Court Opinion

ID: 3002116
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:25:06.275225+00
Date Added: 2024-06-11T11:39:09.738561
License: Public Domain

In the

United States Court of Appeals
               For the Seventh Circuit
                          ____________

Nos. 06-4389, 07-1794, 07-2484

E XTRA E QUIPAMENTOS E E XPORTAÇÃO L TDA.,

                                                  Plaintiff-Appellant,
                                  v.

C ASE C ORPORATION,
                                                 Defendant-Appellee.
                          ____________
            Appeals from the United States District Court
        for the Northern District of Illinois, Eastern Division.
             No. 01 C 8591—Blanche M. Manning, Judge.
                          ____________

      A RGUED A PRIL 1, 2008—D ECIDED S EPTEMBER 3, 2008
                          ____________

  Before P OSNER, R IPPLE, and R OVNER, Circuit Judges.
  P OSNER, Circuit Judge. Extra, a Brazilian distributor,
sued Case, a large U.S. manufacturer of farm and construc-
tion equipment, in the federal district court in Chicago,
charging fraud. Jurisdiction was based on 28 U.S.C.
§ 1332(a)(2), because the suit was between a citizen of a
state (Case) and citizens of a foreign country (Extra and its
boss—the latter no longer a party). The law governing the
substantive issues in the case is agreed to be that of Illinois.
2                            Nos. 06-4389, 07-1794, 07-2484

The district judge dismissed the suit on the ground that
Case Brasil & Cia—Case’s wholly owned Brazilian sub-
sidiary—was an indispensable party to the suit. Fed. R.
Civ. P. 19(b). Extra appealed and we reversed, 361 F.3d 359
(7th Cir. 2004), and the case went back to the district court
for discovery. Eventually Case moved for summary
judgment, which was granted, and Extra appeals. It also
appeals from the district court’s order awarding costs to
Case as the prevailing party.
  In 1992 Case Brasil had hired Extra to distribute Case
products in Brazil. In 1999 Extra sued Case Brasil in a
Brazilian court, claiming that corrupt employees of the
subsidiary had caused it to overcharge Extra. Later that
year, a “Release of Claims and Settlement of Certain
Obligations” (we’ll call it the “release”) was negotiated
and signed in Illinois by Persio Briante, Extra’s president,
on behalf of Extra, and by James Sharman on behalf of Case
Brasil. Sharman was a vice president of Case Corporation,
not of Case Brasil; no one employed by the latter was
present at the negotiation or signed the release.
  The release ended the Brazilian litigation and provided
among other things (most not pertinent to this case) that
Case Brasil would seek no more than $2 million in past-due
payments that it claimed Extra owed it under the 1992
distributorship contract. In exchange, Extra, besides
agreeing to drop its suit against Case Brasil and also
drop an objection it had lodged with Brazilian authorities
to a merger that Case wanted to make, agreed to give
Case information about the corrupt conduct of Case
Brasil’s employees that would enable Case to have them
Nos. 06-4389, 07-1794, 07-2484                             3

removed (thus avoiding possible trouble with the Brazilian
government) without the parent or the subsidiary incur-
ring liability to the terminated employees.
   The present suit, which Extra filed in 2001, charges that
at the negotiation of the release Case’s representative,
Sharman, had promised that if Extra agreed to the
release, Case Brasil would retain Extra as a Case Brasil
distributor in good standing; that the promise was fraudu-
lent because Case had no intention of fulfilling it; and that
after the release was signed, Case Brasil, claiming not to
be bound by the release because it hadn’t authorized its
parent to make it—indeed, contending that it had had no
wind of the negotiations or of the signing of the re-
lease—terminated Extra’s distributorship and refuses to
recognize the $2 million limit in the release on its money
claims. Thus, Extra charges, Case had “manipulated the
corporate distinction between itself and Case Brasil” by
falsely representing that the Case official who signed the
release was authorized to sign on behalf of Case Brasil.
Extra contends that as a result of the manipulation,
Case obtained the benefits of the release without
honoring either the obligations that the release placed on
it or Sharman’s oral promise to retain Extra as a Case
Brasil distributor. Instead Case Brasil quickly terminated
Extra as a distributor, precipitating a second Brazilian
suit by Extra, in which Extra claimed that the termina-
tion violated the 1992 contract. The Brazilian courts
agreed that there had been a breach of contract; but
specific performance was refused and the Brazilian litiga-
tion is now in the damages-determination phase.
4                             Nos. 06-4389, 07-1794, 07-2484

  The district court’s principal ground for dismissing the
present suit is a provision in the release captioned “No
Reliance On The Other Party.” It states that “Both parties
represent and warrant that in making this Release they
are relying on their own judgment, belief and knowledge
and the counsel of their attorneys of choice. The parties
are not relying on representations or statements made
by the other party or any person representing them
except for the representations and warranties expressed in
this Release.” A claim of fraud requires proof that the
victim of the fraud relied on the representations that he
contends are fraudulent. E.g., HPI Health Care Services, Inc.
v. Mt. Vernon Hospital, Inc., 545 N.E.2d 672, 681 (Ill. 1989);
Vigortone AG Products, Inc. v. PM AG Products, Inc., 316 F.3d
641, 644-45 (7th Cir. 2002) (Illinois law). Otherwise he
cannot have been hurt by the fraud. If reliance on the
allegedly fraudulent statements that Sharman made to
Briante in the negotiation of the release is negated by
the no-reliance clause, Extra’s fraud claim evaporates, as
the district court ruled.
  Drafters of contracts worry lest in the event of a dispute
one of the parties ask the court to depart from the terms
of the written contract on the ground that it is not the
parties’ entire agreement—there are additional terms to
which they had agreed during the negotiations leading
up to the making of the contract. If such a claim enabled
the party making it to obtain a jury trial on the meaning
of the contract, the contractual process would be riven
by uncertainty. The law’s response to this problem is the
parol evidence rule, which, so far as bears on this case,
forbids the introduction of evidence (whether oral or
Nos. 06-4389, 07-1794, 07-2484                              5

written) of what was said in the process of negotiating
a contract to vary the terms of the contract that resulted
from the negotiation, provided the contract seems clear
and complete. A.W. Wendell & Sons, Inc. v. Qazi, 626 N.E.2d
280, 287 (Ill. App. 1993); Maas v. Board of Trustees of Commu-
nity College District No. 529, 418 N.E.2d 1029, 1042-44
(Ill. App. 1981); Utica Mutual Ins. Co. v. Vigo Coal Co., 393
F.3d 707, 713-14 (7th Cir. 2004). The rule implements the
parties’ intention to “simplify the administration of the
resulting contract and to facilitate the resolution of
possible disputes by excluding from the scope of their
agreement those matters that were raised and dropped or
even agreed upon and superseded during the negotia-
tions.” 2 E. Allan Farnsworth, Farnsworth on Contracts,
§ 7.2, p. 224 (3d ed. 2004).
   To make assurance doubly sure, parties to a written
contract commonly include in it an “integration” clause;
for if they do not, the party resisting the invocation of
the parol evidence rule can ask the judge to consider
extrinsic evidence bearing on the question whether the
parties really did intend the written contract to be the
complete and final articulation of their agreement. Utica
Mutual Ins. Co. v. Vigo Coal Co., supra, 393 F.3d at 714. The
parties did include an integration clause in the release.
It states: “This Release constitutes the entire agreement
between the parties, and this Release supersedes all prior
negotiations and agreements between the parties relating
to the subject of this Release.” So evidence of what was
said in the negotiations that led up to the signing of the
release would not be admissible—in a suit for breach
of contract.
6                             Nos. 06-4389, 07-1794, 07-2484

   That is a critical qualification. The parol evidence rule
is a rule of contract law, and a contract integration
clause is a privately negotiated supplement to the rule,
and most courts, including, we have assumed (though the
matter is not free from doubt), Illinois, hold that neither
the rule nor the clause prevents a disappointed party to
the contract from basing a tort suit on proof that in the
course of the negotiations the other party made fraudulent
representations. Vigortone AG Products, Inc. v. PM AG
Products, Inc., supra, 316 F.3d at 643-44; General Casualty
Co. v. Carroll Tiling Service, Inc., 796 N.E.2d 702, 708-09
(Ill. App. 2003); Pinken v. Frank, 704 F.2d 1019, 1022-23 (8th
Cir. 1983); 2 Farnsworth, supra, § 7.4, pp. 245, 247.
  Granted, a suit for fraud is not a perfect substitute for a
suit for breach of contract. There are additional pleading
requirements, see, e.g., Fed. R. Civ. P. 9(b), and in Illinois
fraud must be proved by clear and convincing evidence,
and not just by a preponderance of the evidence, Hofmann
v. Hofmann, 446 N.E.2d 499, 506 (Ill. 1983); Williams v.
Chicago Osteopathic Health Systems, 654 N.E.2d 613, 619 (Ill.
App. 1995); Association Benefit Services, Inc. v. Caremark RX,
Inc., 493 F.3d 841, 852-53 (7th Cir. 2007) (Illinois law),
which is all that is required to prove a breach of con-
tract. Also, the statute of limitations is shorter in a tort
suit than in a suit for breach of a written contract—five
years rather than ten. 735 ILCS 5/13-205, -206; LeBlang
Motors, Ltd. v. Subaru of America, Inc., 148 F.3d 680, 690-
91 (7th Cir. 1998) (Illinois law). On the other hand, punitive
damages can be awarded in a suit for an intentional tort,
such as fraud, but not (with rare exceptions, Morrow v. L.A.
Goldschmidt Associates, Inc., 492 N.E.2d 181, 183-86 (Ill.
Nos. 06-4389, 07-1794, 07-2484                              7

1986); Zapata Hermanos Sucesores, S.A. v. Hearthside Baking
Co., 313 F.3d 385, 389-91 (7th Cir. 2002) (Illinois law)) in
a suit for breach of contract.
  The tradeoffs are complex. But as this case, in which
the claim of fraud is based on statements made in a
negotiation that resulted in a contract, illustrates, a suit
for fraud can be a device for trying to get around the
limitations that the parol evidence rule and contract
integration clauses place on efforts to vary a written
contract on the basis of oral statements made in the
negotiation phase. The release nowhere promises to
retain Extra as a distributor of Case products; the fraud
suit is based on an alleged oral promise to that ef-
fect—made en route to the signing of a contract (the
release) that did not contain any such promise.
  No-reliance clauses serve a legitimate purpose in closing
a loophole in contract law (thus resisting, in Judge
Kozinski’s colorful expression, the metastasizing of
contract law into tort law, Oki America, Inc. v. Microtech
Int’l, Inc., 872 F.2d 312, 315 (9th Cir. 1989)). They are, we
have held, enforceable in Illinois, Vigortone AG Products,
Inc. v. PM AG Products, Inc., supra, 316 F.3d at 644-45, as
elsewhere. Sundown, Inc. v. Pearson Real Estate Co., 8 P.3d
324, 331-32 (Wyo. 2000); Haygood v. Burl Pounders Realty,
Inc., 571 So. 2d 1086, 1088-89 (Ala. 1990); Rissman v.
Rissman, 213 F.3d 381, 383-85 (7th Cir. 2000); Manufacturers
Hanover Trust Co. v. Yanakas, 7 F.3d 310, 315-18 (2d Cir.
1993); First Financial Federal Savings & Loan Ass’n v. E.F.
Hutton Mortgage Corp., 834 F.2d 685, 687-88 (8th Cir. 1987);
Landale Enterprises, Inc. v. Berry, 676 F.2d 506, 507-08 (11th
8                            Nos. 06-4389, 07-1794, 07-2484

Cir. 1982) (per curiam). But that is in general rather than
in every case. The purpose of such a clause is to head off
a suit for fraud, but the clause doesn’t say that; it uses
the anodyne term “reliance” and a lay person might not
realize how much he was giving up by agreeing to the
inclusion of the clause in his contract.
  In the trade, no-reliance clauses are called “big boy”
clauses (as in “we’re big boys and can look after our-
selves”). But if someone who is not a big boy—indeed is
not even represented by counsel—signs a big-boy clause,
there can be a problem, and this has led some courts to
require, before such a clause can be enforced, an inquiry
into the circumstances of its negotiation, to make sure
that the signatory knew what he was doing. See Brown
v. Earthboard Sports USA, Inc., 481 F.3d 901, 920-21 (6th
Cir. 2007); AES Corp. v. Dow Chemical Co., 325 F.3d 174, 180-
81 (3d Cir. 2003); see also Rissman v. Rissman, supra, 213
F.3d at 387-89 (concurring opinion). (The D.C. Circuit
appears to be on both sides of the question. Compare One-
O-One Enterprises, Inc. v. Caruso, 848 F.2d 1283, 1286-
87 (D.C. Cir. 1988), with Whelan v. Abell, 48 F.3d 1247, 1258
(D.C. Cir. 1995).)
  Whether Illinois would permit or require such an
inquiry we do not know, but will assume an affirmative
answer. It would not follow that the enforceability of
such a clause could never be decided, as Extra seems to
believe, without a trial. When no reasonable jury could
find that the signatory did not understand the meaning
of the no-reliance clause that he signed, the issue of
enforceability can be resolved on summary judgment. FMC
Nos. 06-4389, 07-1794, 07-2484                              9

Technologies, Inc. v. Edwards, 2007 WL 1725098, at *2-6 (W.D.
Wash. June 12, 2007); see Cozzi Iron & Metal, Inc. v. U.S.
Office Equipment, Inc., 250 F.3d 570, 574 (7th Cir. 2001)
(Illinois law); MBIA Ins. Corp. v. Royal Indemnity Co., 426
F.3d 204, 214-19 (3d Cir. 2005). And that is the case here.
Briante is the president of a very large company, and
he was represented at the negotiation of the release by
Brazilian and New York lawyers, all experienced in
commercial transactions. Extra is a big boy and acted
through counsel. It does not argue that its lawyers were
unfamiliar with no-reliance clauses or failed to explain
all the terms of the release to Briante, or that Case’s
representatives misrepresented the meaning of the no-
reliance clause—that is not among the frauds alleged.
  It argues instead that the representations that underlie its
fraud claim were not “made by the other party”—that is,
by Case Brasil—“or any person representing” it, as re-
quired by the no-reliance clause. Case Brasil was the
other party, and Sharman, who signed for Case Brasil, is
not employed by that company, but by Case Corporation.
But we do not understand the relevance of who em-
ployed Sharman. Extra admits that Sharman represented
at the negotiation that he was authorized to sign for Case
Brasil, and it does not argue that this was a false represen-
tation. And Case admits that Sharman had at least appar-
ent authority to bind Case Brasil. That must be right. He
was the only signatory on Case Brasil’s behalf, signing
directly below the legend CASE BRASIL & CIA in the
signing space of the release. If he had neither actual nor
apparent authority to bind Case Brasil, the contract was not
agreed to by one of its two parties and is therefore unen-
10                           Nos. 06-4389, 07-1794, 07-2484

forceable. But Extra does not argue that it is unenforceable.
It would like to have the benefit of that $2 million ceiling
on money owed Case Brasil. If Extra sued to enforce the
release, and Case Brasil defended on the ground that
Sharman had lacked the authority to make a contract on
Case Brasil’s behalf, Extra would be indignant and the
defense would be laughed out of court.
  Extra is driven to argue that while Sharman was autho-
rized to sign the release on behalf of Case Brasil, the
representations that Extra is complaining about are repre-
sentations that he made on behalf of Case rather than
Case Brasil and therefore he was not speaking as a repre-
sentative of the latter. This bit of wordplay does violence
to the language of the no-reliance clause, which refers to
representations by a party’s representative—and Sharman
was representing Case Brasil, a party (the only party,
besides Extra). It is also unrealistic. Extra itself argues
that in promising to retain Extra as a distributor,
Sharman was trying to get Extra to sign the release so
that Case Brasil could obtain at no cost evidence of corrup-
tion that would enable it to fire its misbehaving em-
ployees and thus avoid getting into trouble with the
Brazilian government without incurring liability to
them. If Sharman was lying, as Extra contends, he was
lying on behalf of both his employer and the employer’s
wholly owned subsidiary—in which he had a special
interest because he was in charge of Case’s Latin Ameri-
can subsidiaries, which included Case Brasil.
   So the no-release clause is valid and applicable. And if
it weren’t, that would not save the day for Extra. For its
Nos. 06-4389, 07-1794, 07-2484                            11

suit is a suit for fraud, and the significance of the no-
reliance clause, which does not depend on its enforceability
in contract law, is that its language and the circumstances
of its negotiation render Extra’s reliance on Sharman’s
supposed oral misrepresentations unreasonable as a
matter of law. The principle behind a no-reliance clause
is, as this court explained in Rissman v. Rissman, supra, 213
F.3d at 384, “functionally the same as a doctrine long
accepted in this circuit: that a person who has received
written disclosure of the truth may not claim to rely on
contrary oral falsehoods.” Thus, whether a person rea-
sonably appears to have authority to sign a contract on
behalf of a party is a different question from whether
a reasonable person would rely on such a person’s repre-
sentations. Had Sharman disclaimed authority to act on
behalf of Case Brasil, how could Extra reasonably have
relied on his oral representations about what Case
Brasil would do? If Santa Claus had showed up at the
bargaining table in place of Sharman, his absence of
apparent authority to bind Case Brasil would not render
Extra’s reliance on his oral promises reasonable.
  Notice too that the no-reliance clause refers to the
“party’s representative”—a term broader than apparent
authority. A person may “represent” another without
giving the impression that he has the authority to bind
the person he represents—lawyers represent companies
in mergers without having apparent authority to con-
summate the transaction.
  Case’s written disclosure in the no-reliance clause, in
short, made Extra’s reliance on oral representations
12                             Nos. 06-4389, 07-1794, 07-2484

unreasonable no matter what Case’s (or Sharman’s)
authority, actual or apparent, was vis-à-vis Case Brasil. If
Case had authority, actual or apparent, then Extra was
bound by the no-reliance clause; if Case didn’t even
have apparent authority, Extra was unreasonable in
relying on its oral representations.
   There is more that is wrong with Extra’s suit. Extra’s
theory is that Sharman made oral misrepresentations in
the negotiation in order to induce Extra to agree to the
release. That sounds like a fraud designed to induce the
victim to sign a contract; and the remedy for fraud in
the inducement is to rescind the contract. Tower Investors,
LLC v. 111 East Chestnut Consultants, Inc., 864 N.E.2d 927,
939 (Ill. App. 2007); Kochert v. Adagen Medical Int’l, Inc., 491
F.3d 674, 678-79 (7th Cir. 2007). But Extra is emphatic
that it is not charging fraud in the inducement and has no
desire to rescind the release. The fraud it charges is an
oral promise—to retain it as a distributor for Case
Brasil—that Case did not intend to honor. But what
damages could it have incurred as a result of the fraud? It
is not contending that it would be better off had it not been
induced to sign the release. It complains about being
terminated as a distributor. But that is the subject of its
Brazilian suit for breach of the distributorship contract.
It does not argue that the termination was more costly to
it because of Sharman’s promise not to terminate it.
  So the suit was properly dismissed, and we move to the
issue of costs. The district court awarded Case, as the
winning party, some $116,000 in court costs. Rule 54(d) of
the civil rules provided (when the costs were awarded
Nos. 06-4389, 07-1794, 07-2484                               13

in this case—the rule now reads “costs—other than attor-
ney’s fees—should be allowed to the prevailing party,” but
the committee note explains that the change is only
“stylistic”) that the costs specified in 28 U.S.C. § 1920 “shall
be allowed as of course to the prevailing party unless
the court otherwise directs.” Extra argues that the district
court should have “otherwise direct[ed],” awarding no
costs, to punish Case for not presenting its defense
based on the no-reliance clause until almost five years
after Extra filed this suit. The argument is frivolous. The
process for awarding court costs is intended to be sum-
mary. Extra wants to turn it into an inquest on the
winning party’s litigation strategy. Should Case have
filed a motion to dismiss based on the no-reliance clause?
Should it have filed its motion for summary judgment
earlier? Did it need discovery in order to establish the
enforceability and applicability of the no-release clause?
Was it a foot-dragging defendant? These are not issues
that a district court should have to resolve in order to
decide whether a tiny fraction of the expenses of a pro-
tracted litigation, now almost seven years old, should
be shifted from the losing to the winning party.
  Extra also complains about two of the cost items—court-
reporter attendance fees of some $8,700 and translation
fees of almost $76,000—that the judge awarded. The first
complaint has no merit. The statute authorizes the
award as costs of “fees of the court reporter for all or any
part of the stenographic transcript necessarily obtained
for use in the case.” 28 U.S.C. § 1920(2). Some reporters
charge a separate fee for attending the trial or hearing that
they make a stenographic transcript of; others roll that
14                            Nos. 06-4389, 07-1794, 07-2484

fee into the fee for the transcript itself. Since the reporter
cannot make the transcript without attending the hearing,
the separate attendance fee is properly regarded as a
component of the fee for the transcript. Held v. Held, 137
F.3d 998, 1002 (7th Cir. 1998); Finchum v. Ford Motor
Co., 57 F.3d 526, 534 (7th Cir. 1995); Arrambide v. Wal-Mart
Stores, Inc., 33 Fed. Appx. 199, 203 (6th Cir. 2002) (per
curiam).
  There is greater merit to Extra’s complaint about the
award of translation fees. The statute refers to “compensa-
tion of court appointed experts, compensation of inter-
preters, and salaries, fees, expenses and costs of special
interpretation services under [28 U.S.C. § 1828].” 28 U.S.C.
§ 1920(6) (emphasis added). (Section 1828 creates a pro-
gram for the provision of interpretation services in
federal criminal and habeas corpus proceedings.) The
specificity of section 1920(6), and the character of section
1920 as a whole, makes us reluctant to interpret “interpret-
ers” loosely to include translators of written documents,
in this case the exhibits presented by Case at depositions
and in support of its motion for summary judgment, and
also the exhibits on its list of proposed trial exhibits. An
interpreter as normally understood is a person who
translates living speech from one language to another.
He is a type of translator, see, e.g., Yu Cong Eng v. Trinidad,
271 U.S. 500, 508-09 (1926); Gjerazi v. Gonzales, 435 F.3d
800, 807 (7th Cir. 2006); Ememe v. Ashcroft, 358 F.3d 446,
448 (7th Cir. 2004), but the translator of a document is not
referred to as an interpreter. Robert Fagles made famous
translations into English of the Iliad, the Odyssey, and the
Aeneid, but no one would refer to him as an English-
language “interpreter” of these works.
Nos. 06-4389, 07-1794, 07-2484                              15

  We are mindful that the Sixth Circuit in BDT Products,
Inc. v. Lexmark Int’l, Inc., 405 F.3d 415, 419 (6th Cir. 2005),
held that the statute allows the award of costs for trans-
lating documents. (Other decisions have allowed such
awards, but BDT is the only reported appellate decision
that we have found in which the meaning of the statute
was placed in question.) The only reason the court
gave was that “the definition of interpret expressly in-
cludes to ‘translate into intelligible or familiar language.’
Webster’s Third New International Dictionary 1182 (1981).”
But the statutory term is “interpreters,” not “interpret.”
The same dictionary defines “interpreter” (so far as
might relate to the statute) as “one that translates; esp: a
person who translates orally for persons who are convers-
ing in different tongues.” Id. The qualification in “espe-
cially” leaves open the possibility that an interpretation
can sometimes be of a document. And indeed it can be: a
judge interprets statutes, and might sometimes (though
rarely) be referred to as a statutory interpreter. But he is
not a translator. If a judge translated the French Code of
Criminal Procedure into English, we would not say that
he had “interpreted” the French code into English.
  There are plenty of loose interpretations; so we do not
wish to deny the possibility of stretching section 1920 as
far as urged by Case. But it would be a stretch, and
there should be a good reason for disfiguring statutory
language before wielding the knife, and there is not here.
We cannot find a “spirit” in section 1920 that might
guide an interpretation unmoored from the statutory
language. The items allowable as costs are a hodge-
podge. There is no purposive explanation for why some
items are in and others out. To include translation fees
16                           Nos. 06-4389, 07-1794, 07-2484

would simply complicate the process of awarding court
costs—the concern that underlies our rejection of Extra’s
attempt to avoid having to pay costs on the basis of
Case’s alleged “unreasonable delay” in interposing its
determinative defense to Extra’s suit. For while there is
a natural limit to the expense of interpreters—the amount
of time that witnesses (including deponents) undergo
live examination—there is no natural limit on the
number of documents that can be translated in aid of a
claim or defense. A suit of the magnitude of Extra’s suit
(remember, it’s almost seven years old) can generate
millions of pages of documents. A large fraction of the
documents in this case are in Portuguese, not to mention
the countless pages of Brazilian statutes and cases that
might be relevant to the litigation. It is ominous that 65
percent of the costs awarded in this case were for transla-
tion, and of that amount only 11 percent was for interpreta-
tion. Was all that translation of written documents neces-
sary? We do not think a district judge should be required
to wade into such issues without a clearer directive from
Congress. (Because this ruling creates a conflict with
another circuit, we have circulated the opinion, in advance
of issuance, to the entire court under 7th Cir. R. 40(e).
No judge voted to hear the case en banc; Judge Flaum did
not participate in the consideration of the matter.)
  To summarize, the judgment for the defendant on the
merits is affirmed. The award of costs is affirmed in part
and reversed in part, and the matter of costs is remanded
to the district court for redetermination.
                     A FFIRMED IN P ART, R EVERSED IN P ART,
                                           AND R EMANDED .
Nos. 06-4389, 07-1794, 07-2484                              17

  R IPPLE, Circuit Judge, concurring in part and dissenting
in part. The district court granted summary judgment
in favor of Case with respect to both Extra’s fraud and
promissory fraud claims. The panel majority affirms the
district court with respect to both counts. I join the panel
majority’s determination that the district court properly
dismissed Extra’s fraud claim. With respect to Extra’s
promissory fraud count, however, I would reverse the
judgment of the district court and remand the case for trial.

                               I
                              A.
  In this diversity action, Extra Equipamentos E
Exportação, Ltda. (“Extra”) asserts claims of fraud and
promissory fraud against Case Corporation (“Case”). Case
is a manufacturer of farm and construction equipment;
Case Brasil is a wholly owned subsidiary of Case organized
under the laws of Brazil. From 1992 until 2001, Extra
operated as a distributor of Case equipment under a
distribution agreement with Case Brasil (the “1992 distri-
bution agreement”).
  In 1999, Case began having serious concerns about the
allegedly illegal or improper conduct of executives at Case
Brasil. From 1997 until 1999, Mario Hirose allegedly had
been operating a “charge-back” scheme 1 to inflate both

1
  The scheme operated as follows: Extra and other distributors
had open accounts with Case Brasil that reflected the amounts
owed by one entity to the other. As part of the scheme, Case
                                                 (continued...)
18                            Nos. 06-4389, 07-1794, 07-2484

Case Brasil’s profits and the bonuses of Case Brasil’s
management; Hirose also allegedly was extorting from
Persio Briante, Extra’s owner and president, R$50,000
per month as a condition for continuing the 1992 dis-
tribution agreement. Although Case became aware of, and
was investigating, the alleged corruption at Case Brasil, it
was unable to garner sufficient evidence to terminate
Hirose and his corrupt colleagues. In 1999, based on
Hirose’s corrupt conduct, Extra sued Case Brasil in Brazil-
ian court.
  At the same time that it was investigating Case Brasil
executives, Case also was seeking to have a proposed
merger approved by CADE, a Brazilian agency with the
regulatory authority to approve business mergers. Extra
had filed objections to the merger. Case was aware of these
objections; indeed, at one time, Case executives met with
Briante and his counsel regarding these objections.
Briante’s lawyer informed Brian Cahill, a senior in-house
counsel at Case, that Briante was most concerned about
alleged improper charge-backs to Extra’s open account
and that the CADE objections were filed to get Case’s
attention.

1
  (...continued)
Brasil would approve farm equipment loans for customers
whom they knew could not pay off the loans. Whenever a
customer defaulted on such a loan, Case Brasil’s management
would transfer these loans from Case Brasil’s books to the
open accounts kept with distributors like Extra. This resulted
in losses to the distributor as well as a windfall to Case
Brasil’s management because it enabled management to
inflate improperly their bonuses based on false sales figures.
Nos. 06-4389, 07-1794, 07-2484                           19

  Cahill met with Briante in October 1999. On behalf of
Case, Cahill had three issues to discuss: (1) additional
information needed to fire Hirose and his associates;
(2) objections to the pending merger; and (3) the charge-
back issue. The parties could not resolve these issues;
later, however, Briante’s lawyer called Cahill to indicate
Briante’s interest in another meeting and also to express
concern for Briante’s safety if he should meet with Case
people again in Brazil. It was therefore agreed that Briante
would fly to the United States and would meet with Case
management in an airplane hangar at an airport in
Waukegan, Illinois.
  The parties met in Waukegan. Extra was represented
by Briante, who had with him Extra’s Brazilian and
American attorneys as well as Extra’s financial advisor.
Case was represented by James Sharman, Cahill and
William Dietrick, a Case outside attorney. Sharman
introduced himself as a Case Vice-President and head of
Case’s Latin American operations. It is undisputed that
Sharman is not an officer of Case Brasil. Cahill testified
in a deposition that he did not inform Extra’s representa-
tives that Sharman was not an officer of Case Brasil.
   After a full day of negotiations, the parties reached an
agreement (the “Release”). The Release recites that it is
between Extra and Case Brasil; James Sharman signed
the Release on behalf of Case Brasil. Throughout this
litigation, moreover, Case has maintained that the “actual
party” to the Release was Case Brasil. R.173 at 1-2.
  The Release contains a no-reliance clause:
    No Reliance On The Other Party: Both parties repre-
    sent and warrant that in making this Release they
20                           Nos. 06-4389, 07-1794, 07-2484

     are relying on their own judgment, belief and knowl-
     edge and the counsel of their attorneys of choice. The
     parties are not relying on representations or state-
     ments made by the other party or any person repre-
     senting them except for the representations and war-
     ranties expressed in this Release.
R.157, Ex. 9 at 5-6. Under the terms of the Release, Case
was assured of Briante’s full cooperation and support in
rectifying Case’s problems with its Brazilian operations.
Case Brasil, for its part, assured that it would provide to
Extra a “standard” Case “Commercial Representative
Agreement and Technical Services Agreement.” Id., Ex. 9
at 1. With respect to the charge-back issue, Case Brasil
agreed to cap at R$2 million the total amount of monies
that Extra owed to Case Brasil. In exchange, Extra
dropped the suit that it had instituted in 1999 in Brazilian
courts. Additionally, Extra released all claims that it
might have had against Case Brasil, including any claims
regarding the charge-back scheme, Hirose’s alleged
extortion and objections to Case Brasil’s then-pending
merger.
  Extra, in compliance with the terms of the Release,
provided Case with information about the operations of
Case Brasil, namely that Hirose was extorting money or
other favors from Case dealers, which allowed Case to
terminate Hirose’s employment. Indeed, Sharman and
Cahill flew to Brazil the following day to fire Hirose; other
Case officials fired Hirose’s staff.
  At this point in the litigation, the record does not permit
a definitive determination as to the extent to which Case
Nos. 06-4389, 07-1794, 07-2484                           21

Brasil failed to comply with the Release or whether Case
Brasil repudiated the contract. According to Extra, Case
Brasil has ignored, almost completely, its obligations under
the Release by failing to tender proper Commercial Repre-
sentative and Technical Services agreements to Extra. Case
Brasil officers called the Release “stupid” and said that
it “made no sense at all.” In 2001, moreover, Case Brasil
attempted to force Extra into signing a novation that
would have released Case Brasil from its obligations
under the Release. In that document, Case Brasil asked
Extra to recognize a debt of R$10,365,000, despite the
R$2 million cap set in the Release. After Extra refused to
sign the novation, Case Brasil terminated Extra’s line of
credit and refused to sell to Extra any spare parts of Case
equipment. Case Brasil informed Extra that Extra’s
credit would be restored if Extra signed the novation.
According to Extra, Case Brasil executives repeatedly
demanded that Extra desist from attempting to enforce
the terms of the Waukegan agreement and threatened
Extra’s position as a distributor of Case equipment if
Extra did not comply with Case Brasil’s demands.
  Case, in contrast, contends that Case Brasil has per-
formed fully and that termination of the 1992 distribution
agreement was permissible under the terms of the dis-
tribution agreement itself and occurred only after negotia-
tions to extend the agreement (through Case’s tendering
of the Commercial Representative and Technical Services
agreements to Extra) had failed. In any event, Case con-
tends, after Case Brasil’s perceived breach of the 1992
distribution agreement, Extra sued Case Brasil in Brazil for
wrongful termination; Brazil’s highest court held that
22                            Nos. 06-4389, 07-1794, 07-2484

Case Brasil could terminate, although it might owe Extra
some damages. This issue still is being litigated in
Brazilian courts.

                              B.
  Extra asserts claims of fraud and promissory fraud
against Case. In our previous disposition in this case, we
reversed the judgment of the district court, which had
dismissed Extra’s suit on the ground that Case Brasil was
an indispensable party to the suit,2 and remanded the
case for further proceedings. See Extra Equipamentos E
Exportação v. Case Corp., 361 F.3d 359 (7th Cir. 2004) [herein-
after Extra I]. In reversing the judgment of the district
court, we noted repeatedly that Extra’s suit was based on
Case’s alleged fraud in negotiating the Release. See id. at
360-61, 362-63. Specifically, we noted that Extra was
contending that Case had manipulated its corporate
form to dupe Extra into signing the Release while concomi-
tantly preserving Case Brasil’s ability to repudiate the
Release. Id. On remand, the district court denied Case’s
motion to dismiss. After the parties had conducted dis-
covery, Case filed a motion for summary judgment.
  The district court granted summary judgment on all
claims based on the Release’s no-reliance clause and on this
court’s decision in Rissman v. Rissman, 213 F.3d 381, 383-84

2
  See Fed. R. Civ. P. 19. See generally Republic of Philippines
v. Pimentel, 128 S. Ct. 2180, 2184-85, 2188 (2008) (discussing
changes to the 2007 amendments to Rule 19).
Nos. 06-4389, 07-1794, 07-2484                                   23

(7th Cir. 2000).3 In this case, the district court explained
that Rissman applied only with “limited value” because a
no-reliance clause “is typically a shield one party uses to
deflect the opposing party’s claims of fraud.” R.174 at 8.
Although the district court recognized that Case is not a
party to the Release, which was between Case Brasil and
Extra, it believed that “the non-reliance clause [neverthe-
less] bears on the critical issue” whether “Extra’s reliance
on Case’s oral representations [was] reasonable[.]” Id. The
court ruled that Extra’s reliance on Case’s representations
was not reasonable, as a matter of law. In support of this
determination, the district court explained that, when
Extra met with Case to negotiate the Release, Extra was
“under the impression” that Sharman was representing
Case Brasil because both Sharman and Cahill had said so.
As a result, Sharman was “any person representing” the
parties, under the terms of the no-reliance clause. Under
Illinois law, both fraud and promissory fraud require
proof of reliance. Consequently, the district court dis-
missed both the fraud and the promissory fraud claim.
  As relevant here, Case also had moved, in the alterna-
tive, for summary judgment with respect to Extra’s promis-

3
   In Rissman v. Rissman, 213 F.3d 381, 383-84 (7th Cir. 2000), we
held that “a written anti-reliance clause precludes any claim
of deceit by prior representations.” See also id. at 388-89 (Rovner,
J., concurring) (noting that this is not a per se rule and that
courts should continue to apply a totality of the circumstances
approach).
24                               Nos. 06-4389, 07-1794, 07-2484

sory fraud 4 claim on the ground that Extra had no evi-
dence of a scheme to defraud. The district court rejected
this alternative basis for granting summary judgment. It
concluded that “Extra has offered evidence to support
its allegations of a scheme to defraud.” Id. at 12. Specifi-
cally, the district court noted that
     according to Extra’s owner, Persio Briante, as soon as
     Case got the information it wanted from Extra, it
     reneged on its various agreements. Specifically, Case
     failed to stop Case Brasil from terminating the dis-
     tribution agreement with Extra. Briante also contends
     that Case allowed Case Brasil to pressure Extra into
     forfeiting either the $2 million cap on Case Brasil’s
     liability or risk Case Brasil terminating the distribution
     agreement (which Case Brasil eventually did). Evi-

4
  Under Illinois law, a plaintiff may prove promissory fraud by
establishing all of the elements of fraud and, additionally, by
establishing that the false statement concerns future conduct
rather than an existing or preexisting material fact and that the
false statement of future conduct is part of a pattern or scheme
to defraud. Steinberg v. Chi. Med. Sch., 371 N.E.2d 634, 640-41 (Ill.
1977). The elements of fraud are: (1) the defendant made a false
statement of material fact; (2) the defendant knew or believed
that the statements were false, or the statements were made
with a reckless disregard of whether they were true or false;
(3) the statements were made with the intent to induce action;
(4) the plaintiff reasonably believed the statements and justifi-
ably acted in reliance on those statements; and (5) the plaintiff
suffered damages as a result. Kapelanski v. Johnson, 390 F.3d
525, 530 (7th Cir. 2004) (Illinois law).
Nos. 06-4389, 07-1794, 07-2484                            25

    dence of a series of broken promises, even if the
    promises are all related, is sufficient to prove a scheme
    to defraud.
Id. at 12-13.
  Finally, the district court also declined to grant sum-
mary judgment with respect to the promissory fraud
claim on the alternative ground that Extra could not
establish proximate causation between Case’s alleged
misrepresentation and Extra’s damages. Id. at 13-14.

                             II
                             A.
   Extra contends that Case Brasil’s promises as set forth
in the Release (that Case Brasil would provide a com-
mercial representative agreement to renew the 1992
distribution agreement and that it would cap Extra’s
liability for the charge-backs at R$2 million) were, as we
explained in our previous opinion, the “bait dangled before
Extra to persuade it” to provide evidence of Hirose’s fraud
and extortion, dismissing its then-pending Brazilian suit,
releasing any future claims that it might bring against Case
Brasil, and dropping its objections to Case Brasil’s pro-
posed merger. Extra I, 361 F.3d at 363. Indeed, as we
explained in our prior opinion, Extra’s theory of the case
is that “Case . . . manipulated the corporate distinction
between itself and Case Brasil by falsely representing that
the Case official who signed the agreement [Sharman] was
authorized to sign on behalf of Case Brasil.” Id. at 360
(emphasis supplied) (internal quotation marks omitted).
26                            Nos. 06-4389, 07-1794, 07-2484

   The panel majority’s application of the no-reliance clause
simply ignores Extra’s promissory fraud theory. Under
Illinois law, as a general matter, “misrepresentations of
intention to perform future conduct, even if made
without a present intention to perform, do not generally
constitute fraud.” HPI Health Care Servs. v. Mount Vernon
Hosp., Inc., 545 N.E.2d 672, 682 (Ill. 1989). Illinois courts,
however, have “recognized an exception to this rule,”
under which “such promises are actionable if ‘the false
promise or representation of future conduct is alleged to
be the scheme employed to accomplish the fraud.’ ” Id.
(quoting Steinberg v. Chi. Med. Sch., 371 N.E.2d 634, 641 (Ill.
1977)); see also Desnick v. Am. Broadcasting Cos., Inc., 44
F.3d 1345, 1354 (7th Cir. 1995) (“Unlike most states nowa-
days, Illinois does not provide a remedy for fraudulent
promises (’promissory fraud’)—unless they are part of a
‘scheme’ to defraud.” (emphasis added)). Accordingly, a
promissory fraud action, under Illinois law, requires that
a plaintiff prove that (1) the defendant made a false and
material statement concerning future conduct; (2) as part
of a scheme to defraud; (3) knowing that the statements
were false, or the statements were made with a reckless
disregard of whether they were true or false; (4) the
statements were made with the intent to induce action;
(5) the plaintiff reasonably believed the statements and
justifiably acted in reliance on those statements; (6) the
plaintiff suffered damages as a result. Kapelanski v. Johnson,
390 F.3d 525, 530 (7th Cir. 2004) (Illinois law); Steinberg,
371 N.E.2d at 641.
  Based on the no-reliance clause, the district court granted
summary judgment to Case with respect to both Extra’s
Nos. 06-4389, 07-1794, 07-2484                            27

fraud and promissory fraud claims. The no-reliance clause,
the district court determined, would prevent Extra, as a
matter of law, from proving reliance, which is an
element of both fraud and promissory fraud.
   The district court erred, however, in dismissing Extra’s
promissory fraud claim on the basis of the no-reliance
clause. Many of the fraudulent statements upon which
Extra has predicated this suit are repeated and reenforced
in the Release itself, and, by its own terms, the no-reliance
clause does not apply to “representations and warranties
expressed in” the Release. R.157, Ex. 9 at 5-6. For example,
the Release specifically contains the following terms:
Before October 1999, Case Brasil promises to provide to
Extra standard Case Commercial Representative and
Technical Services agreements; Case Brasil promises that
any charge-backs made by Case Brasil against Extra’s open
account would be reversed; and Case Brasil promises that
it will cap Extra’s liabilities at R$2 million. R.157, Ex. 9.
Because Extra’s promissory fraud claim is predicated
upon the “representations and warranties expressed in”
the Release itself, the no-reliance clause, by its plain
language, cannot prevent Extra from establishing re-
liance as a matter of law on that claim. R.157, Ex. 9 at 5-6.
  In addition to adhering to the plain language of the no-
reliance clause, this result is consistent with the policy
justifications for strictly enforcing such clauses. By memo-
rializing conclusively the terms governing a transaction,
no-reliance clauses mitigate the risks of skullduggery and
faulty memory. Rissman, 213 F.3d at 384. It allows the
parties to “ensure[] that both the transaction and any
28                           Nos. 06-4389, 07-1794, 07-2484

subsequent litigation proceed on the basis of the parties’
writings.” Id. As the court in Rissman recognized, where
a party has incorporated allegedly fraudulent terms
into the agreement, these concerns are not implicated.
Rissman, 213 F.3d at 383 (noting that the plaintiff who
was suing for fraud did not contend that any misrepresen-
tation in the agreement itself was untrue or misleading).
   In sum, the panel majority’s application of the no-
reliance clause does not take into account Extra’s promis-
sory fraud claim. Extra claims that Case, as part of a
scheme to defraud, has manipulated its corporate
form—that is, the distinction between it and its subsidiary,
Case Brasil—to dupe Extra into signing the Release and
divulging information that Case needed while concomi-
tantly scheming to ensure that Extra would not obtain
the benefits of the Release. Having obtained from Extra
the requisite information to fire Hirose and his corrupt
associates as well as a blanket release of all claims, Case
failed to ensure that Case Brasil follow the terms of the
Release. The no-reliance clause cannot prevent Extra
from proving reliance, as a matter of law, with respect to
its promissory fraud claim.
  The panel majority’s opinion further obscures the
importance of the foregoing analysis by faulting Extra
for maintaining that it is seeking damages rather than
rescission. Supra at 12. Extra’s complaint and the
Release itself, however, elucidate why Extra did not seek
rescission as a remedy. As Illinois law recognizes, rescis-
sion of the Release cannot not place Extra in the status quo
ante because the consideration that it tendered to Case
Nos. 06-4389, 07-1794, 07-2484                            29

cannot be recovered. See, e.g., Klucznik v. Nikitopoulos, 503
N.E.2d 1147, 1150 (Ill. App. Ct. 1987) (“[A] court will not
grant rescission of a contract in any event where the
status quo ante of the parties cannot be restored.”); see
also Sweet Dreams Unlimited, Inc. v. Dial-A-Mattress Int’l,
Ltd., 1 F.3d 639, 641 (7th Cir. 1993) (“A successful
rescission action annuls the contract and returns the
parties to the status quo ante.”). As consideration for
Case’s (allegedly unfulfilled) promises set forth in the
Release, Extra released all claims against Case Brasil,
including the suit that it had instituted in 1999 regarding
Case Brasil’s charge-back scheme; the Release might also
encompass any claims that Extra may have had for
Hirose’s extortion of Extra and Mr. Briante. Rescission
would mean little to Extra if the Brazilian statute of
limitations has expired or an equivalent to our laches
doctrine prevents Extra from suing on these claims.
Similarly, only damages can recompense Extra for the
lost opportunity that it allegedly suffered when it agreed
to divulge to Case information regarding Hirose and
Case Brasil’s corruption and to drop its objections to
Case’s then-pending merger. Rescission, in short, is
“simply not feasible” in this case. Jones v. InfoCure Corp.,
310 F.3d 529, 535 (7th Cir. 2002) (internal quotation marks
and citation omitted).

                             B.
  As discussed above, Illinois law requires that Extra, to
win its promissory fraud claim, establish that Case en-
gaged in a scheme to defraud. In discussing Illinois law, we
30                            Nos. 06-4389, 07-1794, 07-2484

have noted that “the distinction between a mere promis-
sory fraud and a scheme of promissory fraud is elusive,
and has caused, to say the least, considerable uncertainty,
as even the Illinois cases acknowledge.” Desnick, 44 F.3d
at 1354. Despite this uncertainty, we continued, “it is not
our proper role as a federal court in a diversity suit to read
‘scheme’ out of Illinois law; we must give it some mean-
ing.” Id. We concluded: “Our best interpretation is that
promissory fraud is actionable only if it either is particu-
larly egregious or, what may amount to the same thing,
it is embedded in a larger pattern of deceptions or entice-
ments that reasonably induces reliance and against
which the law ought to provide a remedy.” Id.
   The district court rejected Case’s claim that it was
entitled to summary judgment based on Extra’s failure
to proffer evidence with respect to this element of the
promissory fraud claim. The district court believed that
Extra has alleged sufficient evidence to create a genuine
issue of material fact as to whether Case engaged in a
scheme to defraud. According to Extra, Case reneged on
various provisions of the Release as soon as it received
the information that it sought from Extra. Moreover,
Case allowed Case Brasil to ignore, almost completely,
its obligations under the Release by failing to tender
proper Commercial Representative and Technical
Services agreements to Extra. Case Brasil officers called
the Release “stupid” and said that it “made no sense at
all.” In 2001, Case Brasil attempted to force Extra into
signing a novation that would have excused Case Brasil
from its obligations under the Release. In that document,
Case Brasil asked Extra to recognize a debt of
R$10,365,000, despite the R$2 million cap set in the Release.
Nos. 06-4389, 07-1794, 07-2484                          31

After Extra refused to sign the novation, Case Brasil
terminated Extra’s line of credit and refused to sell to
Extra any spare parts of Case equipment. Case Brasil
informed Extra that Extra’s credit would be restored if
Extra signed the novation. According to Extra, Case
Brasil executives repeatedly demanded that Extra desist
from attempting to enforce the terms of the Waukegan
agreement and threatened Extra’s position as a dis-
tributor of Case equipment if Extra did not comply with
Case Brasil’s demands.
  Whether Extra has adduced sufficient evidence that
Case engaged in a scheme to defraud is a close issue. Given
that this action is before us on summary judgment and
given that, contrary to Case’s suggestions, the parties are
disputing vigorously whether Case was complicit in
Case Brasil’s (alleged) failure to comply with the
Waukegan agreement, Extra should be allowed to proceed
with its promissory fraud claim. Extra has adduced
sufficient evidence to allow a jury to conclude that Case
engaged in a scheme with Case Brasil to dupe Extra into
signing the Release and divulging the information that
Case needed while concomitantly scheming to ensure
that Extra would not obtain the benefits of the Release.

                       Conclusion
  For the foregoing reasons, I would reverse the judg-
ment of the district court with respect to Extra’s promis-
sory fraud claim and remand for a jury trial on that issue.

                           9-3-08