### PUBLISH

UNITED STATES COURT OF APPEALS Filed 11/14/96 TENTH CIRCUIT

DP-TEK, INC., Plaintiff-Appellant,

v. AT&T GLOBAL INFORMATION SOLUTIONS COMPANY, fka NCR CORPORATION, Defendant-Appellee. No. 95-3228

Appeal from the United States District Court

for the District of Kansas (D.C. No. 94-CV-2115)

Gregory L. Musil (R. Lawrence Ward and P. John Brady, with him on the briefs), of Shughart, Thomson & Kilroy, P.C., Overland Park, Kansas, for PlaintiffAppellant. Edwin L. Noel (Thomas B. Weaver, of Armstrong, Teas dale, Schlafly & Davis, St. Louis, Missouri, and Truman K. Eldridge and Dar ren S. Black, of Armstrong, Teasdale, Schlafly & Davis, Kansas City, Missouri, with him on the brief), of Armstrong, Teasdale, Schlafly & Davis, St. Louis, M issouri, for DefendantAppellee.

Before SEYMOUR , Chief Judge, PORFILIO and ANDERSON , Circuit Judges.

SEYMOUR , Chief Judge.1 AT&T acquired NCR in 1991 and subsequently rename d the company

AT&T Global Information Solutions Company. We will refer to defendant as NCR, however, because DP-Tek’s claims arise out of conduct that occurred prior to the change in name. -2- DP-Tek, Inc., brought this action against AT&T Glob al Information Solutions Company, formerly known as NCR Corporatio n, 1 alleging tortious interference with an existing contract and with a p rospective contract. Prior to trial, the district court granted NCR’s motion for summary judgment on both claims. DP-Tek, Inc. v. AT&T Global Info. Co. , 891 F. Supp. 1510 (D. Kan. 1995). DP-Tek appeals only with respect to the cla im regarding interference with a prospective contract. We affirm.

I. The pleadings and discovery evince the following un disputed facts. In late 1990, Venture Stores, Inc., initiated the Store Aut omation Project (Project) to upgrade the three components of its cash register a nd sales recording system. The three components consisted of Point of Sale (PO S) software, POS hardware, and an In-Store Processor (ISP). This dispute aris es out of the competition between DP-Tek and NCR to win the contract for the POS hardware component.2 DP-Tek’s proposal was approximately $10 million l ess than those of most

competitors, including NCR, because it was the only proposal that did not include the purchase of new units. -3- In early 1991, Venture sent a Request for Proposal (RFP) to several companies interested in providing services and prod ucts to upgrade the components. Venture explained in the RFP that diff erent companies could supply different components and stated with respect to pro prietary codes only that they could be included. DP-Tek submitted a proposal forthe POS hardware, based upon a retrofit of Venture’s existing POS hardware. 2 NCR submitted proposals for the POS hardware and ISP components, based uponnew equipment. Research Computer Services (RCS), a business partner of NCR, submitted a proposal for the POS software. Other companies also submitted p roposals. In September 1991, Venture and DP-Tek executed a Pr oduct and Service Master Agreement (Master Agreement) which set forthgeneral guidelines, including a confidentiality provision, for any pote ntial product orders between the two companies. Venture and DP-Tek also signed a co ntract under which DP-Tek would sell Venture eight retrofit prototype units f or evaluation. In December, DP-Tek delivered six of the units, for which Ventur e paid $80,000. Other companies supplied new off-the-shelf units for Vent ure’s evaluation. By April 1992, Venture had determined to accelerate the implementation of the Project and solicited amended or additional pro posals to obtain more-4-

competitive terms. On April 17, DP-Tek submitted i ts final proposal reflecting amended quantity, delivery, installation, and prici ng terms. On April 30, Venture telephoned to inform DP-Tek it had been selected fo r the POS hardware component. During the telephone conversation, DP-T ek requested a one million dollar downpayment. Venture responded that it coul d not agree to such an amount and that the downpayment was a problem which would have to be resolved on a later date. Venture also contacted R CS and NCR to inform them they had been selected for the POS software and ISP components respectively. Between September 1991 and May 1992, changes in the marketplace brought about significant decreases in the cost of new POS hardware. In early May, IBM submitted a revised proposal for the POS h ardware component reflecting a substantial price reduction. In addit ion, NCR informed Venture that because it had been selected for the ISP component it could offer a more competitive price on the POS hardware component. V enture stated that no final contract had been executed with DP-Tek and encourag ed NCR to submit an additional proposal. Shortly thereafter, Venture supplied NCR a price range which Venture thought would make the NCR proposal competi tive with DP-Tek’s proposal. In early May an NCR manager, Ms. Brenda K. Pohl, vi sited a Venture location on other business and overheard conversati ons regarding one of DP-3 Several of the comparisons were based on informat ion NCR received as a

result of the May 13 inspection of DP-Tek’s prototype unit. -5- Tek’s prototypes. She asked if an NCR team could v iew the prototype and was told that it could. On May 13, an NCR engineer ins pected and photographed the prototype and prepared a memorandum which contained his findings. Venture and DP-Tek continued to work on the details of a contract for the retrofit units. On May 19, Venture met with DP-Tekand RCS to address the integration of DP-Tek’s retrofit unit and RCS’ POS software. During the meeting, all parties were aware that the successful integration of the hardware and software would be facilitated by a “source code” wh ich RCS licensed from NCR. NCR owned the source code but refused to provide itto DP-Tek. Other possibilities for integration were discussed but th e parties never resolved the issue. On May 20, NCR presented an amended proposal to Venture that was significantly less costly than its original bid. D uring the presentation, NCR made various comparisons between DP-Tek’s retrofit unit and its own proposed new unit. 3 Venture ultimately signed a contract with NCR in August 1992, and NCR installed the POS hardware. DP-Tek thereafter comm enced this action alleging tortious interference.-6-

In granting summary judgment for NCR, the district court acknowledged that Kansas recognizes the tort of interference wit h prospective business contracts, but then applied RESTATEMENT (S ECOND ) OF T ORTS § 768 (1979) and held “that NCR’s actions constituted privileged bus iness competition.” DP-Tech , 891 F. Supp. at 1528. On appeal, DP-Tek contends t he district court erred when it: (1) held that Kansas would adopt the competitorprivilege stated in section 768; (2) held that Kansas would interpret the “wron gful means” element of section 768 to require independently actionable con duct; and (3) placed on DPTek the burden of proving section 768 did not apply

.

II.
A. Standard of Review We review a grant of summary judgment de novo. Uni ted States v. Agri Servs., Inc. , 81 F.3d 1002, 1005 (10th Cir. 1996). Summary jud gment is warranted only where there is no genuine issue as t o a material fact and the movant is entitled to judgment as a matter of law. Id. The nonmovant “may not rest upon the mere allegations or denials of his pl eading, but . . . must set forth specific facts showing that there is a genuine issu e for trial.” Fed. R. Civ. P. 56(e); Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). An issue of4 Menne v. Celotex Corp. , 861 F.2d 1453 (10th Cir. 1988), was decided

prior to the Supreme Court’s decision in Salve Regi na College v. Russell , 499 U.S. 225, 231, 235 (1991), in which the Court held that an appellate court does not give deference to the district court’s determin ation of state law. We do not apply the second factor here, therefore, although w e view the district court opinion in this case as well reasoned. See id. at 232 (“Any expertise possessed by the district court will inform the structure and co ntent of its conclusions of law and thereby become evident to the reviewing court.” ). -7- material fact is genuine if the evidence is such th at a reasonable jury could return a verdict for the nonmovant. Id. In applying this standard, we view the record and the reasonable inferences therefrom in the ligh t most favorable to the nonmovant. Agri Servs. , 81 F.3d at 1005. Because this is a diversity case, we apply the subs tantive law of the forum state. Farmers Alliance Mut. Ins. Co. v. Salazar , 77 F.3d 1291, 1294 (10th Cir. 1996). “In the absence of authoritative precedent from the Kansas Supreme Court, however, our job is to predict how that court would rule.” Carl v. City of Overland Park , 65 F.3d 866, 872 (10th Cir. 1995). [A] federal court’s prediction of state law looks t o (1) lower state court decisions and state Supreme Court dicta; (2) the lower court ruling in the case; (3) the general rule on the iss ue; (4) the rule in other states looked to by [Kansas] courts when theyformulate their own substantive law, and (5) other available legal sources, such as treatises and law review commentaries. Menne v. Celotex Corp. , 861 F.2d 1453, 1464-65 n.15 (10th Cir. 1988). 45 Section 768 provides: (1) One who intentionally causes a third person notto enter into a prospective contractual relation with another who is his competitor or not to continue an existin g contract terminable at will does not interfere impr operly with the other’s relation if (a) the relation concerns a matter involved in the competition between the actor and the other and (b) the actor does not employ wrongful means and (c) his action does not create or continue an unlawful restraint of trade and (d) his purpose is at least in part to advance his interest in competing with the other. (2) The fact that one is a competitor of another fo r the business of a third person does not prevent his cau sing a breach of an existing contract with the other from being an improper interference if the contract is not ter minable at will. -8- B. Competition Privilege The first issue is whether the district court erred when it predicted Kansas would adopt the competition privilege defense to th e tort of interference with prospective business contracts expressed in the RESTATEMENT (S ECOND ) OF T ORTS § 768. 5 We begin with the Kansas requirements for a claim of tortious interference with a prospective contract. They are : (1) the existence of a business relationship or exp ectancy . . .; (2) knowledge of the relationship or expectancy by the defendant; (3) that, except for the conduct of the defendant, plai ntiff was reasonably certain to have continued the relationship or reali zed the expectancy; (4) intentional misconduct by the defendant; and (5 ) damages-9-

suffered by plaintiff as a direct or proximate caus e of defendant’s misconduct. Turner v. Halliburton Co. , 722 P.2d 1106, 1115 (Kan. 1986). Kansas recogniz es that “not all interference in present or future con tractual relations is tortious. A person may be privileged or justified to interfere with contractual relations in certain situations.” Id. ; see also Noller v. GMC Truck & Coach Div. , 760 P.2d 688, 699 (Kan. Ct. App. 1988)(“Intertwined in this problem are the actions of [the defendant], which may be justified or privileged--t hat is, proper rather than improper.”), rev’d on other grounds , 772 P.2d 271 (Kan. 1989).
In Turner , the plaintiff alleged that his former employer to rtiously interfered with his prospective employment by infor ming the new employer he had been discharged for stealing. 722 P.2d at 1111 . The defendants argued they had a privilege to make the communications at issue . Id. at 1112. The court reasoned that “[o]ccasions privileged under the law of defamation are also occasions in which interference with contractual re lations may be considered justified or privileged.” Id. at 1116 (citing W. P AGE K EETON ET AL ., P ROSSER &
K EETON ON THE L AW OF T ORTS § 129, at 989 (5th ed. 1984)). After quoting a New York appellate court that recognized such a pri vilege, as well as section 767 of the RESTATEMENT (S ECOND ) OF T ORTS , the court held that where the tort was “based upon alleged defamatory statements . . . suc h communication is subject to6 Section 767 provides: In determining whether an actor’s conduct in intentionally interfering with a contract or a pros pective contractual relation of another is improper or not, consideration is given to the following factors: (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 interest s of the -10- a qualified privilege which requires the plaintiff to prove actual malice by the defendant.” Turner , 722 P.2d at 1117. Citing Turnerand Noller v. GMC Truck & Coach Div. , 772 P.2d 271 (Kan. 1989), the district court held that the Kansas Supr eme Court “would adopt the business competitor privilege set forth in § 768" b ecause Kansas courts “have adopted other portions of the Restatement in regard s to the torts of tortious interference.” DP-Tek , 891 F. Supp. at 1521. DP-Tek argues that despite Kansas’ reliance on section 767 in Turner , Kansas would not adopt the section 768 competition privilege. We are not persuaded. First, DP-Tek contends that because the court in Tu rnerrelied only upon section 767, the court would not adopt the more spe cific provisions of section 768. Section 767 is the general balancing test app licable in tortious interference claims. 6 Section 767 is followed by sections 768 to 773, h owever, whichother, (f) the proximity or remoteness of the actor’s conduct to the interference and (g) the relations between the parties.

-11- illustrate the “specific applications of the factor s set out in § 767 to certain types of factual patterns.” RESTATEMENT (S ECOND ) OF T ORTS , ch. 37, p. 7. “The rule stated in [section 768] is [thus] a special application of the factors determining whether an interference is improper or not, as stat ed in § 767.” RESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. b. The court in Turnerrelied upon the general balancing test in section 767 because none of the s pecific fact patterns enumerated in sections 768-773 applied there. Cons equently, it does not follow that the court’s reliance on the general test of se ction 767 indicates its rejection of the specific privilege stated in the very next sect ion. Second, we find it significant that the court adopt ed in Turnera specific privilege not listed in section 767. The court exp ressly held that in cases where a former employer communicates allegedly defamatory s tatements from personnel files regarding a former employee, a qualified priv ilege “requires the plaintiff to prove actual malice.” 722 P.2d at 1117. We glean from Turnerthat the Kansas Supreme Court would first determine whether a privi lege exists for the interference alleged, then define the requirements of the privilege, and then determine whether the privilege is overcome under t he facts of the case.-12-

Predicting how a court would rule is inherently dif ficult. Nonetheless, we are persuaded that the Kansas Supreme Court would adoptsection 678.-13- C. Wrongful Means DP-Tek next contends the district court erred when it predicted Kansas would interpret the wrongful means element of secti on 768 to require independently actionable conduct. A competitor doe s not tortiously interfere with a prospective business relationship where “the acto r does not employ wrongful
means.” RESTATEMENT (S ECOND ) OF T ORTS § 768(1)(b). Wrongful means are described as [t]he predatory means discussed in § 767, Comment c , physical violence, fraud, civil suits and criminal prosecuti ons, are all wrongful in the situation covered by this Section. . . . If [a competitor] diverts [another] competitor’s business by exerting a superior power in affairs unrelated to their compet ition there is no reason to suppose that his success [will] . . . pro mote the interest that is the reason for encouraging competition.
RESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. e. We agree with the district court that in a claim fo r interference with a prospective contract, wrongful means requires independently ac tionable conduct. DP-Tek fails to recognize that both the Restatementand the Kansas Supreme Court distinguish between interference with existin g contracts and interference with prospective contracts. RESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. h;
Turner , 722 P.2d at 1115 (“While these torts tend to merg e somewhat in the ordinary course, the former is aimed at preserving existing contracts and the latter-14-

at protecting future or potential contractual relat ions.”). This distinction is significant because depending upon the relative significance of the oth er factors, the actor’s conduct in interfering with the other’s pro spective contractual relations with a third party may be held to be not improper, although his interference would be improper if it involved p ersuading the third party to commit a breach of an existing contract wi th the other. Restatement § 767 cmt. e. DP-Tek relies upon Colorado Interstate Gas v. Natur al Gas Pipeline , 885 F.2d 683 (10th Cir. 1989), to support its assertionthat the wrongful means required by section 768 are not necessarily indepen dently actionable conduct. In the context of interference with an existing contract, we said in that case although “[t]here is some support for the proposition that c onduct which is otherwise lawful ought not form the basis of a tortious inter ference claim . . ., we believe that the better position is that . . . motive can b e a determinative factor in converting otherwise lawful behavior into ‘improper ’ conduct.” Id. at 691 (interpreting Colorado law and citing RESTATEMENT (S ECOND ) OF T ORTS § 767 cmt. d)(citations omitted); see also RESTATEMENT (S ECOND ) OF T ORTS § 767 cmt. h (“The actor’s conduct need not be predatory or in dependently tortious . . . .”). In the context of interference with a prospective contract, however, we have said that “‘wrongful means’ refers to conduct such as ‘physical violence, fraud, civil suits, and criminal prosecutions.’” Oc cusafe, Inc. v. EG&G Rocky-15-

Flats, Inc. , 54 F.3d 618, 623 (10th Cir. 1995)(interpreting Co lorado law and citing
RESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. e)(emphasis added). In Occusafe , the plaintiff alleged the defendant interfered with its prospective economic advantage when it hired plaintiff’s employees. We first held the parties were competitors, then held the alleged conduct was not wrongful within the meaning of section 768 and Colorado law. Occusafe is more analogous to the present case than Colorad o Interstate
Gas because the latter case involved an existing contr act and section 768 was therefore inapplicable. See RESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. h. Moreover, the defendants there did not assert a competitor privilege. Finally, we expressly relied in Colorado Interstate Gas on section 767, which requires a balancing of several factors. See RESTATEMENT (S ECOND ) OF T ORTS § 767 cmt. a. To the extent we have previously addressed section 768, as we did in Occusafe , our interpretation of state law suggests independen tly actionable conduct is required. The district court here refused to limit instances of wrongful means to those listed in section 768, comment e. It focused inste ad on whether the conduct was independently actionable. DP-Tek , 891 F. Supp. at 1522-23. In so doing, the court relied upon Amerinet, Inc. v. Xerox Corp. , 972 F.2d 1483 (8th Cir. 1992)(applying Minnesota law), to predict Kansas wo uld require independently-16-

actionable conduct. DP-Tek , 891 F. Supp. at 1523. In Amerinet , the Eighth Circuit held that “‘[w]rongful means,’ as those wor ds are used in Restatement Section 768(b), ‘refer[] to means which are intrins ically wrongful--that is, conduct which is itself capable of forming the basi s for liability of the actor.’” 972 F.2d at 1507 (quoting Conoco, Inc. v. Inman Oil Co. , 774 F.2d 895, 907 (8th Cir. 1985)). The Seventh Circuit has also held under Indiana law in a claim of tortious interference with prospective contract that “it app ears to be critical that the defendant acted illegally in achieving his end.” G reat Escape, Inc. v. Union City Body Co. , 791 F.2d 532, 542 (7th Cir. 1986)(quoting Biggs v . Marsh , 446 N.E.2d 977 (Ind. Ct. App. 1983)). The court was persuaded the Restatement supported Indiana’s standard: First, interference with prospective relations requ ires that more blameworthy means be used than does the tort of int erference with contractual relations. Thus, “when the means adopt ed is not innately wrongful . . . the interference is more likely to b e found to be not improper.” Restatement of Torts § 766B Comment e. The Restatement defines innately wrongful means as thos e that are tortious themselves. Second, the Restatement requi res especially egregious means to be employed when a competitor is seeking to expand its business. Id. , at 542 n.6 (citing RESTATEMENT (S ECOND ) OF T ORTS § 768). Other jurisdictions have interpreted the wrongful means e lement of section 768 to require independently actionable conduct as well. See San Francisco Design Ctr.-17-

Assocs. v. The Portman Cos. , 50 Cal. Rptr. 2d 716, 723 (Cal. Ct. App. 1995)(“I n order to defeat the privilege the defendant’s condu ct must be . . . independently actionable.”), review dismissed, remanded and order ed published by911 P.2d 1373 (Cal. 1996); Conoco Inc. v. Inman Oil Co., Inc

. , 774 F.2d 895, 907 (8th Cir. 1985)(same); Briner Elec. Co. v. Sachs Elec. Co. , 680 S.W.2d 737, 741 (Mo. Ct. App. 1984)(“[C]ompetitive conduct which is neither illegal nor independently actionable does not become actionable because it in terferes with another’s prospective contractual relations.”). The independently actionable standard finds supportin the broad view of justified competition adopted in P ROSSER & K EETON
. In short, it is no tort to beat a business rival to prospective customers. Thus, in the absence of prohibition by statute, illegitimate means, or some other unlawful element, a defendant seeking to increase his own business may cut rates or prices, allow discounts or rebates, enter into secret negotiation s behind the plaintiff’s back, refuse to deal with him or threat en to discharge employees who do, or even refuse to deal with third parties unless they cease dealing with the plaintiff, all without incurring liability.
P ROSSER & K EETON § 130, at 1012-13 (footnotes omitted). Few courts have clearly rejected the independently actionable standard. Some jurisdictions “‘extend[] liability to cases wh ere the defendant’s actions are not independently unlawful.’” Lightning Lube, Inc. v. Witco Corp. , 4 F.3d 1153, 1167 (3d Cir. 1993)(interpreting New Jersey law)(ci ting Harvey S. Perlman, Interference with Contractual and Other Economic Expectancies: A Clash of Tort7 DP-Tek cites a litany of additional cases as supp ort for the rejection of

the independently actionable standard. We have rev iewed the cases and find them inapplicable for a variety of reasons. See , e.g. , C.R. Bard, Inc. v. Wordtronics Corp. , 561 A.2d 694, 698 (N.J. Super. Ct. Law Div. 1989) (involving existing contract); Michigan Ave. Nat’l Bank v. State Farm I ns. Cos. , 404 N.E.2d 426, 431 (Ill. App. Ct. 1980)(holding that whether parties w ere competitors was not properly before court). -18- and Contract Doctrine , 49 U. C HI
. L. REV
. 61, 78 (1982)). However, examination of these cases reveals that most involve tortious i nterference with existing contracts, see Colorado Interstate Gas , 885 F.2d at 691, or do not reference section 768 in their analysis of a competitor privi lege, see Lightning Lube , 4 F.3d at 1167; Architectural Mfg. Co. of Am. v. Airotec, Inc. , 166 S.E.2d 744, 746-47 (Ga. Ct. App. 1969). 7 In sum, we are convinced the weight of authority supports the conclusion that the wrongful means test of sect ion 768 requires independently actionable conduct. DP-Tek asserts that the requirement of independentl y actionable conduct renders the cause of action redundant to the underl ying tort. We disagree. The damages recoverable for the underlying tort may be far smaller than those for interference with prospective econom ic advantage. Thus if Companies A and B are competing for a piece of lucrative business and A uses violence against the employees of B to prevail, these employees could presumably sue for battery. B’s damages for intentional interference with prospective advantage , which depend in part on proof of the torts committed against its employees, would be far larger, however.8 We note there may exist an exception where a plai ntiff proffers evidence

that the defendant exerted “a superior power in aff airs unrelated” to the business in which they compete. RESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. e. -19- San Francisco Design Ctr. , 50 Cal. Rptr. 2d at 723 n.9; see also P ROSSER &
K EETON § 129, at 992 (“Thus in many cases interference wit h contract is not so much a theory of liability in itself as it is an el ement of damage resulting from the commission of some other tort, or the breach of som e other contract.” (footnotes omitted)). In addition, if A and B are competing f or the business of Company C and A uses violence against the employees of C, B w ould have an independent cause of action against A notwithstanding any cause of action the employees of C might possess. This cause of action potentially in creases liability where conduct is otherwise actionable, and therefore is not redun dant. Based upon the Kansas Supreme Court’s reliance in T urneron both the
RESTATEMENT and P ROSSER & K EETON and our assessment of the general weight of authority, we believe the Kansas Supreme Court w ould interpret wrongful means to require independently actionable conduct. 8
D. The Merits DP-Tek contends that, even if independently actiona ble conduct is required, NCR engaged in several actions which constitute suc h conduct. DP-Tek first alleges NCR tortiously pressured and induced Ventur e to breach its9 At most Venture gave NCR a price it considered co mpetitive. Mr. Darell

R. Zerbe, a Venture vice president, stated: [w]ell as much as they all tell their customers or potential customers ‘Please treat my prices as confidential,’ they all ask for the other guy’s. So, you know, the customer is really in a p osition of having to honor both sides of that. The way I typically appr oach it is to tell them the number that I want them to hit. . . . [T]h en I come back into . . . reality, and it’s usually based on what range we can go elsewhere and, you know, get reasonably close. Aplt. App. at 1907. -20- confidentiality agreement with DP-Tek when NCR enti ced Venture with reduced prices. DP-Tek further alleges the reduced prices were conditioned on Venture providing NCR with unrestricted access to DP-Tek’s prototype and confidential pricing information. The record does not support D P-Tek’s allegations. DP-Tek has offered no evidence that reduced prices or any other advantageous terms were conditioned on access to the prototype or disclosur e of confidential pricing. 9 Moreover, the Restatement authorizes “persuasion” a nd “limited economic pressure.” RESTATEMENT § 768, cmt. e; see also P ROSSER & K EETON § 130, at 1013 (stating that “a defendant may . . . cut rates or prices, allow discounts or rebates”). The mere offer of a more competitive bi d epitomizes the goal of section 768. We agree with the district court thateven if there was breach of the confidentiality agreement “it was an agreement to w hich NCR was not a party and which, of course it did not breach.” DP-Tek , 891 F. Supp. at 1524. Accordingly,-21-

neither NCR’s disassembly of the prototype nor its access to the price range of DP-Tek’s prototype constituted independently action able conduct. DP-Tek next alleges NCR made misrepresentations anddisparaged the prototype with inaccurate and unverified informatio n during its May 20 presentation. DP-Tek offers a litany of technical errors which involved issues such as power sources, number of serial ports, and processor speed. The district court thoroughly addressed this contention in its o pinion below, relying in part on cases cited by DP-Tek on appeal. Id. at 1524-26. The district court concluded that [i]nevitably, competition in the marketplace will i nvolve one competitor extolling the virtues of its product, wh ile at the same time disparaging the virtues of a competitor’s product. Such conduct is not per se actionable. . . . There is no evidence t hat NCR doubted the merits of the arguments they were making, or that N CR engaged in any type of fraudulent misrepresentation. Id. at 1526. Substantially for the reasons given by t he district court, we hold that any unfavorable or inaccurate statements made durin g the May 20 presentation do not rise to the level of independently actionable c onduct. DP-Tek further asserts NCR wrongfully used RCS as asource of confidential information. This assertion stems fro m information RCS received from DP-Tek during the integration meeting on May 1 9. Because NCR and RCS were business partners, DP-Tek alleges, there is a strong inference that the-22-

confidential information NCR used in its presentati on to Venture the following day was supplied by RCS. We agree with the district court that DP-Tek fails to “present any legal argument as to why RCS’ disclosure to NCR of any in formation revealed to it by DP-Tek was wrongful. There is no evidence of any c onfidentiality agreement between RCS and DP-Tek that would prevent RCS from disclosing such information.” Id. at 1527. Accordingly, NCR’s alleged acquisition o f information from RCS does not constitute independen tly actionable conduct. Finally, DP-Tek asserts that NCR wrongfully refusedto offer its proprietary source code to RCS’ software. DP-Tek does not iden tify any legal duty that required NCR to divulge its own proprietary softwar e. Any undue economic pressure was the result of the incompatibility of D P-Tek’s hardware and RCS’ software. “Venture’s selection process may have be en flawed,” id. at 1528, in that it did not require vendors to share codes. Ho wever, that failure does not raise NCR’s refusal to the level of actionable conduct. We are not persuaded that the conduct asserted sing ularly or in the aggregate constitutes independently actionable cond uct. Accordingly, we hold that DP-Tek failed to overcome the competitor privi lege of section 768.-23- E. Burden of Proof DP-Tek’s final contention on appeal is that the dis trict court erred when it placed on DP-Tek the burden of proving NCR’s conduc t was not privileged. We disagree. In Turner , the Kansas Supreme Court said that “a qualified p rivilege . . . requires the plaintiff

to prove actual malice . . . .” Turner , 722 P.2d at 1117 (emphasis added). The court cited Leibowitz v. Szo verffy , 436 N.Y.S.2d 451 (N.Y. App. Div. 1981), as support for a qualified p rivilege, 722 P.2d at 1116, and Leibowitz in turn held that “[p]laintiff’s failure to show the malice requirement essential to both her causes of action renders them insufficient.” Leibowitz , 436 N.Y.S.2d at 453 (emphasis added). Although the cou rt in Turnerquoted 45
A M .J UR
. 2d Interference § 27 (1969), which defines a justification or priv ilege as an affirmative defense, the court nevertheless expr essly placed the burden of overcoming the justification or privilege on the pl aintiff. Accordingly, the district court properly placed the burden of proof on DP-Tek. The judgment of the district court is AFFIRMED.