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Conte v. Emmons

United States Court of Appeals for the Second Circuit
895 F.3d 168 (2018)
ELI5:

Rule of Law:

To succeed on a claim for tortious interference with contract against law enforcement officials, a plaintiff must present sufficient evidence that the officials acted with the specific purpose of inducing a breach of a particular contract. Evidence showing that the officials' conduct was merely incidental to a lawful, albeit aggressive, investigation is insufficient to establish the required elements of intent and causation.


Facts:

  • Anthony Conte founded a company named I Media to produce and distribute a television magazine called TV Time.
  • I Media sold exclusive distribution rights to 'route distributors,' who paid an upfront fee for the right to distribute the magazine in a specific area.
  • The company experienced early difficulties, and some route distributors who had paid their fees did not receive any magazines to distribute.
  • Two distributors filed complaints with the Nassau County District Attorney's Office, alleging they had been defrauded.
  • The DA's office assigned prosecutors Robert Emmons and William Wallace, and investigator Michael Falzarno, to investigate the complaints, which eventually grew to nearly fifty.
  • During their investigation, Emmons, Wallace, and Falzarno issued grand jury subpoenas and made inquiries to I Media's route distributors, printers, and potential advertisers.
  • Ultimately, no criminal charges were filed against Conte.
  • Conte's company, I Media, subsequently failed.

Procedural Posture:

  • Anthony Conte sued Robert Emmons, William Wallace, Michael Falzarno, and others in the U.S. District Court for the Eastern District of New York for tortious interference with contract under New York law.
  • The case proceeded to a jury trial.
  • At the close of evidence, the defendants moved for judgment as a matter of law pursuant to Fed. R. Civ. P. 50(a).
  • The district court denied the motion and submitted the claims to the jury.
  • The jury returned a verdict in favor of Conte against Emmons, Wallace, and Falzarno, awarding him $1,381,500.
  • The defendants (appellants) renewed their motion for judgment as a matter of law pursuant to Fed. R. Civ. P. 50(b).
  • The district court denied the post-verdict motion and entered judgment for Conte.
  • Emmons, Wallace, and Falzarno appealed the denial of their motion to the U.S. Court of Appeals for the Second Circuit.

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Issue:

Is there sufficient evidence for a reasonable jury to find that law enforcement officials, while conducting a criminal investigation, acted with the specific intent to induce a breach of contract and that their actions were the 'but-for' cause of the breach?


Opinions:

Majority - Judge Walker

No, there was insufficient evidence for a reasonable jury to find the required elements of intent and causation for a tortious interference with contract claim. To prevail, a plaintiff must demonstrate that the defendants acted with the specific purpose of inducing a contract breach. Here, the evidence showed the appellants' actions were incidental to their lawful mandate to investigate widespread allegations of fraud. Even if their conduct was overzealous or showed personal animus, it could not be reasonably interpreted as anything other than pursuing a law enforcement goal. Furthermore, Conte failed to establish causation, as he presented no admissible evidence that any third party breached a contract because of the appellants' actions; the jury's conclusion to the contrary was based on 'sheer surmise and conjecture' rather than permissible inference.


Dissenting - Judge Pooler

Yes, the jury's verdict was sufficiently grounded in the evidence and should be upheld. The appellants forfeited their challenge to the sufficiency of the evidence by not raising these specific arguments in their pre-verdict motion, meaning the verdict should only be overturned to prevent a 'manifest injustice,' which is not the case here. The jury was entitled to make credibility determinations based on live testimony and could have reasonably inferred that the appellants, frustrated that Conte's behavior was not technically illegal, intentionally used their official power to shut down his business. Overturning the verdict of a pro se plaintiff who successfully convinced a jury is an inappropriate use of appellate discretion, especially without granting a new trial.



Analysis:

This decision reinforces the high evidentiary bar for succeeding on tortious interference claims against prosecutors and investigators acting within the scope of their official duties. It clarifies that conduct incidental to a lawful investigation, even if aggressive or causing economic harm, does not satisfy the specific intent required for this tort. The ruling protects law enforcement from civil liability arising from zealous investigations, making it more difficult for subjects of such investigations to sue for resulting business failures unless they can produce concrete evidence of an improper purpose aimed specifically at breaking contracts, rather than just investigating a crime.

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