Citation. Della Penna v. Toyota Motor Sales, U.S.A., 11 Cal. 4th 376, 902 P.2d 740, 45 Cal. Rptr. 2d 436, 95 Daily Journal DAR 13801, 95 Cal. Daily Op. Service 8056 (Cal. Oct. 12, 1995)
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Brief Fact Summary.
The Plaintiff, Della Penna (Plaintiff), is a distributor of automobiles. The Defendant, Toyota Motor Sales, U.S.A., Inc. (Defendant), made a policy disallowing the sale and distribution of the line of cars outside the United States. The Defendant published a list of “offenders”, parties supposedly guilty of this practice and told its franchise owners not to do business with them, threatening punishment if they did.
Synopsis of Rule of Law.
Showing that there was an interference with an economic relationship is not enough to make a case for the tort of “interference with economic relations”. One must show that the interference was one that is outside what is considered normal and proper business dealings.
The Plaintiff is a distributor of automobiles. The Defendant made a policy whereby no United States Toyoda dealer could sell Lexus cars to parties outside the United States.
* The Defendant compiled a list of parties who broke this policy and distributed it to all the franchise owners. The Defendant said that if the franchise owners did business with the parties on the list, they would face sanctions from the Defendant, up to and including, the loss of the franchise.
* The Plaintiff’s name was on the list of offenders. The Plaintiff lost much of its business because the Plaintiff was on the list.
* The Plaintiff sued the Defendant. The trial court gave the jury an instruction that, for the jury to rule in favor of the Plaintiff, they must find that the Defendant’s actions were “wrongful”. The court defined “wrongful” as “outside the act of legitimate business transactions”. The jury ruled in favor of the Defendant. This was a departure from the usual instructions that required “. . .the defendant [to] intentionally engage[ ] in acts designed to interfere with or disrupt the relationship”
Was the trial court’s instruction to the jury in error?
* Throughout history, there has been confusion over the tort of “interference with economic relations”. Many acts that might interfere with economic relations are merely participation in a competitive economic system. In order to recover for a disruption of economic relationship, one must prove that the acts that lead to the disruption were wrong – beyond what one would normally do to increase one’s own business. Mere evidence that the disruption happened is not enough to make a case for the tort of interference with economic relations.
Concurrence. The judge agreed with the court’s decision, but not with their conclusion that the trial court’s instructions were correct. He also found them to be too vague and not helpful in defining what actions constitute behavior in a competitive economy and what actions constitute tortuous interference.
This case brings out two principles having to do with the tort of interference with an economic relationship: Malicious motives are not enough to prove the tort and neither is the mere existence of the disruption.