 N.W.2d 901, 903-04 (Minn. Ct. App. 1988).
80. See Lloyd F. Smith Co. v. Den-Tal-Ez, Inc., 491 N.W.2d 11, 13 (Minn. 1992) (finding "all property separate from the allegedly defective" product to be "other property").
81. MINN. STAT. § 604.10(d) (1998). See R.W. Murray Co. v. Shatterproof Glass Corp., 697 F.2d 818, 829 n.11 (8th Cir. 1983) (concluding that general diminution in value to a building due to checkerboard appearance caused by required replacement of defective glass panels does not constitute other property). Some courts have also focused on whether the alleged "other property" is or is not an integral part of the finished product. See, e.g., Pulte Homes Corp. v. Osmose Wood Preserving, Inc., 60 F.3d 734, 741-42 (11th Cir. 1995) (finding that plywood is not an integral part of a roofing system because the contractor bargained for the purchase of the plywood; damage caused to other components in replacing plywood did not constitute damage to "other property"); Casa Clara Condominium Ass'n v. Charlie Toppino & Sons, Inc., 620 So. 2d 1244, 1247 (Fla. 1993) (finding concrete to be an integral part of the finished product, hence damage to other components not damage to other property).
82. Saratoga Fishing Co. v. J.M. Martinac & Co., 520 U.S. 875, 878 (1997). See Philadelphia Nat'l Bank v. Dow Chem. Co., 605 F. Supp. 60, 63-64 (E.D. Pa. 1985) (finding damage to structural steel caused by defective building product as damage to "other property"); Minneapolis Soc'y of Fine Arts v. Parker-Klein Assocs., 354 N.W.2d 816 (Minn. 1984) (finding damage to mortar caused by defective bricks as damage to "other property").
83. See supra notes 20-32 and accompanying text.
84. See supra notes 33-35 and accompanying text.
85. See supra notes 50-52 and accompanying text.
86. See supra notes 50-79 and accompanying text. See also Dale G. Goble, All Along the Watchtower: Economic Loss in Tort (The Idaho Case Law), 34 IDAHO L. REV. 225, 244 & n.82 (1998) (stating this proposition).
87. Northern States Power Co. v. International Tel. & Tel. Corp., 550 F. Supp. 108, 111-12 (D. Minn. 1982) (applying Minnesota law).
88. See, e.g., Squish LaFish, Inc. v. Thomco Specialty Prods., Inc., 149 F.3d 1288, 1291 (11th Cir. 1998) (applying Georgia law, the court found that the manufacturer's reliance on the misrepresentations brought the claim within the negligent misrepresentation exception to the economic loss rule); Trans States Airline v. Pratt & Whitney Canada, Inc., 86 F.3d 725, 731 (7th Cir. 1996) (applying Illinois law, the court noted an exception to the general rule precluding recovery of economic losses in tort exists "where the plaintiffs damages are the proximate result of a defendant's intentional, false representation"); Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623, 625 & n.1 (1st Cir. 1994) (applying federal admiralty law, the court stated that the "classic exceptions" to the Economic Loss Doctrine include "claims for economic losses that are intentionally caused"); City of Richmond v. Madison Management Group, Inc., 918 F.2d 438, 446-47 (4th Cir. 1990) (applying Virginia law, the court stated that defendants were "not entitled to the protection of the economic loss rule" in a case involving a fraud claim); McCarthy, Lebit, Crystall & Haiman Co. v. First Union Management Co., 622 N.E.2d 1093, 1105 (Ohio Ct. App. 1993) (stating that "courts hold the economic loss rule does not apply . . . where one intentionally makes false representations . . . ."); Jones v. Trucks of Duluth, Inc., No. C3-91-1476, 1992 WL 83311, at *1-2 (Minn. Ct. App. Apr. 28, 1992) (holding that the Economic Loss Doctrine does not bar misrepresentation and fraud claims); Ohio Sav. Bank v. H.L. Vokes Co., 560 N.E.2d 1328, 1331 (Ohio Ct. App. 1989) (holding that "a cause of action for fraud is maintainable in addition to a U.C.C. cause of action"); Johnson v. Land O'Lakes, Inc., 18 F. Supp. 2d 985, 1001-02 (N.D. Iowa 1998) (applying Iowa law, the court held that the U.C.C. as adopted in Iowa does not displace the plaintiffs tort claims); In re Ford Motor Co. Vehicle Paint Litig., No. MDL 1063, 1997 WL 539665, at *7 (E.D. La. Aug. 27, 1997) (applying New York law, "[t]he Court . . . notes that New York courts commonly permit fraud claims seeking recovery for economic injuries to proceed"); In re Ford Motor Co. Vehicle Paint Litig., No. MDL 1063, 1996 WL 426548, at *24 (E.D. La. July 30, 1996) (applying Alabama law, "the court will not dismiss [plaintiffs] fraud claim on the basis of the economic loss doctrine"); id. at *11 (applying North Carolina law, "[t]he Court finds that plaintiffs North Carolina fraud claim is not barred by the economic loss doctrine"); id. at *15 (applying Louisiana law, the court states that "Louisiana allows recovery in tort for purely economic losses for negligent misrepresentation" (citing Barrie v. VP Exterminators, 625 So. 2d 1007, 1014 (La. 1993))); id. at *17 (applying Mississippi law, "[t]he Court does not find this [fraud] claim barred by the economic loss doctrine"); Arthur D. Little, Inc. v. Dooyang, 928 F. Supp. 1189, 1205 (D. Mass. 1996) (applying Massachusetts law, the court stated that "the economic loss rule does not apply to harm caused by intentional misrepresentations"); Saint Denis v. Department Hous. & Urban Dev., 900 F. Supp. 1194, 1201 (D. Alaska 1995) (applying Alaska law, the court stated that "[w]hen products do not meet the purchaser's expectations, the purchaser's redress must be found in an action on the contract or for deceit"); Commercial Union Ins. v. Roxborough Joint Venture, 944 F. Supp. 827, 831 & n.3 (D. Colo. 1995) (applying Colorado law, the court noted that the "economic loss rule is not absolute," and indicated that "liability in tort and in contract can coexist . . . where the conduct is intentional, rather than negligent conduct"); In re Ford Motor Co. Bronco II Prod. Liab. Litig., No. Civ. A. MDL-991, 1995 WL 714441, at *7 (E.D. La. Dec. 4, 1995) (applying Indiana law and holding that "plaintiffs' Indiana law claims for fraud and misrepresentation are not barred by the economic loss doctrine"); id. at *5 (applying West Virginia law and stating that "[plaintiffs' state law fraud and misrepresentation claims are not barred by the Economic Loss Doctrine . . . ."); id. at *6 (applying Texas law and noting that "fraud and misrepresentation cases are commonly recognized exceptions to the rule of nonrecovery of purely economic loss in tort cases"); Auger v. The Stouffer Corp., No. 93-2529, 1993 WL 364622, at *5 (E.D. Pa. Aug. 31, 1993) (applying Pennsylvania law and recognizing an exception to the Economic Loss Doctrine "where one intentionally makes a false representation"); Vermont Plastics, Inc. v. Brine, Inc., 824 F. Supp. 444, 451 (D. Vt. 1993).
89. 965 F. Supp. 1227 (W.D. Wis. 1997).
90. Id. at 1236 (emphasis added).
91. 8 F. Supp. 2d 1137 (E.D. Wis. 1998).
92. Id. at 1148.
93. Id. (citations & footnotes omitted) (emphasis added).
94. Budgetel Inns, Inc. v. Micros Sys., Inc., 34 F. Supp. 2d 720, 725 (E.D. Wis. 1999).
95. See Budgetel Inns, Inc. v. Micros Sys., Inc., 8 F. Supp. 2d 1137, 1144-48 (E.D. Wis. 1998).
96. See infra notes 98-100 and accompanying text.
97. See infra notes 98-100 and accompanying text.
98. 532 N.W.2d 541 (Mich. Ct. App. 1995).
99. See infra notes 118-124 and accompanying text.
100. See infra notes 98-181 and accompanying text.
101. 532 N.W.2d 541 (Mich. Ct. App. 1995).
102. Id. at 546.
103. Raytheon Co. v. McGraw-Edison Co., 979 F. Supp. 859 870 (E.D. Wis. 1997).
104. 486 N.W.2d 612 (Mich. 1992).
105. Id. at 613.
106. Id. at 613-14.
107. Id. at 615-16 (citations omitted).
108. Id. at 618.
109. Neibarger, 486 N.W.2d at 618-19 (citations omitted).
110. Id. at 613, 623.
111. Notably, all of the cases cited to and discussed by the Michigan Supreme Court either involved only the products liability "tort" claims of negligence and strict liability, see, e.g., Miller v. United States Steel Corp., 902 F.2d 573, 574 (7th Cir. 1990); S.M. Wilson & Co. v. Smith Int'l, Inc., 587 F.2d 1363, 1376 (9th Cir. 1978); A.C. Hoyle Co. v. Sperry Rand Corp., 340 N.W.2d 326 (Mich. Ct. App. 1983); Superwood v. Siempelkamp Corp., 311 N.W.2d 159, 162 (Minn. 1981), or actually permitted fraud to proceed while otherwise barring negligence and strict liability claims, see, e.g., Hapka v. Paquin Farms, 458 N.W.2d 683, 685 n.2 (Minn. 1990).
112. Huron Tool v. Precision Consulting Servs., 532 N.W.2d 541, 544 (Mich. Ct. App. 1995).
113. Id.
114. Id. (citing Interstate Sec. Corp. v. Hayes Corp., 920 F.2d 769, 776 n. 11 (11th Cir. 1991) (involving a defamation claim); Northern States Power Co. v. International Tel. & Tel. Corp., 550 F. Supp. 108 (D. Minn. 1982) (discussing fraudulent inducement to contract and misrepresentation); Werblood v. Columbia College of Chicago, 536 N.E.2d 750 (Ill. 1989) (involving tortious interference with prospective economic advantage); Moorman Mfg. Co. v. National Tank Co., 435 N.E.2d 443 (Ill. 1982) (dealing with intentional misrepresentation); Stanucci Constr. Co. v. Baxter & Woodman, Inc., 502 N.E.2d 1134 (Ill. Ct. App. 1987) (involving intentional interference with contractual relations)).
115. See Huron Tool, 532 N.W.2d at 544. In Huron Tool, the Court explained: [T]he distinction is critical, for the essence of the "economic loss" rule is that contract law and tort law are separate and distinct, and that the courts should maintain that separation in the allowable remedies. There is a danger that tort remedies could simply engulf the contractual remedies and thereby undermine the reliability of commercial transactions. Once the contract has been made, the parties should be governed by it. Fraud in the inducement, however, addresses a situation where the claim is that one party was tricked into contracting. It is based on pre-contractual conduct which is, under law, a recognized tort. Id. at 544-45 (quoting Williams Elec. Co. v. Honeywell, Inc., 772 F. Supp. 1225, 1237-38 (N.D. Fla. 1991)).
116. Huron Tool, 532 N.W.2d at 545 (emphasis added).
117. Id. (citing Public Serv. Enter. Group, Inc. v. Philadelphia Elec. Co., 722 F. Supp. 184, 201 (D.N.J. 1989)). "With respect to the latter kind of fraud, the misrepresentations relate to the breaching party's performance of the contract and do not give rise to an independent cause of action in tort." Id. Such fraud is not extraneous to the contract dispute among the parties, but is instead but another thread in the fabric of [the] plaintiffs' contract claim . . . . [It] is undergirded by factual allegations identical to those supporting their breach of contract counts . . . . This fraud did not induce the plaintiffs to enter into the original agreement nor did it induce them to enter into additional undertakings. It did not cause harm to the plaintiffs distinct from those caused by the breach of contract . . . . Id. (quoting Public Serv. Enter. Group, 722 F. Supp. at 201).
118. Id. at 546 (citing Neibarger v. Universal Coops., Inc., 486 N.W.2d 612 (Mich. 1992)) (emphasis added).
119. Id. at 545. "These representations are indistinguishable from the terms of the contract and warranty that plaintiff alleges were breached. Plaintiff fails to allege any wrongdoing by defendants independent of defendants' breach of contract and warranty." Id. (footnote omitted).
120. Id.
121. 685 So. 2d 1238 (Fla. 1996).
122. Id. at 1239 (quoting AFM Corp. v. Southern Bell Tel. & Tel. Co., 515 So. 2d 180, 181-82 (Fla. 1987)).
123. Id. The court continued to state that, "[w]here a contract exists, a tort action will lie for either intentional or negligent acts considered to be independent from acts that breached the contract." Id. (citing Ferguson Transp., Inc. v. North Am. Van Lines, Inc., 687 So. 2d 821 (Fla. 1996)). For more authority, see AFM Corp. v. Southern Bell Tel. & Tel. Co., 515 So. 2d 180, 181 (Fla. 1987); Lance v. Wade, 457 So. 2d 1008, 1011 (Fla. 1984); Griffith v. Shamrock Village, Inc., 94 So. 2d 854 (Fla. 1957).
124. HTP, Ltd., 685 So. 2d at 1239 (quoting Woodson v. Martin, 663 So. 2d 1327, 1331 (Fla. Dist. Ct. App. 1995) (Altenbernd, J., dissenting); Williams v. Peak Resorts Int'l, Inc., 676 So. 2d 513, 517 (Fla. Dist. Ct. App. 1996)).
125. HTP, Ltd., 685 So. 2d at 1239 (citing Bankers Trust Co. v. Pacific Employers Ins. Co., 282 F.2d 106, 110 (9th Cir. 1960); Williams, 676 So. 2d at 517.
126. Id. at 1239-40 (quoting Huron Tool & Eng'g Co. v. Precision Consulting Servs., 532 N.W.2d 541, 545 (Mich. Ct. App. 1995)).
127. Id. at 1240. These claims are not barred by the Economic Loss Doctrine because: [T]he interests protected by fraud is society's need for true factual statements in important human relationships, primarily commercial or business relationships. More specifically, the interest protected by fraud is a plaintiff's right to justifiably rely on the truth of the defendant's factual representation in a situation where an intentional lie would result in loss to the plaintiff. Id. (quoting Woodson, 663 So. 2d at 1330 (Altenbernd, J., dissenting)).
128. See Allmand Assocs. v. Hercules, Inc., 960 F. Supp. 1216, 1226-27 (E.D. Mich. 1997) (applying Huron Tool); Martin v. A.O. Smith Corp., 931 F. Supp. 543, 547 (W.D. Mich. 1996) (applying Huron Tool); Valleyside Dairy Farms, Inc. v. A.O. Smith Corp., 944 F. Supp. 612, 616-17 (W.D. Mich. 1995) (applying Huron Tool).
129. 944 F. Supp. 612 (W.D. Mich. 1995).
130. Id. at 613.
131. Id. at 614.
132. Id. at 616-17.
133. Id. at 617.
134. 960 F. Supp. 1216 (E.D. Mich. 1997).
135. Id. at 1221.
136. Id. at 1227-28 (citing Huron Tool & Eng'g Co. v. Precision Consulting Servs., 532 N.W.2d 541 (Mich. Ct. App. 1995)).
137. Id. at 1228 (citations omitted) (citing Huron Tool, 532 N.W.2d 541). Examples of the alleged misrepresentations included "Allmand's claims that Hercules represented that METTON® would be compatible with Zinc Alloy Tooling, which was allegedly false since METTON® ruined Allmand's tools" and "that Hercules' representatives misrepresented the cycle time for forming a mold out of METTON®." Id.
138. 999 F. Supp. 968 (E.D. Mich. 1998).
139. Id. at 969.
140. Id. at 971 (quoting Neibarger v. Universal Coops., Inc., 486 N.W.2d 612 (Mich. 1992)).
141. Id.
142. Id.
143. Dinsmore Instrument, 999 F. Supp. at 971-72.
144. Id. at 972.
145. 123 F.3d 675 (7th Cir. 1997).
146. Id. at 682 n.4.
147. Id. at 681-82.
148. Id. at 682.
149. Id. at 682 & n.4 (citing Huron Tool & Eng'g Co. v. Precision Consulting Servs., Inc., 532 N.W.2d 541, 545 (Mich. Ct. App. 1995)).
150. 979 F. Supp. 858 (E.D. Wis. 1997).
151. Id. at 870.
152. 8 F. Supp. 2d 1137 (E.D. Wis. 1998).
153. Cooper Power Sys., Inc. v. Union Carbide Chems. & Plastics Co., 123 F.3d 675, 682 (7th Cir. 1997); Budgetel Inns, 8 F. Supp. 2d at 1142 (citing Badger Pharmacal, Inc. v. Colgate Palmolive Co., 1 F.3d 621, 628 (7th Cir. 1993)). The court noted that, while Michigan and Florida have appareave apparently made this "leap," other states, such as Illinois, had not. Id. (citing Moorman Mfg. Co. v. National Tank Co., 435 N.E.2d 443 (Ill. 1982)).
154. Id. at 1143.
155. Id. at 1145 (citations omitted).
156. Budgetel Inns, 8 F. Supp. 2d at 1145. The court further noted that "[i]n all cases cited by the parties and researched by the court, use of the Huron limitation eliminated the claims of fraud in the inducement" altogether. Id. at 1145-46.
157. Id. at 1147.
158. Id. at 1147-48 (citations omitted).
159. Id. at 1148.
160. Id.
161. Budgetel Inns, 8 F. Supp. 2d at 1148.
162. Id. at 1149.
163. Budgetel Inns v. Micros Sys., Inc., 34 F. Supp. 2d 720 (E.D. Wis. 1999).
164. Id. at 724.
165. Id. at 724-25.
166. Id. at 725 (citing Stoughton Trailers, Inc. v. Henkel Corp., 965 F. Supp. 1227, 1236 (W.D. Wis. 1997)).
167. Indeed, fraudulent behavior, while perhaps not frequently prosecuted, often times (and perhaps always) may constitute a violation of criminal statutes as well as civil common law and statutory law prohibiting fraud and misrepresentation.
168. 598 N.W.2d 262 (Wis. Ct. App. 1999).
169. Id. at 269.
170. Id. at 270.
171. Id. at 269.
172. Id. at 270-71. Notably, the court expressly refrained from addressing the question of "whether the Economic Loss Doctrine bars an intentional misrepresentation claim if the representation does not fraudulently induce the party to enter into a contract." Id. at 271.
173. See All-Tech Telecom Inc. v. Amway Corp., 174 F.3d 862, 867 (7th Cir. 1999) (stating that the Wisconsin Supreme Court's decision in Daanen & Janssen, Inc. v. Cedarapids, Inc., 573 N.W.2d 842, 851 (Wis. 1998), "ducks the issue").
174. 137 F.3d 1083 (8th Cir. 1998).
175. Id. at 1086-87.
176. Id. at 1084.
177. Id.
178. Id.
179. AKA Distrib. Co. v. Whirlpool Corp., 948 F. Supp. 903, 907 (D. Minn. 1996). Notably, the District Court reached this conclusion by expressly disregarding earlier Eighth Circuit and District Court interpretations of Minnesota law. See id. at 907 (citing Clements Auto Co. v. Service Bureau Corp., 444 F.2d 169, 180 (8th Cir. 1971); Northern States Power Co. v. International Tel. & Tel. Corp., 550 F. Supp. 108, 111-12 (D. Minn. 1982)). The court also disregarded U.C.C. sections 1-103 and 2-721, which have been adopted in Minnesota's enactment of the U.C.C. Id.
180. AKA Distrib., 137 F.3d at 1084.
181. Id. at 1086 (footnote & citations omitted) (emphasis added).
182. Id. at 1087.
183. Minnesota Forest Prods., Inc. v. Ligna Mach., Inc., 17 F. Supp. 2d 892, 906 n.7 (D. Minn. 1998) (quoting AKA Distrib., 137 F.3d at 1086 n.3).
184. Marvin Lumber & Cedar Co. v. PPG Indus., Inc., 34 F. Supp. 2d 738, 749-51 (D. Minn. 1999).
185. 18 F. Supp. 2d 985 (N.D. Iowa 1998).
186. Id. at 1001-02.
187. Id. at 1001 (citing Kemin Indus., Inc. v. KPMG Peat Marwick LLP, 578 N.W.2d 512, 520-21 (Iowa 1998); Nelson v. Todd's Ltd., 426 N.W.2d 120, 124 (Iowa 1988)).
188. Id.
189. Id. at 1002. The Court has since likewise declined to predict such an expansive application of the Economic Loss Doctrine under Iowa law with regard to misrepresentation claims arising from other types of transactions. See, e.g., Cunningham v. PFL Life Ins. Co., 42 F. Supp. 2d 872, 886-87 (N.D. Iowa 1999).
190. There has been some suggestion that federal judges have a preference for applying federal predictions of state law to the exclusion of relevant and applicable state law authority. See generally Jed I. Bergman, Putting Precedent in Its Place: Stare Decisis and Federal Predictions of State Law, 96 COLUM. L. REV. 969, 1014 n.266 (1996) (providing some evidence that federal judges will continue to apply federal predictions of state law even when there is no need to do so); William M. Landes & Richard A. Posner, Legal Change, Judicial Behavior, and the Diversity Jurisdiction, 9 J. LEGAL STUD. 367 (1980) (tracking the increase of federal-court citation of federal, rather than state, cases in diversity opinions).
191. There has been some suggestion that federal judges have a preference for applying federal predictions of state law to the exclusion of relevant and applicable state law authority. See generally Jed I. Bergman, Putting Precedent in Its Place: Stare Decisis and Federal Predictions of State Law, 96 COLUM. L. REV. 969, 1014 n.266 (1996) (providing some evidence that federal judges will continue to apply federal predictions of state law even when there is no need to do so); William M. Landes & Richard A. Posner, Legal Change, Judicial Behavior, and the Diversity Jurisdiction, 9 J. LEGAL STUD. 367 (1980) (tracking the increase of federal-court citation of federal, rather than state, cases in diversity opinions).
192. See, e.g., James E. Moore, Agristor Leasing v. Spindler: Economic Loss, Strict Liability and the U.C.C. - What a Mess, 34 S.D. L. REV. 101 (1989); Ronald R. Pawlak & David W. Moore, The Rule of the Federal Court and the Expansion of the Ambit of Liability of Manufacturers: Conceptual Approaches and a Suggested Solution, 28 DRAKE L. REV. 389 (1978-79); Cornelius J. Peck, Comments on Judicial Creativity, 69 IOWA L. REV. 1, 13-17 (1983).
193. See, e.g., James E. Moore, Agristor Leasing v. Spindler: Economic Loss, Strict Liability and the U.C.C. - What a Mess, 34 S.D. L. REV. 101 (1989); Ronald R. Pawlak & David W. Moore, The Rule of the Federal Court and the Expansion of the Ambit of Liability of Manufacturers: Conceptual Approaches and a Suggested Solution, 28 DRAKE L. REV. 389 (1978-79); Cornelius J. Peck, Comments on Judicial Creativity, 69 IOWA L. REV. 1, 13-17 (1983).
194. See, e.g., Citizens Ins. Co. of N.J. v. Foxbilt, Inc., 226 F.2d 641, 643 (8th Cir. 1955); Dierks Lumber & Coal Co. v. Barnett, 221 F.2d 695, 697 (8th Cir. 1955).
195. Bergman, supra note 187, at 1014 & n.266; see Regents of the Univ. of Minn. v. Chief Indus., 106 F.3d 1409, 1412-15 (8th Cir. 1997) (Lay, J., dissenting) (arguing that the court characterized state precedent too narrowly).
196. U.C.C. § 1-103. See also supra notes 16-29 and accompanying text.
197. U.C.C. § 2-271. See also supra notes 30-37 and accompanying text.
198. See, e.g., City of Willmer v. Short-Elliott-Hendrickson, Inc., 512 N.W.2d 872, 876 n.6 (Minn. 1994); Hapka v. Paquin Farms, 458 N.W.2d 683, 688 (Minn. 1990); Superwood Corp. v. Siempelkamp, 311 N.W.2d 159, 161 (Minn. 1981).
199. East River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858, 866 (1986). See Bernstein, supra note 64, at 120 & n.42.
200. See supra notes 80-91 and accompanying text.
201. See supra notes 118-124 and accompanying text.
202. See Consolidated Sch. Dist. No. 102 v. Walter, 66 N.W.2d 881, 885 (Minn. 1954) (holding that the common law rule that possibilities of reverter are not alienable can be modified only by the legislature); Jung v. Saint Paul Fire Dep't Relief Ass'n, 27 N.W.2d 151, 153 (Minn. 1947) (noting that courts cannot change the common law rule that illegitimates are not considered "children" in wills); Congdon v. Congdon, 200 N.W. 76, 82 (Minn. 1924) (holding only the legislature may modify common law property rules); In re Hulett's Estate, 69 N.W. 31, 35-36 (Minn. 1896) (stating that the courts cannot change common law marriage rules).
203. See Budgetel Inns, Inc. v. Micros Sys., Inc., 8 F. Supp. 2d 1137, 1146 n.2 (E.D. Wis. 1998) (discussing the small number of courts that decline to use the Economic Loss Doctrine).
204. See id. at 1141 (stating that "[t]he 'economic loss doctrine'is a judicially created doctrine providing that a commercial purchaser of a product cannot recover from a manufacturer under tort theories damages that are solely economic losses").
205. Northern States Power Co. v. International Tel. & Tel. Corp., 550 F. Supp. 108, 112 (D. Minn. 1982).
206. See generally Mark W. Peacock, An Equitable Approach to Products Liability Statutes of Repose, 14 N. ILL. U. L. REV. 223, 241 (1993) (stating that courts should ensure fraud is not rewarded and the interests of society outweigh interests of manufacturers); Phillips, supra note 42, at 325 (discussing deceit and fraudulent concealment).
207. Phillips, supra note 42, at 381.
208. Turkish v. Kasenetz, 27 F.3d 23, 27-28 (2d Cir. 1994); Martin Marietta v. International Telecomm., 991 F.2d 94, 99 (4th Cir. 1992); Slater v. KFC Corp., 621 F.2d 932, 935 (8th Cir. 1980); Gambino v. Music TV, Inc., 932 F. Supp. 1399, 1400 (M.D. Fla. 1996); TBG, Inc. v. Bendis, 841 F. Supp. 1538, 1565-66 (D. Kan. 1993), reconsideration granted in part, 845 F. Supp. 1459 (D. Kan. 1994); Andrews v. Fitzgerald, 823 F. Supp. 356, 379 (M.D.N.C. 1993); Public Serv. Enter. Group, Inc. v. Philadelphia Elec. Co., 722 F. Supp. 184, 215 (D.N.J. 1989); Nimis v. Saint Paul Turners, 521 N.W.2d 54, 57 (Minn. Ct. App. 1994); First Nat'l Bank of Barron v. Strimling, 241 N.W.2d 478, 481 (Minn. 1976); State v. AAMCO Automatic Transmissions, Inc., 199 N.W.2d 444, 448 (Minn. 1972).
209. See Budgetel Inns, 8 F. Supp. 2d at 1148 (discussing fraud and the Economic Loss Doctrine); Stoughton Trailers, Inc. v. Henkel Corp., 965 F. Supp. 1227, 1236 (W.D. Wis. 1997) (refusing to extend the Economic Loss Doctrine to fraud claims).
210. Summers, supra note 28, at 197-98.
211. Esquibel, supra note 52, at 845.
212. Schmucking v. Mayo, 235 N.W. 633, 634 (Minn. 1931).
213. It is in this manner that one can reconcile those cases where innocent or negligent misrepresentation has been barred by the U.C.C. and/or the Economic Loss Doctrine. The same policy considerations that exist to deter and punish deceit and misrepresentation simply do not exist where the misrepresentation is the product of innocent or negligent behavior.
214. BLACK'S LAW DICTIONARY 1313 (6th ed. 1990).
215. RESTATEMENT (THIRD) OF TORTS § 9 (1997).
216. Steenson, supra note 26, at 3.
217. Id.
218. RESTATEMENT (THIRD) OF TORTS § 9 (1997).
219. James A. Henderson, Jr., Restatement Third, Torts: Products Liability: What Hath the ALI Wrought, 64 DEF. COUNS. J. 501, 522 (1997). See Victor E. Schwartz, The Restatement (Third) of Torts: Products Liability: A Guide to Its Highlights, 34 TORT & INS. L. J. 85, 92 (1998) (stating that Restatement (Third) duplicates § 402B of the Restatement (Second)); Steenson, supra note 26, at 62 (discussing the misrepresentation section of Restatement (Second)).
220. James A. Henderson, Jr., Restatement Third, Torts: Products Liability: What Hath the ALI Wrought, 64 DEF. COUNS. J. 501, 522 (1997). See Victor E. Schwartz, The Restatement (Third) of Torts: Products Liability: A Guide to Its Highlights, 34 TORT & INS. L. J. 85, 92 (1998) (stating that Restatement (Third) duplicates § 402B of the Restatement (Second)); Steenson, supra note 26, at 62 (discussing the misrepresentation section of Restatement (Second)).
221. Section 310 of the Restatement (Second) of Torts is entitled "Conscious Misrepresentation Involving Risk of Physical Harm," and reads as follows: An actor who makes a misrepresentation is subject to liability to another for physical harm which results from an act done by the other or a third person in reliance upon the truth of the representation, if the actor (a) intends his statement to induce or should realize that it is likely to induce action by the other, or a third person, which involves an unreasonable risk of physical harm to the other, and (b) knows (i) that the statement is false, or (ii) that he has not the knowledge which he professes. RESTATEMENT (SECOND) OF TORTS § 310 (1965) (emphasis added).
222. Section 311 of the Restatement (Second) of Torts is entitled "Negligent Misrepresentation Involving Risk of Physical Harm," and reads as follows: (1) One who negligently gives false information to another is subject to liability for physical harm caused by action taken by the other in reasonable reliance upon such information, where such harm results (a) to the other, or (b) to such third persons as the actor should expect to be put in peril by the action taken. (2) Such negligence may consist of failure to exercise reasonable care (a) in ascertaining the accuracy of the information, or (b) in the manner in which it is com municated. Id. at § 311 (emphasis added).
223. Section 402B of the Restatement (Second) of Torts is entitled "Misrepresentation by Seller of Chattels to Consumer," and reads as follows: One engaged in the business of selling chattels who, by advertising, labels, or otherwise, makes to the public a misrepresentation of a material fact concerning the character or quality of a chattel sold by him is subject to liability for physical harm to a consumer of the chattel caused by justifiable reliance upon the misrepresentation, even though (a) it is not made fraudulently or negligently, and (b) the consumer has not brought the chattel from or entered into any contractual relation with the Seller. Id. at § 402B (emphasis added).
224. RESTATEMENT (THIRD) OF TORTS § 9 cmt. e (1997).
225. Steenson, supra note 26, at 63 nn.313-14.
226. U.C.C. § 2-725(1).
227. See, e.g., MINN. STAT. § 541.05, subd. 1(6) (1998).
228. See U.C.C. § 2-316 cmt. 8 (stating that the "[a]pplication of the Doctrine of 'Caveat Emptor' in all cases where the buyer examines the goods regardless of statements made by the seller is . . . rejected by this Article"); see also Cousineau v. Walker, 613 P.2d 608, 614, 616 (Alaska 1980) (rejecting the doctrine of "Caveat Emptor" and holding that a buyer may rely on the material representations by the seller); Gerdin v. Princeton State Bank, 371 N.W.2d 5, 8-9 (Minn. Ct. App. 1985), aff'd, 384 N.W.2d 868, 871 (Minn. 1986) (same).
229. FED. R. CIV. P. 9(b). See All-Tech Telecom, Inc. v. Amway Corp., 174 F.3d 862, 867 (7th Cir. 1999) ("[T]he fraud tort comes with safeguards against false claims, such as the requirement of pleading fraud with particularity . . . .").
230. FED. R. CIV. P. 11.
231. Id. at 12(b)(6).
232. Id at 56(b) & (c).
233. Id. at 50. See All-Tech Telecom, Inc. v. Amway Corp., 174 F.3d 862, 867 (7th Cir. 1999) (noting that some jurisdictions subject fraud claims to "a heightened burden of proof - clear and convincing evidence versus a bare preponderance of the evidence, the standard civil burden").
234. FED. R. CIV. P. 59(a).
235. 44 Fed. Reg. 62,714 (proposed Oct. 31, 1979).
236. MODEL UNIF. PROD. LIAB. ACT, Overview, at 1 (1979).
237. MODEL UNIF. PROD. LIAB. ACT § 101 & preamble, 44 Fed. Reg. 62,716 (1979).
238. Id.
239. See supra notes 26-49 and accompanying text.
240. See supra notes 38-45 and accompanying text.
241. See 37 C.J.S. Fraud § 7 (1997).
242. See U.C.C. § 2-721; see also Monserud, supra note 34, at 472-73 & nn.211-13; Summers, supra note 28, at 223.
243. See ROBERT E. KEETON & ALAN I. WIDISS, INSURANCE LAW § 5.3(a), at 475 (student ed. 1988); 18 COUCH ON INSURANCE 2d § 74:663, at 976-79 (rev. ed. 1983 & Supp. 1996). See, e.g., Saint Paul Ins. Cos. v. Talladege Nursing Home, Inc., 606 F.2d 631, 633-34 (5th Cir. 1979).
244. KEETON & WIDISS, supra note 237, § 5.3(a), at 475; Brent R. Lindahl, Insurance Coverage for an Innocent Co-Insured Spouse, 23 WM. MITCHELL L. REV. 433, 434 & nn.2-5 (1997); Rachel R. Watkins Schoenig, Property Insurance and the Innocent Co-Insured: Was It All Pay and No Gain for the Innocent Co-Insured?, 43 DRAKE L. REV. 893, 894-95 (1995).
245. KEETON & WIDISS, supra note 237, § 5.3(a), at 475; Brent R. Lindahl, Insurance Coverage for an Innocent Co-Insured Spouse, 23 WM. MITCHELL L. REV. 433, 434 & nn.2-5 (1997); Rachel R. Watkins Schoenig, Property Insurance and the Innocent Co-Insured: Was It All Pay and No Gain for the Innocent Co-Insured?, 43 DRAKE L. REV. 893, 894-95 (1995).
246. UNIF. PROD. LIAB. ACT § 110(B)(2)(b)(1979).
247. 44 Fed. Reg. 62,714-62,716 (proposed Oct. 31, 1979).
248. MODEL UNIF. PROD. LIAB. ACT, Overview, at 3 (1979).
249. See CONN. GEN. STAT. §§ 52-572m to 52-572r (1997); KAN. STAT. ANN. §§ 60-3301 to 60-3307 (1994); LA. REV. STAT. ANN. §§ 2800.51 to 2800.59 (1997); WASH. REV. CODE §§ 7.72.010 to 7.72.060 (1998); see also Celia E. Holuk & Donna L. Walker, Products Liability - Tort Reform: An Overview of Washington's New Act, 17 GONZ. L. REV. 357, 370-71 (1982); John Kennedy, A Primer on the Louisiana Products Liability Act, 49 LA. L. REV. 565, 569 (1989); Keith Moheban, Hodder v. Goodyear: End of the Road for the Useful Life Defense, 73 MINN. L. REV. 1081, 1091 (1989); William Edward Westerbeke, Some Observations on the Kansas Product Liability Act (Part 1), 53 J. KAN. B. ASS'N 296, 296 & n.2 (1984); Robert B. Yules, An Analysis of Connecticut's New Product Liability Law, 56 CONN. B.J. 269, 269 (1982).
250. See CONN. GEN. STAT. §§ 52-572m to 52-572r (1997); KAN. STAT. ANN. §§ 60- 3301 to 60-3307 (1994); LA. REV. STAT. ANN. §§ 2800.51 to 2800.59 (1997); WASH. REV. CODE §§ 7.72.010 to 7.72.060 (1998); see also Celia E. Holuk & Donna L. Walker, Products Liability - Tort Reform: An Overview of Washington's New Act, 17 GONZ. L. REV. 357, 370-71 (1982); John Kennedy, A Primer on the Louisiana Products Liability Act, 49 LA. L. REV. 565, 569 (1989); Keith Moheban, Hodder v. Goodyear: End of the Road for the Useful Life Defense, 73 MINN. L. REV. 1081, 1091 (1989); William Edward Westerbeke, Some Observations on the Kansas Product Liability Act (Part 1), 53 J. KAN. B. ASS'N 296, 296 & n.2 (1984); Robert B. Yules, An Analysis of Connecticut's New Product Liability Law, 56 CONN. B.J. 269, 269 (1982).
251. See CONN. GEN. STAT. §§ 52-572m to 52-572r (1997); KAN. STAT. ANN. §§ 60- 3301 to 60-3307 (1994); LA. REV. STAT. ANN. §§ 2800.51 to 2800.59 (1997); WASH. REV. CODE §§ 7.72.010 to 7.72.060 (1998); see also Celia E. Holuk & Donna L. Walker, Products Liability - Tort Reform: An Overview of Washington's New Act, 17 GONZ. L. REV. 357, 370-71 (1982); John Kennedy, A Primer on the Louisiana Products Liability Act, 49 LA. L. REV. 565, 569 (1989); Keith Moheban, Hodder v. Goodyear: End of the Road for the Useful Life Defense, 73 MINN. L. REV. 1081, 1091 (1989); William Edward Westerbeke, Some Observations on the Kansas Product Liability Act (Part 1), 53 J. KAN. B. ASS'N 296, 296 & n.2 (1984); Robert B. Yules, An Analysis of Connecticut's New Product Liability Law, 56 CONN. B.J. 269, 269 (1982).
252. See CONN. GEN. STAT. §§ 52-572m to 52-572r (1997); KAN. STAT.
253. CONN. GEN. STAT. §§ 52-572m to 52-572r (1997). See Yules, supra note 242, at 269.
254. Yules, supra note 242, at 269.
255. Id.
256. Id. at 270 (footnotes omitted).
257. See CONN. GEN. STAT. § 52-572m(b) (1997).
258. Id.
259. CONN. GEN. STAT. § 52-577a(a) (1997). See Yules, supra note 242, at 270 (footnote omitted).
260. CONN. GEN. STAT. § 52-577a(d) (1997). See Yules, supra note 242, at 270-71.
261. WASH. REV. CODE §§ 7.72.010-.060 (1998).
262. See generally Holuk & Walker, supra note 242, at 357 (discussing the development of strict liability in product liability cases).
263. Bruce L. Schroeder, Washington's Useful Safe Life: Snipping Off the Long Tail of Product Liability, 57 WASH. L. REV. 503, 503, 509 (1982); see Holuk & Walker, supra note 242, at 357 (discussing the development of strict liability in product liability cases).
264. WASH. REV. CODE § 7.72.030 (1998).
265. Id. § 7.72.040(1)(c).
266. Id. § 7.72.010 (preamble).
267. Philip A. Talmadge, Washington's Product Liability Act, 5 U. PUGET SOUND L. REV. 1, 10 (1981).
268. WASH. REV. CODE § 7.72.010(4) (emphasis added).
269. KAN. STAT. ANN. §§ 60-3301 to 60-3307 (1994). See William Edward Westerbeke, Some Observations on the Kansas Product Liability Act (Part 2), 54 J. KAN. B. ASS'N 39, 51 (1985) (concluding that the recent revisions to the Kansas Code would have little or no effect on most cases); Westerbeke, supra note 242, at 296 (noting that some of the Code's recent revisions have their origin in the Uniform Product Liability Act); William Edward Westerbeke, Survey of Kansas Law: Torts, 33 KAN. L. REV. 1, 63 (1984) (discussing recent important products liability cases).
270. KAN. STAT. ANN. §§ 60-3301 to 60-3307 (1994). See William Edward Westerbeke, Some Observations on the Kansas Product Liability Act (Part 2), 54 J. KAN. B. ASS'N 39, 51 (1985) (concluding that the recent revisions to the Kansas Code would have little or no effect on most cases); Westerbeke, supra note 242, at 296 (noting that some of the Code's recent revisions have their origin in the Uniform Product Liability Act); William Edward Westerbeke, Survey of Kansas Law: Torts, 33 KAN. L. REV. 1, 63 (1984) (discussing recent important products liability cases).
271. KAN. STAT. ANN. § 60-3303 (1994).
272. Id. § 60-3303(b)(2)(B).
273. Westerbeke, supra note 242, at 305.
274. LA. REV. STAT. ANN. §§ 2800.51 to 2800.59 (West 1997). See Kennedy, supra note 242, at 569.
275. LA. REV. STAT. ANN. §§ 2800.52, 2800.54 (West 1997). See John Kennedy, Highlights, for Lawyers, of the 1988 Regular Legislative Session, 36 LA. B.J. 165, 165-69 (1988); Kennedy, supra note 242, at 568, 571.
276. See, e.g., Bernard v. Ferrell Gas, Inc., 689 So. 2d 554, 558 (La. Ct. App. 1997); Ashley v. General Motors Corp., 666 So. 2d 1320, 1321 (La. Ct. App. 1996).
277. See, e.g., In re Ford Motor Co. Vehicle Paint Litig., No. MDL 1063, 1996 WL 426548, at *17 (E.D. La. July 30, 1996) (applying Louisiana law); Barrie v. VP Exterminators, 625 So. 2d 1007, 1014 (La. 1993).
278. MINN. STAT. § 604.10(e) (1998).
279. 311 N.W.2d 159, 162 (Minn. 1981).
280. Id. at 162.
281. 550 F. Supp. 108 (D. Minn. 1982).
282. Id. at 111.
283. Id. at 111-12 (citing Clements Auto Co. v. Service Bureau Corp., 444 F.2d 169 (8th Cir. 1971); Fischer v. Division W. Chinchilla Ranch, 310 F. Supp. 424 (D. Minn. 1970); General Corp. v. General Motors Corp., 184 F. Supp. 231 (D. Minn. 1960)).
284. Id. at 112.
285. See, e.g., McCarthy Well Co. v. Saint Peter Creamery, Inc., 410 N.W.2d 312, 314-15 (Minn. 1987) (concluding that "commercial transactions" to which Economic Loss Doctrine applies limited to transactions governed by U.C.C.); Valley Farmers' Elevator v. Lindsay Bros., 398 N.W.2d 553, 556-57 (Minn. 1987) (holding that the Economic Loss Doctrine applied to sale of goods that involved improvement to real property); S.J. Groves & Sons Co. v. Aerospatiale Helicopter Corp., 374 N.W.2d 431, 434 (Minn. 1985) (holding that the Economic Loss Doctrine applied to limit recovery for damage to other property notwithstanding personal injury sustained by third party); Minneapolis Soc'y of Fine Arts v. Parker-Klein Assocs., 354 N.W.2d 816, 819-21 (Minn. 1984) (clarifying "other property" exception to Economic Loss Doctrine).
286. See Hapka v. Paquin Farms, 458 N.W.2d 683, 687-88 (Minn. 1990).
287. Id. at 688.
288. Id. Notably, the Minnesota Supreme Court only applied the doctrine to the negligence and strict liability claims in Hapka, while letting stand the trial court's decision to submit a misrepresentation claim to the jury. Id. at 685 & n.2.
289. Id. at 688.
290. Id.
291. See, e.g., AKA Distrib. Co. v. Whirlpool Corp., 137 F.3d 1083, 1086 n.3 (8th Cir. 1998); Regents of the Univ. of Minn. v. Chief Indus., 106 F.3d 1409, 1413 & n.4 (8th Cir. 1997) (Lay, J., dissenting); Zum Berge v. Northern States Power Co., 481 N.W.2d 103, 107 (Minn. Ct. App. 1992). See also Gregory P. Brenny, A Survey of Important Decisions of the Minnesota Supreme Court: The 1990-1991 Term, 18 WM. MITCHELL L. REV. 205, 205 (1992); Jacquelyn K. Brunmeier, Death by Footnote: The Life and Times of Minnesota's Economic Loss Doctrine, 19 WM. MITCHELL L. REV. 871, 883 (1993); Jonathan M. Bye & Eric J. Peck, New Windows on Tort Claims: Minnesota's Economic Loss Doctrine, 55 BENCH & BAR 41, 43 (May-June 1998); John E. Simonett, An Introduction of Essays on the Minnesota Constitution, 20 WM. MITCHELL L. REV. 227, 231 &n.17 (1994).
292. See, e.g., AKA Distrib. Co. v. Whirlpool Corp., 137 F.3d 1083, 1086 n.3 (8th Cir. 1998); Regents of the Univ. of Minn. v. Chief Indus., 106 F.3d 1409, 1413 & n.4 (8th Cir. 1997) (Lay, J., dissenting); Zum Berge v. Northern States Power Co., 481 N.W.2d 103, 107 (Minn. Ct. App. 1992). See also Gregory P. Brenny, A Survey of Important Decisions of the Minnesota Supreme Court: The 1990-1991 Term, 18 WM. MITCHELL L. REV. 205, 205 (1992); Jacquelyn K. Brunmeier, Death by Footnote: The Life and Times of Minnesota's Economic Loss Doctrine, 19 WM. MITCHELL L. REV. 871, 883 (1993); Jonathan M. Bye & Eric J. Peck, New Windows on Tort Claims: Minnesota's Economic Loss Doctrine, 55 BENCH & BAR 41, 43 (May-June 1998); John E. Simonett, An Introduction of Essays on the Minnesota Constitution, 20 WM. MITCHELL L. REV. 227, 231 &n.17 (1994).
293. See, e.g., AKA Distrib. Co. v. Whirlpool Corp., 137 F.3d 1083, 1086 n.3 (8th Cir. 1998); Regents of the Univ. of Minn. v. Chief Indus., 106 F.3d 1409, 1413 & n.4 (8th Cir. 1997) (Lay, J., dissenting); Zum Berge v. Northern States Power Co., 481 N.W.2d 103, 107 (Minn. Ct. App. 1992). See also Gregory P. Brenny, A Survey of Important Decisions of the Minnesota Supreme Court: The 1990-1991 Term, 18 WM. MITCHELL L. REV. 205, 205 (1992); Jacquelyn K. Brunmeier, Death by Footnote: The Life and Times of Minnesota's Economic Loss Doctrine, 19 WM. MITCHELL L. REV. 871, 883 (1993); Jonathan M. Bye & Eric J. Peck, New Windows on Tort Claims: Minnesota's Economic Loss Doctrine, 55 BENCH & BAR 41, 43 (May-June 1998); John E. Simonett, An Introduction of Essays on the Minnesota Constitution, 20 WM. MITCHELL L. REV. 227, 231 &n.17 (1994).
294. See, e.g., AKA Distrib. Co. v. Whirlpool Corp., 137 F.3d 1083, 1086 n.3 (8th Cir. 1998); Regents of the Univ. of Minn. v. Chief Indus., 106 F.3d 1409, 1413 & n.4 (8th Cir. 1997) (Lay, J., dissenting); Zum Berge v. Northern States Power Co., 481 N.W.2d 103, 107 (Minn. Ct. App. 1992). See also Gregory P. Brenny, A Survey of Important Decisions of the Minnesota Supreme Court: The 1990-1991 Term, 18 WM. MITCHELL L. REV. 205, 205 (1992); Jacquelyn K. Brunmeier, Death by Footnote: The Life and Times of Minnesota's Economic Loss Doctrine, 19 WM. MITCHELL L. REV. 871, 883 (1993); Jonathan M. Bye & Eric J. Peck, New Windows on Tort Claims: Minnesota's Economic Loss Doctrine, 55 BENCH & BAR 41, 43 (May-June 1998); John E. Simonett, An Introduction of Essays on the Minnesota Constitution, 20 WM. MITCHELL L. REV. 227, 231 &n.17 (1994).
295. See AKA Distrib. Co. v. Whirlpool Corp., 137 F.3d 1083, 1086 n.3 (8th Cir. 1998); Minnesota Forest Prods., Inc. v. Ligna Mach., Inc., 17 F. Supp. 2d 892, 903 (D. Minn. 1998). Section 604.10 initially read as follows: (a) Economic loss that arises from a sale of goods that is due to damage to tangible property other than the goods sold may be recovered in tort as well as in contract, but economic loss that arises from a sale of goods between parties who are each merchants in goods of the kind is not recoverable in tort. (b) Economic loss that arises from a sale of goods, between merchants, that is not due to damage to tangible property other than the goods sold may not be recovered in tort. (c) The economic loss recoverable in tort under this section does not include economic loss due to damage to the goods themselves. MINN. STAT. § 604.10, subd. (a)-(c) (emphasis added).
296. Id.
297. Memorandum from Kathleen Pontius on Uniform Commercial Code Economic Loss Legislation to Senator LeRoy A. Stumpf (Apr. 3, 1998) (on file with author); Remedies for Fraud, House Republican Research Analysis (Apr. 7, 1997) (on file with author).
298. Memorandum from Kathleen Pontius to Senator LeRoy A. Stumpf, supra note 283.
299. Id.
300. See Lloyd F. Smith Co. v. Den-Tal-Ez, Inc., 491 N.W.2d 11, 14 (Minn. 1992).
301. See Bentz v. A.O. Smith, 431 N.W.2d 528, 529, 533 (Minn. 1988); Easton Farmers Elevator Co. v. Chromalloy Am. Corp., 246 N.W.2d 705, 706 (Minn. 1976); Hydra-Mac, Inc. v. Onan Corp., 430 N.W.2d 846, 854 (Minn. Ct. App. 1989), aff'd in pertinent part, 450 N.W.2d 913, 914 n.1 (Minn. 1990); St. Croix Printing v. Rockwell Int'l, 428 N.W.2d 877, 881 (Minn. Ct. App. 1988); Hayes v. Northwood Panelboard Co., 415 N.W.2d 687, 688 (Minn. Ct. App. 1987); Yost v. Millhouse, 373 N.W.2d 826, 828 (Minn. Ct. App. 1985); Sohns v. Pederson, 354 N.W.2d 852, 854-55 (Minn. Ct. App. 1984).
302. Superwood Corp. v. Siempelkamp Corp., 311 N.W.2d 159, 160-62 (Minn. 1981); Seely v. White Motor Co., 403 P.2d 145, 150-52 (Cal. 1965).
303. See, e.g., Hutchinson Util. Comm'n v. Curtiss-Wright Corp., 775 F.2d 231, 233 (8th Cir. 1985) (applying Minnesota law); Hennepin County v. AFG Indus., Inc., 726 F.2d 149, 150 (8th Cir. 1984) (applying Minnesota law); LeSueur Creamery, Inc. v. Haskon, Inc., 660 F.2d 342, 345 (8th Cir. 1981) (applying Minnesota law); Clements Auto Co. v. Service Bureau Corp., 444 F.2d 169, 178-79 (8th Cir. 1971) (applying Minnesota law); Agristor Leasing v. Kramer, 640 F. Supp. 187, 190-91 (D. Minn. 1986) (applying Minnesota law); Agristor Leasing v. Guggisberg, 617 F. Supp. 902, 904-05 (D. Minn. 1985) (applying Minnesota law); Northern States Power Co. v. International Tel. & Tel. Corp., 550 F. Supp. 108, 111-12 (Minn. 1982) (applying Minnesota law).
304. Northern States Power Co., 550 F. Supp. at 112.
305. 808 F. Supp. 684 (D. Minn. 1992). Notably, in relying upon the unpublished decision in ETM Graphics, Inc. v. H.B. Fuller Co., No. C2-91-2103, 1992 WL 61394 (Minn. Ct. App. Mar. 31, 1992)(interpreting Hapka), the Minnesota Federal District Court did not take into account that the Minnesota Court of Appeals issued another unpublished decision approximately one month after ETM was filed which held that the Economic Loss Doctrine does not bar claims for fraud and misrepresentation. See Jones v. Trucks of Duluth, Inc., No. C3-91-1476, 1992 WL 83311 (Minn. Ct. App. Apr. 28, 1992). Further, the court did not take into account the fact that, in Hapka, the plaintiff's claims for misrepresentation had been permitted to proceed to the jury. See Hapka v. Paquin Farms, 458 N.W.2d 683, 685 n.2 (Minn. 1990); see also Steen" son, supra note 26, at 63 nn.313-14 (noting that in Minnesota there can be both claims of fraud and misrepresentation brought with products liability claims).
306. Nelson Distrib., 808 F. Supp. at 687.
307. Id.
308. 550 F. Supp. 108 (D. Minn. 1982).
309. Id. at 112. For further discussion, see supra notes 270-273 and accompanying text.
310. No. C2-91-2103, 1992 WL 61394 (Minn. Ct. App. Mar. 31, 1992).
311. Id. at *2 (stating that "[t]he Minnesota Supreme Court has held that 'the Uniform Commercial Code must control exclusively with respect to damages in a commercial transaction which involves property damages only") (quoting Hapka v. Paquin Farms, 458 N.W.2d 683, 688 (Minn. 1990)).
312. See supra notes 98-117 and accompanying text.
313. ETM Graphics, 1992 WL 61394, at *2 (quoting Hapka, 458 N.W.2d at 688).
314. Nelson Distrib., Inc. v. Stewart-Warner Indus. Balancers, 808 F. Supp. 684, 687-88 (D. Minn. 1992). Specifically, the Minnesota Supreme Court in Hapka had noted: The law is entitled to expect parties to a commercial transaction to be knowledgeable and of relatively equal bargaining power so that warranties can be negotiated to the parties' mutual advantage. Having negotiated the warranties and any limitations of liability, that a defective product causes damage to other property should not defeat the liability parameters that parties have set by opening the door to tort theories of recovery. Id. (quoting Hapka, 458 N.W.2d at 688) (emphasis added).
315. Id. at 688.
316. See, e.g., In re Grain Land Coop., 978 F. Supp. 1267, 1279-80 (D. Minn. 1997) (following Hapka); Upsher-Smith Lab. v. Mylan Lab., 944 F. Supp. 1411, 1435-36 (D. Minn. 1996) (same).
317. 137 F.3d 1083 (8th Cir. 1998).
318. Id. at 1086-87. See supra notes 171-179 and accompanying text.
319. AKA Distrib. Co. v. Whirlpool Corp., 948 F. Supp. 903, 907 (D. Minn. 1996).
320. The Honorable Diana E. Murphy was appointed to the United States Court of Appeals for the Eighth Circuit in 1994.
321. AKA Distrib., 137 F.3d at 1086 (citing In re Grain Land Coop., 978 F. Supp. 1267 (D. Minn. 1997); Upsher-Smith Labs. v. Mylan Labs., 944 F. Supp. 1411 (D. Minn. 1996); Nelson Distrib., Inc. v. Stewart-Warner Corp., 808 F. Supp. 684 (D. Minn. 1992), as directly stating the contrary of the proposition stated in Northern States Power Co. v. International Tel. & Tel. Corp., 550 F. Supp. 108 (D. Minn. 1982)).
322. AKA Distrib., 137 F.3d at 1086.
323. Id. (citations omitted).
324. Id. at 1086-87 (citations & footnote omitted).
325. Id. at 1086.
326. See supra notes 123-148 and accompanying text.
327. MINN. STAT. § 604.10(e) (1998).
328. Bye & Peck, supra note 280, at 44. The authors of this article participated in the legislative process as counsel for the plaintiffs in that litigation, Marvin Lumber & Cedar Co. and Marvin Windows of Tennessee, Inc., who supported the clarification. The United States District Court for the District of Minnesota subsequently held the clarification did not apply to the action involving these parties to that litigation because the underlying transactions occurred prior to the original enactment of this statute. Marvin Lumber & Cedar Co. v. PPG Indus., Inc., 34 F. Supp. 2d 738, 742-44 (D. Minn. 1999). This matter is currently on appeal before the United States Court of Appeals for the Eighth Circuit.
329. Memorandum from Kathleen Pontius on Uniform Commercial Code Economic Loss Legislation to Senator LeRoy A. Stumpf, supra note 283; Remedies for Fraud, House Republican Research Analysis, supra note 283.
330. Professor Linda Rusch, Audio tape of Proceedings of Minnesota Senate Judiciary Committee, at 42:21-42:23 (Apr. 6-7, 1998) (on file with author).
331. See Bye & Peck, supra note 280, at 44.
332. Senator LeRoy A. Stumpf, Audio tape of Proceedings of Minnesota Senate Floor Special Session, at 4:1-4:9 & 36:16-37:5 (Apr. 20, 1998) (on file with author).
333. Senator Thomas M. Neuville, Audio tape of Proceedings of Minnesota Senate Floor Special Session, at 20:5-20:8 (Apr. 20, 1998) (on file with author).
334. Representative Jim Tunheim, Audio tape of Proceedings of Minnesota House of Representatives Floor Debate, at 3:1-3:5, 3:10-3:16, & 3:20-3:25 (Apr. 22, 1998) (on file with author).
335. Journal of the Senate, 80th Legis., Special Sess. 18 (Minn. Apr. 20, 1998) (49 voting for and 13 voting against the legislation); Journal of the House, 80th Legis., Special Sess. 26-27 (Minn. Apr. 22, 1998) (99 voting for and 30 voting against the legislation).
336. JoEllen Mitchell-Lockyer, Common Law Misrepresentation In Sales Cases - An Argument For Code Dominance, 19 FORUM 361, 377-78 (1984).
337. Budgetel Inns, Inc. v. Micros Sys. Inc., 34 F. Supp. 2d 720, 724-25 (E.D. Wis. 1999); see also Stoughton Trailers, Inc. v. Henkel Corp., 965 F. Supp. 1227, 1236 (W.D. Wis. 1997) ("When a seller is lying about the subject matter of a contract, the party best suited to assess the risk of economic loss switches from being the purchaser, who cannot possibly know which of several statements maybe a lie, to the seller, who certainly knows.").
338. Stoughton Trailers, 965 F. Supp. at 1236.
339. Budgetel Inns, 34 F. Supp. 2d at 725.
340. Id. ("More sophistication brings with it more clever ways to lie.").
341. Schmucking v. Mayo, 235 N.W. 633, 634 (Minn. 1931).