The Best Defense to Tortious Interference Claims in New York
Here's a dose of some cold, hard truth:
As a practical matter it is far from simple to prove a tortious interference with contract claim under New York law.
The Two Main Elements Needed for a Successful Tortious Interference With Contract Claim
First, there are two (2) primary elements that the plaintiff must prove in order to demonstrate tortious interference with contract:
1) That the defendant intentionally induced a third party to break their contract with the plaintiff; AND
2) That the defendant did so without justification.
"Why is that so hard?" you ask.
Why It's So Hard to Win a Tortious Interference With Contract Claim Under NY Law
The answer lies in the latter prong - without justification - because that is where many defendants have successfully defeated tortious interference claims.
The reason this defense is often so potent is really simple:
All the defendant needs to show is that their actions were undertaken for their own legitimate economic interests.
In other words, garden-variety competition is considered "justified," and a valid defense when it comes to tortious interference claims.
Make no mistake: that is a very broad category.
In fact, New York's highest court has held that this exemption applied not only where the defendant was a direct competitor of the plaintiff's but even if they weren't directly competing, and summarized the rule as follows:
"The existence of competition may often be relevant, since it provides an obvious motive for defendant's interference other than a desire to injure the plaintiff; competition, by definition, interferes with someone else's economic relations. Where the parties are not competitors, there may be a stronger case that the defendant's interference with the plaintiff's relationships was motivated by spite. But as long as the defendant is motivated by legitimate economic self-interest, it should not matter if the parties are or are not competitors in the same marketplace." (Carvel Corp. v Noonan, 3 NY3d at 191.)
The Policy Reasons Behind the "Without Justification" Requirement
Strange as it may sound, the rationale for this rule, which, at first blush, seems rather unfair to the plaintiff (whose customer contract was just broken due to the acts of the defendant in inducing the breach), is grounded in solid public policy.
After all, if the defendant can offer the customer better service or product, or at better prices, why shouldn't the customer be allowed to do so? Stated differently, any contrary rule would inhibit, rather than foster, healthy competition.
Based on the above, the instances where a plaintiff is able to prove that a defendant's actions weren't justified when they interfered with an existing contract will be rare.
The reason should be fairly obvious: in the vast majority of cases, the only reason anyone would be interested in inducing a customer to break its contract with a service provider is in order to secure that customer's business for themselves.
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