White Plains Coat & Apron Co. v. Cintas Corp.
8 N.Y.3d 422, 867 N.E.2d 381, 835 N.Y.S.2d 530 (2007)
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Rule of Law:
A competitor's generalized economic interest in soliciting business for profit does not constitute a valid economic justification defense to a claim of tortious interference with an existing contract. To assert this defense, the defendant must have a pre-existing legal or financial interest in the breaching party's business.
Facts:
- White Plains Coat & Apron Co., Inc. (White Plains), a linen rental business, had five-year exclusive service contracts with its customers.
- Cintas Corp. (Cintas), a nationwide competitor, was aware of White Plains' exclusive contracts.
- Cintas intentionally solicited and induced dozens of White Plains' customers to breach their existing contracts and enter into new rental agreements with Cintas.
- White Plains sent a letter demanding Cintas cease its solicitation of contract customers and enclosed a list of those customers.
- Cintas denied knowledge of the contracts and continued to solicit White Plains' customers.
Procedural Posture:
- White Plains sued Cintas in the U.S. District Court for the Southern District of New York for tortious interference with existing customer contracts.
- The District Court granted summary judgment to Cintas, dismissing the complaint on the grounds that Cintas's competitive interest was a valid economic justification.
- White Plains appealed the dismissal to the U.S. Court of Appeals for the Second Circuit.
- The Second Circuit, finding the relevant New York state law unclear, certified a dispositive question to the New York Court of Appeals, the state's highest court.
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Issue:
Does a generalized economic interest in soliciting business for profit constitute a defense to a claim of tortious interference with an existing contract for a competitor with no previous economic relationship with the breaching party?
Opinions:
Majority - Chief Judge Kaye
No. A generalized economic interest in soliciting business for profit does not constitute a defense to a claim of tortious interference with an existing contract. The court reasoned that while it must balance the protection of contracts with the promotion of competition, existing contracts receive greater legal protection than prospective business relationships. The economic interest defense is narrow and applies only when the defendant has a specific, pre-existing legal or financial stake in the breaching party's business, such as being a stockholder, parent company, or creditor. Merely being a competitor does not create such an interest, and to hold otherwise would improperly blur the line between acceptable competition and tortious interference with established contractual rights.
Analysis:
This decision clarifies and narrows the scope of the economic justification defense in New York tort law. It reinforces the critical distinction between interfering with existing contracts and competing for prospective business, holding the former to a higher standard of protection. The ruling establishes that while robust competition is encouraged, it cannot extend to improperly inducing parties to breach their existing, valid contracts. Future defendants in similar cases cannot simply claim they were competing for business; they must demonstrate a specific, pre-existing legal or financial connection to the breaching party to successfully invoke the defense.
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