Roy Allan Slurry Seal, Inc. v. Am. Asphalt S., Inc., 213 Cal. Rptr. 3d 568

Plaintiffs Roy Allan Slurry Seal, Inc. and Doug Martin Contracting, Inc. (together, plaintiffs) submitted bids on multiple sealed public-works slurry-seal contracts in Riverside and other counties and were allegedly the second-lowest bidders on six Riverside contracts awarded to defendant American Asphalt South, Inc.
Plaintiffs sued for intentional interference with prospective economic advantage, alleging American underbid by submitting unlawfully deflated bids (failing to pay prevailing wages), and that but for that misconduct plaintiffs would have been awarded the contracts.
Plaintiffs claimed lost profits (approx. $168,511 for Allan; $269,830 for Martin). The complaint lacked the actual bid documents in the record.
The trial court sustained defendant’s demurrer without leave to amend; the Court of Appeal reversed as to the interference claim, but the California Supreme Court granted review.
The Supreme Court examined whether a disappointed bidder on a statutorily governed public-works solicitation can allege the required preexisting economic relationship that contains a probability of future economic benefit.
The Court reversed the Court of Appeal, holding that in the public bidding context plaintiffs at most had a speculative hope, not a protectible expectancy, and therefore failed to plead the first element of the tort.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a disappointed bidder in a public-works sealed-bid process can show an existing economic relationship with the public entity that contains a probability of future economic benefit (first element of intentional interference with prospective economic advantage).	Plaintiffs: submitting a bid that would have been the lowest responsible bid but for defendant’s wage-law violations creates an economic relationship and a probable expectancy because the public entity must award to the lowest responsible bidder and in fact awarded the contract.	American: submitting a bid is only a hope for an economic relationship; public entities treat bidders as strangers, may reject all bids, must assess responsibility, and the award is discretionary—so no existing relationship or probable expectancy exists.	Court: Held for defendant. Public-works sealed bidding is too regimented and discretionary to create the required preexisting economic relationship or the reasonable probability of benefit; plaintiffs’ expectancy was speculative and insufficient to plead the tort.

Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (2003) (articulates five elements of tortious interference and requires an economic relationship with a probable future benefit)
Buckaloo v. Johnson, 14 Cal.3d 815 (1975) (open listing broker case holding a prospective relationship can suffice when an offer to pay commission creates a reasonable expectancy)
Blank v. Kirwan, 39 Cal.3d 311 (1985) (public-licensing discretionary processes do not give rise to protectible expectancies)
Youst v. Longo, 43 Cal.3d 64 (1987) (speculative expectancies—like contest outcomes—are insufficient; requires reasonable probability)
Kajima/Ray Wilson v. Los Angeles County Metropolitan Transportation Authority, 23 Cal.4th 305 (2000) (public bidding secrecy and rejection discretion make lost-profit claims speculative)
Westside Center Associates v. Safeway Stores 23, Inc., 42 Cal.App.4th 507 (1996) (rejecting market-loss theory; interference tort protects existing relationships with identifiable third parties, not speculative market expectancies)