DP-Tek, Inc. v. AT & T Global Information Solutions Co.

PUBLISH

UNITED STATES COURT OF APPEALS
Filed 11/14/96TENTH CIRCUIT

DP-TEK, INC.,

Plaintiff-Appellant,

v.
No. 95-3228
AT&T GLOBAL INFORMATION
SOLUTIONS COMPANY, fka NCR
CORPORATION,

Defendant-Appellee.

Appeal from the United States District Court
for the District of Kansas
(D.C. No. 94-CV-2115)

Gregory L. Musil (R. Lawrence Ward and P. John Brady, with him on the briefs),
of Shughart, Thomson & Kilroy, P.C., Overland Park, Kansas, for Plaintiff-
Appellant.

Edwin L. Noel (Thomas B. Weaver, of Armstrong, Teasdale, Schlafly & Davis,
St. Louis, Missouri, and Truman K. Eldridge and Darren S. Black, of Armstrong,
Teasdale, Schlafly & Davis, Kansas City, Missouri, with him on the brief), of
Armstrong, Teasdale, Schlafly & Davis, St. Louis, Missouri, for Defendant-
Appellee.

Before SEYMOUR, Chief Judge, PORFILIO and ANDERSON, Circuit Judges.

SEYMOUR, Chief Judge.
 DP-Tek, Inc., brought this action against AT&T Global Information

Solutions Company, formerly known as NCR Corporation, 1 alleging tortious

interference with an existing contract and with a prospective contract. Prior to

trial, the district court granted NCR’s motion for summary judgment on both

claims. DP-Tek, Inc. v. AT&T Global Info. Co., 891 F. Supp. 1510 (D. Kan.

1995). DP-Tek appeals only with respect to the claim regarding interference with

a prospective contract. We affirm.

I.

The pleadings and discovery evince the following undisputed facts. In late

1990, Venture Stores, Inc., initiated the Store Automation Project (Project) to

upgrade the three components of its cash register and sales recording system.

The three components consisted of Point of Sale (POS) software, POS hardware,

and an In-Store Processor (ISP). This dispute arises out of the competition

between DP-Tek and NCR to win the contract for the POS hardware component.

1
AT&T acquired NCR in 1991 and subsequently renamed the company
AT&T Global Information Solutions Company. We will refer to defendant as
NCR, however, because DP-Tek’s claims arise out of conduct that occurred prior
to the change in name.

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 In early 1991, Venture sent a Request for Proposal (RFP) to several

companies interested in providing services and products to upgrade the

components. Venture explained in the RFP that different companies could supply

different components and stated with respect to proprietary codes only that they

could be included. DP-Tek submitted a proposal for the POS hardware, based

upon a retrofit of Venture’s existing POS hardware. 2 NCR submitted proposals

for the POS hardware and ISP components, based upon new equipment. Research

Computer Services (RCS), a business partner of NCR, submitted a proposal for

the POS software. Other companies also submitted proposals.

In September 1991, Venture and DP-Tek executed a Product and Service

Master Agreement (Master Agreement) which set forth general guidelines,

including a confidentiality provision, for any potential product orders between the

two companies. Venture and DP-Tek also signed a contract under which DP-Tek

would sell Venture eight retrofit prototype units for evaluation. In December,

DP-Tek delivered six of the units, for which Venture paid $80,000. Other

companies supplied new off-the-shelf units for Venture’s evaluation.

By April 1992, Venture had determined to accelerate the implementation of

the Project and solicited amended or additional proposals to obtain more

2
DP-Tek’s proposal was approximately $10 million less than those of most
competitors, including NCR, because it was the only proposal that did not include
the purchase of new units.

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competitive terms. On April 17, DP-Tek submitted its final proposal reflecting

amended quantity, delivery, installation, and pricing terms. On April 30, Venture

telephoned to inform DP-Tek it had been selected for the POS hardware

component. During the telephone conversation, DP-Tek requested a one million

dollar downpayment. Venture responded that it could not agree to such an

amount and that the downpayment was a problem which would have to be

resolved on a later date. Venture also contacted RCS and NCR to inform them

they had been selected for the POS software and ISP components respectively.

Between September 1991 and May 1992, changes in the marketplace

brought about significant decreases in the cost of new POS hardware. In early

May, IBM submitted a revised proposal for the POS hardware component

reflecting a substantial price reduction. In addition, NCR informed Venture that

because it had been selected for the ISP component it could offer a more

competitive price on the POS hardware component. Venture stated that no final

contract had been executed with DP-Tek and encouraged NCR to submit an

additional proposal. Shortly thereafter, Venture supplied NCR a price range which

Venture thought would make the NCR proposal competitive with DP-Tek’s

proposal.

In early May an NCR manager, Ms. Brenda K. Pohl, visited a Venture

location on other business and overheard conversations regarding one of DP-

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Tek’s prototypes. She asked if an NCR team could view the prototype and was

told that it could. On May 13, an NCR engineer inspected and photographed the

prototype and prepared a memorandum which contained his findings.

Venture and DP-Tek continued to work on the details of a contract for the

retrofit units. On May 19, Venture met with DP-Tek and RCS to address the

integration of DP-Tek’s retrofit unit and RCS’ POS software. During the

meeting, all parties were aware that the successful integration of the hardware and

software would be facilitated by a “source code” which RCS licensed from NCR.

NCR owned the source code but refused to provide it to DP-Tek. Other

possibilities for integration were discussed but the parties never resolved the

issue.

On May 20, NCR presented an amended proposal to Venture that was

significantly less costly than its original bid. During the presentation, NCR made

various comparisons between DP-Tek’s retrofit unit and its own proposed new

unit. 3 Venture ultimately signed a contract with NCR in August 1992, and NCR

installed the POS hardware. DP-Tek thereafter commenced this action alleging

tortious interference.

Several of the comparisons were based on information NCR received as a
3

result of the May 13 inspection of DP-Tek’s prototype unit.

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 In granting summary judgment for NCR, the district court acknowledged

that Kansas recognizes the tort of interference with prospective business

contracts, but then applied R ESTATEMENT (S ECOND ) OF T ORTS § 768 (1979) and

held “that NCR’s actions constituted privileged business competition.” DP-Tech,

891 F. Supp. at 1528. On appeal, DP-Tek contends the district court erred when

it: (1) held that Kansas would adopt the competitor privilege stated in section

768; (2) held that Kansas would interpret the “wrongful means” element of

section 768 to require independently actionable conduct; and (3) placed on DP-

Tek the burden of proving section 768 did not apply.

II.

A.

Standard of Review

We review a grant of summary judgment de novo. United States v. Agri

Servs., Inc., 81 F.3d 1002, 1005 (10th Cir. 1996). Summary judgment is

warranted only where there is no genuine issue as to a material fact and the

movant is entitled to judgment as a matter of law. Id. The nonmovant “may not

rest upon the mere allegations or denials of his pleading, but . . . must set forth

specific facts showing that there is a genuine issue for trial.” Fed. R. Civ. P.

56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of

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material fact is genuine if the evidence is such that a reasonable jury could return

a verdict for the nonmovant. Id. In applying this standard, we view the record

and the reasonable inferences therefrom in the light most favorable to the

nonmovant. Agri Servs., 81 F.3d at 1005.

Because this is a diversity case, we apply the substantive law of the forum

state. Farmers Alliance Mut. Ins. Co. v. Salazar, 77 F.3d 1291, 1294 (10th Cir.

1996). “In the absence of authoritative precedent from the Kansas Supreme

Court, however, our job is to predict how that court would rule.” Carl v. City of

Overland Park, 65 F.3d 866, 872 (10th Cir. 1995).

[A] federal court’s prediction of state law looks to (1) lower state
court decisions and state Supreme Court dicta; (2) the lower court
ruling in the case; (3) the general rule on the issue; (4) the rule in
other states looked to by [Kansas] courts when they formulate their
own substantive law, and (5) other available legal sources, such as
treatises and law review commentaries.

Menne v. Celotex Corp., 861 F.2d 1453, 1464-65 n.15 (10th Cir. 1988). 4

4
Menne v. Celotex Corp., 861 F.2d 1453 (10th Cir. 1988), was decided
prior to the Supreme Court’s decision in Salve Regina College v. Russell, 499
U.S. 225, 231, 235 (1991), in which the Court held that an appellate court does
not give deference to the district court’s determination of state law. We do not
apply the second factor here, therefore, although we view the district court
opinion in this case as well reasoned. See id. at 232 (“Any expertise possessed by
the district court will inform the structure and content of its conclusions of law
and thereby become evident to the reviewing court.”).

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 B.

Competition Privilege

The first issue is whether the district court erred when it predicted Kansas

would adopt the competition privilege defense to the tort of interference with

prospective business contracts expressed in the R ESTATEMENT (S ECOND ) OF T ORTS

§ 768. 5 We begin with the Kansas requirements for a claim of tortious

interference with a prospective contract. They are:

(1) the existence of a business relationship or expectancy . . .; (2)
knowledge of the relationship or expectancy by the defendant; (3)
that, except for the conduct of the defendant, plaintiff was reasonably
certain to have continued the relationship or realized the expectancy;
(4) intentional misconduct by the defendant; and (5) damages

5
Section 768 provides:
(1) One who intentionally causes a third person not to
enter into a prospective contractual relation with another
who is his competitor or not to continue an existing
contract terminable at will does not interfere improperly
with the other’s relation if
(a) the relation concerns a matter involved in the
competition between the actor and the other and
(b) the actor does not employ wrongful means and
(c) his action does not create or continue an
unlawful restraint of trade and
(d) his purpose is at least in part to advance his
interest in competing with the other.
(2) The fact that one is a competitor of another for the
business of a third person does not prevent his causing a
breach of an existing contract with the other from being
an improper interference if the contract is not terminable
at will.

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 suffered by plaintiff as a direct or proximate cause of defendant’s
misconduct.

Turner v. Halliburton Co., 722 P.2d 1106, 1115 (Kan. 1986). Kansas recognizes

that “not all interference in present or future contractual relations is tortious. A

person may be privileged or justified to interfere with contractual relations in

certain situations.” Id.; see also Noller v. GMC Truck & Coach Div., 760 P.2d

688, 699 (Kan. Ct. App. 1988)(“Intertwined in this problem are the actions of [the

defendant], which may be justified or privileged--that is, proper rather than

improper.”), rev’d on other grounds, 772 P.2d 271 (Kan. 1989).

In Turner, the plaintiff alleged that his former employer tortiously

interfered with his prospective employment by informing the new employer he

had been discharged for stealing. 722 P.2d at 1111. The defendants argued they

had a privilege to make the communications at issue. Id. at 1112. The court

reasoned that “[o]ccasions privileged under the law of defamation are also

occasions in which interference with contractual relations may be considered

justified or privileged.” Id. at 1116 (citing W. P AGE K EETON ET AL ., P ROSSER &

K EETON ON THE L AW OF T ORTS § 129, at 989 (5th ed. 1984)). After quoting a

New York appellate court that recognized such a privilege, as well as section 767

of the R ESTATEMENT (S ECOND ) OF T ORTS , the court held that where the tort was

“based upon alleged defamatory statements . . . such communication is subject to

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a qualified privilege which requires the plaintiff to prove actual malice by the

defendant.” Turner, 722 P.2d at 1117.

Citing Turner and Noller v. GMC Truck & Coach Div., 772 P.2d 271 (Kan.

1989), the district court held that the Kansas Supreme Court “would adopt the

business competitor privilege set forth in § 768" because Kansas courts “have

adopted other portions of the Restatement in regards to the torts of tortious

interference.” DP-Tek, 891 F. Supp. at 1521. DP-Tek argues that despite

Kansas’ reliance on section 767 in Turner, Kansas would not adopt the section

768 competition privilege. We are not persuaded.

First, DP-Tek contends that because the court in Turner relied only upon

section 767, the court would not adopt the more specific provisions of section

768. Section 767 is the general balancing test applicable in tortious interference

claims. 6 Section 767 is followed by sections 768 to 773, however, which

6
Section 767 provides:
In determining whether an actor’s conduct in
intentionally interfering with a contract or a prospective
contractual relation of another is improper or not,
consideration is given to the following factors:
(a) the nature of the actor’s conduct,
(b) the actor’s motive
(c) the interests of the other with which the
actor’s conduct interferes,
(d) the interests sought to be advanced by the
actor,
(e) the social interests in protecting the freedom
of action of the actor and the contractual interests of the

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illustrate the “specific applications of the factors set out in § 767 to certain types

of factual patterns.” R ESTATEMENT (S ECOND ) OF T ORTS , ch. 37, p. 7. “The rule

stated in [section 768] is [thus] a special application of the factors determining

whether an interference is improper or not, as stated in § 767.” R ESTATEMENT

(S ECOND ) OF T ORTS § 768 cmt. b. The court in Turner relied upon the general

balancing test in section 767 because none of the specific fact patterns

enumerated in sections 768-773 applied there. Consequently, it does not follow

that the court’s reliance on the general test of section 767 indicates its rejection of

the specific privilege stated in the very next section.

Second, we find it significant that the court adopted in Turner a specific

privilege not listed in section 767. The court expressly held that in cases where a

former employer communicates allegedly defamatory statements from personnel

files regarding a former employee, a qualified privilege “requires the plaintiff to

prove actual malice.” 722 P.2d at 1117. We glean from Turner that the Kansas

Supreme Court would first determine whether a privilege exists for the

interference alleged, then define the requirements of the privilege, and then

determine whether the privilege is overcome under the facts of the case.

other,
(f) the proximity or remoteness of the actor’s
conduct to the interference and
(g) the relations between the parties.

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Predicting how a court would rule is inherently difficult. Nonetheless, we are

persuaded that the Kansas Supreme Court would adopt section 678.

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 C.

Wrongful Means

DP-Tek next contends the district court erred when it predicted Kansas

would interpret the wrongful means element of section 768 to require

independently actionable conduct. A competitor does not tortiously interfere with

a prospective business relationship where “the actor does not employ wrongful

means.” R ESTATEMENT (S ECOND ) OF T ORTS § 768(1)(b). Wrongful means are

described as

[t]he predatory means discussed in § 767, Comment c, physical
violence, fraud, civil suits and criminal prosecutions, are all
wrongful in the situation covered by this Section. . . . If [a
competitor] diverts [another] competitor’s business by exerting a
superior power in affairs unrelated to their competition there is no
reason to suppose that his success [will] . . . promote the interest that
is the reason for encouraging competition.

R ESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. e.

We agree with the district court that in a claim for interference with a

prospective contract, wrongful means requires independently actionable conduct.

DP-Tek fails to recognize that both the Restatement and the Kansas Supreme

Court distinguish between interference with existing contracts and interference

with prospective contracts. R ESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. h;

Turner, 722 P.2d at 1115 (“While these torts tend to merge somewhat in the

ordinary course, the former is aimed at preserving existing contracts and the latter

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at protecting future or potential contractual relations.”). This distinction is

significant because

depending upon the relative significance of the other factors, the
actor’s conduct in interfering with the other’s prospective contractual
relations with a third party may be held to be not improper, although
his interference would be improper if it involved persuading the third
party to commit a breach of an existing contract with the other.

Restatement § 767 cmt. e.

DP-Tek relies upon Colorado Interstate Gas v. Natural Gas Pipeline, 885

F.2d 683 (10th Cir. 1989), to support its assertion that the wrongful means

required by section 768 are not necessarily independently actionable conduct. In

the context of interference with an existing contract, we said in that case although

“[t]here is some support for the proposition that conduct which is otherwise

lawful ought not form the basis of a tortious interference claim . . ., we believe

that the better position is that . . . motive can be a determinative factor in

converting otherwise lawful behavior into ‘improper’ conduct.” Id. at 691

(interpreting Colorado law and citing R ESTATEMENT (S ECOND ) OF T ORTS § 767

cmt. d)(citations omitted); see also R ESTATEMENT (S ECOND ) OF T ORTS § 767 cmt.

h (“The actor’s conduct need not be predatory or independently tortious . . . .”).

In the context of interference with a prospective contract, however, we

have said that “‘wrongful means’ refers to conduct such as ‘physical violence,

fraud, civil suits, and criminal prosecutions.’” Occusafe, Inc. v. EG&G Rocky

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Flats, Inc., 54 F.3d 618, 623 (10th Cir. 1995)(interpreting Colorado law and citing

R ESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. e)(emphasis added). In Occusafe,

the plaintiff alleged the defendant interfered with its prospective economic

advantage when it hired plaintiff’s employees. We first held the parties were

competitors, then held the alleged conduct was not wrongful within the meaning

of section 768 and Colorado law.

Occusafe is more analogous to the present case than Colorado Interstate

Gas because the latter case involved an existing contract and section 768 was

therefore inapplicable. See R ESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. h.

Moreover, the defendants there did not assert a competitor privilege. Finally, we

expressly relied in Colorado Interstate Gas on section 767, which requires a

balancing of several factors. See R ESTATEMENT (S ECOND ) OF T ORTS § 767 cmt. a.

To the extent we have previously addressed section 768, as we did in Occusafe,

our interpretation of state law suggests independently actionable conduct is

required.

The district court here refused to limit instances of wrongful means to those

listed in section 768, comment e. It focused instead on whether the conduct was

independently actionable. DP-Tek, 891 F. Supp. at 1522-23. In so doing, the

court relied upon Amerinet, Inc. v. Xerox Corp., 972 F.2d 1483 (8th Cir.

1992)(applying Minnesota law), to predict Kansas would require independently

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actionable conduct. DP-Tek, 891 F. Supp. at 1523. In Amerinet, the Eighth

Circuit held that “‘[w]rongful means,’ as those words are used in Restatement

Section 768(b), ‘refer[] to means which are intrinsically wrongful--that is,

conduct which is itself capable of forming the basis for liability of the actor.’”

972 F.2d at 1507 (quoting Conoco, Inc. v. Inman Oil Co., 774 F.2d 895, 907 (8th

Cir. 1985)).

The Seventh Circuit has also held under Indiana law in a claim of tortious

interference with prospective contract that “it appears to be critical that the

defendant acted illegally in achieving his end.” Great Escape, Inc. v. Union City

Body Co., 791 F.2d 532, 542 (7th Cir. 1986)(quoting Biggs v. Marsh, 446 N.E.2d

977 (Ind. Ct. App. 1983)). The court was persuaded the Restatement supported

Indiana’s standard:

First, interference with prospective relations requires that more
blameworthy means be used than does the tort of interference with
contractual relations. Thus, “when the means adopted is not innately
wrongful . . . the interference is more likely to be found to be not
improper.” Restatement of Torts § 766B Comment e. The
Restatement defines innately wrongful means as those that are
tortious themselves. Second, the Restatement requires especially
egregious means to be employed when a competitor is seeking to
expand its business.

Id., at 542 n.6 (citing R ESTATEMENT (S ECOND ) OF T ORTS § 768). Other

jurisdictions have interpreted the wrongful means element of section 768 to

require independently actionable conduct as well. See San Francisco Design Ctr.

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Assocs. v. The Portman Cos., 50 Cal. Rptr. 2d 716, 723 (Cal. Ct. App. 1995)(“In

order to defeat the privilege the defendant’s conduct must be . . . independently

actionable.”), review dismissed, remanded and ordered published by 911 P.2d

1373 (Cal. 1996); Conoco Inc. v. Inman Oil Co., Inc., 774 F.2d 895, 907 (8th Cir.

1985)(same); Briner Elec. Co. v. Sachs Elec. Co., 680 S.W.2d 737, 741 (Mo. Ct.

App. 1984)(“[C]ompetitive conduct which is neither illegal nor independently

actionable does not become actionable because it interferes with another’s

prospective contractual relations.”).

The independently actionable standard finds support in the broad view of

justified competition adopted in P ROSSER & K EETON .

In short, it is no tort to beat a business rival to prospective
customers. Thus, in the absence of prohibition by statute,
illegitimate means, or some other unlawful element, a defendant
seeking to increase his own business may cut rates or prices, allow
discounts or rebates, enter into secret negotiations behind the
plaintiff’s back, refuse to deal with him or threaten to discharge
employees who do, or even refuse to deal with third parties unless
they cease dealing with the plaintiff, all without incurring liability.

P ROSSER & K EETON § 130, at 1012-13 (footnotes omitted).

Few courts have clearly rejected the independently actionable standard.

Some jurisdictions “‘extend[] liability to cases where the defendant’s actions are

not independently unlawful.’” Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153,

1167 (3d Cir. 1993)(interpreting New Jersey law)(citing Harvey S. Perlman,

Interference with Contractual and Other Economic Expectancies: A Clash of Tort

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and Contract Doctrine, 49 U. C HI . L. R EV . 61, 78 (1982)). However, examination

of these cases reveals that most involve tortious interference with existing

contracts, see Colorado Interstate Gas, 885 F.2d at 691, or do not reference

section 768 in their analysis of a competitor privilege, see Lightning Lube, 4 F.3d

at 1167; Architectural Mfg. Co. of Am. v. Airotec, Inc., 166 S.E.2d 744, 746-47

(Ga. Ct. App. 1969). 7 In sum, we are convinced the weight of authority supports

the conclusion that the wrongful means test of section 768 requires independently

actionable conduct.

DP-Tek asserts that the requirement of independently actionable conduct

renders the cause of action redundant to the underlying tort. We disagree.

The damages recoverable for the underlying tort may be far smaller
than those for interference with prospective economic advantage.
Thus if Companies A and B are competing for a piece of lucrative
business and A uses violence against the employees of B to prevail,
these employees could presumably sue for battery. B’s damages for
intentional interference with prospective advantage, which depend in
part on proof of the torts committed against its employees, would be
far larger, however.

7
DP-Tek cites a litany of additional cases as support for the rejection of
the independently actionable standard. We have reviewed the cases and find them
inapplicable for a variety of reasons. See, e.g., C.R. Bard, Inc. v. Wordtronics
Corp., 561 A.2d 694, 698 (N.J. Super. Ct. Law Div. 1989)(involving existing
contract); Michigan Ave. Nat’l Bank v. State Farm Ins. Cos., 404 N.E.2d 426, 431
(Ill. App. Ct. 1980)(holding that whether parties were competitors was not
properly before court).

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San Francisco Design Ctr., 50 Cal. Rptr. 2d at 723 n.9; see also P ROSSER &

K EETON § 129, at 992 (“Thus in many cases interference with contract is not so

much a theory of liability in itself as it is an element of damage resulting from the

commission of some other tort, or the breach of some other contract.” (footnotes

omitted)). In addition, if A and B are competing for the business of Company C

and A uses violence against the employees of C, B would have an independent

cause of action against A notwithstanding any cause of action the employees of C

might possess. This cause of action potentially increases liability where conduct

is otherwise actionable, and therefore is not redundant.

Based upon the Kansas Supreme Court’s reliance in Turner on both the

R ESTATEMENT and P ROSSER & K EETON and our assessment of the general weight

of authority, we believe the Kansas Supreme Court would interpret wrongful

means to require independently actionable conduct. 8

D.

The Merits

DP-Tek contends that, even if independently actionable conduct is required,

NCR engaged in several actions which constitute such conduct. DP-Tek first

alleges NCR tortiously pressured and induced Venture to breach its

8
We note there may exist an exception where a plaintiff proffers evidence
that the defendant exerted “a superior power in affairs unrelated” to the business
in which they compete. R ESTATEMENT (S ECOND ) OF T ORTS § 768 cmt. e.

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confidentiality agreement with DP-Tek when NCR enticed Venture with reduced

prices. DP-Tek further alleges the reduced prices were conditioned on Venture

providing NCR with unrestricted access to DP-Tek’s prototype and confidential

pricing information. The record does not support DP-Tek’s allegations. DP-Tek

has offered no evidence that reduced prices or any other advantageous terms were

conditioned on access to the prototype or disclosure of confidential pricing. 9

Moreover, the Restatement authorizes “persuasion” and “limited economic

pressure.” R ESTATEMENT § 768, cmt. e; see also P ROSSER & K EETON § 130, at

1013 (stating that “a defendant may . . . cut rates or prices, allow discounts or

rebates”). The mere offer of a more competitive bid epitomizes the goal of

section 768. We agree with the district court that even if there was breach of the

confidentiality agreement “it was an agreement to which NCR was not a party and

which, of course it did not breach.” DP-Tek, 891 F. Supp. at 1524. Accordingly,

9
At most Venture gave NCR a price it considered competitive. Mr. Darell
R. Zerbe, a Venture vice president, stated:
[w]ell as much as they all tell their customers or potential customers
‘Please treat my prices as confidential,’ they all ask for the other
guy’s. So, you know, the customer is really in a position of having to
honor both sides of that. The way I typically approach it is to tell
them the number that I want them to hit. . . . [T]hen I come back into
. . . reality, and it’s usually based on what range we can go elsewhere
and, you know, get reasonably close.
Aplt. App. at 1907.

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neither NCR’s disassembly of the prototype nor its access to the price range of

DP-Tek’s prototype constituted independently actionable conduct.

DP-Tek next alleges NCR made misrepresentations and disparaged the

prototype with inaccurate and unverified information during its May 20

presentation. DP-Tek offers a litany of technical errors which involved issues

such as power sources, number of serial ports, and processor speed. The district

court thoroughly addressed this contention in its opinion below, relying in part on

cases cited by DP-Tek on appeal. Id. at 1524-26. The district court concluded

that

[i]nevitably, competition in the marketplace will involve one
competitor extolling the virtues of its product, while at the same time
disparaging the virtues of a competitor’s product. Such conduct is
not per se actionable. . . . There is no evidence that NCR doubted the
merits of the arguments they were making, or that NCR engaged in
any type of fraudulent misrepresentation.

Id. at 1526. Substantially for the reasons given by the district court, we hold that

any unfavorable or inaccurate statements made during the May 20 presentation do

not rise to the level of independently actionable conduct.

DP-Tek further asserts NCR wrongfully used RCS as a source of

confidential information. This assertion stems from information RCS received

from DP-Tek during the integration meeting on May 19. Because NCR and RCS

were business partners, DP-Tek alleges, there is a strong inference that the

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confidential information NCR used in its presentation to Venture the following

day was supplied by RCS.

We agree with the district court that DP-Tek fails to “present any legal

argument as to why RCS’ disclosure to NCR of any information revealed to it by

DP-Tek was wrongful. There is no evidence of any confidentiality agreement

between RCS and DP-Tek that would prevent RCS from disclosing such

information.” Id. at 1527. Accordingly, NCR’s alleged acquisition of

information from RCS does not constitute independently actionable conduct.

Finally, DP-Tek asserts that NCR wrongfully refused to offer its proprietary

source code to RCS’ software. DP-Tek does not identify any legal duty that

required NCR to divulge its own proprietary software. Any undue economic

pressure was the result of the incompatibility of DP-Tek’s hardware and RCS’

software. “Venture’s selection process may have been flawed,” id. at 1528, in

that it did not require vendors to share codes. However, that failure does not raise

NCR’s refusal to the level of actionable conduct.

We are not persuaded that the conduct asserted singularly or in the

aggregate constitutes independently actionable conduct. Accordingly, we hold

that DP-Tek failed to overcome the competitor privilege of section 768.

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 E.

Burden of Proof

DP-Tek’s final contention on appeal is that the district court erred when it

placed on DP-Tek the burden of proving NCR’s conduct was not privileged. We

disagree. In Turner, the Kansas Supreme Court said that “a qualified privilege . .

. requires the plaintiff to prove actual malice . . . .” Turner, 722 P.2d at 1117

(emphasis added). The court cited Leibowitz v. Szoverffy, 436 N.Y.S.2d 451

(N.Y. App. Div. 1981), as support for a qualified privilege, 722 P.2d at 1116, and

Leibowitz in turn held that “[p]laintiff’s failure to show the malice requirement

essential to both her causes of action renders them insufficient.” Leibowitz, 436

N.Y.S.2d at 453 (emphasis added). Although the court in Turner quoted 45

A M .J UR . 2d Interference § 27 (1969), which defines a justification or privilege as

an affirmative defense, the court nevertheless expressly placed the burden of

overcoming the justification or privilege on the plaintiff. Accordingly, the

district court properly placed the burden of proof on DP-Tek.

The judgment of the district court is AFFIRMED.

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