Opinion ID: 775592
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: 1. Shell's Motive 22 Because the district court resolved the matter on summary judgment, we draw all reasonable inferences in favor of the Mudgetts. Block v. City of Los Angeles, 253 F.3d 410, 421 (9th Cir. 2001). After doing so, we conclude that a trier of fact could reasonably infer that Shell's motive in refusing to load its oil on Marin Tug barges was retaliatory. (We use the word retaliatory here and elsewhere in this opinion in the sense that the parties in this case and the district court have used it, that is, to mean actions intended either to induce Marin Tug to drop its lawsuit or to punish the company for having brought it.) 23 There was some evidence that Shell offered to resume shipping in Marin Tug's barges if Marin dropped the lawsuit. There was also evidence -including the fact that the boycott began right after the lawsuit began and long after the dispute arose, as well as Shell's out-of-sequence reliance on post-boycott proposals as an explanation for the refusal to deal --from which one could find that Shell's explanation of its motives was pretextual and that the real motive was to retaliate for the filing of the lawsuit against it. We therefore do not subscribe to the district court's assessment that there were no material facts in dispute, and that the Mudgetts therefore failed to meet their burden on summary judgment with regard to whether Shell's motive was retaliatory. We conclude instead that, resolving all factual disputes and drawing all inferences against Shell (the moving party), one could infer that Shell's refusal to deal was carried out either in order to induce Marin Tug (and later the Mudgetts) to abandon this lawsuit or to impose punishment for bringing it. So we must decide whether Shell committed the tort of intentional interference of prospective economic advantage by doing a perfectly lawful thing -refusing unilaterally either to contract with Marin Tug or to allow its oil to be carried on Marin Tug barges -because it did so with the purpose of interfering with Marin Tug's resort to the courts to settle a dispute. 24 2. Intentional Interference with Prospective Economic Advantage 25 To answer that question, we begin by surveying the relevant principles of California law, indistinct as they are (as we shall soon see). 26 In Della Penna, the California Supreme Court (the Court) recounted the complicated history of the tort of intentional interference with prospective economic advantage. 902 P.2d at 743-51. 7 The Court noted that nearly a majority of state supreme courts, following the lead of the Oregon Supreme Court in Top Service Body Shop, Inc. v. Allstate Insurance Co., 582 P.2d 1365 (Or. 1978), had in recent years abandoned the prima facie tort approach to the intentional interference tort -under which the defendant had to prove a privilege or justification for interfering with the prospective business dealings of third parties -in favor of an approach placing the burden on the plaintiff to prove wrongful or improper behavior. Della Penna, 902 P. 2d at 746-47. Recognizing that the law usually takes care to draw lines of legal liability in a way that maximizes areas of competition free of legal penalties, the California Court decided to embrace a general approach similar to that pioneered by the Oregon Supreme Court in Top Service Body Shop v. Della Penna, 902 P.2d at 750-51. Henceforth, the Court announced, a plaintiff must plead and prove as part of its case-in-chief that the defendant not only knowingly interfered with the plaintiff's expectancy, but engaged in conduct that was wrongful by some legal measure other than the fact of interference itself. 8 Id. at 751 (emphasis added). 27 The Court's majority did not go beyond that very general conclusion, despite a lengthy, careful, and thoughtful concurrence by Justice Mosk arguing for more precision. 9 Expressly declining to define the contours of the wrongful  element, the Court stated that 28 the case, if any, to be made for adopting refinements to that element of the tort--requiring the plaintiff to prove, for example, that the defendant's conduct amounted to an independently tortious act, or was a species of anticompetitive behavior proscribed by positive law, or was motivated by unalloyed malice --can be considered on another day, and in another case. 29 Id. at 741. 30 Subsequent decisions from the California Courts of Appeal have set forth interpretations of the wrongful  standard that appear to be in conflict. Compare PMC, Inc. v. Saban Entm't, Inc., 52 Cal. Rptr. 2d 877, 891 (Ct. App. 1996) ( `Defendant's liability may arise from improper motives or from the use of improper means.' ) (quoting Top Serv. Body Shop, 582 P.2d at 1371), with Arntz Contr. Co. v. St. Paul Fire & Marine Ins. Co., 54 Cal. Rptr. 2d 888, 895 (Ct. App. 1996) ([O]ur focus for determining the wrongfulness of . . . intentional acts should be on the defendant's objective conduct, and evidence of motive or other subjective states of mind is relevant only to illuminating the nature of that conduct.); see also Korea Supply Co. v. Lockheed Martin Corp, 109 Cal. Rptr. 2d 417, 427 (Ct. App. 2001) (endorsing Justice Mosk's position in concurrence in Della Penna that motive is irrelevant). One other reported California appellate case expressly refused to take sides in this dispute, instead considering the facts before it under all possible standards and concluding that the tort was not made out under any of them. See LiMandri v. Judkins, 60 Cal. Rptr. 2d 539, 546-47 (Ct. App. 1997). As these diverse decisions indicate, the precise type of wrongfulness necessary to trigger liability for intentional interference with prospective economic advantage remains very much an unresolved question in California. 3. The Principles Applicable Here 31 It is therefore with some trepidation that we tread into this area of California tort law. Looking at that law as a whole, however, including cases decided before Della Penna; concentrating on results as well as reasoning; and considering not only intentional interference with prospective economic advantage but also related areas such as the protection accorded employees for discharges against public policy, we conclude that the plaintiffs here cannot make out a case. 32 California law points toward three principles that, taken together, undergird that conclusion: 33 First, even before Della Penna, during the period when the California law of intentional interference with prospective economic advantage placed a less stringent burden on plaintiffs, it was clear with regard to refusals to deal in particular that, 34 in the absence of prohibition by statute, illegitimate means, or some other unlawful element, a defendant seeking to increase his own business may . . . refuse to deal with [the plaintiff] or threaten to discharge employees who do, or even refuse to deal with third parties unless they cease dealing with the plaintiff, all without incurring liability. 35 A-Mark Coin Co. v. General Mills, Inc., 195 Cal. Rptr. 859, 867 (Ct. App. 1983) (emphasis added) (quoting PROSSER, THE LAW OF TORTS &#167 130, at 954-55 (4th ed. 1971)). A-Mark Coin does not speak directly to whether a defendant is insulated from liability when the refusal to deal is intended to coerce the plaintiff to drop or settle a lawsuit. But it does establish, as a background principle, that the tort of interference with prospective economic advantage was not intended broadly to limit individuals or commercial entities in choosing their commercial relationships, whatever their motives in doing so might be -unless those motives are independently unlawful. 10 36 Second, and closely connected to that background principle, California law has long recognized that the core of intentional interference business torts is interference with an economic relationship by a third-party stranger to that relationship, so that an entity with a direct interest or involvement in that relationship is not usually liable for harm caused by pursuit of its interests. Della Penna, 902 P.2d at 750; Hamro v. Shell Oil, 674 F.2d 784, 790 (9th Cir. 1982); Exxon Corp. v. Superior Court, 60 Cal. Rptr. 2d 195, 205 (Ct. App. 1997). 37 Third, although Della Penna itself 11 and some California cases since then have not ruled out the possibility that a malicious motive or one otherwise against general public policy could be sufficient to establish the wrongful element of the tort, see LiMandri, 60 Cal. Rptr. 2d at 546 (citing Willard v. Caterpillar, Inc., 48 Cal. Rptr. 2d 607 (Ct. App. 1995)); PMC, Inc., 52 Cal. Rptr. 2d at 891, there are no post-Della Penna cases that actually found liability on the basis that the defendant merely had a wrongful motive. By contrast, in the two cases in which reliance on a wrongful motive might have made a difference, the California appellate courts adopted Justice Mosk's view in his Della Penna concurrence that motive, standing alone, is entirely irrelevant. Arntz Contracting Co., 54 Cal. Rptr. 2d at 895 (holding thatbad thoughts are no tort and that our focus for determining the wrongfulness of those intentional acts should be on the defendant's objective conduct, (citing Boyson v. Thorn, 33 P.492 (Cal. 1893), and Justice Mosk's concurrence in Della Penna); Korea Supply Co., 109 Cal. Rptr. 2d at 427. 38 The reasoning and results of those post-Della Penna California appellate cases that have actually had to confront the question of the pertinence of bad motive appear to us to be a significant indicator of how the California Supreme Court will ultimately rule if and when it confronts the issue. Further, strong policy considerations counsel that conclusion. Unless the wrongfulness inquiry is limited to those motives or species of malice already proscribed by established legal principles--racial discrimination, for example--parties would be without clear guidelines as to whether any particular manifestation of ill-will would suffice. The result would be uncertainty as to how to tailor conduct in order to avoid liability. 12 39 Modern jurisprudence does in many instances, it is true, turn liability on motive. 13 Justice Mosk's concurring opinion in Della Penna, which exhibits a general suspicion of judicial assessments of motivation (see id. at 759-760), is in that respect out of keeping with a wide body of contemporary law, and may well overstate the dangers and difficulties of relying on motive as the basis for finding conduct unlawful. In the many instances where unlawful motive is the basis for sanctioning behavior, however, the forbidden motive is generally a specific one, proscribed by a particular statute, regulation, or constitutional provision, not one derived from general judicial perceptions of public policy. The citizenry thereby has notice of which motives are unlawful and can accordingly govern its behavior. 40 Developments in the California law of tortious wrongful discharge demonstrate the force of this distinction between generalized proscription of bad motives or motives inconsistent with public policy on one hand and specifically proscribed motives on the other. Gantt v. Sentry Ins. Co., 1 Cal. 4th 1083 (1992), held that an employee who was terminated in retaliation for supporting a co-worker's claim of sexual harassment may state a cause of action for tortious discharge against public policy . . . . Id. at 1085. In so holding, Gantt did not rely on judicially defined notions of public policy as the basis for discovering forbidden motives for discharges, for it recognized that a generalized notion of public policy is notoriously resistent to precise definition. Id. at 1094. Instead, Gantt found that retaliation for refusal to testify untruthfully or to withhold testimony regarding employment discrimination is a misdemeanor under a specific California statute and held the discharge tortious for that reason. Although the California Supreme Court later broadly expanded the sources of positive law that can inform the wrongful discharge against public policy tort to include, for example, regulations grounded in legislative enactments, see Green v. Ralee Engineering Co., 960 P.2d 1046 (Cal. 1998), the Court continued to express concern with delimiting the scope of the anti-public policy motives that can support the wrongful termination tort,  `lest [courts] mistake their own predilections for public policy which deserves recognition at law.'  Green at 1049, citing Hentzel v. Singer Co., 188 Cal. Rptr. 159 (Cal. Ct. App. 1982). 41 We conclude that if faced with the issue, the California Supreme Court would either eliminate motive, standing alone, as a basis for the wrongfulness element of the tort of intentional interference with prospective economic advantage or, more likely, import into the tort a limitation on motive-based causes of action similar to the one used under Gantt and its progeny. 4. Application to This Case 42 Shell's refusal to deal was wrongful, say the Mudgetts, because it interfered with the Mudgetts' constitutionally protected right to petition government for redress of grievances and was contrary to California's public policy favoring judicial resolution of disputes over self-help remedies. 14 Applying the standards derived above to the facts at hand, we conclude the Mudgetts cannot on these grounds make out the requisite showing of wrongfulness. 43 Shell's actions were, at bottom, simply a refusal to deal with Marin Tug, and therefore presumptively valid, under A-Mark, absent some unlawful element. We are not dissuaded from this conclusion by the fact that in some instances the actual contracts were between Marin Tug and the buyer, not with Shell. Such contracts, no less than those in which Marin Tug contracted directly with Shell, required direct, active involvement by Shell -the loading of Shell oil onto Marin Tug's barges. Because the economic relationship between Marin Tug and the buyer of any Shell oil shipped on Marin Tug's barges depends on Shell's cooperation, Shell is not easily characterized as a stranger to that relationship. Further, as the underlying dispute that gave rise to this lawsuit demonstrates, Shell and Marin Tug had a mutual economic interest in delivering the oil safely and cleanly, and were dependent upon each other to do so. In this situation, there is nothing wrongful under California law about the means Shell chose to advance its interests, a simple refusal to deal with Marin Tug or to load its oil on Marin Tug's barges. 44 The Mudgetts' intentional interference claim depends entirely, then, upon a showing that Shell acted with a wrongful motive. Our inquiry into California law predicted, however, that the California Supreme Court may accept the position advocated in Justice Mosk's concurrence in Della Penna (and by two post-Della Penna court of appeal opinions) that motive is entirely irrelevant to the tort. If so, the Mudgetts' cause of action would necessarily fail. 45 The Mudgetts' cause of action would also fail if California law instead adopted the alternative approach discussed above, limiting wrongful motives to those proscribed by some constitutional, statutory, regulatory or other determinable legal standard. 15 The Mudgetts correctly point out that unimpeded access to the courts is a value constitutionally protected from governmental impairment, often protected by law from private impairment (as illustrated by Gantt), and favored by public policy. The Mudgetts fail, however, to demonstrate that the refusal by Shell-a private party-to deal with Marin Tug in order to influence or punish Marin Tug's lawsuit against it is proscribed by any statute, constitutional provision, or other independent source of legal principles.