Monday, May 30, 2016

Milestones: Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003)


Two military suppliers competed to win the contract for military equipment from Republic of Korea. The losing company sued the winning company for lost business opportunity due to unfair practices of a competitor, namely providing bribes and sexual favors to key Korean officials.

The questions presented to California Supreme Court were: (1) whether disgorgement of profit is available even if the defendant won the profit from a third party, and; (2) whether tortious interference with prospective economic advantage requires pleading specific intent to interfere with plaintiff's business expectations.

The court found that disgorgement is not an available remedy under California's Unfair Competition Law, but also found that plaintiff only needs to plead that the defendant knew interference was substantially certain to occur in order to plead intentional interference.


This is about as sexy as a legal case can get. Military equipment and sexual favors! But this is also a landmark case that defined the contours of two major laws governing business, and it is cited quite frequently.

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