More Difficult for Contracting Parties to Sue in New York for Tortious Interference

New York’s highest state court, the Court of Appeals, appears to have made it more difficult for parties claiming breach of contract to also sue for tortious interference. This seems to reverse a trend that saw judges shift the boundary between contract and tort sharply toward tort.

For years, Carvel Corp. sold ice cream only through its franchisees, repeatedly representing to them that it did not intend to sell ice cream through supermarkets. To overcome declining sales, however, Carvel adopted a "supermarket program" that called for sales to both supermarkets and franchisees. Three franchisees brought claims against Carvel both for breach of their franchise agreements and for tortiously interfering with their customers. The franchisees claimed that Carvel lured away their customers by selling to supermarkets at bargain prices and issuing coupons redeemable only at supermarkets.¹