Application of Antitrust Principles to Business Tort Claims

The previous chapter explored how the role of business tor ts
in establishing antitrust violations has evolved over the last
century. This chapter examines how business tort defendants
have attempted to use some of the concepts successfully invoked
in defense of antitrust claims when defending against tort claims
based upon competitive conduct. Eds.
A. Introduction
This chapter focuses upon two defensive theories with connections to
antitrust that have enjoyed increasing acceptance in business tort
The so called “competitive privilege” or “freedom to compete”
theories increasingly are viewed as principles of nonliability rather than
as affirmative defenses to business tort claims. The Noerr doctrine,
which likewise originated in the antitrust context, is now widely
recognized as an immunity from business tort liability. This chapter also
briefly examines several other antitrust principles that have been used
with varying degrees of success in business tort litigation.
B. The Competitive Privilege and the Freedom to Compete
As noted in Chapter I, antitrust plaintiffs long have attempted with
varying success to import business tort principles into antitrust cases. As
business torts have gained prominence and antitrust defenses have
strengthened, business tort defendants increasingly have sought to import
antitrust concepts into business tort cases. Foremost among these is the
so-called “competitive privilege.”
Business tort doctrine long has recognized a privilege for conduct
that is legitimately competitive.
This privilege is embodied in the
formulation of standards concerning tortious interference with business
. See, e.g., The Schoolmaster Case, Y.B. 11, Hen. IV, f.47 pl. 21 (C.P. Hil.
Term 1 410); see also Pacific Express v. U nited Airlines, 959 F.2d 814,
818-20 (9th Cir. 1992).
22 Business Torts and Unfair Competition Hand book
relations set forth in the Restatement (Second) of Torts.
that “[t]he freedom t o engage in busi ness and to compete for the
patronage of prospective customers is a fundamental premise of the free
enterprise system,” the Restatement (Third) of Unfair Competition
recognizes a broader “freedom to compete.”
This more recent
Restatement rejects the view that competition is a “privilege” as to which
the defendant has the burden of proof; instead, it places the burden on the
plaintiff to allege and prove that the defendant’s conduct amounted to
something more than mere competition.
The Competitive Privilege
“One of the most firmly established principles of the common law is
that competition is not a tort.”
Although competition literally is an
intentional interference with a competitor’s prospective contractual
relations, to conclude that it is therefore tortious would disrupt the
system of free enterprise and thus makes no sense from a legal or
economic standpoint.
The law of contract exists to provide a means of enforcing business
expectations; however, when a business relation affords the parties no
enforceable expectations, but only the hope of continued benefits, the
law must allow for the rights of others,
since no business has a
proprietary interest in its customers.
Thus, while a company is not
justified in inducing a breach of contract simply because it is in
. RESTATEMENT (SECOND) OF TORTS § 768 (1979) [hereinafter
[hereinafter RESTATEMENT (THIRD)].
. Id. at cmt. a.
. Shank v. William R. Hague, Inc., 192 F.3d 675, 687 (7th Cir. 1 999)
(quoting Frandsen v. Jensen-Sundquist Agency, 802 F.2d 941, 947 (7th
Cir. 1986)); see Speakers of Sport, Inc. v. ProServ, Inc., 178 F.3d 862,
865 (7th Cir. 1999) (citing Keeble v. Hickeringill, 103 Eng. Rep. 1127
(K.B. 1706-07)); Grempler v. Multiple Listing Bureau, 258 Md. 419, 425
(Md. App. 1970).
. Shank, 192 F.3d at 687; Fr andsen, 802 F.2d at 947; see Macklin v.
Robert Logan Assocs., 639 A.2d 112, 119 (Md. App. 1994).
. See Bed, Bath & Beyond of La Jolla, Inc. v. La Jolla Vill. Sq uare Venture
Partners, 60 Cal. Rptr. 2d 830, 837-38 (Cal. App. 1997); Belden Corp. v.
InterNorth, 413 N.E.2d 98, 101 (Ill. App. 1980); Macklin, 639 A.2d at
. See Prudential Ins. Co. of Am. v. Sipula, 776 F.2d 157, 163 (7th Cir.
Application of Antitrust Princip les 23
competition with one of the parties to the contract and seeks to further its
own economic interests, competitive freedom is of sufficient importance
to justify inducement of a third party to abandon its relationship with
another in the absence of an existing contractual relationship.
Applying this reasoning, courts generally have held that, while
competition is not a defense to a claim of interference with an existing
contract not terminable at will, it is a valid defense to a claim of
interference with a contract that is terminable at will, or to a claim of
interference with prospective advantage.
Many of these decisions have
relied upon section 768 of the Restatement (Second), which provides:
(1) One who intentionally causes a third person not to enter into a
prospective co ntractual relati on with another who is his competitor or
not to continue an existing contract ter minable at will does not interfere
improperly with the other’s relation if
(a) the relation concerns a matter involved in the
competition between the actor and the other and
(b) the actor does not employ wrongful means and
(c) his action does not create or continue an unlawful
restraint of trade and
(d) his purpose is at least in part to advance his interest in
competing with the other.
(2) The fact that one is a competitor of another for the business of a
third person does not prevent his causing a breach of an existing
. Macklin, 639 A.2d at 120; see Jewel Cos. v. Pay Less Drug Stores Nw.,
741 F.2d 1555, 1568 (9th Cir. 1984); Republic Tobacco v. N. Atl.
Trading Co., 254 F. Supp. 2d 1007, 1011-12 (N.D. Ill. 2003).
. See Navellier v. Sletten, 262 F.3 d 923, 937-38 (9th Cir. 20 01);
International Sales & Ser v. v. Austral Insulated Prods., 262 F.3d 1152,
1159 (11th Cir. 2001); P roServ, 178 F.3d at 865; Nobody in Particular
Presents, Inc. v. Clear Channel Commc’ns, 311 F. Supp. 2d 1048, 1072
(D. Colo. 2004); Cacique, Inc. v. Gonzalez, 2004 U.S. Dist. LEXIS 4966,
at *5-7 (N.D. Ill. 2004); Edwards v. Anaconda Co., 565 P.2d 190, 193-94
(Ariz. Ct. App. 1977); Heavener, Ogier Servs. v. R.W. Fla. Region, 418
So. 2d 1074, 1076 -77 (Fla. Dist. Ct. App. 1982); Automated Solutions
Enters. v. Clearview Soft ware, 567 S.E .2d 335, 339 (Ga. Ct. App. 2002);
Belden, 413 N.E.2d at 101-02; Macklin, 63 9 A.2d at 120; North
Plumbing & Htg. v. Henderson Bros., 268 N.W.2d 296, 302 (Mich. Ct.
App. 1 978); United Wild Rice v. Nelson, 313 N.W.2d 628, 633 (Minn.
1982); Fred Siegel Co. v. Arter & Hadden, 707 N.E.2d 853, 861 (Ohio
1999); Martin v. Phillips Petroleum Co., 4 55 S.W.2d 429, 435 (Tex. App.
1970); Wilder v. Cody Country Chamber of Commerce, 868 P.2d 211,
225 (Wyo. 1994).

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