| Venue: | MA SC |
| Facts: | Plaintiff buys a major interest in Gulf, relying on KPMG's annual report. Gulf files for bankruptcy... perhaps that annual report painted a sunnier picture than was warranted? KPMG, however, knew nothing about the purchase plan. |
| Posture: | Summary judgment for the defendant at trial. |
| Issue: | Is KPMG liable for this harm? |
| Holding: | No. Affirmed. |
| Rule: | There's no legal duty if the defendant had no knowledge that the plaintiff (or a small group to which the plaintiff belongs) would rely on the information. In other words, there's no general duty of care here. |
| Reasoning: | Straight up application or R2T § 552. We could rely on near-privity (which there isn't here) or foreseeability (which is also disfavored), but no. And ultimately, it's the client, not the auditor, who is responsible: if the client deceives the auditor, what can be done? |
| Dicta: | |