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w . vi l l a no va . e du/thir dc ir c uit_2004/928NOT PRECEDE NTIAL UNITED STATES COURT OF APPEALS FO R T HE TH IRD CIR CU IT
No. 03-2590
STUART A . WILLIAMS; W SC IN VE ST M EN TS , LL C, a Pe nn sylv an ia L im ite d L iab ilit y C om pa ny, Ap pellan ts
v. HILTON GROUP P LC; LADBROKE S I NTERNAT IONAL BETTI NG AND GAMING; a di vi si on o f Hi lt on Gr oup , P LC, ALA N RO SS, an indi vidual

ON APPE AL FROM THE UNIT ED STA TES DI STRI CT COURT FOR THE

WE STE RN DIST RIC T O F PE NN SY LV AN IA (Dist. Court No. 99-cv- 02024) Distri ct Court J

udge: Honorable Arthur J. Schwab Argued: Januar

y 13, 2004 Be for e: A LIT O, C HE RT OF F, an d B EC KE R, Circuit Judges
. (Opinion Fi led: March 17, 2004 )

David L. McClenahan (argued)2 Joseph Leibowicz Luc as G . Paglia Kirkpa trick & L ockha rt 535 Smithfie ld Str eet Henry W. Olive r Building Pitt sburgh, PA 15222 Attorn eys for App ellants Danf orthNewco mb John Gueli ( argued) Tammy P. Bieber Shearman & Sterling 599 Lexington Avenue New Y ork, NY 10022 Paul H. Titus Sch nade r, Har rison, S egal & Lew is 120 Fifth Avenue Fifth Avenue Pla ce, Sui te 2700 Pitt sburgh, PA 15222 Tim othy K . Lew is 200 1 Pe nns y lv an iaAve nue , N W Suite 300 Washington, DC 20006 Attorney s for Appellees

OPINI ON OF THE COURT

PER CU RIA M : Stua rt A. W illiams a nd W SC Inve stmen ts, LL C (co llectively “W illiams” ) filed th is3

actio n ag ains t the H ilton Gr oup , plc a nd L adb rok es In tern ation al B ettin g an d G am ing , a divisio n of

the H ilton G roup (collec tively “La dbro kes” ), alleging breac h of contra ct in
conn ection with William s’s efforts to p urch ase v arious No rth A meric an ga ming assets
owne d by

Ladb ro kes . Wi ll iams s ubs equ ently amen dedhi s c ompl ai nt , a ddi ng c la ims against Hilton for

fraudule nt and negl igent mi srepre sentation and punitive damages and add ing Ala n R oss , the M ana gin g D irect or o f L adb rok es, a s a d efe nda nt o n th e tor t claim s. The case was ori ginally as signed t o Judge Donald J. Lee but was lat er reas signed t o Judge Arthur J. Sc hwa b, who granted su mm ary judgmen t in favor of L adbrok es on the tort claim s ass erted . Th is de cisio n w as b ase d on Pen nsylv ania ’s “g ist of the a ction ” do ctrin e. Th e D istrict Co urt c ertif ied it s ord er fo r inte rloc uto ry app eal u nde r 28 U.S .C. § 1292(b)(2) , and a moti on panel of our court per

mitt ed the appeal . Although ne ither the order of t

he Distr ict Court

nor the appl icat ion for r eview speci fied the preci se quest ion or que stion s pre sen ted for in terlo cuto ry revi ew , see Fed. R. App. Proc . 5(b) (1)(B), the is sues are suffi cient ly

clear to permit

the appealto go forward. We hold that t he “gist of the acti on” doctrine bars t

he tort clai ms at is sue. As a preliminary matter , we reject Willi ams’s argument that the law-of- the-case doctrine precl uded Judge Schwab from grant ing summary judgment for

Ladbrokes on the tort clai ms. Will iams conte nds that Judge Lee had previ ously held that the “ gist

of the action” do ctrine did not ap ply to the claims at issue, but w e disagree. W illiams’s papers cite d some “gi st

of t he a ct io n” c as es andmai nt ai nedth athi s c ont ra ctandfr audcl ai ms4

cou ld co exis t, see App. at 2373-74, 2380-82, but Judge Lee’s opinion made no dir ect or indir ect re ference t o the doctrine, and it was not necessar y for Judge Lee to deci de the issu e in o rde r to m ake the r ulin gs th at he did
. We also rej ect Will iams’s argument that the “ gist of the action” doctrine does not bar his tort

clai ms. Although t

he Pennsy lvania

Supreme Court has not expressly adopt ed this doctrine, we predi ct that the s tate supreme court would adopt the doctrine as set out in th e Su per ior C our t’s ca ses. In Etoll , Inc. v. Eli as/Savi on Advertis ing, I nc. , 811 A .2d 10 (Pa . Super. Ct. 20 02), the Pennsylvania

Superior Court, s tate d that t

he “gist of the action” doctrine “i s designe d to mai nt ai n the c onc ept ualdi st in ct io n be twe en b re achof c ont ra ctcl ai ms and t ort c la ims [by] preclud[ing ] plaintiffs from recasting ordina ry breach of co ntract claims into tort clai ms.” Id. at 14. The Cou rt then described the differen ce betw een con tract and tort clai ms as foll ows: “Tort ac tions lie f or breache s of duti es imposed by law as a matt er of socialpolicy , while contrac t act ions l ie only for breache s of duti es imposed by mutual consensus agr eements bet ween parti cular individual s.” Id. (quoti ng Bas h v. B ell Telephone Co. , 601 A.2 d 82 5, 82 9 (P a. Su per . Ct. 1 992 )). In Etoll the Court f ound that the “fr aud at i ssue was not s o tangent ial to the parties’ relationship so as to make fraud the gis t of the acti on.” Etoll , 8 11 A. 2d at 2 1. Rather , t he c ourt s tate d, th e fr audcl ai ms were so “inextricably

intertwined with the contract claims” that t

hey were barred as a
ma tter o f law fro m b eing raise d in dep end ently. Id. The Superior Court has appli ed the5

“gis t of th e ac tion ” do ctrin e in o ther cas es. See , e.g. , Pitt sburgh Constr uction Co. v. Griffith , 834 A.2d 572 (Pa. Super. Ct. 2003) (appl yi ng Etoll and stating that “co urts are cautious about permitti ng tort recovery based on contractual breaches” ); Pen nsylvan ia M anufacture rs As sociatio n Insu rance Co . v. L.B . Smith , 831 A .2d 1178 , 1181 (Pa . Super. Ct. 2003) ( “The ‘gist

of the action’ doct

rine i s designe d to maint ain the conceptual distinctio n betw een b reach of co ntract a nd to rt claim s.”); Freest one v. New England Log Homes, Inc. , 819 A .2d 55 0 (Pa . Sup er. Ct. 2 003 ); see also Bohler-Uddeholm America, Inc. v. Ellwood Group, Inc. , 247 F.3d 79, 103-0 4 (3d C ir. 2001). From our examinat ion of the Pennsylvania

cases, we conclude that the “gi st of t

he acti on” doctrine cannot be captu red b y any precise ly word ed test. In stead, th e doc trine ap pears to call fo r a fac tinten sive jud gm ent a s to th e tru e na ture of a claim
. In making the requis ite inquiry here, a recent case from the United States Dist rict Court for t

he Easter n Distri ct of Pennsylvania is i nstruc tive. In Penn City Investments, Inc. v. Soltech, Inc. , 2003 U .S. Dist. LEX IS 2232 1 (E.D . Pa. Nov . 25, 2003), the C ourt held that the do ctrine barred a f raudulent ind ucem ent claim w here the de fendan t-counterclaim ant alleg ed tha t the co unter- defe ndan t had m ade p re-con tract statem ents in o rder to induce i t to enter int o a contra ctualrelationship. The Court hel d that t he fraudul ent indu cem ent cla im w as ba rred b ecau se the “ pre-co ntractu al statem ents co ncern ed sp ecific duties that t

he parti es lat er outl ined in t he contra ct. ” Id. at *12 ; see also id . at *15 (dismissing the t ort claims because they were “directly

addressed by the contract , or so6

closely r elat ed to the contrac tual relat ionship, that the di spute bet ween the part ies [nee ded to b e] re solv ed b y exc lusiv e referen ce to con tract ual p rinc iples ”). Here, Will iams conte nds that his fr aud clai ms are not for fraud in t

he performance of a contr act but

are aki n to cla ims for fr aud in the inducement bec ause Ladbrokes “induced Will iams into signi ng the Lett er of Int ent and deal ing with Ladbr okes byly ing about its int ent to honor the agreement.” Appellants’ Br. at 25. According to W illi ams, Lad brok es an d R oss en gage d in a s chem e by w hich th ey induc ed W illiams to “com mit to buyi ng the proper

ties for $120 mill ion on an exclusive bas is, while secr etly marketi ng the propert ies t o other buy ers. ” Id. at 26. The Letter of Intent , the y as sert , was the devi ce by wh ich W illiam s w as in duc ed a nd d ece ived
. App lying the case law c ited above , we con clude that W illiams’s tort claims are barred. Willi ams’s tor

t cla ims are al l founded on Ladbrokes ’ agreement to grant him the
exc lusiv e rig ht to pur cha se th e N orth Am erica n as sets d urin g th e du e dili gen ce p erio d. William s and Lad brok es are s oph isticated parties w ho w ere w ell able to protec t their right s in re lati on to thi s matter by cont ract, and they

atte mpted to do so. On the parti cular fac ts pr es ent ed h er e, we ag re e wi thth e Di stri ctCour t t hat th e “g is t” of Wi ll iams’ s c la ims sounds in cont

ract, not tor

t. Becaus e of the nat

ure of the “gist

of the action” doctrine and beca use c larificatio n of the do ctrine for pre cede ntial pu rpose s mu st com e from the state
cou rts, fu rthe r ex plan ation of o ur h old ing in th is ca se w oul d no t be f ruitf ul. Finally, we hold that

the Dist rict Court did not

err i n concludi ng that t he doctrine7

bar red W illiam s’s c laim s ag ains t Ro ss, as we ll as h is cla ims aga inst L adb rok es. Although Will iams did not have a contr actualrelationship with Ross, Willi ams cannot detach Ross from his st atus as an agent for Ladbrokes. Ross served as the principal negotiator for

Ladbrokes. As t

he Pennsy lvania

courts have spell ed out, the gis t of the acti on doctrine bars t ort cl aims agai nst an i ndividualdefendant where t he contra ct between the pl ainti ff and the offi cer’s company cr eated t he dutie s that

the individual alleg edly b reac hed
. See Flynn Co. v. Peer less Door & Glass, Inc. , 2002 WL 1018937, at *3 (Pa. Com. Pl . May 15, 2002) (st ating t hat becaus e it was t

he contra ct between the “plai ntiff and defendants that c reate d the duti es which Pratt [the indivi dual in que sti on] allegedly breached ” that the gist of the ac tion doctrine ba rred a suit against the c omp any’s offic er); Atch is on Cas ti ng Cor p. v . Del oit

te & Touche , LLP , 2003 WL 1847665, at * 1 (Pa. Com. Pl . March 14, 2003) (dismi ssing t ort cl aims agai nst cor porati on and indivi dual defend ants wh o we re emplo yees of corpo ration on ba sis of the gist of the a ction doctrine); Flynn Co. v. Cytometri cs, I nc. , 2000 WL 33711055, at *4 (Pa. Com. Pl. Nov. 17, 2000) (dism issing m isrepre sentatio n claim s aga inst cor pora tion an d its em ployees in dividu ally under the gi st of t

he acti on doctrine because t he all eged misrepr esentations were br eaches of the exclusive r epresent ation a greement) . All of Ross ’s al leged misrepresent ations
con cern ed m atter s go ver ned by the Le tter o f In tent b etw een La dbr oke s an d W illiam s. After revi ewing, al l of Will iams’s arguments, we affirm the Dis tri ct Court order gra ntin g su mm ary jud gm ent in fav or o f L adb rok es o n th e tor t claim s at is sue .8

BE CK ER , Circuit

Judge , dis senti ng. I ag ree w ith th e m ajor ity’s dis pos ition of th e law of th e ca se iss ue. Ho we ver, I dis agree with the m ajority’s interp retation and a pplica tion of the P enns ylvania “gist of the action” jurisprude nce, hence t his di ssent f

rom the judgment . I bel ieve that the majorit y r eads Pennsy lvania

law too narrowly. I als o belie ve that its abbreviated and antis eptic renderi ng of the under ly ing fact s beli es the t rue natur e and ult imate es sence of Ladbrokes’ conduc t, whic h (if pr oven) would render it l iable in tor

t. Ibegin with a

fulle r description of t

hat conduct , from which i t willbe apparent that t he writt en agreement, on which the majority

focuses, is not

the cent ral fa ct of the case but

rather a mere inst

rument of Ladbrokes’ fraudulent scheme. I. In Jun e 199 9, plain tiff Stu art W illiams w as ap proa ched by Lad brok es to solic it his in teres t as a pot entia l bu yer fo r La dbr oke s’ N orth Am erica n ga min g bu sine sses . By Jul y 1999, Willi ams and Alan Ross, r epresenting Ladbrokes, had reached an or al underst anding that Will iams would purchas e severalof Ladbrokes’ ca sinos, betting parlor s and racet

racks for $120 mill ion cash. They then negoti ated the terms of a binding letter of int ent. When Ross first met Willi ams, he had not yet test ed the market

for the prop erties, bu t he did not w ant to p reclud e a de al with William s if he w as un able to get a higher price el sewhere. Wil liams insist ed that he have the exc lusi ve right to purchas e the propert ies dur ing the pe riod of due di ligenc e and finalagreement dr afti ng. Indeed9

Willi ams told Ross that he would not spend “one mi nute” of hi s ti me or “one penny ” of his m one y purs uin g a tr ans actio n un less L adb rok es in tend ed to dea l exc lusiv ely w ith h im. Ross did not want

exclusi vity

but, r ecognizi ng that Wil liams would not proceed furt

her with out it, he ultima tely assured William s that L adbr okes wo uld d eal ex clusive ly with him; th e con sidera tion w as a h efty purc hase price. A lthoug h the a ssuran ce of exclu sivity was memoriali zed in the letter of intent and signed by Willi ams and Ladbrokes, it i s clear from the rec ord th at La dbro kes a nd R oss n ever in tende d to p rovid e exc lusivity to Williams. The record i s uncontr adict ed that Ladbrokes and Ross, even as the y negotiated speci fical ly

with Will iams about e xclusivity and extra cted addi tional
con side ratio n fr om him in ex cha nge for it, sec retly m ark eted the p rop ertie s to o ther s. When asked by Will iams whether Ladbr okes had engaged or was engaging in s uch discuss ions, Ross lie d and told Wil liams “no, ” and when asked in hi s deposition why he had not dis closed hi s contact s with ot her potential buyers t o Willi ams, Ross answere d, “Why would I?” An inter nal Ladbrokes memorandum written by Ross stat ed that

he intend ed m erely to “k eep [ William s] in the runn ing” w hile he shop ped th e pro perties to third parti es. M oreo ver, thro ugh out A ugu st and Sep temb er 19 99, R oss rep eated ly lied to Willi ams about Will iams’s a ccess t o due dili gence materi als, and about the soli citation of offers for

the proper

ty under agree ment with Will iams. When Will iams tol d Ross that he10

was concerned ab out the continuing delay s and excuses, and specifically asked Ross whether Ladbrokes was dealing wit h others , Ross t old Will iams, “ You don’t have any th in g t o worry

abo ut ,” and“y ou’ re ju st ove rr eac ti ng. ” But , o n Ju ly 28, 199 9, th e s ame day Ross s igned the letter of int ent, Ross had sent doc uments rel ating to some of the pr ope rtie s t o on e p ro sp ec tive purch as er an d aco nf

id en ti al it yag re eme ntto an othe r. On August 3, Ross met

another pot entia l buy er and dis cussed the possibl e acquisition of t he pr ope rtie s, in cl uding p ur ch as e p ri ce . A nd o n Au gus t 5 , R os s me t and n eg ot iate d wi thtwo other pr ospecti ve purchaser s. Then, on August 10, Ross met with anothe r int erest ed party , who made an offer. Also that day, another Ladbr okes execut ive faxed financial stat ements and other financialinformat ion for t he Pennsy lvania

propert ies t o sti ll anot

her potential buyer.

On August 26, 1999, Ladbroke s iss ued a press relea se indi cati ng an inte nt to sel l it s North American pr operti es, i ncluding t he busines ses cover ed by t he letter of inten t. Strik ing ly, the p ress relea se m ade no m entio n of W illiam s or th e lette r of inten t. In respons e, at

least seven more individuals expresse d their interest i n purchasi ng some or all of the proper

ties . By t

he end of August, Ross had sent financialinformat ion to anot her prospective purchaser and offered to meet with him the following week. O ver the course of the next

week, Ross continued to meet wit h other pos sibl e buyer s and received a
con cr et e of

fer fr om on e of

th em. Willi ams call ed Ross immediat ely after becoming aware of the August 26,11

1999 press r elease . Ross t old Will iams that “the pre ss rel ease rea lly didn’t have anything to do with our

trans acti on.” Ross fur

ther t old Will iams “not to worry, that t his t ransaction was absolut ely

[his] .” Ross al so reminded Wil liams t hat Ladbrokes ’ board had “a pproved the tran saction .” Af

ter furth er con versa tions, L adbr okes ’ CE O P eter G eorg e w rote confirmi ng that Ladbr okes would “not s olicit expres sions of interes t,” would not “negoti at[e] terms of s ale and pur chase” with any t hird par ties , and would not

give any third parti es access to the data room during the peri od that Wil liams had a ccess. And yet on Se pt embe r 3 , 1 999 , at abou t t he s ame time Ross andGeor ge we re as surin g Wil li ams they had not and would not

soli cit e xpressi ons of int erest of send financ ial or

legal docu men ts to anyon e else, R oss w rote a m emo to G eorg e stating that R oss inte nded to “keep [W illi ams] in the running” while he continued to shop the gaming business.

Throughout Septe mber 1999, “t he beat went on. ” The short of it i s that defendants ’ repeat ed lie s and misre present ations were made to string Will iams along while Ladbrokes and Ross conti nued to shop t he properties t o third parti es. As Judge Lee, who preceded Judge Schwab in the cas e, found i n connecti on with his grant of
sum mary jud gm ent on the issu e of th e defenda nt’s bre ach o f their o bligatio n to n egotia te in good fai th under t

he letter of intent, “Ross and other Ladbrokes’ offi cers and employe es aggres sively shoppe d around the gaming int erest s as to whic h Willi ams had just bee n gra nted e xclus ivity rights.” T his co ndu ct con tinued even after L adbr okes finally gave W illiams access to the d ue diligence m aterials on Sep tember 2 2, 1999. T here w ere12

further discuss ions bet

ween Ladbrokes and Will iams which ultimately i mploded when Ladbrokes purcha sed, at a heavydiscount , $54 mil lion in bonds that Willi ams had expected t o assume. II.

I do not quar

rel wit h the majority ’s gener al st atement of t he rele vant Pen nsylvan ia jurispr uden ce, i.e., that th e “gist o f the a ction” doctrin e “is de signe d to
m ain tai n t he co nc ep tu al d ist in cti on be tw ee n b re ac h o f c on tra ct c lai m s a nd to rt c lai m s [ by] pre clud [ing ] pla intiffs f rom reca sting ord inar y brea ch o f co ntra ct cla ims into tort c laim s,” and that “[t]or t act ions l ie for br eaches of dut ies i mposed by l aw as a matter of social policy , while contrac t act ions l ie only for breache s of duti es imposed by mutual conse nsus agreements between part icular indi viduals .” And see Bohler-Uddeholm America, Inc. v. Ellwood Group, Inc

. , 247 F.3d 79, 103-0 4 (3d C ir. 2001) (alteration in original):

[T]he import ant dif

ference bet

ween contract

and tort acti ons is t

hat the latter li e from the br each of dutie s imposed as a

matter of socialpolicy while the former li e for the breach of dut ies imposed by

mutual conse nsus Redevelopm ent Auth. of Cambria Cty. v. International I ns. Co. , 454 Pa. Super . 374, 685 A. 2d 581, 590 (1996) (en banc) (quoti ng Phico Ins. Co. v. Pres byterian Med. Servs. Corp. , 444 Pa. Super. 221, 663 A.2d 753, 757 (1995)). In other words, a cl aim should be l imit ed to a cont ract c laim when “the parties ’ obli gations are defi ned by t he terms of t

he contrac ts, and not by

the larger soc ial pol icie s embodied in t he law of to rts.” Bash v. Bell Tel. Co. , 411 Pa. Super . 347, 601 A.2d 8 25, 830 (1 992).13 I do, how ever, disagree w ith what I see a s a crabbe d view of Pen nsylvania’s willingness to a

pply tort principles where t

he facts show that a par ty to an al leged cont

ract had a fraudul ent intent with respect to its contrac tual promises. As I read the Pennsylvania cas es, where, as here, there was fr audulent intent , i. e. a subj ecti ve and und isclo sed inten t no t to p erfo rm, a frau d cla im is state d.

Let m e beg in w ith basic princip les. If a p arty to a co ntract m isrepre sents h is or h er p rese nt in tenti on t o pe rfo rm, h e or she has com mitte d th e tor t of m isrep rese ntati on. On the o th erhan d, if

a part yhada pr es ent

in te nt io n t o pe rf

orm but late r f ai ls to per for

m, delibe rately or

otherwis e, the acti on ordinarily is one for

breach of cont

ract, unless t

he breachi ng party

gives knowingly fal se assur ances of perf ormance, i n which case an action for mis rep rese ntati on c an a lso lie
. See 5 Corbin on C ontracts § 10 77 at 2 38 (S upp . Fall 2001) (“I f a party at

tempts to commit fraud, he should not be insul ated fr om liabi lit y for pun itive da mag es, just b ecau se the m eans he ha s cho sen for ach ieving his fra ud h appe n to involve a breach of cont

ract. ”). As we held in Mellon Bank Corp. v. First Union Real Esta te Eq uity & M ortga ge In vestm ents , 951 F.2d 1399, 1410 (3d Cir. 1991), under Pennsylvania l aw, “‘[a] stat ement of pres ent intention whic h is fal se when uttered may consti tute a

fraudule nt misr epresent ation of fact. ’” (quot ing Brentwater Homes, I nc. v. Weibley , 369 A.2 d 11 72, 1 175 (Pa . 197 7)) (a ltera tion in o rigin al).

My view of the open t exture of Pennsylvania l aw in this area i s support ed by Jah ans hah i v. C entu ra D eve lop me nt C o. 816 A.2d 1179 (Pa. Super . 2003), which14

applie d an analogous mi sfeasance/ nonfeasance analysi s. I t is also suppor ted by a number of fede ral d istrict cou rt cas es a ppl ying P enn sylvan ia law
. See, e. g. , Precision Printing Co . v. Uniso urc e W

orld wid e, In c., 993 F. Supp. 338, 356 (W .D. Pa. 1998) (“[A] promise wh ich the prom isor ha d no intentio n of keep ing at th e time he m ade it m ay be ac tionab le as fraud.”); Leonard A. Feinber g, Inc. v. Cent. Asia Capital Corp. , 974 F. Supp. 822, 843 (E.D . Pa. 19 97) (“ ‘[A ] caus e of a ction for fra ud ca n be p redica ted on future prom ises if the defen dant kne w at the time he ma de the prom ise that he w ould no t carry it out.’” (quoti ng Killian v. McCulloch , 850 F . Sup p. 123 9, 125 5 (E.D . Pa., 19 94)); Fox’s Foods, Inc. v. Kmart Corp. , 870 F. Supp. 599, 609 (M.D. Pa. 1994) (hol ding there was suffici ent evidence for

a jury to conclude that

the defendant

did not intend to pe rform when the promise w as mad e); Ebeling & R euss, Ltd. v. Sw arovski, Int’l , 1 992 WL 21 155 4 *9 (E .D
. Pa. A ugu st 25, 1 992 ) (“[A ] party can be liab le for f raud if the p arty intend ed no t to comp ly with the terms of the contract at the incep tion of the co ntractual relationship.”).

I read t he majori ty

opinion as having twin f oci. On the one hand, whenever fraudule nt misr epresent ations to induce a contra ct res ult in specifi c dutie s outl ined in t he late r c ont

ra ct be twe en so phi st ic at edpa rtie s, th e ma jo ri ty wou ld ba r an a ct io n i n t ort. On the oth er han d, can didly ack now ledgin g the o paqu enes s and fluidity of the P enns ylvania gist of the ac tion jurisp rude nce, th e majority really seem s to be mak ing an impre ssionis tic judgment as to whether the acti on sounds in cont ract or tort . I’ ll t ake it

eithe r way. The firs t focus, I respe ctful ly suggest, is si mply wrong as a matter of the hi story

of the gi st of15

the ac tion do ctrine. T he se cond , wh ich see ms to supp ly the ma jority’s ratio de ciden di, does not, I submit, square with t he facts. History tell s us that

sophisticat ed parti es can be duped, especia lly when, like t he la te T ug M cG raw , they w ant to belie ve. T he faithl ess R oss wa s a m aste r du per . As Judge Lee held, the fact s support the conclusion: Tha t Alan Ro ss and Lad brok es de liberately an d inten tionally deceived pl ainti ffs and st rung them al ong while shoppi ng their business and properties ar ound to third part ies, knowing that plaintiffs wo uld be incu rring significant exp enses tow ard due dili gence on a deal defendants decided t hey were not going to cons ummate. An d as Ju dge L ee rec ogn ized, p resen ted w ith the facts I h ave c hron icled, a re ason able jury certa inly

could conclude that

Ladbrokes, t

hrough Ross, e ntered into the l ette r of intent in order to induce Willi ams to keep hi s money on t he tabl e, with no present intention of honoring its contractual obli gations.

The evidence her e is over whelming and uncontr adict ed. It refle cts an egregious fraud, papered over by a contract. It is al so a case in which “the parties’ obligations ar e defined . . . by the larger soc ial pol icie s embodied in t he law of torts. ” Bo hler -U

dde hol m A me rica , Inc ., sup ra. I believe that Pennsy lvania would, on these facts, re cogn ize a to rt claim . I wo uld the refor e reve rse the gran t of su mm ary judgm ent in fav or o f L adb rok es (a nd, a fortiori , of Ross) and remand for a t rialon Willi ams’ fraud cl ai m.16