Opinion ID: 1227777
Heading Depth: 3
Heading Rank: 2

Heading: Interference With Competitive Contests

Text: (5) As indicated previously, the Court of Appeal failed to apply the threshold requirement of a probability of the prospective economic benefit. That requirement is especially appropriate to evaluate a lost economic expectancy where the facts involve a competitive contest of one kind or another. To require less of a showing would open the proverbial floodgates to a surge of litigation based on alleged missed opportunities to win various types of contests, despite the speculative outcome of many of them. In fact, it is the very speculativeness of the outcome that makes such competitions interesting. Further, to allow recovery without proof of probable loss would essentially eliminate the tort's element of causation, which links the wrongful act with the damages suffered. Scholarly authority and cases from other jurisdictions agree that an application of the threshhold requirement of probable expectancy to the area of contests in general will usually result in a denial of recovery. Prosser has generally remarked that since a large part of what is most valuable in modern life depends on `probable expectancies,' as social and industrial life becomes more complex the courts must do more to discover, define and protect them from undue interference. (See Prosser & Keeton, Torts (5th ed. 1984) § 130, p. 1006, fn. omitted.) Prosser, however, has specifically addressed the area of interference with contests: When the attempt has been made to carry liability for interference ... into such areas as ... deprivation of the chance of winning a contest, the courts have been disturbed by a feeling that they were embarking upon uncharted seas, and recovery has been denied; and it is significant that the reason usually given is that there is no sufficient degree of certainty that the plaintiff ever would have received the anticipated benefits. ( Ibid., italics added, fn. omitted.) Notwithstanding rare cases where public policies are compelling, the tort of interference with prospective economic advantage traditionally has not protected speculative expectancies such as the particular outcome of a contest. Prosser instructs that the true source of the modern law on interference with prospective relations is the principle that tort liability exists for interference with existing contractual relations. (Prosser & Keeton, supra, at p. 1006.) For the most part the `expectancies' thus protected have been those of future contractual relations.... In such cases there is a background of business experience on the basis of which it is possible to estimate with some fair amount of success both the value of what has been lost and the likelihood that the plaintiff would have received it if the defendant had not interfered. ( Ibid., italics added.) Recently in Blank v. Kirwan (1985) 39 Cal.3d 311 [216 Cal. Rptr. 718, 703 P.2d 58], we acknowledged Prosser's suggestion that the interests generally protected by the tort are business expectancies, and on that basis we declined to expand the tort to cover interference with prospective nonbusiness relations. In Blank, an unsuccessful applicant for a license to operate a poker club brought an action against a city, public official and private individuals alleging a conspiracy to monopolize the operations of poker clubs. We ruled the complaint failed to state a cause of action for intentional interference with prospective economic advantage. Citing Buckaloo, supra, 14 Cal.3d at page 827, we held that plaintiff had failed to state adequate facts satisfying the first element of the tort, namely, an economic relationship between the plaintiff and some third person containing the probability of future economic benefit to the plaintiff. ( Id., at pp. 330-331.) There were two reasons in Blank why plaintiff failed to state a cause of action. First, the requisite relationship with third persons involved as yet unknown or nonexistent patrons; the relationship between the defendant city and plaintiff could not be characterized as an economic one. Second, even if the relationship between plaintiff and the city could be so characterized, it would make little difference. The tort has traditionally protected the expectancies involved in ordinary commercial dealings  not the `expectancies,' whatever they may be, involved in the governmental licensing process. (See Prosser & Keeton, [ supra, ] p. 1006.) Plaintiff does not attempt to justify such an expansion of the tort. Nor would he likely have been successful if he had. (39 Cal.3d at p. 330.) Thus, the plaintiff in Blank failed to show any real expectation of economic advantage because the city council's discretion to grant or deny applications for a poker club license was broad and negated any expectancy as a matter of law. ( Id., at pp. 330-331.) Determining the probable expectancy of winning a sporting contest but for the defendant's interference seems impossible in most if not all cases, including the instant case. Sports generally involve the application of various unique or unpredictable skills and techniques, together with instances of luck or chance occurring at different times during the event, any one of which factors can drastically change the event's outcome. In fact, certain intentional acts of interference by various potential defendant players may, through imposition of penalties or increased motivation, actually allow the victim player or team to prevail. Usually, it is impossible to predict the outcome of most sporting events without awaiting the actual conclusion. The Restatement Second of Torts specifically addresses the speculative nature of the outcome of a horserace. The relevant comment is contained in a Special Note on Liability for Interference With Other Prospective Benefits of a Noncontractual Nature. The comment states that various possible situations may justify liability for interference with prospective economic benefits of a noncommercial character. Special mention is given to [c]ases in which the plaintiff is wrongfully deprived of the expectancy of winning a race or a contest, when he has had a substantial certainty or at least a high probability of success. For example, the plaintiff is entered in a contest for a large cash prize to be awarded to the person who, during a given time limit, obtains the largest number of subscriptions to a magazine. At a time when the contest has one week more to run and the plaintiff is leading all other competitors by a margin of two to one, the defendant unjustifiably strikes the plaintiff out of the contest and rules him ineligible. In such a case there may be sufficient certainty established so that the plaintiff may successfully maintain an action for loss of the prospective benefits. On the other hand, if the plaintiff has a horse entered in a race and the defendant wrongfully prevents him from running, there may well not be sufficient certainty to entitle the plaintiff to recover. ... (Rest.2d Torts, § 774B, special note, pp. 59-60, italics added.) As indicated by the Restatement comment, certain contests may have a higher probability of ultimate success than others. To this end, the cases cited by the Court of Appeal here, awarding damages to competitors in contests, are distinguishable because in each case there was a high probability of winning. [8] In addition to the Restatement position, one older case has specifically held that the loss of a chance to win a prize purse at a trotting horserace was too speculative to support tort liability. (See Western Union Tel. Co. v. Crall (1888) 39 Kan. 580 [18 P. 719].) Applying the foregoing analysis to the instant case, it seems clear that plaintiff's complaint fails adequately to allege facts showing interference with a probable economic gain, i.e., that Bat Champ would have won this horserace, or at least won a larger prize, if defendant had not interfered. Here, the complaint only alleged in conclusory terms that defendant's wrongful interference resulted in a lost opportunity to finish higher in the money. The complaint merely indicated that defendant's maneuvers and whipping forced Bat Champ to break stride and fall out of contention. [9] We conclude, as a matter of law, that the threshold element of probability for interference with prospective economic advantage was not met by the facts alleged, whether or not some conspiracy between a competitor and noncompetitor existed. It was not reasonably probable, on the facts alleged, that Bat Champ would have finished in a better position. Indeed, we may take judicial notice of the impossibility of predicting such matters; the winner of a horserace is not always the leader throughout the race for a horse can break the pack at any point in the race, even as a matter of strategy. Further, many races are won by a nose. (6) (See fn. 10.) Thus, no cause of action exists for interference with this horseracing event. [10]