designed to protect, specifically whether the inducement of the breach of contract through lawful means protects an interest that has greater social value than the stability of the contract in question, and 2) to determine that a defendant acting to protect that interest did not act with an improper intent.
Allstate argues that its actions were justified by the following interests: 1) the policy behind a client's absolute right to counsel of its choice, namely not forcing a client to retain an attorney in which it has lost confidence, 2) the lack of any public policy which forbids a client from rejecting an attorney because of age,
and 3) preservation of confidentiality between a client and its attorney.
Plaintiff argues that the privilege Allstate is asserting cannot form the grounds for a motion to dismiss because a factual analysis is always required to determine the existence of the privilege, relying on Rosenfeld, 146 Cal. App. 3d at 230. That court stated that "every case" where the issue of whether interference with economic interests is privileged or justified involves consideration of factual matters. The California Supreme Court has suggested that the grounds for justification may be considered to support a motion to dismiss an action alleging interference with economic interference if the grounds appear on the face of the complaint. See Herron, 56 Cal. 2d at 207. Allstate contends this is such a case. The Court disagrees.
For a complaint to be dismissed because the allegations give rise to an affirmative defense, the defense must clearly appear on the face of the pleading and the defense must be complete. McCalden v. California Library Ass'n, 955 F.2d 1214, 1219 (9th Cir. 1990), cert. denied, 119 L. Ed. 2d 227, 112 S. Ct. 2306 (1992). In this case, while Allstate may prevail on a motion for summary judgment, the Court finds a dismissal at this stage to be premature.
At the same time, the attorney-client privilege should be reasonably protected. The Court therefore holds that the burden of proof is on Plaintiff to show a prima facie case of interference based on a discriminatory motive be fore Allstate is required to produce any privileged information. If and when that occurs, Allstate may request an appropriate protective order.
C. Plaintiff Has Adequately Plead Intent
Allstate also contends that, as to the claim of intentional interference with business relations, plaintiff has not properly alleged the requisite intent element.
A plaintiff must plead the existence of an intentional act designed to induce a breach or disruption of the contract. Pacific Gas & Electric Co., 50 Cal. 3d at 1126. Stated otherwise, there must be a showing of an intent to cause the result, i.e. the interference. Seaman's Direct Buying Service, Inc. v. Standard Oil Co., 36 Cal. 3d 752, 765, 206 Cal. Rptr. 354, 686 P.2d 1158 (1984). The requisite intent can be inferred from an allegation that the defendant engaged in conduct "substantially certain" to interfere with the performance of the contract. Id. at 767.
The complaint alleges that Allstate "intentionally informed the law firm defendants that plaintiff could no longer perform work on any of its files and did so with knowledge that plaintiff's employment relationship with the law firm defendants would be substantially harmed as a result." Compl. P 48. The Court is required to accept as true all reasonable inferences from the complaint, NL Industries, Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986), and to construe the complaint in the light most favorable to a plaintiff. Russell v. Landrieu, 621 F.2d 1037, 1039 (9th Cir. 1980).
The California Supreme Court has held that "intent" in these circumstances can be met by an allegation that the defendant engaged in an intentional act designed to "disrupt" the plaintiff's contractual relationship, Pacific Gas & Electric, 50 Cal. 3d at 1126, and that disruption includes acts which make the plaintiff's performance under the contract more difficult or burdensome. Id. at 1129. The Court, therefore, accepts Plaintiff's construction of the complaint that by alleging Allstate told the law firm defendants to take its cases away from Plaintiff, it was intentionally engaging in conduct substantially certain to interfere with, or otherwise disrupt, Plaintiff's business relations with the law firm defendants.
For the foregoing reasons, the Court hereby DENIES Defendant Allstate Insurance Inc.'s Motion to Dismiss. A case management conference shall be held on 12/14/93 at 2:30 PM.
DATED: September 7, 1993
FERN M. SMITH
United States District Judge