speakers of sport, inc. v. proserve, inc

Speakers of Sport, Inc. v. ProServe, Inc Seventh Circuit Court of Appeals 178 F.3d 862 (7th Cir. 1999) Key Search Terms: puffing, tort of Interference with Business Relationships, fraud, deceptive practices, unfair competition Facts Speakers of Sport (Speakers), the plaintiff, signed Ivan Rodriguez in 1991 to a terminable at will contract making Speakers his agent. ProServ, a competing sports agency, promised Rodriquez that they would find him endorsement contracts worth two (2) to four (4) million dollars if he decided to terminate his contract with Speakers and sign with ProServ. Rodriquez signed with ProServ and did not receive any significant endorsement contracts. Speakers filed suit claiming that ProServ fraudulently interfered with Rodriguez’s contract with Speakers. Issue Did ProServ tortiously interfered with a business relationship when it promised endorsement money to a competitors’ client? And, did ProServ’s actions violate the Consumer Fraud and Deceptive Business Practices Act? Holding The court ruled that sports agents should be allowed to try to take client from competitors without incurring liability. The court reasoned that competition is not a tort, instead it provides a defense to the tort of improper interference. The court reasoned that sports agents do not “own” clients who are signed to a contract that is terminable at will. The court viewed ProServ’s promise to Rodriquez as puffing, which the court defined as “pure fantasy” and gross exaggeration.” The court reasoned that the only reasonable meaning to attach to ProServ’s promise was that ProServ would make its best effort to find Rodriguez the highest amount of endorsement money as possible. The court held that ProServ’s promise could not be the basis for fraud there was no evidence of a scheme to defraud. Therefore, the court concluded that Speakers claim for tortious interference with a business relationship failed. As to the second issue, competitors, who bring suit under the Consumer Fraud and Deceptive Business Practices Act, must produce clear and convincing evidence that the alleged conduct created consumer protection concerns. The court reasoned that Rodriquez was the only consumer involved in Speakers’ allegations, and he did not claim that he had been harmed in any way. The court held that ProServ’s did not engage in an unfair method of competition. The court supported this conclusion by citing a provision of the Federal Trade Commission Act, stating the Act is designed to protect consumers from deceptive practices but not to protect competitors from competition.

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Page 1: Speakers of Sport, Inc. v. ProServe, Inc

Speakers of Sport, Inc. v. ProServe, IncSeventh Circuit Court of Appeals

178 F.3d 862 (7th Cir. 1999)

Key Search Terms: puffing, tort of Interference with Business Relationships, fraud, deceptive practices, unfair competition

FactsSpeakers of Sport (Speakers), the plaintiff, signed Ivan Rodriguez in 1991 to a terminable at will contract making Speakers his agent. ProServ, a competing sports agency, promised Rodriquez that they would find him endorsement contracts worth two (2) to four (4) million dollars if he decided to terminate his contract with Speakers and sign with ProServ. Rodriquez signed with ProServ and did not receive any significant endorsement contracts. Speakers filed suit claiming that ProServ fraudulently interfered with Rodriguez’s contract with Speakers.

IssueDid ProServ tortiously interfered with a business relationship when it promised endorsement money to a competitors’ client? And, did ProServ’s actions violate the Consumer Fraud and Deceptive Business Practices Act?

HoldingThe court ruled that sports agents should be allowed to try to take client from competitors without incurring liability. The court reasoned that competition is not a tort, instead it provides a defense to the tort of improper interference. The court reasoned that sports agents do not “own” clients who are signed to a contract that is terminable at will. The court viewed ProServ’s promise to Rodriquez as puffing, which the court defined as “pure fantasy” and gross exaggeration.” The court reasoned that the only reasonable meaning to attach to ProServ’s promise was that ProServ would make its best effort to find Rodriguez the highest amount of endorsement money as possible. The court held that ProServ’s promise could not be the basis for fraud there was no evidence of a scheme to defraud. Therefore, the court concluded that Speakers claim for tortious interference with a business relationship failed. As to the second issue, competitors, who bring suit under the Consumer Fraud and Deceptive Business Practices Act, must produce clear and convincing evidence that the alleged conduct created consumer protection concerns. The court reasoned that Rodriquez was the only consumer involved in Speakers’ allegations, and he did not claim that he had been harmed in any way. The court held that ProServ’s did not engage in an unfair method of competition. The court supported this conclusion by citing a provision of the Federal Trade Commission Act, stating the Act is designed to protect consumers from deceptive practices but not to protect competitors from competition.