Free Letter - District Court of Delaware - Delaware

Case 1 :04-cv-01278-KAJ Document 335 Filed 05/24/2006 Page 1 of 4
CON NGLLY EGVE §...O§GE Bc MUTE Lim?
, ........,,, . .................... . .... .. ATTORNEYS AT .... . .................. ..... .. . .
i F50. Box 2207 X
Wilmington DE 19899
{302} ess anti
N. Richard Powers tscai ess sera
Counsel
m (sez; ess-sate
mx (302) 658-5514 ts.;
smart [email protected] ;:¢
nzvur rc Wilmington Office {Lp ..._ it 3 .';w. ,
May 24, 2006 CQ;} .:i`
VM CM/EGF ifi it i
Honorable Kent A. Jordan ._ .:1it ··=~ i
5. Caleb Boggs Federal Building =y_ { W Wwwmhim
844 N. King Street, Room 6325
Wilmington, DE 19801
Re: Cymvac, Inc. v. Pechiney Plastic Packaging, Inc., No. 04·-1278-KA.}: Pechiney’s
Submission on Causation
Dear Honorable Judge Jordan:
ln their respective jury instructions, the parties dispute the proof required on the essential
element of causation for Cryovac’s tortious interference claims. Under Cryovac’s instructions,
Cryovac would satisfy the element of causation by simply showing that any conduct of Pechiney
caused National Beef to begin buying from Pechiney, even proper, non-actionable conduct, such
as offering packaging for a lower price than that offered by Cryovac. Cryovac’s proposed
instructions would therefore preclude the jury from considering other possible causes, such as (l)
competitive activities by Pechiney that are lawful and privileged (making presentations to
National Beef, offering favorable terms upon which products would be sold to National Beef and
testing Pechiney’s products in National Beef s plants) and (2) Cryovac’s own conduct (such as
failing to disclose to either National Beef or Pechiney during the five~rnonth bidding process for
National Beef s business that Cryovac believed that it had a binding requirements contract with
National Beef, even though Cryovac knew that Pechiney was bidding for that business and also
knew during the bidding process that National Beef did not believe itself bound to buy from
Cryovac). To establish a claim for tortious interference, however, the law requires that the
plaintiff must prove that the defendant’s wrongful or improper conduct was the direct or
proximate cause of the third-party’s breach of contract or failure to enter into a conuact, and not
some other cause, including legitimate and proper conduct of the defendant. Pechiney’s
instructions follow this legal requirement by providing that Cryovae must prove that it was
Pechiney’s allegedly wrongful conduct, the infringement of the ‘¢ll9 patent, that caused National
Beef to either breach a binding requirements contract with Cryovac or to refuse to enter into a
binding requirements contract with Cryovacl
I As explained in Pechiney’s Submission on the Conduct Cryovac Must Prove to Prevail on its
Tortious Interference Claims, also filed today, infringement of the ‘4l9 patent alone, without
proof of malice, does not establish wrongful means.

Case 1:04-cv—01278-KAJ Document 335 Filed 05/24/2006 Page 2 of 4
Honorable Kent A. Jordan
l\/lay 24, 2006
Page 2
The courts have uniformly held that to prevail on a claim for tortious interference, the plaintiff
must establish that the defendant’s wrongful conduct was the cause of a third-party’s breach of a
contract or refusal to enter into a contract. See L&MEriters., Inc. v. BE] Sensors & Sys. Co., 45
F. Supp. 2d 879, 886-88 (D. Kan. l999) (finding that an element of tortious interference with
prospective business advantage is "darnages suffered by plaintiff as a direct or proximate cause
of defendant’s rnisconduct"); Acorn USA Holdings LLC v. Premork [nfl, Inc., 2003 WL
22861168, *3 (Del. Super. Ct. July 16, 2003) (stating that tortious interference with contract
requires "a subsequent breach caused by [defendants} wrongful conduct"); Dougeles v.
Muhlerzjfeld 548 N.E.2d 45, 52 (lll. Ct. App. 1989) (same); Schott v. Bcussiuk, 950 S.W.2d 621,
628-29 (Mo. Ct. App. l997) (“A defendant is justified in inducing a contract’s breach, unless the
defendant uses improper means to induce the breach."); Commerce Noi ’l Iris. Servs., [uc. v.
Buchler, l20 Fed. Appx. 414, 418-19, 2004 WL 2786315 (3d Cir. 2004) (holding that "under
Delaware law, a plaintiff must show intentional, wrongful interference which induces or
causes a breach or termination ofthe relationship or expectancy") (citation omitted) (unpublished
opinion).
The authorities that Cryovac relies on to support its jury instructions on causation and its
objections to Pechiney’s instructions support Pechiney’s position, not Cryovac’s. (See, eg., D.l.
326, at Tab A 65-66, Tab B 149-50.) In support of its causation instruction for tortious
interference with contract, 3.5.3, Cryovac cites American Bar Association, Model Jury
Irzsiructiorzs: Business Torts § l.4.3 c. The authority listed for that model instruction holds that
tortious interference requires that the allegedly wrongful conduct be the cause of the breach. See
F iizpoirick v. Catholic Bishop, 916 F.2d 1254, 1256 (7th Cir. 1990) (stating that tortious
interference requires “breach of contract caused by defendant’s wrongful conduct”); Merrill
Lynch Futures, lric. v. Miller, 686 F. Supp. 1033, 1040 (S.D.N.Y. l988) (“A plaintiff must plead
and prove that ‘but for the unlawful actions of defendant, the contract would have been
performed."’) (citation omitted); 45 Am. lux. 2d Interference § 10 ("To establish causation in a
tortious interference action, the plaintiff must prove that the defendant’s wrongful or unlawful
conduct proxiinately caused the injury alleged, although it need not be the sole cause.")
Likewise, Cryovac’s causation instruction for tortious interference with prospective economic
advantage relies on rnodel jury instructions that do not reference any authority that supports
Ciyovac’s position. For example, the ABA Model lury Instruction § 2.5.l cites Lyon v.
Campbell, 707 A.2d 850, 860 (Ct. App. Md. 1998), but the court in this case held that, "To
establish causation in a tortious interference action, the plaintiff must prove that the defendanfs
wrongful or unlawful conduct proximately caused the injury alleged."
ln the context of this case, Cryovac’s proposed instructions on causation would require the jury
to find in Cryovac’s favor even if Pechiney was able to prove (l) that it won National Beef’ s
business because it offered National Beef better terms, conduct that is fully protected by the
competitive privilege; (2) that it would have won the business even if it had not infringed the
‘4l9 patent, based on its ability to offer non-infringing packaging at a lower price than that
offered by Cryovac; and (3) that Cryovac’s own actions were responsible for the loss of National
Beef s business. On the issue of causation, Pechiney intends to prove that it could have offered
National Beef a non—lEVOH version of ClearShield that Cryovac admits would not infringe its
patent, and that National Beef decided to buy from Pechiney because Pechiney offered better

Case 1:04-cv—01278-KAJ Document 335 Filed 05/24/2006 Page 3 of 4
Honorable Kent A. Jordan
May 24, 2006
Page 3
pricing, not because National Beef had any desire for an EVOH bone—in packaging product. ln
addition, Pechiney intends to show that National Beef would have continued to buy from
Cryovac if Cryovac had offered National Beef competitive pricing, so that it was C1yovac’s
conduct, not Pechiney’s, that caused Cryovac to lose National Beef s business. Finally,
Pechiney intends to show that Cryovac’s failure to tell either National Beef or Pechiney that it
believed it had a binding requirements contract with National Beef ~»~ despite its knowledge that
Pechiney was bidding for that business and despite its knowledge that National Beef did not
believe itself to be bound by such a contract -— was also a direct and proximate cause of its loss of
National Beef s business. Accordingly, Cryovac’s proposed causation instructions are improper
because they would direct the jury to find that Cryovac had satisfied the causation element even
if Ciyovac lost National Beef’s business due to Pechiney’s lawful competitive activities, rather
than to any wrongful conduct by Pechiney.
In a case raising a similar issue concerning causation, DeBonaver1tnm v. Nationwide Mui. Ins.
Co., 428 A.2d ll5l, l 153-54 (Bel. l98l), a group of automobile body repair shops sued an
insurance company for tortious interference with prospective business opportunities. The
plaintiffs’ claims were based on allegations that the insurance company improperly coerced its
insureds to have their repair work done by a select group of competing repair shops. The court
affirmed the verdict for the insurance company, finding that the plaintiffs had failed to establish
that the alleged wrongful conduct of the defendant was the proximate cause of their loss. The
court found instead that the plaintiffs’ own “pricing policies were the proximate cause of their
loss of business from defendanfs insureds and claimants? 428 A.2d at 1l54. Specifically, the
trial court below had concluded after hearing the evidence that “plaintiffs’ loss of prospective
business was due less to defendanfs channeling • its insureds and claimants to the favored
shops than to plaintiffs’ deliberate decision not to compete with the favored shops on repair
prices? Id
Similarly here, Pechiney intends to show that Cryovac’s loss of National Beef s business was
due to Cryovac’s own decision not to offer a pricing proposal that was competitive with
l"echiney’s proposal, and not to any improper conduct by Pechiney. If the evidence introduced at
trial proves Pechiney’s contention, the jury should find, if properly instructed, that Cryovac has
not established the element of causation necessary to prevail on its tortious interference claims.
As discussed above, Cryovac must show that some wrongful or improper conduct on the part of
Pechiney was the direct or proximate cause of National Beef’s alleged breach of contract or
refusal to enter into a contract. The only wrongful or improper conduct Ciyovac has alleged in
this case is l’echiney’s infringement of the ‘4l9 patent. The jury instructions should therefore
provide that to prevail on its claims for tortious interference, Cryovac must show that Pechiney’s
infringement ofthe ‘4l 9 patent directly or proximately caused National Beef to breach an
existing contract or refuse to enter into a contract.

Case 1:04-cv—01278-KAJ Document 335 Filed 05/24/2006 Page 4 of 4
Honorable Kent A. J ordan
May 24, 2006
Page 4
Very truly yours,
/s/’ N Richard Powers
N. Richard Powers
cc: Cierk ofthe Court
John W. Shaw (via hand delivery & CM/ECF)
Ford F. Farabow (via e-mail)
466575