Intentional Interference With Business Relations California
"The tort of intentional interference with prospective business advantage . . . is premised on the ideal ' "everyone has the right to establish and conduct a lawful business and is entitled to the protection of organized society, through its courts, whenever that right is unlawfully invaded." ' " (Institute of Veterinary Pathology, Inc. v. California Health Laboratories, Inc. (1981) 116 Cal. App. 3d 111, 125, 172 Cal. Rptr. 74, quoting Buxbom v. Smith (1944) 23 Cal. 2d 535, 546, 145 P.2d 305; accord, Settimo Associates v. Environ Systems, Inc. (1993) 14 Cal. App. 4th 842, 845; PMC, Inc. v. Saban Entertainment, Inc., supra, 45 Cal. App. 4th at p. 595.)
The same interest is protected by the related tort of interference with contract. (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal. 3d 1118, 1126, 270 Cal. Rptr. 1, 791 P.2d 587; see also PMC, Inc. v. Saban Entertainment, Inc., supra, 45 Cal. App. 4th at pp. 594-595.)
In PMC, Inc. v. Saban Entertainment, Inc. (1996) 45 Cal. App. 4th 579, the court reviewed the law on these two torts in cases involving contracts of questionable validity.
Building on our Supreme Court's decision in Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal. 4th 376, 902 P.2d 740, the PMC court drew a clear line between interference with contract and interference with prospective business advantage, based on whether the underlying contract was enforceable.
Justice Croskey, writing for Division Three of the Second District, reasoned that determining whether the plaintiff's contract was "void" or "voidable" is less useful than simply considering whether it could be enforced.
If the agreement was enforceable, the logical claim is for interference with contract. If not, the plaintiff could not count on performance of the contract and enjoyed nothing more than an expectancy.
Therefore, any interference by a stranger would disturb only a prospective relationship, and interference with prospective economic advantage is the appropriate cause of action.
Interference with prospective economic advantage is more difficult to prove than interference with contract. It entails an enhanced burden of proving intentionally wrongful conduct by the defendant, and permits the defendant a broader defense based on the competition privilege. (PMC, supra, 45 Cal. App. 4th at pp. 595-602)