Unfair Competition and Contractual Interference

January 13, 2006

American Products Co., Inc. v. Law Offices of Geller, Stewart & Foley, et al. 

134 Cal.App. 4th 1332, Riverside County Superior Court Case No. RIC 389812 (Opinion filed December 16, 2005)

In this published decision, the Court of Appeal reversed the trial court’s dismissal of an action for unfair competition and contractual interference. Reid & Hellyer’s client, American Products Co., Inc. ("APC") filed suit against a law firm and its client on the basis that those parties improperly sent demand letters and initiated lawsuits against two APC suppliers, asserting that APC products were illegal for use. At the trial court level, the court accepted the defense of the law firm and client that their conduct was privileged because it was committed as part of the judicial process. Reid & Hellyer successfully argued that the privilege only applied to the litigants in the underlying lawsuit (the suppliers and the law firm/client) and that, as a non-party, it was entitled to pursue an action for unfair competition and interference with its business relationship with its suppliers. In its opinion, the court recognized that the public has an interest in stopping unfair business practices and that attorneys engaged in abusing California’s unfair competition law should be subjected to a level of judicial review. As a result, the Appellate Court reversed the judgment and allowed APC’s action to proceed. Dave Moore and Mike Kerbs handled the litigation on behalf of the firm.

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