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Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. It h as be e n a c c ept e d for inclusion in 2008 D e c i sion s b y an authori z e d a dmini s tr at or of V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

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w . vi ll anova . e du . Re c omme nde d C it at ion " H op kin s v

. GNC F r anchi sin g Inc " (2008). 2008 D e cisio n s . P ape r 641. http://d i git alc ommon s .l a

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____________ PA T R I C K H O PK I N S, I ndi vi dual l yand on beha l f of

O P P O R T U N IT IE S P L U S , IN C ., A p p e llan t v. G N C F R A N C H IS IN G , IN C .

__________ O n A p p ea l from the U n it ed S tat es D istri ct C o u rt f o r th e W e ste rn D istric t o f P e n n sy lv a n ia ( N o. 06- cv- 00304) D i s tr i ctJ udge: H onor abl e A r thurJ . Schw ab Subm i t t ed U nderT hi r d C i r cui tL A R 34. 1( a)

Sept ember14, 2007 B e f o re : R E N D E L L , F U E N T E S , an d C H A G A R E S , C irc u it Judg es.

____________ ( Fi l ed: A ugus t19, 2008 )

____________ OPI NI ON O F THE COURT

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C H A G A R E S, C i r cui tJ udge. P at ri ck H op kins, i nd i vidual l yand on beh al f of his com pan y , O pp ortun i t i es Plus, I nc. , appea l s the D i s tr i ctC our t ’ s di s m i s s al of hi s cl ai m s . Forthe r eas ons expr es s ed b e lo w , w e w ill r e v e rs e th e c o u rt ’s ju d g m e n t a n d re m a n d f o r f u rt h e r p ro c e e d in g s . I. A s w e w r i t e forthe bene fi tof the part i es , w e w i l l onl ybr i efl yr eci t e the fa ct s , r ead in the li g h t m o st fav o rab le t o the n o n m o v ing p arty . E igh t y ea rs i n to a f ran ch isorfra n ch isee relati o n sh ip, th e f ran ch isor, G en era l N u tr it ion C en ter F ran ch isi n g (G N C ), chan ged several of it s poli ci es, dir ect l yaffecti ng the p rofi t abil i tyof f ranchi see- H op kins’ s t o r e s . Ho p k i n s f

e l l b e h i n d i n s o me o f

h i s p a yme n t s , l e a d i n g GNC t o s h u td o wn H opki ns ’ fi ve fr anchi s e l ocat i ons . A s a r es ul t , H opki ns fi l ed s ui tagai ns tG N C ( H opki ns I ) . Fourof the fi ve count s i n t he compl ai nt( i ncl udi ng cl ai m s of comm on l aw fr aud and b re a c h o f

th e im p lied c o v e n a n t o f g o o d f a ith a n d f

a ir d e a lin g ) w e re d ism iss e d w ith p re ju d ic e , w h ile o n e c o u n t, to rt io u s in te rf e re n c e , w a s d is m is s e d w ith o u t p re ju d ic e . T w o m onths aft erthe D i s tr i ctC our t ’ s opi ni on i n H opki ns I , H opki ns i ni t i at ed the pr es enttw o- countci vi l act i on agai ns tG N C , al l egi ng t or t i ous i nt er fer ence and br eac h of contr act( H opki ns I I ) . T he D i s tr i ctC our ts ubs equent l ydi s m i s s ed the compl ai nt , s t at i ng thatcl ai m pr ecl us i on barr ed H opki ns ’ s econd s ui t , and al t ernat i vel y , thatH opki ns fai l ed to s ta te a c la im u p o n w h ic h re lie f m a yb e g ra n te d .3 II. F o r a su b seq u en t acti o n to b e b arred u n d er the d o ctri n e o f c lai m p rec lusion , there mu s th a v e b e e n : “ ( 1 ) a f i n a l j u d g me n to n th e me r i t s i n a p r i o rs u i ti n v o l v i n g ( 2 ) th e s a me part i es orthei rpr i vi es and ( 3) a s ubs equents ui tbas ed on the s ame caus es of ac t i on. ” U n it ed S tat es v . A thlon e In d u s. , Inc . , 7 4 6 F . 2 d 9 7 7 , 9 8 3 (3d C ir . 1 9 8 4 ). A s to H o p k ins’s t ort i ou s i nter ference cl ai m , the p art i es di spute onl ythe fir stel em ent— w hetherthere w as a f i nalju d g m e n t o n th e m e ri ts in H o p k in s I. H o p k in s ’ t o rt io u s in te rf e re n c e c la im w a s d is m is s e d w ith o u t p re ju d ic e . G e n e ra lly, a cl ai m di s m i s s ed w i thoutpr ej udi ce “ i s nei therfi nal norappea l abl e bec aus e the defi ci encym aybe corr ect ed bythe pl ai nt i ff w i thoutaff ect i ng the ca us e of a ct i on. ” B or el l i v. C i tyof R eadi ng, 532 F. 2d 950, 951 ( 3d C i r . 1976) . W hi l e i ti s true thatan or derdi s m i s s i ng a cl ai m w i thoutpr ej udi ce be comes fi nal and appe al abl e “i f the pl ai nt i ff cannotamend ordecl ar es hi s i nt ent i on t o s t and on hi s compl ai nt , ” i d. at951- 52, nei therof thos e exc ept i ons appl i es t o the i ns t antcas e. See M or t on I nt ’ l I nc. v. A . E . St al eyM fg. C o ., 4 6 0 F .3 d 4 7 0 , 4 7 7 -7 9 (3 d C ir. 2 0 0 6 ) (e x p lain in g th a t, rath e r th a n sta n d in g o n its c o m p lain t, pla in tiff

, at o ra l ar g u m e n t, “e x p re ss lyd e c lin e d to d isa v o w a n yin ten tio n to t ake f ur theract i on” aga i ns tthe def endant s ) . H er e, ther e w as no i ndi cat i on thatH opki ns c o u ld n o t am e n d h is c o m p lain t (to th e c o n tra ry , the trial ju d g e e x p e c ted H o p k in s toT he D i s tr i ctC our tnot ed that“[a ] s defe ndantemphasi ze[ d] i n i t s r epl yt o the 1 m o ti o n to d ism iss, thro u g h the M em o ran d u m O p inion an d O rde r i n H o p k ins I, this C o u rt pr ovi ded pl ai nt i ff w i th a ‘ r oadmap’ of how t o cur e the def ect s i n i t s or i gi nal compl ai nt . ” A ppendi x ( A pp. ) 3- 5. T he D i s tr i ctC our tnot ed that“Pl ai nt i ff f i l ed no form al m ot i on t o amend, but 2 ra th e r, a o n e lin e sta tem e n t at th e e n d o f a 1 6 p a g e b rie f

in o p p o sitio n to th e m o tio n to di s m i s s . ” A pp. 3- 4, 3- 5. 4 a m e n d h is c o m p lain t), n o r d id H o p k in s e v e r d e c lar e h is in ten tio n to sta n d o n h is 1 c o m p lain t. In d e e d , H o p k in s e x p re ss lysta ted h is d e sire to a m e n d h is c o m p lain t in h is re p lyto G N C ’s m o tio n to d ism iss , h o w e v e r in f o rm a llyp u t. A s s u c h , the e x c e p tio n s to

2 the gene r al rul e do notappl y . C f. G arberv. L ego, 11 F. 3d 1197, 1198 ( 3d C i r . 1993) ( fi ndi ng a di s m i s s al w i thoutpr ej udi ce f i nal and appe al abl e w her e the pl ai nt i ff a s s ert ed th a t h is a p p e a l w a s f

ro m a “ f in a l o rd e r,” th e trial c o u rt b e liev e d p lain tiff h a d n o d e sire to a m e n d th e c o m p lain t, an d th e b rie f s a n d o ra l ar g u m e n t m a d e n o m e n tio n o f a d e sire to amend t he compl ai nt ) ; Shapi r o v. U J B Fi n. C orp. , 964 F. 2d 272, 278 ( 3d C i r . 1992) (f in d in g a d is tr ic t c o u rt ’s o rd e r f in a l w h e n p la in tif

f s “ f o rm a lly sto o d o n th e irc o m p la in t” ). A ccor di ngl y , the D i s tr i ctC our t ’ s or derw as notfi nal , i tcarr i es no pr ecl us i ve ef fec t s , and th e c o u rt e rr e d in d is m is s in g th e c la im b a s e d o n c la im p re c lu s io n . A s t o H opki ns ’ br eac h of contr actcl ai m , the part i es di s put e the thi r d el ementof th e c l a i m p r e c l u s i o n a n a l y s i s — wh e th e rHo p k i n s I I i s a s u b s e q u e n ts u i tb a s e d o n th e s a me caus e of a ct i on as i n H opki ns I . A s w e have not ed, the t erm “‘ [c] aus e of a ct i on’ cannot be pr eci s el ydefi ned, norcan a s i m pl e t es tbe ci t ed forus e i n det erm i ni ng w hatcons t i tut es a c a u s e o f

a c tio n f o r r e s ju d ic a ta p u rp o s e s .” A th lo n e In d u s ., In c ., 7 4 6 F .2 d a t 9 8 3 .5

I ns t ead, i ti s appr opr i at e t o addr es s : ( 1) w hetherthe ac t s compl ai ned of a nd the demand forr el i ef a r e the s ame; ( 2) w hetherthe theoryof r ecove ryi s the s ame; ( 3) w hetherthe w i tnes s es and document s nece s s aryattr i al ar e the s ame; and ( 4) w hetherthe m at er i al fac t s al l eged a r e the s ame. I d. at984. I n the i ns t antcas e, thes e fa ct or s demonstr at e that the br eac h of contr actcl ai m i n H opki ns I I i s notthe s ame caus e of a ct i on as the cl ai m for br eac h of the i m pl i ed cove nantof good fa i th and fa i rdeal i ng ( orthe comm on l aw fr aud c laim ) in H o p k in s I. W h ile th e re lev a n t co u n ts in H o p k in s I a lleg e d th a t G N C f a iled to actfai r l yi n i m pl ement i ng i t s var i ous fr anchi s ee- unfr i endl ybus i nes s pr act i ces , and that G N C m ade f

r audul entr epr es ent at i ons w hen H opki ns deci ded t o become a fr anchi s ee, t he c o n tr a c tc l a i m i n Ho p k i n s I I f o c u s e s o n a d i f

f e r e n ta s p e c to f

th e Ho p k i n s - GNC r el at i ons hi p: G N C ’ s br eac h of expr es s dut i es underthe fr anchi s e contr act s , i ncl udi ng G N C ’s w ron g fu l t erm ination o f H o p k ins’ fra n ch ises. A s the ac ts co m p lai n ed o f, th eo ry of r ecove ry , and mat er i al fac t s al l di ffe rbetw een the tw o caus es of ac t i on, the D i s tr i ct C our terr ed i n fi ndi ng thatcl ai m pr ecl us i on barr ed thi s cl ai m , and w e w i l l r ever s e the c o u rt ’s ju d g m e n t. II I. T he D i s tr i ctC our tal s o err ed i n i t s al t ernat e gr ound fordi s m i s s al

— thatH opki ns fai l ed t o s t at e a c l ai m forw hi ch r el i ef c an be gr ant ed. A s t o H opki ns ’ t ort i ous i nt er fer ence cl ai m , the r el evantel ement s underPenns y l vani a l aw ar e: ( 1) the exi s t ence of a contr actual r el at i ons hi p betw een pl ai nt i ff a nd a thi r d party ; ( 2) purpos eful act i on on the6

partof the def

endant , w i th s peci fi c i nt entt o harm the exi s t i ng r el at i ons hi p; ( 3) the abs ence of a pr i vi l ege orj us t i fi cat i on on the partof def endant ; and ( 4) actual l egal dam ages resul t i ng therefrom . C B G O ccup at i on al T herapy , Inc. v. R H A H eal th S ervs. I nc. , 357 F. 3d 375, 384 ( 3d C i r . 2004) ( ci t i ng C r i vel l i v. G ener al M ot or s C orp. , 215 F. 3d 3 8 6 , 3 9 4 (3 d C ir. 2 0 0 0 ) (a p p ly in g P e n n sy lv a n ia la w )). W h ile H o p k in s d id n o t ex p licitly al l ege f act s r egar di ng the thi r d el ement

— the abs ence of a pr i vi l ege orj us t i fi cat i on on t he partof def

endant

— s uch abs ence can be i nferr ed fr om the compl ai nt . A ccor di ng t o the Penns y l vani a Supr eme C our t , “[t ] he abs ence of pr i vi l ege orj us t i fi cat i on i n the t or tunder di s cus s i on i s cl os el yr el at ed t o t he el ementof i nt ent . ” A dl er , B ar i s h, D ani el s , L evi n and C res ko ff v . E pst ei n, 48 2 P a. 41 6, 43 2 (197 8). Indeed , the R est at em ent ( S econ d) of T ort s, w h ic h P e n n s y lv a n ia h a s e x p re s s ly ad o p te d , f o c u s e s u p o n w h e th e r c o n d u c t is “ p ro p e r,” ra th e r t h a n “ p ri v ile g e d .” Id . a t 4 3 3 n .1 7 ; s e e W in d s o r S e c ., In c . v . H a rt f o rd L if e In s . C o ., 986 F. 2d 655, 660 ( 3d C i r . 1993) . G i ven H opki ns ’ al l egat i ons of G N C ’ s w r ongful del ay in ap p rov ing the s ale o f H o p k ins’ stores, H o p k ins a ll eg ed su ff ici en t fac ts of

G N C ’s i m pr operact i ons t o m eetthe l ow s t andar d r equi r ed atthi s s t age of l i t i gat i on. See M e n k o w itz v . P o tts to w n M e m o ri a l M e d . C tr ., 1 5 4 F .3 d 1 1 3 , 1 2 4 (3 d C ir . 1 9 9 8 ). A ccor di ngl y , the D i s tr i ctC our t ’ s di s m i s s al of hi s t or t i ous i nt er fer ence cl ai m w as i n err or and w i l l be r ever s ed. A s t o H opki ns ’ br eac h of contr actcl ai m , Penns y l vani a l aw r equi r es thata pl ai nt i ff a lleg e : “( 1 ) th e e x iste n c e o f a c o n tra c t, i n c lu d in g its e ss e n tial te rm s, (2 ) a b re a c h o f a d u ty7

i m pos ed bythe contr act , and ( 3) r es ul t antdamages . ” C or eSt at es B ank, N . A . v. C ut i l l o, 72 3 A . 2d 10 53 , 10 58 (Pa. S up er. 19 99 ). S i nce H op kins att ached a cop yof ea ch franch i se a g re e m e n t to h is c o m p lain t, an d th e c o m p lain t su f f icie n tlya lleg e d H o p k in s’ lo ss e s d u e to th e w ro n g f

u l term in a tio n o f

th e f ra n c h ise a rra n g e m e n t an d c lo sin g o f h is s to re s, th e o n ly iss u e is w h e th e r G N C b re a c h e d a d u tyim p o se d b yth e c o n tra c t. In m a k in g th is det erm i nat i on, w e mustcons true the pl eadi ngs i n the l i ghtm os tfavor abl e t o the nonm o v ing p arty . B u d insk yv . P en n sy lvan ia D ep t. o f E n v tl . R es., 8 1 9 F . 2 d 4 1 8 , 4 2 1 (3d C ir . 1 9 8 7 ). M o reo v er, “a p lai n ti ff g en era ll yn ee d n o t exp li cit lyall eg e the ex ist en ce o f e v ery e lem e n t in a c a u se o f

a c tio n if f a ir n o tice o f

th e tra n sa c tio n is g iv e n a n d th e c o m p lain t se ts for th the mat er i al poi nt s nece s s aryt o s us t ai n r ecove ry . ” M enkow i t z, 154 F. 3d at124 ( “Thi s i s es peci al l ys o i f the mat er i al defi ci enci es i n the compl ai nts t em from not hi ng m or e than i nart ful pl eadi ng . . . . ”) . G i ven H opki ns ’ fac tual al l egat i ons conce rni ng G N C ’ s w r ongful t erm i nat i on of hi s fr anchi s es , ther e i s atthe veryl eas tan i nfer ence — w hi ch mustbe dr aw n i n appel l ant ’ s favor

— thatG N C t erm i nat ed the fr anchi s e agr eement s i n vi ol at i on of the contr act ’ s pr ovi s i ons on “D efa ul tand T e rm in a tio n .” A c c o rd in g ly , jus t as w ith to rtio u s in ter f e re n c e , H o p k in s h a s a d e q u a tely s ta te d a c la im f

o r b re a c h o f

c o n tr a c t. IV . Forthes e r eas ons , w e w i l l r ever s e the D i s tr i ctC our t ’ s j udgm entand r emand for f u rt h e r p ro c e e d in g s .