Opinion ID: 2775233
Heading Depth: 2
Heading Rank: 3

Heading: the improper-purpose doctrine

Text: SHOULD BE ABANDONED ¶42 If we were convinced that the improper-purpose doctrine served important public purposes, we would uphold it despite its weak basis in precedent. But our conviction is the opposite: improper purpose, in the absence of any improper means, should not be a basis for tortious interference liability. ¶43 As our decisions have recognized, determining the predominant purpose behind a defendant’s actions raises significant evidentiary problems. Because this inquiry is necessarily factintensive, appellate review has been limited, and little case law has developed to guide courts’ and juries’ work. The improper-purpose doctrine thus requires trial courts and juries to make decisions that are effectively without guidance. 12 Cite as: 2015 UT 21 Opinion of the Court ¶44 This vagueness does more than lead to unpredictable verdicts. It also fails to give parties adequate notice of their rights and duties. If improper-purpose liability became commonplace, it would have a chilling effect on legitimate, socially beneficial competitive practices. Worse, it would chill speech, discouraging the free spread of information and opinion. ¶45 For these reasons, among others, other states have increasingly limited or rejected improper-purpose liability. In addition to supporting our arguments against improper-purpose liability, this trend further weakens the authority on which Leigh Furniture was based. With both contemporary authority and our own reasoning opposed to improper-purpose liability, we conclude that it should be rejected.
Too Little Guidance for Courts and Juries ¶46 Anger and even malice are commonplace human emotions, and it would be neither possible nor desirable to treat every angry or malicious action as a tort. Even a tort allowing liability whenever a defendant maliciously interfered with a plaintiff’s economic relations would be unwise. As Leigh Furniture recognized, such a tort would interfere with “much competitive commercial activity, such as a businessman’s efforts to forestall a competitor in order to further his own long-range economic interests.” Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293, 307 (Utah 1982). ¶47 Leigh Furniture sought to foreclose this possibility by requiring plaintiffs to show not merely that an improper purpose was present, but that it predominated over legitimate motivations. Id. (“[The improper-purpose doctrine] takes the long view of the defendant’s conduct, allowing objectionable short-run purposes to be eclipsed by legitimate long-range economic motivation.”). Yet even so, it recognized that there were “[p]roblems inherent in proving motivation or purpose” and cautioned against overuse of the improper-purpose prong. Id. ¶48 In Pratt v. Prodata, Inc., Chief Justice Zimmerman argued that Leigh Furniture’s efforts to limit the improper-purpose prong were inadequate. 885 P.2d 786, 789 n.3 (Utah 1994) (opinion of Zimmerman, C.J.). Under Leigh Furniture’s predominant-purpose standard, “all relevant considerations are issues of fact,” and “improper-purpose findings” are therefore “insulate[d] . . . from meaningful appellate review.” Id. Consequently, once a plaintiff presents evidence of an improper purpose, no legal standard exists to guide fact-finders’ determination of whether that purpose or the 13 ELDRIDGE v. JOHNDROW Opinion of the Court defendant’s legitimate purposes predominated. Juries are required to look into the defendant’s soul and discern which of her mixed motives was the real cause of her action—a question she herself, at the time she acted, may not have been able to answer with any certainty. ¶49 The three Utah cases that have allowed improper-purpose claims demonstrate the perceptiveness of Chief Justice Zimmerman’s critique.10 In each case, the question of improper purpose reached the court in a procedural posture that permitted only minimal scrutiny.11 In each case, there was clearly evidence to support a finding of a legitimate purpose.12 And yet in each case, the court concluded that weighing the evidence of a proper purpose against 10 These cases are Pratt, 885 P.2d 786; ProMax Development Corp. v. Mattson, 943 P.2d 247 (Utah Ct. App. 1997); and Peterson v. Luna Bronze, L.C., No. 2:07CV00054DS, 2008 WL 4130021, at  (D. Utah Aug. 14, 2008). 11 Pratt and ProMax both involved challenges to a factual finding of improper purpose, and therefore reviewed only the sufficiency of the evidence. Pratt, 885 P.2d at 789 (“There is substantial credible evidence in the record to support the jury’s determination that defendants interfered with Pratt’s economic relations for an improper purpose . . . .”); ProMax, 943 P.2d at 252 (“[D]oes the evidence support the trial court’s factual findings and legal conclusions . . . ?”). In Luna Bronze, the federal district court denied summary judgment against an improper-purpose claim, concluding there was sufficient evidence for a jury to find an improper purpose. 2008 WL 4130021, at – (“The Court is of the view that a reasonable jury could conclude from the evidence cited by Luna Bronze that Peterson’s purpose was improper.”). 12 In all three cases, a jury could have concluded that the defendants’ action was intended to protect their legal rights and economic interests. Pratt arose out of an employer’s efforts to enforce a non-compete agreement, though the means the employer used to enforce the agreement were unconventional and possibly unethical. 885 P.2d at 789 (“Rather than suing Pratt for breach of the Noncompete Covenant as it was legally entitled to do, Prodata utilized its contacts at [Pratt’s employer] to have Pratt fired.”). In ProMax, the defendant claimed he had a contractual right “to act as [the] selling agent” for a home and took steps to prevent the home’s sale without his involvement. 943 P.2d at 251. And in Luna Bronze, the defendant’s allegedly tortious action was to send out cease-anddesist letters during a copyright dispute. 2008 WL 4130021, at . 14 Cite as: 2015 UT 21 Opinion of the Court the evidence of an improper purpose was a task for the finder of fact.13 ¶50 Were the approach of these cases followed in large numbers of cases, Leigh Furniture’s efforts to limit the scope of the improper-purpose doctrine would be futile; any significant evidence of improper purpose would allow juries to find even the most commonplace commercial conduct tortious, no matter how much evidence could be presented of legitimate motivations.14 The outcome of improper-purpose claims would thus depend more on jurors’ personal sympathies for one party or the other than on any generally applied legal rule.
Inadequate Notice of Their Rights and Duties ¶51 Because improper-purpose findings are so dependent on fact-finders’ personal sympathies, and so insulated from appellate review, the outcome of an improper-purpose suit becomes unpredictable as soon as any evidence of improper purpose is introduced. This is a problem not merely because it may lead to unjust outcomes in individual cases, but because it makes it impossible for private parties to understand their rights and duties under tortious interference law. ¶52 Under the improper-purpose prong as it has developed, a business owner could be sued for undercutting his competitor’s prices if he held a grudge against her. An investor in a Ponzi scheme 13 Pratt, 885 P.2d at 788–89 (expressing deference to the jury’s finding of improper purpose); ProMax, 943 P.2d at 255 (“[T]here was sufficient evidence presented at trial from which the trial court could have [found improper purpose].”); Luna Bronze, 2008 WL 4130021, at  (“The evidence, thus, presents sufficient disagreement to require submission to a jury.”). 14 The ProMax and Luna Bronze courts each cited only a single piece of evidence suggesting an improper purpose. In ProMax, the court mentioned only that the defendant could have sued to protect his contractual rights but chose not to. 943 P.2d at 255. In Luna Bronze, the court cited only testimony that the defendant had warned the plaintiff that their copyright dispute would cause “the owner of Luna Bronze to lose the business to Peterson and to be deported.” 2008 WL 4130021, at . And yet each court concluded that a single piece of ambiguous evidence was sufficient to support a finding of improper purpose. ProMax, 943 P.2d at 255; Luna Bronze, 2008 WL 4130021, at . 15 ELDRIDGE v. JOHNDROW Opinion of the Court might be sued for exposing the scheme if she did so with enough malice towards her swindlers. And a customer leaving angry reviews online might receive a response to her complaints via service of process. ¶53 It is of course likely that few juries would find a predominantly improper purpose in any of these cases, but that is beside the point. The mere risk that a jury might find liability, coupled with the low bar the claims need to clear in order to reach a jury in the first place, could become a substantial deterrent to socially beneficial speech and conduct if improper-purpose suits became common.15 In the First Amendment context, the tendency of a law to deter conduct it does not actually prohibit is known as a chilling effect, and is sometimes sufficient to invalidate the law as an infringement of the freedom of speech even when the object of the law is constitutionally unobjectionable. See Frederick Schauer, Fear, Risk and the First Amendment: Unraveling the “Chilling Effect,” 58 B.U. L. REV . 685, 693 (1978). ¶54 We do not hold that the improper-purpose doctrine actually violates the First Amendment—that question is not before us, and we have no need to reach it. But we are persuaded that the improper-purpose doctrine as it currently exists in Utah is in tension with First Amendment principles, and this tension is a further reason to abandon the precedent on which it is based. C. The Pratt Dissenters’ Concerns Are Adequately Addressed by the Improper Means Prong ¶55 Though the foregoing discussion demonstrates the disadvantages of improper-purpose liability, it does not weigh those costs against the doctrine’s benefits—benefits sufficient to persuade two justices of the Pratt court that the improper-purpose prong 15 The Seventh Circuit recognized this problem in a tortious interference case brought under Illinois law. In rejecting an argument that “[a] competitor’s privilege does not include a right to get business from a competitor by means of fraud,” the court pointed out that “[o]nce a case gets to the jury, all bets are off. The practical consequence of [this] approach, therefore, would be that a sports agent who lured away the client of another agent with a promise to do better by him would be running a grave legal risk.” Speakers of Sport, Inc. v. ProServ, Inc., 178 F.3d 862, 865–66 (7th Cir. 1999). 16 Cite as: 2015 UT 21 Opinion of the Court should be retained despite its dangers. 885 P.2d at 790–91 (Stewart, A.C.J., concurring in the result).16 ¶56 Specifically, two of the Pratt justices argued that although “[the improper-purpose] prong, if construed broadly, could seriously interfere with the forces of competition in the marketplace,” the doctrine was nevertheless “sound[].” Id. Without an improper-purpose prong, they argued, “[i]nfliction of gratuitous harm” might go unremedied. Id. at 790–91. Because of the need for a remedy in cases like Pratt, the two justices preferred to deal with the improper-purpose prong’s problems by letting the doctrine mature and narrow itself through the normal processes of commonlaw adjudication. Id. (“It is, indeed, the strength of the common law that general principles of law receive definition and limitation over time by their application in specific fact situations.” (emphasis added)).