Urica, Inc. v. Medline Industries, Inc.
669 F. App'x 421
| 9th Cir. | 2016Background
- Urica, Inc. sued Medline Industries, Inc. for inducing Pharmaplast S.A.E. to breach an exclusivity contract with Urica’s affiliate URI Health & Beauty LLC (URIHB).
- District court granted summary judgment to Medline on Urica’s inducing-breach claim; Urica appealed.
- California law requires proof of five elements for intentional interference with contractual relations, including resulting damages.
- At trial Urica conceded it could not make an admissible lost-profits claim; evidence showed Pharmaplast continued supplying existing URIHB customers and had independently stopped quoting new-customer prices before Medline’s agreement due to URIHB’s late payments.
- Urica argued Medline’s profits from Pharmaplast sales could measure damages, but courts require proof of actual damage to plaintiff before using defendant’s profits as a proxy.
- The district court also had granted Pharmaplast summary judgment on breach-of-contract for lack of damages; Urica did not appeal that ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Urica proved resulting damages from Medline’s alleged inducement | Urica: loss can be measured by Medline’s profits from Pharmaplast sales | Medline: Urica suffered no lost customers or lost profits; Pharmaplast continued serving existing customers and had other reasons for not quoting new business | Court: Urica failed to show resulting damages; summary judgment for Medline affirmed |
| Whether defendant’s profits may substitute for plaintiff’s lost profits | Urica: defendant’s profits are an appropriate measure of damages | Medline: defendant’s profits cannot be used absent proof plaintiff was damaged | Court: Profits may measure damages only after plaintiff proves actual loss; Urica did not meet that threshold |
| Whether Urica could recover more from Medline than it could from Pharmaplast | Urica: seeks recovery for interference-induced sales | Medline: California law precludes greater recovery from tortfeasor than from breaching party; Pharmaplast had no damages judgment against it | Court: If Urica cannot recover from Pharmaplast (no damages), it cannot recover from Medline |
| Whether URIHB could have captured Medline’s customers absent the interference | Urica: would have obtained those customers and profits | Medline: expert showed URIHB lacked capacity/management to take large new business | Court: Evidence showed URIHB could not have handled those clients; attributing Medline’s sales to URIHB would be a windfall |
Key Cases Cited
- Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal. 3d 1118 (sets elements for intentional interference with contractual relations)
- Grupe v. Glick, 26 Cal. 2d 680 (prospective lost profits recoverable if reasonably certain)
- GHK Assocs. v. Mayer Grp., 224 Cal. App. 3d 856 (defendant profits may measure damages only after plaintiff proves loss)
- Ramona Manor Convalescent Hosp. v. Care Enters., 177 Cal. App. 3d 1120 (discusses measure of damages and use of defendant profits)
AFFIRMED.