369 F. Supp. 3d 788
W.D. Tex.2019Background
- Predictive Profiles, Inc. (Predictive) and ProTradeNet, LLC (ProTradeNet) entered a Distributor Vendor Relations Agreement in Feb. 2017: Predictive would post jobs via its web system; ProTradeNet would recommend Predictive to franchisors/franchisees.
- Predictive alleges ProTradeNet breached the Agreement months later by failing to recommend Predictive, directing franchisees to stop using Predictive, and moving business to a competitor (Career Plug).
- Predictive also alleges Dwyer Franchising, LLC (Dwyer) — the alleged parent/owner of ProTradeNet — pushed ProTradeNet to terminate the Agreement and interfered with Predictive’s prospective contracts.
- ProTradeNet filed a state-court declaratory action; Predictive removed and filed affirmative claims in federal court. Defendants moved to dismiss Predictive’s amended complaint under Rule 12(b)(6).
- The court dismissed with prejudice Predictive’s tortious-interference-with-contract claim against Dwyer, granted leave to amend certain tortious-interference claims (prospective contracts against both defendants; existing contracts against ProTradeNet), and denied dismissal of Predictive’s breach-of-contract claim against ProTradeNet.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dwyer can be liable for tortious interference with Predictive–ProTradeNet contract | Dwyer (as parent) intentionally induced breach and is liable | A parent cannot tortiously interfere with its subsidiary's contracts; Dwyer is ProTradeNet's parent | Dismissed with prejudice — parent cannot interfere as a matter of law |
| Whether Dwyer and ProTradeNet tortiously interfered with Predictive's prospective contracts | They induced franchisees not to use Predictive and undermined prospective deals | Alleged conduct is at most sharp/unfair, not independently tortious | Claims fail pleading standard; leave to amend granted for Predictive to plead independently tortious conduct |
| Whether ProTradeNet tortiously interfered with Predictive's existing third‑party contracts | ProTradeNet encouraged Predictive’s customers to stop using Predictive | Defendants challenge sufficiency and clarity of allegations | Court orders Predictive to clarify/amend; allowed to replead against ProTradeNet |
| Whether ProTradeNet breached the Agreement | Predictive alleges failure to recommend and other contractual breaches | Defendants sought dismissal | Motion to dismiss denied as to breach-of-contract claim — claim survives |
Key Cases Cited
- Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752 (U.S. 1984) (parent and wholly owned subsidiary share a unity of purpose; treated as a single entity for certain tort/antitrust purposes)
- Deauville Corp. v. Federated Dept. Stores, Inc., 756 F.2d 1183 (5th Cir. 1985) (parent and subsidiary so closely aligned they cannot tortiously interfere with each other)
- Holloway v. Skinner, 898 S.W.2d 793 (Tex. 1995) (elements and principle that interference requires defendant be a stranger to the contract)
- In re Vesta Ins. Group, Inc., 192 S.W.3d 759 (Tex. 2006) (a defendant must be a stranger to the contract to tortiously interfere)
- Wal‑Mart Stores, Inc. v. Sturges, 52 S.W.3d 711 (Tex. 2001) (to recover for interference with prospective relations, defendant's conduct must be independently tortious)
- Tex. Taco Cabana, L.P. v. Taco Cabana of N.M., Inc., 304 F. Supp. 2d 903 (W.D. Tex. 2003) (as a matter of law parent cannot tortiously interfere with subsidiary's contracts)
- Cleveland Reg'l Med. Ctr., L.P. v. Celtic Properties, L.C., 323 S.W.3d 322 (Tex. App.) (endorsing rule that parent cannot interfere with wholly owned subsidiary's contracts)
- Valores Corporativos, S.A. de C.V. v. McLane Co., Inc., 945 S.W.2d 160 (Tex. App. San Antonio) (contrary holding that a parent may interfere when privileged unless wrongful means or improper purpose are used)