All-Tech Telecom, Inc. v. Amway Corporation

174 F.2d 862 (7th Cir. 1999)

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Nature of the Case

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Facts

In 1987, Amway (D) offered distributors a new product called the TeleCharge phone. All-Tech (P) was created for the very purpose of being an Amway distributor of these phones. P bought a large number of phones but eventually for a number of reasons, D withdrew from the marketplace in 1992. P claims that it was lured into this venture by a series of misrepresentations in that P had done extensive research, it was approved in all 50 states and that each phone would be expected to provide $750 in annual revenue and that the carrier selected for this service, ITI was the largest company of its kind and that the purchase of the phones would have to deal with ITI as the phone could not be configured to work with another carrier. The lower court dismissed all of P's claims of misrepresentation based on the doctrine of economic loss. P's claims for breach of warranty were tried, and the jury found a breach but awarded no damages. P appealed.