Bauer v. Interpublic Group of Companies, Inc.
2003 WL 1786879, 255 F. Supp. 2d 1086, 2003 U.S. Dist. LEXIS 5202 (2003)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A defendant cannot be liable for intentional interference with contract if the plaintiff fails to prove that the defendant's intentional acts were the proximate cause of a third party's decision to breach the contract. If the third party has already independently decided to terminate the contract before the defendant's involvement, the element of causation is not met.
Facts:
- Sports agent Francis G. Bauer spent months recruiting college quarterback David Carr, primarily communicating through Carr's father.
- On January 1, 2002, Carr signed a representation agreement with Bauer, which included a clause allowing termination by either party with five days' written notice via certified mail.
- Shortly after signing, Carr began having second thoughts, feeling that he had not been personally involved enough in the agent selection process.
- On January 11, 2002, after a workout session arranged by Bauer was criticized by Carr's friend, NFL quarterback Trent Dilfer, Carr's dissatisfaction grew.
- On January 12, 2002, Carr decided to terminate the agreement and left Bauer a voicemail message to that effect.
- On January 13, Carr spoke with Bauer by phone and explicitly stated that he was terminating their relationship and taking matters into his own hands.
- After informing Bauer of his decision, Carr contacted Dilfer for advice on selecting a new agent, which led him to hire a business manager who then arranged an interview with Mike Sullivan of Octagon.
- Carr first met with Sullivan on January 17, and on January 22, 2002, he officially signed a representation agreement with Octagon.
Procedural Posture:
- Plaintiff Francis G. Bauer filed a lawsuit against The Interpublic Group of Companies, Inc. and its related entities (collectively 'Octagon') in the United States District Court, the court of first instance.
- Bauer's complaint alleged causes of action for intentional interference with contract and unfair competition.
- Following the discovery phase of litigation, the defendants filed a motion for summary judgment, asking the court to rule in their favor without a full trial.
- The case is before the U.S. Magistrate Judge for a ruling on the defendants' motion for summary judgment.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Do a defendant's actions constitute intentional interference with contract when they enter into negotiations with a third party who has already independently decided to terminate their pre-existing contract with the plaintiff, even if the formal termination period has not yet expired?
Opinions:
Majority - Laporte, United States Magistrate Judge
No. The defendants' actions do not constitute intentional interference with contract. To prevail on such a claim, the plaintiff must demonstrate that the defendant's intentional acts were the proximate cause of the breach. The undisputed evidence shows that Carr had already decided to terminate his contract with Bauer and had communicated that decision before he or his representatives initiated any contact with the defendants. Because Carr's decision to breach was made independently, the defendants' subsequent negotiations with him cannot be considered the cause of the breach. Even though negotiations began before the five-day notice period in Bauer's contract had formally expired, this is irrelevant because the defendants did not induce the decision to terminate; they were merely contacted by a party who had already made up his mind to seek new representation.
Analysis:
This decision reinforces the critical element of causation in claims for intentional interference with contract. It clarifies that a competitor is not liable for interference if they are approached by a party who has already made an independent decision to breach a prior agreement. The case highlights that the timing of the third party's decision to breach is paramount; if the decision predates the defendant's involvement, the defendant cannot be the proximate cause of the breach. This provides a degree of protection for businesses and agents who are approached by individuals already seeking to change their contractual relationships.
