Cancel Culture in a Petri Dish
Cancel Culture in a Petri Dish
When Free Speech Mutates into Contract Interference
You have your opinions. Must everyone else agree with you? How far will you go? Will you end up in court?
If a business does something you don’t like, would you stage a boycott? Would you take it a step further, and attempt to put them out of business? Having the right to express your views under the First Amendment is crucial to a healthy nation. But when do such actions mutate and land you in court?
Recently, activists’ angry reactions have led to businesses suffering. The law provides a defense: Tortious Interference with Contractual Relations (or “TICR”). This claim is brought when a defendant intentionally interferes with a valid contract, and the plaintiff suffers damages from the interference. As the cases indicate, significant money damages are awarded.
Of course, many activities where people voice their displeasure are protected under the First Amendment. But there have been several recent cases where free speech has crossed the proverbial line into one of TICR. Each is discussed below.
City of Keene v. Cleveland
City of Keene v. Cleveland is different from the other cases that follow because it involves activity that was protected under the First Amendment, and did not amount to a contractual interference. In this case, some of the city’s residents were displeased with the city of Keene’s issuance of parking tickets by their parking enforcement officers (PEOs). These resident protesters would follow the PEOs around daily while they were issuing parking tickets. They would hurl slurs at the PEOs, calling them thieves, cowards, and racists. Many PEO’s quit their jobs due to this type of harassment. This prompted the City of Keene to file suit against the protesters. One of the claims was TICR.
Unlike the following cases, the court ruled against the plaintiffs. The court found that because the encounters did not involve acts of significant violence, the protesters’ actions were protected under the First Amendment.
On the other hand, the next three cases involve activity that is not only unprotected under the First Amendment, but which also amounts to TICR.
Texas Campaign for the Environment v. Partners Dewatering International, LLC
The first case is Texas Campaign for the Environment v. Partners Dewatering International, LLC. Here, Partners Dewatering International (PDI) entered into a 10-year contract with the city of Rio Hondo, Texas, where PDI ran a liquid waste dewatering facility. PDI had operated other similar facilities around Texas.
The first five years of PDI’s contract went smoothly. Then the Texas Campaign for the Environment (TCE) stepped into the picture. One TCE member received notice from the Texas Commission of Environmental Quality (TCEQ) that PDI was going to accept nonhazardous waste at its Rio Hondo facility. PDI had accepted this type of waste at another one of their facilities.
Even though PDI’s actions were appropriate, TCE still took action. TCE’s members encouraged Rio Hondo residents to pressure the city to cancel their 10-year contract with PDI. In doing so, TCE members made false statements to the residents. They said that PDI’s facilities were not in compliance with environmental regulations, which was a lie. Another lie they told was that PDI was going to accept toxic industrial waste at its Rio Hondo facility. With pressure from the TCE and the Rio Hondo residents, the city cancelled their contract with PDI five years after it was signed.
One of the claims PDI brought was tortious interference of contractual relations. Because TCE made blatantly false statements that lead to the contract being cancelled, the court found that TCE intentionally interfered with PDI’s contract. PDI was awarded $6.5 million in TICR damages.
Hurchalla v. Lake Point Phase I, LLC
The next case is Hurchalla v. Lake Point Phase I, LLC. In this case, Lake Point attempted to develop a limestone mining project in Martin County, Florida. Once the mining pits were complete, they would be used to store stormwater, a useful public benefit.
Documented reports described the usefulness of the project. But Maggy Hurchalla, a former county commissioner, decided to step in the way. Despite having read these reports herself, Hurchalla still pressured her former colleagues to oppose the project. Hurchalla made false statements about the project, and even gave the commissioners instructions on how to obstruct the project. Hurchalla’s efforts succeeded, and the board of county commissioners vetoed the project.
Lake Point filed suit, bringing a TICR claim. Because Hurchalla lied about the project despite knowing of its benefits, the court held that Hurchalla intentionally interfered with Lake Point’s contractual relations. The court required Hurchalla to pay $4.4 million in damages to Lake Point.
Gibson Bros, Inc. V. Oberlin College
This next case is Gibson Bros, Inc. v. Oberlin College. This is perhaps the most egregious example of contractual interference.
Gibson Bros runs Gibson’s bakery in Oberlin, Ohio, where Oberlin College is located. The incident at issue involved three black students and the owner’s son, a bakery employee. As the son rung up the students’ orders, the son believed that one of the students was shoplifting. After the son confronted him, the student fled the store, and the son chased after him. Then, the son and the other three students got into a physical altercation. Once the police came to the scene, they arrested the three students.
Oberlin students got word of this incident and staged a protest outside of the bakery. They passed out flyers stating that, without evidence, the bakery was racist and had a long history of racial profiling. The student government then passed a resolution indicating such, and encouraged the student body to stop supporting the bakery.
The matter got worse when the Oberlin College administrators got involved. Some attended the protests. Others took it a step further. Because Gibson’s bakery supplied food to Oberlin College, administrators demanded that their food supplier cancel their contract with Gibson’s bakery. Private texts also revealed that the administrators wanted to rain fire and brimstone on the bakery and were happy with the students’ actions.
Gibson’s Bakery filed suit against the College for TICR and other claims. The court found this to be a clear-cut case. Because the students made false statements, and because the College administrators cancelled their contract with Gibson’s without looking at the evidence, the court found that Oberlin College intentionally interfered with the Gibson’s relationship. The court made Oberlin College pay $36.5 million to Gibson’s, which included an award of punitive damages.
Are students and administrators in higher level education still regarded as the best and brightest? Are they self-aware? A culture of cancellation can become a cancer, dividing everything in its path. Can the courts, as a last line of defense, provide some sanity to the situation?
So where exactly is the line drawn between conduct being protected under the First Amendment, and conduct being actionable under a theory of tortious interference with a contractual relationship? From the cases reviewed, we can gather what is acceptable and unacceptable:
Expressing your First Amendment rights, without violence
Partaking in actions that do not interfere with a contractual relationship
Making false statements about an existing contract
Making false statements about a potential contract
Ignoring evidence before making false statements to the contrary
Pressuring others to cancel contracts
When people peacefully express their displeasure and do not interfere with a contract, that activity is protected under the First Amendment. But when a company has an existing or expected contract and a third party interferes with that, that company has a clear and actionable TICR claim. As the cases here indicate, the courts will assess significant penalties against self-righteous bad actors.
In reviewing these TICR claims the questions become: Will the courts continue to punish extreme behaviors? Will more people continue to cross the line? We don’t know. What we do know, however, is that if a third party does cross that line, you may have a TICR claim against them. Given today’s climate, this type of protection may be crucial to safeguard businesses against coordinated bad faith acts from both left and right.
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 City of Keene v. Cleveland, 167 N.H. 731 (N.H. 2015)
 Texas Campaign for the Environment v. Partners Dewatering International, LLC, 485 S.W.3d 184 (Tex. App. 2016)
 Hurchalla v. Lake Point Phase I, LLC, 278 So. 3d 58 (Fla. Dist. Ct. App. 2019)
 Gibson Bros., Inc. V. Oberlin College, 2022-Ohio-1079