Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376; CACI No. 2202
Interference with prospective economic advantage: competition is not a tort
A claim in California superior courts · Last verified August 26, 2026
This is the claim businesses reach for when they lose a customer, a deal, or a hire to a rival — and it is the claim California has worked hardest to make difficult.
Because taking business from a competitor is the point of competing. A tort that punished it would outlaw the market it was meant to police.
So in 1995 the Supreme Court added a requirement that has no counterpart in the sibling tort covering existing contracts: the plaintiff must prove the defendant's conduct was independently wrongful — unlawful by some standard other than the fact that it caused harm.
What the claim is
You had an economic relationship with someone that probably would have produced a benefit. A third party knew about it, did something wrongful that disrupted it, and you lost the benefit.
The distinction from the contract tort is the presence of a contract. No contract yet, or a contract terminable at will: this claim. A binding, fixed-term contract: the other one, and no wrongfulness requirement.
Where the right comes from
Common law, restructured by Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376.
What a plaintiff has to prove — CACI No. 2202
- The plaintiff and a third party were in an economic relationship that probably would have resulted in an economic benefit to the plaintiff.
- The defendant knew of the relationship.
- The defendant engaged in wrongful conduct — and this is the element Della Penna added.
- The defendant intended to disrupt the relationship, or knew disruption was substantially certain.
- The relationship was disrupted.
- The plaintiff was harmed, and the conduct was a substantial factor in causing the harm.
Element one is a real threshold
A hope is not a relationship. The plaintiff must identify an existing economic relationship with a specific third party that probably would have produced a benefit — not a general expectation of doing business with the public, and not a speculative prospect.
A claim pleaded as interference with the plaintiff's ability to attract customers generally, without identifying who, fails at this element.
Element three is the case
"Independently wrongful" means conduct proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard — the definition the Supreme Court supplied in Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134.
It is not enough that the conduct was intentional, aggressive, or aimed at harming the plaintiff. Wrongfulness must come from somewhere other than the interference itself, which means the plaintiff effectively has to identify a second violation — a misrepresentation, a trade secret misappropriation, a defamation, a breach of a statute — and prove that too.
A defendant who competed hard and lawfully wins.
Negligent interference exists as a separate theory (CACI No. 2204) and requires a duty of care owed to the plaintiff, which is rarely present between competitors. It is a narrow claim and is usually pleaded without much prospect.
How long you have to file
Two years, under CCP § 339.
The discovery rule applies, and it does more work here than in most torts, because interference with a prospective relationship is generally invisible to the plaintiff — you know you did not get the deal, not why.
What has to happen before you file
Nothing, unless a public entity is a defendant, in which case the Government Claims Act's six-month presentation requirement applies.
Who can be sued — and who cannot
Any third party to the relationship.
Not the person you were dealing with. If the counterparty walked away, that is their choice to make and no tort of yours against them.
Not, generally, a competitor doing ordinary competitive things — which is the point of the wrongfulness element rather than a separate rule.
Common defenses
No independently wrongful act. The dominant defense, and the reason most of these claims fail.
No probable economic relationship — the expectancy was speculative, or no specific third party is identified.
Competition privilege, which after Della Penna is largely subsumed into element three.
No knowledge, and no intent to disrupt.
Anti-SLAPP, and this claim is the paradigm target. Interference claims are among the most common subjects of a special motion to strike under CCP § 425.16, because the "wrongful conduct" alleged is so often speech: a complaint to a regulator, a statement to the press, a warning letter, testimony, or a lawsuit.
The motion brings a mandatory fee award to a prevailing defendant, an automatic discovery stay that freezes the plaintiff's case before it starts, and immediate appealability that can add a year to the schedule. A plaintiff who pleads this tort against protected speech should expect the motion and should expect to lose it.
The exemptions at § 425.17 are the counterweight. The commercial speech exemption in subdivision (c) removes representations of fact about the defendant's own business goods or services, made to customers, from anti-SLAPP protection — which is exactly the conduct a false-advertising-flavoured interference claim is about. The public interest exemption in subdivision (b) covers actions brought solely in the public interest.
The litigation privilege, Civil Code § 47(b), which is absolute where the conduct was communication in or about a judicial proceeding, and which defeats the claim outright rather than merely shifting fees.
What the claim pays
Lost profits from the disrupted relationship, which must be proved with reasonable certainty — the weakest part of most of these cases, because the benefit was never realised.
Consequential damages.
Punitive damages under Civil Code § 3294, on clear and convincing proof of oppression, fraud, or malice. Given that the claim already requires independently wrongful conduct, the punitive showing is often within reach where liability is.
Not nonrestitutionary disgorgement. Korea Supply — the same decision that defined independent wrongfulness — held a plaintiff cannot recover the defendant's profits under the Unfair Competition Law, and the tort claim does not supply that remedy either. You recover your loss, not their gain.
No fee-shifting, and a prevailing defendant on an anti-SLAPP motion recovers fees from you.
Jury trial: yes.
What people get wrong
"They stole my customer, so I have a claim." Not without an independently wrongful act. Taking a customer is competition.
"They were trying to hurt my business." Intent to harm is not wrongfulness. Della Penna requires conduct unlawful by some independent standard.
"I lost business generally." You need a specific relationship with a specific third party that probably would have produced a benefit.
"It's the same claim as interference with contract." It is not. That one requires no wrongfulness; this one does. And after Ixchel, an at-will contract falls on this side of the line.
"They badmouthed me to a regulator." That is petitioning activity. Expect an anti-SLAPP motion and the litigation privilege.
"I can recover the profits they made." No. Your loss, not their gain — Korea Supply.
"I have four years." Two.
Where it came from
Before 1995, California treated the two interference torts alike: intentional disruption of an economic relationship was actionable, and a defendant who wanted to escape had to establish a privilege as an affirmative defense.
The problem was that the tort had no natural stopping point. Every successful competitor intentionally disrupts a rival's relationships with customers. Placing the burden on the defendant to justify ordinary competition meant meritless claims survived the pleadings and imposed real costs on lawful business behaviour.
Della Penna (1995) restructured it. The Court moved the burden: rather than requiring the defendant to prove justification, it required the plaintiff to prove the conduct was independently wrongful. That converted a tort of general application into one that reaches only conduct already unlawful for some other reason.
Korea Supply (2003) defined the standard, tying wrongfulness to a determinable legal rule rather than to judicial intuition about fair play. Ixchel (2020) then extended the same requirement to interference with at-will contracts, moving the boundary between the two torts from the existence of a contract to its terminability.
The direction of travel has been consistent for thirty years: narrower, and more protective of competition.
Common questions
Can I sue a competitor for taking my customer?
Not on these facts alone. You must prove the competitor did something independently wrongful — unlawful by some standard other than the harm it caused. Ordinary competition is not a tort.
What counts as independently wrongful?
Conduct proscribed by a constitutional, statutory, regulatory, common law, or other determinable legal standard — a misrepresentation, a trade secret misappropriation, a defamation, a statutory violation. Aggression and bad motive do not qualify.
How is this different from interference with a contract?
The contract tort requires no wrongful means; inducing the breach is itself the wrong. This one requires independent wrongfulness. Since Ixchel, a contract terminable at will is treated under this stricter standard.
Do I need to identify a specific customer?
Yes. You must show an existing economic relationship with a specific third party that probably would have produced a benefit. A general expectation of doing business is not enough.
Can I recover the profits the defendant made?
No. You recover your own lost profits, proved with reasonable certainty. Korea Supply forecloses recovery of the defendant's gains.
What is the risk of bringing this claim?
If the conduct you complain of was speech — a regulatory complaint, a press statement, a lawsuit — you face an anti-SLAPP motion with a mandatory fee award against you, an automatic discovery stay, and an immediate appeal if you win it.