The Massachusetts Appeals Court Agrees With NELF That A Business Cannot Be Liable For Tortious Interference Merely By Choosing Not To Contract With Another Business
At issue in this case was the decision by Sovereign Bank of New England (“Sovereign Bank”) not to renew a contract between its predecessor bank, Fleet Bank, and Berkshire Armored Car Services, Inc. (“Berkshire”) for cash processing services. Berkshire sued Sovereign Bank for intentional interference with contractual relations, alleging that Sovereign Bank’s decision caused another of Berkshire’s large customers, Victory Supermarkets (“Victory”), to terminate its wholly separate contract with Berkshire to transport and process Victory’s cash deposits with Sovereign Bank. Berkshire prevailed at a jury trial on this claim, even though the trial judge threw out its Mass. G.L. 93A claim, which was based on the same facts.
The issue before the Appeals Court was whether Sovereign Bank could be held liable for tortiously interfering with Berkshire’s business relationship with Victory merely by making the business decision not to contract with Berkshire. NELF filed an amicus brief in the appeal on behalf of itself, the Massachusetts Bankers Association, and Associated Industries of Massachusetts, supporting Sovereign Bank. In its brief, NELF argued that, as a matter of law and sound public policy, a business should be able to choose freely to do business with whomever it wishes and should not have to fear potential liability for the incidental consequences that may arise from its legitimate business decisions. NELF also argued that courts from many other jurisdictions have rejected claims of tortious interference when one business simply has decided not to do business with another, regardless of any adverse economic consequences. Finally, NELF argued that the two verdicts in this case—the trial judge’s finding against Berkshire on its Mass. G.L. 93A claim and the jury’s verdict in Berkshire’s favor on the tortious interference claim—were inconsistent and irreconcilable and failed to provide any rational basis on which a business could plan its conduct in the marketplace.
In November 2005 the Appeals Court ruled in Sovereign’s favor, reversing the Superior Court’s judgment. The Appeals Court held that Sovereign's choice of armored car services was a legitimate business decision and that Berkshire “failed to establish that Sovereign had an improper motive to intentionally interfere with Berkshire's contract with Victory.” The Court noted that there was no evidence that Sovereign even knew of Berkshire's contract with Victory when it chose not to renew Berkshire’s contract, and therefore that there was no causal link between any hostility on the part of Sovereign toward Berkshire and Berkshire’s loss of its business relationship with Victory. On December 21, 2005, the Supreme Judicial Court denied Berkshire’s application for further appellate review.
At issue in this case was the decision by Sovereign Bank of New England (“Sovereign Bank”) not to renew a contract between its predecessor bank, Fleet Bank, and Berkshire Armored Car Services, Inc. (“Berkshire”) for cash processing services. Berkshire sued Sovereign Bank for intentional interference with contractual relations, alleging that Sovereign Bank’s decision caused another of Berkshire’s large customers, Victory Supermarkets (“Victory”), to terminate its wholly separate contract with Berkshire to transport and process Victory’s cash deposits with Sovereign Bank. Berkshire prevailed at a jury trial on this claim, even though the trial judge threw out its Mass. G.L. 93A claim, which was based on the same facts.
The issue before the Appeals Court was whether Sovereign Bank could be held liable for tortiously interfering with Berkshire’s business relationship with Victory merely by making the business decision not to contract with Berkshire. NELF filed an amicus brief in the appeal on behalf of itself, the Massachusetts Bankers Association, and Associated Industries of Massachusetts, supporting Sovereign Bank. In its brief, NELF argued that, as a matter of law and sound public policy, a business should be able to choose freely to do business with whomever it wishes and should not have to fear potential liability for the incidental consequences that may arise from its legitimate business decisions. NELF also argued that courts from many other jurisdictions have rejected claims of tortious interference when one business simply has decided not to do business with another, regardless of any adverse economic consequences. Finally, NELF argued that the two verdicts in this case—the trial judge’s finding against Berkshire on its Mass. G.L. 93A claim and the jury’s verdict in Berkshire’s favor on the tortious interference claim—were inconsistent and irreconcilable and failed to provide any rational basis on which a business could plan its conduct in the marketplace.
In November 2005 the Appeals Court ruled in Sovereign’s favor, reversing the Superior Court’s judgment. The Appeals Court held that Sovereign's choice of armored car services was a legitimate business decision and that Berkshire “failed to establish that Sovereign had an improper motive to intentionally interfere with Berkshire's contract with Victory.” The Court noted that there was no evidence that Sovereign even knew of Berkshire's contract with Victory when it chose not to renew Berkshire’s contract, and therefore that there was no causal link between any hostility on the part of Sovereign toward Berkshire and Berkshire’s loss of its business relationship with Victory. On December 21, 2005, the Supreme Judicial Court denied Berkshire’s application for further appellate review.
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