The New York Court of Appeals in White Plains Coat & Apron Co., Inc. v. Cintas Corp. recently decided the following certified question from the United States Court of Appeals for the Second Circuit: Whether a generalized economic interest in soliciting business for profit can constitute a defense to a claim of tortious interference with an existing contract for an alleged tortfeasor with no previous economic relationship with the breaching party.

The plaintiff rents napkins, tablecloths, and other laundered articles to bars, restaurants, and other businesses.  The plaintiff executes signed contracts with the 2 majority of its customers.  In these form contracts, a plaintiff customer typically “agrees to rent from [the plaintiff] exclusively during the term of [the] Agreement, all of Customer’s requirements for laundered articles.”  The plaintiff accused the breaching party of soliciting its customers and encouraging them to breach the service contracts with the plaintiff.  The alleged breaching party argued that it had no knowledge of the agreements with the plaintiff and hat it had not induced any breaches.

The Court answered the certified question in the negative.  Put simply, a defendant cannot rely on an economic justification defense arguing that it is justified to induce a plaintiff’s customer to breach a contract because the plaintiff is a competitor.   The Court stated: "A defendant who is simply plaintiff’s competitor and knowingly solicits its contract customers is not economically justified in procuring the breach of contract.  In other words, mere status as plaintiff’s competitor is not a legal or financial stake in the breaching party’s business that permits defendant’s inducement of a breach of contract."  The Court noted that a competitor could engage in ethical business practices with a competitor’s customers, such as sending those customers advertisements.