Court Opinion

ID: 2995986
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:24:04.13711+00
Date Added: 2024-06-11T15:03:18.192566
License: Public Domain

In the
United States Court of Appeals
               For the Seventh Circuit
                          ____________

Nos. 01-4029, 01-4073, 02-1071, and 02-1171
VIGORTONE AG PRODUCTS, INC., formerly
  known as PROVIMI ACQUISITION CORPORATION,
                               Plaintiff-Appellee, Cross-Appellant,

                                  v.

PM AG PRODUCTS, INC.,
                           Defendant-Appellant, Cross-Appellee.
                          ____________
            Appeals from the United States District Court
        for the Northern District of Illinois, Eastern Division.
            No. 99 C 7049—Harry D. Leinenweber, Judge.
                          ____________
      ARGUED JUNE 7, 2002—DECIDED NOVEMBER 6, 2002
                          ____________

 Before BAUER, POSNER, and RIPPLE, Circuit Judges.
  POSNER, Circuit Judge. This diversity suit charges fraud
and breach of contract in the sale of a business called
Vigortone, a manufacturer of “swine premix,” which is a
vitamin- and mineral-enriched food supplement for pigs.
The fraud claim is governed by Illinois law; the contract
claim is governed by Delaware law by virtue of a choice
of law provision in the contract.
2                    Nos. 01-4029, 01-4073, 02-1071, 02-1171

  Vigortone was a subsidiary of an animal-nutrition busi-
ness called PM AG Products, which sold Vigortone to
Provimi, a large manufacturer of agricultural products,
including animal food products, for $39.5 million. PM is
the defendant. The plaintiff, Vigortone Ag Products, is a
Provimi subsidiary that was created to purchase Vigortone.
To avoid confusion, we’ll call the plaintiff Provimi.
  Pigs are raised in stages. Piglets are kept at the sow farm
until they weigh 12 pounds, and then they are weaned
and shipped to “nurseries.” When, having graduated from
“weaners” to “feeders,” they reach 50 pounds, they are
transferred from the nursery to a finishing barn and raised
to market weight. Vigortone decided to buy weaners and
feeders and resell them to nurseries and other pig grow-
ers in the hope that both the sellers of the pigs to Vigortone
and the buyers of the pigs from Vigortone would buy their
swine premix from Vigortone. This kind of promotion is
apparently common in the animal-feed business. By the
time Vigortone was sold to Provimi in April of 1998, it
had signed seven contracts with pig farms to buy a total
of 3 million pigs over a 10-year period at specified prices.
But it had made no contracts to sell the pigs, and so it
bore the risk of a change in the market price of the ani-
mals. That risk passed to Provimi with the seven con-
tracts. The price of pigs fell and as a result Provimi, ac-
cording to its expert witness, lost $16 or $17 million. Even
the lower figure is questionable, because it is based on
a price drop most of which occurred months after the
closing and therefore after Provimi discovered the con-
tracts and could have hedged against any further decline;
for it acknowledges having discovered its exposure “short-
ly after the closing.”
  Provimi claims that PM fooled it into thinking that
Vigortone had offsetting sale contracts for all the pigs and
Nos. 01-4029, 01-4073, 02-1071, 02-1171                      3

so bore no risk of price changes in the pig market. The
jury agreed and awarded Provimi $12 million in damages
for fraud and another $3 million in damages for breach
of contract. The district judge thought the awards du-
plicative and so cut out the $3 million. PM appeals from
the judgment against it. Provimi cross-appeals, seeking
restoration of the $3 million in breach of contract dam-
ages and also additional attorney’s fees pursuant to a con-
tract clause that entitles a party that proves a breach to his
attorney’s fees. The judge awarded Provimi $1 million in
attorney’s fees in the belief that that was the most that
would be consistent with the jury’s award of $3 million
in contract damages. Provimi argues that the fee award
should be more and PM that it should be zero because,
PM argues, Provimi failed to prove a breach of contract.
   There was clear and convincing evidence (required un-
der Illinois law to prove fraud, Ray v. Winter, 367 N.E.2d
678, 682 (Ill. 1977); Niemoth v. Kohls, 524 N.E.2d 1085, 1094
(Ill. App. 1988); Ronan v. Rittmueller, 434 N.E.2d 38, 42 (Ill.
App. 1982)) that during the contract negotiations with
Provimi, PM made false statements about the market
risk that Vigortone had incurred by buying pigs without
entering into offsetting sale contracts in order to hedge
against fluctuations in the price of pigs over the life of
the pig-purchase contracts. PM said the contracts were
part of a pig “pass-through” or pig “placement” program,
terms understood in the industry to refer to the broker-
ing (or equivalent) of pigs as a promotional device that
does not involve assuming any risk of fluctuations in ani-
mal prices. PM even assured Provimi that Vigortone’s pass-
through program involved absolutely no market risk.
  These were oral assurances made before the contract
was signed, and PM argues that the integration clause in
the contract precludes Provimi’s relying on such assur-
4                    Nos. 01-4029, 01-4073, 02-1071, 02-1171

ances to establish fraud. The general rule is to the con-
trary. Schlumberger Technology Corp. v. Swanson, 959 S.W.2d
171, 179 (Tex. 1997); Danann Realty Corp. v. Harris, 157
N.E.2d 597, 598-99 (N.Y. 1959); Lewelling v. Farmers Ins. of
Columbus, Inc., 879 F.2d 212, 216 (6th Cir. 1989); UAW-GM
Human Resource Center v. KSL Recreation Corp., 579 N.W.2d
411, 418 (Mich. App. 1998); E. Allan Farnsworth, Contracts
§ 7.4, pp. 442-43 (3d ed. 1999). By virtue of the parol evi-
dence rule, an integration clause prevents a party to a
contract from basing a claim of breach of contract on
agreements or understandings, whether oral or written,
that the parties had reached during the negotiations that
eventuated in the signing of a contract but that they had
not written into the contract itself. Bidlack v. Wheelabrator
Corp., 993 F.2d 603, 608 (7th Cir. 1993); International Market-
ing, Ltd. v. Archer-Daniels-Midland Co., 192 F.3d 724, 730-31
(7th Cir. 1999); Astor Chauffeured Limousine Co. v. Runnfeldt
Investment Corp., 910 F.2d 1540, 1545-46 (7th Cir. 1990);
Olympia Hotels Corp. v. Johnson Wax Development Corp., 908
F.2d 1363, 1373 (7th Cir. 1990). But fraud is a tort, and the
parol evidence rule is not a doctrine of tort law and so
an integration clause does not bar a claim of fraud based
on statements not contained in the contract. Doctrine aside,
all an integration clause does is limit the evidence avail-
able to the parties should a dispute arise over the meaning
of the contract. It has nothing to do with whether the con-
tract was induced, or its price jacked up, by fraud.
   That is just the general rule, though, and it may not be
the rule in Illinois. PM cites Barille v. Sears Roebuck & Co.,
682 N.E.2d 118 (Ill. App. 1997), which holds that an inte-
gration clause does extinguish a claim of fraud based
on precontractual misrepresentations. But Barille contains
no discussion of the issue—just a conclusion—and no
reference to the general rule. Moreover, another case in
Illinois’ intermediate appellate court is directly contrary to
Nos. 01-4029, 01-4073, 02-1071, 02-1171                     5

Barille, though also unreasoned. See Salkeld v. V.R. Busi-
ness Brokers, 548 N.E.2d 1151, 1157-58 (Ill. App. 1989). There
is a dictum to the same effect in another case in the inter-
mediate appellate court. Pecora v. Szabo, 418 N.E.2d 431, 435
(Ill. App. 1981).
  When state law on a question is unclear, which is
surely the proper characterization here, the best guess is
that the state’s highest court, should it ever be pre-
sented with the issues, will line up with the majority of
the states. Wammock v. Celotex Corp., 835 F.2d 818, 820
(11th Cir. 1988); see Amherst Sportswear Co. v. McManus,
876 F.2d 1045, 1048 (1st Cir. 1989); Adkinson v. International
Harvester Co., 975 F.2d 208, 215 (5th Cir. 1992); cf. Liberty
Mutual Ins. Co. v. Metropolitan Life Ins. Co., 260 F.3d 54, 65
(1st Cir. 2001). And the majority rule is that an integration
clause does not bar a fraud claim.
  One consequence of the rule is that parties to contracts
who do want to head off the possibility of a fraud suit
will sometimes insert a “no-reliance” clause into their
contract, stating that neither party has relied on any repre-
sentations made by the other. Rissman v. Rissman, 213 F.3d
381, 383-84 (7th Cir. 2000); First Financial Federal Savings
& Loan Ass’n v. E.F. Hutton Mortgage Corp., 834 F.2d 685,
687 (8th Cir. 1987); Landale Enterprises, Inc. v. Berry, 676
F.2d 506, 507-08 (11th Cir. 1982) (per curiam); Danann Realty
Corp. v. Harris, supra, 157 N.E.2d at 599, 600; see also
Jackvony v. RIHT Financial Corp., 873 F.2d 411, 416-17 (1st
Cir. 1989). Since reliance is an element of fraud, the
clause, if upheld—and why should it not be upheld, at
least when the contract is between sophisticated commer-
cial enterprises—precludes a fraud suit, as the cases we
have just cited make clear. So PM describes what we
have been calling the integration clause as a no-reliance
clause. But it is not. It is a standard integration clause. It
6                    Nos. 01-4029, 01-4073, 02-1071, 02-1171

contains no reference to reliance. What is more, another
provision in the contract, captioned “Disclosure,” states
that “To the best knowledge of [PM], there is no fact
which adversely affects or in the future is likely to ad-
versely affect the Purchased Assets or the Business in
any material respect which has not been set forth or re-
ferred to in this Agreement or the Schedules hereto.” That
sounds like a warranty and one PM violated since it knew
that the enormous market risk which Vigortone had as-
sumed and was being transferred to Provimi might affect
Vigortone’s business adversely, yet it failed to disclose the
risk in the contract or any of its riders. More to the point,
since at the moment we’re discussing the fraud charge
rather than the breach of contract charge, the existence of
such a warranty makes it implausible to suppose that the
integration clause was meant to reach representations de-
signed actively to conceal the existence of an undisclosed
fact likely to harm Vigortone.
   But we must also consider whether Provimi’s reliance
on PM’s representations concerning the absence of mar-
ket risk was “justifiable,” as required for a suit for fraud
to succeed. Charles Hester Enterprises, Inc. v. Illinois Found-
ers Ins. Co., 499 N.E.2d 1319, 1323 (Ill. 1986). The term
“justifiable reliance” is pretty vague. In an effort to clarify
it for the jury, the district judge instructed that reliance
is unjustifiable only if reckless, and he further explained
that what “reckless” means in this context is, as we said
in one of our cases interpreting Illinois fraud law, not
that the victim was careless but, worse, that he closed his
eyes to a known or obvious risk. Mayer v. Spanel Int’l Ltd.,
51 F.3d 670, 676 (7th Cir. 1995). As we put it in another
fraud case governed by Illinois law, AMPAT/Midwest, Inc.
v. Illinois Tool Works Inc., 896 F.2d 1035, 1042 (7th Cir.
1990), “the potential victim of a fraud may not ignore a
manifest danger.” See also Melko v. Dionisio, 580 N.E.2d 586,
Nos. 01-4029, 01-4073, 02-1071, 02-1171                      7

592 (Ill. App. 1991), citing AMPAT/Midwest approvingly;
Schmidt v. Landfield, 169 N.E.2d 229, 231-32 (Ill. 1960);
Costello v. Liberty Mutual Ins. Co., 348 N.E.2d 254, 257 (Ill.
App. 1976); Mayer v. Spanel International Ltd., supra, 51 F.3d
at 675-76 (Illinois law); Dexter Corp. v. Whittaker Corp., 926
F.2d 617, 620 (7th Cir. 1991) (ditto) (“an ostrich can hardly
be said to rely on there being no danger in the vicinity”).
This incidentally is the general rule, e.g., 2 Fowler V.
Harper, Fleming James, Jr. & Oscar S. Gray, The Law of
Torts § 7.8, pp. 423-24 (2d ed. 1986), not anything peculiar
to Illinois.
  Although the jury found that Provimi’s reliance had not
been reckless, this finding has so little basis in the evi-
dence that, even though appellate review of jury verdicts
is highly deferential, Reynolds v. City of Chicago, 296 F.3d
524, 526-27 (7th Cir. 2002), we are compelled to reverse.
Six of Vigortone’s seven contracts for the purchase of
pigs were actually shown to a lawyer who was doing “due
diligence” for Provimi before the purchase of Vigortone
was signed and who summarized the basic provisions
of some of the contracts in a memo to the higher execu-
tives of the company; but no contracts for the sale of
the pigs, or any other documents indicating that the
pig-purchase contracts had been hedged, were shown to
Provimi or its agent, since they did not exist. Provimi
is charged with its agent’s knowledge acquired in the
course of the engagement, Booker v. Booker, 70 N.E. 709,
714 (Ill. 1904); Metropolitan Sanitary District of Greater
Chicago v. Anthony Pontarelli & Sons, Inc., 288 N.E.2d 905,
912 (Ill. App. 1972) (per curiam); New York Marine & Gen-
eral Ins. Co. v. Tradeline (L.L.C.), 266 F.3d 112, 122 (2d Cir.
2001).
  Anyway Provimi had to know there were pig-purchase
contracts because it had been told about the pig place-
8                     Nos. 01-4029, 01-4073, 02-1071, 02-1171

ment program. The absence of any indication of offsetting
or hedging contracts was a gigantic warning flag unaccount-
ably ignored. Provimi, a huge commercial enterprise en-
gaged in the same line of business as the company it was
acquiring (it brags in its Web site that it is “the world lead-
er in animal nutrition solutions”), knew it was about to
become the proud owner of 250,000 pigs, a number that
would eventually swell to 3 million. Its able lawyer assured
us at the argument that his client had been assiduous to
avoid ever owning animals, not wanting to bear the risk of
fluctuations in their prices. All of a sudden it found itself the
current or future owner of an immense number of pigs. It
must have known that the ownership of animals creates a
market risk unless the purchase contracts are hedged. No
document was requested by or shown to Provimi indicating
that any of the contracts had been hedged. Provimi itself
stated, in its statement of uncontested facts in the district
court, that PM had “prepared a ‘Data Room’ containing
information about Old Vigortone, which it made available
to the Provimi representatives at the meeting. The index to
the materials in the Data Room referred to the ‘F/Y 1998 Pig
Source Agreements.’ The pig-purchase contracts were not in
the Data Room.” Precisely: and their absence should have
sent Provimi’s negotiating team hunting for offsetting
sales contracts.
  As we explained in AMPAT, the reason or at least a rea-
son for barring the reckless fraud plaintiff from obtaining
relief is that when a person or firm, especially (we add)
a large, sophisticated commercial enterprise with relevant
experience, closes its eyes to a manifest danger, suspicion
arises that it wasn’t actually fooled by the false represen-
tations of which it is complaining. 896 F.2d at 1042. Maybe
Provimi thought that pig prices would rise and that there-
fore it would make money by bearing market risk; or may-
Nos. 01-4029, 01-4073, 02-1071, 02-1171                   9

be it thought it could readily hedge the contracts after it
bought Vigortone; or maybe it thought Vigortone such a
bargain at $39.5 million that it was willing to assume
some animal-market risk. (The fact that it did not hedge
supports the first inference, that it thought the price of
pigs would rise.) These are just speculations. But they are
considerably more plausible than Provimi’s argument that
despite the absence of documentary evidence which it
would have received from PM had such evidence existed,
it believed that the 3 million pigs that Vigortone had com-
mitted to buy had already been resold.
  Our conclusion owes nothing, however, to PM’s argu-
ment that the district judge improperly excluded admis-
sions by Provimi at an arbitration hearing that preceded
the trial. The contract for the sale of Vigortone to Provimi
provided for arbitration if after the closing either party
believed that an adjustment in the purchase price was
necessary. Provimi did of course believe that, for it ad-
mits that it was soon after the contract closed that it dis-
covered that the pig-purchase contracts were not hedged,
and so an arbitration was conducted (resulting however in
a net adjustment in favor of PM). But the arbitrator in-
sisted and the parties agreed that “neither Party shall in-
troduce as evidence in any subsequent litigation between
the Parties all or any part of any submissions prepared by
the other Party solely for the arbitration proceeding.” The
arbitration clause was explicit that any arbitration, which
was to be limited to accounting issues, would have no
preclusive effect on a suit for breach of contract. The evi-
dence submitted by Provimi in the arbitration included
a statement by an accounting firm it had retained that
during the “due diligence” phase of the contract nego-
tiations, Provimi had made “repeated inquiries” of PM
“regarding the economic impact of the [swine-purchase]
commitments,” that PM had insisted “that the arrange-
10                   Nos. 01-4029, 01-4073, 02-1071, 02-1171

ments were ‘pass-through’ in nature with no negative or
positive economic impact,” but that “because of the econ-
omic uncertainty associated with the Pig Pass-Through Pro-
gram and the swine purchase commitments, as well as the
lack of audited historical financial information, the Buyer
specifically negotiated a provision for the adjustment of
the Purchase Price based on the net assets and liabilities of
the Business as of the Closing Date” (emphasis added). This
could be construed as an admission that Provimi suspected
that Vigortone had failed to hedge its pig-purchase con-
tracts adequately (or at all) and so would bolster the infer-
ence that Provimi ignored a known danger.
  PM argues that the presumption that Rule 402 of the
Federal Rules of Evidence creates in favor of the admission
of relevant evidence should override the parties’ agree-
ment not to use evidence submitted in the arbitration in
any future litigation. We do not agree with this position,
for which there is no support in case law or elsewhere—
certainly not in Rule 402, which does not purport to alter
the many limitations on the admissibility of relevant
evidence. The beauty of arbitration is that it allows dis-
putants to design their own method of dispute resolu-
tion. In this case they wanted a nonpreclusive form of
arbitration, one that would not prevent a suit for breach
of contract, and it made perfectly good sense therefore
for them to agree to bar the use of the evidence presented in
the arbitration in such a suit. Otherwise the arbitration
would become as cumbersome as a trial, with either party
fearful that any slip in its evidentiary submissions would
come back to haunt it in litigation. The analogy to the in-
admissibility of “conduct or statements made in compro-
mise negotiations,” Fed. R. Evid. 408; see Winchester Packag-
ing, Inc. v. Mobil Chemical Co., 14 F.3d 316, 320 (7th Cir.
1994), is apparent.
Nos. 01-4029, 01-4073, 02-1071, 02-1171                  11

  So the fraud verdict must be thrown out; PM is entitled
to judgment as a matter of law on that aspect of the case.
This leaves the breach of contract claim. Remember that
the district judge vacated the jury’s $3 million award of
damages for breach of contract because he thought it
duplicated the fraud award. Provimi argues that he erred
in doing this because the $3 million may well have been
the jury’s estimation of Provimi’s past and anticipated
future losses on the seventh pig-purchase contract, the
one PM had not disclosed to Provimi. The jury might
have thought, Provimi argues, that the failure to disclose—
a clear breach of contract—had been inadvertent and
therefore not fraudulent. This makes no sense. The theory
of fraud presented to and apparently accepted by the jury
was that PM had concealed the existence of any market
risk in its pig pass-through program. There was no ra-
tional basis for supposing that PM might have wanted
to conceal the market risk created by the six contracts that
it showed Provimi but not the market risk created by
the seventh contract.
   We have no idea what the jury was thinking when it
awarded $3 million for breach of contract; no path con-
nects the evidence bearing on the breach of contract claim
to that number or a number remotely like it. We are puz-
zled, therefore, why the judge thought that award the
proper basis for assessing attorney’s fees, although this
is not a puzzle that we’ll have to unravel on this appeal,
since any award of attorney’s fees must abide the new
trial that we are ordering—a trial, unfortunately, that can-
not be limited to damages, because we do not know what
provisions of the contract the jury found had been vio-
lated. PM denies that there was any breach. This is clearly
wrong with respect to the failure to disclose the seventh
pig-purchase agreement. The contract required PM to
furnish Provimi a complete list of Vigortone’s contracts—
12                   Nos. 01-4029, 01-4073, 02-1071, 02-1171

PM does not argue otherwise. Yet even with respect to
that breach, it is far from certain that Provimi suffered
any damages. We know that the six contracts that were
disclosed did not cause Provimi to back out of the deal
or insist on a change in its terms; how likely is it that
disclosure of the seventh would have had any effect?
  PM may, however, have violated other provisions of
the contract as well, and with greater legal consequences.
Remember the warranty that to the best of PM’s knowl-
edge “there is no fact which adversely affects or in the
future is likely to adversely affect the Purchased Assets
or the Business in any material respect which has not
been set forth or referred to in this Agreement or the
Schedules hereto”? As we pointed out earlier, the fact,
which was not disclosed, that PM had failed to hedge
Vigortone’s pig-purchase contracts may well have been
a fact “which adversely affects or in the future is likely
to adversely affect the Purchased Assets or the Business.”
If the jury on remand determines that this warranty (or
some other warranty in the contract) was breached, it will
have to assess damages anew.
  A warranty is a kind of insurance, entitling the benefici-
ary of the warranty to be held harmless against the event
insured against. All-Tech Telecom, Inc. v. Amway Corp., 174
F.3d 862, 869 (7th Cir. 1999); Metropolitan Coal Co. v. Howard,
155 F.2d 780, 784 (2d Cir. 1946) (L. Hand, J.); Council of
Dorset Condominium Apartments v. Dorset Apartments, Civ. A.
No. 90C-10-269, 1992 WL 240365, at *3 (Del. Super. Sept.
24, 1992). In the case of the sale of a business, a breach
of warranty entitles the victim of the breach, by way of
damages, to “the difference between the purchasers’
reasonable expectations as to the worth of the company,
as fairly described in the warranties, and the actual worth
of the company as a result of any breach of warranties.”
Nos. 01-4029, 01-4073, 02-1071, 02-1171                      13

Blodgett Supply Co. v. P.F. Jurgs & Co., 617 A.2d 123, 127
(Vt. 1992); see also Phillips v. Ripley & Fletcher Co., 541 A.2d
946, 950 (Me. 1988). That is what the plaintiff’s expert
purported to estimate, though imperfectly as we noted
at the outset. And we reject PM’s argument that against
whatever unavoidable loss Provimi incurred must be set
off the profits that Provimi made by virtue of the addi-
tional sales of swine premix that the pig-purchase con-
tracts generated. Those profits would have been obtained
even if the contracts had been perfectly hedged. They were
not a benefit conferred on Provimi by PM’s breach.
   It appears, however, that Provimi failed to mitigate its
damages. It discovered its exposure to a change in pig
prices shortly after the closing and could at that time
have averted most of the loss that ensued by prompt
hedging of the pig-purchase contracts that it had inher-
ited. It is not entitled to damages that it could readily
have avoided. Cates v. Morgan Portable Building Corp., 780
F.2d 683, 688-89 (7th Cir. 1985); Messer v. E.F. Hutton & Co.,
833 F.2d 909, 921-22 (11th Cir. 1987). The briefs do not
discuss this point, however, and maybe it has been for-
feited; this is a matter that can be straightened out on
remand.
  If as we have determined Provimi was reckless in fail-
ing to discover that the pig-purchase contracts were not
hedged, it may seem anomalous that it should be able
to obtain contract damages for PM’s failure to hedge. The
general rule, however, is that a party to a contract can
enforce an express warranty even if he should believe
or even does believe that the mishap warranted against
will occur. Suppose one buys an automobile and the
contract of sale contains a warranty that it is a new car. The
condition of the car is such that the buyer is sure it’s a
used car, and a few days after the purchase he discovers
14                   Nos. 01-4029, 01-4073, 02-1071, 02-1171

proof that he was right. He can still enforce the warranty.
CBS Inc. v. Ziff-Davis Publishing Co., 553 N.E.2d 997, 1000-01
(N.Y. 1990); Indeck North American Power Fund, L.P. v. Nor-
web plc, 735 N.E.2d 649, 658-59 (Ill. App. 2000). This is
an application of the principle emphasized by Holmes
that it is possible to make an enforceable promise to do
the impossible, since the practical meaning of the duty
imposed by contract is that the promisor must either
perform or pay damages if he fails to perform. Oliver
Wendell Holmes, Jr., The Common Law 300-02 (1881);
Holmes, “The Path of the Law,” 10 Harv. L. Rev. 457, 462
(1897). It is a general characteristic of insurance that the
promisor has no control over the event that, should it
come to pass, will trigger his duty to pay.
  CBS and Indeck state the general rule, but Delaware,
whose law controls the contract claim, has been said to
require that the party seeking to enforce the warranty have
relied on its being truthful. See Kelly v. McKesson HBOC,
Inc., No. Civ. A. 99C-09-265WCC, 2002 WL 88939, at *8-9
(Del. Super. Jan. 17, 2002); Middleby Corp. v. Hussman Corp.,
No. 90 C 2744, 1992 WL 220922, at *6 (N.D. Ill. Aug. 27,
1992) (discussing Delaware law). The fons et origens of
Delaware’s unorthodox position is an old case called
Loper v. Lingo, 97 A. 585, 586 (Del. Super. 1916), decided
at a time when breach of warranty was considered a
tort, not, as in the modern cases, a breach of contract. The
repetition of Loper in later cases, none by Delaware’s high-
est court has been, we suggest with all due respect, un-
thinking. We greatly doubt that Delaware’s highest court
would follow Loper today.
                                 REVERSED AND REMANDED.
Nos. 01-4029, 01-4073, 02-1071, 02-1171                   15

A true Copy:
       Teste:

                          _____________________________
                          Clerk of the United States Court of
                            Appeals for the Seventh Circuit

                   USCA-02-C-0072—11-6-02