Chief Justice CASTILLE.
We consider whether Restatement (Second) of Torts § 772(a) applies in Pennsylvania to preclude an action for tortious interference with contractual relations where it is undisputed that the defendant's interfering statements were truthful.
Appellant, Walnut Street Associates ("WSA"), provides insurance brokerage services and assists employers in obtaining health insurance for their employees. Since the 1980s, WSA was the broker of record for health insurance provided to employees of Procacci Brothers Sales Corporation ("Procacci"). Appellee, Brokerage Concepts, Inc. ("BCI"), is a third party administrator of employee benefit plans. In 1994, at the recommendation of WSA, Procacci retained BCI as administrator of its insurance plans, and BCI paid commissions to WSA based on premiums paid by Procacci.
In 2005, Procacci requested that BCI lower costs, but BCI would not meet Procacci's proposal. Procacci then notified BCI that it would be moving its business to another third-party administrator. Shortly thereafter, BCI's employee Kimberly Macrone wrote a letter to Procacci asking it to reconsider its decision, and in the process advising Procacci of the amount of compensation WSA had been receiving as broker of record. The amount was apparently higher than Procacci believed WSA had been earning, but there is no dispute that Macrone's statements about WSA's compensation were true. As a result of Macrone's letter, Procacci terminated its longstanding contractual relationship with WSA.
WSA then filed this action against BCI and Macrone.
The Superior Court reversed, holding that Macrone's truthful statements to Procacci regarding WSA's compensation could not support a claim for tortious interference with contractual relations. Walnut St. Assocs., Inc. v. Brokerage Concepts, Inc., 982 A.2d 94 (Pa.Super.2009). The court relied on Restatement Section 772(a), which, as noted above, provides that one who intentionally causes a third person not to perform a contract with another does not interfere improperly with the other's contractual relation by giving the third person truthful information. Because Macrone's statements to Procacci about WSA's compensation were true, the court held as a matter of law that BCI's interference with the WSA/Procacci contract was not actionable as tortious interference, and remanded for entry of judgment notwithstanding the verdict in favor of BCI. Id. at 102. In doing so, the Superior Court predicted that this Court would adopt and apply Section 772(a) under these circumstances, and noted that "the courts of sister jurisdictions have nearly universally adopted" it. Id. at 101 & n. 7 (collecting cases).
We granted allocatur in part, rephrasing the issue as follows:
Walnut St. Assocs., Inc. v. Brokerage Concepts, Inc., 605 Pa. 407, 990 A.2d 724 (2010).
Appellant WSA argues that the Superior Court's decision adopting and applying Section 772(a) was erroneous. WSA insists that the trial court properly held that truth is not a defense to a claim for tortious interference with contractual relations. According to WSA, the court properly instructed the jury to consider the following factors in evaluating Macrone/BCI's conduct: a) the nature of the actor's conduct; b) the actor's motive; c) the interest of the other with which the actor's conduct interferes; d) the interests sought to be advanced by the actor; e) the social interest in protecting the freedom of action of the actor and the contractual interests of the other; and f) the relations between the parties. See RESTATEMENT (SECOND) OF TORTS § 767 (listing factors relevant to determining whether interference is improper); Adler, Barish, Daniels, Levin & Creskoff v. Epstein, 482 Pa. 416, 393 A.2d 1175 (1978) ("Adler Barish") (considering Section 767 factors in analyzing whether defendants' conduct was actionable).
Moreover, argues WSA, only this Court, and not the Superior Court, may adopt a section of the Restatement not previously applied in Pennsylvania. According to WSA, the Superior Court should have relied on this Court's decision in Adler Barish. In that case, certain associates of the Adler Barish law firm left that firm and opened a competing firm; the former associates sent letters to Adler Barish clients informing them that they could now choose to be represented by the new firm instead of Adler Barish, and included a form that the clients could complete and return to Adler Barish (in an enclosed, addressed and stamped envelope) severing their relationship with that firm. WSA argues that these client letters were "true," and yet this Court nonetheless held that the communications were actionable. From these factual circumstances, WSA argues that Adler Barish stands for the proposition that truth is not a defense to its tortious interference claim against BCI in this case.
WSA further argues that the Superior Court erroneously concluded that this Court would adopt Restatement (Second) of Torts § 772(a), simply because we had relied upon "what is now" Section 772(b) to support a different proposition in Menefee v. Columbia Broadcasting System Inc., 458 Pa. 46, 329 A.2d 216 (1974) (action against employer and its representatives for tortious interference with employment contract was properly dismissed; representatives were privileged to advise employer on handling its employees and terminating plaintiff's contract). Instead, WSA relies on a different Superior Court panel's earlier statement that this Court in Adler Barish recognized Sections 766 and 767 of the Restatement as "accurate embodiments of the law of this Commonwealth." See Yaindl v. Ingersoll-Rand Co., 281 Pa.Super. 560, 422 A.2d 611, 622 n. 11 (1980), abrogation on other grounds recognized in Yetter v. Ward Trucking Corp., 401 Pa.Super. 467, 585 A.2d 1022 (1991). WSA acknowledges, but rejects as dicta, a footnote in Yaindl declaring that if the jury in that case had concluded that the defendant imparted truthful information, the interference with contract would not be improper. Id. at 622 n. 12 (citing RESTATEMENT (SECOND) OF TORTS § 772).
WSA also relies on Collincini v. Honeywell, Inc., 411 Pa.Super. 166, 601 A.2d 292 (1991), appeal denied, 530 Pa. 651, 608 A.2d 27 (1992), arguing that the Superior Court panel there held that truth was not a defense to a tortious interference action.
Finally, WSA reiterates its view that only this Court has the authority to adopt Section 772(a), and that the Superior Court erred in applying a new rule retroactively here. According to WSA, this retroactive change in the law has led to an inequitable result by reversing a jury verdict, after years of litigation which proceeded on the basis that Section 767 — not Section 772 — was the law of the Commonwealth. WSA claims that because it was aware that at least portions of the BCI letter were true, WSA "would not have even brought its claim for tortious interference if [Section] 772(a) were the applicable law," and thus "changing] the playing field" now is a great hardship to WSA. Appellant's Brief at 23.
Appellee BCI argues that the Superior Court properly applied Section 772(a) here. BCI asserts that this Court has repeatedly looked to the Restatements of Torts in shaping the law of tortious interference, citing, inter alia, Adler Barish, supra. BCI accurately points out that at the time Adler Barish was decided, the Second Restatement of Torts had not yet been published and the Draft that existed did not include subsection (a) regarding truthful statements.
BCI also relies on this Court's decision in Menefee, supra, noting that the Court there endorsed the "honest advice privilege" in Section 772 of the First Restatement, now Section 772(b) of the Second Restatement, and that it "is only a small step" to approve Section 772(a); both current subsections of Section 772 "protect speech that is truthful, regardless of the speaker's intent." Appellee's Brief at 14. BCI draws a parallel between the truth defense in defamation claims, e.g., Connor v. Archdiocese of Philadelphia, 601 Pa. 577, 975 A.2d 1084, 1104 (2009) (citing 42 Pa.C.S. § 8343(b) regarding truth as a defense), and the truth defense implicated in this tortious interference case. See also PROSSER AND KEETON ON THE LAW OF TORTS § 129 at p. 989 (5th ed.1984) ("it is probably safe to assume that occasions privileged under the law of defamation are also occasions in which interference with contract by legal means would be considered justified").
BCI also argues that "the majority of courts in other states have concluded that truthful statements do not give rise to a tortious interference claim." Appellee's Brief at 18. See also Walnut St., 982 A.2d at 101 n. 7. BCI further asserts that adopting
BCI further asserts that the Superior Court properly predicted that this Court would adopt Section 772(a) when given the opportunity, and that the Superior Court does not lack the authority to adopt a Restatement provision involving an issue not previously resolved by this Court. BCI rejects WSA's claim that the Superior Court retroactively applied a new rule of law, because the rule had been applied earlier in Yaindl and Geyer v. Steinbronn, 351 Pa.Super. 536, 506 A.2d 901 (1986), but in any event, application in this case was not error.
Finally, BCI argues that even if this Court declines to adopt Section 772(a), we should nonetheless affirm. According to BCI, this case involves the termination of an at-will contract as the result of a letter accurately describing WSA's compensation, which information was not entitled to confidentiality or privacy, and where the disclosure did not violate industry customs or ethical standards. Moreover, BCI claims, the social utility of the disclosure is "obvious." Even under comment f to Section 767, an "interference" designed to further one's own economic interests "will normally prevail over a similar interest of the other if the actor does not use wrongful means."
The issue posed is a question of law. Because the relevant facts are not in dispute, our review of the lower courts' conclusions of law is plenary and de novo. See Vicari v. Spiegel, 605 Pa. 381, 989 A.2d 1277,
In Adler Barish, supra, this Court acknowledged a well-established cause of action for intentional, improper interference with existing contractual relations. 393 A.2d at 1181-82 (citing RESTATEMENT (FIRST) OF TORTS § 766 and Birl v. Philadelphia Elec. Co., 402 Pa. 297, 167 A.2d 472 (1960)). See also Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466 (1979) (considering First Restatement § 766 in analyzing claim of tortious interference with prospective contractual relations); Glenn v. Point Park College, 441 Pa. 474, 272 A.2d 895 (1971) (same). "`[T]he common law has recognized an action in tort for an intentional, unprivileged interference with contractual relations. It is generally recognized that one has the right to pursue his business relations or employment free from interference on the part of other persons except where such interference is justified or constitutes an exercise of an absolute right.'" Adler Barish, 393 A.2d at 1182 (quoting from Birl, 167 A.2d at 474). The Court explained that "[s]ince Birl, we have repeatedly looked to the Restatement as authority for the elements of a cause of action for intentional interference with existing contract relations." Id. at 1182 n. 13. The Court further recognized that it "constantly seeks to harmonize common law rules, principles, and doctrines with modern perceptions of societal needs and responsibilities," and since the American Law Institute, which publishes the Restatements, makes a "continuing effort to provide the judicial system orderly and accurate restatements of the common law," it is "appropriate to analyze this case in light of the approach fashioned by Restatement (Second)." Id. at 1183.
The Adler Barish Court proceeded to quote then-Tentative Draft No. 23 of the Restatement (Second) of Torts § 766, which provided that "[o]ne who intentionally and improperly interferes with the performance of a contract" is subject to liability for pecuniary loss resulting from a failure to perform the contract.
Ours is a free society where citizens may freely interact and exchange information. Tortious interference, as a basis for civil liability, does not operate to burden such interactions, but rather, to attach a reasonable consequence when the defendant's intentional interference was "improper."
393 A.2d at 1184. After analyzing the facts of that case under Section 767, the Court concluded that the former associates' contact with clients of their former employer — clients who had open, active cases being handled by that firm — "unduly suggested a course of action" for them, "unfairly prejudiced" Adler Barish, and thus was improper. Id. at 1185. The former associates had even used the potential fees from these Adler Barish clients' active cases as collateral for obtaining a line of bank credit for their new firm. Id. at 1177. We noted that "[n]o public interest is served in condoning use of confidential information which has these effects." Id. at 1185. As BCI accurately notes, the Adler Barish Court did not consider Section 772(a), which had not yet been published, nor the specific proposition for which it stands, although the proposition was contained in commentary to the Tentative Draft. See footnote 5, supra.
Together with Sections 766 and 767, Section 772 is now part of a larger scheme of Second Restatement provisions regarding tortious interference with contractual relations, and further defines the core concept of "improper" interference.
We do not view Section 772(a) as intending to alter the traditional understanding of the tort; as the Second Restatement makes clear, the elaborations are a product of experience and refinement. It is true that this Court has not yet expressly "adopted" Restatement (Second) of Torts § 772(a); nor have we rejected it.
The Superior Court, which by design hears and decides many issues that have not yet been resolved by this Court, had occasion to consider Section 772(a), even before its application in this case. See, e.g., Geyer, supra (Section 772(a) considered but deemed inapplicable because defendant's statements about plaintiff were not believed by jury to be true); Yaindl, supra (stating in dicta that if defendant's statements were true, there would be no improper interference under Section 772). See also Kachmar, supra (truthfulness might be useful along with Section 767 factors in determining whether interference is actionable, but noting that Pennsylvania Supreme Court has not yet adopted Section 772). Now that Restatement (Second) of Torts § 772(a) is squarely before us, we hold that the Superior Court properly determined that Section 772(a) should apply, and that it controls under the facts of this case.
There is no dispute that BCI's employee Macrone intentionally imparted information about WSA's compensation to Procacci, when Procacci was seeking lower employee health insurance costs, and that the information was truthful. As a result of its learning that truth, Procacci fired WSA as insurance broker of record. The question is whether BCI's intentional interference with the Procacci/WSA contract was improper, and thus actionable. The jury found that the interference was improper, but only after being instructed on the Section 767 factors. The parties do not dispute that, if the trial court had deemed Section 772(a) applicable as BCI advocated, BCI would have been entitled to judgment as a matter of law. In our view, the Superior Court properly determined that Section 772(a) — the more specific Restatement provision regarding truthful disclosures — was available to BCI, rather than the more general Section 767 factors, exclusively.
As we have noted, Section 772 addresses a particular, recurring subclass of cases involving the construction of what may be deemed to be "improper" (and hence actionable) interference with contractual relations. Section 772 provides that it is not improper interference if the defendant is merely giving the third person: "(a) truthful information, or (b) honest advice within the scope of a request for the advice." The comments to Section 772 amplify the meaning of subsection (a):
RESTATEMENT (SECOND) OF TORTS § 772, cmts. a-b (emphasis added).
Of course, the fact that the Second Restatement contains this refinement, and explicitly provides that the conveyance of truthful information is not "improper" interference, is not reason alone for this
Furthermore, we reject WSA's argument that the adoption of Section 772(a) in this case comprises an improper retroactive application that unfairly "change[s] the playing field." Appellant's Brief at 23. "While retroactive application of a new rule of law is a matter of judicial discretion usually exercised on a case-by-case basis, the general rule is that a decision announcing a new rule of law is applied retroactively so that a party whose case is pending on direct appeal is entitled to the benefit of changes in the law." Kituskie v. Corbman, 552 Pa. 275, 714 A.2d 1027, 1030 n. 5 (1998). See also Leland v. J.T. Baker Chemical Co., 282 Pa.Super. 573, 423 A.2d 393, 397 n. 7 (1980) (citing Note, The Retroactivity of Minnesota Supreme Court Personal Injury Decisions, 6 WM. MITCHELL L.REV. 179, 196-97 (1980)) ("by applying the new law to the case before the court, the policy of providing incentive for challenging outmoded legal doctrines is served"). "Courts will deviate from the general rule of retroactivity and apply a new rule of law purely prospectively where: (1) the decision to be applied non-retroactively established a new principle of law; (2) a retrospective application will retard application of the old rule of law; and (3) retroactive application will lead to an inequitable result which imposes an injustice or hardship." Kituskie, 714 A.2d at 1030 n. 5.
First of all, our holding does not amount to an adoption of an entirely new rule of law. The Restatement provision, which was first published in 1979, merely explicates the longstanding, existing rule concerning improper interference; the specific application follows logically from the general principle and nature of the tort. Our formal "adoption" of Section 772(a) as an accurate application of the general principle respecting what amounts to "improper" interference does not overrule any governing contrary precedent, and no existing "old rule" is impaired. Indeed, if anything, our agreement with, and adoption of Second Restatement Section 772(a), was foreshadowed by this Court's citation to former Section 772 in Menefee, our reliance on related Sections 766 and 767 in Adler Barish, and the very fact that we have looked to the Restatement in our prior considerations of the tort.
Finally, we offer some guidance in light of WSA's argument concerning the power of the Superior Court to adopt a provision of the Restatement. It is beyond peradventure that the Superior Court must follow this Court's mandates, and it generally lacks the authority to determine that this Court's decisions are no longer controlling. Commonwealth v. Jones, 520 Pa. 385, 554 A.2d 50, 51-52 (1989). Moreover, the intermediate appellate courts are duty-bound to effectuate this Court's decisional law. See, e.g., Behers v. Unemployment Comp. Bd. of Review, 577 Pa. 55, 842 A.2d 359, 367 (2004) (task of lower courts is "to effectuate the decisional law of this Court, not to restrict it through curtailed readings of controlling authority"). But, WSA's suggestion that the Superior Court lacked the authority to apply Section 772(a) simply because the provision had not yet been explicitly adopted by this Court is mistaken. Also incorrect is WSA's assertion that Adler Barish, which relied on Section 767, provides the exclusive method for analyzing a tortious interference claim, and is thus controlling precedent in this case. As we have stated, Section 772(a) was not considered by this Court in that case. But see In re Estate of Stephano, 602 Pa. 527, 981 A.2d 138, 141-42 (2009) (lower courts erred in ignoring controlling Supreme Court precedent directly on point and instead adopting new Restatement of Trusts provision). When open questions, or close questions, are presented to the intermediate appellate courts, they should look closely to our precedent for guidance. There is nothing improper in those courts deciding new or close issues, consistently with their duty to master, and act consistently with, this Court's teachings. This is the same role this Court plays when deciding many questions of federal law; there is no institutional prohibition upon the power of the intermediate appellate courts to act to decide the questions fairly, and squarely, presented to them.
For the foregoing reasons, we hold that BCI's truthful statements to Procacci were not actionable in this claim for tortious interference, and accordingly, we affirm the Superior Court's decision.
Order affirmed.
Justice ORIE MELVIN did not participate in the consideration or decision of this case.
RESTATEMENT (SECOND) OF TORTS § 772 (1979).
Id. at 14-16. See RESTATEMENT (SECOND) OF TORTS §§ 766 (intentional interference with contract by third person) and 767 (factors in determining whether interference is improper). The court denied the requested instruction on Section 772(a), but BCI raised truthfulness as a defense in its Answer and New Matter, its motion for directed verdict, its post-trial motion for judgment n.o.v. or a new trial, its Pa.R.A.P. 1925(b) statement of errors complained of on appeal, and its appeal to the Superior Court.