Goldhirsh Group, Inc. v. Alpert

• Decision Date: 21 February 1997
• Docket Number: No. 456,D,456
• Citation: 107 F.3d 105
• Parties: GOLDHIRSH GROUP, INC., Plaintiff-Appellant, v. Lew ALPERT; and Alpert Productions, Inc., Defendants-Appellees. ocket 96-7386.
• Court: U.S. Court of Appeals — Second Circuit

Page 105

107 F.3d 105

GOLDHIRSH GROUP, INC., Plaintiff-Appellant, v. Lew ALPERT; and Alpert Productions, Inc., Defendants-Appellees.

No. 456, Docket 96-7386.

United States Court of Appeals, Second Circuit.

Argued Jan. 8, 1997.

Decided Feb. 21, 1997.

Joseph D. Steinfield, Hill & Barlow, Boston, MA (Martha Born, Brian P. Lenihan, Hill & Barlow, Boston, MA; Ronald G. Blum, Kavanaugh Peters Powell & Osnato, New York City, of counsel), for Plaintiff-Appellant.

William R. Maguire, Hughes Hubbard & Reed, New York City (Patrick L. Gibson, Hughes Hubbard & Reed, New York City, of counsel), for Defendants-Appellees.

Before: NEWMAN, Chief Judge, McLAUGHLIN, Circuit Judge, and SAND, District Judge. ^*

McLAUGHLIN, Circuit Judge:

Lew Alpert and his production company, Alpert Productions, Inc. (together "Alpert"), won a judgment against Goldhirsh Group, Inc. ("Goldhirsh") in United States District Court for the Southern District of New York (Lawrence M. McKenna, Judge ), on a counterclaim for tortious interference with business relations. Goldhirsh moved for judgment as a matter of law, arguing that the evidence was insufficient to support the jury's verdict on such a claim. The district court denied the motion, see Goldhirsh Group, Inc. v. Alpert, No. 94 Civ. 3922, 1996 WL 122441 (S.D.N.Y. March 20, 1996) (unpublished Memorandum and Order); Goldhirsh now appeals.

BACKGROUND

Alpert is a freelance television producer. Goldhirsh is the publisher of Inc. Magazine ("Inc."), a periodical for and about growing companies. In late 1991, Alpert approached Goldhirsh with the idea of producing sixty-second television "vignettes" on subjects of interest to small businesses, attaching Inc.'s name to the TV spots, and selling them to sponsors. The first thirty seconds of the spot would be a business tip from Inc., and the second thirty seconds would be a related commercial for the sponsor.

Proceeding cautiously, Goldhirsh agreed to two pilot vignettes, to be sponsored by the Avis Corporation ("Avis"). The vignettes were well received, and Alpert and Goldhirsh decided to expand the idea to include a new series of half-hour television shows entitled "Inc. Magazine Getting Down to Business" (along with more vignettes). Under their agreement, Alpert was allowed to use Inc.'s name for the TV shows. Alpert would pay all production costs for the new shows and would also search for more sponsors. If the revenue from the sponsorship payments exceeded costs, Alpert and Goldhirsh agreed to a 50-50 split of the profits.

Avis sponsored all the new shows. They were broadcast on CNBC. While everything went well, Alpert's production costs exceeded revenues, so there was no profit. Undeterred, Alpert and Goldhirsh agreed to yet another run of shows. For this third series, however, Alpert secured American Telephone & Telegraph, Inc. (AT & T) as a sponsor. AT & T promised to pay $575,000 to sponsor eight episodes and related vignettes. The shows were produced and scheduled to run on CNBC on weekends from late September 1993 to early January 1994.

In November, while the third series of shows was underway, Alpert and Goldhirsh were already discussing the possibility of a fourth run of shows, and Alpert was talking to potential sponsors for that fourth series. Alpert, however, was now weathering severe financial troubles. In fact, Alpert had fallen behind in paying CNBC for the airtime devoted to the third run. CNBC called Alpert and threatened to pull the show scheduled for Thanksgiving weekend, 1993, unless he came up with all the money he owed CNBC. Unable to make the payments, Alpert took his troubles to Goldhirsh. Three Goldhirsh AT & T paid Alpert, as anticipated, in early 1994. But Alpert did not forward $180,000 to Goldhirsh, as he had promised. Instead, he poured the money back into production and development costs and paid off various debts associated with the show. When Goldhirsh inquired about the money, Alpert lied and said that AT & T had not yet paid him. But Reardon, who had frequent contact with McCann Erickson, AT & T's advertising agency, found out that AT & T had indeed paid Alpert.

                employees--James Spanfeller, publisher of Inc.;   Howard Kaplan, associate publisher of Inc.;   and John Reardon, vice president and controller of Inc.--were worried that, if the show was pulled, it would damage Goldhirsh's long-term relationship with AT & T, the sponsor of the third run.  Goldhirsh lent Alpert $180,000, which Alpert promised to repay when it received the final sponsorship payments from AT & T.  At the same time, Alpert and Goldhirsh reached a formal agreement to produce the fourth run of shows
                

Reardon confronted Alpert. Alpert confessed that he had been paid by AT & T, but had spent the money. Reardon demanded immediate repayment of the $180,000 debt to Goldhirsh, warning Alpert that, if he did not repay, Goldhirsh might bring "criminal fraud" charges against him. Reardon then called Kaplan and Spanfeller, his confreres at Goldhirsh, telling them that Goldhirsh would be terminating its agreement with Alpert and pulling the Inc. name from all of Alpert's shows. Reardon also proposed to his confreres that Goldhirsh file "criminal fraud" charges against Alpert unless he promptly repaid the loan.

By now, Alpert was well on the way to securing sponsorship contracts with AT & T and the United States Postal Service ("USPS") for the fourth series of shows. Reardon, Kaplan, and Spanfeller decided that, because both AT & T and USPS had longstanding relationships with Inc., Goldhirsh should inform both of them of its decision to pull Inc.'s name from all of Alpert's shows. They agreed that Kaplan would call McCann Erickson (AT & T's advertising agency) and Young & Rubicam (USPS's advertising agency) and tell them that (1) Goldhirsh was terminating its agreement with Alpert and pulling the Inc. name from his shows; (2) the matter was now "legal," and Goldhirsh could therefore say no more; and (3) if anything changed, Goldhirsh would call them.

Kaplan then called two people at each agency (four people in all), reaching three in person and leaving a message for one. Kaplan testified that he told each of these people only that (1) Goldhirsh was terminating the agreement and pulling Inc.'s name; (2) the matter was now "legal"; and (3) if anything changed, Goldhirsh would call them. After these calls, Alpert's prospective sponsorship deals with AT & T and USPS fell through.

Goldhirsh sued Alpert in the United States District Court for the Southern District of New York, alleging fraud, breach of contract, money had and received, conversion, and unjust enrichment--all based on the unrepaid $180,000 loan. Alpert counterclaimed against Goldhirsh for breach of contract and tortious interference with business relations--both based on Alpert's loss of the potential sponsorship deals, a loss that Alpert attributed to Goldhirsh's reproachful calls to the advertising agencies.

The jury found for plaintiff Goldhirsh on its money had and received claim, awarding it $180,700. The jury, however, also found for defendant Alpert on the tortious interference counterclaim, awarding Alpert $750,000 in tort damages.

Goldhirsh, defendant on the counterclaim, moved for judgment as a matter of law or, in the alternative, a new trial, on the ground that no rational jury could have found on the evidence submitted that Goldhirsh had tortiously interfered with Alpert's business relations. The district court denied the motion. Goldhirsh now appeals.

DISCUSSION

Goldhirsh's basic contention is that the evidence was insufficient to support a rational finding that Goldhirsh tortiously interfered with Alpert's business relations. We agree.

We review the denial of a motion for judgment as a matter of law de novo. See Valley Juice Ltd. v. Evian Waters of France, Inc., 87 F.3d 604, 613 (2d Cir.1996); Song v. Ives Labs. Inc., 957 F.2d 1041, 1046 (2d Cir.1992). While it is hornbook law that we may not substitute our view of the evidence for the jury's when that evidence allows multiple legitimate inferences, see 9A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure Civil 2d § 2524 at 255-56 (1995); H.L. Moore Drug Exch. v. Eli Lilly & Co., 662 F.2d 935, 940 (2d Cir.1981), we cannot let a verdict stand where it is grounded on "such a complete absence of evidence ... that the jury's findings could only have been the result of sheer surmise and conjecture." Mallis v. Bankers Trust Co., 717 F.2d 683, 688-89 (2d Cir.1983). As noted in Michelman v. Clark-Schwebel Fiber Glass Corp., 534 F.2d 1036 (2d Cir.1976):

[i]f ... after viewing all the evidence most favorably to [the prevailing party], we cannot say that the jury could reasonably have returned the verdict in his favor, our duty is to reverse the judgment below. The jury's role as the finder of fact does not entitle it to return a verdict based only on confusion, speculation or prejudice; its verdict must be reasonably based on evidence presented at trial.

Michelman, 534 F.2d at 1042; see also County of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1311 (2d Cir.1990).

The line between permissible inference and impermissible speculation is not always easy to discern. When we "infer," we derive a conclusion from proven facts because such considerations as experience, or history, or science have demonstrated that there is a likely correlation between those facts and the conclusion. If that correlation is sufficiently compelling, the inference is "reasonable." But if the correlation between the facts and the conclusion is slight, or if a different conclusion is more closely correlated with the facts than the chosen conclusion, the inference is less reasonable. At some point, the link between the facts and the conclusion becomes so tenuous that we call it "speculation." When that point is reached is, frankly, a matter of judgment. See generally United States v. Shonubi, 895 F.Supp. 460, 482-88 (E.D.N.Y...