Opinion ID: 216819
Heading Depth: 4
Heading Rank: 1

Heading: Blending of Sections 767 and 768

Text: HCP first argues that the jury instructions were erroneous because the district court blended §§ 767 and 768 instead of relying exclusively on § 768. Before considering the propriety of the district court's hybrid approach, we must consider the threshold issue of whether the district court properly looked to § 768 in the first instance. As explained below, we find no error in the district court's decision to apply § 768 as a matter of Kentucky law. Although the Kentucky Supreme Court has not considered whether to apply § 768 in cases involving competitors, the reported cases on the issue have predicted that the state high court would apply § 768. See, e.g., Brake Parts, Inc. v. Lewis, Nos. 09-132 & 10-212, 2011 WL 42973, at  (E.D.Ky. Jan. 6, 2011) (Kentucky courts would utilize the Section 768 factors as the appropriate factors for evaluating the legality of competitive conduct.); Midwest Agency Servs., Inc. v. JP Morgan Chase Bank, N.A., No. 2:09-165, 2010 WL 935450,  (E.D.Ky. Mar. 11, 2010) (citing AMC of Louisville, Inc. v. Cincinnati Milacron, Inc., No. 3:97-CV-343, 2000 WL 33975582, at -8 (W.D.Ky. Jan. 25, 2000) (relying on Section 768 in considering a tortious interference claim between competitors under Kentucky law)). We believe that these decisions make the proper prediction. Kentucky courts generally follow the Restatement (Second) of Torts, which, of course, includes Section 768, and nothing of which we are aware suggests that Kentucky courts would not apply that section under the facts of this case. Indeed, the Restatement's heightened scrutiny of claims between competitors under § 768 is consistent with Kentucky's strong interest in robust competition. [9] See, e.g., ATC Distrib. Grp., Inc. v. Whatever It Takes Transmissions & Parts, Inc., 402 F.3d 700, 717 (6th Cir.2005) ([S]imply attempting to advance one's own legitimate economic interests at the expense of another's interests does not constitute malice.) (applying Kentucky law); Brooks v. Patterson, 234 Ky. 757, 29 S.W.2d 26, 29 (1930) (distinguishing cases where the alleged injury resulted from an outgrowth of competition in business from those where it was brought about by the exercise of either fraud or force.); accord Carvel Corp. v. Noonan, 350 F.3d 6, 18-20 (2d Cir.2003) (stating that [t]he Restatement's distinction between competitors and non-competitors is intended to strike a balance between protecting economic relationships and encouraging competitive behavior in the market.). Having determined that Kentucky law would look to § 768 in cases between competitors, we now turn to HCP's argument that the district court erred by also considering § 767. Specifically, HCP contends that it was error to instruct the jury on certain factors listed in § 767 to define significantly wrongful means within the meaning of § 768. HCP's argument relies principally on commentary to § 767, which states that § 768 supplant[s] § 767 in cases of competitors. See Restatement (Second) of Torts § 767, cmt. (a). HCP contends that the word supplant is dispositive and renders § 768 inapplicable to claims as between competitors. We disagree with HCP's myopic reading of, and unreasonable reliance on, one word in the commentary. [10] Section 768 does not define wrongful means, and in fact places no limitation whatsoever on the factors that a jury might consider to determine whether the interference of a competitor was wrongful. Without any instruction regarding the meaning of significantly wrongful conduct, the jury would have been left without any guidance. See Bucyrus-Erie Co. v. Gen. Prods. Corp., 643 F.2d 413, 418 (6th Cir.1981) (The purpose of jury instructions is to inform the jury on the law and to provide proper guidance and assistance in reaching its verdict.). In seeking guidance, the district court properly looked to § 767, as many other courts have done, to illuminate the meaning of wrongful conduct under § 768. See, e.g., Franklin Music v. Am. Broad. Cos., Inc., 616 F.2d 528, 545 (3d Cir.1979); Buztronics, 2005 WL 1865512, at ; White Sands Grp., L.L.C. v. PRS II, L.L.C., 32 So.3d 5, 18-19 (Ala.2009); Siren, Inc. v. Firstline Sec., Inc., No. 06-1109, 2006 WL 3257440, at  (D.Ariz. May 17, 2006); RTL Distrib., Inc. v. Double S Batteries, Inc., 545 N.W.2d 587, 591 (Iowa Ct.App.1996); Downers Grove Volkswagen, Inc. v. Wigglesworth Imports, Inc., 190 Ill.App.3d 524, 137 Ill.Dec. 409, 546 N.E.2d 33, 37 (1989). Part of the same Restatement, § 767 immediately proceeds § 768, and both sections relate to tortious interference. Section 768 stands simply as special application of the factors determining whether an interference is improper or not, as stated in § 767. Restatement (Second) or Torts § 768, cmts. (a) (Like § 767, this Section speaks of an interference that is improper or not.) and (b). Section 768 itself refers to § 767 in its discussion of wrongful means. See Restatement (Second) of Torts § 768, cmt. (b) (The predatory means discussed in § 767, Comment c, physical violence, fraud, civil suits and criminal prosecutions, are all wrongful in the situation covered by this Section.). Moreover, § 767 specifically defines improper interference, a phrase also used in § 768, and that the Kentucky Supreme Court has interpreted to mean wrongful, the operative word under § 768. Cf. Atlantic Cleaners & Dyers v. United States, 286 U.S. 427, 433, 52 S.Ct. 607, 76 L.Ed. 1204 (1932) (noting the natural presumption that identical words used in different parts of the same act are intended to have the same meaning.). Finally, we address HCP's policy argument that the district court's [ ] effort to `blend' § 767 with § 768 diluted the competitive protections § 768 is designed to provide. (HCP Br. at 50.) We do not agree. To the extent the district court's hybrid approach may have increased the likelihood of liability under the facts of this case, the approach did not dilute the competitive protections of § 768. Robust competition may also require regulation, and unfair competitive practices certainly do not fall within the protections of § 768. Although courts should be circumspect in adjudicating claims between competitors, wrongful and anti-competitive conduct should not be insulated from liability. Indeed, the public interest in full and fair competition is furthered by imposing liability on a market player, such as HCP, for fraudulently leveraging a public market to sabotage a competitor, as liability for such conduct will deter similar future conduct and promote economic certainty in the marketplace. Under these circumstances, we find that the district court properly resolved the interplay between §§ 767 and 768 as a matter of Kentucky law by instructing the jury pursuant to § 768 and also using certain factors listed in § 767 to explicate § 768.