On August 2, 2021, the Tennessee Supreme Court issued its opinion in Milan Supply Chain Solutions Inc. v. Navistar Inc. The opinion affirmed an earlier judgment by the Tennessee Court of Appeals vacating in its entirety a $32 million judgment (including $20 million in punitive damages and $1.3 million in attorney’s fees) against Bulso PLC client Navistar Inc. The Supreme Court also affirmed the Court of Appeals’ decision upholding an award of attorney’s fees to Navistar’s codefendant, Jackson, Tennessee, truck dealer Volunteer International Inc., while holding Volunteer entitled to an award of fees incurred on appeal.
The Court’s ruling rearticulates Tennessee’s economic-loss doctrine, clarifying that in “situations such as this one, involving a contract between sophisticated commercial business entities and a fraudulent inducement claim seeking recovery of economic losses only, the economic loss doctrine applies if “the only misrepresentation[s] by the dishonest party concern the quality or character of the goods sold.”
The Court also expressly held that the defined term “goods” in the Tennessee Consumer Protection Act does not include personal property purchased by a business entity for business purposes, and determined that the trial court did not abuse its discretion in awarding fees under the Consumer Protection Act to Volunteer International, given that the plaintiff produced no evidence at trial substantiating the claim brought against it under the Act.
Navistar and Volunteer were represented throughout the appeal by Bulso PLC members Gino Bulso and Paul Krog, as well as by attorneys from the Washington and Chicago offices of Latham & Watkins LLP.