D.H. Griffin Wrecking Company, Inc. v. 1031 Canal Development, LLC
2:20-cv-01051
E.D. La.Mar 10, 2021Background
- In October 2019 the Hard Rock Hotel under construction in New Orleans partially collapsed; D.H. Griffin (Griffin) demolished two damaged tower cranes and later negotiated a "Binding Memorandum of Understanding" (MOU) with 1031 Canal Development, LLC (1031) to pursue demolition of the building.
- The MOU required Griffin to secure $50 million in insurance and to finalize a formal agreement after a good-faith negotiation within seven days; Griffin alleges the MOU was a nonbinding term sheet because the State refused to indemnify it and Griffin only procured $22 million in coverage.
- 1031 contends the MOU was binding and accuses Griffin of price gouging, lobbying officials, advocating for implosion, and otherwise interfering to keep 1031 from contracting with others.
- 1031 asserted multiple counterclaims including tortious interference with business relations; the Court earlier dismissed duress and allowed 1031 to amend the interference claim to plead specific facts showing Griffin actually prevented 1031 from dealing with third parties.
- The amended counterclaim alleges Griffin interfered from March 24, 2020 (when 1031 purportedly told Griffin it would not proceed) until April 30, 2020 (when 1031 obtained a demolition permit), by lobbying the City and refusing to demobilize equipment, thereby delaying 1031 and Kolb Grading (Kolb).
- The court granted Griffin’s Rule 12(b)(6) motion and dismissed 1031’s tortious-interference counterclaim, holding 1031 failed to plausibly plead (1) that it was actually prevented from dealing with third parties and (2) that Griffin acted with the requisite actual malice.
Issues
| Issue | Plaintiff's Argument (Griffin) | Defendant's Argument (1031) | Held |
|---|---|---|---|
| Actual prevention (must show defendant actually prevented plaintiff from dealing with a third party) | 1031 was not actually prevented—it contracted with Kolb and obtained a permit during the alleged period | Griffin’s lobbying and refusal to demobilize caused a month-long delay that prevented the permit and Kolb from proceeding | Dismissed — 1031 did not plausibly plead actual prevention (Kolb contract dated March 20; permit obtained April 30; public records show communications) |
| Actual malice (required element under Louisiana law) | 1031 failed to allege spite or ill will; conduct driven by profit motive | Griffin acted maliciously and retaliatorily to harm 1031 after termination | Dismissed — allegations show commercial motive and profit-seeking, which is not malice under Louisiana law |
| Improper conduct vs. legitimate interest (whether Griffin’s conduct was improper) | Griffin acted to protect legitimate commercial interests (seek demolition contract) | Griffin’s conduct was improper and designed to block 1031’s dealings with City and Kolb | Court: alleged conduct falls within competitive/legitimate business interest and is not the sort of malicious interference the tort requires |
| Pleading sufficiency under Rule 12(b)(6) (specific factual allegations required) | 1031’s amended pleading still lacks specific factual allegations showing influence over City or concrete acts that prevented dealings | Amendment sufficiently alleges lobbying, misrepresentations, and refusal to demobilize that plausibly caused delay | Dismissed — amended claim remains conclusory and fails to plead the essential elements plausibly |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (establishes plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must permit reasonable inference of liability)
- Conley v. Gibson, 355 U.S. 41 (historical pleading standard discussed)
- IberiaBank v. Broussard, 907 F.3d 826 (sets Louisiana elements for tortious interference)
- Whitney Bank v. SMI Companies Glob., Inc., 949 F.3d 196 (requires actual prevention, not merely impact on business)
- Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594 (recognizes legitimate business interest can justify interference)
- Bogues v. Louisiana Energy Consultants, Inc., 71 So. 3d 1128 (notes Louisiana courts view tortious interference with disfavor)