Chris Hinrichs v. DOW Chemical Company

2020 WI 2, 937 N.W.2d 37, 389 Wis. 2d 669

• Court: Wisconsin Supreme Court
• Decided: January 9, 2020
• Docket: 2017AP002361
• Status: Published

Opinion

2020 WI 2

SUPREME COURT OF WISCONSIN CASE NO.: 2017AP2361

COMPLETE TITLE: Chris Hinrichs and Autovation Limited, Plaintiffs-Appellants-Petitioners, v. The DOW Chemical Company d/b/a Dow Automotive, Defendant-Respondent-Petitioner.

REVIEW OF DECISION OF THE COURT OF APPEALS Reported at 386 Wis. 2d 351,927 N.W.2d 156 (2019 – unpublished)

OPINION FILED: January 9, 2020 SUBMITTED ON BRIEFS: ORAL ARGUMENT: October 3, 2019

SOURCE OF APPEAL: COURT: Circuit COUNTY: Waukesha JUDGE: Kathryn W. Foster

JUSTICES: ANN WALSH BRADLEY, J., delivered the majority opinion of the Court, in which ROGGENSACK, C.J., ZIEGLER and DALLET, JJ., joined and REBECCA GRASSL BRADLEY, J., joined with respect to Parts I, II, and III. REBECCA GRASSL BRADLEY, J., filed an opinion concurring in part and dissenting in part. NOT PARTICIPATING: KELLY and HAGEDORN, JJ.

ATTORNEYS:

For the defendant-respondent-petitioner, there were briefs filed by Patrick M. Harvey, Gabrielle Baumann Adams, and Husch Blackwell LLP, Milwaukee. There was an oral argument by Patrick M. Harvey.

For the plaintiff-appellant-petitioner, there were briefs filed by Terry J. Booth and Rogahn Jones LLC, Waukesha. There was an oral argument by Terry J. Booth. 2020 WI 2 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2017AP2361 (L.C. No. 2016CV1544)

STATE OF WISCONSIN : IN SUPREME COURT

Chris Hinrichs and Autovation Limited,

Plaintiffs-Appellants-Petitioners, FILED v. JAN 9, 2020 The DOW Chemical Company d/b/a Dow Automotive, Sheila T. Reiff Defendant-Respondent-Petitioner. Clerk of Supreme Court

ANN WALSH BRADLEY, J., delivered the majority opinion of the Court, in which ROGGENSACK, C.J., ZIEGLER and DALLET, JJ., joined and REBECCA GRASSL BRADLEY, J., joined with respect to Parts I, II, and III. REBECCA GRASSL BRADLEY, J., filed an opinion concurring in part and dissenting in part.

KELLY and HAGEDORN, JJ., did not participate.

REVIEW of a decision of the Court of Appeals. Affirmed.

¶1 ANN WALSH BRADLEY, J. In this case we are asked to

address a multitude of issues that arise out of common law and

statutory misrepresentation claims. Along the way, we discuss the

economic loss doctrine together with its exceptions and examine statutes and their applications. No. 2017AP2361

¶2 Both parties to this case seek review of aspects of an

unpublished, per curiam decision of the court of appeals.1 The

court of appeals affirmed the circuit court's dismissal of Chris

Hinrichs and Autovation Limited's (collectively, Hinrichs) common

law misrepresentation claims against the DOW Chemical Company

(Dow) and reversed the circuit court's dismissal of Hinrichs'

statutory claim made pursuant to Wis. Stat. § 100.18 (2015-16).2

¶3 Hinrichs appeals the dismissal of his common law

misrepresentation claims. Specifically, he contends that the

court of appeals erred by applying the economic loss doctrine to

bar such claims. He argues that the "fraud in the inducement" and

"other property" exceptions to the economic loss doctrine apply

and that as a result his common law claims should go forward.

¶4 Dow cross-petitioned for review of the court of appeals'

determination that Hinrichs' Wis. Stat. § 100.18 claim survives

its motion to dismiss. It asserts first that Hinrichs' statutory

claim is barred by the economic loss doctrine. Next, it contends

that Hinrichs is not "the public" within the meaning of § 100.18 and that this court should overrule its previous decision in State

v. Automatic Merchs. of Am., Inc., 64 Wis. 2d 659, 221 N.W.2d 683

(1974). Finally, Dow contends that the heightened pleading

standard set forth by Wis. Stat. § 802.03(2) for claims of fraud

1 Hinrichs v. The DOW Chemical Co., No. 2017AP2361, unpublished slip op. (Wis. Ct. App. Feb. 6, 2019) (per curiam) (affirming in part and reversing in part an order of the circuit court for Waukesha County, Kathryn W. Foster, Judge). 2 All subsequent references to the Wisconsin statutes are to the 2015-16 version unless otherwise indicated.

2 No. 2017AP2361

applies to claims made under § 100.18, and that Hinrichs' complaint

fails to meet those heightened standards.

¶5 In examining Hinrichs' common law claims, we conclude

that the "fraud in the inducement" exception to the economic loss

doctrine does not apply to allow Hinrichs' common law claims to go

forward because the alleged misrepresentation is related to the

quality and characteristics of the product in question and is thus

not extraneous to the contract. We further conclude that the

"other property" exception to the economic loss doctrine does not

apply to allow Hinrichs' common law claims to go forward because

the JeeTops and adhesive are components of an integrated system.

¶6 With regard to Hinrichs' statutory claim, we conclude

first that the economic loss doctrine does not serve as a bar to

claims made under Wis. Stat. § 100.18. We conclude second that

one person can be "the public" for purposes of Wis. Stat.

§ 100.18(1) and decline Dow's invitation to overrule Automatic

Merchandisers. The court of appeals correctly determined that

dismissal for failure to meet "the public" component of a § 100.18 claim in this case was in error. Finally, we conclude that the

heightened pleading standard set forth by Wis. Stat. § 802.03(2)

for claims of fraud does not apply to claims made under Wis. Stat.

§ 100.18 and that Hinrichs' complaint states a claim under the

general pleading standard.

¶7 Accordingly, we affirm the decision of the court of

appeals.

3 No. 2017AP2361

I

¶8 The facts set forth below are taken from Hinrichs'

complaint. Because we are reviewing the circuit court's

determination of a motion to dismiss for failure to state a claim,

we must assume that these facts are true.3

¶9 Hinrichs developed a product called JeeTops, which he

manufactures and installs through his company, Autovation Limited.

He obtained a patent for the JeeTops in 2010.

¶10 JeeTops are acrylic skylights installed aftermarket in

the roofs of Jeep Wrangler vehicles equipped with a certain type

of hardtop. The complaint describes the JeeTops as giving "front-

seat passengers unparalleled views of the outdoors" and rear-seat

passengers "unprecedented panoramic views." After installation,

"[t]he cumulative effect is to give the Wrangler's occupants the

sensation of directly experiencing the environment through which

they are driving."

¶11 Installation of JeeTops is accomplished using an

adhesive manufactured by Dow. The adhesive performs a dual role, attaching the JeeTops to the existing Jeep and maintaining a

watertight seal.

¶12 In 2013, Mark Formentini, an agent for Dow, informed

Hinrichs that Dow had a new primer available for use with the

adhesive employed in installing JeeTops panels. Formentini

3 See Yacht Club at Sister Bay Condominium Ass'n, Inc. v. Village of Sister Bay, 2019 WI 4, ¶4, 385 Wis. 2d 158, 922 N.W.2d 95.

4 No. 2017AP2361

further informed Hinrichs that the primer would be tested with the

acrylic used in JeeTops.

¶13 Shortly thereafter, Hinrichs relayed to Dow that

customers were experiencing cracks in their JeeTops panels. Dow

responded that the acrylic used in the JeeTops had been sent to

its labs for testing.

¶14 After completing testing, Dow sent a report to Hinrichs

claiming that the adhesive was properly functioning. The report

further indicated that Dow found "[n]o evidence of any crazing or

surface cracking . . . ."

¶15 Hinrichs continued purchasing and using Dow adhesives to

install JeeTops, but customers continued to observe crazing and

fracturing of the acrylic. By October of 2014, one-third of all

JeeTops panel installations using the Dow adhesive system had

failed.

¶16 Investigation eventually revealed that the Dow adhesive

was attacking the integrity of the acrylic, which caused the panels

to leak, and subsequently to craze and fracture. By this time JeeTops had received extensive negative publicity, high profile

customers had stopped purchasing the product, and dealers had

dropped JeeTops from their product lines.

¶17 In time Hinrichs was able to identify a suitable

replacement adhesive, but by then the product had suffered a rash

of negative publicity. As a result, Hinrichs alleges that despite

the warm reception JeeTops initially received, he is unable to

sell them because of the perception that they are unreliable.

5 No. 2017AP2361

¶18 Following these events, Hinrichs brought four causes of

action against Dow: negligent misrepresentation, intentional

misrepresentation, strict responsibility misrepresentation and

violation of Wis. Stat. § 100.18(1).4 Dow moved to dismiss the

complaint for failure to state a claim upon which relief can be

granted.5

4 Wisconsin Stat. § 100.18(1) provides:

No person, firm, corporation or association, or agent or employee thereof, with intent to sell, distribute, increase the consumption of or in any wise dispose of any real estate, merchandise, securities, employment, service, or anything offered by such person, firm, corporation or association, or agent or employee thereof, directly or indirectly, to the public for sale, hire, use or other distribution, or with intent to induce the public in any manner to enter into any contract or obligation relating to the purchase, sale, hire, use or lease of any real estate, merchandise, securities, employment or service, shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in this state, in a newspaper, magazine or other publication, or in the form of a book, notice, handbill, poster, bill, circular, pamphlet, letter, sign, placard, card, label, or over any radio or television station, or in any other way similar or dissimilar to the foregoing, an advertisement, announcement, statement or representation of any kind to the public relating to such purchase, sale, hire, use or lease of such real estate, merchandise, securities, service or employment or to the terms or conditions thereof, which advertisement, announcement, statement or representation contains any assertion, representation or statement of fact which is untrue, deceptive or misleading. 5 See Wis. Stat. § 802.06(2)(a)6.

6 No. 2017AP2361

¶19 The circuit court granted Dow's motion to dismiss. As

relevant here, the circuit court determined first that the economic

loss doctrine barred Hinrichs' common law misrepresentation

claims. It characterized Hinrichs' losses as purely economic in

nature and rejected Hinrichs' argument that either the "fraud in

the inducement" exception or "other property" exception applied.

¶20 Second, the circuit court determined that Hinrichs' Wis.

Stat. § 100.18 claim must fail because Hinrichs is not "the public"

within the meaning of the statute. Specifically, the circuit court

based its conclusion on the "plain inference from the

complaint . . . that Dow's agent had already been dealing with

Plaintiff, and was merely offering another product to them."

¶21 Hinrichs appealed and the court of appeals affirmed in

part and reversed in part. The court of appeals affirmed the

circuit court's determination that the economic loss doctrine bars

Hinrichs' common law misrepresentation claims. Like the circuit

court, the court of appeals concluded that neither of the claimed

exceptions to the economic loss doctrine applied. Hinrichs v. The DOW Chemical Co., No. 2017AP2361, unpublished slip op., ¶¶14-16

(Wis. Ct. App. Feb. 6, 2019) (per curiam).

¶22 However, the court of appeals reversed the circuit

court's determination with regard to the Wis. Stat. § 100.18 claim.

It concluded that "dismissal of the Wis. Stat. § 100.18 claim based

upon the failure to meet 'the public' component of the first

element was improper. The issue requires further exploration

through the discovery process." Id., ¶22. Hinrichs petitioned for review of the court of appeals' conclusion regarding the common 7 No. 2017AP2361

law misrepresentation claims, and Dow cross-petitioned for review

of the § 100.18(1) issue.

II

¶23 We are asked to review the court of appeals'

determination affirming in part and reversing in part the circuit

court's grant of Dow's motion to dismiss for failure to state a

claim. Whether a motion to dismiss was properly granted is a

question of law this court reviews independently of the

determinations rendered by the circuit court and court of appeals.

Town of Lincoln v. City of Whitehall, 2019 WI 37, ¶21, 386

Wis. 2d 354, 925 N.W.2d 520.

¶24 A motion to dismiss tests the legal sufficiency of the

complaint. Meyers v. Bayer AG, Bayer Corp., 2007 WI 99, ¶21, 303

Wis. 2d 295, 735 N.W.2d 448. Under our established methodology

for review of a motion to dismiss, we accept all facts pleaded in

the complaint as true. Id.

¶25 In our review, we are called upon to review the court of

appeals' determination that the economic loss doctrine bars Hinrichs' common law misrepresentation claims. The application of

the economic loss doctrine to a set of facts presents a question

of law we review independently from the determinations of the

circuit court and court of appeals. Insurance Co. of N. Am. v.

Cease Elec. Inc., 2004 WI 139, ¶15, 276 Wis. 2d 361, 688

N.W.2d 462.

¶26 Next, we are asked to review the court of appeals'

conclusion that Hinrichs' claim under Wis. Stat. § 100.18(1) may proceed. In our review, we must interpret §§ 100.18(1) and Wis. 8 No. 2017AP2361

Stat. 802.03(2). Statutory interpretation likewise presents a

question of law we review independently without deference to the

interpretations of the circuit court or court of appeals. Maple

Grove Country Club Inc. v. Maple Grove Estates Sanitary Dist.,

2019 WI 43, ¶25, 386 Wis. 2d 425, 926 N.W.2d 184.

III

¶27 We address first whether the economic loss doctrine bars

Hinrichs' common law misrepresentation claims. For context, we

initially set forth the legal principles underlying the economic

loss doctrine. Subsequently, we address the applicability of the

"fraud in the inducement" and "other property" exceptions to the

economic loss doctrine in this case.

¶28 Second, we address whether the court of appeals properly

determined that Hinrichs' Wis. Stat. § 100.18 claim survives Dow's

motion to dismiss. In our review, we analyze whether the economic

loss doctrine can bar claims made pursuant to § 100.18(1). Next,

we examine whether Hinrichs is properly "the public" for purposes

of § 100.18(1). We then address whether a claim pursuant to § 100.18(1) is subject to the heightened pleading standard set

forth by Wis. Stat. § 802.03(2) for claims of fraud and whether

Hinrichs' complaint meets the applicable standard.

A

¶29 The economic loss doctrine is a judicially created

doctrine with three primary purposes. Van Lare v. Vogt, Inc.,

2004 WI 110, ¶17, 274 Wis. 2d 631, 683 N.W.2d 46 (citing Daanen &

Janssen, Inc. v. Cedarapids, Inc., 216 Wis. 2d 395, 403, 573 N.W.2d 842 (1998)). First, the doctrine exists to "maintain the 9 No. 2017AP2361

fundamental distinction between tort law and contract law . . . ."

Id. Second, it protects "commercial parties' freedom to allocate

economic risk by contract . . . ." Id. Third, the doctrine

encourages "the party best situated to assess the risk [of]

economic loss, the commercial purchaser, to assume, allocate, or

insure against that risk." Id. The doctrine has been part of our

jurisprudence since it was first adopted by this court in

Sunnyslope Grading, Inc. v. Miller, Bradford and Risberg, Inc.,

148 Wis. 2d 910, 437 N.W.2d 213 (1989).

¶30 We have described the economic loss doctrine as holding

that "a commercial purchaser of a product cannot recover solely

economic losses from the manufacturer under negligence or strict

liability theories . . . ." Van Lare, 274 Wis. 2d 631, ¶18.

"Economic loss" in the context of the doctrine is defined as "the

loss in a product's value which occurs because the product is

'inferior in quality and does not work for the general purposes

for which it was manufactured and sold.'" Insurance Co. of N.

Am., 276 Wis. 2d 361, ¶23 (quoting Wausau Tile, Inc. v. Cty. Concrete Corp., 226 Wis. 2d 235, 246, 593 N.W.2d 445 (1999)). Both

direct and consequential economic loss are encompassed within this

definition. Daanen & Janssen, Inc., 216 Wis. 2d at 401.

¶31 The upshot of the economic loss doctrine is that it

"requires transacting parties in Wisconsin to pursue only their

contractual remedies when asserting an economic loss claim, in

order to preserve the distinction between contract and tort." Ins.

Co. of N. Am., 276 Wis. 2d 361, ¶24 (quoting Digicorp, Inc. v. Ameritech Corp., 2003 WI 54, ¶34, 262 Wis. 2d 32, 662 N.W.2d 652). 10 No. 2017AP2361

It "precludes parties under certain circumstances from eschewing

the more limited contract remedies and seeking tort remedies."

Id.

B

¶32 We have recognized several exceptions to the economic

loss doctrine, two of which are at issue here. See John J.

Laubmeier, Demystifying Wisconsin's Economic Loss Doctrine, 2005

Wis. L. Rev. 225, 228 (2005). First, we address the "fraud in the

inducement" exception. Subsequently, we turn to the "other

property" exception.

¶33 This court has recognized "a narrow fraud in the

inducement exception" to the economic loss doctrine. Kaloti

Enters., Inc. v. Kellogg Sales Co., 2005 WI 111, ¶42, 283

Wis. 2d 555, 699 N.W.2d 205. We have emphasized the limited nature

of this exception. See id.

¶34 As explained by the Michigan court of appeals, on whose

opinion we relied in Kaloti Enters.,

Fraud in the inducement presents a special situation where parties to a contract appear to negotiate freely— —which normally would constitute grounds for invoking the economic loss doctrine——but where in fact the ability of one party to negotiate fair terms and make an informed decision is undermined by the other party's fraudulent behavior. Huron Tool and Eng'g Co. v. Precision Consulting Servs., Inc., 532

N.W.2d 541, 545 (Mich. Ct. App. 1995).

¶35 Pursuant to this exception, "a fraud in the inducement

claim is not barred by the economic loss doctrine where the fraud is extraneous to, rather than interwoven with, the contract."

11 No. 2017AP2361

Kaloti Enters., 283 Wis. 2d 555, ¶42 (citations and internal

quotation omitted). To invoke the "fraud in the inducement"

exception, a plaintiff must demonstrate three elements: (1) that

the defendant engaged in an intentional misrepresentation; (2)

that the misrepresentation occurred before the contract was

formed; and (3) that the alleged misrepresentation was extraneous

to the contract. Id. Stating the third element differently, the

misrepresentation must "concern[] matters whose risk and

responsibility did not relate to the quality or the characteristics

of the goods for which the parties contracted or otherwise involved

performance of the contract." Id.

¶36 A misrepresentation relates to the quality or

characteristics of the goods sold if it is expressly dealt with in

the contract's terms. Id., ¶43. If not addressed explicitly in

the contract, a misrepresentation is still related to the quality

or characteristics of the goods sold, precluding the application

of the "fraud in the inducement" exception, if the

misrepresentation informs the reasonable expectations of the parties to the risk of loss in the event the goods purchased did

not meet the purchaser's expectations. Id. (citations omitted).

¶37 Hinrichs urges us to apply the "fraud in the inducement"

exception here to preclude application of the economic loss

doctrine. He contends that his prior purchases of adhesive from

Dow do not preclude a claim where a subsequent purchase is induced

by a misrepresentation.

¶38 We disagree with Hinrichs. His argument ignores a fatal shortcoming: that the alleged misrepresentation regarding the 12 No. 2017AP2361

effectiveness of Dow's adhesive is related to the quality and

characteristics of the product in question and is thus not

extraneous to the contract. As the court of appeals correctly

stated, "[w]hether the Dow adhesive was properly functioning on

the acrylic used in JeeTops directly relates to its quality and

characteristics——in particular its ability to maintain a water-

tight seal, which was one of its main functions." Hinrichs, No.

2017AP2361, unpublished slip op., ¶14. Hinrichs therefore cannot

fulfill the third necessary element for application of the "fraud

in the inducement" exception.

¶39 Therefore, we conclude that the "fraud in the

inducement" exception to the economic loss doctrine does not apply

to allow Hinrichs' common law misrepresentation claims to go

forward because the alleged misrepresentation is related to the

quality and characteristics of the product in question and is thus

not extraneous to the contract.

C

¶40 We turn now to the "other property" exception to the economic loss doctrine. Pursuant to this exception, the economic

loss doctrine "does not bar a commercial purchaser's claims based

on personal injury or damage to property other than the product,

or economic loss claims that are alleged in combination with

noneconomic losses." Daanen & Janssen, Inc., 216 Wis. 2d at 402;

Grams v. Milk Products, Inc., 2005 WI 112, ¶24, 283 Wis. 2d 511,

699 N.W.2d 167. In other words, the economic loss doctrine bars

"the recovery of purely economic losses in consumer transactions through tort remedies where the only damage is to the product 13 No. 2017AP2361

purchased by the consumer." State Farm Fire and Cas. Co. v. Hague

Quality Water, Int'l, 2013 WI App 10, ¶6, 345 Wis. 2d 741, 826

N.W.2d 412 (citing State Farm Mut. Auto. Ins. Co. v. Ford Motor

Co., 225 Wis. 2d 305, 341, 348, 592 N.W.2d 201 (1999)).

¶41 To determine whether the "other property" exception

applies, we apply a two part test. Id. First, we consider whether

the defective product and the damaged property are part of an

"integrated system." Id., ¶7. If the product and damaged property

are part of such a system, then any damage to that property is

considered to be damage to the product itself. Id. That is, "once

a part becomes integrated into a completed product or system, the

entire product or system ceases to be 'other property' for purposes

of the economic loss doctrine." Selzer v. Brunsell Bros., Ltd.,

2002 WI App 232, ¶38, 257 Wis. 2d 809, 652 N.W.2d 806 (citations

omitted).6

6 Hinrichs urges us to adopt a new test he terms the "product bargained for" test in determining whether products constitute an "integrated system." He explains such a test as based on "what the buyer agreed to buy and what the seller agreed to sell." In Hinrichs' view, the adhesive and JeeTops were not an integrated system because the bargain he entered into with Dow was for the purchase of the adhesive as a standalone product and not as part of a fully integrated system.

We decline to adopt Hinrichs' "product bargained for" analysis. Hinrichs does not identify any infirmity in the current test that would require us to depart from our prior case law. Further, we observe that the Wausau Tile court rejected a similar contention that the "integrated system" rule does not apply where a party buys only a component and not the fully integrated system. See Wausau Tile, Inc. v. Cty. Concrete Corp., 226 Wis. 2d 235, 252 n.10, 593 N.W.2d 445 (1999).

14 No. 2017AP2361

¶42 If the damaged property and the defective product are

not part of an integrated system, we then apply the second part of

the "other property" test——the "disappointed expectations" test.

State Farm Fire and Cas. Co., 345 Wis. 2d 741, ¶7. In doing so,

we focus on the product's expected function and whether the

purchaser should have foreseen that the product could cause the

damage at issue. Id. When claimed damages are merely the result

of disappointed expectations of a product's performance, the

exception will not apply and the economic loss doctrine will bar

recovery in tort. Grams, 283 Wis. 2d 511, ¶3.

¶43 The court of appeals here concluded that the JeeTops and

the adhesive were components of an integrated system. Hinrichs,

No. 2017AP2361, unpublished slip op., ¶15. It reasoned that

"[t]hey became components of an integrated system once the adhesive

was applied to bond the JeeTops to the motor vehicle. At that

point, they were integral parts of a greater whole and did not

serve an independent purpose." Id. Accordingly, the court of

appeals concluded that the "other property" exception did not apply. Id.

¶44 We agree with the court of appeals that the JeeTops and

the adhesive formed an integrated system.7 Wausau Tile, 226

7Because we determine that the JeeTops and adhesive were components of an integrated system, we need not consider the second part of the "other property" test——disappointed expectations. See State Farm Fire and Cas. Co. v. Hague Quality Water, Int'l, 2013 WI App 10, ¶7, 345 Wis. 2d 741, 826 N.W.2d 412 ("If the damaged property is not part of an integrated system with the defective product, then courts apply the 'disappointed expectations' test . . . .") (emphasis added).

15 No. 2017AP2361

Wis. 2d 235, provides a useful analogy. In that case, Wausau Tile

purchased cement from Medusa Corporation for use in manufacturing

concrete paving blocks. Id. at 241. Wausau Tile claimed that the

concrete it received from Medusa was defective and brought claims

against Medusa sounding in both contract and tort. Id. at 242.

¶45 This court determined that the economic loss doctrine

barred Wausau Tile's tort claims. Id. at 241. Rejecting Wausau

Tile's argument that the "other property" exception applies, this

court reasoned that "the pavers were integrated systems comprised

of several component materials, including Medusa's cement." Id.

at 251. "[V]arious substances incorporated into finished products

constitute integral components of those products." Id. (citation

omitted).

¶46 Similarly here, when the adhesive joins a JeeTops to the

body of a Jeep, it creates an integrated system. An adhesive does

not function on its own——its basic purpose is to integrate two

parts by adhering them together. Like the court of appeals did,

we see no relevant difference between the products here and others that courts have determined to be components of an integrated

system, such as the cement in a concrete paving block in Wausau

Tile, a window in a house,8 a gear in a printing press,9 a generator

8 Selzer v. Brunsell Bros., Ltd., 2002 WI App 232, ¶38, 257 Wis. 2d 809, 652 N.W.2d 806. 9 Cincinnati Ins. Co. v. AM Int'l, Inc., 224 Wis. 2d 456, 463, 591 N.W.2d 869 (Ct. App. 1999).

16 No. 2017AP2361

connected to a turbine,10 and a drive system in a helicopter.11

Hinrichs, No. 2017AP2361, unpublished slip op., ¶15 n.2 (citing

Selzer, 257 Wis. 2d 809, ¶¶38-39).

¶47 Accordingly, we conclude that the "other property"

exception to the economic loss doctrine does not apply to allow

Hinrichs' common law misrepresentation claims to go forward

because the JeeTops and adhesive are components of an integrated

system.

IV

¶48 We address next Hinrichs' claim under Wis. Stat.

§ 100.18. Section 100.18(1) provides in relevant part:

No person, firm, corporation or association, or agent or employee thereof, with intent to sell . . . merchandise . . . or with intent to induce the public in any manner to enter into any contract or obligation relating to the purchase, . . . shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, . . . an advertisement, announcement, statement or representation of any kind to the public . . . contain[ing] any assertion, representation or statement of fact which is untrue, deceptive or misleading. ¶49 This section is part of Wisconsin's Deceptive Trade

Practices Act, the purpose of which is "to protect consumers from

10Midwhey Powder Co., Inc. v. Clayton Indus., 157 Wis. 2d 585, 590-91, 460 N.W.2d 426 (Ct. App. 1990). 11Midwest Helicopters Airways, Inc. v. Sikorsky Aircraft, Div. of United Technologies Corp., 849 F. Supp. 666, 672 (E.D. Wis. 1994), aff'd Nos. 94-1645, 94-1700, 1994 WL 682906 (7th Cir. 1994).

17 No. 2017AP2361

untrue, deceptive or misleading representations to promote the

sale of a product." Bonn v. Haubrich, 123 Wis. 2d 168, 173, 366

N.W.2d 503 (Ct. App. 1985). It is also intended "to deter sellers

from making false and misleading representations in order to

protect the public." Novell v. Migliaccio, 2008 WI 44, ¶30, 309

Wis. 2d 132, 749 N.W.2d 544.

¶50 As a threshold matter, we consider whether the economic

loss doctrine bars claims made pursuant to Wis. Stat. § 100.18.

The court of appeals has previously concluded that the economic

loss doctrine does not serve as such a bar. Kailin v. Armstrong,

2002 WI App 70, ¶43, 252 Wis. 2d 676, 643 N.W.2d 132.

¶51 In Kailin, the court of appeals rejected an argument

that Wis. Stat. § 100.18 does not create a new cause of action,

but instead provides a remedy for common law claims. Id., ¶42.

Because Wis. Stat. § 100.18 creates a new cause of action, the

court of appeals therefore saw "nothing supporting [the]

conclusion that the economic loss doctrine applies to claims under

§ 100.18." Id. The Kailin court further found "no argument to link the rationale for the economic loss doctrine to the purpose

of § 100.18 . . . ." Id.

The legislature has plainly chosen in § 100.18 to provide protection and remedies for false advertising that do not exist at common law. The underpinnings of the economic loss doctrine——protecting parties' freedom to allocate economic risk by contract, encouraging the purchaser to assume, allocate, or insure against that risk, and maintaining the fundamental distinction between tort and contract law——are either irrelevant to, or inconsistent with, that legislative choice. Id.

18 No. 2017AP2361

¶52 Dow urges us to reject Kailin's approach and apply the

economic loss doctrine to bar the Wis. Stat. § 100.18 claim in

this case. It contends that Kailin was decided in the context of

a consumer relationship, and is therefore distinguishable from the

sophisticated commercial relationship in which the claim arises

here.

¶53 For support, Dow turns to two federal district court

cases. First, in MBI Acquisition Partners, L.P. v. Chronicle

Publ'g Co., 301 F. Supp. 2d 873, 885-86 (W.D. Wis. 2002), the court

granted the defendants summary judgment on the plaintiff's Wis.

Stat. § 100.18 claims on the basis of the economic loss doctrine.

Second, in Weather Shield Mfg., Inc. v. PPG Indus., Inc., No. 97-

C-707-S, 1998 WL 469913, at *6 (W.D. Wis. June 11, 1998), the court

applied the economic loss doctrine to § 100.18 claims, reasoning,

"exempting § 100.18 claims from the effects of the economic loss

doctrine would virtually nullify the doctrine since § 100.18 is

broad enough to encompass nearly every misrepresentation claim in

the commercial sales context, and claims arising from product failure can readily be recast as misrepresentation claims."

¶54 The federal court cases on which Dow relies are not

binding on this court. State v. Wood, 2010 WI 17, ¶18, 323

Wis. 2d 321, 780 N.W.2d 63. Further, MBI Acquisition Partners,

the one published case Dow cites in support, applied the economic

loss doctrine to § 100.18 claims with little in the way of

analysis. See MBI Acquisition Partners, 301 F. Supp. 2d at 885-

86.

19 No. 2017AP2361

¶55 We reject Dow's argument. Rather than adopting

nonbinding authority with scant analysis, we instead reaffirm the

Kailin court's determination on this issue. Wisconsin Stat.

§ 100.18 created a new cause of action, providing "protection and

remedies for false advertising that do not exist at common law."

Kailin, 252 Wis. 2d 676, ¶42; see also K & S Tool & Die Corp. v.

Perfection Mach. Sales, Inc., 2007 WI 70, ¶36, 301 Wis. 2d 109,

732 N.W.2d 792 (determining that "the legislature created a

distinct cause of action" pursuant to § 100.18). As the Kailin

court stated, the policies underlying the economic loss doctrine—

—the allocation of risk and the distinction between tort and

contract law——are irrelevant to the legislature's choice to

provide a purely statutory cause of action and remedy by way of

§ 100.18. Kailin, 252 Wis. 2d 676, ¶42. A common law restriction

like the economic loss doctrine therefore does not apply to

Hinrichs' statutory claim.

¶56 Therefore, we conclude that the economic loss doctrine

does not serve as a bar to claims made under Wis. Stat. § 100.18. B

¶57 Having determined that the economic loss doctrine does

not bar claims made pursuant to Wis. Stat. § 100.18, we turn now

to Dow's assertion that Hinrichs is not "the public" for purposes

of the statute.

¶58 To prevail on a claim under Wis. Stat. § 100.18, a

plaintiff must demonstrate that the defendant made a

representation to "the public." K & S Tool & Die Corp., 301

20 No. 2017AP2361

Wis. 2d 109, ¶19. "The public" is not defined in § 100.18,

although courts have interpreted the term. Id., ¶20.

¶59 In the seminal case on the subject, Automatic

Merchandisers, a company was alleged to have engaged in a marketing

scheme to sell vending machines at prices in excess of their actual

value. 64 Wis. 2d at 660. The company placed classified

advertisements in newspapers, and subsequently contacted those who

responded to the advertisement at their homes with deceptive

promotional materials and oral representations. Id.

¶60 In its analysis, the Automatic Merchandisers court

examined "whether or not Sec. 100.18(1), Stats. applies to oral

representations made in private conversations to prospective

purchasers of the defendants' products." Id. at 662. The court

determined that the statute applies in such a situation: "While

the representations were made privately to prospective purchasers

their only relationship to the defendants was that they had

responded to advertisements in the classified sections of

newspapers. These persons were members of 'the public' as that term is used in this statute." Id. at 663.

¶61 Further, the court recognized that "the number of people

involved is not controlling and that 'the public' may be only one

person." Id. at 664 (citing Ford Hydro-Electric Co. v. Town of

Aurora, 206 Wis. 489, 240 N.W. 418 (1932)). "The use of the term

'the public' does not mean that the statements be made to a large

audience." Id. Indeed, the use of the term "contemplates the

individual action of one member of the public." Id. Rather than

21 No. 2017AP2361

the number of people involved, "[t]he important factor is whether

there is some particular relationship between the parties." Id.

¶62 Following Automatic Merchandisers, Wisconsin courts have

consistently applied the "particular relationship" test in

determining whether a plaintiff is a member of "the public" for

purposes of Wis. Stat. § 100.18(1). See, e.g., K & S Tool & Die

Corp., 301 Wis. 2d 109, ¶27; Kailin, 252 Wis. 2d 676, ¶44. The

test provides that "a plaintiff remains a member of 'the public'

unless a particular relationship exists between him or her and the

defendant." K & S Tool & Die Corp., 301 Wis. 2d 109, ¶27. Whether

such a relationship exists is a question of fact that depends on

the peculiar facts and circumstances of the case. Id., ¶¶27, 30

(citing Cawker v. Meyer, 147 Wis. 320, 326, 133 N.W. 157 (1911)).

¶63 Dow contends that our previously established framework

of analysis strays from the plain language of Wis. Stat.

§ 100.18(1). Specifically, it asserts that one person cannot be

"the public" and that consequently we should overrule Automatic

Merchandisers. In Dow's view, Automatic Merchandisers is inconsistent with the plain meaning of "public."

¶64 We decline Dow's invitation to overrule Automatic

Merchandisers. First, as Automatic Merchandisers states, the use

of "the public" in Wis. Stat. § 100.18(1) "contemplates the

individual action of one member of the public." Automatic Merchs.,

64 Wis. 2d at 664; see also Wis JI——Civil 2418 (2017) (referring

to a representation made to "one or more members of the public").

"While the readily apparent legislative goal underlying the enactment of § 100.18 is to protect all members of [the] public 22 No. 2017AP2361

from fraudulent advertisements and deceptive marketing practices,

in its practical application, the section individually protects

each member of the public." Jersild v. Aker, 775 F. Supp. 1198,

1205 (E.D. Wis. 1991).

¶65 For example, in Automatic Merchandisers, the

misrepresentation induced action when any individual member of the

public entered into a private interaction with the vending machine

company. See Automatic Merchs., 64 Wis. 2d at 660. If only one

person saw the newspaper ad at issue, responded, and formed a

relationship with Automatic Merchandisers, Wis. Stat. § 100.18(1)

was implicated. Similarly here, a single representation to a

single person is enough to trigger § 100.18(1)'s protections.

¶66 Second, the doctrine of stare decisis12 militates against

the precipitous change in the law that Dow seeks. Stare decisis

is fundamental to the rule of law. Johnson Controls, Inc. v.

Emp'rs Ins. of Wausau, 2003 WI 108, ¶94, 264 Wis. 2d 60, 655

N.W.2d 227. Indeed, "[t]his court follows the doctrine of stare

decisis scrupulously because of our abiding respect for the rule of law." Id.

¶67 "Fidelity to precedent ensures that existing law will

not be abandoned lightly. When existing law is open to revision

12"Stare decisis" refers to the principle that requires courts to "stand by things decided." State v. Harrell, 199 Wis. 2d 654, 667, 546 N.W.2d 115 (1996) (Abrahamson, J., concurring); see Black's Law Dictionary 1626 (10th ed. 2014) (defining "stare decisis" as "[t]he doctrine of precedent, under which a court must follow earlier judicial decisions when the same points arise again in litigation").

23 No. 2017AP2361

in every case, deciding cases becomes a mere exercise of judicial

will, with arbitrary and unpredictable results." Schultz v.

Natwick, 2002 WI 125, ¶37, 257 Wis. 2d 19, 653 N.W.2d 266 (internal

quotation and citations omitted). Accordingly, any departure from

stare decisis requires "special justification." Id.

¶68 Our case law has identified several criteria for

overturning prior cases. Johnson Controls, Inc., 264 Wis. 2d 60,

¶98. "First, changes or developments in the law have undermined

the rationale behind a decision." Id. "Second, there is a need

to make a decision correspond to newly ascertained facts." Id.

"Third, there is a showing that the precedent has become

detrimental to coherence and consistency in the law." Id. We

also consider "whether the prior decision is unsound in principle,

whether it is unworkable in practice, and whether reliance

interests are implicated." Id., ¶99.

¶69 In this case, these criteria do not support overturning

Automatic Merchandisers. As analyzed above, its interpretation is

consistent with both the plain language and the purpose of Wis. Stat. § 100.18(1). Cases subsequent to Automatic Merchandisers

have consistently and coherently followed it. See, e.g., K & S

Tool & Die Corp., 301 Wis. 2d 109, ¶¶23-27; Bonn, 123 Wis. 2d at

173 n.4. The particular relationship test is clear and workable.

¶70 Accordingly, we reaffirm that one person can be "the

public" for purposes of Wis. Stat. § 100.18(1) and decline Dow's

invitation to overrule Automatic Merchandisers. The court of

appeals correctly determined that dismissal for failure to meet

24 No. 2017AP2361

"the public" component of a § 100.18 claim in this case was in

error.

¶71 We emphasize that we are not determining in this opinion

whether Hinrichs is in fact a member of "the public," but rather

that we agree with the court of appeals that dismissal on that

ground was in error. See Hinrichs, No. 2017AP2361, unpublished

slip op., ¶22. Whether Hinrichs and Dow were in a "particular

relationship" so as to remove Hinrichs from the realm of "the

public" pursuant to Wis. Stat. § 100.18(1) remains an open question

to be determined by the circuit court after further discovery.

See K & S Tool & Die Corp., 301 Wis. 2d 109, ¶27.

¶72 Finally, we address whether Hinrichs' claim pursuant to

Wis. Stat. § 100.18 is subject to the heightened pleading standard

set forth by § 802.03(2) for claims of fraud and whether Hinrichs'

complaint states a claim under the appropriate standard. This is

an issue of first impression that was not addressed by the court

of appeals in this case. ¶73 Wisconsin Stat. § 802.03(2) provides in relevant part:

"In all averments of fraud . . . the circumstances constituting

25 No. 2017AP2361

fraud . . . shall be stated with particularity."13 To put

defendants on notice so that they can prepare meaningful responses,

this statute requires that allegations of fraud specify the

particular individuals involved, where and when misrepresentations

occurred, and to whom the misrepresentations were made. Kaloti

Enters., Inc., 283 Wis. 2d 555, ¶21 (citations omitted). In other

words, "[p]articularity means the 'who, what, when, where and

how.'" Ferris v. Location 3 Corp., 2011 WI App 134, ¶10, 337

Wis. 2d 155, 804 N.W.2d 822 (citing Friends of Kenwood v. Green,

2000 WI App 217, ¶14, 239 Wis. 2d 78, 619 N.W.2d 271).

¶74 Dow asserts that Wis. Stat. § 802.03(2)'s heightened

pleading requirements apply to Hinrichs' claim under Wis. Stat.

§ 100.18(1). Hinrichs apparently concedes this point and

accordingly contends that his complaint was sufficient to meet the

heightened standard.

¶75 However, we are not bound by Hinrichs' apparent

concession of law. See Fletcher v. Eagle River Memorial Hosp.,

Inc., 156 Wis. 2d 165, 179, 456 N.W.2d 788 (1990). Consequently,

The Wis. Stat. § 802.03(2) pleading standard for fraud 13

claims is more stringent than the standard employed for most other claims. Generally, for claims not subject to § 802.03(2) a plaintiff need only plead "[a] short and plain statement of the claim, identifying the transaction or occurrence or series of transactions or occurrences out of which the claim arises and showing that the pleader is entitled to relief." Wis. Stat. § 802.02(1)(a); see Cattau v. Nat'l Ins. Servs. of Wis., 2019 WI 46, ¶4, 386 Wis. 2d 515, 926 N.W.2d 756 (per curiam); Data Key Partners v. Permira Advisers LLC, 2014 WI 86, ¶21, 356 Wis. 2d 665, 849 Wis. 2d 693 (citing Strid v. Converse, 111 Wis. 2d 418, 422- 23, 331 N.W.2d 350 (1983)). Thus, we refer to § 802.03(2) as creating a "heightened" standard.

26 No. 2017AP2361

we examine the question Dow poses and arrive at a contrary

conclusion.

¶76 By its terms, Wis. Stat. § 802.03(2) applies to "all

averments of fraud." Although entitled "Fraudulent

representations," the text of Wis. Stat. § 100.18 does not include

the word "fraud." The title of a statute may be helpful in

resolving ambiguities in a statute, but it is not part of the

statute. State v. Dorsey, 2018 WI 10, ¶30, 379 Wis. 2d 386, 906

N.W.2d 158; Wis. Stat. § 990.001(6). Therefore, we cannot rely on

the title of "fraudulent representations" to determine that

§ 100.18 is a "fraud" statute to which § 802.03(2) applies.

¶77 Case law has previously indicated that Wis. Stat.

§ 100.18 creates a new cause of action and does not simply provide

a remedy for common law fraud claims. See Kailin, 252 Wis. 2d 676,

¶42. Through the enactment of § 100.18, "[t]he legislature has

plainly chosen . . . to provide protection and remedies for false

advertising that do not exist at common law." Id. Kailin thus

indicates that common law restrictions do not apply to § 100.18. See id. That Wis. Stat. § 802.03(2) may apply to common law fraud

claims therefore does not affect our determination of whether it

also applies to purely statutory claims under § 100.18.

¶78 Further, considering the purpose of Wis. Stat. § 100.18

we arrive at the conclusion that the application of heightened

pleading standards would run counter to that purpose. As stated,

§ 100.18 serves a dual purpose of protecting consumers and

deterring sellers from making deceptive representations. See supra, ¶49; Bonn, 123 Wis. 2d at 173; Novell, 309 Wis. 2d 132, 27 No. 2017AP2361

¶30. It is aimed at preventing "certain activities deemed harmful

to citizens' economic and social well-being." Tim Torres Enters.,

Inc. v. Linscott, 142 Wis. 2d 56, 72, 416 N.W.2d 670 (Ct. App.

1987).

¶79 "Section 100.18 has maintained its central importance in

consumer protection for more than a century since its enactment."

John S. Greene, Navigating Wisconsin's Consumer Protection System,

90 Wis. Law. 22, 24 (Sept. 2017); see also James D. Jeffries,

Protection for Consumers Against Unfair and Deceptive Business

Practices in Wisconsin, 57 Marq. L. Rev. 559, 595-605 (1974). "The

state, individual consumers, and business consumers regularly

invoke Wis. Stat, section 100.18 to pursue claims of deceptive

representations." Greene, supra, at 24.

¶80 Consistent with this history and purpose, Wis. Stat.

§ 100.18(11)(b)2. provides for a private cause of action.14 As

14 Wis. Stat. § 100.18(11)(b)2. provides:

Any person suffering pecuniary loss because of a violation of this section by any other person may sue in any court of competent jurisdiction and shall recover such pecuniary loss, together with costs, including reasonable attorney fees, except that no attorney fees may be recovered from a person licensed under ch. 452 while that person is engaged in real estate practice, as defined in s. 452.01(6). Any person suffering pecuniary loss because of a violation by any other person of any injunction issued under this section may sue for damages therefor in any court of competent jurisdiction and shall recover twice the amount of such pecuniary loss, together with costs, including reasonable attorney fees, except that no attorney fees may be recovered from a person licensed under ch. 452 while that person is engaged in real estate practice, as defined in s. 452.01(6).

28 No. 2017AP2361

such, a successful plaintiff is entitled to recover pecuniary

losses, costs, and reasonable attorney fees. § 100.18(11)(b)2.;

see Mark R. Hinkston, Protecting Consumers in the Modern Age:

Wisconsin's Deceptive Trade Practices Act, 81 Wis. Law. 14, 16

(Oct. 2008). Double damages are available for any violation of an

injunction previously issued pursuant to § 100.18.

§ 100.18(11)(b)2.; see Wis. Stat. § 100.18(11)(d) (authorizing the

Department of Agriculture, Trade, and Consumer Protection, the

Department of Justice, or any district attorney to seek a temporary

or permanent injunction of "any violation of this section").

¶81 "We have previously recognized that an individual who

brings an action to enforce a statutory right may be acting as a

'private attorney general' to enforce the public's rights under

the statute." Watkins v. Labor and Indus. Review Comm'n, 117

Wis. 2d 753, 764, 345 N.W.2d 482 (1984) (citing Shands v.

Castrovinci, 115 Wis. 2d 352, 358, 340 N.W.2d 506 (1983)). Absent

such a private right of action and the prospect of attorney fees,

many victims of deceptive representations "would not be in an economic position to advance the private and public interest at

stake." Estate of Miller v. Storey, 2017 WI 99, ¶58, 378

Wis. 2d 358, 903 N.W.2d 759. We must look at Wis. Stat. § 100.18

through this lens when examining the applicable pleading standard.

¶82 Heightened pleading requirements may prevent private,

pro se parties from seeking redress for deceptive representations.

Such a requirement would run counter to Wis. Stat. § 100.18's

purpose as a consumer protection statute with a broad scope. See Tim Torres Enters., Inc., 142 Wis. 2d at 72 ("The broad remedial 29 No. 2017AP2361

scope of sec. 100.18 and its protective purpose make it similar to

the remedial provisions of the federal antitrust laws in that to

eliminate or rectify a wrong the traditional standards of proof

may be relaxed if necessary.").

¶83 Accordingly, we conclude that the heightened pleading

standard set forth by Wis. Stat. § 802.03(2) for claims of fraud

does not apply to claims made under Wis. Stat. § 100.18.

¶84 We therefore apply general pleading standards to

determine if Hinrichs' complaint states a claim. Thus, we must

examine whether Hinrichs' complaint pleads facts, which if true,

would entitle him to relief. See Cattau v. Nat'l Ins. Servs. of

Wis., 2019 WI 46, ¶4, 386 Wis. 2d 515, 926 N.W.2d 756 (per curiam);

Data Key Partners v. Permira Advisers LLC, 2014 WI 86, ¶21, 356

Wis. 2d 665, 849 Wis. 2d 693 (citing Strid v. Converse, 111

Wis. 2d 418, 422-23, 331 N.W.2d 350 (1983)).

¶85 Specifically with regard to a claim made pursuant to

Wis. Stat. § 100.18(1), a plaintiff must allege facts that would

fulfill three elements: (1) the defendant made a representation to one or more members of the public with the intent to induce an

obligation; (2) the representation was untrue, deceptive or

misleading; and (3) the representation materially induced a

pecuniary loss to the plaintiff. Novell, 309 Wis. 2d 132, ¶49;

see Wis JI——Civil 2418 (2017) (referring to "one or more members

of the public[,]" consistent with this court's conclusion in

Automatic Merchs., 64 Wis. 2d at 663-64). Hinrichs' complaint

alleges facts that, if true, meet each of these elements.

30 No. 2017AP2361

¶86 First, as analyzed above, the complaint alleges that Dow

made a representation to "the public" within the meaning of Wis.

Stat. § 100.18. The complaint further alleges that the

representation was made "with the intent of inducing Mr. Hinrichs

to continue purchasing Dow adhesives."

¶87 Second, as the court of appeals determined, "the

complaint sufficiently alleges that Dow made representations that

were untrue, deceptive or misleading." Hinrichs, No. 2017AP2361,

unpublished slip op., ¶23. Specifically, the complaint alleges

that "[t]he report prepared and produced by Dow claimed the Dow

adhesive was properly functioning on the acrylic used by Mr.

Hinrichs in the JeeTops panels . . . ." The complaint further

alleges that this representation was untrue, deceptive, or

misleading in that the Dow adhesive actually was the cause of the

structural breakdown of the JeeTops panels.

¶88 Finally, the complaint amply alleges that the

representation materially induced a pecuniary loss to Hinrichs.

Hinrichs alleges that Dow's representations destroyed his ability to sell further JeeTops panels by negatively affecting the

product's reputation. The complaint specifically references

negative commentary on social media and elsewhere within the Jeep

enthusiast community, as well as allegations that high profile

customers stopped purchasing the product and that dealers dropped

JeeTops from their product lines.

¶89 We therefore conclude that Hinrichs' complaint states a

claim under the general pleading standard.

31 No. 2017AP2361

V

¶90 In sum, with regard to Hinrichs' common law claims, we

conclude that the "fraud in the inducement" exception to the

economic loss doctrine does not apply to allow Hinrichs' common

law claims to go forward because the alleged misrepresentation is

related to the quality and characteristics of the product in

question and is thus not extraneous to the contract. We further

conclude that the "other property" exception to the economic loss

doctrine does not apply to allow Hinrichs' common law claims to go

forward because the JeeTops and adhesive are components of an

integrated system.

¶91 Concerning Hinrichs' statutory claims, we conclude first

that the economic loss doctrine does not serve as a bar to claims

made under Wis. Stat. § 100.18. We conclude second that one

person can be "the public" for purposes of § 100.18(1) and decline

Dow's invitation to overrule Automatic Merchandisers. The court

of appeals correctly determined that dismissal for failure to meet

"the public" component of a § 100.18 claim in this case was in error. Finally, we conclude that the heightened pleading standard

set forth by Wis. Stat. § 802.03(2) for claims of fraud does not

apply to claims made under Wis. Stat. § 100.18 and that Hinrichs'

complaint states a claim under the general pleading standard.

¶92 Accordingly, we affirm the decision of the court of

By the Court.—The decision of the court of appeals is

affirmed.

32 No. 2017AP2361

¶93 DANIEL KELLY and BRIAN HAGEDORN, JJ., did not

participate.

33 No. 2017AP2361.rgb

¶94 REBECCA GRASSL BRADLEY, J. (concurring in part,

dissenting in part). I agree with the majority's decision to

affirm the court of appeals' dismissal of Hinrichs'1 common law

misrepresentation claims because the economic loss doctrine bars

them, and the "other property" and "fraudulent inducement"

exceptions to that doctrine do not apply. Accordingly, I join

parts I, II, and III of the majority opinion. However, the

majority's interpretation of Wis. Stat. § 100.18(1) (2015-2016)2

does not apply the plain meaning of "the public," which would

exclude Hinrichs based upon the particularized statements Dow made

solely to Hinrichs within the context of the ongoing business

relationship between the parties. I would therefore reverse the

court of appeals' decision, which allows Hinrichs' § 100.18

fraudulent representation claim against Dow to proceed despite the

absence of any "advertisement, announcement, statement or

representation" "to the public" or "to induce the public" as

required under the statute. Accordingly, I dissent from part IV.B of the majority opinion.3

1 Like the majority, I use "Hinrichs" to refer to Chris Hinrichs and Autovation Limited collectively. 2 All subsequent references to the Wisconsin Statutes are to the 2015-16 version unless otherwise indicated. 3 Because I conclude Hinrichs is not a member of "the public" within the meaning of Wis. Stat. § 100.18(1) and the statute therefore does not provide an avenue for Hinrichs' claim, I need not address whether the economic loss doctrine bars a claim under this statute (part IV.A of the majority opinion) or whether the heightened pleading requirements apply to § 100.18(1) (part IV.C of the majority opinion).

1 No. 2017AP2361.rgb

¶95 The foundation for Wis. Stat. § 100.18(1) arose in 1913,

when the Wisconsin Legislature first enacted a law prohibiting

untrue and deceptive advertisements to induce the purchase of a

good. See § 1, ch. 510, Laws of 1913. In 1925, the legislature

adopted the precursor to the current version of § 100.18(1). See

§ 2, ch. 264, Laws of 1925. In the text of the original Act, like

the current language of § 100.18(1), the phrase "the public"

appeared five times. See § 100.18(1); § 2, ch. 264, Laws of 1925.

The text of § 100.18(1) currently comprises a single lengthy

sentence, prompting one court to remark "its length would put even

Dickens to shame."4 Eliminating repetitive words, as well as those

portions inapplicable in this case, condenses the statute to the

following more readable statement:

No . . . corporation . . . with intent to sell . . . any . . . merchandise . . . to the public . . . or with intent to induce the public . . . to enter into any contract or obligation relating to the purchase . . . of any . . . merchandise . . . shall make . . . or place before the public, or cause . . . to be made . . . or placed before the public, in this state . . . an advertisement . . . statement or representation of any kind to the public relating to such purchase . . . which advertisement, . . . statement or representation contains any assertion, representation or statement of fact which is untrue, deceptive or misleading. § 100.18(1) (emphasis added). Based merely on the number of times

the phrase appears in the statutory text, "the public" has manifest

importance to the law's meaning.

4 Uniek, Inc. v. Dollar General Corp., 474 F. Supp. 2d 1034, 1036 (W.D. Wis. 2007).

2 No. 2017AP2361.rgb

¶96 This court's first interpretation of the meaning of the

phrase "the public" appeared in State v. Automatic Merchandisers

of Am., Inc., 64 Wis. 2d 659, 663-64, 221 N.W.2d 683 (1974). A

full recitation of that case is unnecessary here, as the majority

already outlined it. See majority op., ¶¶59-61. In Automatic

Merchandisers, the court held Wis. Stat. § 100.18(1) reaches

private face-to-face oral representations between a seller and

prospective purchasers responding to newspaper advertisements.

Automatic Merchs. of Am., Inc., 64 Wis. 2d at 663. The court

recognized that "in some situations one person can constitute the

public" and the alleged misrepresentation need not be communicated

to a wide audience. Id. at 664. Generally, the court concluded

§ 100.18 "protect[s] the residents of Wisconsin from any untrue,

deceptive or misleading representations made to promote the sale

of a product." Id. at 663. The court identified as "[t]he

important factor" in defining "the public" whether there is a

"particular relationship" between the parties. Id. at 664 (citing

Cawker v. Meyer, 147 Wis. 320, 326, 133 N.W. 157 (1911)). ¶97 In this case, the majority expands Automatic

Merchandisers' interpretation of "the public" beyond the plain

meaning of Wis. Stat. § 100.18. While just a single individual

may receive a representation prohibited under § 100.18, in order

for the representation to run afoul of that statute, it must have

been "made . . . or placed before the public." See Automatic

Merchs., 64 Wis. 2d at 664; majority op., ¶¶64-65. In Automatic

Merchandisers, "the representations were made privately to prospective purchasers" whose "only relationship" to the sellers

3 No. 2017AP2361.rgb

consisted of responding "to advertisements in the classified

sections of newspapers." Automatic Merchs., 64 Wis. 2d at 663.

The court's statement that "'the public' may be only one person"

simply recognized that even if only one prospective purchaser

responded to the advertisement and heard the misrepresentation

from the seller, then that person would have a claim under

§ 100.18(1) as a member of "the public." See id. at 664 (citations

omitted). In contrast, at the time Hinrichs alleges Dow made a

misrepresentation regarding its adhesive, Hinrichs and Dow were

businesses in a commercial relationship. Because Hinrichs alleges

Dow's misrepresentation was made solely to Hinrichs, and in regard

to Hinrichs' unique application of Dow's adhesive to Hinrichs'

particular product, unlike the generalized representations made

privately in Automatic Merchandisers to anyone responding to

classified advertisements, Dow's representation was not made to

"the public," and therefore does not fall within the scope of

§ 100.18.

¶98 A textual approach to statutory interpretation gives language "its common, ordinary, and accepted meaning . . . ."

State ex rel. Kalal v. Circuit Court for Dane Cty., 2004 WI 58,

¶45, 271 Wis. 2d 633, 681 N.W.2d 110. We presume the "legislature

says in a statute what it means and means in a statute what it

says there." Milwaukee Dist. Council 48 v. Milwaukee Cty., 2019

WI 24, ¶25, 385 Wis. 2d 748, 924 N.W.2d 153 (quoting Connecticut

Nat'l Bank v. Germain, 503 U.S. 249, 253-54 (1992)); see also

Kalal, 271 Wis. 2d 633, ¶39 (quoting the same). As a fundamental tenet of statutory interpretation, where possible, we render no

4 No. 2017AP2361.rgb

word in a statute surplusage, but instead give meaning to every

word. See, e.g., Enbridge Energy Co., Inc. v. Dane Cty., 2019 WI

78, ¶28, 387 Wis. 2d 687, 929 N.W.2d 572 (Statutory construction

should not "create[] an avoidable surplusage problem[;]" rather,

"'[i]f possible, every word and every provision is to be given

effect (verba cum effectu sunt accipienda). None should be

ignored. None should needlessly be given an interpretation that

causes it . . . to have no consequence.'" (quoting Antonin Scalia

& Bryan Garner, Reading Law: The Interpretation of Legal Texts

174 (2012))); see also Kalal, 271 Wis. 2d 633, ¶46 ("Statutory

language is read where possible to give reasonable effect to every

word, in order to avoid surplusage." (citations omitted)); State

v. Martin, 162 Wis. 2d 883, 894, 470 N.W.2d 900 (1991) ("A statute

should be construed so that no word or clause shall be rendered

surplusage and every word if possible should be given effect."

(quoting Donaldson v. State, 93 Wis. 2d 306, 315, 286 N.W.2d 817

(1980))).

¶99 "[T]he ordinary and common meaning of a doubtful word may be established by the definition of a recognized dictionary."

In re Nottingham's Estate, 46 Wis. 2d 580, 588, 175 N.W.2d 640

(1970). Wisconsin Stat. § 100.18(1) uses the word "public" as a

noun. When used in this manner, the word "public" refers to people

in the general community. See Public, Black's Law Dictionary (11th

ed. 2019) ("The people of a country or community as a

whole . . . ."); Public, American Heritage Dictionary (5th ed.

2011) ("The community or the people as a whole."); Public, Oxford Dictionary (6th ed. 2007) ("People collectively; the members of

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the community."); see also Public, Funk & Wagnalls New Standard

Dictionary (1923) ("The people collectively, or in general, as of

a particular locality, state, or nation, or of the world at

large . . . ."); Public, Black's Law Dictionary (2d ed. 1910) ("As

a noun, the word 'public' denotes the whole body politic, or the

aggregate of the citizens of a state, district, or municipality."

(citations omitted)). Read in conjunction with Automatic

Merchandisers, these definitions inform the interpretation of "the

public" under § 100.18(1), indicating that the prohibited

"representation" must be "made" or "placed before" people within

the general community. See Automatic Merchs., 64 Wis. 2d at 664.

In Automatic Merchandisers, the prohibited representations were

made to whomever responded to the seller's classified newspaper

advertisements published to the general community. Id. at 664.

¶100 The majority's construction of "the public," as used in

Wis. Stat. § 100.18(1), would include a business in an ongoing

commercial relationship with another business whose alleged

misrepresentation relates to a particularized use of the product and was directed at no one other than that purchaser. Automatic

Merchandisers does not support this reading. Instead, that case

interpreted § 100.18(1) as protecting "the residents of

Wisconsin"——meaning anyone who happened to respond to classified

advertising directed at the community in general. Automatic

Merchs., 64 Wis. 2d at 663-64. In similar fashion, "[t]he word

'public' has been construed under comparable statutes to mean that

any person who invites the trade of the general populace in a given area, or who is engaged in his principal business, is dealing with

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the 'public.'" James D. Jeffries, Protection for Consumers Against

Unfair and Deceptive Business Practices in Wisconsin, 57 Marq. L.

Rev. 559, 561 n.14 (1974) (emphasis added) (citing to cases in

Texas, Michigan, Missouri, and Wisconsin). The email from Dow's

agent to Hinrichs conveyed lab testing reports and results——

requested by Hinrichs——regarding the application of Dow's adhesive

to Hinrichs' product. The representation in that email responded

to Hinrichs' unique concerns and in no way invited the trade of

the general populace in a given area.

¶101 The majority broadens the meaning of a "representation"

"made . . . or placed before the public" to encompass an email

between two businesses in a commercial relationship. See majority

op., ¶70.5 Under the majority's interpretation, "the public" means

everyone and therefore has no meaning, which creates an avoidable

surplusage problem: the majority causes "the public" to have no

operative effect whatsoever in the statute. As the District Court

for the Western District of Wisconsin has recognized, this court's

ever-expanding construction of "the public" under Wis. Stat.

5 The majority blurs the boundary between statutory claims under Wis. Stat. § 100.18(1) (the Deceptive Trade Practices Act) and breach of contract claims under general contract law. See generally Donald R. Stroud III, Beyond Deception: Finding Prudential Boundaries Between Breach of Contract and Deceptive Trade Practices Act Violations in Wisconsin, 93 Marq. L. Rev. 1157 (2010) (criticizing this court's decision in K & S Tool & Die Corp. v. Perfection Machinery Sales, Inc., 2007 WI 70, 301 Wis. 2d 109, 732 N.W.2d 792, allowing for the possible extension of § 100.18(1) claims to commercial parties, and discussing the impact on contract law). The majority in this case permits commercial parties to avoid negotiated contract terms by bringing DTPA claims in lieu of breach of contract actions, thereby escaping bargained-for liability limitations and remedies and upending the parties' allocation of risk. See Stroud, supra at 1159, 1164-72.

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§ 100.18(1) renders it "anachronistic to interpret 'the public' as

having any limitation" and now "any person or entity is a member

of the public." Uniek, Inc. v. Dollar General Corp., 474 F. Supp.

2d 1034, 1038 (W.D. Wis. 2007). However outmoded under this

court's errant jurisprudence, "the public" must have some

parameters in order to avoid being rendered superfluous. Excising

"the public" from the statutory text yields the same meaning the

majority gives it:

No . . . corporation . . . with intent to sell . . . any . . . merchandise . . . shall make . . . in this state . . . an advertisement . . . statement or representation of any kind . . . relating to such purchase . . . which advertisement, . . . statement or representation contains any assertion, representation or statement of fact which is untrue, deceptive or misleading. The majority reads "the public" out of the statute entirely by

"needlessly" giving that phrase "an interpretation that causes

it . . . to have no consequence." See Scalia & Garner, supra ¶98,

at 174.

¶102 In cases with similar facts, other courts concluded that

"the public" cannot mean two businesses in an ongoing commercial

relationship. For example, the Uniek court held a distributor was

not a member of "the public" within the meaning of Wis. Stat.

§ 100.18(1) because it had a 13-year business relationship with

the defendant. Uniek, 474 F. Supp. 2d at 1039-40. The Uniek court

reasoned that if anything were to distinguish the distributor from

"the public," surely this longstanding business relationship

would. Id. at 1040. Although not specifically based on § 100.18(1), our court of appeals clarified the common, ordinary,

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and accepted meaning of "the public" by differentiating private

clubs patronized by members only, from restaurants "open to the

public." See City of Wausau v. Jusufi, 2009 WI App 17, ¶¶14-16,

315 Wis. 2d 780, 763 N.W.2d 201. In Jusufi, the court of appeals

concluded a smoking ban ordinance did not violate equal protection

even though it treated restaurants differently than private clubs.

See id., ¶1. The court of appeals held there was a rational basis

for "distinguishing private clubs from other restaurants," namely,

the protection of "the greatest number of restaurant patrons, while

preserving the right to associate in truly private clubs that are

not open to the public." Id., ¶14 (emphasis added). The court of

appeals recognized that while restaurants are open to everyone in

the community, i.e. "the public," private clubs are not. See id.,

¶16. While the canons of statutory construction compel giving

"the public" this common, ordinary, and accepted meaning, the

majority instead continues the capricious approach of supplanting

the text of § 100.18(1) with a judicially-preferred standard.

II ¶103 The majority perpetuates the judicially-created

"particular relationship" test for determining whether a person is

part of "the public" within the meaning of Wis. Stat. § 100.18(1).

Majority op., ¶62. This test has no foundation in the statutory

text. Automatic Merchandisers introduced the "particular

relationship" test in attempting to divine "the intent of the

legislature," in particular whom "the legislature intended to

protect." 64 Wis. 2d at 663. The court's entire analysis in that case rests on the defective foundation of the fiction commonly

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called "legislative intent."6 "An interpretation based on what

the legislature intended a statute to mean is improper." State v.

Lopez, 2019 WI 101, ¶39, __ Wis. 2d __, 936 N.W.2d 125 (Rebecca

Grassl Bradley, J., concurring). Aside from the impossibility of

assigning a collective "intent" motivating a body of individual

lawmakers, "[i]t is the enacted law, not the unenacted intent,

that is binding on the public." Kalal, 271 Wis. 2d 633, ¶44. "It

is the law that governs, not the intent of the lawgiver[,]" and

"[m]en may intend what they will; but it is only the laws that

they enact which bind us." Id., ¶52 (emphasis omitted) (quoting

Antonin Scalia, A Matter of Interpretation: Federal Courts and

the Law 17 (Princeton University Press 1997)). "[I]t is the text's

meaning, and not the content of anyone's expectations or

intentions, that binds us as law." Id., Lawrence H. Tribe, Comment

in Scalia, A Matter of Interpretation at 66; see also Winebow,

Inc. v. Capitol-Husting Co., 2018 WI 60, ¶40, 381 Wis. 2d 732, 914

N.W.2d 631 (Rebecca Grassl Bradley, J., dissenting)

("[L]egislative intent behind enactment of a law . . . cannot govern statutory interpretation. Rather, our analysis must focus

on the statutory language itself[.]"); State v. Grandberry, 2018

WI 29, ¶55, 380 Wis. 2d 541, 910 N.W.2d 214 (Kelly, J., concurring)

6 See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 391-96 (2012) ("[C]ollective intent is pure fiction because dozens if not hundreds of legislators have their own subjective views on the minutiae of bills they are voting on[.]"); see also Robert E. Keeton, Keeton on Judging in the American Legal System 210-11 (Lexis Pub. 1999) ("'[L]egislative intent' . . . is a legal fiction. Only a natural person can have a state of mind such as intent. No legal entity such as a legislature can have an 'intent' in a strictly factual sense.").

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("[W]e give effect only to what the legislature does, not what it

tried to do." (footnote omitted)).

¶104 Rather than displacing the actual text of the statute

with a judicially-created "particular relationship" test to define

"the public" in the context of Wis. Stat. § 100.18(1), courts

should instead determine who constitutes "the public," based on

the plain meaning of § 100.18(1). See supra ¶¶98-102. Using the

"particular relationship" test in the context of § 100.18(1)

inappropriately adds words to the statutory text that the

legislature did not write into the law, while introducing

additional ambiguity into the meaning of "the public." In

construing a statute, "we interpret the words the legislature

actually enacted into law" and "[u]nder the omitted-case canon of

statutory interpretation, '[n]othing is to be added to what the

text states or reasonably implies (casus omissus pro omisso

habendus est).'" State v. Fitzgerald, 2019 WI 69, ¶30,

Wis. 2d 384, 929 N.W.2d 165 (quoting Lopez-Quintero v. Dittman,

2019 WI 58, ¶18, 387 Wis. 2d 50, 928 N.W.2d 480 (quoting Scalia & Garner, Reading Law at 93)); see also Fond du Lac Cty. v. Town of

Rosendale, 149 Wis. 2d 326, 334, 440 N.W.2d 818 (Ct. App. 1989)

("One of the maxims of statutory construction is that courts should

not add words to a statute to give it a certain meaning." (citation

omitted)).

¶105 Instead of analyzing the words the legislature actually

wrote in Wis. Stat. § 100.18(1)——whether a person is a member of

"the public"——courts have digressed into a consideration of whether the parties have a "particular relationship." Applying

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this test only raises additional questions, such as whether the

parties have a contractual relationship or (as Hinrichs advances)

an "effective contractual relationship," thereby disconnecting the

analysis even further from the actual statutory text. For example,

in K & S Tool & Die Corp. v. Perfection Machinery Sales, Inc., the

court stated that "a plaintiff is no longer a member of 'the

public' for the purpose of § 100.18(1) once he or she has entered

into a contract to purchase the offered item." 2007 WI 70, ¶26,

301 Wis. 2d 109, 732 N.W.2d 792 (citation omitted). K & S Tool &

Die Corp. relied on Kailin v. Armstrong for this proposition. Id.

In Kailin, the court of appeals held "[o]nce the contract was made,

the Kailins were no longer 'the public' under

[§ 100.18(1)] . . . ." Kailin, 2002 WI App 70, ¶44, 252

Wis. 2d 676, 643 N.W.2d 132. However, "[i]f the Wisconsin courts

had intended to exclude from the law only contracting parties, it

could have stated the rule as whether the parties had a

'contracting relationship,' but they have employed the more

general language, 'particular relationship.'" Uniek, 474 F. Supp. 2d at 1039. This muddying of the plain language of the statute

prompted one federal court, struggling to discern a clear rule of

law by which to apply § 100.18(1), to "question whether" Wisconsin

courts' adoption of the extra-textual "particular relationship"

test "leads to the most logical distinctions between those

plaintiffs that fall within the statute and those that are

excluded." Id. It doesn't, but returning to the proper plain

meaning approach certainly would. III

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¶106 Even if Hinrichs did constitute a member of "the public"

under Wis. Stat. § 100.18(1), Dow's statement to Hinrichs cannot

be deemed "untrue, deceptive or misleading," as required by the

statutory text. The majority does not address this requirement in

its analysis of § 100.18(1). See majority op., ¶¶57-71. Nothing

in the Complaint creates even an inference of this element. The

Complaint characterizes as "untrue, deceptive or misleading" Dow's

statement that "[n]o evidence of any crazing or surface cracking

was observed." Complaint, ¶¶24-25 (emphasis added). Hinrichs

does not allege that Dow disclaimed its adhesive as the cause of

the cracking. To the contrary, Hinrichs alleges Dow advised "we

are assisting in determining the root cause of the issue and

apologize for the inconvenience." Complaint, ¶27. Hinrichs

alleges only that Dow stated it did not observe any crazing or

cracking during testing. Nothing in the Complaint supports even

an inference that at the time Dow made this statement, it knew the

statement was "untrue", or that the statement was "deceptive or

misleading." Accordingly, Hinrichs' § 100.18(1) claim should not be allowed to proceed.

¶107 The plain meaning of "the public" under Wis. Stat.

§ 100.18(1), as confirmed by dictionaries, common parlance, and

cases, means people in the general community, not businesses in an

ongoing commercial relationship. "On its face, a statement made

to 'the public' suggests an attempt to communicate with a large

audience rather than a private message directed at one party." Uniek, 474 F. Supp. 2d at 1037 (citing to an additional dictionary

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beyond those mentioned in ¶99, referring to "public" as a

collective entity). As the majority acknowledges, statutory

interpretation presents a question of law and it is therefore

beyond the province of the factfinder to determine the meaning of

"the public" as used in § 100.18(1). Majority op., ¶26 ("Statutory

interpretation likewise presents a question of law we review

independently . . . ."). As a matter of law, Hinrichs was not a

member of "the public" under § 100.18(1) when Dow made the

statement Hinrichs alleges to be a misrepresentation because Dow

directed the statement to Hinrichs alone, not "the public"

generally. Because the majority's interpretation of "the public"

empties the phrase of any meaning, I respectfully dissent.

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