California Civil Jury Instructions (CACI)

2202. Intentional Interference With Prospective Economic Relations

[Name of plaintiff] claims that [name of defendant] intentionally interfered with an economic relationship between [him/her/it] and [name of third party] that probably would have resulted in an economic benefit to [name of plaintiff]. To establish this claim, [name of plaintiff] must prove all of the following:

1. That [name of plaintiff] and [name of third party] were in an economic relationship that probably would have resulted in an economic benefit to [name of plaintiff];

2. That [name of defendant] knew of the relationship;

3. That [name of defendant] intended to disrupt the relationship;

4. That [name of defendant] engaged in wrongful conduct through [insert grounds for wrongfulness, e.g., misrepresentation, fraud, violation of statute];

5. That the relationship was disrupted;

6. That [name of plaintiff] was harmed; and

7. That [name of defendant]’s wrongful conduct was a substantial factor in causing [name of plaintiff]’s harm.

New September 2003

Directions for Use

Regarding element 4, the court must specifically state for the jury the conduct that the judge has determined as a matter of law would satisfy the “wrongful conduct” standard. This conduct must fall outside the privilege of fair competition. (PMC, Inc. v. Saban Entertainment, Inc. (1996) 45 Cal.App.4th 579, 603 [52 Cal.Rptr.2d 877]; Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393 [45 Cal.Rptr.2d 436, 902 P.2d 740].) The jury must then decide whether the defendant engaged in the conduct as defined by the judge. If the conduct is tortious, the judge should instruct on the elements of the tort.

Sources and Authority

  • “The tort of intentional or negligent interference with prospective economic advantage imposes liability for improper methods of disrupting or diverting the business relationship of another which fall outside the boundaries of fair competition.” (Settimo Associates v. Environ Systems, Inc. (1993) 14 Cal.App.4th 842, 845 [17 Cal.Rptr.2d 757], internal citation omitted.)
  • “The tort of interference with prospective economic advantage protects the same interest in stable economic relationships as does the tort of interference with contract, though interference with prospective advantage does not require proof of a legally binding contract. The chief practical distinction between interference with contract and interference with prospective economic advantage is that a broader range of privilege to interfere is recognized when the relationship or economic advantage interfered with is only prospective.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126 [270 Cal.Rptr. 1, 791 P.2d 587], internal citations omitted.)
  • “The five elements for intentional interference with prospective economic advantage are: (1) [a]n economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Youst v. Longo (1987) 43 Cal.3d 64, 71, fn. 6 [233 Cal.Rptr. 294, 729 P.2d 728].)
  • “With respect to the third element, a plaintiff must show that the defendant engaged in an independently wrongful act. It is not necessary to prove that the defendant acted with the specific intent, or purpose, of disrupting the plaintiff’s prospective economic advantage. Instead, ‘it is sufficient for the plaintiff to plead that the defendant “[knew] that the interference is certain or substantially certain to occur as a result of his action.” ’ ‘[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.’ ‘[A]n act must be wrongful by some legal measure, rather than merely a product of an improper, but lawful, purpose or motive.’ ” (San Jose Construction, Inc. v. S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1544—1545 [67 Cal.Rptr.3d 54], internal citations omitted.)
  • “[A]n essential element of the tort of intentional interference with prospective business advantage is the existence of a business relationship with which the tortfeasor interfered. Although this need not be a contractual relationship, an existing relationship is required.” (Roth v. Rhodes (1994) 25 Cal.App.4th 530, 546 [30 Cal.Rptr.2d 706], internal citations omitted.)
  • “If a party has no liability in tort for refusing to perform an existing contract, no matter what the reason, he or she certainly should not have to bear a burden in tort for refusing to enter into a contract where he or she has no obligation to do so. If that same party cannot conspire with a third party to breach or interfere with his or her own contract then certainly the result should be no different where the ‘conspiracy’ is to disrupt a relationship which has not even risen to the dignity of an existing contract and the party to that relationship was entirely free to ‘disrupt’ it on his or her own without legal restraint or penalty.” (Kasparian v. County of Los Angeles (1995) 38 Cal.App.4th 242, 266 [45 Cal.Rptr.2d 90], original italics.)
  • “Although varying language has been used to express this threshold requirement, the cases generally agree it must be reasonably probable that the prospective economic advantage would have been realized but for defendant’s interference.” (Youst, supra, 43 Cal.3d at p. 71, internal citations omitted.)
  • “[A] plaintiff seeking to recover for an alleged interference with prospective contractual or economic relations 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.” (Della Penna, supra, 11 Cal.4th at p. 393.)
  • Della Penna did not specify what sort of conduct would qualify as ‘wrongful’ apart from the interference itself.” (Limandri v. Judkins (1997) 52 Cal.App.4th 326, 340 [60 Cal.Rptr.2d 539].)
  • “Justice Mosk’s concurring opinion in Della Penna advocates that proscribed conduct be limited to means that are independently tortious or a restraint of trade. The Oregon Supreme Court suggests that conduct may be wrongful if it violates ‘a statute or other regulation, or a recognized rule of common law, or perhaps an established standard of a trade or profession.’ . . . Our Supreme Court may later have occasion to clarify the meaning of ‘wrongful conduct’ or ‘wrongfulness,’ or it may be that a precise definition proves impossible.” (Arntz Contracting Co. v. St. Paul Fire and Marine Insurance Co. (1996) 47 Cal.App.4th 464, 477—478 [54 Cal.Rptr.2d 888], internal citations omitted.)
  • “Commonly included among improper means are actions which are independently actionable, violations of federal or state law or unethical business practices, e.g., violence, misrepresentation, unfounded litigation, defamation, trade libel or trade mark infringement.” (PMC, Inc., supra, 45 Cal.App.4th at p. 603, internal citation omitted.)
  • “It is insufficient to allege the defendant engaged in tortious conduct distinct from or only tangentially related to the conduct constituting the actual interference.” (Limandri, supra, 52 Cal.App.4th at p. 342.)
  • “[O]ur focus for determining the wrongfulness of those 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.” (Arntz Contracting Co., supra, 47 Cal.App.4th at p. 477.)
  • “Since the crux of the competition privilege is that one can interfere with a competitor’s prospective contractual relationship with a third party as long as the interfering conduct is not independently wrongful (i.e., wrongful apart from the fact of the interference itself), Della Penna’s requirement that a plaintiff plead and prove such wrongful conduct in order to recover for intentional interference with prospective economic advantage has resulted in a shift of burden of proof. It is now the plaintiff’s burden to prove, as an element of the cause of action itself, that the defendant’s conduct was independently wrongful and, therefore, was not privileged rather than the defendant’s burden to prove, as an affirmative defense, that it’s [sic] conduct was not independently wrongful and therefore was privileged.” (Bed, Bath & Beyond of La Jolla, Inc. v. La Jolla Village Square Venture Partners (1997) 52 Cal.App.4th 867, 881 [60 Cal.Rptr.2d 830].)
  • “[I]n the absence of other evidence, timing alone may be suffıcient to prove causation … Thus, . . . the real issue is whether, in the circumstances of the case, the proximity of the alleged cause and effect tends to demonstrate some relevant connection. If it does, then the issue is one for the fact finder to decide.” (Overhill Farms, Inc. v. Lopez (2010) 190 Cal.App.4th 1248, 1267 [119 Cal.Rptr.3d 127], original italics.)
  • There are other privileges that a defendant could assert in appropriate cases, such as the “manager’s privilege”. (See Halvorsen v. Aramark Uniform Services, Inc. (1998) 65 Cal.App.4th 1383, 1391—1392 [77 Cal.Rptr.2d 383].)
  • “We conclude that a plaintiff seeking to state a claim for intentional interference with contract or prospective economic advantage because defendant induced another to undertake litigation, must allege that the litigation was brought without probable cause and that the litigation concluded in plaintiff’s favor.” (Pacific Gas & Electric Co., supra, 50 Cal.3d at p. 1137.)

Secondary Sources

5 Witkin, Summary of California Law (10th ed. 2005) Torts, §§ 741—754, 759

Chin et al., California Practice Guide: Employment Litigation, Ch. 5-E, Intentional Interference With Contract Or Prospective Economic Advantage, ¶¶ 5:463, 5:470 (The Rutter Group)

Croskey et al., California Practice Guide: Insurance Litigation, Ch. 11-G, Intentional Interference With Contract Or Economic Advantage, ¶ 11:138.5 (The Rutter Group)

3 Levy et al., California Torts, Ch. 40, Fraud and Deceit and Other Business Torts, §§ 40.100—40.105 (Matthew Bender)

49 California Forms of Pleading and Practice, Ch. 565, Unfair Competition, § 565.133 (Matthew Bender)

12 California Points and Authorities, Ch. 122, Interference, §§ 122.23, 122.32 (Matthew Bender)