Speakers of Sport, Inc. v. ProServ, Inc.

178 F.3d 862 (7th Cir. 1999)

 

RULE:

Promissory fraud is not actionable unless it is part of a scheme to defraud, that is, unless it is one element of a pattern of fraudulent acts. 

FACTS:

A sports agency filed claims for tortious interference with a business relationship and violation of the Illinois Consumer Fraud and Deceptive Practices Act (Act) against a competing sports agency. The competing sports agency made a promise of endorsements to the sport agency's client, which it claims was fraudulent and had induced him to terminate his contract with them. The district court issued a summary judgment in favor of the competing sports agency. The case was appealed to the United States Court of Appeals.

ISSUE:

Were the claims for tortious interference valid?

ANSWER:

No

CONCLUSION:

The court affirmed the judgment, finding competing sports agency's conduct in luring away a client from plaintiff was protected by the competitor's privilege. The court found that plaintiff's client had a contract with it that was terminable at will, and the conduct of defendant in inducing a breach of that contract was not actionable. The court held that to sustain a cause of action based on false and fraudulent promises by defendant, plaintiff had to establish that such promises were part of a scheme to defraud being perpetrated by defendant. Plaintiff was unable to prove this. The court concluded that for plaintiff to bring suit under the Act as a representative of the consumer interest, it had to prove, by clear and convincing evidence, how the complained-of conduct implicated consumer protection concerns, which it could not.

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