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Media Alerts - Brand Marketing Group LLC v. Intertek Testing Services NA - Third Circuit
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September 15, 2015
  Brand Marketing Group LLC v. Intertek Testing Services NA - Third Circuit
Headline:
The Third Circuit holds that punitive damages are available for negligent misrepresentation claims.

Area of Law: Tort

Issues Presented:
Whether punitive damages are per se unavailable for negligent misrepresentation?

Brief Summary:
A jury found Intertek Testing Services, N.A., Inc. liable to Brand Marketing Group, LLC for negligent misrepresentation and awarded Brand $1,045,000 in compensatory and $5 million in punitive damages. Interk appealed. The Third Circuit affirmed, finding that punitive damages are available for negligent misrepresentation claims and that there is an exception to the economic loss doctrine for negligent misrepresentation relied on by a third party.

Extended Summary:
A jury found Intertek liable to Brand Marketing Group for negligent misrepresentation and awarded Brand over $6 million in damages. Intertek was responsible for ensuring that Brand's product, a vent-free heater, complied with the relevant safety standard. Intertek represented to Brand that the product complied with that standard. Brand then entered into a contract with Ace Hardware Corporation to sell the product, but it was not in fact compliant with the relevant standard and Ace refused to sell it and demanded a refund. Ace ultimately filed a lawsuit against Brand and was awarded $611,060 in damages.
Brand sued Intertek for negligent misrepresentation. The jury awarded Brand $725,000 in past compensatory damages and $320,000 in future compensatory damages, and $5 million in punitive damages. Intertek unsuccessfully moved for post-trial relief and then timely appealed.
Intertek first argued on appeal that Brand's case was foreclosed by the economic loss doctrine because Intertek's negligence resulted in only economic damages. The Court noted that the Supreme Court of Pennsylvania has recognized an exception for negligent misrepresentation claims. The plain text of Restatement (Second) of Torts ยง 552(2)(a) permits claims by a third party when a professional provides information and knows that the recipient intends to supply it to the third party. The Court held that Intertek knew that somebody aside from the manufacturer would rely on its testing. Therefore, the district court correctly permitted Brand's negligent misrepresentation claim to proceed under Pennsylvania's exception to the economic loss doctrine.
The Court also considered whether punitive damages are available for negligent misrepresentation claims. The Court noted that the Pennsylvania. Supreme Court had held that punitive damages may be awarded in negligence cases if the plaintiff proves greater culpability than ordinary negligence at trial. The Court held that a plaintiff may undertake the additional burden of proving a heightened culpability required to sustain a punitive damages claim in negligence suits and in negligent misrepresentation cases specifically. The Third Circuit rejected Intertek's remaining arguments and affirmed the district court's denial of its post-trial motions. To view the full opinion, click here: http://www2.ca3.uscourts.gov/opinarch/143010p.pdf


Panel: Fisher, Hardiman, and Roth, Circuit Judges

Argument Date: April 28, 2015

Date of Issued Opinion: September 10, 2015

Docket Number: No. 14-3010

Decided: Affirmed.

Case Alert Author: Yolanda Felix

Counsel: William T. Hangley, Esq., Matthew A. Hamermesh, Esq., Dina L. Hardy Grove, Esq. for Appellant Intertek Testing Services N.A., Inc.; Brendan B. Lupetin, Esq. for Appellee Brand Marketing Group LLC d/b/a Thermablaster.

Author of Opinion: Judge Hardiman

Circuit: Third Circuit

Case Alert Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 09/15/2015 10:38 AM     3rd Circuit  

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