Free Letter - District Court of Delaware - Delaware

Case 1 :04-cv-01278-KAJ Document 333 Filed 05/24/2006 Page 1 of 3
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Re: Crjyavac, Inc. v. Pechiney Plastic Packaging, Inc., N0. 04-1278»KAJ: Pechiney’s
Submission on the Conduct Cryovac Must Prove to Prevail on its Tortious
Interference Clairns
Dear Honorable Judge Jordan:
In their respective tortious interference jury instructions, Bechiney and Cryovac agree that
Cryovac rnust prove that Pechiney used wrongful means to interfere. Cryovac asks the Court to
instruct the jury that Pechiney’s infringement ofthe ‘4l9 patent, without more, satisfies that
element. Under Delaware’s choice-of»law principles, however, Kansas law should apply,
because that is where the alleged wrongful conduct took place, where National Beef is located
and where the allegedly lost sales were made. Kansas law requires proof that the defendant
acted with actual malice. Furthermore, even if the Court does not apply Kansas law, Cryovac’s
position that patent infringement, without more, establishes that Pechiney’s conduct was
improper or wrongful is not supported by the law in the states with far fewer and less significant
contacts to this lawsuit.
I. Delaware’s Choice~of~Law Rules Dictate that Kansas Law Governs the Tortious
Interference Claims.
Delaware’s choice—of-law rules apply the law ofthe state with the most significant relationship to
the occurrence and the parties. Travelers Indemnity Co. v. Lake, 594 A.2d 38, 47 (Del. l99l).
The Delaware Supreme Court has adopted the factors outlined in the Restatement (Second) of
Conflict of Laws for determining which state has the most significant contacts to the alleged tort.
_ Id These factors are: “(a) the place where the injury occurred; (ln) the place where the conduct
causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and
place of business ofthe parties; and (d) the place where the relationship, if any, between the
parties is centered? Rest. 2d Conflict of Laws § 145.
The single niost important factor applied by Delaware courts for determining which state has the
most significant relationship to claims involving tortious interference or an analogous tort is "the
place where the conduct causing the injury occurred." Corning Inc. v. SRU Biosystems, LLCQ

Case 1:04-cv—01278-KAJ Document 333 Filed 05/24/2006 Page 2 of 3
Honorable Kent A. Jordan
l\/lay 24, 2006
Page 2
292 F. Supp. 2d 583, 585 (D. Del. 2003); Integra! Res. Ltd v. Istil Group, Inc., 2004 WL
2758672, *3-4 (D. Del. Dec. 2, 2004), ajfd l55 Fed. Appx. 69, 73 (3d Cir. Nov. 23, 2005); Rest.
2d Conflict of Laws § 145, crnt. e. The next most important factor is the place where the injury
occurred, which has been defined as the place where the contract "that is the subject of [the]
unlawful conduct was negotiated and perforined." Integral Res. Ltd, 2004 WL 2758672, at *3·—
4. The parties’ domicile, standing alone, is given the least weight in the choice-of—law analysis.
Id at *3—4; Corning Inc., 292 F. Supp. 2d at 585 n.1; Rest. 2d. Conflict of Laws § 145, cmt. e.
Under these principles, Kansas law should govern, because almost all ofthe relevant conduct
occurred in Kansas -~ (1) the face—to-face negotiations between Pechiney and National Beef
occurred in Kansas (including the negotiations that took place on January 14, 2004, the day
Cryovac claims that National Beef entered into a contract with Cryovac), (2) the National Beef
packaging facilities at which Pechiney partially supplanted Cryovac are located in Kansas, (3)
the pre—sale trial runs of ClearShield for National Beef’s benefit were all run at National Beef` s
facilities in Kansas, and (4) the packaging sold by Pechiney to National Beef was all shipped to
National Beef’s Kansas facilities. By contrast, the parties’ only connection with South Carolina
is that that is the state where Cryovac is located, and it is arguable that Cryovac’s injuries
occurred there (although it is equally arguable that they occurred in Kansas, where Cryovac’s
lost sales would have been made and where Pechiney’s sales were actually made).1 Delaware
has even less of a connection to the facts in this dispute, since its only connection is as the state
where the parties are incorporated. Similarly, l\/lissouri’s only relevant connection is that it is the
location of the corporate headquarters of non-party National Beef (although National Beefs
factories and offices where the alleged wrongful conduct took place are located in Kansas).2
II. Under Kansas Law, Crycvac Must Prove Malice to Prevail on its Tortious
Interference Claims. Even Under South Carolina and Delaware Law, Cryovac
Must Prove that Pechiney Acted with an Improper Motive.
"[C}laims for tortious interference with a contract and prospective business advantage require
proof of malice under Kansas law." L&MErzter., Inc. v. BE] Sensors & Sys. Co., 231 F.3d l284,
1288 (10th Cir. 2000); see also Turner Ho//iburtorz Co., 722 P.2d l106, 1l15 (Kan. 1986).
Moreover, Kansas law requires proof of "actual rnalice,’” rather than rnere legal malice for all
tortious interference claims. L&M Enter., Inc., 231 F.3d at l288; Dodson Aviation, Inc. v.
RoytheonAircro)‘i* Co., l24 P.3d 1083 (Table), 2005 WL 3527064, * 8 (Ct. App. Kan. Dec. 23,
2005). Under Kansas law, "actual rnalice" is defined as "actual evil-mindedness or specific
intent to injure." Turner, 722 P.2d at 1113.3
I To the extent that the injury is felt in both Kansas and South Carolina, this factor favors
application of Kansas law as the greatest significance is placed on the location where the
defendant’s conduct occurred. Rest. 2d Conflict of Laws § 145, crnt. f.
2 A detailed list ofthe relevant contacts for each state is attached as Exhibit l to this letter.
3 Because actual malice is required to prevail on a tortious interference claim under Kansas law,
a finding of willful infringement would not ordinarily be sufficient for Cryovac to prevail on its

Case 1:04-cv—01278-KAJ Document 333 Filed 05/24/2006 Page 3 of 3
Honorable Kent A. Jordan
l\/lay 24, 2006
Page 3
South Carolina law also emphasizes the defendants wrongful intent, requiring proof that
defendant acted without justification and for an improper purpose. A Fisherman ’s Best, Inc. v.
Recreational Fishing Alliance, 310 F.3d 183, 195-96 (4th Cir. 2002) (finding under South
Carolina law that defendant did not tortiously interfere where it did not have an "improper
purpose” that predominated over its legitimate purposes); DeBerry v. McCain, 274 S.E.2d 293,
296 (S.C. l98l) (finding no tortious interference where the defendant did not intentionally cause
the injury or act without justification). Even Delaware substantive law requires courts to examine
whether the defendant acted with “illicit motives? Am. Orig. Corp. v. Legend Inc., 689 F. Supp.
372, 381 (D. Del. l981).4
Kansas law should be applied, because all of the most significant contacts to this dispute arose in
Kansas. Under that law, Cryovac should be required to show that Pechiney acted with actual
malice in acquiring National Beef’s business. In the alternative, if the Court decides to apply
South Carolina, Delaware or Missouri law, the Court should require at a minimum proof that
Pechiney acted with an improper purpose or with illicit motives, a standard of proof higher than
that required to show willful infringement and certainly higher than that required to show non·—
willful infringement.
Very truly yours,
/s/ N Richard Powers
N. Richard Powers
Attachments
cc: Clerk of the Court
John W. Shaw, Esquire (via hand delivery and CM/ECP)
Ford F. Farabow, Esquire (via e—mail)
466586

tortious interference claims. See Jurgens v. CBK Ltd., 80 F.3d l566, 1572 (Fed. Cir. 1996)
(stating that "bad faith is not required for a finding of willful infringe1nent").
4 Cryovac-’s citations to dicta in Missouri cases in its objections to Pechiney’s jury instructions
are unavailing. (See D.I. 326, p. 144, 147.) Neither of the cases cited by Cryovac even
addressed whether the improper or wrongful conduct element of tortious interference was
satisfied by showing a mere violation of a statute without any improper purpose or intent. ln fact,
the court found that the defendant did not act improperly or without justification in both of the
cases cited by Cryovac. See Briner Elec. Co. v. Sachs Elec. Co., 680 S.W.2d 73 7, 743 (Ct. App.
Mo. 1984); Community Title Co. v. Roosevelt Feal Savings, 796 S.W.2d 369, 374 (Mo. 1990).
indeed, Cryovac has not cited one case in which a court has held that violation of a statute,
without more, is sufficient to establish the state of mind necessary to prevail on its tortious
interference claims.