IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE P3 HEALTH GROUP 

HOLDINGS, LLC

)

)

Consol. C.A. No. 2021-0518-JTL

ORDER DENYING SAMEER MATHUR’S MOTION TO DISMISS COUNT XI

1. Hudson Vegas Investment SPV, LLC (“Hudson”) was a minority investor 

in P3 Health Group Holdings, LLC (the “Company”). In this litigation, Hudson has 

asserted various claims based on a transaction between the Company and a special 

purpose acquisition company, commonly known as a SPAC.

2. The defendants filed a surfeit of motions to dismiss on various grounds, 

including Rule 12(b)(6). The court has issued a decision addressing the breach of contract 

claims that Hudson asserted. Dkt. 172 (the “Contract Opinion,” cited as “Contract Op.”). 

The court also has issued a decision denying Mathur’s motion to dismiss for lack of 

personal jurisdiction. Dkt. 168 (the “Mathur Opinion,” cited as “Mathur Op.”). This order 

incorporates those decisions by reference.

3. In Count XI of its complaint, Hudson has asserted a claim against Sameer 

Mathur for tortiously interfering with Hudson’s contractual rights.

4. Delaware has adopted the formulation of a claim for tortious interference 

with contract that appears in the Restatement (Second) of Torts. WaveDivision Hldgs., 

LLC v. Highland Cap. Mgmt., L.P., 49 A.3d 1168, 1174 (Del. 2012); ASDI, Inc. v. Beard

Rsch., Inc., 11 A.3d 749, 751 (Del. 2010). Generally speaking, “[o]ne who intentionally 

and improperly interferes with the performance of a contract . . . between another and a 

third person by inducing or otherwise causing the third person not to perform the 
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contract, is subject to liability to the other.” Restatement (Second) of Torts § 766 (Am. L. 

Inst. 1979), Westlaw, (database updated Oct. 2022). Reframed as elements, a plaintiff 

must plead “(1) a contract, (2) about which defendant knew, and (3) an intentional act 

that is a significant factor in causing the breach of such contract, (4) without justification, 

(5) which causes injury.” Bhole, Inc. v. Shore Invs., Inc., 67 A.3d 444, 453 (Del. 2013) 

(internal quotation marks omitted).

5. The Contract Opinion has found that Hudson stated claims for breach of 

contract. See Contract Op. at 31, 41, 44, 60, 65, 74. It is reasonably conceivable that 

Mathur knew about the LLC Agreement and Hudson’s contract rights. 

6. As described in the Contract Opinion and in the Mathur Opinion, Hudson 

alleges that Mathur caused the Company to take actions that breached Hudson’s rights 

under the LLC Agreement. See id. at 71–73; Mathur Op. at 8–10. It is reasonably 

conceivable that Mathur took those actions intentionally. 

7. The final element is the issue of justification. 

a. “The tort of interference with contractual relations is intended to 

protect a promisee’s economic interest in the performance of a contract by making 

actionable ‘improper’ intentional interference with the promisor’s performance.” Shearin 

v. E.F. Hutton Gp., 652 A.2d 578, 589 (Del. Ch. 1994). “The adjective ‘improper’ is 

critical. For participants in a competitive capitalist economy, some types of intentional 

interference with contractual relations are a legitimate part of doing business.” NAMA 

Hldgs., LLC v. Related WMC LLC, 2014 WL 6436647, at *26 (Del. Ch. Nov. 17, 2014). 

“[C]laims for unfair competition and tortious interference must necessarily be balanced 
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against a party’s legitimate right to compete.” Agilent Techs. v. Kirkland, 2009 WL 

119865, at *8 (Del. Ch. Jan. 20, 2009). Determining when intentional interference 

becomes improper requires a “complex normative judgment relating to justification” 

based on the facts of the case and “an evaluation of many factors.” Shearin, 652 A.2d at 

589 (internal quotation marks omitted).

b. The Delaware Supreme Court has adopted the factors identified in 

Section 767 of the Restatement (Second) of Torts as considerations to weigh when 

evaluating the existence of justification. WaveDivision, 49 A.3d at 1174. The factors are:

(a) the nature of the actor’s conduct, (b) the actor’s motive, (c) the interests 

of the other with which the actor’s conduct interferes, (d) the interests 

sought to be advanced by the actor, (e) the social interests in protecting the 

freedom of action of the actor and the contractual interests of the other, (f) 

the proximity or remoteness of the actor’s conduct to the interference and 

(g) the relations between the parties.

Id. Weighing the seven factors identified in the Restatement requires the court to engage 

in a fact-specific inquiry to determine whether the interference with contract is improper 

under the particular circumstances of the case. See Restatement (Second) of Torts § 767 

cmt. b (“[T]his branch of tort law has not developed a crystallized set of definite rules as 

to the existence or non-existence of a privilege . . . . Since the determination of whether 

an interference is improper is under the particular circumstances, it is an evaluation of 

these factors for the precise facts of the case before the court.”).

c. This court has previously addressed the role the weighing of factors 

plays in a claim for tortious interference with contract against a controller in Bandera 
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Master Fund LP v. Boardwalk Pipeline P’rs, LP, 2019 WL 4927053 (Del. Ch. Oct. 7, 

2019). This court in Bandera stated:

When the defendant that a plaintiff has sued for tortious interference 

controls an entity that was a party to the contract, the weighing of factors 

becomes more complex because of the need to balance the important 

policies served by a claim for tortious interference with contract against the 

similarly important policies served by the corporate form. 

Id. at *26. The Bandera decision explained further:

A party who wishes to have a parent entity or other controller backstop the 

obligations of the controlled entity can do so by contract, either by making 

the parent a party to the agreement or by obtaining a guarantee. A party 

should not be able to use a claim of tortious interference with contract to 

reap the benefits of protections that it did not obtain at the bargaining table. 

Id.

d. At the same time, Delaware’s respect for corporate separateness 

means that Delaware maintains a role for tortious interference even when one entity 

controls another. For example, Delaware law rejects the theory that “a parent and its 

wholly owned subsidiaries constitute a single economic unit” such that “a parent cannot 

be liable for interfering with the performance of a wholly owned subsidiary.” Shearin, 

652 A.2d at 590; accord Allied Cap. Corp. v. GC-Sun Hldgs., L.P., 910 A.2d 1020, 1038 

(Del. Ch. 2006). Delaware law instead balances “the significant economic interest of a 

parent corporation in its subsidiary,” including the parent’s legitimate interest in 

consulting with its subsidiary, against the subsidiary’s status as a separate entity and the 

interests of third parties in their contractual relationships with the subsidiary. Shearin, 

652 A.2d at 590. The result is a limited affiliate privilege that protects a parent 

corporation that “pursues lawful action in the good faith pursuit of [the subsidiary’s] 
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profit making activities.” Id. Recognizing a limited affiliate privilege is “consistent with 

the traditional respect accorded to the corporate form by Delaware law . . . in that it does 

not ignore that a parent and a subsidiary are separate entities. Rather, it recognizes that 

the close economic relationship of related entities requires enhanced latitude in defining 

what ‘improper’ interactions would be.” Id. at 590 n.13 (internal citation omitted).

e. Because these principles are grounded in the economic relationship 

between a parent entity and its subsidiary, or among affiliated entities, they logically 

apply to a claim asserting that the representative of the controlling member of an LLC 

tortiously interfered with the entity’s LLC agreement by causing the entity to breach that 

agreement.

f. Here, because of the fact-intensive nature of this inquiry, it is not 

possible to determine at the pleading stage whether Mathur acted with justification when 

he negotiated on behalf of the Company, made decisions on behalf of the Company, gave 

instructions to the Company’s management and its advisors, withheld information from 

the Hudson Managers, and otherwise took the actions described in the Mathur Opinion

that contributed to the breaches of contract described in the Contract Opinion. It is 

reasonably conceivable that Mathur took at least some of these actions in a bad faith 

attempt to push through a transaction that was favorable to Chicago Pacific and which 

would serve Chicago Pacific’s goal of eliminating Hudson’s contractual veto rights.

8. Mathur argues that he acted as an agent of Chicago Pacific and therefore 

cannot be held liable for tortious interference with contract unless he exceeded the scope 

of his agency. For this proposition he relies on Goldman v. Pogo.com Inc., 2002 WL 
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1358760, at *8 (Del Ch. June 14, 2002), In re CVR Ref., LP Unitholder Litig., 2020 WL 

506680, at *18 (Del. Ch. Jan. 31, 2020), and OptimisCorp v. Waite, 2015 WL 5147038, 

at *76 n.602 (Del. Ch. Aug. 26, 2015), aff’d, 137 A.3d 970 (Del. 2016). Mathur’s 

argument is misplaced. Hudson is not arguing that Mathur induced a breach of Chicago 

Pacific’s obligations. Hudson is arguing that Mathur induced a breach of the Company’s 

obligations. Mathur had no official role or capacity with the Company that could entitle 

him to invoke this doctrine.

9. Count XI states a claim on which relief can be granted against Mathur. His 

motion to dismiss Count XI is DENIED.

/s/ J. Travis Laster

Vice Chancellor Laster

November 9, 2022