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Michigan Court of Appeals Holds “Outbidding and Outmaneuvering” Does Not Constitute Tortious Interference

The Michigan Court of Appeals reversed a circuit court judgment on tortious interference and remanded for entry of a judgment of no cause of action. In Datam Manufacturing v Magna Powertrain USA(Case No. 306202, February 13, 2014), Magna competed with plaintiff Datam to purchase a supplier’s inventory of unsold parts. Magna had asserted in 2007 that the supplier was contractually bound to ship the residual inventory parts to Magna, but supplier refused. The supplier then offered to sell the residual inventory parts to Datam, who in turn entered into a contract with a Magna tier one supplier who would supply the parts to Magna. Magna issued a purchase order to its tier-one supplier for the parts. In the meantime, Magna continued to negotiate directly with the supplier for the purchase of the parts, ultimately reaching an agreement with the supplier to release the parts directly to Magna. The supplier then released the parts to Magna and declined to fulfill its purchase order for the parts with Datam. Datam sued Magna for tortious interference with contract and for tortious interference with a business relationship or expectancy. The court focused on the element of the tortious interference claims requiring either a per se wrongful act that can never be justified under any circumstances or a specific, affirmative act that corroborates an unlawful purpose for the interference, noting that, “[w]here the defendant’s actions were motivated by legitimate business reasons, its actions would not constitute improper motive or interference.” “Mere interference for the purpose of competition is not enough.” “In other words, liability may not be predicated on the fact that the defendant ‘outbid and outmaneuvered’ the plaintiff in purchasing an item from a third party. Rather, the defendant must have done something illegal, unethical, or fraudulent.” The court held that Magna did not commit an inherently wrongful act or an affirmative act corroborating an unlawful purpose for its actions. “At most, Magna ‘outbid and outmaneuvered’ Datam in purchasing the parts from [supplier]; such conduct by itself fails to corroborate an improper motive.” Simply put, competition does not establish tortious interference.

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