Tuttle v. Buck

Supreme Court of Minnesota · Torts

TortsInterference with businessCompetitionMalicemalicious competitionbusiness rivalryintentional harmlawful act and motive

Facts

The complaint alleged that the defendant opened an opposition barber shop in competition with the plaintiff. The opinion frames the plaintiff's theory as one of malicious business interference rather than slander, conspiracy, or combination. The court discussed a situation in which a person starts a competing business not for profit, but regardless of loss and solely to drive a competitor out of business, intending to retire once that object is achieved. A majority of the justices concluded the complaint was sufficient on that principle.

Issue

Can a defendant be liable in tort for opening and operating a competing business when the enterprise is undertaken solely to injure a rival and drive him out of business, rather than to advance the defendant's own legitimate business interests? More specifically, may motive make actionable conduct that would otherwise appear to be ordinary competition?

Rule

Motive is not always immaterial in tort. Although ordinary competition, such as diverting customers by lower prices, is generally lawful, a person commits an actionable tort when he starts and operates a rival business, not for his own profit or legitimate advantage, but regardless of loss to himself and for the sole purpose of driving a competitor out of business, intending to stop once that malevolent objective is accomplished.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Duluth, Nora Ellison owned the only neighborhood flower shop. Victor Senn, a wealthy retiree with no interest in floristry, leased the storefront next door, sold bouquets far below cost, told friends he did not care how much money he lost so long as Nora shut down, and said he would close his own shop as soon as she was forced out.

If Nora sues Victor in tort for interference with her business, which is the strongest analysis?

Explanation. The majority rejects the sweeping idea that motive is always irrelevant in tort. Ordinary competition is lawful, but a rival business opened not for profit or legitimate advantage, and instead regardless of self-loss solely to ruin a competitor and then cease operations, is actionable. That conduct is not treated as true competition but as intentional harm without legal justification. (Derived from Tuttle v. Buck (n.d.).)