A federal jury in Chicago on March 21 awarded more than $90 million to JamSports and Entertainment LLC, holding Clear Channel Entertainment (CCE) liable for tortious interference of contract and with
A federal jury in Chicago on March 21 awarded more than $90 million to JamSports and Entertainment LLC, holding Clear Channel Entertainment (CCE) liable for tortious interference of contract and with prospective economic advantage.
The case arose from a dispute over production of supercross events for the Paradama Productions' American Motorcycle Assn. (AMA Pro) supercross events. For years CCE's motorsports division produced the events. In 2001, the AMA signed a letter of intent with JamSports for a long-term deal, yet supercross ended up back with CCE.
Lawyers for JamSports claimed that CCE used its leverage as the world's largest live entertainment producer to intimidate venue managers, threatening that they would lose CCE events if they went with JamSports on supercross.
Prior to the verdict in the U.S. District Court for the Northern District of Illinois, CCE had challenged the propriety of a claim for interference with prospective economic advantage under Illinois law.
When a company such as JamSports may not have a business expectancy with third parties, there can be no tortious interference, CCE argued in its motion. The claim could only be based on actions directed at AMA Pro, with which JamSports had a business expectancy, and not on CCE's activities directed to other entities such as stadiums, original equipment manufacturers and so on.
In a written opinion March 13, the court acknowledged that no Illinois cases directly approved this claim when activities were directed toward remote parties.
Quoting the Restatement (Second) of Torts, the court noted that one who induces a third person not to perform a contract with another interferes directly with the other's contractual relations. "The actor's conduct need not be predatory or independently tortious, for example, and mere knowledge that this consequence is substantially certain to result may be sufficient," the court wrote.
The court then quoted an example from the Restatement: "If A induces B to sell certain goods to him and thereby causes him not to perform his contract to supply the goods to C, this may also have the effect of preventing C from performing his contractual obligations to supply them to D and E. This remoteness conduces toward a finding that the interference was not improper."
However, the court emphasized the next passage from the treatise: "The weight of this factor, however, may be controverted by the factor of motive if it was the actor's primary purpose to interfere with C's obligation to D and E, or perhaps by the factor of the actor's conduct if that conduct was inherently unlawful or independently tortious."
The court held that there was evidence from which a jury could find that CCE's purpose in its actions toward companies other than AMA Pro was to interfere with the prospective relationship between AMA Pro and JamSports. In a footnote, the court indicated that modifying proposed jury instructions to reflect these factors could be appropriate.
As a result, the court rejected CCE's motion and let the jury decide this claim. It did, to the tune of more than $17 million plus $73 in punitive damages.
CCE has said it intends to appeal the verdict.