Rock River Commc'n v. Universal Music Group

A claim of intentional interference with prospective economic advantage cannot be defeated on the alleged illegality of the expectancy unless the illegality is affirmatively established.

Rock River Communications ("Rock River") sued Universal Music Group Inc. (UMG) for intentional interference with prospective economic advantage ("IIEPA"). The suit alleged that UMG inappropriately blocked Rock River's distribution of an album of remixes of early Bob Marley recordings by wrongfully threatening to sue Rock River and its business associates. The district court granted summary judgment for UMG, holding that Rock River's claim to the licensing rights was as invalid as UMG's claim since Rock River could not prove a chain of licensing rights dating back to the original musicians and producers of the tracks. The district court found that since there is no liability for interference with an invalid business expectancy, UMG was entitled to summary judgment. The Ninth Circuit found that while an IIEPA claim cannot succeed if the expectancy is unlawful, the claim cannot be defeated on the alleged illegality of the expectancy unless the illegality is affirmatively established. The panel remanded the IIEPA claim to trial to determine the exclusivity of the licensing rights. The panel also held that Noerr-Pennington immunity did not apply to UMG's threats of litigation as a reasonable fact finder could determine that when UMG sent cease and desist letters, UMG knew it did not have exclusive rights to the recordings. AFFIRMED IN PART, REVERSED IN PART