Opinion ID: 1159154
Heading Depth: 2
Heading Rank: 1

Heading: History and Elements of the Tort

Text: The tort of intentional interference with prospective economic relations reaches beyond protection of an interest in an existing contract and protects a party's interest in prospective relationships of economic advantage not yet reduced to a formal contract (and perhaps not expected to be). Buckaloo v. Johnson, 14 Cal.3d 815, 537 P.2d 865, 868-69, 122 Cal. Rptr. 745, 748-49 (1975); Restatement, supra, § 766B comment c; W. Prosser, supra, § 130. Although previously faced with arguments or circumstances presenting the issue, e.g., Searle v. Johnson, Utah, 646 P.2d 682, 683 (1982); Soter v. Wasatch Development Corp., 21 Utah 2d 224, 443 P.2d 663 (1968), we have never expressly resolved the question of whether Utah recognizes this tort. We now resolve that question, in the affirmative. The plethora of decided cases and abundant literature on the tort of intentional interference with prospective economic relations has been helpful in our consideration. [3] In summarizing the history of this tort, the Restatement (Second) of Torts, ch. 37, Interference with Contract or Prospective Contractual Relation (1979), observes that its elements are a curious blend of the principles of liability for intentional torts (in which the plaintiff proves a prima facie case of liability, subject to the defendant's proof of justification) and for negligent torts (in which the plaintiff must prove liability based on the interplay of various factors). The disagreement and confusion incident to this blend of intentional and negligent tort principles has produced two different approaches to the definition of this tort. Influenced by the model of the intentional tort, many jurisdictions and the first Restatement of Torts define the tort of intentional interference with prospective economic relations as a prima facie tort, subject to proof of privilege as an affirmative defense. To recover, the plaintiff need only prove a prima facie case of liability, i.e., that the defendant intentionally interfered with his prospective economic relations and caused him injury. As with other intentional torts, the burden of going forward then shifts to the defendant to demonstrate as an affirmative defense that under the circumstances his conduct, otherwise culpable, was justified and therefore privileged. [4] This is the approach assumed in several Utah decisions describing the related tort of interference with contract. Bunnell v. Bills, 13 Utah 2d 83, 90, 368 P.2d 597, 602-03 (1962); Gammon v. Federated Milk Producers Association, Inc., 11 Utah 2d 421, 426, 360 P.2d 1018, 1022 (1961), and 14 Utah 2d 291, 295-96, 383 P.2d 402, 405-06 (1963). This approach was also suggested in a subsequent case that described (though it did not formally adopt) the tort of intentional interference with prospective economic relations. Searle v. Johnson, Utah, 646 P.2d 682 (1982). The problem with the prima facie-tort approach is that basing liability on a mere showing that defendant intentionally interfered with plaintiff's prospective economic relations makes actionable all sorts of contemporary examples of otherwise legitimate persuasion, such as efforts to persuade others not to eat certain foods, use certain substances, engage in certain activities, or deal with certain entities. The major issue in the controversy  justification for the defendant's conduct  is left to be resolved on the affirmative defense of privilege. In short, the prima facie approach to the tort of interference with prospective economic relations requires too little of the plaintiff. Under the second approach, which is modeled after other negligent torts, the plaintiff must prove liability based on the interplay of various factors. The Restatement (Second) of Torts now defines an actionable interference with prospective economic relations as an interference that is both intentional and improper. Id. at § 766B. [5] Under this approach, the trier of fact must determine whether the defendant's interference was improper by balancing and counterbalancing seven factors, including the interferor's motive, the nature of his conduct and interests, and the nature of the interests with which he has interfered. Id. at § 767. In those jurisdictions which have followed the negligence model, the plaintiff bears the burden of proving that in view of all of these factors the defendant's interference was improper. This obviously imposes a very significant burden on the plaintiff and magnifies the difficulty of resolving some contested issues on the pleadings. So far as we have been able to discover, only four states have specifically adopted the Restatement (Second) definition of the elements of this tort, [6] though others have apparently applied some portion of the Restatement formulation in their own definitions. [7] In short, there is no generally acknowledged or satisfactory majority position on the definition of the elements of the tort of intentional interference with prospective economic relations. In its historical review, the Restatement (Second) of Torts states that the law in this area has not fully congealed but is still in a formative stage so that the several forms of the tort ... are often not distinguished by the courts, and cases have been cited among them somewhat indiscriminately. Id., Introductory Note to ch. 37 at 5. We concur in the Restatement (Second) 's rejection of the prima facie tort approach because it leaves too much uncertainty about the requirements for a recognized privilege and the defendant's burden of pleading and proving these and other matters. Id. But we also reject the Restatement (Second) 's definition of the tort because of its complexity. We seek a better alternative. Oregon has outlined a middle ground by defining the tort of interference with prospective economic relations so as to require the plaintiff to allege and prove more than the prima facie tort, but not to negate all defenses of privilege. Privileges remain as affirmative defenses. This approach originated with Justice Linde's opinion in Top Service Body Shop, Inc. v. Allstate Insurance Co., 283 Or. 201, 582 P.2d 1365 (1978). After summarizing the history of this tort and specifically refusing to require a plaintiff to prove that the interference was improper under the balancing-of-factors approach specified in the Restatement (Second), the court defined the cause of action for wrongful interference with economic relationships as follows: Either the pursuit of an improper objective of harming plaintiff or the use of wrongful means that in fact cause injury to plaintiff's contractual or business relationships may give rise to a tort claim for those injuries... . In summary, such a claim is made out when interference resulting in injury to another is wrongful by some measure beyond the fact of the interference itself. Defendant's liability may arise from improper motives or from the use of improper means. Top Service Body Shop, Inc., 283 Or. at 205, 209, 582 P.2d at 1368, 1371. A subsequent decision of that court restated and elaborated what the plaintiff must prove, as follows: In Top Service we decided that the defendant's improper intent, motive or purpose to interfere was a necessary element of the plaintiff's case, rather than a lack thereof being a matter of justification or privilege to be asserted as a defense by defendant. Thus, to be entitled to go to a jury, plaintiff must not only prove that defendant intentionally interfered with his business relationship but also that defendant had a duty of non-interference; i.e., that he interfered for an improper purpose rather than for a legitimate one, or that defendant used improper means which resulted in injury to plaintiff. Straube v. Larson, 287 Or. 357, 361, 600 P.2d 371, 374 (1979). Cf. Anderson v. Dairyland Insurance Co., 97 N.M. 155, 637 P.2d 837, 840-41 (1981) (nominally adopting the Restatement (Second) definition in Section 766B but using the Oregon elements of improper means or improper motive to define requirement that interference be improper). We recognize a common-law cause of action for intentional interference with prospective economic relations, and adopt the Oregon definition of this tort. Under this definition, in order to recover damages, the plaintiff must prove (1) that the defendant intentionally interfered with the plaintiff's existing or potential economic relations, (2) for an improper purpose or by improper means, (3) causing injury to the plaintiff. Privilege is an affirmative defense, Searle v. Johnson, Utah, 646 P.2d 682 (1982), which does not become an issue unless the acts charged would be tortious on the part of an unprivileged defendant. Top Service Body Shop, Inc., 283 Or. at 210, 582 P.2d at 1371.