926 F.3d 85
4th Cir.2019Background
- Serco held a prime contract with the U.S. Air Force to perform HEMP-related work and subcontracted task orders; L-3 (and successors) had been Serco’s sole subcontractor for HEMP task orders from 2004–June 2009.
- In 2009 Serco began awarding HEMP task orders to Jaxon, formed by a former L-3 employee; L-3 alleges Serco and Jaxon conspired to transfer confidential information and rig awards so Jaxon received task orders that would otherwise have gone to L-3.
- L-3 sued for (inter alia) tortious interference with business expectancy, aiding and abetting, Virginia common-law and statutory conspiracy, and violations of Colorado Organized Crime Control Act (COCCA).
- The district court granted summary judgment for Serco, holding (1) tortious interference/aiding-and-abetting claims failed because Serco was a party to the contracts/expectancies, (2) conspiracy and COCCA claims were time-barred or failed on the expectancy element.
- The Fourth Circuit affirmed summary judgment on tortious interference and aiding-and-abetting claims, reversed on statute-of-limitations and expectancy grounds for conspiracy claims, and remanded COCCA claims for limitations-period factfinding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Serco can be liable for tortious interference/aiding-and-abetting its subcontractor relationship | Serco’s conduct in conspiring with Jaxon produced actionable interference | Serco was a party to the contracts/expectancy and thus cannot be liable as an interferor | Affirmed for Serco: party to the contract cannot be sued for tortious interference; aiding-and-abetting failed likewise |
| Whether civil conspiracy claims (common law and Va. Code § 18.2-499) were time-barred | Claims accrued when Serco began awarding task orders to Jaxon in July 2009; suit was within five years | Serco argued accrual earlier (2007–2008) so claims were time-barred | Reversed: conspiracy claims accrued when first task order awarded to Jaxon (July 2009); plaintiffs sued within the 5-year window |
| Whether plaintiffs had a valid business expectancy in future task orders (essential to conspiracy/tortious-interference) | L-3’s long course of dealing (sole provider pre-2009) created an objectively reasonable expectancy | Subcontract and RFP disclaimers negated any reasonable expectancy | Reversed on summary judgment: disputed material facts (course of dealing, disclaimers, government contracting context) preclude summary judgment on conspiracy counts |
| Applicable statute of limitations for COCCA claims and accrual | Two- vs five-year limitations; plaintiffs urged five-year for injury to property | COCCA sounds in fraud → Va. two-year fraud statute applies; accrual may be task-order specific | Affirmed that Va. two-year fraud statute applies; remanded to determine, factually, whether discrete fraudulent acts within the two-year windows give rise to recoverable COCCA claims |
Key Cases Cited
- Francis Hosp., Inc. v. Read Props., LLC, 820 S.E.2d 607 (Va. 2018) (party-to-contract cannot be sued for tortious interference; conspiracy exception explained)
- Chaves v. Johnson, 335 S.E.2d 97 (Va. 1985) (tortious interference recognized under Virginia law)
- Glass v. Glass, 321 S.E.2d 69 (Va. 1984) (background on interference torts)
- Worrie v. Boze, 95 S.E.2d 192 (Va. 1956) (third-party rule and conspiracy to interfere)
- CaterCorp, Inc. v. Catering Concepts, Inc., 431 S.E.2d 277 (Va. 1993) (conspiracy liability even when one conspirator is party to the contract)
- Dunlap v. Cottman Transmission Sys., 754 S.E.2d 313 (Va. 2014) (elements and accrual of tortious interference and conspiracy claims)
- Gelber v. Glock, 800 S.E.2d 800 (Va. 2017) (conspiracy requires an underlying wrongful act that causes damage)
- Almy v. Grisham, 639 S.E.2d 182 (Va. 2007) (plaintiff must plead every element of the underlying tort to prove conspiracy damages)
- Halifax Corp. v. Comm. Bus. Sys., 484 S.E.2d 892 (Va. 1997) (course-of-dealing relevant to proving business expectancy)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) (federal courts apply forum state choice-of-law rules)