United States Court of Appeals For the Seventh Circuit ____________________ No. 21-1839 TAIZHOU YUANDA INVESTMENT GROUP CO., LTD., and TAIZHOU YUANDA FURNITURE CO., LTD., Plaintiffs-Appellants,

v. Z OUTDOOR LIVING, LLC, et al., Defendants-Appellees. ____________________

Appeal from the United States District Court for the Western District of Wisconsin. No. 3:19-cv-875 — James D. Peterson, Chief Judge. ____________________

ARGUED JANUARY 11, 2022 — DECIDED AUGUST 10, 2022 ____________________

Before EASTERBROOK, SCUDDER, and KIRSCH, Circuit Judges. KIRSCH, Circuit Judge. Chinese manufacturer Taizhou Yu- anda sued its Wisconsin-based vendors, Z Outdoor Living and AFG, and owners and officers of both companies, after the companies failed to pay Taizhou money owed under a fur- niture production deal. Taizhou sued for breach of contract and under tort theories of fraud and conversion, alleging eli- gibility for recovery in tort on the basis that Taizhou only 2 No. 21-1839 continued to do business with the defendants because they repeatedly misled Taizhou about when it could expect pay- ment for prior orders. The parties resolved the breach of con- tract claims, and the district court dismissed the plaintiffs’ tort claims under Federal Rule of Civil Procedure 12(b)(6), con- cluding they were barred by Wisconsin’s economic loss doc- trine. Taizhou says we should reinstate those claims because two exceptions to that doctrine apply. But we disagree and so affirm. I We recite as true the well-pleaded facts raised in the com- plaint. W. Bend Mut. Ins. Co. v. Schumacher, 844 F.3d 670, 675 (7th Cir. 2016). In January 2017, Taizhou Yuanda Furniture Co., Ltd. (a Chinese manufacturer and subsidiary of Taizhou Yuanda In- vestment Group Co., Ltd., collectively “Taizhou”) entered into a Cooperation Agreement with Z Outdoor Living, LLC (a Wisconsin company wholly owned by Casual Products of America, LLC). Under the Cooperation Agreement, Taizhou would manufacture outdoor furniture and other related items for Z Outdoor to sell to customers. The Cooperation Agreement provided that customers would order Taizhou-manufactured furniture through Z Out- door, which would then send purchase orders to Taizhou for fulfillment. Once those orders were fulfilled, Z Outdoor was to pay Taizhou for all outstanding invoices within 10 days of receiving payment from the customer. The agreement also stated that Z Outdoor would clarify all payment terms in the purchase orders and would pay Taizhou on the price detailed in the outstanding invoice. No. 21-1839 3

Z Outdoor eventually stopped paying Taizhou for all the purchase orders Taizhou had fulfilled. Don and Erin Corning, on behalf of Z Outdoor, made a series of false statements be- tween August 2, 2018 and February 20, 2019 about future busi- ness, forthcoming payment, and other causes for the delays. According to Taizhou, these false statements convinced the company to “continue to … procure materials, manufacture the furniture, and fill customer orders even without receiving compensation for their goods.” In October 2018, AFG (a Wisconsin LLC also wholly owned by Casual Products of America, LLC) started submit- ting purchase orders to Taizhou. AFG never signed the Coop- eration Agreement but told Taizhou that AFG would begin to submit orders in order to increase their business with a na- tional chain of home improvement stores. According to the complaint, “[l]ike Z Outdoor, AFG obtained purchase orders from customers and then submitted those purchase orders to [Taizhou]. … [Taizhou] filled the orders and shipped the