Case Title: Korea Supply Co. v. Lockheed Martin Corp.

Citation: 

Docket Number: S100136

State: california

Court: California Supreme Court

Date: 2003-03-03T00:00:00Z

Document:
1
Filed 3/3/03 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
KOREA SUPPLY COMPANY, 
) 
 
 
) 
 
Plaintiff and Appellant, 
) 
 
 
) 
S100136 
 
v. 
) 
 
 
) 
Ct.App. 2/4 B136410 
LOCKHEED MARTIN CORPORATION ) 
et. al, 
 
) 
 
 
) 
Los Angeles County 
 
Defendants and Respondents. ) 
Super. Ct. No. BC 209893 
___________________________________ ) 
 
This case addresses what claims and remedies may be pursued by a plaintiff 
who alleges a lost business opportunity due to the unfair practices of a competitor.  
The Republic of Korea wished to purchase military equipment known as synthetic 
aperture radar (SAR) systems and solicited competing bids from manufacturers, 
including Loral Corporation (Loral) and MacDonald, Dettwiler, and Associates 
Ltd. (MacDonald Dettwiler).  Plaintiff Korea Supply Company (KSC) represented 
MacDonald Dettwiler in the negotiations for the contract and stood to receive a 
commission of over $30 million if MacDonald Dettwiler’s bid was accepted.  
Ultimately, the contract was awarded to Loral (now Lockheed Martin Tactical 
Systems, Inc.).  KSC contends that even though MacDonald Dettwiler’s bid was 
lower and its equipment superior, it was not awarded the contract because Loral 
Corporation and its agent had offered bribes and sexual favors to key Korean 
officials.  KSC instituted the present action asserting claims under both 
 
2
California’s unfair competition law (Bus. & Prof. Code, § 17200 et seq.) and the 
tort of interference with prospective economic advantage.   
We granted review to decide two issues.  First, we address whether 
disgorgement of profits allegedly obtained by means of an unfair business practice 
is an authorized remedy under the UCL where these profits are neither money 
taken from a plaintiff nor funds in which the plaintiff has an ownership interest.  
We conclude that disgorgement of such profits is not an authorized remedy in an 
individual action under the UCL.  Accordingly, we reverse the judgment of the 
Court of Appeal on this issue.   
Second, we address whether, to state a claim for interference with 
prospective economic advantage, a plaintiff must allege that the defendant 
specifically intended to interfere with the plaintiff’s prospective economic 
advantage.  We conclude that a plaintiff need not plead that the defendant acted 
with the specific intent to interfere with the plaintiff’s business expectancy in 
order to state a claim for this tort.  We affirm the judgment of the Court of Appeal 
on this issue. 
I. 
“Because ‘[t]his case comes to us after the sustaining of a general demurrer 
. . . , we accept as true all the material allegations of the complaint.’ ” (Charles J. 
Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 807, quoting 
Shoemaker v. Myers (1990) 52 Cal.3d 1, 7.) 
Plaintiff KSC is a corporation engaged in the business of representing 
manufacturers of military equipment in transactions with the Republic of Korea.  
In the mid-1990’s, the Republic of Korea solicited bids for a SAR system for use 
by its military.  KSC represented MacDonald Dettwiler, a Canadian company, in 
its bid to obtain the contract award.  KSC expected a commission of 15 percent of 
 
3
the contract price, or over $30 million, if MacDonald Dettwiler were awarded the 
contract.   
In June 1996, the Korean Ministry of Defense announced that Loral,1 an 
American competitor of the Canadian company MacDonald Dettwiler, was 
awarded the contract, despite the fact that MacDonald Dettwiler’s bid was about 
$50 million lower and that the project management office of the Korean Defense 
Intelligence Command had determined that MacDonald Dettwiler’s equipment 
was far superior to Loral’s system.  The Ministry of Defense explained that the 
decision to award Loral the contract was based on a suggestion that the United 
States government would not be favorably disposed to share intelligence 
information with the Republic of Korea if the latter selected a Canadian supplier.   
Beginning in October 1998, major news publications in the Republic of 
Korea revealed that an internal investigation had established that the SAR contract 
was awarded to Loral as a result of bribes and sexual favors, rather than pressure 
from the United States government.  Loral’s agent for the procurement of the SAR 
contract, defendant Linda Kim, had bribed two Korean military officers.  In 
addition, Ms. Kim had extended bribes and sexual favors to the Minister of 
National Defense, the ultimate decision maker with respect to the award of the 
SAR contract.  Ms. Kim reportedly received approximately $10 million in 
commission from Loral, an amount that exceeded the maximum established by the 
Foreign Corrupt Practices Act (15 U.S.C. § 78dd-2) and foreign military sales 
policies and regulations.  As a result of the internal investigation by the Republic 
                                             
 
1  
In 1996, Loral changed its name to Lockheed Martin Tactical Systems, 
Inc., and became a subsidiary of Lockheed Martin Corporation, both of which are 
defendants in the present case.  These defendants will collectively be referred to as 
Lockheed Martin, unless otherwise indicated. 
 
4
of Korea, several persons were imprisoned, including high-ranking Korean 
military officers.  Ms. Kim herself was indicted in absentia; she avoided 
imprisonment because she resides in the United States and refuses to travel to the 
Republic of Korea.   
Upon learning of these alleged reasons for the award of the SAR contract to 
Loral, KSC commenced the present action on May 5, 1999.  In its first amended 
complaint, KSC alleged that defendants2 “conspired, knowingly and intentionally 
to induce and did knowingly and intentionally induce the Republic of Korea, 
through its authorized agencies, to award the SAR contract to Loral instead of 
MacDonald Dettwiler by employing wrongful means including bribes and sexual 
favors.”  As a direct and proximate result of defendants’ actions, the Republic of 
Korea awarded the contract to Loral; but for the bribes and sexual favors, this 
contract would have been awarded to MacDonald Dettwiler.  “In securing the 
contract by wrongful means, Loral acted with full knowledge of the commission 
relationship between plaintiff and MacDonald Dettwiler and knowing that its 
interference with the award of the contract . . . would cause plaintiff severe loss.”  
“Defendant Lockheed Martin has been the beneficiary of the illegal Loral-Kim 
conduct and to that extent has been unjustly enriched.”  
The first amended complaint asserts three causes of action:  (1) conspiracy 
to interfere with prospective economic advantage, (2) intentional interference with 
prospective economic advantage, and (3) unfair competition pursuant to Business 
and Professions Code section 17200.3  For its unfair competition claim, KSC 
                                             
 
2  
Lockheed Martin Corporation, Lockheed Martin Tactical Systems, Inc., 
and Linda Kim were named as defendants in the present action. 
3  
As in Kraus v. Trinity Management Services, Inc. (2000) 23 Cal.4th 116, 
121 (Kraus), we refer to Business and Professions Code section 17200 et seq., the 
unfair competition law, as the UCL, and the claim as one for unfair competition. 
 
5
sought disgorgement to it of the profits realized by Lockheed Martin on the sale of 
the SAR to Korea.  For the tort claims, KSC sought damages for the loss of its 
expected compensation from MacDonald Dettwiler.   
Lockheed Martin, joined by Ms. Kim, generally demurred to all counts.   
The trial court sustained the demurrer without leave to amend, finding that 
plaintiff’s complaint did not state facts sufficient to constitute a cause of action 
under California law.  Judgment was entered dismissing the action on September 
7, 1999.  After the trial court subsequently denied KSC’s motion for 
reconsideration, KSC filed its notice of appeal.  The Court of Appeal reversed the 
trial court’s judgment in full, finding that plaintiff had sufficiently stated causes of 
action for unfair competition and for intentional interference with prospective 
economic advantage.     
Lockheed Martin sought review in this court of two bases of the Court of 
Appeal’s decision:  first, its holding that disgorgement of profits is an available 
remedy under the UCL even where the disgorgement sought does not represent 
restitution of money or property in which plaintiff has an ownership interest; and 
second, its holding that the tort of intentional interference with prospective 
economic advantage does not require plaintiff to plead that defendant acted with 
the specific intent to interfere with plaintiff’s business expectancy.  We granted 
review on both issues.   
II. 
We first address plaintiff’s unfair competition claim.  Business and 
Professions Code section 17200 et seq.4 prohibits unfair competition, including 
                                             
 
4  
Section 17200 states: “As used in this chapter, unfair competition shall 
mean and include any unlawful, unfair or fraudulent business act or practice and 
unfair, deceptive, untrue or misleading advertising and any act prohibited by 
 
(Footnote continued on next page.) 
 
6
unlawful, unfair, and fraudulent business acts.  The UCL covers a wide range of 
conduct.  It embraces “anything that can properly be called a business practice and 
that at the same time is forbidden by law. [Citations.]”  (Cel-Tech 
Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 
163, 180 (Cel-Tech), internal quotations omitted.)  Standing to sue under the UCL 
is expansive as well.  Unfair competition actions can be brought by a public 
prosecutor or “by any person acting for the interests of itself, its members or the 
general public.”  (§ 17204.)   
Section 17200 “borrows” violations from other laws by making them 
independently actionable as unfair competitive practices.  (Cel-Tech, supra, 20 
Cal.4th at p. 180.)  In addition, under section 17200, “a practice may be deemed 
unfair even if not specifically proscribed by some other law.”  (Cel-Tech, at p. 
180.)  In the present case, KSC’s third cause of action, for unfair competition, 
“borrowed” from the federal Foreign Corrupt Practices Act, which prohibits, 
among other things, bribing a foreign government official for the purpose of 
influencing any act or decision in his or her official capacity and in violation of a 
lawful duty, or for the purpose of inducing the use of official influence to obtain or 
retain business.  (See 15 U.S.C. § 78dd-2(a)(1)(A), (B).)  The Court of Appeal 
determined that a claim under the UCL may be predicated on a violation of this 
act.5   
                                                                                                                                      
 
 
(Footnote continued from previous page.) 
 
Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the 
Business and Professions Code.”  All subsequent statutory citations are to the 
Business and Professions Code, unless otherwise noted. 
5  
The parties did not challenge this ruling and so we accept, without 
deciding, that a claim under the UCL may be predicted on a violation of the 
Foreign Corrupt Practices Act. 
 
7
While the scope of conduct covered by the UCL is broad, its remedies are 
limited.  (Cel-Tech, supra, 20 Cal.4th at p. 180.)   A UCL action is equitable in 
nature; damages cannot be recovered.  (Bank of the West v. Superior Court (1992) 
2 Cal.4th 1254, 1266 (Bank of the West).)  Civil penalties may be assessed in 
public unfair competition actions, but the law contains no criminal provisions.  (§ 
17206.)  We have stated that under the UCL, “[p]revailing plaintiffs are generally 
limited to injunctive relief and restitution.”  (Cel-Tech, supra, 20 Cal.4th at p. 
179.)  The question raised by this case is whether disgorgement of profits that is 
not restitutionary in nature is an available remedy for an individual private 
plaintiff under the UCL.   
A. 
The Court of Appeal in this case held that plaintiff can recover 
disgorgement of profits earned by defendants as a result of their allegedly unfair 
practices, even where the money sought to be disgorged was not taken from 
plaintiff and plaintiff did not have an ownership interest in the money.  This 
holding was based on language taken from our recent decision in Kraus, supra, 23 
Cal.4th 116.  As we explain, the Court of Appeal’s reliance on this language was 
mistaken. 
In Kraus, we held that disgorgement of unfairly obtained profits into a fluid 
recovery fund is not an available remedy in a representative action brought under 
the UCL.  (Kraus, supra, 23 Cal.4th at p. 137.)  We began by describing the 
remedies that are clearly available to a plaintiff under the UCL: “Through the 
UCL a plaintiff may obtain restitution and/or injunctive relief against unfair or 
unlawful practices.”  (Kraus, at p. 126.)  We then differentiated between the terms 
“restitution” and “disgorgement” in order to show why a plaintiff in a 
representative action under the UCL could recover restitution but could not obtain 
disgorgement of profits into a fluid recovery fund. 
 
8
We defined an order for “restitution” as one “compelling a UCL defendant 
to return money obtained through an unfair business practice to those persons in 
interest from whom the property was taken, that is, to persons who had an 
ownership interest in the property or those claiming through that person.”  (Kraus, 
supra, 23 Cal.4th at pp. 126-127.)  We then clarified that “disgorgement” is a 
broader remedy than restitution.  We stated that an order for disgorgement “may 
include a restitutionary element, but is not so limited.”  (Id. at p. 127.)  We further 
explained that an order for disgorgement “may compel a defendant to surrender all 
money obtained through an unfair business practice even though not all is to be 
restored to the persons from whom it was obtained or those claiming under those 
persons.  It has also been used to refer to surrender of all profits earned as a result 
of an unfair business practice regardless of whether those profits represent money 
taken directly from persons who were victims of the unfair practice.”  (Ibid.)  
Relying on this distinction between restitution and disgorgement, we held in 
Kraus that although restitution was an available remedy in UCL actions, a plaintiff 
in a representative action under the UCL could not recover disgorgement in the 
broader, nonrestitutionary sense, into a fluid recovery fund.  (Kraus, at p. 137.) 
The Court of Appeal in the present case misread our opinion in Kraus.  
Noting that plaintiff in this case seeks disgorgement of profits unjustly earned by 
defendants, the Court of Appeal quoted our statement in Kraus that “ ‘[a]n order 
that a defendant disgorge money obtained through an unfair business practice may 
include a restitutionary element, but is not so limited. . . . [S]uch orders may 
compel a defendant to surrender all money obtained through an unfair business 
practice even though not all is to be restored to the persons from whom it was 
obtained or those claiming under those persons.  It has also been used to refer to 
surrender of all profits earned as a result of an unfair business practice regardless 
of whether those profits represent money taken directly from persons who were 
 
9
victims of the unfair practice.’ ”  (Quoting Kraus, supra, 23 Cal.4th at p. 127, 
italics added.)  Relying on this language, the Court of Appeal concluded that 
plaintiff adequately stated a claim under the UCL. 
As Lockheed Martin and several amici curiae point out, however, this 
passage from Kraus, cited by the Court of Appeal as authorization for 
disgorgement under the UCL, merely defined the term “disgorgement” in order to 
demonstrate that it was broader in scope than “restitution.”  In the above cited 
quotation, this court was not approving of disgorgement as a remedy under the 
UCL.  To the contrary, we held in Kraus that while restitution was an available 
remedy under the UCL, disgorgement of money obtained through an unfair 
business practice is an available remedy in a representative action only to the 
extent that it constitutes restitution.  We reaffirm this holding here in the context 
of an individual action under the UCL.  We therefore reverse the judgment of the 
Court of Appeal on this issue.   
B. 
We begin our analysis with the statutory authorization for relief under the 
UCL, found in section 17203:  “Any person who engages, has engaged, or 
proposes to engage in unfair competition may be enjoined in any court of 
competent jurisdiction.  The court may make such orders or judgments, including 
the appointment of a receiver, as may be necessary to prevent the use or 
employment by any person of any practice which constitutes unfair competition, 
as defined in this chapter, or as may be necessary to restore to any person in 
interest any money or property, real or personal, which may have been acquired by 
means of such unfair competition.” 
The fundamental objective of statutory construction is to ascertain the 
Legislature’s intent and to give effect to the purpose of the statute.  (Code Civ. 
Proc., § 1859.)  If the language of the statute is unambiguous, the plain meaning 
 
10
governs.  (Day v. City of Fontana (2001) 25 Cal.4th 268, 272.)  Under section 
17203, “[t]he statutory authorization . . . to make orders necessary to restore 
money to any person in interest is clear.”  (Kraus, supra, 23 Cal.4th at p. 129.)  An 
order for restitution, then, is authorized by the clear language of the statute.  In 
fact, “restitution is the only monetary remedy expressly authorized by section 
17203.” (Ibid.)  
While a remedy of nonrestitutionary disgorgement of profits is not 
expressly authorized by the statute, KSC argues that the equitable language in 
section 17203 is sufficiently broad to allow courts to award this monetary remedy 
for an unfair competition claim.  KSC contends that under the UCL a court may, 
in its discretion, order Lockheed Martin to surrender its profits to KSC because 
KSC allegedly has been wronged by Lockheed Martin’s unfair conduct.  
Here, since the remedy of nonrestitutionary disgorgement is not expressly 
authorized by the statute, we determine whether the Legislature intended to 
authorize such a remedy under section 17203.  If the statutory language is 
ambiguous, we may look to the history and background of the statute.  (Kraus, 
supra, 23 Cal.4th at p. 129.)  In ascertaining the Legislature’s intent, we attempt to 
construe the statute to preserve its constitutional validity, as we presume that the 
Legislature intends to respect constitutional limits.  (See ibid.) 
We described the legislative history of the UCL in Kraus.  (Kraus, supra, 
23 Cal.4th at pp. 129-130.)  As amended in 1933, the predecessor to the current 
law provided express authority to enjoin unfair competition.  (Civ. Code, former § 
3369, as amended by Stats. 1933, ch. 953, § 1, p. 2482.)  While no specific 
provision empowered courts to order monetary remedies, in People v. Superior 
Court (Jayhill) (1973) 9 Cal.3d 283, 286, we held that trial courts retained their 
inherent equitable power to order restitution under the UCL.  Three years after 
Jayhill, express authority to order restitution was added to Civil Code section 
 
11
3369, the predecessor to section 17203.  (Stats. 1976, ch. 1005, § 1, p. 2378.)  As 
we have previously said, this revision of the act was intended to codify, not 
change, the remedies available to a trial court under the UCL.  (Kraus, supra, at p. 
132 [with the 1976 amendments, “the Legislature confirmed, but did not increase, 
the powers of the court in a UCL action”]; see also Assem. Com. on Judiciary, 
Analysis of Assem. Bill No. 1763 (1972 Reg. Sess.) May 1, 1972 [congruent 
amendments to false advertising law were intended to affirm equity power already 
existing in courts]; Sen. Com. on Judiciary, Analysis of Assem. Bill No. 1763 
(1972 Reg. Sess.) [same].) 
While express authority to order restitution was added to the UCL, courts 
were not given similar authorization to order nonrestitutionary disgorgement.  
Further, plaintiff has not pointed to anything in the legislative history that suggests 
that the Legislature intended to provide such a remedy in an individual action.  
Plaintiff contends that this court’s interpretation of the UCL and commentary by 
leading academic authorities establish that a court’s equitable power under the 
UCL is broad.  Notably absent from this argument, however, is any showing from 
the language or history of section 17203 that the Legislature intended to authorize 
a disgorgement remedy that was not restitutionary in nature.  Instead, KSC merely 
asserts, without pointing to any particular statutory language or legislative history, 
that a court’s equitable powers under section 17203 are broad enough to 
encompass its requested remedy. 
We have previously found that the Legislature did not intend section 17203 
to provide courts with unlimited equitable powers.   In Kraus, we rejected the 
argument, revived by plaintiff in this case, that the general grant of equitable 
authority in section 17203 implicitly permitted a disgorgement remedy—in that 
case, into a fluid recovery fund in a representative action.  We found that since 
there was nothing in the express language of the statute or its legislative history 
 
12
indicating that the Legislature intended to provide such a remedy, the remedy was 
not available.  (Kraus, supra, 23 Cal.4th at p. 132.)  Here, again, we find nothing 
to indicate that the Legislature intended to authorize a court to order a defendant to 
disgorge all profits to a plaintiff who does not have an ownership interest in those 
profits. 
In fact, the language of section 17203 is clear that the equitable powers of a 
court are to be used to “prevent” practices that constitute unfair competition and to 
“restore to any person in interest” any money or property acquired through unfair 
practices.  (§ 17203.)  While the “prevent” prong of section 17203 suggests that 
the Legislature considered deterrence of unfair practices to be an important goal, 
the fact that attorney fees and damages, including punitive damages, are not 
available under the UCL is clear evidence that deterrence by means of monetary 
penalties is not the act’s sole objective.  A court cannot, under the equitable 
powers of section 17203, award whatever form of monetary relief it believes 
might deter unfair practices.   The fact that the “restore” prong of section 17203 is 
the only reference to monetary penalties in this section indicates that the 
Legislature intended to limit the available monetary remedies under the act.6    
Our previous cases discussing the UCL indicate our understanding that the 
Legislature did not intend to authorize courts to order monetary remedies other 
than restitution in an individual action.  This court has never approved of 
nonrestitutionary disgorgement of profits as a remedy under the UCL.  While prior 
                                             
 
6  
Our discussion in this case is limited to individual private actions brought 
under the UCL.  In public actions, civil penalties may be collected from a 
defendant.  (§ 17206.)  Further, in Kraus we noted that the Legislature “has 
authorized disgorgement into a fluid recovery fund in class actions.”  (Kraus, 
supra, 23 Cal.4th at p. 137.)  These issues are not before us, and therefore we need 
not address them further. 
 
13
cases discussing the UCL may have characterized some of the relief available as 
“disgorgement,” we were referring to the restitutionary form of disgorgement, and 
not to the nonrestitutionary type sought here by plaintiff.  (Cortez v. Purolator Air 
Filtration Products Co. (2000) 23 Cal.4th 163, 176 (Cortez) [holding that because 
section 17203 authorizes an order compelling a defendant to pay back wages as a 
restitutionary remedy, we “need not consider whether the order might be proper 
under the UCL under a disgorgement of benefit theory”]; ABC International 
Traders, Inc. v. Matsushita Electric Corp. (1997) 14 Cal.4th 1247, 1271 [stating 
that “the defendant’s victims may be entitled to restitution” under section 17203];  
Fletcher v. Security Pacific National Bank (1979) 23 Cal.3d 442, 452 (Fletcher) 
[trial court may order restitution under the UCL for bank customers challenging a 
bank’s computation of per annum interest on the basis of a 360-day year]; People 
v. Superior Court (Jayhill), supra, 9 Cal.3d at p. 286 [court may order a defendant 
to pay restitution to victims who have been defrauded as a result of an unfair 
business practice].)  The present case merely confirms what we have previously 
held:  Under the UCL, an individual may recover profits unfairly obtained to the 
extent that these profits represent monies given to the defendant or benefits in 
which the plaintiff has an ownership interest.   
C. 
In an attempt to fit its claim within the statutory authorization for relief, and 
as an implicit acknowledgement that nonrestitutionary disgorgement is not an 
available remedy in an individual action under the UCL, plaintiff describes its 
requested remedy as “restitution.”  This term does not accurately describe the 
relief sought by plaintiff.   As defined in Kraus, an order for restitution is one 
“compelling a UCL defendant to return money obtained through an unfair 
business practice to those persons in interest from whom the property was taken, 
that is, to persons who had an ownership interest in the property or those claiming 
 
14
through that person.”  (Kraus, supra, 23 Cal.4th at pp. 126-127.)  The object of 
restitution is to restore the status quo by returning to the plaintiff funds in which 
he or she has an ownership interest.    
The remedy sought by plaintiff in this case is not restitutionary because 
plaintiff does not have an ownership interest in the money it seeks to recover from 
defendants.  First, it is clear that plaintiff is not seeking the return of money or 
property that was once in its possession.  KSC has not given any money to 
Lockheed Martin; instead, it was from the Republic of Korea that Lockheed 
Martin received its profits.  Any award that plaintiff would recover from 
defendants would not be restitutionary as it would not replace any money or 
property that defendants took directly from plaintiff. 
Further, the relief sought by plaintiff is not restitutionary under an 
alternative theory because plaintiff has no vested interest in the money it seeks to 
recover.  We have stated that “[t]he concept of restoration or restitution, as used in 
the UCL, is not limited only to the return of money or property that was once in 
the possession of that person.”  (Cortez, supra, 23 Cal.4th at p. 178.)  Instead, 
restitution is broad enough to allow a plaintiff to recover money or property in 
which he or she has a vested interest.  In Cortez, we determined that “earned 
wages that are due and payable pursuant to section 200 et seq. of the Labor Code 
are as much the property of the employee who has given his or her labor to the 
employer in exchange for that property as is property a person surrenders through 
an unfair business practice.”  (Ibid.)  Therefore, we concluded that such wages 
could be recovered as restitution under the UCL.  We reached this result because 
“equity regards that which ought to have been done as done [citation], and thus 
recognizes equitable conversion.”  (Cortez, supra, at p. 178.) 
While the plaintiffs in Cortez had a vested interest in their earned but 
unpaid wages, KSC itself acknowledges that, at most, it had an “expectancy” in 
 
15
the receipt of a commission.  KSC’s expected commission is merely a contingent 
interest since KSC only expected payment if MacDonald Dettwiler was awarded 
the SAR contract.  (See United States v. Rodrigues (9th Cir. 2000) 229 F.3d 842, 
846 [finding that under the federal Victim and Witness Protection Act of 1982, 
restitution was not available for a contingent loss in which the company had only 
an expectancy interest; restitution could only be recovered for the loss of a vested 
interest].)  Such an attenuated expectancy cannot, as KSC contends, be likened to 
“property” converted by Lockheed Martin that can now be the subject of a 
constructive trust.  To create a constructive trust, there must be a res, an 
“identifiable kind of property or entitlement in defendant’s hands.”  (1 Dobbs, 
Law of Remedies (1993) § 4.1(2), pp. 589-590.)  As the United States Supreme 
Court recently said, a constructive trust requires “money or property identified as 
belonging in good conscience to the plaintiff [which can] clearly be traced to 
particular funds or property in the defendant’s possession.”  (Great-West Life & 
Annuity Insurance Co. v. Knudson (2002) 534 U.S. 204, __ [112 S.Ct. 708, 714].)   
The recovery requested in this case cannot be traced to any particular funds in 
Lockheed Martin’s possession and therefore is not the proper subject of a 
constructive trust. 
KSC’s expectancy in this case is further attenuated since KSC never 
anticipated payment directly from Lockheed Martin.  Instead, it expected the 
Republic of Korea to pay MacDonald Dettwiler, which would then pay a 
commission to KSC.  In contrast, in Cortez, the defendant was the employer from 
which the plaintiffs expected payment.  (Cortez, supra, 23 Cal.4th at p. 169.)  
Therefore, the order for restitution served to restore to the plaintiffs funds that 
were directly owed to them by the defendant.  Unlike Cortez, then, the monetary 
relief requested by KSC does not represent a quantifiable sum owed by defendants 
to plaintiff.  Instead, it is a contingent expectancy of payment from a third party.  
 
16
For these reasons, we find that plaintiff’s claim is properly characterized as a 
claim for nonrestitutionary disgorgement of profits.   
D. 
We reaffirm that an action under the UCL “is not an all-purpose substitute 
for a tort or contract action.”  (Cortez, supra, 23 Cal.4th at p. 173.)  Instead, the act 
provides an equitable means through which both public prosecutors and private 
individuals can bring suit to prevent unfair business practices and restore money 
or property to victims of these practices.  As we have said, the “overarching 
legislative concern [was] to provide a streamlined procedure for the prevention of 
ongoing or threatened acts of unfair competition.”  (Id. at pp. 173-174.)  Because 
of this objective, the remedies provided are limited.  While any member of the 
public can bring suit under the act to enjoin a business from engaging in unfair 
competition, it is well established that individuals may not recover damages.  
(Bank of the West, supra, 2 Cal.4th at p. 1266.)   
The nonrestitutionary disgorgement remedy sought by plaintiff closely 
resembles a claim for damages, something that is not permitted under the UCL.  
As one court has noted: “Compensation for a lost business opportunity is a 
measure of damages and not restitution to the alleged victims.”  (MAI Systems 
Corp. v. UIPS (N.D.Cal. 1994) 856 F.Supp. 538, 542.)  Plaintiff suggests that its 
disgorgement remedy need not include all of the profits unfairly obtained by 
Lockheed Martin; instead, its recovery might be limited to the amount it allegedly 
would have obtained as a commission had McDonald Dettwiler been awarded the 
contract.  This proposed recovery would be in exactly the same amount that 
plaintiff is seeking to recover as damages for its traditional tort claim of 
interference with prospective economic advantage.  The only difference between 
what plaintiff seeks to recover as “disgorgement” and the damages it seeks under 
its traditional tort claim is that plaintiff would not recover its full expected 
 
17
commission under a “disgorgement” remedy if, for some reason, the profits 
obtained by Lockheed Martin did not equal the amount of plaintiff’s expected 
commission.   
Allowing the plaintiff in this case to recover nonrestitutionary 
disgorgement under the UCL would enable it to obtain tort damages while 
bypassing the burden of proving the elements of liability under its traditional tort 
claim for intentional interference with prospective economic advantage.  As we 
have stated, any member of the public can bring suit under the UCL.  In addition, 
“to state a claim under the act one need not plead and prove the element of a tort.  
Instead, one need only show that ‘members of the public are likely to be 
deceived.’ [Citation.]”  (Bank of the West, supra, 2 Cal.4th at p. 1267; see also 
Fletcher, supra, 23 Cal.3d at p. 453 [individual plaintiff’s knowledge of the unfair 
practice not needed in order to recover restitution].)   Given the UCL’s liberal 
standing requirements and relaxed liability standards, were we to allow 
nonrestitutionary disgorgement in an individual action under the UCL, plaintiffs 
would have an incentive to recast claims under traditional tort theories as UCL 
violations.  They could recover from a competitor without having to meet the 
more rigorous pleading requirements of a negligence action, or a breach of 
contract suit.  The result could be that the UCL would be used as an all-purpose 
substitute for a tort or contract action, something the Legislature never intended.   
In addition, it is possible that due process concerns would arise if an 
individual business competitor could recover disgorgement of profits under the 
UCL.  While restitution is limited to restoring money or property to direct victims 
of an unfair practice, a potentially unlimited number of individual plaintiffs could 
recover nonrestitutionary disgorgement.  Allowing such a remedy would expose 
defendants to multiple suits and the risk of duplicative liability without the 
traditional limitations on standing.  (See Stop Youth Addiction v. Lucky Stores, Inc. 
 
18
(1998) 17 Cal.4th 553, 582 (conc. opn. of Baxter, J.) [disgorgement of profits to a 
party that has not paid money to the defendant and was not a party to the litigation 
“raises substantial due process issues implicating the rights of both the defendant 
and the absent parties”].)  The disgorgement remedy requested in this case would 
not require that the disgorged money or property have come from the prospective 
plaintiff in the first instance.  Nor is there any limit on the number of times the 
remedy could be sought or any limit on the monetary relief available.  There is a 
risk of unfairness not only to defendants but also to direct victims of the unfair 
practice.  If Lockheed Martin were forced to disgorge its profits to KSC, there 
might be little left for the Republic of Korea to recover, even though it is the party 
ostensibly entitled to restitutionary relief.   
Plaintiff suggests ways of alleviating these due process concerns, proposing 
several “options to prevent abuse,” including that this remedy be “limited to 
instances where the defendant has engaged in egregious practices.”  None of 
plaintiff’s proposals, however, alleviate the possibility that defendants would be 
subjected to duplicate liability.  Further, none of plaintiff’s proposed “options to 
prevent abuse” are contemplated by the legislative scheme. 
E. 
We conclude, therefore, that allowing plaintiff to recover monetary relief 
under the UCL in this case would be at odds with the language and history of the 
statute, our previous decisions construing the UCL, and public policy.  We hold 
that nonrestitutionary disgorgement of profits is not an available remedy in an 
individual action under the UCL.  We note that the UCL remains a meaningful 
consumer protection tool.  The breadth of standing under this act allows any 
consumer to combat unfair competition by seeking an injunction against unfair 
business practices.  Actual direct victims of unfair competition may obtain 
 
19
restitution as well.  The present decision merely reaffirms the balance struck in 
this state’s unfair competition law between broad liability and limited relief.   
In addition, we note that our decision does not foreclose all relief to 
plaintiff.  While plaintiff may not recover monetary relief under the limited 
remedies provided by the UCL, plaintiff may pursue a cause of action under 
traditional tort law.   In fact, as we conclude below, plaintiff in this case can state a 
claim for the tort of intentional interference with prospective economic advantage.  
While the pleading and proof requirements under this tort are more rigorous than 
under the UCL, if plaintiff succeeds in meeting its burden of proof, it may recover 
damages for the injuries it claims to have suffered as a result of unfair 
competition.  
III. 
Lockheed Martin argues that KSC fails to state a claim for intentional 
interference with prospective economic advantage because it has not shown that 
Lockheed Martin acted with the specific intent to disrupt KSC’s business 
relationship.  KSC counters that a plaintiff need only show that the defendant 
acted with the knowledge that its wrongful acts were substantially certain to 
disrupt plaintiff’s business expectancy.  We conclude that the tort of intentional 
interference with prospective economic advantage does not require a plaintiff to 
plead that the defendant acted with the specific intent, or purpose, of disrupting the 
plaintiff’s prospective economic advantage.  Instead, to satisfy the intent 
requirement for this tort, it is sufficient to plead that the defendant knew that the 
interference was certain or substantially certain to occur as a result of its action. 
A. 
We first articulated the elements of the tort of intentional interference with 
prospective economic advantage in Buckaloo v. Johnson (1975) 14 Cal.3d 815, 
827 (Buckaloo).  These elements are usually stated as follows: “ ‘(1) an economic 
 
20
relationship between the plaintiff and some third party, with the probability of 
future economic benefit to the plaintiff; (2) the defendant’s knowledge of the 
relationship; (3) intentional acts on the part of the defendant designed to disrupt 
the relationship; (4) actual disruption of the relationship; and (5) economic harm 
to the plaintiff proximately caused by the acts of the defendant.’ [Citations.]” 
(Westside Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 
507, 521-522.) 
We most recently considered this tort in Della Penna v. Toyota Motor 
Sales, U.S.A., Inc. (1995) 11 Cal.4th 376 (Della Penna), where we held that a 
plaintiff seeking to recover damages for interference with prospective economic 
advantage must plead and prove as part of its case-in-chief that the defendant’s 
conduct was “wrongful by some legal measure other than the fact of interference 
itself.”  (Id. at p. 393.)  In Della Penna, we did not address the elements of the tort 
as we had formulated them in Buckaloo, other than noting that “[t]o the extent that 
language in Buckaloo . . . addressing the pleading and proof requirements in the 
economic relations tort is inconsistent with the formulation we adopt in this case, 
it is disapproved.”  (Della Penna, supra, 11 Cal.4th at p. 393, fn. 5.)   
Since our opinion in Della Penna, lower courts considering this tort have 
continued to apply the elements we articulated in Buckaloo, with the added 
understanding that a plaintiff must plead that the defendant engaged in an act that 
is wrongful apart from the interference itself.  (See, e.g., Limandri v. Judkins 
(1997) 52 Cal.App.4th 326, 339; Arntz Contracting Co. v. St. Paul Fire and 
Marine Insurance Company (1996) 47 Cal.App.4th 464, 475; Westside Center 
Associates v. Safeway Stores 23, Inc., supra, 42 Cal.App.4th at pp. 521-522.)  The 
Court of Appeal in the present case, however, in considering whether a plaintiff 
must plead specific intent, determined that after Della Penna, “it is no longer 
 
21
appropriate to apply the elements formulated in Buckaloo in all actions for 
interference with prospective advantage.”   
We disagree with the Court of Appeal’s conclusion that the elements we 
first articulated in Buckaloo, supra, 14 Cal.3d 815, do not still apply to this tort.  
In Della Penna, we did not abandon these elements.  Instead, we specifically 
stated that “[w]e do not in this case . . . go beyond approving the requirement of a 
showing of wrongfulness as part of the plaintiff’s case.”  (Della Penna, supra, 11 
Cal.4th at p. 378.)  In fact, we explicitly approved the trial court’s modified 
version of the standard jury instruction on intentional interference with 
prospective economic advantage, BAJI No. 7.82.  The instruction at issue 
articulated the traditional elements of the tort, but changed the third element to 
provide that the defendant “ ‘intentionally engaged in [wrongful] acts or conduct 
designed to interfere with or disrupt’ the relationship.”  (Della Penna, at p. 380, 
fn. 1, italics and brackets added.)  Rather than overrule the established elements of 
this tort, Della Penna merely clarified the plaintiff’s burden as to the third 
element, stating that to meet this element, a plaintiff must plead and prove that the 
defendant’s acts are wrongful apart from the interference itself.  (Id. at p. 393.)  
Thus, as the majority of the Courts of Appeal have understood, after Della Penna 
the elements of the tort of interference with prospective economic advantage 
remain the same, except that the third element also requires a plaintiff to plead 
intentional wrongful acts on the part of the defendant designed to disrupt the 
relationship. 
B. 
Having clarified the required elements, we now consider the intent 
requirement of this tort.  The question is whether a plaintiff must plead and prove 
that the defendant engaged in wrongful acts with the specific intent of interfering 
with the plaintiff’s business expectancy.  We conclude that specific intent is not a 
 
22
required element of the tort of interference with prospective economic advantage.  
While a plaintiff may satisfy the intent requirement by pleading specific intent, 
i.e., that the defendant desired to interfere with the plaintiff’s prospective 
economic advantage, a plaintiff may alternately plead that the defendant knew that 
the interference was certain or substantially certain to occur as a result of its 
action. 
Lockheed Martin argues that specific intent is an established element of this 
tort.  It contends that to satisfy the tort’s third element—intentional wrongful acts 
designed to disrupt the plaintiff’s relationship with its benefactor—a plaintiff must 
allege that the defendant purposely sought the disruption.  It asserts that the 
inclusion of the word “designed” in the typical formulation of the third element is 
evidence that a plaintiff is required to plead specific intent.  We disagree.  The 
elements of the tort of interference with prospective economic advantage do not 
require a plaintiff to allege that the defendant acted with the specific intent, or 
purpose, of disrupting the plaintiff’s prospective economic advantage.   
Contrary to Lockheed Martin’s assertion, the inclusion of the word 
“designed” in the third element of the tort does not necessarily mean that this tort 
contains a specific intent requirement.  Our analysis of the intent requirement for 
the tort of intentional interference with contract in Quelimane Company, Inc. v. 
Stewart Title Guaranty Company (1998) 19 Cal.4th 26 (Quelimane) is 
instructive.7  In Quelimane, we articulated the elements of this tort, stating that the 
                                             
 
7  
The concurring and dissenting opinion argues that we should rely on 
Seaman’s Direct Buying Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752, 
overruled on other grounds in Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 
Cal.4th 85, 88, rather than on Quelimane, supra, 19 Cal.4th 26.  Both cases 
discuss the intent requirement for the tort of interference with contract.  Yet the 
Quelimane court did not consider the earlier per curiam decision in Seaman’s.  As 
 
(Footnote continued on next page.) 
 
23
third element requires a plaintiff to plead the “defendant’s intentional acts 
designed to induce a breach or disruption of the contractual relationship.”  (Id. at 
p. 55.)  Notwithstanding the presence of the word “designed,” we found that this 
tort did not require a plaintiff to plead that the defendant acted with the specific 
intent to interfere.  (Id. at p. 79.) 
In determining that intentional interference with contract does not contain a 
specific intent requirement, we relied on the Restatement Second of Torts.  
(Quelimane, supra, 19 Cal.4th at p. 56.)  The Restatement, section 766, comment 
j, makes clear that the tort of intentional interference with contract applies not only 
when a defendant acts with the purpose or desire to interfere but that “[i]t applies 
also to intentional interference . . . in which the actor does not act for the purpose 
of interfering with the contract or desire it but knows that the interference is 
certain or substantially certain to occur as a result of his action.  The rule applies, 
in other words, to an interference that is incidental to the actor’s independent 
purpose and desire but known to him to be a necessary consequence of his action.”  
(Rest.2d Torts, § 766, com. j, p. 12.) 
We similarly look to the Restatement to determine whether the tort at issue 
in the present case, intentional interference with prospective economic advantage, 
                                                                                                                                      
 
 
(Footnote continued from previous page.) 
 
we noted in Della Penna, the Seaman’s court “rel[ied] on the first Restatement . . . 
without reviewing or even mentioning intervening revaluations of the tort by the 
Restatement Second, other state high courts and our own Court of Appeal.”  
(Della Penna, supra, 11 Cal.4th at p. 389.)  Further, we expressly disapproved of 
our language in Seaman’s to the extent that it was inconsistent with Della Penna.  
(Della Penna, at p. 393, fn. 5.)  Thus, we find in Quelimane, which relies on Della 
Penna and the Second Restatement, a better representation than Seaman’s of the 
current state of the law. 
 
24
contains a specific intent requirement.  Restatement Second of Torts section 766B, 
entitled Intentional Interference with Prospective Contractual Relation,8 explains 
in comment d: “The intent required for this Section is that defined in § 8A.  The 
interference with the other’s prospective contractual relation is intentional if the 
actor desires to bring it about or if he knows that the interference is certain or 
substantially certain to occur as a result of his action.  (See § 766, Comment j).”  
(Rest.2d Torts, § 766B, com. d, p. 22.) 
In explaining the intent requirement for intentional interference with 
prospective economic advantage, the Restatement Second of Torts specifically 
refers to the intent requirement for the tort of intentional interference with 
contract, as defined in section 766, comment j.  We relied on this section of the 
Restatement in Quelimane to conclude that this tort contained no specific intent 
requirement.  (Quelimane, supra, 19 Cal.4th at p. 56.)  In addition, the 
Restatement refers to the definition of intent in section 8A, which states: “The 
word ‘intent’ is used throughout the Restatement [Second] of [Torts] to denote 
that the actor desires to cause consequences of his act, or that he believes that the 
consequences are substantially certain to derive from it.”  (Rest.2d Torts, § 8A.)  
Comment b to this section clarifies that “[i]ntent is not, however, limited to 
consequences which are desired.  If the actor knows that the consequences are 
certain, or substantially certain, to result from his act, and still goes ahead, he is 
                                             
 
8  
This section states: “One who intentionally and improperly interferes with 
another’s prospective contractual relation (except a contract to marry) is subject to 
liability to the other for pecuniary harm resulting from loss of the benefits of the 
relation, whether the interference consists of (a) inducing or otherwise causing a 
third person not to enter into or continue the prospective relation or (b) preventing 
the other from acquiring or continuing the prospective relation.”  (Rest.2d Torts, § 
766B, p. 20.) 
 
25
treated by the law as if he had in fact desired to produce the result.”  (Rest.2d 
Torts, § 8A, com. b, p. 15.) 
Based on our reading of the Restatement and our discussion in Quelimane 
of the intent requirement, we reject Lockheed Martin’s argument that the tort of 
intentional interference with prospective economic advantage contains a 
requirement that a plaintiff plead and prove that the defendant acted with the 
specific intent, purpose, or design to interfere with the plaintiff’s prospective 
advantage.  Instead, we agree with the Restatement that it is sufficient for the 
plaintiff to plead that the defendant “[knew] that the interference is certain or 
substantially certain to occur as a result of his action.”  (Rest.2d Torts, § 766B, 
com. d, p. 22.)9 
C. 
We caution that although we find the intent requirement to be the same for 
the torts of intentional interference with contract and intentional interference with 
prospective economic advantage, these torts remain distinct.  We reiterate our 
statement in Della Penna that “[o]ur courts should . . . firmly distinguish the two 
kinds of business contexts, bringing a greater solicitude to those relationships that 
have ripened into agreements, while recognizing that relationships short of that 
subsist in a zone where the rewards and risks of competition are dominant.”  
(Della Penna, supra, 11 Cal.4th at p. 392.)   
We note initially that even though these two torts are distinct, some 
plaintiffs may be able to state causes of action for both torts.  As we stated in 
                                             
 
9  
We consider only whether, to state a claim for this tort, a plaintiff need 
allege that the defendant acted with a specific intent to interfere with the plaintiff’s 
business expectancy.  A defendant’s intent, as defined in section 8A of the 
Restatement Second of Torts, is still a triable issue of fact.  (See Quelimane, 
supra, 19 Cal.4th at p. 57.) 
 
26
Buckaloo, “the tort of interference with contract is merely a species of the broader 
tort of interference with prospective economic advantage.”  (Buckaloo, supra, 14 
Cal.3d at p. 823.)  In the present case, KSC’s claim was appropriately stated as 
one for interference with prospective economic advantage.  KSC did not allege in 
its complaint that it had a contractual agreement with MacDonald Dettwiler.  KSC 
merely alleged that it had an economic expectancy in that it was acting as 
MacDonald Dettwiler’s broker and it expected a commission if the contract was 
awarded to MacDonald Dettwiler.  KSC nowhere pleads that this expectancy 
amounted to an enforceable contract. 
Moreover, the existence of a contract does not mean that a plaintiff’s claim 
must be brought exclusively as one for interference with contract.  In Buckaloo, 
we concluded that the tort of interference with prospective economic advantage “is 
considerably more inclusive than actions based on contract or interference with 
contract, and is thus is not dependent on the existence of a valid contract.”  
(Buckaloo, supra, 14 Cal.3d at pp 826-827; see id. at p. 823, fn. 6 [“ ‘the basic tort 
of interference with economic relations can be established by showing, inter alia, 
an interference with an existing contract or a contract which is certain to be 
consummated’ ”].)10  Thus, a plaintiff who believes that he or she has a contract 
but who recognizes that the trier of fact might conclude otherwise might bring 
claims for both torts so that in the event of a finding of no contract, the plaintiff 
might prevail on a claim for interference with prospective economic advantage.  In 
                                             
 
10  
The concurring and dissenting opinion contends that the Buckaloo court 
made other statements indicating that the two torts were mutually exclusive.  But it 
is apparent that each of the statements it quotes in support of this contention, when 
read in context, are merely made in furtherance of Buckaloo's central thesis: that 
the existence of a contract is not necessary to maintain an action for intentional 
interference with prospective economic advantage. 
 
27
the present case, even if KSC could have alleged a contractual relationship with 
MacDonald Dettwiler, its claim was properly brought as one for interference with 
prospective economic advantage.  As we explain below, however, a plaintiff that 
chooses to bring a claim for interference with prospective economic advantage has 
a more rigorous pleading burden since it must show that the defendant’s conduct 
was independently wrongful. 
As we have made clear in both Della Penna and Quelimane, the distinction 
between these two torts is found in the independent wrongfulness requirement of 
the tort of interference with prospective economic advantage.  We stated in 
Quelimane: “Because interference with an existing contract receives greater 
solicitude than does interference with prospective economic advantage [citation], 
it is not necessary that the defendant’s conduct be wrongful apart from the 
interference with the contract itself. [Citation.] [¶] . . . Intentionally inducing or 
causing a breach of an existing contract is . . . a wrong in and of itself.  Because 
this formal economic relationship does not exist and damages are speculative 
when remedies are sought for interference in what is only prospective economic 
advantage, Della Penna concluded that some wrongfulness apart from the impact 
of the defendant’s conduct on that prospect should be required.”  (Quelimane, 
supra, 19 Cal.4th at pp. 55-56.) 
Thus, while intentionally interfering with an existing contract is “a wrong 
in and of itself” (Quelimane, supra, 19 Cal.4th at p. 56), intentionally interfering 
with a plaintiff’s prospective economic advantage is not.  To establish a claim for 
interference with prospective economic advantage, therefore, a plaintiff must 
plead that the defendant engaged in an independently wrongful act.  (See Della 
Penna, supra, 11 Cal.4th at p. 393.)  An act is not independently wrongful merely 
because defendant acted with an improper motive.  As we said in Della Penna, 
“the law usually takes care to draw lines of legal liability in a way that maximizes 
 
28
areas of competition free of legal penalties.”  (Della Penna, supra, 11 Cal.4th at p. 
392.)   The tort of intentional interference with prospective economic advantage is 
not intended to punish individuals or commercial entities for their choice of 
commercial relationships or their pursuit of commercial objectives, unless their 
interference amounts to independently actionable conduct.  (Marin Tug & Barge, 
Inc. (9th Cir. 2001) 271 F.3d 825, 832.)  We conclude, therefore, that an act is 
independently wrongful if it is unlawful, that is if it is proscribed by some 
constitutional, statutory, regulatory, common law, or other determinable legal 
standard.11  (See Marin Tug & Barge, Inc., supra, at p. 835; see also Della Penna, 
supra, 11 Cal.4th at 408 (conc. opn. of Mosk, J.) [“It follows that the tort may be 
satisfied by intentional interference with prospective economic advantage by 
independently tortious means”].)   
Here, KSC has clearly satisfied the independent wrongfulness requirement.  
In its complaint, KSC alleged that defendant Kim, as an agent for Loral, engaged 
in bribery and offered sexual favors to key Korean officials in order to obtain the 
contract from the Republic of Korea.  Under the Foreign Corrupt Practices Act, it 
is unlawful to pay or offer money or anything of value to a foreign official for the 
purposes of influencing any act or decision of the foreign official, or to induce the 
foreign official to use his or her influence with a foreign government to affect or 
influence any act or decision of the government.  (15 U.S.C. § 78dd-1(a)(1)(A), 
                                             
 
11  
We need not in this case further define which sources of law can be relied 
on to determine whether a defendant has engaged in an independently wrongful 
act, other than to say that such an act must be wrongful by some legal measure, 
rather than merely a product of an improper, but lawful, purpose or motive.  To 
the extent that the lower courts have determined otherwise, these decisions are 
disapproved.  (See, e.g., PMC, Inc. v. Saban Entertainment, Inc. (1996) 45 
Cal.App.4th 579, 603 [stating that liability may arise from either improper motive 
or improper means].) 
 
29
(B).)  In addition, the complaint alleges that the commissions paid by Loral to Kim 
exceeded the maximum allowable amounts established by the Foreign Corrupt 
Practices Act. (15 U.S.C. § 78dd-2(a)(1)(A), (B).)  The complaint thus clearly 
alleges that defendants engaged in unlawful behavior in order to secure the SAR 
contract.  KSC has, therefore, sufficiently alleged that defendants’ acts, in addition 
to interfering with KSC’s business expectancy, were wrongful in and of 
themselves.  
D. 
It is this independent wrongfulness requirement that makes defendants’ 
interference with plaintiff’s business expectancy a tortious act.  Because we have 
determined that the act of interference with prospective economic advantage is not 
tortious in and of itself, the requirement of pleading that a defendant has engaged 
in an act that was independently wrongful distinguishes lawful competitive 
behavior from tortious interference.  Such a requirement “sensibly redresses the 
balance between providing a remedy for predatory economic behavior and 
keeping legitimate business competition outside litigative bounds.”  (Della Penna, 
supra, 11 Cal.4th at p. 378.) 
The independent wrongfulness requirement also differentiates California 
law from that of other states and the Restatement Second of Torts.   Lockheed 
Martin’s reliance on these authorities is unpersuasive since they require a plaintiff 
only to plead that the defendant’s interference was improper, and not that the 
interference was independently unlawful.  As we explain, California’s independent 
wrongfulness requirement more narrowly defines actionable conduct under this 
tort.  
According to the Restatement, there are two requirements for liability under 
this tort: The interference must be both intentional and improper.  A defendant 
who “intentionally and improperly interferes with another’s prospective 
 
30
contractual relation” is subject to liability.  (Rest.2d Torts, § 766B.)  The intent 
requirement, as described above, is that the defendant either desires to bring about 
the interference or knows that the interference is certain or substantially certain to 
occur as a result of its action.  (Rest.2d Torts, § 766B, com. d, p. 22.)  In addition 
to this general intent, the second requirement is that “[t]he interference . . . must 
also be improper.  The factors to be considered in determining whether an 
interference is improper are stated in § 767.  One of them is the actor’s motive and 
another is the interest sought to be advanced by him.  Together these factors mean 
that the actor’s purpose is of substantial significance.  If he had no desire to 
effectuate the interference by his action but knew that it would be a mere 
incidental result of conduct he was engaging in for another purpose, the 
interference may be found to be not improper.  Other factors come into play here, 
however, particularly the nature of the actor’s conduct.  If the means used is 
innately wrongful, predatory in character, a purpose to produce the interference 
may not be necessary.  On the other hand, if the sole purpose of the actor is to vent 
his ill will, the interference may be improper although the means are less 
blameworthy.”  (Rest.2d Torts, § 766B, com. d, pp. 22-23, italics added.)   
Unlike California, the Restatement Second of Torts does not require a 
plaintiff to plead that a defendant engaged in an independently wrongful act in 
order to show “improper” interference.  Instead, a general intent plus an actor’s 
motive or purpose to interfere is enough to subject a defendant to liability under 
the Restatement.   In the absence of an independent wrongfulness requirement, a 
purpose to interfere with the plaintiff’s business expectancy suffices to distinguish 
actionable conduct from behavior that is merely competitive, and therefore 
privileged.  The Restatement, however, recognizes that when the defendant’s 
conduct is innately wrongful, a purpose to interfere may be unnecessary.  The 
Restatement appreciates that the independent wrongfulness of a defendant’s acts 
 
31
may satisfy the “improper” requirement of the tort without the need to look to the 
motive or purpose behind a defendant’s acts. 
Thus, while California does follow the Restatement’s general intent 
requirement, California law adheres to a narrower interpretation of what conduct is 
improper under this tort.  After Della Penna, supra, 11 Cal.4th 376, California has 
required plaintiffs to show that a defendant has engaged in an independently, or 
inherently, wrongful act.  Under this requirement, a defendant’s motive or purpose 
is relevant only to the extent that it renders the defendant’s conduct unlawful.  We 
are therefore unconvinced by Lockheed Martin’s reliance on the Restatement in 
this regard. 
Lockheed Martin’s citation to out-of-state decisions holding that a plaintiff 
must plead that the defendant acted with a specific intent or purpose to interfere 
with the plaintiff’s economic relations is similarly unpersuasive.  Like the 
Restatement Second of Torts, the cases cited by Lockheed Martin look to a 
defendant’s motive or purpose to distinguish tortious conduct from lawful 
behavior.  (See, e.g., Ethyl Corp. v. Balter (Fla.Dist.Ct.App. 1980) 386 So.2d 
1220, 1223 [finding no interference because the defendant’s purpose or motive 
was not directed at the plaintiff]; Bank Computer Network Corp. v. Continental 
Illinois Nat’l Bank and Trust Co. (Ill.App.Ct. 1982) 442 N.E.2d 586, 593 [same]; 
K&K Management v. Lee (Md. 1989) 557 A.2d 965, 975 [same]; Anderson v. The 
Regents of the Univ. of California (Wis.Ct.App. 1996) 554 N.W.2d 509, 519 
[same].)  Unlike California, however, these states do not require a plaintiff to 
plead that the defendant has engaged in an independently wrongful act in order to 
state a claim for interference with prospective economic advantage.  Instead of 
independent wrongfulness, a plaintiff is required to plead a purpose or motive to 
interfere in order to demonstrate that the defendant’s interference was improper.   
 
32
We additionally reject Lockheed Martin’s reliance on DeVoto v. Pacific 
Fidelity Life Insurance Co. (9th Cir. 1980) 618 F.2d 1340 (DeVoto).  In that case, 
the Ninth Circuit Court of Appeals attempted to anticipate whether California 
courts would require a plaintiff to plead that the defendant acted with a specific 
purpose or motive to interfere with the plaintiff’s prospective economic advantage.  
(Id. at p. 1347.)  DeVoto was decided prior to our opinions in Della Penna, supra, 
11 Cal.4th 376, and Quelimane, supra, 19 Cal.4th 26, and, as the Ninth Circuit 
noted, there was “a scarcity of pertinent authority on this issue.”  (DeVoto, at p. 
1347.)  We agree with the Court of Appeal in the present case that DeVoto “does 
not support the requirement of an allegation of purposeful intent directed 
specifically at the plaintiff in every case.”  Instead, the DeVoto court states: 
“Where the actor’s conduct is not criminal or fraudulent, and absent some other 
aggravating circumstances, it is necessary to identify those whom the actor had a 
specific motive or purpose to injure by his interference and to limit liability 
accordingly.”  (DeVoto, supra, 618 F.2d at p. 1347, italics added.)   
The DeVoto court, then, determined that a defendant’s motive or purpose to 
interfere is a necessary element only when the defendant’s conduct is not 
independently unlawful.  After Della Penna, independent wrongfulness has been 
recognized as a required element of the tort.  Therefore, an additional showing of 
specific intent to interfere is not necessary.   
E. 
Lockheed Martin additionally argues that a specific intent requirement is 
necessary to prevent potential plaintiffs with injuries remotely caused by a 
defendant’s acts from maintaining standing to sue for this tort.  It contends that 
since KSC is an indirect victim of defendants’ alleged acts of interference, KSC 
should only be able to state a claim if it can show that Lockheed Martin acted with 
the purpose of interfering with KSC’s economic expectancy.  We disagree.  Were 
 
33
we to adopt a specific intent requirement, a plaintiff’s standing would turn on the 
subjective intent of a defendant who has committed an independently wrongful 
act.  Such a requirement would lead to absurd and unfair results.  A defendant who 
engaged in an unlawful act knowing that it would harm the plaintiff’s business 
interest could escape liability if the defendant acted with the purpose of furthering 
its own interest, rather than specifically harming the plaintiff’s interest.  Standing 
for this tort should not be made to turn on such a consideration.     
As support for its argument, Lockheed Martin cites section 767 of the 
Restatement Second of Torts and argues that a defendant must act with the 
specific intent of interfering with a plaintiff’s business expectancy when the 
plaintiff is not the direct victim of the interference.  We note, however, that section 
767 of the Restatement Second of Torts is entitled Factors in Determining 
Whether Interference is Improper.  This section, then, refers to the element of the 
tort that defines when interference is improper, not to the element that defines the 
required intent.  As stated above, California law does not follow the Restatement’s 
definition of when interference is improper.  Instead, California law defines 
“improper” more narrowly than the Restatement, allowing recovery only when the 
defendant’s conduct is independently unlawful. 
We further note that even the Restatement, with its broader definition of 
improper conduct, recognizes that an indirectly injured plaintiff may state a claim 
under this tort without pleading that the defendant acted with the purpose to 
interfere with the plaintiff’s business expectancy.  Section 767, comment h, of the 
Restatement, discussing the proximity or remoteness of the defendant’s conduct to 
the interference, supports our conclusion: “This remoteness [between the 
defendant’s conduct and the plaintiff’s injury] conduces toward a finding that the 
interference was not improper.  The weight of this factor, however, may be 
controverted by . . . the factor of the actor’s conduct if that conduct was inherently 
 
34
unlawful or independently tortious.”  (Rest.2d Torts, § 767, com. h, p. 36, italics 
added.)12  If the defendant’s improper conduct constitutes independently wrongful 
behavior, the fact that the plaintiff is an indirect victim does not preclude recovery. 
Contrary to the arguments of Lockheed Martin and the concurring and 
dissenting opinion, we find no sound reason for requiring that a defendant’s 
wrongful actions must be directed towards the plaintiff seeking to recover for this 
tort.  The interfering party is liable to the interfered-with party “when the 
independently tortious means the interfering party uses are independently tortious 
only as to a third party.  Even under these circumstances, the interfered-with party 
remains an intended (or at least known) victim of the interfering party—albeit one 
that is indirect rather than direct.”  (Della Penna, supra, 11 Cal.4th at p. 409 
(conc. opn. of Mosk, J) [citing Rest.2d Torts, § 767, com. c, pp. 29-30].)  In fact, 
“the most numerous of the tortious interference cases are those in which the 
disruption is caused by an act directed not at the plaintiff, but at a third person.”  
(Perlman, Interference with Contract and Other Economic Expectancies:  A Clash 
of Contract and Tort Doctrine (1982) 49 U.Chi.L.Rev. 61, 106.) 
We do not share the concern of Lockheed Martin and the concurring and 
dissenting opinion that our ruling today will expose defendants to an unlimited 
number of potential plaintiffs.13   The “substantial certainty” test used in the 
                                             
 
12  
Contrary to the assertion of the concurring and dissenting opinion, section 
767 “applies to each form of the tort,” and is therefore applicable to both 
interference with contract and interference with prospective economic advantage.  
(Rest.2d Torts, § 767, com. a, p. 27.)  
13  
Further, we find federal cases discussing antitrust and RICO law to be 
inapplicable to the question of whether a plaintiff may state a claim under the 
California common law tort of interference with prospective economic advantage.  
The federal antitrust cases cited by the concurring and dissenting opinion address 
the question of whether the plaintiffs in those cases could maintain standing under 
section 4 of the Clayton Act (15 U.S.C. § 15).  (Associated General Contractors v. 
 
(Footnote continued on next page.) 
 
35
Restatement, coupled with the independent wrongfulness requirement of Della 
Penna, sufficiently limits this tort.  It is important to underscore that the 
independent wrongfulness requirement of this tort limits the class of potential 
defendants; only defendants who have engaged in an unlawful act can be held 
liable for this tort.  In addition, as described below, each of the five elements of 
the tort of interference with prospective economic advantage serves to limit the 
number of potential plaintiffs that can state a cause of action for this tort.14   
First, a plaintiff that wishes to state a cause of action for this tort must 
allege the existence of an economic relationship with some third party that 
contains the probability of future economic benefit to the plaintiff.  This tort 
therefore “protects the expectation that the relationship eventually will yield the 
                                                                                                                                      
 
 
(Footnote continued from previous page.) 
 
California State Council of Carpenters (1983) 459 U.S. 519, 529.)  To answer this 
question, these courts engage, inter alia, in an analysis of the statutory language of 
the Clayton Act, as well as its relevant legislative history and objectives.  (459 
U.S. at pp. 529-531, 538-540.)  The question of whether a plaintiff has standing to 
bring a claim under a California common law tort is not subject to the same 
considerations and limitations that were raised in the Clayton Act and RICO cases.  
Adopting this federal case law would be a significant departure from our prior 
cases discussing this tort, especially Buckaloo, supra, 14 Cal.3d 815, and Della 
Penna, supra, 11 Cal.4th 376.  Nevertheless, the concurring and dissenting 
opinion points to the Restatement, which states in section 768, comment f, that 
“there is therefore interplay between [antitrust] law and the law of tortious 
interference with prospective contractual relations.”  The concurring and 
dissenting opinion fails to include the remainder of this sentence, which continues: 
“[antitrust] law is so involved and is so primarily concerned with areas of public 
law only tangentially related to tort law that it must be regarded as outside the 
scope of the Restatement of Torts.”  (Rest.2d Torts, § 768, com. c, p. 43, italics 
added.) 
14  
We address only plaintiff’s allegations as pleaded in its complaint.  We 
express no view as to whether plaintiff’s proof will be sufficient to establish these 
elements at trial. 
 
36
desired benefit, not necessarily the more speculative expectation that a potentially 
beneficial relationship will arise.”  (Westside Center Associates v. Safeway Stores 
23, Inc., supra, 42 Cal.App.4th at p. 524.)  Here, KSC had an agency relationship 
with MacDonald Dettwiler under which KSC’s commission was fixed at 15 
percent of the contract price.  As alleged in the complaint, if MacDonald Dettwiler 
had been awarded the contract, KSC’s commission would have exceeded $30 
million.  This business relationship and corresponding expectancy is sufficient to 
meet this first element.  Only plaintiffs that can demonstrate an economic 
relationship with a probable future economic benefit will be able to state a cause 
of action for this tort. 
Second, a defendant must have knowledge of the plaintiff’s economic 
relationship.  KSC alleges that “Loral acted with full knowledge of the 
commission relationship between plaintiff and MacDonald Dettwiler.”  Again, this 
element serves to restrict the class of plaintiffs that can state a claim for this tort. 
Third, the defendant must have engaged in intentionally wrongful acts 
designed to disrupt the plaintiff’s relationship.  As discussed above, this requires a 
plaintiff to plead (1) that the defendant engaged in an independently wrongful act, 
and (2) that the defendant acted either with the desire to interfere or the knowledge 
that interference was certain or substantially certain to occur as a result of its 
action.  Here, KSC alleges that defendants bribed and offered sexual favors to 
Korean officials, and paid excessive commissions, in violation of the Foreign 
Corrupt Practices Act.  Further, KSC claims that Loral acted “knowing that its 
interference with the award of the contract on a competitive basis would cause 
plaintiff severe loss.”   
This intent requirement is an appropriate limitation on both the potential 
number of plaintiffs that may bring a claim under this tort and the remoteness of 
these plaintiffs to a defendant’s wrongful conduct.  At the very least, a defendant 
 
37
must know that its action is substantially certain to interfere with the plaintiff’s 
business expectancy.  This interference becomes less certain as the time frame 
expands, the identity of potential victims becomes more vague, the causal 
sequence becomes more attenuated, and the assumption of easy preventability 
becomes less plausible.  If the interference is not certain or substantially certain to 
occur as a result of the defendant’s acts, then a plaintiff will not be able to state a 
claim for intentional interference with prospective economic advantage.  However, 
if a defendant knows that its wrongful acts are substantially certain to injure the 
plaintiff’s business expectancy, the defendant can be held liable, regardless of the 
motivation behind its actions. 
Liability will not be imposed for unforeseeable harm, since the plaintiff 
must prove that the defendant knew that the consequences were substantially 
certain to occur.  For example, if the president of MacDonald Dettwiler stood to 
receive a bonus if the company secured the SAR contract, it would be unlikely that 
Lockheed Martin would have known this with substantial certainty.  Here, 
however, KSC has alleged that defendants had full knowledge of its commission 
relationship with MacDonald Dettwiler and that KSC would lose its commission if 
Lockheed Martin secured the contract through anticompetitive means. 
Fourth, only plaintiffs that can demonstrate actual disruption of their 
economic relationship will be able to state a claim for this tort.  In this case, KSC 
sufficiently pleads actual disruption by alleging that it did not receive its expected 
commission, since MacDonald Dettwiler was not awarded the contract. 
Fifth, a plaintiff must establish proximate causation.  Specifically, this 
element requires a plaintiff to show that the economic harm it suffered was 
proximately caused by the acts of the defendant.  Here, KSC claims that 
MacDonald Dettwiler would have been awarded the contract but for Lockheed 
Martin’s interference.  KSC specifically pleads that MacDonald Dettwiler’s 
 
38
product was superior and that its bid was significantly lower than the bid 
submitted by Lockheed Martin.  KSC also alleges that its own loss of commission 
from MacDonald Dettwiler was directly caused by Lockheed Martin’s tortious 
acts.  We therefore conclude that KSC has satisfied the proximate cause element.  
In other cases, however, this proximate cause requirement will prevent a plaintiff 
from recovering for harm that is more remotely connected to a defendant’s 
wrongful conduct.   
 
 
F. 
An actor engaging in unlawful conduct with the knowledge that its actions 
are certain or substantially certain to interfere with a party’s business expectancy 
should be held accountable.  Liability for such actions, which are independently 
wrongful, should not turn on the subjective intent of the defendant.   
We conclude that the Court of Appeal correctly determined that to state a 
claim for intentional interference with prospective economic advantage, a plaintiff 
need not plead that the defendant acted with the specific intent to interfere with the 
plaintiff’s business expectancy.15  Further, we agree that plaintiff in this case has 
sufficiently pled that defendants acted with the required intent, that is, the 
knowledge that its actions were certain or substantially certain to interfere with 
plaintiff’s business expectancy. 
                                             
 
15  
As noted above, however, we disagree with the Court of Appeal’s 
determination that, after Della Penna, supra, 11 Cal.4th 376, it is no longer 
appropriate for courts to apply elements of this tort that we first formulated in 
Buckaloo, supra, 14 Cal.3d 815, with the addition of the independent 
wrongfulness requirement.  
 
39
IV. 
We reverse the judgment of the Court of Appeal with respect to its holding 
that plaintiff has stated a cause of action under the unfair competition law and we 
affirm the judgment of the Court of Appeal with respect to its determination that 
plaintiff has stated a cause of action for the tort of interference with prospective 
economic advantage.  The present case is remanded to the Court of Appeal for 
proceedings consistent with this opinion. 
 
 
 
 
 
 
 
 
MORENO, J. 
 
WE CONCUR: KENNARD, ACTING C. J. 
 
BAXTER, J. 
 
WERDEGAR, J. 
                         * RUBIN, J. 
 
 
 
                                             
 
* 
Honorable Laurence D. Rubin, Associate Justice, Court of Appeal, Second 
Appellate District, Division Eight, assigned by the Acting Chief Justice pursuant 
to article VI, section 6 of the California Constitution.   
 
1
 
 
 
 
 
 
 
CONCURRING OPINION BY KENNARD, ACTING C. J. 
 
 
I concur in the majority opinion.   
The majority holds that disgorgement of profits is not an available remedy 
under California’s unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et 
seq.) when the action is brought by an individual entity on its own behalf.  This 
conclusion logically follows from this court’s decision in Kraus v. Trinity 
Management Services, Inc. (2000) 23 Cal.4th 116 (Kraus).  That case held that 
disgorgement of profits is not an available remedy in a representative action under 
the UCL when the case is not brought as a class action.  Kraus explained:  “[T]he 
Legislature has not expressly authorized monetary relief other than restitution in 
UCL actions, but has authorized disgorgement into a fluid recovery fund in class 
actions.  Although the Legislature is well aware of the distinction between class 
actions and representative actions, it has not done so for representative UCL 
actions.”  (Id. at p. 137.)  On this issue, I agreed with the majority in Kraus. 
I wrote separately in Kraus, however, because I was troubled by dictum in 
that case suggesting “ ‘it may be appropriate . . . to condition payment of 
restitution to [nonparty] beneficiaries of a representative UCL action on execution 
of acknowledgement that the payment is in full settlement of claims against the 
defendant.’ ”  (Kraus, supra, 23 Cal.4th at p. 142 (conc. opn. of Kennard, J.) 
quoting maj. opn., id. at pp. 138-139.)  But here the issue of conditioning payment 
of restitution to nonparty beneficiaries in a representative UCL action is not 
 
2
implicated because this case involves an individual entity, the agent of 
unsuccessful bidders for a lucrative contract to supply military equipment to the 
Republic of Korea.  Because plaintiff here paid no money to defendant successful 
bidder, I agree with the majority that plaintiff is not entitled to restitution.  (Maj. 
opn., ante, at p. 14.) 
 
 
 
 
 
 
KENNARD, ACTING C. J.  
 
 
 
1
 
 
 
 
CONCURRING OPINION BY WERDEGAR, J. 
 
 
I agree with the majority that a plaintiff, in order to state a claim for 
interference with prospective economic advantage, need not plead that a defendant 
acted with the specific intent to interfere with the plaintiff’s business expectancy, 
and with the reasoning leading to that conclusion.  (Maj. opn., ante, at pp. 2, 19-
38.)  Under compulsion of Kraus v. Trinity Management Services, Inc. (2000) 23 
Cal.4th 116, from which I dissented, I further agree that nonrestitutionary 
disgorgement of profits is not an available remedy in an individual action under 
the unfair competition law, Business and Professions Code section 17200 et seq.  
(Maj. opn., ante, at p. 18.)  Accordingly, I concur in the judgment. 
 
 
 
 
 
 
WERDEGAR, J. 
 
 
 
 
1 
 
 
 
 
 
 
 
 
CONCURRING AND DISSENTING OPINION BY CHIN, J. 
 
I agree with the majority’s conclusion that disgorgement of profits is not a 
proper remedy where an individual private plaintiff alleges a violation of 
California’s unfair competition law (Bus. & Prof. Code, § 17200 et seq.) and the 
requested disgorgement would not be restitutionary in nature.  However, I dissent 
from the majority’s conclusion that recovery for intentional interference with 
prospective advantage is available to a plaintiff whose alleged injury only 
indirectly and remotely followed from the defendant’s interference with the 
prospective economic advantage of a third party with whom the plaintiff had a 
contractual relationship.  Here, plaintiff Korea Supply Company (KSC) alleges 
that it sustained such remote, indirect, and derivative injury as a result of the 
interference by defendants Lockheed Martin Tactical Systems, Inc., and Lockheed 
Martin Corporation (collectively Lockheed) with the prospective economic 
advantage of MacDonald, Dettwiler, and Associates Ltd. (MacDonald).  Thus, in 
my view, KSC may not state a claim for intentional interference with prospective 
economic advantage. 
I.  KSC’S CLAIM FAILS FOR LACK OF A PROSPECTIVE ECONOMIC 
ADVANTAGE. 
As a threshold matter, KSC has improperly brought its claim as one for 
intentional interference with prospective economic advantage, when it should have 
brought the claim, if at all, as one for interference with contract.  The “first 
 
2 
element” of a claim for intentional interference with prospective economic 
advantage is “an economic relationship between the plaintiff and some third 
person containing the probability of future economic benefit to the plaintiff.”  
(Blank v. Kirwan (1985) 39 Cal.3d 311, 330.)  Here, KSC had no existing or 
prospective economic relationship with the Republic of Korea, which is the only 
entity with which Lockheed had any dealings.  As KSC alleged and as the 
majority explains (maj. opn., ante, at p. 15), KSC expected to receive payment 
from MacDonald, not from the Republic of Korea.  Thus, KSC’s only economic 
relationship here was its existing contractual relationship with MacDonald, and 
KSC alleges that Lockheed’s actions prevented KSC from realizing the benefits of 
that existing contract.  Given these allegations, KSC’s claim is, in reality, a claim 
for interference with contract, not intentional interference with prospective 
economic advantage.  As the Restatement Second of Torts (Restatement Second) 
explains, the latter claim “is concerned only with intentional interference with 
prospective contractual relations, not yet reduced to contract.”  (Rest.2d, § 766B, 
com. a, p. 20, italics added; see also Shoemaker v. Myers (1990) 52 Cal.3d 1, 24 
[complaint identifying “no ‘prospective economic advantage’ other than 
continuation of [plaintiff’s] employment relationship” is, “in reality,” claim for 
inducement of breach of contract].)  Thus, as Lockheed argued in its demurrer, 
KSC’s claim for prospective economic advantage fails at the threshold because the 
complaint fails to allege “a prospective economic relationship between [KSC] and 
a third person, and the disruption of that relationship.”  
In reaching a contrary conclusion, the majority errs factually in stating that 
KSC does “not allege” that it had a contractual agreement with MacDonald.  (Maj. 
opn., ante, at p. 25.)  KSC’s complaint alleges that KSC had a “commission 
relationship” with MacDonald providing for KSC to receive “fifteen percent 
(15%) of the contract price,” and that Lockheed’s interference caused KSC to lose 
 
3 
“its agreed commission.”  (Italics added.)  At oral argument before us, KSC cited 
these allegations in arguing that it had alleged a “contract between” itself and 
MacDonald.  Similarly, at the hearing on Lockheed’s demurrer, KSC argued that it 
could pursue the interference claim because it “had a contract with [MacDonald] 
affording [KSC] a 15 percent commission on the contract price if [MacDonald] 
won the contract.”  (Italics added.)  In the Court of Appeal, KSC argued that it 
“was contractually entitled to receive fifteen percent (15%) of the contract price” 
if MacDonald obtained the contract, that its economic interests were intertwined 
with MacDonald “given [its] contractual representation of MacDonald . . . and its 
contractual entitlement to a commission” if MacDonald obtained the contract, and 
that it could pursue the interference claim “by virtue of its commissionable 
contractual interest” in MacDonald’s prospective contract.  (Italics added.)  Thus, 
the record demonstrates that the majority is simply wrong in asserting that KSC 
does not allege “an enforceable contract” with MacDonald.  (Maj. opn., ante, at p. 
26.)  Moreover, because this case comes to us after the sustaining of a demurrer, 
we must assume, based on these allegations, that KSC had a valid and enforceable 
commission contract with MacDonald. 
The majority also errs in asserting that “the existence of a contract does not 
mean that a plaintiff’s claim must be brought exclusively as one for interference 
with contract.”  (Maj. opn., ante, at p. 26.)  As support for its assertion, the 
majority cites dictum in Buckaloo v. Johnson (1975) 14 Cal.3d 815 (Buckaloo).  
(Maj. opn., ante, at pp. 25-26.)  In generally describing the historical development 
of the interference torts, Buckaloo stated that “the tort of interference with contract 
is merely a species of the broader tort of interference with prospective economic 
advantage.”  (Buckaloo, supra, 14 Cal.3d at p. 823.)  Buckaloo also stated that the 
tort of intentional interference with prospective economic advantage “is 
considerably more inclusive than actions based on contract or interference with 
 
4 
contract, and thus is not dependent on the existence of a valid contract.”  (Id. at pp. 
826-827.)  Buckaloo also seemingly endorsed a federal district court’s view that 
“ ‘[r]ather than characterizing’ ” interference with contract and intentional 
interference with prospective business relations “ ‘as separate torts, the more 
rational approach seems to be that the basic tort of interference with economic 
relations can be established by showing, inter alia, an interference with an existing 
contract or a contract which is certain to be consummated . . . .’ ”  (Id. at p. 823, 
fn. 6.)  The majority’s assertion rests exclusively on this dictum.  (See maj. opn., 
ante, at p. 26.) 
For several reasons, Buckaloo’s dictum is insufficient to support the 
majority’s conclusion.  First, other statements in Buckaloo contradict the 
majority’s analysis.  Buckaloo explained that the tort of intentional interference 
with prospective advantage applies where “a prospective economic relationship 
has not attained the dignity of a legally enforceable agreement . . . .”  (Buckaloo, 
supra, 14 Cal.3d at p. 827.)  Buckaloo also stressed that the “area of activity” this 
tort protects “is not a contractual relationship but an economic relationship with 
the potential to ripen into contract.”  (Id. at p. 830, fn. 7.)  It is in this sense—the 
protection of noncontractual relationships—that Buckaloo stated that the tort of 
intentional interference with prospective advantage “is considerably more 
inclusive than” the tort of interference with contract.  (Id. at pp. 826-827.)  As the 
statements I have quoted make clear, Buckaloo was not, as the majority incorrectly 
suggests, indicating that the tort of intentional interference with prospective 
economic advantage also includes claims based on a valid and enforceable 
contract.  Thus, several statements in Buckaloo contradict the majority’s view that 
 
5 
a plaintiff may base a claim for intentional interference with prospective 
advantage on an interference with a valid and enforceable contract.1 
Second, the majority’s reliance on Buckaloo’s dictum is also incorrect 
because the federal decision Buckaloo endorsed did not, as the majority 
erroneously suggests, state that a claim for interference with contract may be 
brought as one for intentional interference with prospective economic advantage.  
Rather, it suggested that these claims should be recognized not as “ ‘separate 
torts,’ ” but as alternative theories for establishing a single, broader tort called 
“ ‘interference with economic relations.’ ”  (Buckaloo, supra, 14 Cal.3d at p. 823, 
fn. 6, quoting Builders Corporation of America v. United States (N.D.Cal. 1957) 
148 F.Supp. 482, 484, fn. 1, revd. on other grounds (9th Cir. 1958) 259 F.2d 766.)  
Despite Buckaloo’s dictum, we have not recognized this broader tort.  On the 
contrary, we have stressed the “need to draw and enforce a sharpened distinction 
between claims for the tortious disruption of an existing contract and claims that a 
prospective contractual or economic relationship has been interfered with by the 
defendant.”  (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 
376, 392 (Della Penna).)  Indeed, the majority purports to “reiterate” Della 
Penna’s statement that California courts should “ ‘firmly distinguish’ ” between 
these two separate torts.  (Maj. opn., ante, at pp. 24-25.)  Unfortunately, the 
majority fails to follow this statement. 
                                             
 
1  
The majority asserts that these statements were “merely made in 
furtherance of Buckaloo’s central thesis:  that the existence of a contract is not 
necessary to maintain an action for intentional interference with prospective 
economic advantage.”  (Maj. opn., ante, at p. 26, fn 10.)  What the majority fails 
to understand, and what the statements I have quoted establish, is that this thesis 
does not, as the majority incorrectly concludes, imply that an action for intentional 
interference with prospective economic advantage may be brought where there is a 
valid contract. 
 
6 
Finally, the other statement from Buckaloo the majority cites—that “ ‘the 
tort of interference with contract is merely a species of the broader tort of 
interference with prospective economic advantage’ ” (maj. opn., ante, at p. 25)—is 
both imprecise and incorrect.  Buckaloo cited several authorities as establishing 
this proposition, but none of them stated that the tort of interference with contract 
is a species of the tort of intentional interference with prospective economic 
advantage.  Rather, to the extent they spoke to this question, consistent with the 
federal decision discussed above, they characterized or analyzed interference with 
contract and intentional interference with prospective economic advantage as 
separate aspects of the broader “subject of interference with commercial or 
economic relations.”  (Prosser, Torts (4th ed. 1971) § 128, p. 915; see also 1 
Harper & James, Torts (1956) § 6.5, p. 489 [interference with contract “is one of 
several segments of a large area of the law of tort in which damages may be 
recovered for unlawfully causing loss to the plaintiff in connection with his 
business relations”]; id. at §§ 6.7, 6.11, pp. 495, 510 [actions for interference with 
contract and interference with reasonable economic expectations protect different 
rights and interests]; 4 Witkin, Summary of Cal. Law (8th ed. 1974) Torts, pp. 
2634-2643; Note, Developments in the Law—Competitive Torts (1964) 77 Harv. 
L.Rev. 888, 961 [stressing “the difference between the action for inducing breach 
of contract and the action for interference with prospective advantage”].)2  
Consistent with these authorities, in an extensive historical discussion, we have 
previously labeled “interference with contract” and “interference with prospective 
economic relations” as, generally, “the so-called ‘interference torts,’ ” and 
                                             
 
2  
Buckaloo also cited Bernhardt, California Real Estate Transactions 
(Cont.Ed.Bar 1974 supp.) section 5.81.  (Buckaloo, supra, 14 Cal.3d at p. 823.)  
That source did not address the issue or otherwise support Buckaloo’s statement. 
 
7 
characterized them as “two torts” that are “sibling[s].”  (Della Penna, supra, 11 
Cal.4th at p. 381.)  Thus, Buckaloo’s dictum is erroneous and it fails to support the 
majority’s assertion that KSC may properly base a claim for intentional 
interference with prospective economic advantage on allegations that Lockheed 
interfered with the existing contract between KSC and MacDonald. 
The discussion of this subject in the Restatement Second, on which the 
majority heavily relies, fully supports the conclusion that Buckaloo’s dictum, and 
the majority’s conclusion based on that dictum, are incorrect.  Consistent with the 
authorities I have already discussed, the Restatement Second explains that 
interference with contract and “interference with prospective advantage” are 
separate “form[s]” of the broader subject of “intentional interference with business 
relations.”  (Rest.2d, § 766A, com. b, p. 18; see also id., § 767, com. j, p. 37 
[interference with contract and interference with prospective economic advantage 
are separate “forms of interference with business relations”].)  The Restatement 
Second also explains that, as their names suggest, intentional interference with 
contract involves only interference with an “existing contract,” whereas 
intentional interference with prospective economic advantage “is concerned only 
with intentional interference with prospective contractual relations not yet reduced 
to contract.”  (Rest.2d, § 766B, com. a, p. 20, italics added.)  Thus, the 
Restatement Second supports the conclusion that because KSC alleges only a loss 
of benefits under its existing contract with MacDonald, and it had no prospective 
relationship with the Republic of Korea, its claim for intentional interference with 
prospective economic advantage fails at the threshold for lack of a prospective 
economic advantage with which Lockheed allegedly interfered.  The majority’s 
contrary conclusion improperly “blurs the analytical line between interference 
with an existing business contract and interference with commercial relations less 
 
8 
than contractual,” thus “invit[ing] both uncertainty and unpredictability . . . .”  
(Della Penna, supra, 11 Cal.4th at p. 392.) 
II. KSC’S ALLEGED INJURIES ARE TOO REMOTE TO WARRANT RECOVERY. 
In its demurrer, Lockheed argued that “the economic relationship [it] 
allegedly disrupted was MacDonald’s . . . effort to obtain the award of the . . . 
contract from” the Republic of Korea, and that KSC’s alleged injury was merely 
“an indirect consequence of” this alleged disruption.  This indirect injury, 
Lockheed continued, “does not give rise to a claim for intentional interference 
with prospective economic advantage because [KSC] cannot show that the injury 
resulted from the disruption of a prospective economic relationship to which 
[KSC] was a party.”  In sustaining the demurrer, the trial court agreed with 
Lockheed, finding that KSC’s claim failed because it was “secondary and 
derivative and indirect and [KSC] has found no case from any U.S. state or federal 
jurisdiction giving cognizance to a comparable secondary or derivative or indirect 
claim.”  
The majority rejects this view and holds that “an indirectly injured plaintiff 
may state a claim” for intentional interference with prospective economic 
advantage, and may do so “without pleading that the defendant acted with the 
purpose to interfere with the plaintiff’s business expectancy.”  (Maj. opn., ante, at 
p. 33.)  The majority gives scant attention to this issue.  It cites no decisions, from 
California or elsewhere, supporting either its analysis or its holding.  The sole 
authority the majority cites is a portion of comment h to section 767 of the 
Restatement Second (comment h).  The majority states:  “Section 767, comment h, 
of the Restatement [Second], discussing the proximity or remoteness of the 
defendant’s conduct to the interference, supports our conclusion:  ‘This 
remoteness [between the defendant’s conduct and the plaintiff’s injury] conduces 
toward a finding that the interference was not improper.  The weight of this factor, 
 
9 
however, may be controverted by . . . the factor of the actor’s conduct if that 
conduct was inherently unlawful or independently tortious.’  [Citation.]  If the 
defendant’s improper conduct constitutes independently wrongful behavior, the 
fact that the plaintiff is an indirect victim does not preclude recovery.”  (Maj. opn., 
ante, at pp. 33-34, fn. omitted.)  
For several reasons, comment h is insufficient support for the majority’s 
conclusion that KSC’s status as “an indirect victim does not preclude recovery.”  
(Maj. opn., ante, at p. 34.)  First, comment h does not, as the majority suggests, 
categorically state that a defendant’s commission of an independently wrongful 
act does overcome remoteness between the defendant’s conduct and the plaintiff’s 
injury.  Rather, in decidedly equivocal terms, comment h states that the 
significance of remoteness “may be controverted . . . perhaps by the factor of the 
actor’s conduct if that conduct was inherently unlawful or independently tortious.”  
(Rest.2d, § 767, com. h, p. 36, italics added.)  Comment h’s equivocal language 
does not support the majority’s categorical holding that where a defendant’s 
conduct is independently wrongful, “the fact that the plaintiff is an indirect victim 
does not preclude recovery.”3  (Maj. opn., ante, at p. 34.)    
Second, comment h addresses proximity and remoteness in the context of 
an interference with an existing contract, not an interference with a merely 
prospective economic advantage.  This fact is clear from the portion of comment h 
that immediately precedes the portion the majority quotes, which states:  “If . . . A 
                                             
 
3  
Comment b of section 767 of the Restatement Second makes the same 
point.  In discussing “the interplay between” a defendant’s “motive” and “the 
nature of [his or her] conduct,” it states, in equivocal terms, that “[i]f the conduct 
is independently wrongful . . . the desire to interfere with the other’s contractual 
relations may be less essential to a holding that the interference is improper.”  
(Rest.2d, § 767, com. b, p. 33, italics added.)   
 
10 
induces B to sell certain goods to him and thereby causes him not to perform his 
contract to supply the goods to C, this may also have the effect of preventing C 
from performing his contractual obligations to supply them to D and E.  C’s 
failure to perform his contracts is a much more indirect and remote consequence 
of A’s conduct than B’s breach of his contract with C, even assuming that A was 
aware of all contractual obligations and the interference can be called 
intentional.”  (Rest.2d, § 767, com. h, p. 36, italics added.)  This fact is significant 
because, as the Restatement Second elsewhere explains, the law affords “greater 
protection . . . to the interest in an existing contract than to the interest in acquiring 
prospective contractual relations,” and section 767’s “weighing process” therefore 
“does not necessarily reach the same result in regard to” these separate “forms of 
interference with business relations.”  (Rest.2d, § 767, com. j, p. 37; see also id., 
com. a, p. 27 [weight of various factors “may vary considerably” with respect to 
different “forms of the tort”].)  Thus, comment h’s discussion of the interaction 
between independently wrongful means and remoteness in the context of an 
interference with an existing contract does not necessarily apply to the same extent 
with regard to an interference with a merely prospective economic advantage.  By 
failing to distinguish between these torts, the majority, in the words of the 
Restatement Second, “produce[s] a blurring of the significance of the factors 
involved in determining liability.”4  (Rest.2d, ch. 37, Introductory Note, p. 5.) 
                                             
 
4  
As should be clear, I do not, as the majority states, “assert[]” that section 
767 of the Restatement Second does not apply to intentional interference with 
prospective economic advantage.  (Maj. opn., ante, at p. 34, fn. 12.)  What I do 
assert is that given the Restatement Second’s caution that “the weight carried by” 
the various factors “may vary considerably” with respect to the different 
interference torts (Rest.2d, § 767, com. a, p. 27), the majority errs in simply 
assuming that comment h’s discussion of remoteness in the context of interference 
 
(Footnote continued on next page.) 
 
11 
Third, and most important, the Restatement Second’s sections and 
comments regarding interference with contract and intentional interference with 
prospective economic advantage do not even purport to address the fundamental 
question before us:  whether Lockheed’s alleged interference is the legal cause of 
the remote, indirect, and derivative injury KSC alleges.  The relevant sections of 
the Restatement Second state rules for determining whether someone is “subject to 
liability.”  (Rest.2d, §§ 766, 766B.)  Under the Restatement Second, “subject to 
liability” means only that “the actor’s conduct is such as to make him liable for 
another’s injury, if,” in addition, “the actor’s conduct is a legal cause” of the 
injury.  (Rest.2d, § 5, italics added.)  “Legal cause,” according to the Restatement, 
means that “the causal sequence by which the actor’s tortious conduct has resulted 
in an invasion of some legally protected interest of another is such that the law 
holds the actor responsible for such harm unless there is some defense to liability.”  
(Rest.2d, § 9.)  Regarding the relationship between these concepts, the 
Restatement Second explains:  “To become liable . . . under the principles of the 
law of Torts, an actor’s conduct must not only be tortious in character but it must 
also be a legal cause of the invasion of another’s interest.  If the actor has engaged 
in conduct which is tortious in character, he thereby subjects himself to liability 
. . . .  In order that the actor become liable to another, it is necessary, among other 
things, that his conduct be the legal cause of the invasion of the other’s interest 
. . . .”  (Rest.2d, § 9, com. a, p. 16.)  “In order that a particular act or omission may 
be the legal cause of an invasion of another’s interest, the act or omission must be 
                                                                                                                                      
 
 
(Footnote continued from previous page.) 
 
with contract necessarily applies to the same extent to intentional interference with 
prospective economic advantage. 
 
12 
a substantial factor in bringing about the harm, and there must be no principle or 
rule of law which restricts the actor’s liability because of the manner in which the 
act or omission operates to bring about such invasion.”  (Rest.2d, § 9, com. b, p. 
16.)  Thus, a defendant “may be ‘subject to liability’ ” within the meaning of the 
Restatement Second “but may escape” liability if his or her conduct is not “the 
legal cause of the plaintiff’s harm.”  (Rest.2d, § 5, com. b, p. 11.)  Because the 
Restatement Second’s sections on interference with contract and intentional 
interference with prospective economic advantage consider the circumstances only 
for determining whether a defendant is “subject to liability” (Rest.2d, §§ 766, 
766B), they do not even purport to address the more fundamental question now 
before us:  whether Lockheed’s alleged interference is the legal cause of the 
remote, indirect, and derivative injury KSC alleges.  Thus, the majority’s reliance 
on the Restatement Second is both inadequate and unpersuasive. 
Our prior decisions discuss similar concepts in tort law.  As we have 
explained, “[p]roximate cause involves two elements.  [Citation.]  One is cause in 
fact.  An act is a cause in fact if it is a necessary antecedent of an event.  
[Citation.]  . . .  [¶]  To simply say, however, that the defendant’s conduct was a 
necessary antecedent of the injury does not resolve the question of whether the 
defendant should be liable. . . .  ‘[T]he consequences of an act go forward to 
eternity, and the causes of an event go back to the dawn of human events, and 
beyond.  But any attempt to impose responsibility upon such a basis would result 
in infinite liability for all wrongful acts, and would “set society on edge and fill 
the courts with endless litigation.” ’  [Citation.]  Therefore, the law must impose 
limitations on liability other than simple causality.  These additional limitations 
are related not only to the degree of connection between the conduct and the 
injury, but also with public policy.  [Citation.]  As Justice Traynor observed, 
proximate cause ‘is ordinarily concerned, not with the fact of causation, but with 
 
13 
the various considerations of policy that limit an actor’s responsibility for the 
consequences of his conduct.’  [Citation.]”  (PPG Industries, Inc. v. Transamerica 
Ins. Co. (1999) 20 Cal.4th 310, 315-316 [holding that although the defendant was 
cause in fact of the plaintiff ‘s damages, for policy reasons, it was not proximate 
cause].)  In short, proximate cause is “ ‘a policy-based legal filter on “but for” 
causation’ ” that courts apply “ ‘ “to those more or less undefined considerations 
which limit liability even where the fact of causation is clearly established.” ’  
[Citation.]”  (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 
464.)  Moreover, to the extent proximate cause involves “limitations imposed 
upon liability as a matter of public policy, the issue is for the court” to decide as “a 
question of law.”  (Mosley v. Arden Farms Co. (1945) 26 Cal.2d 213, 223 (conc. 
opn. of Traynor, J.).)  Thus, the majority errs in concluding that KSC “has 
satisfied the proximate cause element” merely by pleading that its injury “was 
directly caused by” Lockheed’s alleged interference.  (Maj. opn., ante, at p. 38.)  
This allegation does “not . . . render the complaint sufficient” because, as I later 
explain, “it affirmatively appears from other allegations that the act[s] made the 
basis of liability [are], as a matter of law, not the proximate cause of the injury 
complained of.”  (Katz v. Helbing (1928) 205 Cal. 629, 633.) 
Regarding the more fundamental policy question of legal, or proximate, 
cause, the majority has little to say.  The majority declares that there is “no sound 
reason for requiring that a defendant’s wrongful actions must be directed towards 
the plaintiff.”  (Maj. opn., ante, at p. 34).  To do so, the majority suggests, would 
exclude what a law review article describes as “ ‘the most numerous of the tortious 
interference cases’ ”—“ ‘those in which the disruption is caused by an act directed 
not at the plaintiff, but at a third person.’ ”  (Maj. opn., ante, at p. 34.)   
This analysis simply attacks a straw man of the majority’s own creation.  
Contrary to the majority’s suggestion, no one asserts that we should allow 
 
14 
recovery only where the defendant’s wrongful act is “directed towards the 
plaintiff.”  (Maj. opn., ante, at p. 34.)  Rather, the issue here is whether to allow 
recovery where the wrongful act is not directed towards the plaintiff or towards 
anyone with whom the plaintiff had a prospective economic advantage.  As I have 
previously explained, Lockheed directed no actions towards either KSC or 
MacDonald.  It directed its actions only towards the Republic of Korea—with 
which KSC has no prospective economic relationship—and KSC’s alleged injury 
is only a remote, indirect, and derivative consequence of those alleged acts 
towards the Republic of Korea.  Moreover, contrary to the majority’s suggestion, 
cases involving such derivative injury are not among those that the cited law 
review article described as being the “most numerous.”  (Perlman, Interference 
with Contract and Other Economic Expectancies:  A Clash of Tort and Contract 
Doctrine (1982) 49 U.Chi. L.Rev. 61, 106.)  According to the article, that category 
consists of cases in which the defendant’s act of interference was directed towards 
a third person who was “in a [r]elationship with the [p]laintiff.”  (Ibid.; see also id. 
at p. 99.)  Again, this is not such a case, because Lockheed’s alleged acts were not 
directed towards anyone having either an existing or prospective relationship with 
KSC.5 
The majority also summarily declares that because, under Della Penna, 
supra, 11 Cal.4th 376, a defendant’s liability for intentional interference with 
prospective economic advantage requires commission of “an independently 
wrongful act,” a plaintiff’s standing to sue should not “turn on” the defendant’s 
                                             
 
5  
Nor does the passage the majority cites from the concurring opinion in 
Della Penna (maj. opn., ante, at p. 34) address recovery where the defendant’s 
alleged act of interference is not directed towards the plaintiff or towards anyone 
with whom the plaintiff has an existing or prospective economic relationship.  
(Della Penna, supra, 11 Cal.4th at p. 409 (conc. opn of Mosk, J.).) 
 
15 
“subjective intent.”  (Maj. opn., ante, at p. 32.)  A contrary conclusion, the 
majority reasons, would produce “absurd and unfair results.”  (Ibid.)  Again, the 
majority cites no case law supporting its analysis and conclusion.  Moreover, the 
majority’s reliance on Della Penna’s wrongful act requirement subverts and 
distorts the purpose of that requirement.  In Della Penna, we required an 
independently wrongful act in order to restrict the scope of the tort.  Contrary to 
this purpose, the majority here uses that requirement as justification for 
significantly expanding the tort’s scope by allowing recovery for remote, indirect, 
and derivative injuries.  Finally, the majority’s conclusion that it would be unfair 
to preclude recovery for indirect and remote injury simply because the defendant 
lacked specific intent begs the more fundamental, threshold question of whether a 
plaintiff with remote, indirect, and derivative injury should be able to recover even 
if the defendant had specific intent. 
Regarding this threshold policy question, and lacking governing California 
authority, we should follow the substantial body of case law from other courts—
including the United States Supreme Court—that deals with analogous causes of 
action and holds that parties with remote, indirect, and derivative injuries may not 
recover.  The high court has addressed this subject in the context of antitrust law.  
Consistent with the causation principles I have previously discussed, the high 
court has explained that although “[a]n antitrust violation may be expected to 
cause ripples of harm to flow through the Nation’s economy,” “ ‘there is a point 
beyond which the wrongdoer should not be held liable.’  [Citation.]”  (Blue Shield 
of Virginia v. McCready (1982) 457 U.S. 465, 476-477 (Blue Shield).)  Like 
“common-law” remedies, “the judicial remedy” for an antitrust violation “cannot 
encompass every conceivable harm that can be traced to alleged wrongdoing.”  
(Associated General Contractors of California, Inc. v. California State Council of 
Carpenters (1983) 459 U.S. 519, 535-536 (Associated General).)  Thus, in an 
 
16 
antitrust case, the “question of which persons have been injured by” the alleged 
antitrust violation “is analytically distinct from the question of which persons have 
sustained injuries too remote to give them standing to sue for damages . . . .”  
(Illinois Brick Co. v. Illinois (1977) 431 U.S. 720, 728, fn. 7 (Illinois Brick); see 
also Blue Shield, supra, 457 U.S. at p. 476.) 
The high court focused on these questions in Associated General, where 
several labor unions sought damages for an alleged antitrust violation by an 
employers association.  The unions alleged that the employers association illegally 
“coerced certain third parties . . . to enter into business relationships with 
nonunion firms.  This coercion, according to the [unions’] complaint, adversely 
affected the trade of certain unionized firms and thereby restrained the business 
activities of the unions.”  (Associated General, supra, 459 U.S. at pp. 520-521.)  
The court of appeals held that the unions “had standing to recover damages for the 
injury to their own business activities” because their injury was not only “a 
foreseeable consequence of the antitrust violation,” but also “was specifically 
intended by the defendants.”  (Id. at p. 525.)  The high court disagreed and held 
that the unions could not maintain their antitrust action notwithstanding their 
“allegation of intent to harm.”  (Id. at p. 545.) 
Notably, in reaching its conclusion, the high court in Associated General 
expressly relied on common law principles, which are, of course, applicable in the 
case now before us.  The court reasoned:  “In 1890, notwithstanding general 
language in many state constitutions providing in substance that ‘every wrong 
shall have a remedy,’ a number of judge-made rules circumscribed the availability 
of damages recoveries in both tort and contract litigation—doctrines such as 
foreseeability and proximate cause, directness of injury, certainty of damages, and 
privity of contract.  Although particular common-law limitations were not debated 
in Congress, the frequent references to common-law principles [in Congressional 
 
17 
debates on the antitrust laws] imply that Congress simply assumed that antitrust 
damages would be subject to constraints comparable to well-accepted common-
law rules applied in comparable litigation.”  (Associated General, supra, 459 U.S. 
at pp. 532-533, fns. omitted.)  The court noted that, based on this understanding of 
congressional intent, federal judges had “held as a matter of law that neither a 
creditor nor a stockholder of a corporation that was injured by a violation of the 
antitrust laws could recover” because a “plaintiff’s injury as a stockholder [is] 
‘indirect, remote, and consequential.’  [Citation.]”  (Id. at p. 533.)  “This holding,” 
the high court continued, is “consistent with . . . ‘[t]he general tendency of the law, 
in regard to damages at least, . . . not to go beyond the first step.’  [Citation.]”  (Id. 
at p. 534.)  Thus, the court reasoned, “as was required in common-law damages 
litigation in 1890,” the question of whether the plaintiff “may recover for the 
injury it allegedly suffered by reason of the defendants’ coercion against certain 
third parties . . . requires . . . evaluat[ion of] the plaintiff’s harm, the alleged 
wrongdoing by the defendants, and the relationship between them.”  (Id. at p. 535, 
fn. omitted.) 
In holding that the unions could not maintain their antitrust action, the high 
court in Associated General stressed, among other factors, the “indirectness of the 
[unions’] asserted injury.”  (Associated General, supra, 459 U.S. at p. 540.)  
Focusing on the “chain of causation” between the unions’ injury and the alleged 
antitrust violation, the high court found “that any such injuries were only an 
indirect result of whatever harm may have been suffered by [the] construction 
contractors and subcontractors” that lost business due to the defendants’ coercion.  
(Id. at pp. 540-541.)  “If either these firms, or the immediate victims of coercion 
by defendants, have been injured by an antitrust violation, their injuries would be 
direct and . . . they would have a right to maintain their own . . . actions against the 
defendants. . . .  The existence of an identifiable class of persons whose self-
 
18 
interest would normally motivate them to” sue “diminishes the justification for 
allowing . . . more remote part[ies] such as the [unions] to” maintain an action.  
(Id. at pp. 541-542.)  “Denying the [u]nion[s] a remedy on the basis of [the] 
allegations in this case is not likely to leave a significant antitrust violation 
undetected or unremedied.”  (Id. at p. 542.)  “Indeed,” the court explained, “if 
there is substance to the [u]nion[s’] claim, it is difficult to understand why these 
direct victims of the conspiracy have not asserted any claim in their own right.”  
(Id. at p. 542, fn. 47.) 
In Illinois Brick, the high court applied similar principles in holding that 
where the defendant violates the antitrust laws by fixing prices and sells to an 
entity that passes the resulting overcharges on to its customers, the injuries of the 
customers resulting from the defendant’s antitrust violation are legally too remote 
to support recovery.  (Illinois Brick, supra, 431 U.S. at pp. 725-729.)  The court 
acknowledged that this holding “denies recovery to . . . indirect purchasers who 
may have been actually injured by antitrust violations.”  (Id. at p. 746.)  However, 
“[i]n view of” the relevant policy “considerations,” the court was “unwilling to 
carry the compensation principle to its logical extreme by attempting to allocate 
damages among all ‘those within the defendant’s chain of distribution’ [citation] 
. . . .”  (Ibid.)  The considerations the court cited were the defendant’s “interest . . . 
in avoiding multiple liability for” the amount of the overcharge, “the interest of 
absent potential plaintiffs in protecting their right to recover for the portion of the 
[overcharge] allocable to them and the social interest in the efficient 
administration of justice and the avoidance of multiple litigation.”  (Id. at pp. 737-
738.) 
The high court reaffirmed Illinois Brick in Kansas v. Utilicorp United, Inc. 
(1990) 497 U.S. 199.  There, the court held that where natural gas suppliers 
illegally overcharged a public utility and the utility passed on the overcharge to its 
 
19 
customers, the customers’ injuries were too remote to support an antitrust action.  
(Id. at p. 204.)  The court explained that the customers “have the status of indirect 
purchasers” because “[i]n the distribution chain, they are not the immediate buyers 
from the alleged antitrust violators.”  (Id. at p. 207.)  The court next observed that 
its decision in Illinois Brick “den[ies] relief to consumers who have paid inflated 
prices because of their status as indirect purchasers.  [Citations.]”  (Kansas, supra, 
497 U.S. at pp. 211-212.)  Finally, the court refused to create an exception to “the 
Illinois Brick rule” for cases involving public utilities, “even assuming that any 
economic assumptions underlying [that] rule might be disproved in a specific case 
. . . .”  (Kansas, supra, 497 U.S. at p. 217.) 
In Holmes v. Securities Investor Protection Corp. (1992) 503 U.S. 258 
(Holmes), the high court applied these same principles to a claim under the 
Racketeer Influenced and Corrupt Organizations Act (RICO).  In Holmes, plaintiff 
Securities Investor Protection Corporation (SIPC) alleged that the defendant, in 
violation of RICO, illegally “conspired in a stock-manipulation scheme that 
disabled two broker-dealers from meeting obligations to customers,” which in turn 
“trigger[ed] SIPC’s statutory duty to advance funds to reimburse the customers.”  
(Holmes, supra, 503 U.S. at p. 261.)  The court held that SIPC could not maintain 
its claim because its injuries were too remote.   
In reaching its conclusion, the Holmes court began by finding it “unlikel[y] 
that Congress meant to allow all factually injured plaintiffs to recover . . . .”  
(Holmes, supra, 503 U.S. at p. 266, fn. omitted.)  The court explained that “ ‘[i]n a 
philosophical sense, the consequences of an act go forward to eternity, and the 
causes of an event go back to the dawn of human events, and beyond.  But any 
attempt to impose responsibility upon such a basis would result in infinite liability 
for all wrongful acts, and would “set society on edge and fill the courts with 
endless litigation.” ’  [Citation.]”  (Id. at p. 266, fn. 10.)  Relying on Associated 
 
20 
General, the Holmes court then found that because Congress “incorporate[d] 
common-law principles of proximate causation” into RICO, a plaintiff’s right to 
recover under RICO “require[s] a showing that the defendant’s violation not only 
was a ‘but for’ cause of his injury, but was the proximate cause as well.”  (Holmes, 
supra, 503 U.S. at p. 268.)  The court next explained that one aspect of proximate 
cause—which is a generic label for “the judicial tools used to limit a person’s 
responsibility for the consequences of [his or her] acts”—is “a demand for some 
direct relation between the injury asserted and the injurious conduct alleged.  
Thus, a plaintiff who complain[s] of harm flowing merely from the misfortunes 
visited upon a third person by the defendant’s acts [i]s generally said to stand at 
too remote a distance to recover.  [Citation.]”  (Id. at pp. 268-269.)   
The Holmes court next discussed its application of the proximate cause 
concept in antitrust cases.  Citing Associated General, the court explained that 
“directness of relationship” between the plaintiff’s injury and the defendant’s 
conduct is one of the “central elements” of “causation” under antitrust law “for a 
variety of reasons.  First, the less direct an injury is, the more difficult it becomes 
to ascertain the amount of a plaintiff’s damages attributable to the violation, as 
distinct from other, independent, factors.  [Citation.]  Second, quite apart from 
problems of proving factual causation, recognizing claims of the indirectly injured 
would force courts to adopt complicated rules apportioning damages among 
plaintiffs removed at different levels of injury from the violative acts, to obviate 
the risk of multiple recoveries.  [Citations.]  And, finally, the need to grapple with 
these problems is simply unjustified by the general interest in deterring injurious 
conduct, since directly injured victims can generally be counted on to vindicate the 
law as private attorneys general, without any of the problems attendant upon suits 
by plaintiffs injured more remotely.  [Citation.]”  (Holmes, supra, 503 U.S. at pp. 
269-270.)   
 
21 
Finally, applying these principles to RICO, the Holmes court held that SIPC 
could not maintain its RICO action.  After noting SIPC’s theory of recovery—that 
SIPC was “subrogated to the rights of those customers of the broker-dealers who 
did not purchase manipulated securities” (Holmes, supra, 503 U.S. at p. 270)—the 
court explained:  “[E]ven assuming arguendo, that [SIPC] may stand in the shoes 
of nonpurchasing customers, the link is too remote between the stock 
manipulation alleged and the customers’ harm, being purely contingent on the 
harm suffered by the broker-dealers.  That is, the conspirators have allegedly 
injured these customers only insofar as the stock manipulation first injured the 
broker-dealers and left them without the wherewithal to pay customers’ claims.  
Although the customers’ claims are senior (in recourse to ‘customer property’) to 
those of the broker-dealers’ general creditors, [citation], the causes of their 
respective injuries are the same:  The broker-dealers simply cannot pay their bills, 
and only that intervening insolvency connects the conspirators’ acts to the losses 
suffered by the nonpurchasing customers and general creditors.  [¶]  As we said, 
however, in Associated General Contractors, quoting Justice Holmes, ‘ “The 
general tendency of the law, in regard to damages at least, is not to go beyond the 
first step[]” ’ [citation], and the reasons that supported conforming [antitrust] 
causation to the general tendency apply just as readily to the present facts, 
underscoring the obvious congressional adoption of the Clayton Act direct-injury 
limitation among the requirements of” RICO.  (Holmes, supra, 503 U.S. at pp. 
271-272, fns. omitted.)  A contrary conclusion would “[a]llow[] suits by those 
injured only indirectly,” thereby “open[ing] the door to ‘massive and complex 
damages litigation’ ” that would “ ‘not only burde[n] the courts, but [would] also 
undermin[e] the effectiveness of treble-damages suits.’  [Citation.]”  (Id. at p. 
274.)   
 
22 
Lower federal courts have applied these principles to preclude recovery for 
remote, indirect, and derivative injury in several cases that are relevant here 
because they involved commission relationships, bribes, pendent state claims for 
interference with prospective economic advantage, and/or allegations of specific 
intent to harm.  In Brian Clewer, Inc. v. Pan American World Airways, Inc. 
(C.D.Cal. 1986) 674 F.Supp. 782, 784-788, the court held that Clewer, a travel 
agency, could not maintain an antitrust action against several airlines that had 
allegedly conspired to destroy Laker, another airline with which Clewer had a 
commission arrangement.  Like KSC, Clewer alleged damages in the form of lost 
commissions.  (Id. at p. 788.)  Clewer also alleged that the defendants had acted 
“ ‘with the object of . . . damaging [its] business.’ ”  (Id. at p. 784.)  Despite this 
allegation, the court, applying Associated General, found that Clewer could not 
maintain the action because “any injury to Clewer [was] only an indirect result of 
whatever harm may have been suffered by Laker, and thus Clewer’s injury [was] 
derivative of . . . Laker’s.”  (Brian Clewer, Inc., supra, at p. 787.)  The court 
explained that “other potential plaintiffs”—Laker, Laker passengers, former Laker 
employees—“stand in a better posture to assert antitrust claims due to a more 
direct harm than” Clewer.  (Ibid.)  Given all of these potential plaintiffs, “if 
Clewer and other similarly situated travel agencies are found to have standing” to 
sue “for a portion of Laker’s revenues, a possibility exists of duplicative recovery 
against the defendants.”  (Id. at p. 788.)  In concluding, the court explained:  
“Clewer stands in the same position as numerous other prospective plaintiffs 
whose alleged losses are indirect and derivative, i.e., other travel agencies, other 
supplie[r]s of goods and services, food vendors, waste disposal services, and 
custodians. . . .  Clewer’s injury is too indirect to provide standing under” the 
antitrust laws.  (Id. at pp. 787-788.) 
 
23 
On analogous facts, another federal court reached a similar conclusion in 
Fallis v. Pendleton Woolen Mills, Inc. (6th Cir. 1989) 866 F.2d 209.  There, the 
plaintiff, a sales representative for the defendant, filed an antitrust action alleging 
that he lost commissions as a result of the defendant’s alleged price-fixing scheme.  
(Id. at pp. 210-211.)  The court held that the plaintiff could not maintain his action 
because his alleged injury was “derivative; it [was] simply a side effect of [the 
defendant’s] alleged antitrust violations. . . .  Any injury to [the plaintiff] was 
merely incidental to the purposes of the alleged price-fixing arrangement,” which 
was “aimed at disciplining retailers and raising consumer prices, not reducing the 
commissions earned by salespersons.”  (Ibid.)  “As is generally true where the 
plaintiff’s injury is indirect, more direct victims of the alleged conspiracy exist in 
the present case . . . .”  (Id. at p. 211.)  “ ‘[I]f the court were to allow all indirect 
victims standing to sue . . . , the dangers of duplicative recovery and complex 
apportionment of damages would become very real.’  [Citations.]”  (Id. at pp. 211-
212.)  “In light of these factors”—the indirectness of plaintiff’s injury, the 
existence of more direct victims, the possibility of duplicative recovery—the court 
held that the plaintiff “lack[ed] antitrust standing.”  (Id. at p. 212.) 
Another case involving analogous facts is Eagle v. Star-Kist Foods, Inc. 
(9th Cir. 1987) 812 F.2d 538.  There, fishermen alleged that fish canneries had 
violated the antitrust laws by conspiring to set tuna prices at artificially low levels.  
(Id. at p. 539.)  The fishermen worked as crewmembers on vessels owned by 
others, who sold the vessels’ catch to the canneries and then paid the fishermen 
based on a “share of the catch” or the “price per ton.”  (Ibid.)  Regarding damages, 
the fishermen alleged that the artificially low price levels “result[ed] in a reduction 
of the wages” they received.  (Ibid.)  Applying Associated General, the court held 
that the fishermen could not maintain an antitrust action because their alleged 
injuries were “derivative of the injuries suffered by the vessel owners.”  (Eagle, 
 
24 
supra, at p. 541.)  In reaching its conclusion, the court rejected the argument that 
the fishermen “were directly injured because calculation of their wages . . . was 
completely and inextricably intertwined with the artificially low selling prices” 
and because “they were joint venturers with the vessel owners . . . .”  (Ibid.)  The 
court explained:  “[W]hat exists between the vessel owners and the crewmembers 
is an employer-employee relationship. . . .  Once a sale has been completed, the 
crewmembers are paid their wages . . . either on a ‘share of the catch’ or ‘per-ton’ 
basis. . . . Thus, any injury [they] suffered . . . is derived from any injury suffered 
by the vessel owners . . . .  ‘When the employer reacts to [a] loss by terminating 
employees, or when employees receive diminished salary or commissions, as a 
result of the employers’ weakened market position, these employees suffer 
derivative injury only.’  [Citation.]”  (Id. at pp. 541-542, first italics added.)  The 
court also reasoned that “the vessel owners . . . [have] the requisite motivation to 
vindicate the public interest” in enforcement of the antitrust laws, and that “[t]he 
justification for allowing the crewmembers . . . to bring the action is thereby 
diminished because they are more remote parties.”6  (Eagle, supra, at p. 542.) 
Still another relevant application of these remoteness principles occurred in 
Hawaii Health & Welfare Trust Fund for Operating Engineers v. Philip Morris, 
Inc. (D.Hawai’i 1999) 52 F.Supp.2d 1196.  There, numerous “multi-employer 
                                             
 
6  
See also Southwest Suburban Board of Realtors, Inc. v. Beverly Area 
Planning Assn. (7th Cir. 1987) 830 F.2d 1374, 1378 (corporate president who may 
have lost commissions as a result of alleged antitrust violation may not maintain 
antitrust action, because “[m]erely derivative injuries sustained by employees, 
officers, stockholders, and creditors of an injured company do not constitute 
‘antitrust injury’ sufficient to confer antitrust standing”); Warnick v. Washington 
Education Association (E.D.Wash. 1984) 593 F.Supp. 66, 67-69 (commissions 
that sales agents lost due to the defendant’s attempt to restrain trade were 
derivative injury and could not support antitrust claim). 
 
25 
labor management health and welfare funds,” which paid medical bills for union 
workers, filed a RICO action against “the major cigarette manufacturers” alleging 
a conspiracy to suppress information regarding the effects of smoking and 
claiming damage “in the form of . . . payment of unnecessary medical costs to 
[fund] beneficiaries.”  (Id. at p. 1197.)  Applying Holmes, the court held that “the 
‘remoteness doctrine’ ” barred the claim because “the Funds themselves ha[d] 
suffered no direct injury.”  (Hawaii Health & Welfare Trust Fund for Operating 
Engineers, supra, 52 F.Supp.2d at p. 1198.)  The court explained that the 
remoteness doctrine, “[w]hether analyzed in terms of proximate cause or standing, 
. . . generally bars indirect claims where other more directly-injured parties are the 
proper plaintiffs.  [Citation.]”  (Ibid.)  The court found the doctrine applicable 
because the alleged injuries were “derivative,” not “direct,” in that they were 
“ ‘entirely dependent upon injuries sustained by [fund] participants and 
beneficiaries, making [the plaintiffs] at least one step removed from the challenged 
harmful conduct.’  [Citation.]”  (Id. at pp. 1199-1200.)  Thus, the plaintiffs were 
“seek[ing] recovery for the same injuries to victims represented, or able to be 
represented, in other direct suits.”  (Id. at p. 1199.)  The court’s conclusion is 
especially relevant to the case now before us because, in applying the remoteness 
doctrine, the court expressly rejected the plaintiffs’ argument that “the[ir] injury 
was allegedly intentional and directed specifically to the trust funds because the 
[d]efendants knew their fraudulent scheme would cause the trust funds to expend 
additional money on health related costs.”  (Ibid.) 
Carter v. Berger (7th Cir. 1985) 777 F.2d 1173 is relevant here because it 
applied these remoteness principles in a case involving alleged bribes.  The 
plaintiffs in Carter filed a RICO action claiming that the defendant used illegal 
bribes to obtain lower property tax assessments, which resulted in higher taxes for 
everyone else.  (Id. at p. 1174.)  The court held that the plaintiffs were “not the 
 
26 
right parties to bring th[e] suit” because their “injury derive[d] from the County’s 
. . . .”  (Ibid.)  After describing Illinois Brick’s remoteness analysis, the court 
explained:  “The same approach prevails throughout the law. . . . ‘[T]he general 
tendency of the law, in regard to damages at least, is not to go beyond the first 
step.’  [Citations.]”  (Carter, supra, at p. 1175.)  Thus, “the indirectly injured party 
may not sue . . . .  If a wrong committed against a firm causes it to become 
bankrupt and discharge its employees or discontinue its purchases, the injured 
employees and suppliers may not sue.”  (Ibid.)  “[A]n indirectly injured party 
should look to the recovery of the directly injured party, not to the wrongdoer, for 
relief.”  (Id. at p. 1176; see also National Enterprises, Inc. v. Mellon Financial 
Services Corp. Number 7 (5th Cir. 1988) 847 F.2d 251, 252-255 [unpaid creditor 
of bankrupt corporation could not pursue RICO action against defendant that 
required kickbacks from corporation as a loan condition].) 
Finally, among the federal cases, Newton v. Tyson Foods, Inc. (8th Cir. 
2000) 207 F.3d 444 is particularly noteworthy here because it involved bribes and 
it applied these remoteness principles to claims for a RICO violation and a 
pendent state law claim for intentional interference with prospective economic 
advantage.  In Newton, cattle producers sued a poultry producer, alleging that it 
“was able to exempt the poultry industry from strict regulations by providing 
illegal payments to” government officials.  (Id. at p. 445.)  They alleged that this 
exemption resulted in lower costs, which enabled poultry producers to lower 
poultry prices, which increased demand for poultry and lowered the demand for 
beef, which reduced beef sales by packers, which reduced the plaintiffs’ sales to 
packers and lowered the price of cattle sold.  (Id. at p. 446.)  The court first held 
that the plaintiffs could not maintain their RICO claim because their alleged 
injuries were “far distant along the chain of causation from [the defendant’s] 
alleged wrongs and [were] too attenuated and removed from those wrongs to 
 
27 
provide a basis for standing under RICO.  [Citation.]”  (Id. at p. 447.)  Noting that 
“proximate cause” was also “an element” of the plaintiffs’ claim for “intentional 
interference with prospective economic advantage,” the court next held that the 
plaintiffs’ “common-law tort claim fail[ed] as a matter of law for the same reasons 
that the [plaintiffs] lack[ed] standing to pursue their RICO claim.  [Citation.]”  (Id. 
at p. 448; see also Laborers Local 17 Health and Benefit Fund v. Philip Morris, 
Inc. (2d Cir. 1999) 191 F.3d 229, 242-243 [applying RICO remoteness/proximate 
cause analysis to dismiss common law claims for fraud and breach of special 
duty].) 
Given the overlap between antitrust law and the tort of intentional 
interference with prospective economic advantage, we should follow these federal 
decisions and decline to recognize a tort cause of action for plaintiffs, like KSC, 
that allege only remote, indirect, and derivative injury.  Liability for both the tort 
and an antitrust violation requires an independently wrongful act.  Moreover, the 
purpose of the tort is similar to the purpose of the antitrust laws:  to “provid[e] a 
remedy for predatory economic behavior” while “keeping legitimate business 
competition outside litigative bounds.”  (Della Penna, supra, 11 Cal.4th at p. 378.)  
Notably, the Restatement Second expressly recognizes the “interplay between 
[antitrust] law and the law of tortious interference with prospective contractual 
relations.”  (Rest.2d, § 768, com. c, p. 43.)  It explains that because a claim for this 
tort is often based on an antitrust violation, antitrust legislation “and the very 
extensive case law that has developed as a gloss upon it are pertinent to a great 
number of the [tort] cases . . . .”7  (Id. at pp. 42-43; see also id., § 767, com. c, p. 
                                             
 
7  
The significance of the Restatement Second’s discussion is not, as the 
majority incorrectly suggests (maj. opn., ante, at p. 35, fn. 13), diminished by the 
 
(Footnote continued on next page.) 
 
28 
31 [“conduct that is in violation of antitrust provisions or is in restraint of trade” 
may make interference “improper”].)  Finally, as I have already explained, the 
federal courts have based their proximate causation analysis on common law 
principles, which are no less applicable in defining the scope of the common law 
tort.  Given this overlap, we should follow the extensive antitrust case law and 
decline to extend tort liability to plaintiffs, like KSC, that allege only remote, 
indirect, and derivative injury. 
Moreover, a claim for intentional interference with prospective economic 
advantage by a plaintiff with only remote, indirect, and derivative injuries 
implicates the same factors the federal courts have cited in precluding antitrust 
recovery for such injuries.  Allowing recovery under these circumstances creates a 
risk of duplicative recovery.  Here, for example, the lost commission KSC seeks to 
recover represents a percentage of the contract price MacDonald would have paid 
to KSC had MacDonald obtained the contract.  There are, no doubt, others who 
also stood to gain from the award of the contract to MacDonald and who would 
have claims to other portions of the contract price.  There is “no principled way to 
cut off a myriad of other indirect claimants” who can each “claim that their 
business was somehow impacted or adversely affected by” MacDonald’s loss of 
the contract.  (Sharp v. United Airlines, Inc. (10th Cir. 1992) 967 F.2d 404, 409 
[dismissing antitrust and prospective economic advantage claims of employees 
alleging that the defendant’s illegal conduct destroyed their employer].)  Of 
course, MacDonald may also sue for the entire contract price.  Moreover, 
                                                                                                                                      
 
 
(Footnote continued from previous page.) 
 
Restatement Second’s further observation that complete discussion of antitrust law 
is “outside the scope of the Restatement of Torts.”  (Rest.2d, § 768, com. f, p. 43.)  
 
29 
MacDonald, which is absent from this action, has an interest in protecting its right 
to recover.  Finally, given MacDonald’s much more direct connection to 
Lockheed’s alleged interference, denying KSC a remedy for its alleged remote, 
indirect, and derivative injury is not likely to leave tortious conduct undetected or 
unremedied.  Thus, “the social interest in the efficient administration of justice and 
the avoidance of multiple litigation” supports a rule precluding a plaintiff like 
KSC from maintaining a claim for intentional interference with prospective 
economic advantage where the plaintiff’s injury only remotely and indirectly 
follows from a defendant’s alleged interference with the prospective economic 
advantage of some third party.  (Illinois Brick, supra, 431 U.S. at p. 738.)  There is 
simply insufficient reason for the law to “shoulder[] these difficulties” when 
“those directly injured” can “be counted on to bring suit for the law’s vindication.”  
(Holmes, supra, 503 U.S at p. 273.)  “The existence of an identifiable class of 
persons whose self-interest would normally motivate them to” sue “diminishes the 
justification for allowing . . . more remote part[ies],” such as KSC, to maintain an 
action.  (Associated General, supra, 459 U.S. at p. 542.) 
Indeed, courts applying New York law have reached precisely this 
conclusion and have held that parties with indirect and remote injuries may not 
recover for intentional interference with prospective economic advantage.  Like 
California, New York precludes recovery for intentional interference with 
prospective economic advantage “unless the means employed by [the defendant] 
were wrongful.”  (NBT Bancorp Inc. v. Fleet/Norstar Financial Group, Inc. 
(1996) 641 N.Y.S.2d 581, 585.)  In addition, “under New York law, in order for a 
party to make out a claim . . . , the defendant must interfere with the business 
relationship directly; that is, the defendant must direct some activities towards the 
third party and convince the third party not to enter into a business relationship 
with the plaintiff.  [Citation.]”  (Fonar Corp. v. Magnetic Resonance Plus, Inc. 
 
30 
(S.D.N.Y. 1997) 957 F.Supp. 477, 482.)  Applying this rule, in G.K.A. Beverage 
Corp. v. Honickman (2d Cir. 1995) 55 F.3d 762, 768, the court held that soft drink 
distributors could not state a claim for intentional interference with prospective 
economic advantage by alleging that the defendants’ acts to drive out of business a 
bottling company with which the distributors had contracted “interfered with their 
relationships with retailers and other final purchasers of soft drinks.”  The court 
explained:  “[The defendants’] alleged goal was to obtain a monopoly in bottling, 
and the distributors’ relationship with their retail customers is irrelevant to that 
goal.  The distributors thus make no allegations that [the defendants] had any 
contact with the distributors’ customers or that [the defendants] tried to convince 
the customers to make contracts with them rather than the distributors.  It is 
axiomatic that, in order to prevail on this claim, the distributors would have to 
show that the [defendants] intentionally caused the retailers not to enter into a 
contractual relationship with them.  [Citations.]  The distributors cannot allege 
such intentional interference, and their claim therefore fails.”  (Ibid.)8 
In Piccoli A/S v. Calvin Klein Jeanswear Co. (S.D.N.Y 1998) 19 F.Supp.2d 
157, 167-168, the court applied similar principles in dismissing a claim for 
tortious interference with business relations.  The plaintiff alleged that the 
defendant exported “surplus Calvin Klein jeans to ‘lower-end stores’ in 
                                             
 
8  
For similar reasons, the court also held that the distributors’ antitrust claim 
failed as a matter of law.  The court explained that the distributors’ injury was 
“derivative of” the bottling company’s injury, and that “a party in a business 
relationship with an entity that failed as a result of an antitrust violation” does “not 
have standing to bring an antitrust claim.”  (G.K.A. Beverage Corp. v. Honickman, 
supra, 55 F.3d at pp. 766-767.)  This rule, the court explained, “follows naturally” 
from the rule that “ ‘[m]erely derivative injuries sustained by employees, officers, 
stockholders, and creditors of an injured company do not . . . confer antitrust 
standing.’  [Citation.]”  (Id. at p. 766.) 
 
31 
Scandinavia and that the presence of these jeans in lower-end stores caused [the 
plaintiff’s] exclusively upper-end clients to cease doing business with it.”  (Id. at 
p. 167, fn. omitted.)  The court held “that such an indirect relationship cannot form 
the basis of a tortious interference claim.  [¶]  . . . ‘[U]nder New York law, . . . the 
defendant must interfere with the business relationship directly; that is, the 
defendant must direct some activities towards the third party and convince the 
third party not to enter into a business relationship with the plaintiff.’  [¶]  Here, 
[the plaintiff’s claim fails because] the defendants’ alleged conduct concededly 
was not directed towards any third party with whom [the plaintiff] had an existing 
or prospective business relationship.”  (Id. at pp. 167-168, fn. omitted.)9 
In summary, regarding the fundamental policy question of proximate cause, 
we should adopt the approach of the courts applying federal and New York law 
and hold that parties who allege only remote, indirect, and derivative injury may 
not recover for intentional interference with prospective economic advantage.  
Applying this principle here, KSC’s claim fails because Lockheed’s alleged acts 
were not directed towards MacDonald or any other third party with which KSC 
had a prospective economic advantage; they were directed solely towards the 
Republic of Korea. 
                                             
 
9  
Apparently, under New York law, instead of showing wrongful means, a 
plaintiff may alternatively show that the defendant “acted for the sole purpose of 
inflicting intentional harm on plaintiffs.”  (NBT Bancorp Inc. v. Fleet/Norstar 
Financial Group Inc. (1995) 628 N.Y.S.2d 408, 410.)  This fact does not 
undermine my conclusion that we should follow New York law regarding 
remoteness.  On the contrary, it reinforces my conclusion, because a defendant 
who acts solely to harm the plaintiff is at least as blameworthy as a defendant who 
uses wrongful means and is only substantially certain that the plaintiff will be 
harmed. 
 
32 
The majority’s explanation for disregarding these decisions is demonstrably 
incorrect.  The majority asserts that because the federal antitrust decisions 
“analy[ze] . . . the statutory language of the Clayton Act, as well as its relevant 
legislative history and objectives,” they are “inapplicable” in determining 
“standing to bring a claim” for intentional interference with prospective economic 
advantage, which is governed by the “common law.”  (Maj. opn., ante, at pp. 34-
35, fn. 13.)  However, the high court’s decisions in both Blue Shield and 
Associated General conclusively refute the majority’s assertion.  In Blue Shield, 
the court explained that “neither the statutory language nor the legislative history 
of [the Clayton Act] offers any focused guidance on the question of which injuries 
are too remote” to support recovery.  (Blue Shield, supra, 457 U.S. at p. 477.)  
“[I]ndeed,” the court observed, the Clayton Act’s “unrestrictive language” and 
“the avowed breadth of the congressional purpose, cautions [sic] us not to cabin 
[the Clayton Act] in ways that will defeat its broad remedial objective.”  (Blue 
Shield, supra, at p. 477.)  Finding no “direct guidance from Congress” for 
determining whether “a particular injury is too remote . . . to warrant . . . standing” 
under the Clayton Act, the court turned to the “analysis . . . employed traditionally 
by courts at common law with respect to the matter of ‘proximate cause.’  
[Citations.]”  (Blue Shield, supra, at p. 477, italics added, fn. omitted.)  Similarly, 
in Associated General, the high court explained that despite the breadth of the 
Clayton Act’s statutory language and its legislative history, “common-law rules” 
and “constraints” govern remoteness questions in “antitrust damages litigation.”  
(Associated General, supra, 459 U.S. at p. 533.)  Thus, in addressing remoteness 
issues under the Clayton Act, the high court has expressly looked to the common 
law, not, as the majority asserts, to the Clayton Act’s statutory language or 
legislative history.  The majority’s rationale for disregarding the federal cases is, 
 
33 
therefore, erroneous.  We should follow the federal antitrust cases precisely 
because they apply common law remoteness principles.10 
 
III.  THE MAJORITY’S SUBSTANTIAL CERTAINTY STANDARD IS INCORRECT 
UNDER PRIOR CALIFORNIA DECISIONS. 
 
The majority holds that to state a claim for intentional interference with 
prospective economic advantage, a plaintiff need not “plead that the defendant 
acted with the specific intent, or purpose, of disrupting the plaintiff’s prospective 
economic advantage.”  (Maj. opn., ante, at p. 19.)  “Instead,” the majority states, 
“to satisfy the intent requirement for this tort, it is sufficient to plead that the 
defendant knew that the interference was certain or substantially certain to occur 
as a result of its action.”  (Ibid.) 
 
The majority’s conclusion is incorrect under existing California law.  In 
Seaman’s Direct Buying Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752, 
758 (Seaman’s), we expressly considered whether “ ‘intent’ [is] an element of a 
cause of action for intentional interference with contractual relations.”  We 
answered this question affirmatively, holding:  “[I]n an action for inducing breach 
of contract it is essential that plaintiff plead and prove that the defendant ‘intended 
to induce a breach thereof . . . .’  [Citations.]  Similarly, to prevail on a cause of 
                                             
 
10  
Notably, in the Court of Appeal, even KSC agreed that federal cases 
addressing “standing under the antitrust laws provide useful guidance . . . in 
determining the reach of the tort of intentional interference with prospective 
economic advantage.”  Similarly, the law review article on which the majority 
relies (maj. opn., ante, at p. 34) states that “[i]n a business competition setting, 
antitrust laws . . . may serve as a yardstick for liability,” and it argues for 
“[i]ncorporating the fluid doctrines of antitrust into an unlawful means test for 
tortious interference . . . .”   (Perlman, Interference with Contract and Other 
Economic Expectancies:  A Clash of Tort and Contract Doctrine, supra, 49 U.Chi. 
L.Rev. at p. 98, fn. omitted.) 
 
34 
action for intentional interference with prospective economic advantage, plaintiff 
must plead and prove ‘intentional acts on the part of the defendant designed to 
disrupt the relationship.’  [Citations.]”  (Id. at p. 766.)  Thus, we rejected the 
plaintiff’s argument “that [the defendant’s] ‘intent’ to interfere with the contract is 
not a necessary prerequisite to liability.”  (Id. at pp. 766-767, fn. omitted.)  
Notably, in defining the intent requirement, we also expressly rejected the 
plaintiff’s argument that to establish intent, it is necessarily sufficient to show that 
the defendant “knew that interference with the contract was ‘substantially certain’ 
to result from its conduct.”  (Id. at p. 765.)  We explained:  “Intent, of course, may 
be established by inference as well as by direct proof.  Thus, the trial court could 
properly have instructed the jury that it might infer culpable intent from conduct 
‘substantially certain’ to interfere with the contract.  Here, though, the jury was 
instructed that culpable intent was ‘deemed’ to exist if [the defendant] knew that 
its conduct would interfere with the contract.  Under the principles outlined above, 
this instruction was clearly error.”  (Id. at p. 767.)  Thus, Seaman’s rejects the very 
standard the majority here adopts.  Our Courts of Appeal have followed Seaman’s 
in this regard.  (E.g. Kasparian v. County of Los Angeles (1995) 38 Cal.App.4th 
242, 270-271; Savage v. Pacific Gas & Electric Co. (1993) 21 Cal.App.4th 434, 
449.) 
 
In reaching its conclusion, the majority virtually ignores our holding in 
Seaman’s and relies instead on dictum in Quelimane Co. v. Stewart Title Guaranty 
Co. (1998) 19 Cal.4th 26 (Quelimane).  (Maj. opn., ante, at pp. 22-25.)  In 
Quelimane, the only issue the defendant raised in challenging the adequacy of the 
plaintiff’s claim for intentional interference with contract was the plaintiff’s failure 
to allege that the defendant’s conduct was “wrong.”  (Quelimane, supra, 19 
Cal.4th at p. 55.)  We disagreed, holding that “[w]rongfulness independent of the 
inducement to breach the contract is not an element of the tort of intentional 
interference with existing contractual relations . . . .”  (Ibid.)  In dictum, we went 
 
35 
on to state:  “Moreover, the tort of intentional interference with performance of a 
contract does not require that the actor’s primary purpose be disruption of the 
contract.  As explained in comment j to section 766 of the Restatement Second 
. . . :  ‘The rule stated in this Section is applicable if the actor acts for the primary 
purpose of interfering with the performance of the contract, and also if he desires 
to interfere, even though he acts for some other purpose in addition.  The rule is 
broader, however, in its application than to cases in which the defendant has acted 
with this purpose or desire.  It applies also to intentional interference, as that term 
is defined in § 8A, in which the actor does not act for the purpose of interfering 
with the contract or desire it but knows that the interference is certain or 
substantially certain to occur as a result of his action. The rule applies, in other 
words, to an interference that is incidental to the actor’s independent purpose and 
desire but known to him to be a necessary consequence of his action.  [¶]  The fact 
that this interference with the other’s contract was not desired and was purely 
incidental in character is, however, a factor to be considered in determining 
whether the interference is improper.’ ”  (Quelimane, supra, 19 Cal.4th at p. 56, 
fn. omitted.) 
 
For several reasons, Quelimane is insufficient authority to support the 
majority’s holding.  First, as already noted, Quelimane’s discussion of the intent 
requirement is dictum because the defendant did not raise this issue.  It is dictum 
for another reason as well; the complaint in Quelimane “allege[d] that ‘defendants 
. . . ha[d] deliberately, willfully, and intentionally interfered with the [plaintiff’s] 
contractual relations . . . .’ ”  (Quelimane, supra, 19 Cal.4th at p. 57.)  Thus, we 
had no need in Quelimane to consider whether an allegation of substantial 
certainty is enough to state a claim.11  Second, Quelimane’s dictum addressed the 
                                             
 
11  
The same is true in the case now before us, because KSC’s complaint 
alleges that Lockheed “intentionally induc[ed]” the Republic of Korea to award 
 
(Footnote continued on next page.) 
 
36 
intent requirement for interference with contract, not intentional interference with 
prospective economic advantage.  (Id. at p.  56.)  As Quelimane also explained, 
because existing contracts “receive[] greater solicitude” than merely prospective 
economic advantages, the elements of interference with contract and intentional 
interference with prospective economic advantage are not identical.  (Id. at pp. 55-
56.)  We made the same point earlier in Della Penna, explaining that “[e]conomic 
relationships short of contractual”—i.e., prospective economic relationships—
“should stand on a different legal footing as far as the potential for tort liability is 
reckoned.”  (Della Penna, supra, 11 Cal.4th at p. 392.)  Logically, because 
prospective economic advantages receive less protection than existing contracts, 
the intent requirement for intentional interference with prospective economic 
advantage should be heightened.  Third, Quelimane did not involve a plaintiff, like 
KSC, whose alleged injuries were only an indirect and remote consequence of the 
defendant’s conduct; the complaint in Quelimane alleged that the defendants 
directly interfered with the plaintiffs’ existing land sales contracts by refusing to 
issue title insurance.  (Quelimane, supra, 19 Cal.4th at pp. 55-57.)  Because 
remoteness was not a factor in Quelimane, its dictum regarding the intent required 
to recover for direct injuries carries even less weight in the case now before us.  
Finally, Quelimane did not consider or even cite Seaman’s, which directly 
considered the intent question and held that proof of substantial certainty permits 
an inference of intent, but that substantial certainty is not a substitute for or an 
alternative articulation of intent to interfere. 
                                                                                                                                      
 
 
(Footnote continued from previous page.) 
 
the contract to Lockheed “[i]n order to disrupt” KSC’s relationship with 
MacDonald.  Thus, it is unnecessary to decide whether a complaint alleging only 
substantial certainty adequately states a claim. 
 
37 
 
The majority gives only slightly more consideration to Seaman’s than did 
Quelimane; its discussion is as incorrect as it is brief.  Relegating Seaman’s to a 
mere footnote, the majority states that in Della Penna, “we expressly disapproved 
of” Seaman’s “to the extent that it was inconsistent with Della Penna.”  (Maj. 
opn., ante, at p. 22, fn. 7.)  The majority’s statement, though accurate (see Della 
Penna, supra, 11 Cal.4th at p. 393, fn. 5), is completely irrelevant because with 
regard to the intent requirement, Seaman’s is not in any way inconsistent with 
Della Penna.  Della Penna never discussed the intent requirement and, as the 
majority concedes, did not affect the elements of the tort other than to add the 
wrongfulness requirement.  (Maj. opn., ante, at pp. 20-21.)  Consistent with its 
concession, the majority cites nothing in Della Penna to support its (the 
majority’s) suggestion that Seaman’s is somehow inconsistent with Della Penna 
with regard to the intent requirement.  The majority also stresses Della Penna’s 
observation that Seaman’s “ ‘rel[ied] on the first Restatement [of Torts] . . . 
without reviewing or even mentioning intervening revaluations of the tort by the 
Restatement Second, other state high courts and our own Court of Appeal.’  
[Citation.]”  (Maj. opn., ante, at p. 22, fn. 7.)  However, in Seaman’s, we based 
our holding regarding the intent requirement on prior decisions of both this court 
and our Courts of Appeal, and mentioned the first Restatement of Torts only 
briefly.  (Seaman’s, supra, 36 Cal.3d at pp. 765-767.)  Notably, the majority fails 
to cite a single decision from our Courts of Appeal—or from the courts of other 
states—that Seaman’s should have, but failed to, consider.  Nor did Quelimane 
cite a case from either California or from some other jurisdiction to support its 
dictum regarding the intent requirement; as I have already explained and as the 
majority acknowledges (maj. opn., ante, at p. 22, fn. 7), Quelimane completely 
ignored Seaman’s (and the cases following it) and relied instead exclusively on the 
Restatement Second.  Unlike the majority, I consider a prior holding of this court 
to be more binding—and “a better representation” of California law (maj. opn., 
 
38 
ante, at p. 22, fn. 7)—than the Restatement Second, or dictum that relied 
exclusively on the Restatement Second.  
 
The other basis for the majority’s conclusion—that specific intent to 
interfere is unnecessary in light of Della Penna’s wrongful act requirement for 
intentional interference with prospective economic advantage (maj. opn., ante, at 
pp. 29-32)—is both questionable and ironic.  It is questionable because, as I have 
explained and as the majority acknowledges (maj. opn., ante, at pp. 20-21), Della 
Penna never discussed the intent requirement or considered whether the wrongful 
act requirement would affect the intent requirement.  The majority’s analysis is 
ironic because, as I have also already explained, our purpose in Della Penna in 
adopting the wrongful act requirement was to restrict the scope of the tort of 
intentional interference with prospective economic advantage.  The majority again 
turns Della Penna on its head by citing its wrongful act requirement as 
justification for relaxing the intent requirement and greatly expanding the tort’s 
scope.  Thus, the majority’s conclusion that a plaintiff may state a claim by 
pleading “that the defendant knew that the interference was certain or substantially 
certain to occur,” and need not “plead that the defendant acted with the specific 
intent . . . of disrupting the plaintiff’s prospective economic advantage” (maj. opn., 
ante, at p. 19), is inconsistent with California case law.  Under Seaman’s and the 
cases following it, a plaintiff who alleges injury that only remotely and indirectly 
follows from a defendant’s intentional interference with the prospective economic 
advantage of some third party should be allowed to recover, if at all, only upon 
pleading and proving that the defendant specifically intended to interfere with the 
plaintiff’s prospective economic advantage. 
 
Finally, I disagree with the majority’s assertion that its substantial certainty 
requirement “is an appropriate limitation on both the potential number of plaintiffs 
that may bring a claim under this tort and the remoteness of these plaintiffs to a 
defendant’s wrongful conduct.”  (Maj. opn., ante, at p. 36.)  As explained in the 
 
39 
law review article on which the majority relies, “[e]conomic relationships are 
intertwined so intimately that disruption of one may have far-reaching 
consequences.  Furthermore, the chain reaction of economic harm flows from one 
person to another without the intervention of other forces.  Courts facing a case of 
pure economic loss thus confront the potential for liability of enormous scope, 
with no easily marked intermediate points and no ready recourse to traditional 
liability-limiting devices such as intervening cause.”  (Perlman, Interference with 
Contract and Other Economic Expectancies:  A Clash of Tort and Contract 
Doctrine, supra, 49 U.Chi. L.Rev. at p. 72, fns. omitted.)  However, “if a plaintiff 
suffering economic loss is required to show that [the defendant] knew of [the 
plaintiff’s] contract or expectancy and purposely disrupted it, the number of 
successful plaintiffs and the extent of liability are considerably smaller.”  (Id. at p. 
77, italics added.)  Thus, “requiring the plaintiff to show intent by the defendant to 
interfere with a particular contract” or expectancy would help “distinguish[] the 
plaintiff’s loss from injuries resulting more indirectly from the defendant’s act.”  
(Id. at p. 76, fn. omitted.)  By contrast, the majority’s relaxed substantial certainty 
requirement does little to narrow the enormous scope of potential liability for harm 
to economic relationships and offers “no principled way to cut off a myriad of 
other indirect claimants” who can each “claim that their business was somehow 
impacted or adversely affected by” MacDonald’s loss of the contract.12  (Sharp v. 
United Airlines, Inc., supra, 967 F.2d at p. 409.)   
                                             
 
12  
For example, although the majority states that a defendant’s interference 
“becomes less certain as . . . the identity of potential victims becomes more vague” 
(maj. opn., ante, at p. 37), at least one California court has held that recovery is 
available as long as the plaintiff was “ ‘identified [to the defendant] in some 
manner,’ ” even if the defendant did not know “of the injured party’s specific 
identity or name.”  (Ramona Manor Convalescent Hospital v. Care Enterprises 
(1986) 177 Cal.App.3d 1120, 1133.) 
 
40 
IV.  CONCLUSION. 
 
In “[a]llowing suits by those injured only indirectly,” the majority “open[s] 
the door to” greatly expanded liability for intentional interference with prospective 
economic advantage.  (Holmes, supra, 503 U.S. at p. 274.)  Ironically, in doing so, 
it relies principally on a requirement—the defendant’s commission of an 
independently wrongful act—that we established specifically to restrict liability.  
Based on the relevant policy considerations and case law, I would hold that a 
plaintiff whose alleged injury only indirectly and remotely follows from the 
defendant’s interference with the prospective economic advantage of some third 
party may not maintain an action for intentional interference with prospective 
economic advantage.  Therefore, I would affirm the trial court’s dismissal of 
KSC’s claim. 
 
 
 
 
 
 
 
 
CHIN, J. 
 
I CONCUR: 
 
BROWN, J. 
 
 
 
1 
See last page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Korea Supply Company v. Lockheed Martin Corporation 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 90 Cal.App.4th 902 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S100136 
Date Filed: March 3, 2003 
 
__________________________________________________________________________________ 
 
Court: Superior 
County: Los Angeles 
Judge: Brett C. Klein 
 
_________________________________________________________________________________ 
 
Attorneys for Appellant: 
 
Blecher & Collins, Steven J. Cannata, David W. Kesselman and Maxwell M. Blecher for Plaintiff and 
Appellant. 
 
 
 
 
__________________________________________________________________________________ 
 
Attorneys for Respondent: 
 
O’Melveny & Myers, Marc F. Feinstein, Marc S. Williams, Robert E. Willett and James W. Colbert III for 
Defendants and Respondents Lockheed Martin Corporation and Lockheed Martin Tactical Systems, Inc. 
 
Law Offices of Jiyoung Kym and Jiyoung Kym for Defendant and Respondent Linda Kim. 
 
Fred J. Hiestand for the Civil Justice Association of California as Amicus Curiae on behalf of Defendants 
and Respondents. 
 
Robie & Matthai, Pamela E. Dunn and Daniel J. Koes for United Services Automobile Association as 
Amicus Curiae on behalf of Defendants and Respondents. 
 
Gibson, Dunn & Crutcher, Gail E. Lees, Mark A. Perry and G. Charles Nierlich for Aetna Health of 
California Inc., Cingular Wireless LLC and AT&T Wireless Services, Inc., as Amici Curiae on behalf of 
Defendants and Respondents. 
 
Skadden, Arps, Slate, Meagher & Flom, Raoul D. Kenned, Sheryl C. Medeiros and Benjamin R. Ostapuk 
for Citibank (South Dakota), N.A., as Amicus Curiae on behalf of Defendants and Respondents. 
 
 
2 
 
 
 
 
 
Page 2 - counsel continued - S100136 
 
 
Attorneys for Respondent: 
 
Heller Ehrman White & McAuliffe, Vanessa Wells and Andrew C. Byrnes for State Farm Mutual 
Automobile Insurance Company as Amicus Curiae on behalf of Defendants and Respondents. 
 
Horvitz & Levy, David M. Axelrad, Lisa Perrochet and Loren H. Kraus for Truck Insurance Exchange and 
Mid-Century Insurance Company as Amici Curiae on behalf of Defendants and Respondents Lockheed 
Martin Corporation and Lockheed Martin Tactical Systems, Inc. 
 
Horvitz & Levy, Mitchell C. Tilner and William N. Hancock for Quality King Distributors, Inc., as Amici 
Curiae on behalf of Defendants and Respondents Lockheed Martin Corporation and Lockheed Martin 
Tactical Systems, Inc. 
 
Morrison & Foerster, Robert S. Stern, John Sobieski and John W. (Jack) Alden, Jr., for Bank One 
Corporation as Amcius Curiae on behalf of Defendants and Respondents Lockheed Martin Corporation 
and Lockheed Martin Tactical Systems, Inc. 
 
Arnold & Porter, James F. Speyer, Ronald C. Redcay; Kirkland & Ellis and Alexander F. Mackinnon for 
California Manufacturers and Technology Association and BP Oil Supply Company as Amici Curiae on 
behalf of Defendants and Respondents Lockheed Martin Corporation and Lockheed Martin Tactical 
Systems, Inc. 
 
Crosby, Heafey, Roach & May, James C. Martin, Christina J. Imre, Michael K. Brown; Daniel J. Popeo 
and Richard A. Samp for Washington Legal Foundation and National Association of Independent Insurers 
as Amici Curiae on behalf of Defendants and Respondents Lockheed Martin Corporation and Lockheed 
Martin Tactical Systems, Inc. 
 
 
3 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Maxwell M. Blecher 
Blecher & Collins 
611 West Sixth Street, Suite 2000 
Los Angeles, CA  90017 
(213) 622-4222 
 
James W. Colbett III 
O’Melveny & Myers 
400 South Hope Street 
Los Angeles, CA  90071-2899 
(213) 430-6000