On October 28, 2013, a unanimous 8-member jury in the United States District Court for the Western District of Tennessee found in favor of IFS Industries, Inc. in a breach of contract, negligent/fraudulent misrepresentation, and Tennessee Consumer Protection Act claim brought by International Paper Company. IFS Industries, Inc. was represented by Larry Sutter, Britt Phillips and Kevin Kita of Sutter O’Connell Co.
International Paper manufactures corrugated bulk boxes for use in holding approximately 1500 lbs. of petroleum resin pellets in its Lafayette, Louisiana facility. Multiple petroleum customers of International Paper experienced numerous corrugated bulk box failures from boxes manufactured in Lafayette, LA during the winter of 2010 – 2011. International Paper alleged that three glues provided by IFS and used in the construction of the bulk boxes were the cause of the box failures. International Paper claimed the glues contained latent defects that made it inappropriate for the bulk boxes to hold the heavy contents and further that IFS misrepresented the quality of the adhesives provided.
IFS denied these claims and proved the box failures were caused by International Paper’s own failure to properly heat or insulate the subject glues and observe industry standard quality control measures or testing in its Lafayette facility during a winter that had 27 days on which the temperatures dropped below freezing (the average over the prior ten years was only 9 days). IFS presented evidence and testimony that International Paper’s failure to practice proper manufacturing methods during the freezing conditions resulted in very poor glue application, an inability of the glue to form a proper film, and resulted in weaker adhesive bonds. Moreover, IFS demonstrated that the glues were used successfully during warmer conditions and in International Paper’s heated facilities elsewhere in the country; and that between 80-90% of boxes produced with the subject adhesives showed no sign of defect whatsoever.
After 7 days of trial, the jury deliberated for approximately 45 minutes before returning a verdict on all counts for IFS. International Paper, represented by in-house counsel Matthew Buck and Wyatt, Tarrant & Combs, LLP’s Kacey Faughnan, was seeking approximately $3.9 million in damages, plus pre-judgment interest, attorney’s fees, and punitive damages.