Speakers of Sport, Inc. v. ProServ, Inc.
178 F.3d 862 (1999)
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Rule of Law:
Under Illinois law, a competitor is privileged to interfere with a contract that is terminable at will. A claim of promissory fraud used to induce such a termination is not actionable unless the single fraudulent promise is part of a broader scheme to defraud.
Facts:
- Baseball catcher Ivan Rodriguez had a series of one-year, terminable-at-will agency contracts with Speakers of Sport, Inc. ('Speakers').
- In 1995, a rival sports agency, ProServ, Inc. ('ProServ'), promised Rodriguez it would secure for him between $2 and $4 million in endorsements if he signed with them.
- Relying on ProServ's promise, Rodriguez terminated his at-will contract with Speakers and signed with ProServ.
- ProServ failed to obtain significant endorsements for Rodriguez during their one-year relationship.
- After one year, Rodriguez left ProServ and hired a different agent.
- The new agent later negotiated a five-year, $42 million contract for Rodriguez with the Texas Rangers.
Procedural Posture:
- Speakers of Sport, Inc. filed a diversity suit against ProServ, Inc. in federal district court, alleging tortious interference and violations of Illinois law.
- The district court granted summary judgment in favor of the defendant, ProServ.
- Speakers of Sport, Inc., as the appellant, appealed the grant of summary judgment to the U.S. Court of Appeals for the Seventh Circuit.
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Issue:
Does a competitor's unfulfilled promise of future earnings to a potential client constitute tortious interference with the client's existing, terminable-at-will business relationship under Illinois law?
Opinions:
Majority - Posner, Chief Judge
No. A competitor's unfulfilled promise of future earnings does not constitute tortious interference because the 'competitor's privilege' permits inducing the lawful termination of an at-will contract, and the promise itself does not rise to the level of actionable fraud under Illinois law. The court reasoned that competition, while fierce, is not a tort and is protected by the competitor's privilege. Speakers' claim hinges on promissory fraud, but Illinois law requires more than a single unfulfilled promise; it demands evidence of a larger 'scheme to defraud' to be actionable. This rule prevents the legal system from being used to stifle legitimate competition. Furthermore, the court characterized ProServ's promise as mere 'puffing'—an aspirational sales pitch or expression of hope that a reasonable person would not interpret as a legally enforceable guarantee or warranty. Since Rodriguez himself could not sue ProServ for this aspirational statement, Speakers cannot use it as the basis for an unfair competition claim.
Analysis:
This decision reinforces the high legal bar for tortious interference claims in competitive markets, particularly under Illinois's restrictive view of promissory fraud. By requiring a 'scheme to defraud' rather than a single broken promise, the court protects aggressive competition and prevents rivals from easily suing each other over optimistic sales pitches. The court's characterization of a multi-million dollar promise as non-actionable 'puffing' signals a strong judicial reluctance to police competitive business conduct, thereby safeguarding the 'competitor's privilege' and promoting a robust, if sometimes ruthless, marketplace.
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