Daanen & Janssen, Incorporated, a Wisconsin Corporation, Plaintiff-Appellant v. Cedarapids, Incorporated, an Iowa…

Summary

The Wisconsin Supreme Court, answering a certified question from the Seventh Circuit, held that the economic loss doctrine bars a remote commercial purchaser from recovering solely economic losses from a manufacturer under tort theories of strict liability and negligence, even absent privity of contract. The court reasoned that the three policies underlying the doctrine—maintaining the tort/contract distinction, protecting freedom to allocate economic risk by contract, and encouraging the commercial purchaser to assume or insure against risk—are unaffected by the presence or absence of privity. The court expressly overruled contrary language in City of La Crosse and Hap's Aerial Enterprises.