Eldridge v. Johndrow , 345 P.3d 553 ( 2015 )

This opinion is subject to revision before final
publication in the Pacific Reporter
2015 UT 21
IN THE
S UPREME C OURT OF THE S TATE OF U TAH
JOSEPH ELDRIDGE, LINDSEY ELDRIDGE, HARRISON COMPANIES, LLC,
and HARRISON COMPANIES PROPERTY MANAGEMENT , LLC,
dba EMPIRE LUXURY LODGING ,
Appellees,
v.
DAVID JOHNDROW ,
Appellant.
No. 20130263
Filed January 30, 2015
Third District, Silver Summit Dep’t
The Honorable Ryan M. Harris
No. 120500564
Attorneys:
Scott A. Dubois, Joseph E. Wrona, Gregory D. Marchant, Draper,
Timothy R. Pack, Park City, for appellees
Milo Steven Marsden, Gregory Saylin, Tyson C. Horrocks,
Salt Lake City, for appellants
JUSTICE DURHAM authored the opinion of the Court, in which
ASSOCIATE CHIEF JUSTICE NEHRING , JUSTICE PARRISH , JUSTICE LEE,
and JUDGE HRUBY-MILLS joined.
Having recused himself, CHIEF JUSTICE DURRANT does not
participate herein; DISTRICT JUDGE HRUBY-MILLS sat.
JUSTICE DURHAM , opinion of the Court:
INTRODUCTION
¶1 This appeal concerns claims for tortious interference with
economic relations by Joseph and Lindsey Eldridge against David
Johndrow. Johndrow moved for summary judgment, and the district
court partially granted his motion, concluding there was no evidence
that he had interfered with the Eldridges’ economic relations
through an improper means. But the court denied summary
judgment for the Eldridges’ claims based on the allegation that
Johndrow had acted with an improper purpose.
¶2 According to our decision in Leigh Furniture & Carpet Co.
v. Isom, “improper purpose . . . will support a cause of action for
ELDRIDGE v. JOHNDROW
Opinion of the Court
intentional interference with prospective economic relations even
where the defendant’s means were proper.” 657 P.2d 293, 307 (Utah
1982). Leigh Furniture recognized, however, that this doctrine posed
risks. There are “[p]roblems inherent in proving motivation or
purpose,” and if juries were allowed to find improper purposes too
easily, it would result in tort liability for much legitimate
“competitive commercial activity.” Id. We therefore sought to
circumscribe the doctrine by allowing improper-purpose liability
only where “the improper purpose predominate[s]” and by
counseling that it would usually be “prudent” not to apply the
doctrine to “commercial conduct.” Id.
¶3 Unfortunately, as the few subsequent cases allowing
improper-purpose liability demonstrate, our efforts to circumscribe
the doctrine have failed. Infra ¶¶ 46–50. Because of this failure, little
law exists to guide juries’ improper-purpose findings or to inform
private parties of their legal rights and obligations. Infra ¶¶ 51–54.
Consequently, if improper-purpose claims became commonplace,
their unpredictable nature would deter much socially beneficial
speech and conduct.
¶4 We could attempt to ameliorate this lawlessness by further
refining the improper-purpose doctrine; for example, we could
establish safe harbors like the Restatement’s rule that the
communication of truthful information never constitutes tortious
interference. See RESTATEMENT (SECOND ) OF TORTS § 772(a) (1979). But
we are persuaded that the doctrine’s flaws warrant not repair but
rejection. We therefore hold that no tortious interference claim can
succeed without evidence of improper means.
BACKGROUND1
¶5 Appellees Joseph and Lindsey Eldridge are the owners and
operators of Harrison Companies, LLC, and Harrison Companies
Property Management, LLC. Through these limited liability
companies, the Eldridges manage residential property and provide
various other services for wealthy homeowners in Summit County.
Because providing these services means taking responsibility for
clients’ homes, the Eldridges’ success depends a great deal on their
reputation.
1
Because the matter reaches us on appeal from a denial of
Johndrow’s summary judgment motion, we recite the facts in the
light most favorable to the Eldridges’ claim. See Glenn v. Reese, 2009
UT 80, ¶ 6, 225 P.3d 185.
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Opinion of the Court
¶6 Appellant David Johndrow is a former friend and client of
the Eldridges who used to recommend their services to his friends
and other associates in the area. But the friendship lasted only a
year. Lindsey Eldridge accused Mr. Johndrow of attacking her at a
restaurant, and Mr. Johndrow accused the Eldridges of spreading
false rumors and stealing his mobile phone. The once amicable
relationship gave way to threats of legal action.
¶7 The action Johndrow actually took, however, did not
involve a lawsuit. Instead, he “turned [the matter] over” to an
“investigative team,” which discovered various embarrassing facts
about the Eldridges: liens, a foreclosure, an old felony conviction,
and unflattering news reports from before they moved to Utah.
Mr. Johndrow threatened that if the Eldridges refused to retract their
accusations and compensate him for the allegedly stolen phone, he
would have to protect his “credibility” by revealing what he had
found to the people to whom he had recommended the Eldridges.
When the Eldridges did not accede to his demands, he emailed
embarrassing information to “at least nine” of the Eldridges’
institutional clients and communicated it verbally to a number of
their individual clients.
¶8 The Eldridges sued, asserting several theories of liability:
tortious interference with economic relations, tortious interference
with prospective economic relations, defamation, false light, and
intentional infliction of emotional distress. The tortious interference
theories each rested on two separate allegations: first, that by
defaming the Eldridges, Mr. Johndrow had interfered with their
economic relations through an improper means; and second, that
because Mr. Johndrow’s only goal was to hurt the Eldridges’
business, he had interfered with their economic relations in pursuit
of an improper purpose.2
¶9 After preliminary discovery, Mr. Johndrow moved for
summary judgment on the tortious interference claims, the
defamation claim, and the false light claim. The district court
concluded that the information Johndrow had disseminated was “at
least substantially true” and “not susceptible to a defamatory
interpretation.” It therefore granted summary judgment on the
defamation and false light claims. Further, because the “improper
2
Initially, one of the Eldridges’ tortious interference claims also
rested on a third allegation: that Johndrow had “harass[ed],
intimidate[ed], threaten[ed], and bull[ied]” Ms. Eldridge. The
Eldridges withdrew this theory before the trial court ruled on
summary judgment, so we do not address it here.
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ELDRIDGE v. JOHNDROW
Opinion of the Court
means” basis for tortious interference liability depended on
Johndrow’s alleged defamation of the Eldridges, the court granted
summary judgment on the tortious interference claims insofar as
they were based on improper means.
¶10 However, the district court denied summary judgment on
the tortious interference claims insofar as they were based on
allegations of improper purpose. Mr. Johndrow had argued that the
court should follow the Restatement and hold that the
communication of “truthful information,” regardless of purpose,
cannot constitute tortious interference. RESTATEMENT (SECOND ) OF
TORTS § 772(a) (1979). But the court relied on our decision in Pratt v.
Prodata, Inc., which explicitly rejected the Restatement’s truth
defense in the context of improper-purpose claims. 885 P.2d 786, 790
(Utah 1994). Correctly concluding that the reconsideration of Pratt
was a matter for a higher tribunal, the court denied summary
judgment with respect to the Eldridges’ improper-purpose claims.
¶11 Mr. Johndrow filed an interlocutory appeal, and we
reverse.
STANDARD OF REVIEW
¶12 Denials of summary judgment are reviewed for
correctness. Glenn v. Reese, 2009 UT 80, ¶ 6, 225 P.3d 185.
ANALYSIS
¶13 The Eldridges’ remaining tortious interference claims
depend on the allegation that Mr. Johndrow interfered with their
economic relations for an improper purpose. This improper-purpose
doctrine was adopted in Leigh Furniture & Carpet Co. v. Isom: “[I]n
order to recover damages [for tortious interference], the plaintiff
must prove (1) that the defendant intentionally interfered with the
plaintiff’s existing or potential economic relations, (2) for an improper
purpose or by improper means, (3) causing injury to the plaintiff.”
657 P.2d 293, 304 (1982) (emphasis added). The Leigh Furniture court
made clear that “improper purpose (or motive, intent, or objective)
will support a cause of action for intentional interference with
prospective economic relations even where the defendant’s means
were proper.” Id. at 307.
¶14 For reasons we articulate below, see infra ¶¶ 42–64, we
hereby reject the improper-purpose rule. Contrary to Leigh Furniture,
we hold that a claim for tortious interference may only succeed
where the defendant has employed an improper means.
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Opinion of the Court
¶15 Before we explain our reasons for rejecting improper
purpose liability, we must deal with two obstacles to our rejection of
the doctrine. First, we conclude that although the reconsideration of
improper purpose liability was not Mr. Johndrow’s chief argument
on appeal, it is nevertheless properly presented for our
consideration. See infra ¶¶ 16–19. Second, we conclude that stare
decisis does not prevent us from abandoning the improper purpose
doctrine. See infra ¶¶ 20–41.
I. RECONSIDERATION OF THE IMPROPER-PURPOSE
DOCTRINE IS PROPERLY BEFORE THE COURT
¶16 In Pratt v. Prodata, Inc., we declined to reconsider our
support for improper-purpose liability because the parties had not
asked us to do so and the question was therefore not properly
presented. 885 P.2d 786, 789 n.3 (Utah 1994) (opinion of Zimmerman,
C.J.). The same obstacle does not exist in this case.
¶17 Admittedly, Johndrow’s first brief did not focus on
reconsideration of the improper-purpose doctrine, instead arguing
that we should follow the Restatement and declare that truth is an
absolute defense to tortious interference liability. See RESTATEMENT
(SECOND ) OF TORTS § 772(a) (1979). It did, however, explain at some
length “the difficulties associated with the improper purpose prong”
and acknowledged that these difficulties could lead the court to
“undertake a complete reconsideration” of it. In particular, it
pointed out how “problematic” it is to “permit[] liability for
otherwise legal and permissible conduct if the defendant can be said
to have acted with ‘ill will’ towards the plaintiff.” Further, it argued
that a growing number of states have limited or rejected claims
based solely on improper purpose.
¶18 The Eldridges’ brief seized on this discussion, accusing
Johndrow of demanding the abandonment of improper-purpose
liability and offering a full-throated defense of the doctrine:
“Essentially, Johndrow asks this Court to reverse itself and impose
a black-letter and inflexible standard that would protect extremely
malicious conduct . . . . The improper purpose prong as currently
utilized and applied by Utah courts strikes a fair and appropriate
balance between the interests of the various parties . . . .” Johndrow’s
reply brief disclaimed that reconsideration of improper-purpose
liability was necessary to its case, but it repeated its arguments
against the doctrine and expressly invited the court to reconsider it.
¶19 The reconsideration of improper-purpose liability has thus
been explicitly raised by the parties and adequately argued in their
briefs. We may therefore reach this issue.
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ELDRIDGE v. JOHNDROW
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II. STARE DECISIS DOES NOT PRECLUDE
RECONSIDERATION OF THE
IMPROPER-PURPOSE DOCTRINE
¶20 The Eldridges urge that “[t]he district court’s decision
should be affirmed because it is mandated by the doctrine of stare
decisis.” Although the Eldridges are correct that stare decisis
required the district court to deny summary judgment,3 the doctrine
does not prevent this court from reconsidering its precedents when
it is appropriate to do so.
¶21 Stare decisis “is a cornerstone of Anglo–American
jurisprudence” because it “is crucial to the predictability of the law
and the fairness of adjudication.” State v. Thurman, 846 P.2d 1256,
1269 (Utah 1993). Because stare decisis is so important to the
predictability and fairness of a common law system, we do not
overrule our precedents “lightly.” State v. Hansen, 734 P.2d 421, 427
(Utah 1986) (plurality opinion).
¶22 However, our presumption against overruling precedent
is not equally strong in all cases. See State v. Menzies, 889 P.2d 393,
399 (Utah 1994) (“[Stare decisis] is neither mechanical nor rigid as it
relates to courts of last resort.”); 20 AM . JUR. 2D Courts § 131 (2005)
(“[T]he principle [that a court should not overrule its own
precedents] is not a binding legal rule to be blindly followed . . . .”).
Our decisions have identified two broad factors that distinguish
between weighty precedents and less weighty ones: (1) the
persuasiveness of the authority and reasoning on which the
precedent was originally based, and (2) how firmly the precedent
has become established in the law since it was handed down. The
second factor encompasses a variety of considerations, including the
age of the precedent, how well it has worked in practice, its
consistency with other legal principles, and the extent to which
people’s reliance on the precedent would create injustice or hardship
if it were overturned.
¶23 As we discuss below, none of the factors that give stare
decisis special weight are present here.
3
“Under [stare decisis], lower courts are obliged to follow the
holding of a higher court, as well as any ‘judicial dicta’ that may be
announced by the higher court.” State v. Menzies, 889 P.2d 393, 399
n.3 (Utah 1994).
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Opinion of the Court
A. The Improper-Purpose Doctrine Rests on
Weak Authority and Reasoning
¶24 The first factor in determining how much deference a
precedent should be afforded is the persuasiveness of the authority
and reasoning on which the precedent is based. See Laney v. Fairview
City, 2002 UT 79, ¶ 46, 57 P.3d 1007 (plurality opinion) (“[T]he
precedent rejected in Menzies was established ‘with little analysis
and without reference to authority.’” (quoting Menzies, 889 P.2d at
399)); accord Montejo v. Louisiana, 556 U.S. 778, 792–93 (2009) (“[T]he
relevant factors in deciding whether to adhere to the principle of
stare decisis include . . . whether the decision was well reasoned.”).
¶25 Here we note first that our cases supporting improper-
purpose liability are themselves weak authorities on this issue. We
first endorsed the improper-purpose doctrine in Leigh Furniture &
Carpet Co. v. Isom, but the decision in that case did not actually rely
on it. 657 P.2d 293, 308 (Utah 1982) (“[T]he evidence in this case
would not support a jury finding [of improper purpose].”). Because
Leigh Furniture was decided on other grounds, its endorsement of
improper-purpose liability was not, in the strictest sense, part of the
case’s holding. Its precedential weight is therefore limited.4 See 20
AM . JUR. 2D Courts § 134 (2014) (“[A] case is not authority for any
point not necessary to be passed on to decide the case . . . .”); Arthur
L. Goodhart, Determining the Ratio Decidendi of a Case, 40 YALE L.J.
161, 161 (1930) (“In order that an opinion may have the weight of a
precedent . . . it must be an opinion the formation of which is
necessary for the decision of a particular case . . . .”).5
4
Limited, that is, with respect to this court. See Menzies, 889 P.2d
at 399 n.3 (“[L]ower courts are obliged to follow . . . any ‘judicial
dicta’ that may be announced by the higher court.”); 20 AM . JUR. 2D
Courts § 134 (2014) (“[D]ictum of a court of last resort can be
tantamount to a decision and therefore binding only in the absence
of a contrary decision of that court.”).
5
This is not a purely formalist distinction, one without any
practical purpose. Rather, it recognizes that when a court announces
a rule that is unnecessary to its decision, it is less likely to have
considered all the potential arguments against the rule. Had the
Leigh Furniture court actually attempted to impose liability in the
absence of any improper means, it might have been forced to
confront the problems inherent in the improper-purpose prong of its
test. As it was, the facts of the case did not require the court to
confront those problems, and, by and large, it did not confront them.
(continued...)
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ELDRIDGE v. JOHNDROW
Opinion of the Court
¶26 The only decision in which we have allowed liability based
solely on an improper purpose is Pratt v. Prodata, Inc., which upheld
a jury verdict based on improper purpose where the jury had found
no improper means. 885 P.2d 786, 788–89 (Utah 1994). Pratt,
however, is also a weak precedent because it merely assumed that
Leigh Furniture’s improper-purpose prong was good law, without
hearing argument on that issue. Cf. 20 AM . JUR. 2D Courts § 134 (2014)
(“For a case to be stare decisis on a particular point of law, that issue
must have been raised in the action decided by the court . . . . [A] case
is not binding precedent on a point of law where the holding is only
. . . assumed in the decision but is not announced.” (emphasis added)
(footnotes omitted)).
¶27 Further, only two of the four justices who decided Pratt
actually endorsed improper-purpose liability. Pratt, 885 P.2d at
790–91 (Stewart, A.C.J., concurring). The other two expressed “grave
doubts about the future vitality of Leigh’s improper-purpose prong,”
but they declined to consider the issue because it was not properly
“before the court.” Id. at 789 n.3 (opinion of Zimmerman, C.J.). That
this court split evenly on improper-purpose liability twenty years
ago, in a case where the issue had been neither raised nor argued by
the parties, does not preclude us from reconsidering it today.
¶28 When we turn from the precedential status of Leigh
Furniture and Pratt to the reasoning and authority on which they
were based, we see nothing in either case that would make us
hesitate to overrule them. To begin with, Pratt’s application of
improper-purpose liability was based entirely on Leigh Furniture,
without any discussion of other authority. See id. at 788. As for its
reasoning, two of the Pratt justices endorsed improper-purpose
liability because it allowed courts to reach desirable results where
“[i]nfliction of gratuitous harm” might otherwise not be remedied.
Id. at 791 (Stewart, A.C.J., concurring in the result). The other two
worried about the doctrine allowing “wholly legitimate” conduct to
be declared tortious by “a jury’s unguided exercise of its moral
judgment.” Id. at 789 n.3 (opinion of Zimmerman, C.J.). Because
reconsideration of the doctrine was not before the court, neither
opinion did the hard work of weighing all the arguments and
reaching a reasoned conclusion.
¶29 Leigh Furniture’s endorsement of improper-purpose
liability rested on more authority, but less reasoning. Leigh adopted
the improper-purpose prong by adopting Oregon’s definition of
5
(...continued)
See infra ¶¶ 29–31.
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Opinion of the Court
tortious interference. 657 P.2d at 304. Its argument for adopting
Oregon’s definition was simple and persuasive: the first Restatement
put too little burden on plaintiffs making their case, the second
Restatement put too much, and Oregon’s “middle ground” was the
best option available. Id.
¶30 But as sound as this reasoning was, it did not explain why
improper purpose, in the absence of improper action, should
constitute independent grounds for liability. On this crucial point,
Leigh Furniture was silent. It warned against overuse of the
improper-purpose prong. Id. at 307 (“[I]t [is] prudent for commercial
conduct to be regulated for the most part by the improper means
alternative . . . .”). It explained why the improper-purpose prong
was problematic. Id. (acknowledging “[p]roblems inherent in
proving motivation or purpose”). But nowhere did it explain why
the improper-purpose prong was necessary at all.
¶31 Its inclusion of improper purpose in its reasoning therefore
rested entirely on persuasive authority. See id. at 307–08 (citing a
treatise and a handful of cases from other jurisdictions). Yet its
appeal to authority on this issue was also weak because, as it
acknowledged, there was “no generally acknowledged or
satisfactory majority position” on the elements of tortious
interference. Id. at 303–04. Rather, tortious interference law
nationwide was “still in a formative stage.” Id. at 304.
¶32 We do not wish to overstate the matter. Leigh Furniture is
the seminal case of Utah’s tortious interference law, and we would
follow even its dicta if we had no good reason to do otherwise.
However, on the narrow issue of improper-purpose liability, its
authority is weak and its reasoning is nearly nonexistent. It does
nothing to quell our concerns about the improper-purpose doctrine.
B. The Improper-Purpose Doctrine Is Not
Firmly Established in Utah Law
¶33 Although our precedents adopting the improper-purpose
prong are weak and unpersuasive, we would still hesitate to
overrule them if the doctrine had become firmly established in Utah
law. But examination of the cases applying Leigh Furniture
demonstrates that it has not.
1. Age and Public Reliance
¶34 In determining how firmly a precedent has established
itself in Utah law, we look to a variety of considerations. Supra ¶ 22.
First, we look to the age of the precedent, since newer precedents are
likely to be less firmly established. See Laney, 2002 UT 79, ¶ 46
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ELDRIDGE v. JOHNDROW
Opinion of the Court
(plurality opinion). The doctrine at issue here was adopted thirty-
two years ago in Leigh Furniture, without any significant precursors
in Utah law. See Leigh Furniture, 657 P.2d at 304. While thirty-two
years is more than enough time for a precedent to become firmly
established if it is regularly used and relied on, we note that unlike
the precedent we upheld in Laney, improper-purpose liability is not
based on a legal principle established in “the earliest days of
statehood.” Laney, 2002 UT 79, ¶ 46 (plurality opinion).
¶35 Second, we consider the extent to which people’s reliance
on the precedent would create injustice or hardship if it were
overturned. As we recently stated in Cope v. Utah Valley State College,
[W]e consider whether overturning a precedent would
undermine the public’s substantial reliance upon an
established legal principle. . . . [P]eople should know
what their legal rights are as defined by judicial
precedent, and having conducted their affairs in
reliance on such rights, ought not to have them swept
away by judicial fiat.
2014 UT 53, ¶ 19, ___ P.3d ___ (internal quotation marks omitted);
accord 20 AM . JUR. 2D Courts § 132 (2014) (“[E]ven if the earlier
precedent was wrongfully decided, the court will not overrule the
precedent where . . . it has remained standing for a significant period
and many have relied on it . . . .” (emphasis added)).
¶36 When a doctrine has not been necessary to the outcome of
many cases, it is unlikely that the public has relied on it in any
substantial way. Cf. Cope, 2014 UT 53, ¶ 26 (“[When a case] has not
become a well-entrenched or frequently applied precedent, the
public’s reliance upon [the case] is not as strong.”). That is certainly
the case here.
¶37 This court, the court of appeals, and Utah’s federal courts
have quoted Leigh Furniture’s “improper purpose” language in
dozens of tortious interferences cases, but they have found evidence
of improper purpose only three times. The first time was in Pratt, in
which half the Court might have rejected the doctrine entirely if a
party had asked it to do so. 885 P.2d at 789 n.3. The second time was
ProMax Development Corp. v. Mattson, in which the court of appeals
affirmed a trial court’s finding of improper purpose in circumstances
similar to Pratt. ProMax Dev. Corp. v. Mattson, 943 P.2d 247, 254–55
(Utah Ct. App. 1997). And the third time occurred in 2008, when the
federal district court of Utah concluded that there was enough
evidence of improper purpose for the issue to go to a jury. Peterson
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v. Luna Bronze, L.C., No. 2:07CV00054DS, 2008 WL 4130021, at *2 (D.
Utah Aug. 14, 2008).
¶38 Far more common are the cases in which courts have
rejected allegations of improper purpose. We have analyzed and
rejected improper-purpose claims five times,6 the court of appeals
has done so once,7 and the District of Utah has done so more than
half a dozen times.8 Often the improper-purpose doctrine has not
been applied at all, either because parties have declined to raise the
issue or because courts have chosen not to consider it.9 Given the
difficulty of winning claims under the improper-purpose doctrine,
it would have been foolhardy for people to rely on it in their private
dealings.
6
Keith v. Mountain Resorts Dev., LLC, 2014 UT 32, ¶¶ 44–47, 337
P.3d 213 (“Ms. Keith failed as a matter of law to establish improper
purpose . . . .”); Ferguson v. Williams & Hunt, Inc., 2009 UT 49, ¶ 42,
221 P.3d 205 (“Protecting the legitimate interests of a firm’s client,
without evidence of predominating ill will, is not an improper
purpose.”); Overstock.com, Inc. v. SmartBargains, Inc., 2008 UT 55,
¶¶ 18–19, 192 P.3d 858 (“Overstock has failed to present a material
fact that would satisfy the second prong of the Leigh test.”); St.
Benedict’s Dev. Co. v. St. Benedict’s Hosp., 811 P.2d 194, 201 (Utah
1991) (“The development company has not . . . established that
defendants acted with an improper purpose in this case.”); Leigh
Furniture, 657 P.2d at 307–08 (“[W]e must conclude that the evidence
in this case would not support a jury finding that the Corporation’s
predominant purpose was to injure or ruin Isom’s business merely
for the sake of injury alone.”).
7
U.P.C., Inc. v. R.O.A. Gen., Inc., 1999 UT App 303, ¶¶ 45–49, 990
P.2d 945 (“Garco cannot establish improper purpose . . . .”).
8
E.g., Soundvision Techs., LLC v. Templeton Grp. Ltd., 929 F. Supp.
2d 1174, 1194–95 (D. Utah 2013) (“These reasons are not indicative
of a predominate purpose of harming [the plaintiff] as the standards
require . . . .”); Wilcox v. Career Step, LLC, 929 F. Supp. 2d 1155, 1172
(D. Utah 2013) (“Plaintiff’s allegations and evidence are not sufficient
to create a disputed issue of fact . . . of an improper purpose . . . .”).
9
E.g., ClearOne Commc’ns, Inc. v. Chiang, No. 2:07–CV–37 TC, 2008
WL 3925219, at *3 (D. Utah Aug. 20, 2008) (court did not address
improper purpose); SliceX, Inc. v. Aeroflex Colo. Springs, Inc., No.
2:04–CV–615 TS, 2006 WL 1699694, at *2 (D. Utah June 15, 2006)
(party alleged only improper means); CDC Restoration & Constr., LC
v. Tradesmen Contractors, LLC, 2012 UT App 60, ¶ 55, 274 P.3d 317
(party declined to appeal unfavorable improper-purpose ruling).
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ELDRIDGE v. JOHNDROW
Opinion of the Court
¶39 The improper-purpose doctrine’s vagueness further
supports this conclusion. In order to rely on their rights under the
improper-purpose doctrine, the Eldridges would have needed to
know what those rights were. But as we explain below, knowing
one’s rights under the improper-purpose doctrine is impossible
because the doctrine is so poorly defined. See infra ¶¶ 46–54.
2. Other Factors Determining Whether a Precedent is Firmly
Established
¶40 We use two more considerations to determine whether a
precedent has become firmly established. First, we ask how well it
has worked in practice. Laney, 2002 UT 79, ¶ 46 (plurality opinion)
(citing Menzies, 889 P.2d at 400); see also People v. Hernandez, 896
N.E.2d 297, 304 (Ill. 2008) (“Good cause to depart from stare decisis
also exists when governing decisions are unworkable . . . .”). Second,
we ask whether the precedent has become inconsistent with other
principles of law. Cf. 20 AM . JUR. 2D Courts § 132 (2005) (“Another
formulation of the grounds for deviation from precedent states that
the court must consider . . . whether the principles of law have
developed to such an extent as to leave the old rule no more than a
remnant of abandoned doctrine . . . .”).
¶41 These considerations will be addressed in Part III, during
our discussion of the merits of the improper-purpose prong. Neither
of them, however, will alter the conclusion we reach based on the
considerations above. Far from being firmly established, our
improper-purpose doctrine has had little influence on litigation in
this state.
III. THE IMPROPER-PURPOSE DOCTRINE
SHOULD BE ABANDONED
¶42 If we were convinced that the improper-purpose doctrine
served important public purposes, we would uphold it despite its
weak basis in precedent. But our conviction is the opposite:
improper purpose, in the absence of any improper means, should
not be a basis for tortious interference liability.
¶43 As our decisions have recognized, determining the
predominant purpose behind a defendant’s actions raises significant
evidentiary problems. Because this inquiry is necessarily fact-
intensive, appellate review has been limited, and little case law has
developed to guide courts’ and juries’ work. The improper-purpose
doctrine thus requires trial courts and juries to make decisions that
are effectively without guidance.
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¶44 This vagueness does more than lead to unpredictable
verdicts. It also fails to give parties adequate notice of their rights
and duties. If improper-purpose liability became commonplace, it
would have a chilling effect on legitimate, socially beneficial
competitive practices. Worse, it would chill speech, discouraging the
free spread of information and opinion.
¶45 For these reasons, among others, other states have
increasingly limited or rejected improper-purpose liability. In
addition to supporting our arguments against improper-purpose
liability, this trend further weakens the authority on which Leigh
Furniture was based. With both contemporary authority and our
own reasoning opposed to improper-purpose liability, we conclude
that it should be rejected.
A. The Improper-Purpose Doctrine Provides
Too Little Guidance for Courts and Juries
¶46 Anger and even malice are commonplace human emotions,
and it would be neither possible nor desirable to treat every angry
or malicious action as a tort. Even a tort allowing liability whenever
a defendant maliciously interfered with a plaintiff’s economic
relations would be unwise. As Leigh Furniture recognized, such a tort
would interfere with “much competitive commercial activity, such
as a businessman’s efforts to forestall a competitor in order to
further his own long-range economic interests.” Leigh Furniture &
Carpet Co. v. Isom, 657 P.2d 293, 307 (Utah 1982).
¶47 Leigh Furniture sought to foreclose this possibility by
requiring plaintiffs to show not merely that an improper purpose
was present, but that it predominated over legitimate motivations.
Id. (“[The improper-purpose doctrine] takes the long view of the
defendant’s conduct, allowing objectionable short-run purposes to
be eclipsed by legitimate long-range economic motivation.”). Yet
even so, it recognized that there were “[p]roblems inherent in
proving motivation or purpose” and cautioned against overuse of
the improper-purpose prong. Id.
¶48 In Pratt v. Prodata, Inc., Chief Justice Zimmerman argued
that Leigh Furniture’s efforts to limit the improper-purpose prong
were inadequate. 885 P.2d 786, 789 n.3 (Utah 1994) (opinion of
Zimmerman, C.J.). Under Leigh Furniture’s predominant-purpose
standard, “all relevant considerations are issues of fact,” and
“improper-purpose findings” are therefore “insulate[d] . . . from
meaningful appellate review.” Id. Consequently, once a plaintiff
presents evidence of an improper purpose, no legal standard exists
to guide fact-finders’ determination of whether that purpose or the
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Opinion of the Court
defendant’s legitimate purposes predominated. Juries are required
to look into the defendant’s soul and discern which of her mixed
motives was the real cause of her action—a question she herself, at
the time she acted, may not have been able to answer with any
certainty.
¶49 The three Utah cases that have allowed improper-purpose
claims demonstrate the perceptiveness of Chief Justice Zimmerman’s
critique.10 In each case, the question of improper purpose reached
the court in a procedural posture that permitted only minimal
scrutiny.11 In each case, there was clearly evidence to support a
finding of a legitimate purpose.12 And yet in each case, the court
concluded that weighing the evidence of a proper purpose against
10
These cases are Pratt, 885 P.2d 786; ProMax Development Corp. v.
Mattson, 943 P.2d 247 (Utah Ct. App. 1997); and Peterson v. Luna
Bronze, L.C., No. 2:07CV00054DS, 2008 WL 4130021, at *2 (D. Utah
Aug. 14, 2008).
11
Pratt and ProMax both involved challenges to a factual finding
of improper purpose, and therefore reviewed only the sufficiency of
the evidence. Pratt, 885 P.2d at 789 (“There is substantial credible
evidence in the record to support the jury’s determination that
defendants interfered with Pratt’s economic relations for an
improper purpose . . . .”); ProMax, 943 P.2d at 252 (“[D]oes the
evidence support the trial court’s factual findings and legal
conclusions . . . ?”). In Luna Bronze, the federal district court denied
summary judgment against an improper-purpose claim, concluding
there was sufficient evidence for a jury to find an improper purpose.
2008 WL 4130021, at *1–*2 (“The Court is of the view that a
reasonable jury could conclude from the evidence cited by Luna
Bronze that Peterson’s purpose was improper.”).
12
In all three cases, a jury could have concluded that the
defendants’ action was intended to protect their legal rights and
economic interests. Pratt arose out of an employer’s efforts to enforce
a non-compete agreement, though the means the employer used to
enforce the agreement were unconventional and possibly unethical.
885 P.2d at 789 (“Rather than suing Pratt for breach of the
Noncompete Covenant as it was legally entitled to do, Prodata
utilized its contacts at [Pratt’s employer] to have Pratt fired.”). In
ProMax, the defendant claimed he had a contractual right “to act as
[the] selling agent” for a home and took steps to prevent the home’s
sale without his involvement. 943 P.2d at 251. And in Luna Bronze,
the defendant’s allegedly tortious action was to send out cease-and-
desist letters during a copyright dispute. 2008 WL 4130021, at *1.
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Opinion of the Court
the evidence of an improper purpose was a task for the finder of
fact.13
¶50 Were the approach of these cases followed in large
numbers of cases, Leigh Furniture’s efforts to limit the scope of the
improper-purpose doctrine would be futile; any significant evidence
of improper purpose would allow juries to find even the most
commonplace commercial conduct tortious, no matter how much
evidence could be presented of legitimate motivations.14 The
outcome of improper-purpose claims would thus depend more on
jurors’ personal sympathies for one party or the other than on any
generally applied legal rule.
B. The Improper-Purpose Doctrine Gives Parties
Inadequate Notice of Their Rights and Duties
¶51 Because improper-purpose findings are so dependent on
fact-finders’ personal sympathies, and so insulated from appellate
review, the outcome of an improper-purpose suit becomes
unpredictable as soon as any evidence of improper purpose is
introduced. This is a problem not merely because it may lead to
unjust outcomes in individual cases, but because it makes it
impossible for private parties to understand their rights and duties
under tortious interference law.
¶52 Under the improper-purpose prong as it has developed, a
business owner could be sued for undercutting his competitor’s
prices if he held a grudge against her. An investor in a Ponzi scheme
13
Pratt, 885 P.2d at 788–89 (expressing deference to the jury’s
finding of improper purpose); ProMax, 943 P.2d at 255 (“[T]here was
sufficient evidence presented at trial from which the trial court could
have [found improper purpose].”); Luna Bronze, 2008 WL 4130021,
at *2 (“The evidence, thus, presents sufficient disagreement to
require submission to a jury.”).
14
The ProMax and Luna Bronze courts each cited only a single
piece of evidence suggesting an improper purpose. In ProMax, the
court mentioned only that the defendant could have sued to protect
his contractual rights but chose not to. 943 P.2d at 255. In Luna
Bronze, the court cited only testimony that the defendant had
warned the plaintiff that their copyright dispute would cause “the
owner of Luna Bronze to lose the business to Peterson and to be
deported.” 2008 WL 4130021, at *2. And yet each court concluded
that a single piece of ambiguous evidence was sufficient to support
a finding of improper purpose. ProMax, 943 P.2d at 255; Luna Bronze,
2008 WL 4130021, at *2.
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Opinion of the Court
might be sued for exposing the scheme if she did so with enough
malice towards her swindlers. And a customer leaving angry
reviews online might receive a response to her complaints via
service of process.
¶53 It is of course likely that few juries would find a
predominantly improper purpose in any of these cases, but that is
beside the point. The mere risk that a jury might find liability,
coupled with the low bar the claims need to clear in order to reach
a jury in the first place, could become a substantial deterrent to
socially beneficial speech and conduct if improper-purpose suits
became common.15 In the First Amendment context, the tendency of
a law to deter conduct it does not actually prohibit is known as a
chilling effect, and is sometimes sufficient to invalidate the law as an
infringement of the freedom of speech even when the object of the
law is constitutionally unobjectionable. See Frederick Schauer, Fear,
Risk and the First Amendment: Unraveling the “Chilling Effect,” 58 B.U.
L. REV . 685, 693 (1978).
¶54 We do not hold that the improper-purpose doctrine
actually violates the First Amendment—that question is not before
us, and we have no need to reach it. But we are persuaded that the
improper-purpose doctrine as it currently exists in Utah is in tension
with First Amendment principles, and this tension is a further
reason to abandon the precedent on which it is based.
C. The Pratt Dissenters’ Concerns Are Adequately Addressed
by the Improper Means Prong
¶55 Though the foregoing discussion demonstrates the
disadvantages of improper-purpose liability, it does not weigh those
costs against the doctrine’s benefits—benefits sufficient to persuade
two justices of the Pratt court that the improper-purpose prong
15
The Seventh Circuit recognized this problem in a tortious
interference case brought under Illinois law. In rejecting an
argument that “[a] competitor’s privilege does not include a right to
get business from a competitor by means of fraud,” the court
pointed out that “[o]nce a case gets to the jury, all bets are off. The
practical consequence of [this] approach, therefore, would be that a
sports agent who lured away the client of another agent with a
promise to do better by him would be running a grave legal risk.”
Speakers of Sport, Inc. v. ProServ, Inc., 178 F.3d 862, 865–66 (7th Cir.
1999).
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Opinion of the Court
should be retained despite its dangers. 885 P.2d at 790–91 (Stewart,
A.C.J., concurring in the result).16
¶56 Specifically, two of the Pratt justices argued that although
“[the improper-purpose] prong, if construed broadly, could
seriously interfere with the forces of competition in the
marketplace,” the doctrine was nevertheless “sound[].” Id. Without
an improper-purpose prong, they argued, “[i]nfliction of gratuitous
harm” might go unremedied. Id. at 790–91. Because of the need for
a remedy in cases like Pratt, the two justices preferred to deal with
the improper-purpose prong’s problems by letting the doctrine
mature and narrow itself through the normal processes of common-
law adjudication. Id. (“It is, indeed, the strength of the common law
that general principles of law receive definition and limitation over
time by their application in specific fact situations.” (emphasis
added)).
¶57 We agree with Justice Stewart’s Pratt concurrence that
tortious interference law needs flexibility to deal with the new and
creative methods people might invent to inflict gratuitous economic
harm on each other. But we disagree that improper-purpose liability
is the best way to maintain this flexibility. As we explained above,
because of the improper-purpose rule’s highly fact-dependent
character, the doctrine hinders rather than promotes case-by-case
efforts to adapt the common law to solve contemporary problems.
Supra ¶¶ 46–50. Further, the improper-purpose prong’s emphasis on
defendants’ motivations, rather than their actions, prevents courts
from articulating clear distinctions between appropriate conduct and
conduct that “ought not to be acceptable under the law.” Pratt, 885
P.2d at 791 (Stewart, A.C.J., concurring in the result).
¶58 The better approach is to encourage further development
of the improper-means prong. As Justice Stewart’s concurrence
recognized, “Leigh Furniture did not, and could not, deal with every
possible fact situation to which the principles enunciated therein
might be applied.” Id. at 790. Neither has our improper-means
jurisprudence since Leigh Furniture set precise boundaries that will
prevent courts from recognizing new sorts of improper means when
they arise.
16
These two justices included the author of this opinion, who can
now only echo Baron Bramwell: “The matter does not appear to me
now as it appears to have appeared to me then.” Andrews v. Styrap,
(1872) 26 L.T. 704 (Exch.) 706 (Bramwell, B.) (Eng.).
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¶59 Further development of the improper-means prong is
therefore possible, and it has a great advantage over developing the
improper-purpose prong. Unlike findings of improper purpose,
findings of improper means will not depend solely on defendants’
state of mind. They will thus allow for more careful appellate
review, leading to a better defined and more predictable tortious
interference jurisprudence.
D. Other Jurisdictions Have Increasingly Limited or Rejected
Improper-Purpose Liability
¶60 Finally, we observe that we are not alone in determining
that improper-purpose liability does more harm than good. In the
context of intentional interference with prospective economic
relations, one prominent treatise acknowledges “a definite
movement toward limiting or even eliminating motive-based
liability.” 3 DAN B. DOBBS ET AL., THE LAW OF TORTS § 639 (2d ed.
2011). This movement is not so great as to be irresistible, and much
of it depends on a distinction drawn in other states between
interference with prospective economic relations and interference
with contract.17
¶61 Nevertheless, in recent decades a number of courts have
concluded that tortious interference liability should result from
wrongful conduct rather than mere malice. See, e.g., Avilla v. Newport
Grand Jai Alai LLC, 935 A.2d 91, 99 (R.I. 2007) (“We do not believe a
searching analysis only of motive is in most instances enough to
send these cases to the jury. There must still . . . be something
‘illegal’ about the means employed.” (alteration in original)). Some
cases have concluded that an improper purpose is sufficient grounds
for tortious interference liability only when there is no other reason
for the defendant’s conduct. E.g., Carvel Corp. v. Noonan, 818 N.E.2d
1100, 1103 (N.Y. 2004) (“[Tortious interference liability] has been
recognized where a defendant engages in conduct for the sole
purpose of inflicting intentional harm on plaintiffs . . . .” (emphasis
added) (internal quotation marks omitted)). Other cases have gone
as far as we go here, for similar reasons, and rejected improper
purpose liability entirely. E.g., Wal-Mart Stores, Inc. v. Sturges, 52
S.W.3d 711, 726 (Tex. 2001) (“We . . . hold that to recover for tortious
interference with a prospective business relation a plaintiff must
prove that the defendant’s conduct was independently tortious or
17
See, e.g., Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 727 (Tex.
2001) (“In [concluding that tortious interference requires wrongful
conduct] we treat tortious interference with prospective business
relations differently than tortious interference with contract.”).
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Opinion of the Court
wrongful. . . . The concepts of malice [and] justification [i.e., intent]
. . . provide no meaningful description of culpable conduct . . . .”
(emphasis added)).
¶62 Again, the trend on this point is not irresistible. But we are
persuaded that our holding accords with the reasoned judgment of
other jurisdictions that have considered the question.
E. Summary
¶63 The improper-purpose doctrine, as it has been articulated
in Leigh Furniture and Pratt, has not been successfully restricted
within the narrow limits envisioned by Leigh. Rather, it has required
fact-finders to look into defendants’ souls whenever any evidence of
improper purpose could be presented. We now conclude that if the
doctrine came into common use, it would deter socially beneficial
speech and conduct, and other courts have increasingly sought to
solve this problem by restricting or abandoning improper-purpose
liability.
¶64 We therefore conclude that the improper-purpose doctrine
has not worked well in practice, and that “more good than harm will
come by departing from precedent.” State v. Menzies, 889 P.2d 393,
399 (Utah 1994). It should therefore be abandoned.
IV. CONSIDERATION OF A DEFENDANT’S PURPOSE
REMAINS APPROPRIATE IN SOME CIRCUMSTANCES
¶65 Although we reject our past doctrine that improper
purpose is sufficient grounds for tortious interference liability, this
does not mean that defendants’ motives and intent are entirely
irrelevant to tortious interference claims. We wish to make clear that
defendants’ motivation is still relevant to tortious interference claims
in two ways.
¶66 First and more obviously, tortious interference remains an
intentional tort. Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293, 304
(Utah 1982) (“[I]n order to recover damages, the plaintiff must prove
(1) that the defendant intentionally interfered with the plaintiff’s
existing or potential economic relations . . . .” (emphasis added)).
Intent and motive are not synonymous; in the tort context, “intent”
means a desire to bring about certain consequences, not a person’s
reasons for that desire. See RESTATEMENT (SECOND ) OF TORTS § 8A
(1965) (“The word ‘intent’ is used throughout the Restatement of this
Subject to denote that the actor desires to cause consequences of his
act . . . .”). Nevertheless, evidence of defendants’ motives will
frequently shed light on their intent.
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¶67 Second, defendants’ motivation will often be relevant to
the improper means prong of the Leigh Furniture test. For example,
a plaintiff might bring a tortious interference suit alleging that the
defendant’s improper means of interference was an abuse of judicial
process. See 3 DAN B. DOBBS, THE LAW OF TORTS § 617 (2d ed. 2011)
(listing abuse of process as a tort on which a tortious interference
claim might be based). In order to adjudicate that claim, a court
would have to determine whether the defendant used a legal process
“primarily to accomplish a purpose for which it is not designed.”
Gilbert v. Ince, 1999 UT 65, ¶ 17, 981 P.2d 841 (emphasis added)
(internal quotation marks omitted). This is only one of many
possible claims in which the propriety of a particular means will
depend in part on the defendant’s reasons for employing it.
¶68 In such cases, however, it will never be the defendant’s
motivation by itself that leads to liability. Abuse of process is an
improper means not because the defendant bore the plaintiff ill will;
it is an improper means because those who avail themselves of the
legal system’s coercive powers have a duty to do so for legitimate
legal reasons. A person who violates this duty, with the intent to
hinder someone’s economic relations, is liable for whatever damages
result from that improper act.
¶69 On the other hand, a person who violates no legal duties,
infringes no one’s rights, and commits no wrongful action can never
be held liable for malice alone.
CONCLUSION
¶70 For the foregoing reasons, we conclude that in the absence
of any improper means, an improper purpose is not grounds for
tortious interference liability. We therefore overrule Pratt v. Prodata,
885 P.2d 786 (Utah 1994). We also disavow all dicta in Leigh Furniture
& Carpet Co. v. Isom, 657 P.2d 293 (Utah 1982), that would allow
liability based solely on an improper purpose. In order to win a
tortious interference claim under Utah law, a plaintiff must now
prove “(1) that the defendant intentionally interfered with the
plaintiff’s existing or potential economic relations, (2) . . . by
improper means, (3) causing injury to the plaintiff.”Id. at 304.
¶71 The Eldridges’ tortious interference claims fail the second
prong of this test: they have failed to produce evidence of an
improper means. The district court’s denial of summary judgment
on the tortious interference claims is therefore reversed, and the
matter is remanded for further action consistent with this opinion.
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