
    DU-ART FILM LABORATORIES, Inc., et al. v. CONSOLIDATED FILM INDUSTRIES, Inc.
    District Court, S. D. New York.
    April 21, 1936.
    Bushel & Gottlieb, of New York City, for plaintiffs.
    Meyer H. Lavenstein, of New York City (Robert Delson, of New York City, of counsel), for defendant.
   PATTERSON, District Judge.

The action is one at law, commenced in ihe state court and removed to this court for diversity of citizenship. The sufficiency of the complaint is brought up by motion of the defendant to dismiss.

The complaint is said by the plaintiffs to be one to recover for wrongful interference with their contractual rights. The facts alleged in the complaint, to be taken as true for present purposes, are these: The plaintiffs made contracts with U Film Laboratories, Inc., whereby the latter leased premises and equipment from the plaintiff Du-Art Film Laboratories for a term and agreed to employ the plaintiff Gottlieb as manager. In the contracts U Film Laboratories also agreed that all film-developing work in New York required to be done by Universal Pictures Corporation should be done at the leased premises. For some months thereafter all work of the Universal in New York was done at the leased premises. The defendant, which had a laboratory of its own and wanted the Universal business, “contrived and conspired with and coerced said Universal Pictures Corporation to take steps to evade, set at naught and bring about the repudiation of said agreements,” and “did wrongfully, knowingly and intentionally and without reasonable justification or excuse, coerce, induce, persuade, procure and bring about the repudiation and breach of the said agreements with the plaintiffs,” thereby getting the business for itself. The defendant also enticed employees who had been working at the leased premises to take employment at its own laboratory. As a result of the defendant’s conduct, the plaintiffs are said to have been damaged in certain particulars not necessary to mention now.

The plaintiff treats the case as an ordinary one under the doctrine of Lomley v. Gye, 2 E. & B. 216, and submits it as settled law, both in New York and elsewhere, that damages may be recovered from one who knowingly induces a party with whom the plaintiff had a contract to break the contract. Lamb v. Cheney & Son, 227 N.Y. 418, 125 N.E. 817; Campbell v. Gates, 236 N.Y. 457, 141 N.E. 914; Hornstein v. Podwitz, 254 N.Y. 443, 173 N.E. 674, 84 A.L.R. 1; Angle v. Chicago, etc., Ry. Co., 151 U.S. 1, 14 S.Ct. 240, 38 L.Ed. 55. The general proposition is of course the law, and if the complaint here had alleged that the contracts which the plaintiffs had made were with the Universal Corporation, the complaint might be regarded as stating a cause of action in spite of the meagre showing of the facts.

But the contracts were not with the Universal Corporation. They were with the U Film Laboratories. The charge in the complaint comes to this, that the plaintiffs had contracts with a company, U Film Laboratories, relative to certain work to be done for the Universal’Corporation, and the defendant obtained the Universal business by causing Universal to evade the contracts and bring about their repudiation. What the - relationship between U Film Laboratories and Universal was is not stated. For all that appears, Universal had an absolute right to withdraw its business from the plaintiffs’’ premises, and the fact’that such withdrawal brought about a breach by U Film Laboratories of its contracts with the plaintiffs does not mean that either the Universal or the defendant must pay the plaintiffs the losses they sustained. The principles of free competition justify a man in getting business for himself, so long as he does not use fraud, deception, or inducement to his customer to break an existing contract with another. He certainly is not under liability because as a result of his ’getting the business his customer’s former supplier breaks a contract with another person. .So the complaint does not show a cause of action against the defendant.

There is a paragraph in the complaint that the defendant enticed employees at the plaintiff’s premises into its own service. It is not pleaded that the persons enticed were in the plaintiffs’ employ. Presumably they were employees of U Film Laboratories. Without an allegation that the employees were persuaded to leave the plaintiffs, there is no grievance. But even if the persons enticed away were the plaintiffs’ employees, it is not. alleged that in leaving they broke any obligation to the plaintiffs. It may be taken for granted that their former employment was terminable at will. An employer has no such vested interest in the continuity of his employees’ services that he can recover damages from a rival who persuades them to leave his employ and enter the rival’s employ; no contract of employment having been broken. Triangle Film Corporation v. Artcraft Pictures Corporation, 250 F. 981 (C.C.A.2); Harley & Lund Corporation v. Murray Rubber Co., 31 F.(2d) 932 (C.C.A.2).

The facts pleaded in the complaint do not reveal a cause of action against the defendant. The motion to dismiss will be granted, with leave to serve an amended complaint within twenty days.  