Opinion ID: 547553
Heading Depth: 2
Heading Rank: 1

Heading: The Reasonableness of the Restraints

Text: 19 The district court appeared to assume that the policy against restraints on alienation of property was applicable to frequent flyer coupons, and proceeded to analyze the reasonableness of TWA's tariffs. Finding the restraints reasonable, the court declared that the tariffs are valid, and conclusively govern the rights and liabilities of the parties. 682 F.Supp. at 1481. The district court apparently regarded this purely as a question of law, and the parties agreed that it should be treated as such. We do not believe, however, that the validity of the tariffs can or should be so treated. 20 In support of its decision to treat the validity of the tariffs as a purely legal question, the district court cited Klicker v. Northwest Airlines, Inc., 563 F.2d 1310 (9th Cir.1977). In Klicker we did say that the question whether a tariff is against public policy is ultimately a judicial question requiring the application of federal law. Id. at 1313. However, we said so only to refute the argument that the federal courts were bound by the decision of the Civil Aeronautics Board under the doctrine of primary jurisdiction. That rule was abolished when the CAB was abolished, First Pennsylvania Bank, 731 F.2d at 1120, but the sound rationale that underlay the rule so long as it existed demonstrates why the district court's legal conclusion of reasonableness can be upheld only if it proceeded from specific factual determinations reached after the development of an adequate evidentiary record. 21 The cases cited for the above quotation from Klicker demonstrate that questions involving the reasonableness of a common carrier's tariffs almost always require substantial investigation of facts that are often complex. For instance, in Great Northern Railway Company v. Merchants Elevator Company, 259 U.S. 285, 42 S.Ct. 477, 66 L.Ed. 943 (1922), Justice Brandeis explained for a unanimous Court why it is sometimes inappropriate for courts to rule on questions that have not yet been presented to administrative agencies: 22 Whenever a rate, rule or practice is attacked as unreasonable or as unjustly discriminatory, ... the enquiry is essentially one of fact and of discretion in technical matters.... Moreover, that determination is reached ordinarily upon voluminous and conflicting evidence, for the adequate appreciation of which acquaintance with many intricate facts of transportation is indispensable. 23 259 U.S. at 291, 42 S.Ct. at 479. Thus, characterizing the ultimate question as one of law cannot eliminate the need for a full development of the factual record. The Court made this clear in another primary jurisdiction case more than twenty-five years later. In Southwestern Sugar and Molasses Co. v. River Terminals Corp., 360 U.S. 411, 79 S.Ct. 1210, 3 L.Ed.2d 1334 (1959), Southwestern had chartered a barge that had been towed and docked by a tug operated by the defendant, RTC. Southwestern sued RTC for damages, alleging that the barge and its cargo had been lost due to RTC's negligence. RTC appealed from a judgment in Southwestern's favor, urging that certain tariffs filed with the Interstate Commerce Commission operated to release RTC from all liability, and that the district court had erred in judging them invalid as a matter of law. Justice Harlan explained why a purely legal determination of the tariffs' validity was inappropriate: 24 For all we know, it may be that the rate specified in the relevant tariff is computed on the understanding that the exculpatory clause shall apply to relieve the towboat owner of the expense of insuring itself against liability for damage caused tows by the negligence of its servants, and is a reasonable rate so computed. If that were so, it might be hard to say that public policy demands that the tow should at once have the benefit of a rate so computed and be able to repudiate the correlative obligation of procuring its own insurance with knowledge that the towboat may be required to respond in damages for any injury caused by its negligence despite agreement to the contrary. 25       26 We may assume that the question whether a clause of this kind offends against public policy is one appropriate ultimately for judicial rather than administrative resolution. But that does not mean that the courts must therefore deny themselves the enlightenment which may be had from a consideration of the relevant economic and other facts.... 27 ... Cases are not decided, nor the law appropriately understood, apart from an informed and particularized insight into the factual circumstances of the controversy under litigation. ... This principle has particular force when the courts are asked to strike down on grounds of public policy a contractual arrangement on its face consensual. 28 360 U.S. at 417-18, 79 S.Ct. at 1214-15 (quoting Federal Maritime Board v. Isbrandtsen Co., 356 U.S. 481, 498, 78 S.Ct. 851, 861-62, 2 L.Ed.2d 926 (1958) (opinion of the Court by Brennan, J.)). Some of our most eminent jurists have thus spoken at some length about the importance of developing a thorough evidentiary record before evaluating a particular measure's reasonableness in light of public policy. We find their reasoning persuasive, and we bear in mind their sound advice in evaluating the factual record before us. 29 In this case, we conclude that the record is wholly inadequate, and the district court's own opinion is the most persuasive testimony to that inadequacy. In discussing the reasonableness of TWA's tariffs, the court engaged in rather broad speculation on several crucial issues that it perceived (correctly, no doubt) to be important: 30 ... TWA's [Frequent Flyer Bonus (FFB) ] Program is structured to balance the benefit of receiving additional publicity and customer loyalty with the cost of providing travel awards. Had TWA intended its FFB awards to be redeemable for cash, it might have scaled its mileage redemption rates differently, or precluded assignability of these awards entirely in an effort to reach a different balance. Accordingly, the nontransferability of these awards is an element of their value intended by TWA. To the extent that a FFB award may constitute property, the award provided to the qualifying passenger is accompanied by restrictions which are an integral part of that right. There is nothing unreasonable about this scheme. 31 682 F.Supp. at 1481. All of these propositions were plausible, and some indeed quite likely. However, the evidence presented by TWA was sufficient to justify none of them. Some receive support from arguments of TWA's counsel, but counsel has not directed our attention to any evidence supporting the district court's speculations about the cost-benefit structure of TWA's program, the assumptions upon which the mileage redemption rates are based, the costs and benefits of assignability, and the tariffs' importance to the program as a whole. We agree with the district court's unstated assumption that all were relevant--indeed, there may be other factors that should ordinarily be considered in reaching such a judgment. 5 However, assuming, as the district court did, that ACE demonstrated the applicability of the policy against restraints on alienation, we cannot agree that TWA carried its burden of proving that its restraints were reasonable. 32 Given the fact-intensive nature of the question with which the district court was faced, we believe the record here would be plainly inadequate for determining the reasonableness of a restriction on the transfer of almost any sort of property. However, we also note that the novelty and complexity of the factual setting in which this case arises makes summary judgment on the reasonableness issue inappropriate on anything less than an exhaustive investigation of the economic realities of the matter. The Supreme Court has likewise taken this consideration into account on occasion. In White Motor Co. v. United States, 372 U.S. 253, 83 S.Ct. 696, 9 L.Ed.2d 738 (1963), Justice Douglas noted, This is the first case involving a territorial restriction in a vertical arrangement; and we know too little of the actual impact of both that restriction and the one respecting customers to reach a conclusion on the bare bones of the documentary evidence before us. 372 U.S. at 261, 83 S.Ct. at 701. Emphasizing the importance of the facts in such a case, the Court declined to address the legal question of whether the practices were subject to the rule of reason or the per se approach under the Sherman Act. We hold only that the legality of the territorial and customer limitations should be determined only after a trial. 372 U.S. at 264, 83 S.Ct. at 702. 33 Similarly, in Kennedy v. Silas Mason Co., 334 U.S. 249, 68 S.Ct. 1031, 92 L.Ed. 1347 (1948), the Court noted the surpassing public importance of the question whether wartime munitions workers were covered under the Fair Labor Standards Act and vacated a summary judgment due to the technical complexity of the question and the inadequacy of the factual record. Justice Jackson explained, 34 We consider it the part of good judicial administration to withhold decision of the ultimate questions involved in this case until this or another record shall present a more solid basis of findings based on litigation or on a comprehensive statement of agreed facts. While we might be able, on the present record, to reach a conclusion that would decide the case, it might well be found later to be lacking in the thoroughness that should precede judgment of this importance and which it is the purpose of the judicial process to provide. 35 334 U.S. at 257, 68 S.Ct. at 1034. See also Anderson v. Hodel, 899 F.2d 766, 770-71 (9th Cir.1990); Eby v. Reb Realty, Inc., 495 F.2d 646, 649 (9th Cir.1974); see generally Schwarzer, Summary Judgment Under the Federal Rules: Defining Genuine Issues of Material Fact, 99 F.R.D. 465, 475-76 (1984). 36 We need not and do not go as far as the Supreme Court did in White Motor when it insisted that the issue presented in that case be decided only after trial, 372 U.S. at 264, 83 S.Ct. at 702-03. Not every novel claim or complex case must be settled through trial, and we must not let the difficulty of such cases make us hostile to summary adjudication generally. Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy, and inexpensive determination of every action.'  Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 1). Moreover, where the ultimate fact in dispute is destined for decision by the court rather than by a jury, there is no reason why the court and the parties should go through the motions of a trial if the court will eventually end up deciding on the same record. However, just as the procedural shortcut must not be disfavored, courts must not rush to dispose summarily of cases--especially novel, complex, or otherwise difficult cases of public importance--unless it is clear that more complete factual development could not possibly alter the outcome and that the credibility of the witnesses' statements or testimony is not at issue. Even when the expense of further proceedings is great and the moving party's case seems to the court quite likely to succeed, speculation about the facts must not take the place of investigation, proof, and direct observation. 37 In this case, almost no evidence supported the district court's conclusion that TWA's restrictions on the alienability of its travel award coupons are reasonable. The evidence that was before the district court completely failed to illuminate many areas of inquiry so important that the court thought it necessary to speculate about them. The evidence presented in this case did not warrant entry of summary judgment. 38 B. The Applicability of the Policy Against Restraints on Alienation of Property 39 As noted above, the district court appears to have assumed that the policy against restraints upon alienation of property applies to frequent flyer coupons. After making that assumption, the court found the restraints reasonable, and as we have explained, that holding cannot be upheld. However, TWA offered another ground for the enforceability of its tariffs: that frequent flyer awards are not property of the type that public policy regards as freely assignable. TWA characterizes these coupons instead as rights of contract, and points to many cases sustaining contractual prohibitions on assignment even of fully matured contractual rights and even when assignment would not affect the remaining duties of the obligor in any way. Because we may affirm the decision of the district court on a ground different from the one expressed in that court's opinion as long as the record supports our alternative ground, Fidelity Fin. Corp. v. Federal Home Loan Bank, 792 F.2d 1432, 1437 (9th Cir.1986), cert. denied, 479 U.S. 1064, 107 S.Ct. 949, 93 L.Ed.2d 998 (1987), we address the argument that the public policy against restraints on alienation of property is inapplicable to TWA's award coupons. 40 Even slight study of the matter makes it difficult to avoid the conclusion that we have come upon a seam in the law's oft-proclaimed seamless web. The common law of property categorically condemns any disabling restraint that would make it impossible for any period of time from the date of the donative transfer to transfer [an interest in property]. Restatement (Second) of Property (Donative Transfers) Sec. 4.1(1) (1983). This has been the rule for at least five centuries, and perhaps as many as seven. See id., Introductory Note to Part II. The common law of contracts, on the other hand, developed during this same period a doctrine forbidding the assignment of a chose in action--a doctrine of almost diametrically opposite tendency. The hostility toward assignment of contractual rights (which must be distinguished from duties ) has almost completely disappeared from the common law, and today the presumption is in favor of assignment. Restatement (Second) of Contracts Sec. 317(2) (1981). However, it remains the case that an explicit contractual provision forbidding assignment of a right created by that contract is ordinarily enforceable according to its terms. Id. (A contractual right can be assigned unless ... assignment is validly precluded by contract. (emphasis added)); id. Sec. 322(2) (clause prohibiting assignment is to be construed as promissory rather than disabling unless a different intention is manifested  (emphasis added)); id. Sec. 322(2) comment a (Rationale) (The policy against restraints on the alienation of property has limited application to contractual rights.). See also 4A. Corbin, Corbin on Contracts Secs. 872-73 (1951 & Supp.1989); 3 S. Williston, A Treatise on the Law of Contracts Sec. 422 (3d ed. 1961) (The question of the free alienation of property does not seem to be involved.); 6A C.J.S. Assignment Secs. 30 & 33 (1975). Thus, for purposes of the case before us, the question of whether TWA's tariffs may be enforced seems to be a question of whether its frequent flyer coupons embody rights of property or of contract. 41 Unfortunately, this bare dichotomy is not very helpful without more. Property rights and contract rights do not have independent existence in the world as natural kinds, detached from any consideration of human purposes. Nor are the categories mutually exclusive in common usage: When property changes hands, it quite often does so pursuant to a contract (as in this case); and contract rights, having an economic value (again, as in this case), are often referred to as property, as they surely are for some purposes. If the distinction between the two bodies of law is to be maintained 6 and preserved from degenerating into a jurisprudence of labels, it should be applied only after considering the competing policies underlying the doctrines in question. Unfortunately courts have not generally bothered themselves with any such inquiry, perhaps because these hoary common-law doctrines have long since taken on lives of their own, somewhat divorced from any analysis of the public policies they are supposed to vindicate. In any event, although we find that prior examinations of the conflicting concepts of property and contract rights do not provide entirely satisfactory answers to the problem that confronts us, we believe that the weight of authority strongly supports the conclusion that it is the latter and not the former that are at issue here. 42 Although there are no other appellate decisions addressing the character of the rights embodied by frequent flyer coupons, decisions in analogous areas suggest that these innovations in the travel market evidence rights of contract, and, thus, that the public policy against restraints on the alienation of property is no impediment to the enforcement of TWA's tariffs. Especially informative are those cases discussing restrictions on the transfer of railroad tickets. In Bitterman v. Louisville & Nashville Railroad Co., 207 U.S. 205, 221, 28 S.Ct. 91, 96-97, 52 L.Ed. 171 (1907), the Supreme Court affirmed a preliminary injunction entered against brokers of reduced-fare railroad tickets. The brokers argued that a ticket was property, the sale of which could not be prohibited without depriving the owner of it of an essential attribute of the property which he had acquired, 207 U.S. at 216. The Court rejected the argument in a paragraph: 43 That the complainant had the lawful right to sell non-transferable tickets of the character alleged in the bill at reduced rates we think is not open to controversy, and that the condition of non-transferability and forfeiture embodied in such tickets was not only binding upon the original purchaser but upon any one who acquired such a ticket and attempted to use the same in violation of its terms is also settled. Mosher v. Railroad Co., 127 U.S. 390, 8 S.Ct. 1324, 32 L.Ed. 249 [1888]. See, also, Boylan v. Hot Springs Co., 132 U.S. 146, 10 S.Ct. 50, 33 L.Ed. 290 [1889]. 44 207 U.S. at 221, 28 S.Ct. at 96-97. Although the result reached in Bitterman entails an implicit rejection of the brokers' contention there (and ACE's here), it must be admitted that the Court did not in that case clearly state that railroad tickets were contract rights rather than property rights. Still, the contractual interpretation is suggested by the Court's reference to conditions and terms being binding upon future purchasers. This interpretation is bolstered by the Court's citation of Mosher, which characterizes a railroad ticket as the express contract between the parties, 127 U.S. at 394, 8 S.Ct. at 1326, and Boylan, which likewise refers to the express conditions of the plaintiff's contract, which were contained in a ticket for passage, 132 U.S. at 150, 10 S.Ct. at 51. 45 The Supreme Court of Colorado was more explicit several years later in another case involving ticket brokering, Kirby v. Union Pacific Railway Co., 51 Colo. 509, 119 P. 1042 (1911). There, the court noted that an overwhelming weight of authority held that a ticket evidenced a legal contract [that] limits the benefits of the contract to the use of the original purchaser only. 119 P. at 1042. The court likewise regarded it as definitely settled and fixed [t]hat such tickets are not property in the hands of the purchaser, in the sense that they can be transferred or sold, and trafficking in them is not and cannot be made a legitimate business. Id. (citing cases). Equally explicit is Illinois Central Railroad Co. v. Caffrey, 128 F. 770 (C.C.E.D.Mo.1904), cited by the Supreme Court in Bitterman: The complaining parties have the right to sell round-trip and commutation tickets over their respective roads at reduced rates, on condition that they shall only be good in the hands of the original purchasers and shall not be transferred. Contracts of this sort between a carrier and its passengers are lawful. 128 F. at 772 (emphasis added). See also Corbin Sec. 873, at 492-93 (No one doubts that railway passenger tickets can be made non-assignable, citing Bitterman ). 46 Other sorts of tickets have been given similar treatment. For example, in Collister v. Hayman, 183 N.Y. 250, 76 N.E. 20 (1905), the Court of Appeals of New York upheld a provision on the back of a theater ticket which read, If sold on the sidewalk, this ticket will be refused at the door. 76 N.E. at 20. The provision was challenged by a ticket speculator who alleged that the Knickerbocker Theater's attempt to enforce this condition interfered with his lawful business. The court framed the main question as whether the [theater] had the right to make a contract with purchasers upon the condition printed in the ticket. There is no restraint by statute against such a condition, and it is not opposed to public policy. 76 N.E. at 21. 7 47 Airline tickets are undoubtedly just as contractual in nature as railroad and theater tickets, as we have recently indicated. Deiro v. American Airlines, Inc., 816 F.2d 1360, 1365 (9th Cir.1987) (holding an airline passenger contractually bound by the liability limitations on his ticket coupon); Harby v. Saadeh, 816 F.2d 436, 438 (9th Cir.1987) (allowing breach of contract action for failure to provide a timely return flight, and analyzing the term[s] of the contract). Indeed, this court has previously refused to enforce tariffs against air passengers when the airline itself has violated applicable tariffs. Coughlin v. TransWorld Airlines, Inc., 847 F.2d 1432, 1434 (9th Cir.1988) (It is axiomatic that a material breach of an agreement warrants rescission.... TWA cannot now attempt to enforce a provision of the contract it has violated. TWA's [conduct] effectively denied [the passenger] the benefit of her bargain with respect to the tariff agreement.). Moreover the award coupons at issue here are actually one step removed from the ticket cases considered above, since a frequent flyer award coupon is not even a ticket; it is merely the right to receive a ticket upon redemption of the coupon. We believe this further militates against classifying these awards as property rights. It would be anomalous indeed if a coupon earned by performance of a contract and redeemable for another contract became property simply by being reduced to a cardboard voucher during its brief period of limbo. 48 There is, to be sure, language in some cases that tends to support the argument that tickets are property, but we believe most of these passing references have occurred in circumstances where property was equated with things of value. For example, we have construed section 541 of the Bankruptcy Code, 11 U.S.C. Sec. 541, to include contract rights as property of the bankruptcy estate. Computer Communications, Inc. v. Codex Corp. (In re Computer Communications, Inc.), 824 F.2d 725, 729 (9th Cir.1987). The same emphasis on value explains why tickets and ticket proceeds have sometimes been declared property for the purposes of Article Nine of the Uniform Commercial Code, e.g. Klingner v. Pocono International Raceway, Inc., 289 Pa.Super. 484, 433 A.2d 1357 (1981). Similarly, the same principle would seem to underlie those decisions holding tickets to be property embraced by theft statutes, e.g. People v. Zakarian, 121 Ill.App.3d 968, 77 Ill.Dec. 366, 369, 460 N.E.2d 422, 425 (1984); Turner v. State, 372 S.W.2d 346, 347 (Tex.Crim.App.1963); but see Zakarian, 77 Ill.Dec. at 369, 460 N.E.2d at 425 (noting that at common law, only tangible personal property could be the subject of larceny. Written documents such as deeds and contracts ... were not considered property for the purpose of larceny.) The fact that tickets have economic value, however, cannot be dispositive for all purposes; the railroad and theater ticket cases cited above establish as much. Though tickets may be property for other purposes, we have discovered no case in which they were held to be property of the type that public policy regards as freely assignable. 49 In any event, we cannot condemn as empty formalism the proposition that rights of property and rights of contract are for some purposes subject to different legal rules. Contract rights generally arise between persons in an ongoing relationship, usually commercial. Those parties deal with each other, or not, depending upon the extent to which they can satisfy each other's needs and promote each other's purposes. There may be good reason to conclude in this situation that if a contractual restriction on the assignability of Smith's right to receive services from Jones should for some reason become outdated, impractical, or unduly onerous, Smith and Jones can work this out between themselves. In contrast, property rights (at least in the typical case of tangibles) often survive all of the persons who were involved in their creation. As a result, enforcement of restrictions on the alienation of property might often tie up a social resource long after the death of the only people with the power to remove the restraint. Moreover, a contract-debtor often retains an interest in the completion of the contract, especially where the contract is for services; no interest of a former owner of property corresponds to this interest. Thus, it might be that the different legal rules which have developed in the two areas are necessary in order to protect this additional interest, present only in the contractual setting. See also Corbin Sec. 873, at 479. 50 Finally, it is true that even within the province of contract law, there is a public policy against contracts that directly or unreasonably restrain trade. See Restatement (Second) of Contracts Secs. 186-88 (1981). However, the theory that TWA's tariffs make the contract between TWA and its passengers one that unreasonably restrains trade is one that has not been briefed or argued at any point in this case, 8 and we decline to raise and decide it on our own. We note, however, that the railroad and theater ticket cases speak directly to the argument that restraints on the transfer of analogous contract rights are unreasonable, as well as to the classification question. On the other hand, as we noted earlier, (1) frequent flyer programs constitute a fairly novel type of business device, one that has a substantial effect upon most if not all members of the travelling public; and (2) questions relating to the reasonableness of tariffs must ordinarily be resolved after an examination of their actual economic effects, see Restatement (Second) of Contracts Sec. 186 (1981). We have already held that the record below is insufficient for such a factual inquiry. 51 In summary, prior judicial treatment of tickets in general and tickets of passage in particular has emphasized their contractual nature. The frequent flyer coupons before us resemble paradigmatic property rights even less than do the tickets considered by those earlier courts. Even if our predecessors did not analyze the conceptual bases for their decisions as clearly as one might have wished, we believe their determinations that the instruments at issue involved contract rights were sensible, and that consistency as well as reason dictates that we follow in their path. Consequently, we hold that the policy against restraints on alienation of property has no application to Frequent Flyer Bonus award coupons; thus, that ancient doctrine--the only tenet of public policy on which we are asked to rule--presents no barrier to the enforcement of TWA's tariffs against holders of brokered coupons. IV TWA's TORT CLAIM 52 The public policy analysis in which we have engaged does not fully dispose of this case. Thus far we have determined only that the public policy against restraints on alienation of property does not prevent TWA from enforcing its tariffs against its frequent flyers and their assignees, by refusing to honor coupons that have been assigned and by disqualifying the assignors from the program. We must still rule on the question whether TWA has adequately substantiated its allegations of tortious conduct on the part of ACE, whether TWA was entitled to a permanent injunction, and on ACE's counterclaims. We first consider TWA's tort claim, and hold that genuine issues of material fact are presented by the record below. We therefore reverse the summary judgment in TWA's favor on that claim. 53 The California cause of action for tortious interference with business relations has five elements. In order to prevail, a plaintiff must show 54 (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant. 55 Youst v. Longo, 43 Cal.3d 64, 71 n. 6, 233 Cal.Rptr. 294, 298 n. 6, 729 P.2d 728, 733 n. 6 (1987); see also Buckaloo v. Johnson, 14 Cal.3d 815, 827, 122 Cal.Rptr. 745, 752, 537 P.2d 865, 872 (1975). We agree with the district court that ACE's conduct implicates TWA's economic relationships with three classes of third parties: program members, nonmember passengers of TWA, and travel agencies doing business with TWA. We also agree, and indeed ACE concedes, that ACE knew of each of these relationships. Nor does ACE argue that TWA's relations with these groups were not actually disrupted by ACE's activities. However, ACE contends most forcefully that it did not act with the intent required for liability under California law, and also that the proof of economic harm to TWA was too speculative to support a judgment in favor of the carrier. We examine each of these contentions to determine whether ACE raised a genuine issue of material fact that precluded the granting of summary judgment below. A. The Wrongfulness of ACE's Intent 56 The intent element of the business tort alleged by TWA is probably the one that has received the most attention from California courts. The California Supreme Court has repeatedly emphasized that the tort of interference with business relations, like the older and narrower tort of interference with contractual relations, 9 can only be committed by a defendant who acts with culpable intent: 57 Thus, in an action for inducing breach of contract it is essential that plaintiff plead and prove that the defendant 'intended to induce a breach thereof....' Similarly, to prevail on a cause of action for intentional interference with prospective economic advantage, plaintiff must plead and prove 'intentional acts on the part of the defendant designed to disrupt the relationship.' 58 Seaman's Direct Buying Serv., Inc. v. Standard Oil Co., 36 Cal.3d 752, 766, 206 Cal.Rptr. 354, 360-61, 686 P.2d 1158, 1164-65 (1984) (citations omitted). As this language from Seaman's indicates, a plaintiff alleging interference with an economic relationship embodied in contract bears a slightly less demanding burden on the issue of wrongful intent. In Rickel v. Schwinn Bicycle Co., 144 Cal.App.3d 648, 192 Cal.Rptr. 732 (1983), the court stated, [W]hen the defendant induces a third party to breach a contract with the plaintiff ..., the defendant's wrongful method ... is apparent from the allegations of fact.... No further showing of wrongfulness is necessary. 144 Cal.App.3d at 659, 192 Cal.Rptr. at 739 (citations and footnote omitted). 59 The district court held that ACE's conduct was wrongful because ACE induced its clients to sell their award coupons, in violation of the agreement between the clients and TWA. 10 ACE does not deny that it intentionally acted in a manner designed to bring about this result; rather, it contends that inducing a breach of an agreement is not wrongful if the agreement is contrary to public policy or otherwise unlawful. Put another way, ACE suggests that there is no agreement to induce a breach of, if the agreement is invalid. Because we have rejected the theory that the restrictions on transfer violated the tenet of public policy relied on by ACE, we necessarily reject ACE's contention. Accordingly, we agree with the district court that ACE's conduct was sufficient under California law to show wrongful intent. 11 60 ACE contends, however, that in this case we should not presume wrongfulness merely because of the breach, because Weisman always believed the tariffs in question to be unenforceable; thus, while there may have been an intent to induce a breach, there was no intent to induce a wrongful breach. The argument is creative, but ACE has not cited a single case in California or anywhere else recognizing such a good-faith exception to the established rule that it is wrong to attempt to induce a breach of contract. Nor do we believe that the California courts would create such an exception, for it would be inconsistent with the principles that have governed the caselaw on this element. In discussing the degree of culpability necessary for commission of this tort, the California Supreme Court has stated that  '[t]he essential thing is the purpose to cause the result.'  Seaman's, 36 Cal.3d at 765, 206 Cal.Rptr. at 360, 686 P.2d at 1164. ACE went to a some lengths to cause the result here--violation of the transfer restrictions--and that effort cannot be thought less wrongful merely because Weisman believed, incorrectly, that the restriction was unlawful. TWA satisfied its burden on this element. B. Economic Harm to TWA 61 The district court devoted only one sentence to its finding of damages. Finally, wrote the court, damages, while difficult to ascertain, are present if it is assumed that the brokered ticket holder is occupying a seat that could have been used by a legitimate frequent flyer or a passenger paying full fare. 682 F.Supp. at 1482 (emphasis added). Thus, the court endorsed two distinct theories of damages: the displacement of legitimate frequent flyers, and the displacement of passengers paying full fare. 12 62 Although we do not wish to foreclose reconsideration of the first theory on remand, we doubt its analytic soundness. TWA's revenues would seem to be constant no matter whether a legitimate frequent flyer or an assignee occupies a particular seat; the salient fact in either case is that TWA receives no revenue for the seat in question. It is understandable, perhaps, that TWA conceives of these coupons as rewards for the exclusive use of its legitimate frequent flyers; but it is difficult to imagine how TWA suffers economic harm simply because those who earn these rewards decide to use them by selling them rather than by taking unwanted holidays. In fact, ACE contends that its business actually benefits TWA economically, by providing an incentive for very frequent flyers to continue flying on TWA even after they have earned more awards than they can personally use. Indeed, Joyce Bennis, a manager of the Frequent Flyer Bonus Program, testified at her deposition that the airline's own marketing department believed that the popularity of TWA's coupons among brokers like ACE actually made the program more attractive, and served to attract customers to TWA. Thus, even if this first sort of theoretical displacement exists, its net economic effect presents a genuine issue of material fact, even within TWA. 63 In contrast to the first displacement theory, we find the second theory somewhat more plausible. It is easy enough to imagine how TWA might be damaged, if, for instance, a fare-paying passenger wished to fly on TWA but was forced to choose another airline because TWA's competing flight was full, due to the presence of the passenger with the brokered ticket. However, this second theory is completely unsupported by the evidence, and thus cannot support a finding of damages. ACE points out, correctly, that it is mere speculation to suppose that the hypothetical displaced passengers actually exist, or again, that they would prefer to fly on TWA rather than a competitor if that choice existed. Furthermore, even if some fare-paying passengers are displaced by users of award coupons, the identity of the coupon-users is, at least for all we know, completely irrelevant: the theoretical displaced passenger is just as displaced when a legitimate frequent flyer uses a coupon as when that frequent flyer's assignee uses it in his stead; the only important question would seem to be whether the coupon is used by anyone at all. 64 This brings us to a damage theory not relied upon by the district court nor suggested by TWA, namely that more of the coupons will be used (and thus more passengers displaced) if a frequent flyer who does not wish to use his award is allowed to sell it to someone who does. Our difficulty in analyzing this theory is not analytic but rather evidentiary: TWA submitted no evidence whatsoever on the rate at which its coupons are redeemed. A great deal of hard statistical evidence could have been introduced to measure the effect of transfer on redemption, comparing, for example, TWA's redemption rate to that of other airlines that allow their award coupons to be transferred without restriction; or comparing TWA's prerestriction redemption rate with its postrestriction redemption rate; or examining the correlation, if any, between TWA's redemption rate and ACE's sales of Frequent Flyer Bonus Coupons. All of this evidence could have been submitted to the district court, but none of it was. Consequently, there is no basis in the record for concluding that ACE's activities have caused TWA to give away more free seats, either in absolute terms or as a percentage of seats on each flight. 65 A fourth possible theory of damages is that brokered frequent flyer coupons are used by passengers who would otherwise pay TWA, rather than ACE, for their ticket. This theory is supported by the declaration of James Smith, TWA's Director of Business Marketing. We quote the relevant paragraph in its entirety: 66 American Coupon Exchange's activities are extremely damaging to TWA for a number of reasons. First, TWA is required to provide a free seat on its aircraft to a person who is not entitled to free transportation. The vast majority of brokered coupons are used for free or upgraded First Class International transportation. Fares on TWA for such transportation vary with the destination, but generally range between $3,000 and $5,000. Thus, for every brokered certificate TWA is not able to detect and confiscate, there is a loss of revenue in that amount. It is also apparent that the passengers attempting to use these brokered certificates were not travelling solely because of the fact they were using a discount-priced certificate. During the past two years TWA has confiscated in excess of 400 tickets and brokered certificates. In virtually every single instance the passenger then purchased a valid full fare ticket from TWA for the identical itinerary. 67 This evidence does tend to support TWA's theories of damages, and TWA has every right to put Mr. Smith in front of a jury and ask them to believe his testimony. But it is obviously insufficient to entitle TWA to a directed verdict on this point, and it is therefore also insufficient to support a summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). It is one thing to note that virtually every single passenger with his vacation plans already final and perhaps uncancellable, and frequently his flight already booked, will buy a ticket as a matter of last resort if his brokered ticket is dishonored; it is quite another thing to assert that even a single such passenger would have made all the same arrangements, and would have chosen to take the same flight with the same airline, had he known in advance of making his final plans or booking his reservation that he could not use a brokered coupon to pay for a flight on that carrier. 13 Many travellers might not have travelled at all if they had known initially that they would be unable to purchase a reduced-fair ticket. Others might have chosen another airline. Indeed, ACE's customers first consult ACE rather than TWA, and are then directed to TWA only because ACE happens to sell them a TWA coupon; if ACE were to refrain from brokering coupons for travel on TWA, ACE's customers might well all end up on carriers that do not object to having their coupons brokered. In light of this fact, Mr. Smith's declaration is barely probative of damages; certainly it is not so one-sided that [TWA] must prevail as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. at 252, 106 S.Ct. at 2512. 68 A fair amount of the hypothesizing and counterhypothesizing outlined above is, as we have said, quite plausible; little or none of it is foreclosed by the evidence. However, little or none of it is established by the evidence either. The various theories never rise above mere plausibility, and motions for summary judgment are not designed for the judicial endorsement of plausible theories. Nor are motions for summary judgment to be used as an occasion for predicting at an early stage what the record would eventually show if the facts were adequately developed. In order to prevail here, TWA was required to produce evidence that it had actually been damaged, evidence such as would compel any reasonable juror to decide in its favor. That, it totally failed to do. 14 V THE PERMANENT INJUNCTION 69 In the trial court, TWA sought both temporary and permanent injunctions against ACE, Weisman, and all persons acting in concert with them, enjoining them from brokering TWA's award coupons. The district court denied the temporary relief because it believed that a monetary damage award would adequately compensate TWA for its financial losses. However, after granting TWA's motion for summary judgment on its claim for tortious interference with business relations, the district court entered the requested permanent injunction on the ground that the monetary damages, while real, would be difficult to ascertain. 682 F.Supp. at 1483-84. 70 As we have just discussed at length, it was improper to conclude on the record before us that TWA had adequately demonstrated the existence of any monetary damages. Because the district court's order was based solely on its now-reversed finding of damages, we also vacate the permanent injunction. 15 VI ACE's AFFIRMATIVE DEFENSES 71 The district court characterized ACE's argument that it acted without wrongful intent as its only defense. As we have seen, the requirement of wrongful intent is an element of the plaintiff's prima facie case. 16 However, ACE did raise a number of affirmative defenses, five of which are before us on this appeal: privilege (or justification), unclean hands, waiver, estoppel, and laches. ACE contends that these defenses presented genuine issues of material fact making summary judgment inappropriate. 72 Although ACE has consistently claimed that its conduct was not wrongful, ACE has not made out any separate argument of justification. ACE pleaded this defense without elaboration in its answer, and has never provided any evidence raising a genuine issue of material fact, or even any unsupported theories about the applicability of this defense. ACE does argue, correctly, that the defense of justification depends upon numerous factual issue[s] to be decided upon all the circumstances of the case. Lowell v. Mother's Cake & Cookie Co., 79 Cal.App.3d 13, 20, 144 Cal.Rptr. 664, 669 (1978). However, ACE must show not merely that justification is generally a factual issue, but also that its assertion of that defense presents a genuine issue of material fact in this case. For this purpose, ACE was not entitled to rest upon its pleadings but was instead obliged to present significant probative evidence tending to support [its] legal theory. Long v. Bureau of Economic Analysis, 646 F.2d 1310, 1321 (9th Cir.), vacated on other grounds, 454 U.S. 934, 102 S.Ct. 468, 70 L.Ed.2d 242 (1981). It has not done so on this record. 73 The district court did not explicitly deny ACE's defense of unclean hands, but such a denial was of course implicit in the granting of the permanent injunction. ACE contends that TWA's hands are unclean because (1) TWA has been operating the FFB program in hopes that FFB members will be unable to use all of the FFB awards TWA has so vigorously encouraged them to use, and (2) TWA conducted some of its monitoring activities through active deception in phone calls to brokers without disclosing the true purpose of the call. Neither of these allegations evidences conduct so unsavory that a court of equity should bar its doors. First, there is no allegation that TWA misled or deceived its passengers regarding the program. Accordingly, as long as TWA stands ready to honor its obligations, and does not unreasonably impede or obstruct the right of frequent flyers to use the coupons in the manner promised, we find nothing unconscionable in its hoping that some of those obligations may never be called in. As for the deceitful telephone calls, we note that TWA was only trying to ascertain a few facts about the secondary market in its own award coupons, and it did so in a manner that did not invade ACE's privacy in any way. 17 Even if we were to accept the somewhat curious notion that TWA had no right to know the terms ACE was offering to the public at large, it would trivialize the clean-hands doctrine to hold that equity will not intervene against a snoop. We therefore affirm the implicit rejection of this defense by the district judge, to whose discretion the matter was committed. See Washington Capitols Basketball Club, Inc. v. Barry, 419 F.2d 472, 478 (9th Cir.1969); Fibreboard Paper Prods. Corp. v. East Bay Union of Machinists, Local 1304, 227 Cal.App.2d 675, 729, 39 Cal.Rptr. 64, 97-98 (1964). 74 ACE's defenses of waiver, estoppel, and laches are more problematic. ACE submitted evidence tending to show that TWA not only tolerated coupon brokering, but actually advised members of its program that they could circumvent the tariff restrictions by falsely designating their transferees as relatives. ACE argues here, as it did below, that these facts, pleaded in a variety of closely similar ways, were sufficient to bar TWA's suit under one or more of the doctrines of waiver, estoppel, and laches. The district court rejected these arguments only by noting that TWA's informal monitoring methods suggested that TWA did not intend to waive its rights against ACE. 18 The district court gave no reason whatsoever for rejecting ACE's claims of estoppel and laches. 75 In evaluating the merit of these defenses, we must first distinguish among TWA's claim for declaratory relief, its claim for injunctive relief, and its claim for damages arising from the tort of interference with business relations. In this case, none of the defenses bars the claim for declaratory relief. An analysis of each defense will show why. 76 First, since equitable estoppel arises only when a defendant has, to his detriment, reasonably relied on a plaintiff's conduct or representations, 19 the very fact that a lawsuit eventuates would seem to us, ordinarily, to remove the estoppel prospectively from the time the lawsuit was commenced. After all, a party who sues thereby manifests an unequivocal intention to enforce his rights, making further reliance unreasonable. Thus, while prior, reasonable reliance interests should be protected, it is difficult to argue that judicial protection should extend even to the subsequent, unreasonable reliance. Of course, if ACE could demonstrate that prior to the filing of the lawsuit it engaged in some sort of long-term reliance, involving capital expenditures or something more than merely continuing to broker TWA's coupons, then that reliance, if reasonable, might be protected even prospectively. However, ACE has neither made nor substantiated any allegations of such long-term reliance. Much the same point can be made in terms of the element of prejudice, for it is difficult to imagine how a defendant could be prejudiced by a declaration of the parties' rights as long as that declaration operates only prospectively and does not materially affect the value of any prior investments or render some prior action less advantageous. Here, even if TWA would be estopped from suing in tort for the damages it has allegedly sustained since ACE began brokering award coupons, it is not estopped from enforcing its tariffs prospectively against ACE's future customers; as to those customers ACE has not yet relied on any misleading conduct by TWA, can no longer reasonably do so, and has not been prejudiced by any earlier misrepresentations of TWA's intentions. 77 Likewise, it is clear that TWA did not waive its right to prospective declaratory relief here. ACE concedes that there is in this case no express, intentional relinquishment of the right to enforce the tariffs; it argues instead that TWA waived that right by acting in a manner that was  'so inconsistent with an intent to enforce the right as to induce a reasonable belief that such right has been relinquished.'  Crest Catering Co. v. Superior Court, 62 Cal.2d 274, 278, 42 Cal.Rptr. 110, 112, 398 P.2d 150, 152 (1965) (quoting Rheem Mfg. Co. v. United States, 57 Cal.2d 621, 626, 21 Cal.Rptr. 802, 805, 371 P.2d 578, 581 (1962)). However, in determining whether specific conduct is inconsistent with an intent to enforce the right, we cannot be blind to the character of the right in question. Although TWA's tariffs form part of the contract the airline makes with each of its passengers, they also operate (by virtue of their being duly filed tariffs) as general statements of policy, governing TWA's right to conduct its business in a particular way in the future. A permanent and total waiver of that right vis a vis the undifferentiated public seems to us to be a decision of such significance that we are unwilling to infer it from the conduct alleged by ACE here. The mildness of TWA's informal monitoring methods may evidence some reluctance to sue brokers for tort damages, but TWA cannot be said to have permanently and completely waived its right to restrict the transfer of award coupons in the future merely because it did not race to the courthouse when it first learned of the brokers' practices. 20 78 Similar considerations apply to the equitable defense of laches. Laches bars an action for equitable relief whenever the defendant can show unreasonable delay in bringing suit 'plus either acquiescence in the act about which plaintiff complains or prejudice to the defendant resulting from the delay.'  Miller v. Eisenhower Medical Center, 27 Cal.3d 614, 624, 166 Cal.Rptr. 826, 832, 614 P.2d 258, 264 (1980) (emphasis added) (quoting Conti v. Board of Civil Serv. Comm'rs, 1 Cal.3d 351, 359, 82 Cal.Rptr. 337, 342, 461 P.2d 617, 622 (1969) (footnotes omitted)). For the same reasons that ACE's evidence cannot support a finding of waiver, neither can it support a finding of acquiescence sufficient to invoke the doctrine of laches. Nor is there prejudice here, for the prejudice requirement does not mean merely that the defendant will be worse off if the relief is granted than he would be if it were not; that sort of prejudice could be claimed by all defendants all of the time. The prejudice that the doctrine of laches is designed to prevent occurs when a defendant, by reason of a plaintiff's delay, is or will be worse off than he would have been if the plaintiff had enforced his rights in a timely fashion. 79 Common forms of prejudice to defendant are loss of evidence to meet the claim of plaintiff, change in situation induced by the delay, and change in the value of the subject-matter involved, especially where plaintiff had the privilege of waiving or asserting his claim so that he could take advantage of either a decrease or an increase in the value. 80 H. McClintock, Handbook of the Principles of Equity 71-72 (2d ed. 1948); see also Trustees for Alaska Laborers-Constr. Ind. Health and Sec. Fund v. Ferrell, 812 F.2d 512, 518 (9th Cir.1987). In a declaratory relief case, the defendant must show that the plaintiff's delay in filing the action has made the relief sought either more burdensome or more likely to be granted. Here, the prospective relief will not cause ACE any injury it would not have incurred had the tariffs been enforced from the outset. In addition, the delay has not adversely affected ACE's presentation of its case. In short, ACE has failed to show the type of prejudice that would warrant the withholding of declaratory relief. 81 A different analysis is necessary regarding the relevance of ACE's defenses to TWA's claim for damages arising from the tort of interference with business relations. 21 A damage award against ACE for the period during which it might have been reasonable to rely on TWA's alleged acquiescence might constitute just the sort of prejudice that is the subject of the doctrine of equitable estoppel. Abundant evidence demonstrated that TWA knew of brokers like ACE, and some of the evidence tended to support the allegation that TWA intended to encourage the activity. Moreover, had ACE known that TWA intended to sue for damages later, then ACE could have ceased its activities and avoided damages for which it may now be liable. Viewing the evidence in the light most favorable to ACE, we believe that a reasonable juror could conclude that TWA's conduct was such as to make it reasonable for ACE to infer, prior to the filing of this action, that TWA did not intend that the tariffs be enforced. Accordingly, ACE demonstrated the existence of a genuine issue of material fact for the jury, and summary judgment should not have been granted. ACE may therefore assert this defense, with respect to the tort claim upon remand. 22 82 Next, we turn to the relationship between ACE's affirmative defenses and TWA's request for injunctive relief. For the same reasons that those defenses do not bar prospective declaratory relief, they do not bar prospective injunctive relief. This does not mean, however, that the facts upon which ACE relies to establish those defenses have no bearing on TWA's right to an injunction. When the district judge again considers whether to issue an injunction, ACE will be free to argue that it continued to broker TWA coupons only because TWA led it to believe that it did not object. Thus, ACE may contend that its own past conduct is not such as to justify the issuance of an injunction. Similarly, ACE may argue that there is no showing of threatened injury, that an injunction is not necessary to ensure against future tortious conduct on its part--that there is no evidence that ACE will fail to respect the tariffs now that TWA's and the court's positions have been made clear. We express no view as to the merits of those arguments. We simply point out that, in the case of injunctive relief, unlike that of declaratory relief, the facts involved in ACE's affirmative defenses may be urged in opposition to the proposed remedy. And we further point out that, with respect to injunctive relief, those facts are relevant to the question whether TWA has made out its affirmative case, not to whether ACE has successfully asserted an affirmative defense to TWA's claim. VII ACE's COUNTERCLAIMS 83 We turn finally to the district court's grant of summary judgment in favor of TWA on all of ACE's counterclaims. In its third counterclaim, ACE requested a declaration that Frequent Flyer Bonus Program award coupons may be freely bartered and sold. ACE's request was based on its contention that the tariffs restricting transfer of the coupons are contrary to the public policy in favor of the free alienation of property. The district court granted summary judgment for TWA on this counterclaim based on its determination that the tariffs did not violate that policy. Because we too have rejected ACE's argument, we affirm the summary judgment on this counterclaim. 84 Our conclusion with respect to TWA's tariffs likewise leads us to affirm the district court's entry of summary judgment for TWA on ACE's fourth counterclaim. In that count, ACE alleged that TWA's attempts to restrict the transfer of its award coupons interfere with ACE's business relations with program members. The district court reasoned that since the tariffs were valid, TWA could have no wrongful intent in enforcing them. Because ACE failed to offer any legitimate reason why the tariffs should be held invalid, it failed to show that TWA did not have a right to enforce them. Accordingly, we affirm this portion of the district court's judgment as well. 85 The first and second counterclaims are not as obviously dependent upon the question of the validity of TWA's tariffs. In these counterclaims, ACE alleged that TWA and the Airlines Reporting Corporation (ARC), an independent organization that acts as a clearinghouse among 135 airlines and 22,000 travel agencies, conspired to drive ACE and other coupon brokers out of business. TWA and ARC allegedly pursued this goal by, among other things, refusing to honor brokered Frequent Flyer Bonus Program award coupons and terminating travel agents who dealt with brokers. ACE challenged this conduct first as a concerted refusal to deal, in violation of section 1 of the Sherman Act, 26 Stat. 209, codified as amended at 15 U.S.C. Sec. 1, and second as an attempt to monopolize, in violation of section 2 of the Sherman Act, 15 U.S.C. Sec. 2. 23 ACE made little or no evidentiary showing to substantiate these allegations, and the district court granted summary judgment in favor of TWA on grounds too numerous to be summarized here. On appeal, however, ACE has declined to argue the merits of its antitrust claims, and relies solely on the suggestion that the district court might have reached a different conclusion if it had found TWA's tariffs to be contrary to the public policy against restraints on alienation of property. Since we have rejected ACE's claim in that regard, we similarly reject its argument for reversal on the antitrust counterclaims. We decline to address the district court's other grounds, as they have not been challenged or briefed on appeal.