J.D. EDWARDS & CO. V. PODANY 168 F.3d 1020 (7th Cir. 1999) CASE BRIEF

J.D. EDWARDS & CO. V. PODANY

168 F.3d 1020 (7th Cir. 1999)

NATURE OF THE CASE: Podany (D) consultant and consulting firm sought review from a decision where a jury had awarded damages for the D's inducement of breach of contract. Ds asserted that the 'consultant's privilege' or the privilege of 'honest advice' protected them from liability.

FACTS: SNE manufactures windows. It hired P, to supply software for a project that SNE called PBS. While the transition to PBS was under way, there was a reorganization that made SNE one of three divisions of a corporation headed by Gary Massel. Massel knew D, an employee of Mercer, and asked him to do what is called in the consulting trade a 'sniff test' a very quick, light review of PBS. The fee was $10,000. D advised Massel that the basic approach that SNE had taken to streamlining its business, that of 'reengineering in parallel' and the leading role that it had assigned to P were unsound. D is not a software expert and neither he nor his company had been retained to select software or offer a critique of the contract with P. D's advice had been sought at the business level. Reengineering in parallel fell within the scope of D's engagement. D advised Massel to stop installing P's software. P sued D arguing that this advice was outside the terms of the engagement and so outside the protection of the consultant's privilege. P was awarded $2.3 million and D appealed.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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