Last October I reported on Leki Aviation’s $250 million breach of contract and tortious interference suit against Airbus, B/E Aerospace and Satair. The suit, filed in state court in Manhattan, claims that the defendants committed various torts in connection with a product distribution agreement between B/E and Leki. The suit alleges that the B/E fraudulently induced Leki to enter into the contract, and that Airbus and Satay tortiously interfered with the $250 million dollar agreement.
The tortious interference cause of action is recognized in most states, included Texas. To prevail on such a claim in Texas, the plaintiff must prove that the defendant committed some tort, which caused a third party to terminate its contract with the plaintiff. Typically the central question in these cases is whether the defendant’s actions were truly tortious, or simply strong competitive business activity.
For instance, assume a restaurant chain has a long term contract to sell Brand A bottled water to its customers. Then assume a competing company goes to the restaurant, claims its water is better than the restaurant’s current brand, and asks it to terminate its contract with Brand A and enter into a new contract for the competing brand. If the restaurant breaks its contract with Brand A, it is unlikely that Brand A can sue the competitor for tortious interference with its contract. This is because the competitor didn’t commit a tort. It simply won out in typical business competition.
On the other hand, if the competitor falsely claims that Brand A contains arsenic, and the restaurant then cancels the contract with Brand A to buy from the competitor, then Brand A has grounds for a suit. The competitor committed torts (e.g. slander and business disparagement) which caused the restaurant to terminate its contract and begin buying from the competitor. Brand A will be entitled to whatever damages it can prove were caused by the wrongful act.
As expected, all three defendants have sought dismissal of the Leki suit, claiming that the complaint fails to allege facts sufficient to support awards against them. In their lengthy motion, Airbus and Satair seek dismissal for the following reasons:
1. Airbus and Satair could not have interfered with the contract between B/E and Leki, because the alleged interference occurred prior to the date the contract became effective.
2. The suit fails to allege facts to support a claim that Satair and Airbus acted through wrongful means. Rather, Satair was a major competitor of Leki, and Airbus and Satair “acted out of their legitimate interest in winning back the distribution agreement with B/E”.
3. Leki’s claim for punitive damages fails to plead facts sufficient to support that Satair and Airbus acted with a “high level of moral culpability”.
B/E then filed its own Motion to Dismiss, claiming that, due to various technicalities, the plaintiff’s breach of contract suit against it must be dismissed.
The parties have filed responses, and responses to the responses. Rulings on the motions are expected in the next few months.