How specific must a misrepresentation be?

Originally published by David Coale.

The plaintiff won a multi-million dollar lawsuit about the sale of Akaushi cattle (example, to right), a specialty breed from Japan valued for its exceptional flavor, and made difficult to acquire as a result of export restrictions on what Japan regards “as a national treasure.” The Fifth Circuit affirmed in large part, reaching these holdings of broader interest:

• The jury found that the defendant “committed fraud by misrepresenting ‘that it intended to sell to [Plaintiff] 30% of its calves and that it would comply with the restrictions in the 2010’ Full-Blood Contracts” that set a number of specification s about registration, marketing, etc. Because “Texas courts have upheld fraud claims based on representations with less specificity,” the defendant’s sufficiency challenge was rejected.
• Despite testimony about millions of dollars in potential harm, the actual judgment awarded equitable relief. Because “the district court’s equitable remedy protected [Plaintiff] from actual harm[, its] harm is limited to presumed harm, and that is insufficient under Texas law to justify an award of punitive damages” in addition to the equitable relief.
• In affirming a calculation made in connection with the equitable remedies, the Court reminded of “the purpose of the law of disgorgement[,] under which ‘a disgorgement order might be for an amount more or less than that required to make the victims whole.’”

Bear Ranch LLC v. Heartland Beef, Inc., No. 16-41261 (March 20, 2018).

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