Reliance not justified

Originally published by David Coale.

Phoneternet complained that an inaccurate report available on Lexis-Nexis caused the loss of a business opportunity (oddly enough, with the car company Lexus). The Fifth Circuit affirmed, holding (among other matters) as to their negligent-misrepresentation and promissory-estoppel claims:

“If Phoneternet believed the errors had already been corrected, there would have been no reason for Phoneternet to repeatedly call LexisNexis. In that case, Phoneternet would be asking LexisNexis to correct already accurate information. Moreover, to the extent Phoneternet did rely on LexisNexis’s alleged statement that all fifteen errors in the report had been “modified . . . as requested,” such reliance cannot be considered reasonable and justified. Given the alleged importance of this report—the only remaining obstacle between Phoneternet and a lucrative multimillion-dollar contract with Toyota—Phoneternet should have at least confirmed that the errors had been corrected before blindly relying on LexisNexis’s representation.”

Phoneternet LLC v. Lexis-Nexis, No. 19-11194 (June 3, 2020) (unpublished) (emphasis added).

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