In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 04-3411 & 04-3561

KEMPNER MOBILE ELECTRONICS,

INCORPORATED,

Plaintiff-Appellant,

Cross-Appellee,

v.

SOUTHWESTERN BELL MOBILE SYSTEMS,

doing business as Cingular Wireless,

Defendant-Appellee,

Cross-Appellant.

____________

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 02 C 5403—Sidney I. Schenkier, Magistrate Judge.

____________

ARGUED FEBRUARY 8, 2005—DECIDED NOVEMBER 3, 2005

____________

Before RIPPLE, EVANS, and WILLIAMS Circuit Judges.

WILLIAMS, Circuit Judge. This continuing litigation has

spawned a preliminary injunction hearing, two trials

and now this appeal of several rulings in Cingular’s favor.

We affirm all the rulings except that we find that judgment

as a matter of law should have been entered in Cingular’s

favor on Kempner’s tortious interference with prospective

economic advantage claim because the evidence in this case

reveals that Cingular did nothing more to “interfere” with
2 Nos. 04-3411 & 04-3561

Kempner than compete for business in the cellular phone

market. We, therefore, reverse the district court’s denial of

Cingular’s motion for judgment as a matter of law on this

claim. We affirm all the remaining rulings of the district

court.

I. BACKGROUND

This diversity lawsuit arises out of disputes between

Kempner Mobile Electronics, Inc. (“Kempner”), an Illinois

corporation with its principal place of business in Illinois,

and Southwestern Bell Mobile Systems, d/b/a as Cingular

Wireless (“Cingular”), a Delaware limited liability corporation with its principal place of business in Georgia.

Kempner engaged in the marketing and sale of, among

other things, cellular telephone products and services.

Cingular was involved in the development, establishment

and sale of cellular telephones and services in various parts

of the United States, including the Chicago metropolitan

area. In late 1999, Kempner and Cingular entered into an

Authorized Agency Agreement (“1999 Agreement”), which

was the last of several written agreements entered into by

the parties dating back to the beginning of their relationship in 1989.

The 1999 Agreement expressly states that the relationship between the parties was not a “general agency, joint

venture, partnership, employment relationship or franchise.” The 1999 Agreement defines “Authorized Services”

as the services offered by Cingular that Kempner was

allowed to sell under the 1999 Agreement. Under the

1999 Agreement, Kempner was to sell only cellular radio

service (“CRS”), not commercial radio services (“CMRS”). In

addition, Kempner could also sell paging services or other

customer premises equipment (“CPE”) offered by companies

other than Cingular. And Kempner was authorized to sell

or lease CPE, the cellular telephones or other related

hardware necessary for the customer to use the Cingular
Nos. 04-3411 & 04-3561 3

cellular services marketed by Kempner. The 1999 Agreement authorized Kempner to sell these products and

services in a specific “Area,” the six-county Chicago metropolitan area, defining “Subscribers” as customers of the

Authorized Services provided by Cingular; each telephone

number assigned to a customer of Authorized Services was

counted as a separate “Subscriber.”

Under the 1999 Agreement, Kempner was a “non-exclusive authorized agent” for Cingular, in that Cingular

reserved the right to market its own cellular services and

CPE “in the same geographical areas served by [Kempner],

whether through [Cingular’s] own representatives or

through others including, but not limited to, other authorized agents, retailers, resellers and distributors.” However,

the 1999 Agreement prohibited Kempner from acting as a

representative or agent of any other reseller or provider of

cellular services in the six-county Chicago metropolitan

area, or to attempt to persuade Subscribers of Cingular’s

services to obtain cellular service from another provider.

Cingular retained sole authority to establish the rates,

terms and conditions of the sale by Kempner of Authorized Services. The 1999 Agreement contains no provision

that specifies how the rates, terms and conditions for

the sale of services offered by Kempner would compare

to that offered by other outside agencies, or to company

stores or in-house sales outlets. The persons to whom

Kempner sold cellular service on behalf of Cingular became

customers of Cingular. On the other hand, individuals who

bought from Kempner CPE, but not Cingular cellular

services became customers of Kempner, and Kempner had

the authority to set the price at which it would sell CPE.

Under the 1999 Agreement, Kempner was compensated

for sales on a commission basis. Kempner received a commission on both pre-paid and post-paid contracts based on a

percentage of the initial payments. With respect to
4 Nos. 04-3411 & 04-3561

post-paid contracts, Kempner also received a residual

commission, based on the payments made by the customer

on their cellular contract going forward. The 1999 Agreement also provided that Cingular could withhold an offset

against this commission stream for amounts past due

and owing from Kempner to Cingular.

In addition to requiring that Cingular pay Kempner

commissions for sales made, the 1999 Agreement required

Cingular to provide Kempner with promotional literature,

sales brochures and information for preparation of catalogs,

advertising and other promotional activities, and a reasonable amount of sales training. The 1999 Agreement also

allowed Kempner to use certain Cingular marks in marketing Cingular’s services.

The 1999 Agreement provided that for a period of one

year after its termination or expiration, Kempner could

not engage in any of the following acts:

(1) directly or indirectly, induce, influence or suggest to any Subscriber of CRS to purchase CRS or

any other CMRS from another reseller or provider

of CRS or CMRS in the Area;

(2) directly or indirectly, induce, influence or suggest to any Subscriber of any other Authorized

Service to purchase a competing service from any

provider or reseller of such competing service in the

Area, whether or not the competing service

is technologically the same as the Authorized Service in question;

(3) under any circumstances or conditions whatsoever, directly or indirectly, as an individual, partner, stockholder, director, officer, employee, manager or in any other relation or capacity whatsoever

engage in the sale or promotion of CRS, CMRS, or

any other authorized service on behalf of any
Nos. 04-3411 & 04-3561 5

competing reseller or provider of such service in the

Area;

(4) directly or indirectly, allow any other person,

firm or other entity to use the name, trade name,

goodwill or any other assets or property of

[Kempner or Cingular] in any manner in connection

with such other entities’ sale of CRS, CMRS or any

other Authorized Service on behalf of a competing

reseller or provider in the Area, . . . and [Kempner]

specifically agrees not to transfer, assign, authorize

or consent to the transfer of [a Kempner] telephone

number to any other person, firm or other entity

upon expiration or termination of this Agreement.

The 1999 Agreement states that the consideration

provided by Cingular for these non-compete provisions

was Cingular’s grant to Kempner “of the right to use

the Marks, the right to advertise affiliation with [Cingular]

as an authorized agent of [Cingular] and great value of

the goodwill associated with [Kempner’s] ability to use

the Marks . . . and . . . the value of specialized, technical

knowledge of the cellular industry and other Services to

be imparted by [Cingular] to [Kempner] from time to time.”

On May 6, 2002, Kempner filed an eleven-count complaint

against Cingular seeking damages relating to the 1999

Agreement. Kempner asserted various claims for breach of

contract, common law tort and statutory tort, arguing that

it should prevail in its suit because (1) the restrictive

provisions in the 1999 Agreement were unenforceable as

Cingular had allegedly breached the 1999 Agreement, (2)

Cingular made misrepresentations to Kempner and (3)

Cingular wrongfully contacted Kempner’s customers. In

addition, Kempner sought a declaration that Kempner was

not bound by any of the terms of the 1999 Agreement,

including its exclusivity and non-compete provisions, which,

among other things, prohibited Kempner from selling
6 Nos. 04-3411 & 04-3561

competitive services. Kempner also sought an injunction to

prevent enforcement of the exclusivity and non-compete

provisions of the Agreement and to require Cingular to

maintain Kempner as an authorized agent but excusing

Kempner from remaining exclusive.

On August 20, 2002, after removing the action to federal court, Cingular filed a cross-motion for preliminary

injunction to enforce the exclusivity and non-compete

provisions of the Agreement and preclude Kempner from

selling wireless services on behalf of competing carriers.

The court held a preliminary injunction hearing on the

issues and held that: (a) the exclusivity provision of the

Agreement was enforceable and that Cingular had properly

terminated Kempner’s agency for violation of the exclusive

agency provision; (b) the post-termination, non-compete

provision was enforceable with respect to Kempner’s sales

to existing Cingular customers activated by Kempner; and

(c) the non-compete provision was not enforceable to

preclude Kempner from selling to non- Cingular customers

on behalf of carriers competing with Cingular.

As a result of voluntarily withdrawing some claims and

the district court’s grant of summary judgment in favor

of Cingular on other claims, for trial Kempner was left with

two claims of breach contract, as well as a claims

for common-law fraud and tortious interference with

economic advantage. In addition, Cingular’s two counterclaims for breach of contract remained. On November 17,

2003, the first day of trial, Cingular presented a motion

to bar Kempner’s expert, which the district court denied

without prejudice. With the consent of the parties, the

trial was bifurcated on issues of liability and damages.

At the close of Kempner’s case in chief on liability,

Cingular moved for judgment as a matter of law under

Federal Rule of Civil Procedure 50(a) on all Kempner’s

claims. The court denied the motion in its entirety.
Nos. 04-3411 & 04-3561 7

Cingular did not renew its Rule 50(a) motion at the close of

its case in chief, or at any other time before submission of

the case to the jury. On November 21, 2003, the case was

submitted to the jury, and the jury returned verdicts in

favor of Kempner and against Cingular on all four of

Kempner’s claims and on both of Cingular’s counterclaims.

After trial, Cingular filed a motion for judgment as a matter

of law, or in the alternative, for a new trial on all claims.

Following briefs and oral argument, the district court

granted Cingular a new trial on Kempner’s tortious interference claim and on Cingular’s equipment receivable

counterclaim.

In preparation for the damages phase of the first trial,

Cingular renewed its motion to bar Kempner’s evidence

concerning fraud damages, and Kempner filed a memorandum in support of its request for punitive damages. The

district court granted Cingular’s motion to bar expert

testimony on the fraud claim and granted Kempner’s

motion to submit evidence for award on punitive damages.

On July 22, 2004, at the pre-trial conference before the

second liability trial, the district court precluded Kempner

from offering evidence or argument that Kempner was

not liable for paying amounts due on Cingular’s equipment receivables counterclaim because of a claimed offset

from the 1999 Agreement. As a consequence, the parties

stipulated to liability and damages on the equipment

receivables claim.

The second trial on liability regarding Kempner’s

claims of tortious interference began on August 2, 2004, and

at the close of Kempner’s presentation of evidence, the court

denied Cingular’s motion for judgment as a matter of law on

the tortious interference claim and on Kempner’s claim for

punitive damages. At the close of all evidence, Cingular

renewed its motion for judgment as a matter of law. This

time the court granted the motion as to punitive damages
8 Nos. 04-3411 & 04-3561

but again denied the motion as to tortious interference. The

jury returned a verdict in favor of Kempner. Thereafter, the

parties stipulated to the actual damages to be awarded on

each of the remaining claims, eliminating the need for any

further damages proceedings. On August 17, 2004, the court

entered judgment on all the parties’ respective claims.

II. ANALYSIS

A. The Trial Court Properly Excluded Kempner’s Evidence

of Fraud Damages.

In its fraud claim, Kempner claimed that in May 2001,

Cingular represented to Kempner that Kempner would

receive the same equipment and service pricing as was

available to Cingular’s internal distribution channels.

Kempner argues that these representations were false, and

that Kempner decided not to terminate its relationship with

Cingular and accept an attractive offer to become a master

agent for Nextel in justifiable reliance on Cingular’s

representations. Kempner claims that by the time it fully

recognized that Cingular’s representations were indeed

false, the offer with Nextel was no longer available. A jury

returned a verdict in favor of Kempner and against

Cingular on this fraud claim.

Following the jury verdict, but before proceeding on

damages, the court granted Cingular’s motion to bar

Kempner’s expert testimony on fraud damages. In granting Cingular’s motion, the court held that Kempner’s evidence of damages failed to match the theory of fraud upon

which Kempner had prevailed at trial. The court found that

Kempner’s expert assumed that Kempner would have been

able to sell for both Nextel and Cingular simultaneously,

while the theory that Kempner presented at trial was that

Kempner would have sold for Nextel, and not for Cingular,
Nos. 04-3411 & 04-3561 9

but for misrepresentations made by Cingular. Furthermore,

the court noted that the damages calculation also included

several months of profit that preceded the alleged fraud,

which would be unrecoverable under any set of facts.

We review de novo whether the district court applied

the appropriate legal standard in making its decision to

admit or exclude expert testimony, and we review for abuse

of discretion the district court’s choice of factors to include

within that framework as well as its ultimate conclusions

regarding the admissibility of expert testimony. U.S. v.

Parra, 402 F.3d 752, 758 (7th Cir. 2005). Expert testimony

is admissible “[i]f scientific, technical, or other specialized

knowledge will assist the trier of fact to understand the

evidence or to determine a fact in issue” FED. R. EVID. 702.

Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993)

laid the foundation for this rule, which was designed to

ensure that “any and all scientific testimony or evidence

admitted is not only relevant, but reliable.” Parra, 402 F.3d

at 758 (quoting Smith v. Ford Motor Co., 215 F.3d 713, 718

(7th Cir. 2000)). A court abuses its discretion when it

commits “a serious error of judgment, such as reliance on a

forbidden factor or failure to consider an essential factor [in

admitting or excluding expert testimony].” Smith, 215 F.3d

at 717 (quoting Powell v. AT&T Comm., Inc., 938 F.2d 823,

825 (7th Cir. 1991)).

On appeal, Kempner never addresses the disconnect

between its damages evidence and the theory of liability

it prevailed upon at trial. Instead, Kempner concedes

that its damages evidence assumed that the exclusivity

provision of the 1999 Agreement was unenforceable such

that Kempner would have been able to sell both Nextel and

Cingular services. (Appellant Opening Br. at 23.) Even if

evidence regarding whether the restrictive covenant

was enforceable had been allowed to go trial, Kempner’s

damages evidence could not be offered as a basis for its
10 Nos. 04-3411 & 04-3561

theory of fraud because Kempner’s damages evidence failed

to separate profits Kempner would have gained from sales

of Nextel products and services from profits gained from

sales of Cingular products and services. Kempner admits

that the “[d]amages [evidence was] not individually calculated on each theory [of fraud presented at trial], as the

damages model reflect[ed] overall profitability levels.”

(Appellant’s Opening Br. at 20.) We agree with the decision

of the district court that the expert testimony submitted by

Kempner would not assist the trier of fact to determine the

issue of fraud damages in this case. We find, therefore, that

the district court properly applied Federal Rule of Evidence

702 to exclude the damages evidence submitted by

Kempner’s expert as irrelevant and inapplicable to its

theory of liability.

In the alternative, Kempner argues that it should have

been allowed to amend its damage disclosures. In excluding

Kempner’s theory of damages, the court found that

Kempner’s failure to disclose relevant expert testimony was

neither justified nor harmless. The court explained, on the

record, that after its ruling on summary judgment only a

single fraud claim remained for Kempner to pursue at trial,

and that Kempner had ample opportunity to submit

damages calculations that matched the remaining theory,

but Kempner failed to do so. Instead, Kempner submitted

a modified damages report that did not match the remaining fraud theory of the case. In explaining that Kempner’s

time to amend included the time between the court’s ruling

on summary judgment and trial, the court reasoned that

not only did Kempner not take advantage of the time

available and allotted to amend its disclosure, but Kempner

never requested to amend the expert report or to continue

the trial to prepare a new expert report.

In addition, the district court found Kempner’s failure

to amend was not harmless as Cingular would be prejudiced
Nos. 04-3411 & 04-3561 11

if the court allowed Kempner, after trial and after a jury

verdict, to submit a new damages report. The

court determined that if it would have allowed Kempner

to amend, then its allowance would have a prolonged delay in the already protracted proceedings requiring additional discovery and increased costs. Moreover, the court

found that allowing Kempner to offer a different damages

theory at such a late stage in the game after a liability

finding would have unfairly changed the entire landscape

of the case to the detriment of Cingular. We agree with the

district court’s reasoning and find that the district court did

not abuse its discretion in denying Kempner the opportunity to amend its damages report.

Finally, Kempner argues that district court erred by

not letting Kempner at least submit out-of-pocket damages in lieu of actual damages. The district court denied

Kempner’s request to pursue out-of-pocket damages because

Kempner failed to identify any out-of-pocket cost damages

attributable to fraud in its final pretrial order. The district

court found Kempner’s omission unjustifiable and prohibited Kempner from proceeding with testimony on the issue

at trial. Based on these findings and our review of the

record, we find that the district court did not abuse its

discretion in denying Kempner’s request to offer evidence

not disclosed in its final pretrial order.
12 Nos. 04-3411 & 04-3561

B. The District Court Did Not Abuse Its Discretion in

Refusing to Permit Kempner to Challenge the Exclusivity Provision of the Contract at Trial.

During the preliminary injunction hearing, Kempner

presented evidence regarding Cingular’s lax enforcement of

the exclusivity provisions of its contract. The district court

concluded that this evidence did not demonstrate a likelihood of success on the issue, but left open the possibility

that the exclusivity provision could be deemed unenforceable at a trial on the merits. Before trial, Cingular filed a

motion in limine to preclude evidence at trial challenging

the exclusivity provision. At the hearing on the motion to

exclude, the district court asked Kempner what additional

evidence it possessed that was not presented at the preliminary injunction hearing that would bolster its claims at

trial. Kempner proffered no additional evidence, which led

the district court to grant Cingular’s motion, and Kempner

argues that the district court erred. We disagree.

We review the district court’s rulings on motions in limine

for an abuse of discretion. Heft v. Moore, 351 F.3d 278, 284

(7th Cir. 2003) (citation omitted). Kempner’s arguments are

inconsistent. On one hand, Kempner argues that Cingular

forced Kempner to forego a lucrative contract with Nextel

by, in part, enforcing its exclusivity provision. On the other

hand, Kempner argues that Cingular should not be allowed

to enforce its exclusivity provision so the Kempner can sign

with Nextel. We find that the court did not abuse its

discretion by excluding this evidence because Kempner

failed to proffer additional evidence to bolster its claims.

C. The District Court Properly Refused to Permit Kempner

to Recover Punitive Damages.

In a diversity action such as this one, state law governs the factors a jury may consider in determining the

amount of punitive damages, while federal law governs the
Nos. 04-3411 & 04-3561 13

district court’s review of the jury award and appellate

review of the district court’s decision. Republic Tobacco Co.

v. North Atlantic Trading Co., Inc., 381 F.3d 717, 735 (7th

Cir. 2004). Under Illinois law, while the measurement

of punitive damages is a jury question, the preliminary

question of whether the facts of a particular case justify the

imposition of punitive damages is properly one of law and

our review is therefore de novo. Brandon v. Anesthesia &

Pain Mgmt. Assocs., Ltd., 277 F.3d 936, 946 (7th Cir. 2002)

(interpreting Illinois law) (quotations and citations omitted).

In general, the Illinois Supreme Court does not favor

punitive damages and such damages may only be awarded

where torts are committed with fraud, actual malice,

deliberate violence or oppression, or when the defendant

acts willfully, or with such gross negligence as to indicate

a wanton disregard of the rights of others. Id. In refusing to

submit the question of punitive damages to the jury, the

court made the following findings based on the evidence

of Kempner’s claim of tortious interference adduced at

the second trial: that Cingular (1) did not act with malice,

or with the intention of injuring Kempner, (2) simply

advanced its own interests in contacting its own customers subscribed through Kempner, (3) never made

improper or untrue statements about Kempner to the

customers at issue, (4) did not engage in a pattern of

tortious conduct, and (5) did not attempt to conceal tortious

conduct.

On appeal, Kempner can point to no evidence of fraud,

aggravation, malice, or wanton disregard on the part of

Cingular in contacting its customers. Instead, Kempner

argues that the district court failed to consider the interrelationship between Cingular’s misrepresentations to

Kempner and its tortious interference with Kempner’s

economic advantage. We find no evidence of any interrelationship between the two. Although we acknowledge the
14 Nos. 04-3411 & 04-3561

evidence presented at trial of misrepresentations between

Cingular and Kempner, we find no evidence of a repeated

pattern of misrepresentations in connection with the

alleged tortious interference, of any misrepresentations

concealed over extended periods of time or any type of

outrageous conduct that would justify a jury awarding

punitive damages. Therefore, the district court correctly

determined that the facts of this case do not justify the

imposition of punitive damages.

D. The District Court Properly Refused to Order an

Equitable Accounting.

We review the district court’s denial of an equitable

remedy for abuse of discretion. ABM Marking, Inc. v.

Zanasi Fratelli, S.R.L., 353 F.3d 541, 544-45 (7th Cir. 2003)

(citations omitted). To state a claim for the equitable relief

of an accounting, a plaintiff must allege the absence of an

adequate remedy at law. Mann v. Kemper Fin. Cos., 618

N.E.2d 317, 327 (Ill. App. Ct. 1992); see also Zell v.

Jacoby-Bender, Inc., 542 F.2d 34, 36 (7th Cir. 1976) (finding

that the necessary prerequisite to maintain a suit for an

equitable accounting, like all other equitable remedies, is

the absence of an adequate remedy at law). In addition to

the absence of an adequate remedy at law, the plaintiff

must allege at least one of the following: (1) a breach of a

fiduciary relationship, (2) a need for discovery, (3) fraud, or

(4) the existence of mutual accounts which are of a complex

nature. Mann, 618 N.E.2d at 327.

In this case, Kempner has not alleged that it is without an adequate remedy at law. Moreover, Kempner

never pled a claim for accounting, but instead waited

until receiving a verdict on liability to request an accounting. We find that this case is nothing more than a gardenvariety contract dispute. Indeed, damages in this case are

not speculative, and the amount of damages is neither
Nos. 04-3411 & 04-3561 15

difficult nor impossible to measure. Furthermore, all of the

accounting information pertinent to Kempner’s claims could

and should have been revealed through discovery, and there

is no showing that the “accounts between the parties” are of

such a “complicated nature” that only a court of equity can

satisfactorily unravel them. See Zell, 542 F.2d at 36. As a

result, we find that the district court did not abuse its

discretion in refusing to allow Kempner an accounting.

E. The District Court Properly Granted Cingular’s Motion

for a New Trial on Its Counterclaim.

At the first trial, Cingular offered evidence that it shipped

cellular equipment to Kempner under a contract separate

from the 1999 Agreement, and that Kempner kept and used

the equipment, but did not pay for it. Over Cingular’s

objections, the district court instructed the jury that in

order to establish this counterclaim, Cingular would have

to prove, among other things, that it “substantially performed all obligations required of it under the agreement.”

After the jury verdict against Cingular on this claim,

Cingular moved for a new trial on its counterclaim, arguing

that the district court confused the jury by combining the

two separate agreements at issue: the 1999 Agreement

which governed Cingular’s obligation to pay commissions,

and the separate agreement between Kempner and

Cingular for the sale of equipment. The district court

agreed, finding that the jury instruction improperly recast

the two agreements into one which confused the jury, and

granted a new trial on Cingular’s equipment receivable

counterclaim. The court also ruled that Kempner would be

prohibited from offering evidence in the second trial that it

was not liable under the equipment contract as the result

of outstanding commissions due to it under the 1999

Agreement.

Appellate review of a district court’s order for a new

trial is limited. Because the trial judge is uniquely sit-
16 Nos. 04-3411 & 04-3561

uated to rule on such a motion, the district court has great

discretion in determining whether to grant a new trial.

Latino v. Kaizer, 58 F.3d 310, 314 (7th Cir. 1995). We,

therefore, review a district court’s decision to grant a

new trial for a clear abuse of discretion. Id. On appeal,

Kempner does not address in any fashion the confusing jury

instruction given to the jury. Instead, Kempner implicitly

concedes the court erred in giving the shortened jury

instruction and focuses its argument on whether the court

erred in denying Kempner the opportunity to introduce

evidence establishing that payment under the equipment

receivable contract was not due until Cingular accounted to

Kempner for unpaid commissions. Therefore, we find that

the district court’s grant of a new trial was not a clear

abuse of discretion, and the limits the district court put on

the evidence to be presented at the second trial was not an

abuse of discretion.

F. The District Court Erred by Not Entering Judgment as

a Matter of Law in Favor of Cingular on Kempner’s

Tortious Interference Claim.

The elements of a claim of tortious interference with

prospective business or economic advantage are: (1) plaintiff ’s

reasonable expectation of entering into a valid business

relationship, (2) defendant’s knowledge of plaintiff’s

expectancy, (3) purposeful or intentional interference by

defendant that prevents plaintiff’s legitimate expectancy

from ripening into a valid business relationship, and (4)

damages to plaintiff resulting from the interference.

Cromeens, Holloman, Sibert, Inc. v. AB Volvo, 349 F.3d 376,

398 (7th Cir. 2003).

In Cromeens, authorized dealers of Volvo claimed that

Volvo tortiously interfered with its prospective business

advantage where Volvo encouraged customers to buy

products from Volvo dealers rather than from the
Nos. 04-3411 & 04-3561 17

independently-owned authorized dealers. The court found

that Volvo used truthful statements to the customers

to encourage their switch and held that the plaintiff’s claim

of interference failed because there is no liability

for interference with a prospective contractual relation

on the part of one who merely gives truthful information to

another and does nothing more than compete with a

competitor for business. Cromeens, 349 F.3d at 399 (citing Soderlund Bros., Inc. v. Carrier Corp., 663 N.E.2d 1,

10 (Ill. 1995)).

In this case, Kempner argues that Cingular interfered

with Kempner’s relationship with Kempner’s customers

for the sale of cellular telephone equipment by improperly contacting Kempner’s customers and soliciting them to

purchase equipment from Cingular directly. Kempner

argues that these contacted third parties were

long-standing customers of Kempner, and as a result,

Kempner had a reasonable business expectation of entering

into future contractual relationships with these customers.

We disagree.

The evidence in this case establishes that the third

parties contacted by Cingular were not Kempner’s customers but in fact Cingular’s customers. Kempner has not

pointed to any evidence in the record which shows that

Cingular contacted Kempner customers, defined as customers who were not subscribed to Cingular’s cellular

services, or that Cingular was prohibited in any way from

contacting its own customers about upgrading their

Cingular equipment or service. Additionally, there is no

evidence that Cingular said anything dishonest or false

to their customers. In the end, Kempner cannot distinguish

Cingular’s behavior to that of any other competitor in the

cellular phone market.

In denying Cingular’s motion for judgment as a matter of

law, the district court improperly reviewed Cingular’s
18 Nos. 04-3411 & 04-3561

motion as a question of whether Kempner could legally

state a claim for tortious interference in light of its claims

for breach of contract. In addressing this subsidiary issue

raised by Cingular’s motion for judgment as a matter

of law, the district court failed to analyze the underlying merits of Kempner’s tortious interference claim to

determine whether there was sufficient evidence to establish such a claim. Accordingly, judgment as a matter of law

should have been entered in Cingular’s favor on Kempner’s

tortious interference claim as there is simply no evidence in

the record that Cingular was doing anything more than

encouraging its own clients to upgrade equipment and/or to

continue to use its cellular services.

III. CONCLUSION

For all the foregoing reasons, the district court’s denial of

Cingular’s motion for judgment as a matter of law on

Kempner’s claim of tortious interference with prospective

business is REVERSED, and judgment as a matter of law on

Kempner’s claim of tortious interference is GRANTED in

favor of Cingular. The remaining rulings of the district

court are AFFIRMED.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—11-3-05