ASDI, INC. v. Beard Research, Inc.
11 A.3d 749
| Del. | 2010Background
- Consolidated appeal from a Court of Chancery judgment awarding $4,338,463 in damages to CB and BR, including pre- and post-judgment interest.
- Judgment held ASDI, ASG, Kates, Smith, and Blize liable for misappropriating CB/BR trade secrets under the Delaware Uniform Trade Secrets Act, breaching fiduciary duties, and tortiously interfering with CB/BR's prospective business relations with Pfizer and others.
- Delaware Supreme Court affirmed the Chancery rulings on the merits and spoliation, and additionally affirmed on the theory that ASDI, ASG, Blize, and Kates tortiously interfered with Pfizer contract.
- The court held that a third party's lawful termination of a contract does not necessarily defeat a tortious-interference claim if the defendant used wrongful means to induce termination.
- Delaware follows the Restatement (Second) of Torts in tortious-interference analysis, requiring wrongful means for liability, which can include misappropriation of trade secrets.
- The court relied on doctrinal support recognizing that even lawful terminations can be actionable where the defendant's conduct interferes with contractual relations with improper means.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether lawful termination defeats tortious interference claim | ASDI/ASG/Blize/Kates contend Pfizer termination bars claim. | Termination was lawful; no improper interference. | Lawful termination does not bar a tortious-interference claim when wrongful means induce termination. |
| Whether misappropriation of trade secrets can constitute wrongful means | Trade-secret misappropriation is wrongful conduct supporting interference. | Only contract terms matter; no wrongful inducement. | Misappropriation constitutes wrongful means under Restatement §767 cmt. c, supporting liability. |
| Whether the Restatement (Second) of Torts governs the improper-means standard in this case | Restatement framework should apply to establish wrongful interference. | Standard should be narrower or limited. | Delaware applies the Restatement framework; wrongful means includes statutory violations like trade-secrets theft. |
| Whether there was liability for tortious interference with Pfizer contract | Defendants induced Pfizer to terminate contract with CB/BR. | Termination was legitimate and not caused by interference. | There was actionable interference with CB/BR's contractual relations with Pfizer. |
| Whether the Court of Chancery's spoliation and merits rulings were correct | Spoliation evidence supports trade secrets violation and related liability. | Chancery rulings were incorrect on some theories. | The judgment affirmed on both spoliation and merits theories. |
Key Cases Cited
- Trimed, Inc. v. Sherwood Med. Co., 977 F.2d 885 (4th Cir. 1992) (misconduct can support interference even without breach; at-will contexts illustrate improper means)
- Lurie v. New Amsterdam Cas. Co., 270 N.Y.379 (N.Y. 1936) (at-will or ongoing relationships: improper means may be actionable)
- Pure Milk Prod. Co-op. v. Nat'l Farmers Org., 64 Wis.2d 241 (Wis. 1974) (contract-interference with improper means can be actionable)