F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JUL 14 2003
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
CARDTOONS, L.C., an Oklahoma
Limited Liability Company,
Plaintiff-Appellant,
v. No. 02-5134
MAJOR LEAGUE BASEBALL
PLAYERS ASSOCIATION, an
unincorporated association,
Defendant-Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
(D.C. No. 93-CV-576-E)
James W. Tilly (Craig A. Fitzgerald with him on the briefs) of Tilly & Fitzgerald,
Tulsa, Oklahoma, for Plaintiff-Appellant.
Russell S. Jones, Jr., of Shughart Thomson & Kilroy, P.C., Kansas City, Missouri
(Susan C. Hascall of Shughart Thomson & Kilroy, P.C., Overland Park, Kansas,
with him on the brief), for Defendant-Appellee.
Before SEYMOUR, McKAY, and LUCERO, Circuit Judges.
McKAY, Circuit Judge.
This is an appeal of a grant of summary judgment in favor of Defendant-
Appellee Major League Baseball Players Association (“MLBPA”) with respect to
Appellant’s state-law claims of tortious interference with contractual relations,
libel and prima facie tort, and the entry of final judgment in Appellee’s favor.
The dispute began in 1992 when Appellant Cardtoons L.C. (“Cardtoons”)
was formed to produce and market parody trading cards of active Major League
baseball players. In 1993, Cardtoons contracted with Champs Marketing, Inc.
(“Champs”) to print and distribute the cards. MLBPA, as the exclusive group
licensing agent for active Major League baseball players, sent Cardtoons and
Champs each a cease-and-desist letter on June 18, 1993, threatening legal action
if the cards were printed.
On June 22, 1993, Cardtoons initiated an action seeking a declaration that
the cards did not violate MLBPA’s publicity rights and also seeking damages for
tortious interference with contractual relations. The district court bifurcated the
claims. With respect to the declaratory judgment request, the court initially
entered judgment in favor of MLBPA, finding that the cards violated MLBPA’s
publicity rights. Following the Supreme Court’s decision in Campbell v. Acuff-
Rose Music, Inc., 510 U.S. 569 (1994), in which the Court first recognized “fair
use” protection under the First Amendment for commercial parody speech, the
district court amended its judgment and entered declaratory judgment in favor of
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Cardtoons. Cardtoons, L.C. v. Major League Baseball Players Ass’n, 868 F.
Supp. 1266 (N.D. Okla. 1994) (“Cardtoons I”). This court affirmed that decision
in Cardtoons, L.C. v. Major League Baseball Players Ass’n, 95 F.3d 959, 979
(10th Cir. 1996) (“Cardtoons II”).
The case then returned to the district court where Cardtoons pursued its
claims for damages. Cardtoons amended its complaint to include claims for libel,
prima facie tort, and negligence. MLBPA moved for summary judgment, arguing
that its threats of litigation were immune from liability under the Noerr-
Pennington doctrine. See Mine Workers v. Pennington, 381 U.S. 657 (1965);
Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S.
127 (1961). The district court agreed with MLBPA and granted summary
judgment on all of Cardtoons’ state-law claims. Cardtoons, L.C. v. Major League
Baseball Players Ass’n, No. 93-C-576-E (N.D. Okla. Mar. 12, 1998) (“Cardtoons
III”); Aplt. App. at 348. A panel of this court affirmed the district court, holding
that the Noerr-Pennington doctrine applied to threats of litigation as well as actual
litigation. Cardtoons, L.C. v. Major League Baseball Players Ass’n, 182 F.3d
1132 (10th Cir. 1999) (“Cardtoons IV”).
After rehearing en banc, this court vacated the panel decision in Cardtoons
IV and remanded the case for further proceedings. Cardtoons, L.C. v. Major
League Baseball Players Ass’n, 208 F.3d 885 (10th Cir. 2000) (“Cardtoons V”).
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The en banc court held that Noerr-Pennington did not apply and that prelitigation
communications between private parties were not immunized by the right to
petition the government guaranteed by the First Amendment because there was no
petition addressed to the government.
On remand, MLBPA filed another motion for summary judgment, seeking a
judgment as a matter of law on the remaining tort claims. The district court
granted MLBPA’s motion for summary judgment and issued a final order for
MLBPA and against Cardtoons. Cardtoons, L.C. v. Major League Baseball
Players Ass’n, 93-C-576-E (N.D. Okla. Aug. 12, 2002) (“Cardtoons VI”).
Cardtoons has appealed the grant of summary judgment with respect to the claims
of tortious interference, libel and prima facie tort.
We must determine whether, on these facts, a genuine issue of fact remains
with respect to any of Cardtoons’ state-law claims. All three claims arise from
the sending of the cease-and-desist letter to Champs. Cardtoons alleges that (1)
the letter to Champs contains libelous statements; (2) by sending the letter,
MLBPA tortiously interfered with the contractual relationship between Cardtoons
and Champs; and (3) MLBPA’s conduct in sending the letter was “generally
culpable and not justified under the circumstances.” We examine each claim in
turn.
In reviewing a grant of summary judgment, we must determine whether,
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viewing the record in the light most favorable to the non-moving party, there exist
any genuine issues of material fact. Simms v. Oklahoma ex rel. Dep’t of Mental
Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999); Wolf v.
Prudential Ins. Co. of America, 50 F.3d 793, 796 (10th Cir. 1995). To prevail on
a claim of tortious interference with a contractual relationship, Oklahoma law
requires that a plaintiff prove:
1. That it had a business or contractual right with which there
was interference.
2. That the interference was malicious and wrongful, and that
such interference was neither justified, privileged nor
excusable.
3. That damage was proximately sustained as a result of the
complained-of interference.
Morrow Dev. Co. v. American Bank and Trust Co., 875 P.2d 411, 416 (Okla.
1994). The Oklahoma Supreme Court has further explained that
[o]ne who, by asserting in good faith a legally protected interest of
his own or threatening in good faith to protect the interest by
appropriate means, intentionally causes a third person not to perform
an existing contract . . . does not interfere improperly with the
other’s relation if the actor believes that his interest may otherwise
be impaired or destroyed by the performance of the contract or
transaction.
Id. (citation and quotation omitted). Our inquiry, therefore, turns on whether
MLBPA acted in good faith in threatening to initiate legal action to protect its
publication rights if Champs printed the cards.
We are not the first to consider this issue in this case. On remand, after the
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first appeal, the district court in Cardtoons III stated:
Here, the case history establishes objective reasonableness. The
Report and Recommendation of the Magistrate, the initial ruling of
this Court and the conclusions of the appellate court all acknowledge
the reasonableness of MLBPA’s position and the fact that the issue
presented a close call.
Cardtoons III at 4, Aplt. App. at 351. Similarly, the panel in Cardtoons IV held
that MLBPA had probable cause to threaten Champs with legal action. Cardtoons
IV at 1139. The district court, in its most recent opinion, also held that Cardtoons
could not show that “the interference was malicious and wrongful, and that such
interference was neither justified, privileged nor excusable.” Cardtoons VI at 9,
Aplt. App. at 729 (quoting Cardtoons V). Nevertheless, because the en banc court
vacated the decision in Cardtoons IV, we are not bound by that panel’s
determination that MLBPA had probable cause to threaten legal action.
Furthermore, we must review the most recent grant of summary judgment de novo
and determine whether factual issues remain with respect to the reasonableness of
MLBPA’s threats of legal action.
Cardtoons’ contention is that the threat of legal action was made in bad
faith since MLBPA was aware that Cardtoons would assert a parody/First
Amendment defense and would therefore be immune from liability. However, at
the time the letter was sent, courts were split on whether parody was protected
under the “fair use” doctrine of the First Amendment. In fact, when the district
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court first ruled on the issue, it held that Cardtoons was not protected by the
parody defense. It was not until March 1994, when the Supreme Court issued its
opinion in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), that the law
became somewhat settled. It was that ruling by the Supreme Court which caused
the district court to vacate its original grant of summary judgment in favor of
MLBPA and hold in favor of Cardtoons. See Cardtoons I. Furthermore,
Cardtoons conceded this point in its brief in Cardtoons IV when it stated that
“Cardtoons readily recognizes that at this stage of the dispute, before this Court
issued its ruling on the right of publicity and First Amendment issues, the law in
this area was unclear.” Aple. Supp. App. at 4.
Having conceded that the law with respect to the parody/First Amendment
defense was unclear, Cardtoons attempts to make a distinction between MLBPA’s
threats of legal action against Cardtoons and the threats against Champs.
Cardtoons points out that, while MLBPA’s attorneys spent approximately forty
hours researching potential claims against Cardtoons, they spent little or no time
researching potential claims against Champs before sending Champs a cease-and-
desist letter. The facts, as alleged by Cardtoons, indicate that upon learning of
Cardtoons’ plans to produce parody cards, MLBPA instructed its lawyers to
research the issue and proceed if there was a likelihood of success. As Cardtoons
alleges, the lawyers’ research likely focused primarily, or even exclusively, on the
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potential liability of Cardtoons and the potential success of a parody defense. It
is unlikely that they spent much, if any, time researching the potential liability of
Champs. After conducting the research, the lawyers informed MLBPA that, in
their opinion, Cardtoons’ plans likely violated the publicity rights of the MLBPA.
Acting on this advice, MLBPA issued the cease-and-desist letters to both
Cardtoons and Champs.
Cardtoons’ argument is unpersuasive. As Cardtoons appears to concede,
the law with respect to the parody/First Amendment defense was not clearly
settled until the Supreme Court issued its decision in Campbell v. Acuff-Rose
Music, Inc. and a panel of this court issued a decision with respect to those issues
in Cardtoons II. Any claim against Champs would necessarily turn on the same
essential issues of law with the addition of some basis for manufacturer liability.
MLBPA had no need to repeat the research on the parody defense with respect to
Champs. Having determined, with the advice of counsel, that there was a
likelihood that the cards violated MLBPA’s publicity rights, MLBPA threatened
legal action against both parties involved in the production of the cards. MLBPA
never actually sued Champs because Champs agreed not to print the cards.
Cardtoons also alleges that MLBPA’s primary purpose in threatening legal
action was to harm Cardtoons rather than protect MLBPA’s publicity rights.
Specifically, Cardtoons alleges that MLBPA was primarily concerned with
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stopping the production of the cards because they were unflattering to Major
League baseball players. Cardtoons may well be correct in asserting that part of
MLBPA’s motivation in threatening legal action was to prevent the production of
cards that they believed to be unflattering. Nevertheless, the existence of such a
motive, which we presume for purposes of summary judgment, would certainly
not preclude MLBPA from threatening to protect its publicity rights with legal
action so long as it is “accompanied by honest intent, and . . . [it is done] to better
one’s own business and not to principally harm another.” Morrow, 875 P.2d at
416 n.21 (citation and quotations omitted). Other than this alleged improper
motive, Cardtoons has provided no additional evidence of either MLBPA’s intent
to harm Cardtoons or that such an intent was MLBPA’s primary motivation in
threatening Champs with legal action. At best, Cardtoons’ allegations about
MLBPA’s motives amount to multiple legitimate business interests and not
intentions to harm Cardtoons.
Based on these facts, viewed in the light most favorable to Cardtoons, we
agree with the district court that “Cardtoons cannot show that ‘the interference
was malicious and wrongful, and that such interference was neither justified,
privileged nor excusable.’” Cardtoons VI at 9, Aplt. App. at 729 (quoting
Cardtoons V).
Cardtoons’ libel claim also turns on whether MLBPA acted in good faith in
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threatening to sue Champs if it printed the cards. To succeed on its libel claim,
Cardtoons must plead and prove that MLBPA made:
(1) a false and defamatory statement concerning [Cardtoons]; (2) an
unprivileged publication to a third party; (3) fault amounting at least
to negligence on the part of the publisher; and (4) either the
actionability of the statement irrespective of special damage, or the
existence of special damage caused by the publication.
Sturgeon v. Retherford Publ’ns, Inc., 987 P.2d 1218, 1223 (Okla. Ct. App. 1999)
(citing Restatement (Second) of Torts § 558 (1977)). In granting summary
judgment to MLBPA on this claim, the district court based its decision on the
applicability of the litigation privilege without considering the other elements of
libel.
Oklahoma has long recognized the litigation privilege under which
attorneys, parties, jurors, and witnesses are immune from defamation liability for
statements made in the course of judicial or quasi-judicial proceedings, so long as
the statements are relevant to the proceeding. Samson Inv. Co. v. Chevaillier,
988 P.2d 327, 329-30 (Okla. 1999) (citing Pacific Employers Ins. Co. v. Adams,
168 P.2d 105 (1946)). Oklahoma has extended this privilege to statements made
in anticipation of litigation. Kirschstein v. Haynes, 788 P.2d 941 (Okla. 1990).
As the Oklahoma Supreme Court has recognized, “[A]s long as the speaker or
writer of the defamatory communication has an actual subjective good faith belief
that litigation is seriously contemplated the privilege attaches whether or not he
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has a good faith belief in the truth of the communication.” Id. at 952.
Cardtoons contends that MLBPA did not subjectively intend to file suit
against Champs and that the evidence supports such an inference. In support of
this assertion, Cardtoons argues that MLBPA threatened suit within twenty-four
hours of learning that Champs was the printer, conducted no research with respect
to Champs’ potential liability or the court in which suit would be filed, and never
made any effort to initiate suit against Champs.
However, the evidence also shows that MLBPA conducted legal research
with respect to a potential claim that the cards violated MLBPA’s publicity rights
and that, upon deciding that they had a valid claim that the cards violated their
publicity rights, they sent cease-and-desist letters to both the designer and printer
of the cards. The fact that they had not taken steps to file suit or decided in
which court to file is insufficient to infer that they did not intend to file suit if the
cards were printed. Likewise, as discussed above, the fact that MLBPA did not
conduct legal research specific to Champs is understandable considering that the
uncertain legal issue involved the infringing nature of the cards and not the
liability of a printer of infringing cards.
Finally, Cardtoons contends both in the briefs and at oral argument that
MLBPA’s failure to eventually bring suit leads to an inference of bad faith. Such
an inference in misguided. Requiring potential plaintiffs to bypass the post office
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on the way to the courtroom would undermine our longstanding policy favoring
efforts to avoid litigation.
The facts indicate that MLBPA had an “actual subjective good faith belief
that litigation [was] seriously contemplated.” See id. Cardtoons has provided no
evidence to the contrary. Viewed in the light most favorable to Cardtoons,
MLBPA’s actions were hasty and their legal theory debatable. However, neither
of these inferences rises to the level of subjective bad faith. Even if MLBPA had
not made the necessary preparations to file suit, it is likely that if Champs
continued to print the cards then MLBPA would have taken steps to enforce its
rights. The litigation privilege was properly applied and MLBPA was entitled to
immunity and summary judgment with respect to the libel claim.
Cardtoons’ final claim on appeal is for prima facie tort. As the district
court noted, it is questionable whether Oklahoma even recognizes liability for
prima facie tort. Cardtoons’ only authority for the existence of such a tort is an
opinion of this court in which, in the absence of any authoritative Oklahoma case
law and relying solely on an article in the Oklahoma Bar Journal, we stated that
Oklahoma appeared to have adopted the tort. See Merrick v. Northern Natural
Gas Co., 911 F.2d 426, 433 (10th Cir. 1990) (citing Cressman, The Prima Facie
Tort Doctrine in Oklahoma: Common Law Protection of Business From
Unjustified Interference, 56 Okla. B.J. 1759, 1759 (1985)). Our cases are not
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binding on the Oklahoma courts with respect to Oklahoma law. Since our
decision in Merrick, the Oklahoma Supreme Court has explained that “the
expression ‘prima facie tort’ does not appear to have ever been recognized in
Oklahoma.” Patel v. OMH Med. Ctr., Inc., 987 P.2d 1185, 1189-90 n.2 (Okla.
1999).
Nevertheless, we need not further speculate about the vitality of prima facie
tort in Oklahoma because, even assuming that Oklahoma would recognize the tort,
Cardtoons’ claim would fail on the merits. As we have recognized before, to
prevail at common law on a theory of prima facie tort, a plaintiff must show that
the defendant’s conduct was “generally culpable and not justified under the
circumstances.” National Ass’n of Prof’l Baseball Leagues, Inc. v. Very Minor
Leagues , Inc., 223 F.3d 1143, 1151 (10th Cir. 2000) (citing Restatement
(Second) of Torts § 870)). As we explained in our discussion of the interference
with contractual relations claim supra, Cardtoons has not shown that by sending
the letter MLBPA acted maliciously or wrongfully or that MLBPA’s actions were
not privileged, justified, or excusable. For the same reasons discussed above,
Cardtoons has raised no evidence to justify an inference that MLBPA’s conduct
was “generally culpable.” Furthermore, our holding that MLBPA’s conduct is
immunized by the litigation privilege would seem to satisfy the second element of
the common law prima facie tort that the conduct be “not justified under the
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circumstances.” Therefore, summary judgment for MLBPA on the prima facie
tort claim was not in error.
AFFIRMED.
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