## Facts

- J. Katz operated a wholesale fish business in Los Angeles and alleged it had valuable goodwill.
- Sam Kapper and others, doing business as “Central Market,” were rival wholesale fish dealers.
- Katz alleged defendants acted with the sole intent to put him out of business and take his customers and goodwill.
- Defendants allegedly convened meetings of Katz’s customers and told them they would be driven out of business and ruined if they continued buying from Katz.
- Defendants allegedly promised substantial price reductions to customers who purchased from defendants so they could compete with Katz and drive him out.
- Defendants allegedly threatened to open a retail store to sell to the public at very low prices if customers continued buying from Katz, and then opened such a store, advertised widely, and sold fish below cost and at a loss.
- Katz alleged these actions caused many customers to stop buying from him, resulting in damages.
- Defendants demurred generally and specially; the trial court sustained the demurrer, Katz declined to amend, and the case was dismissed.

## Issues

1. Whether competition allegedly intended to ruin a rival is unlawful where the competitive acts are otherwise lawful.
2. Whether the complaint sufficiently alleged that defendants used independently unlawful means (e.g., fraud, misrepresentation, intimidation, coercion, obstruction, or procurement of contract breach) to interfere with Katz’s business.

## Decision

- The Court of Appeal affirmed the dismissal after the demurrer was sustained.
- The court held the complaint did not state a cause of action because the alleged conduct was competitive in character and not shown to have been accomplished by unlawful means.
- Allegations of malice or an intent to destroy Katz’s business did not convert otherwise lawful competitive conduct into an actionable tort.

## Legal Principles

- Business competition, even to the point of ruining a rival, is generally not actionable if conducted without wrongful means such as fraud, misrepresentation, intimidation, coercion, obstruction, molestation, or procurement of the violation of contractual relations.
- A lawful act does not become unlawful solely because it is motivated by malice or a desire to harm a competitor.
- Aggressive price cutting, including selling below cost or at a loss, is not tortious absent an independent legal wrong or recognized wrongful means.

## Conclusion

The court held that the complaint alleged hard competition rather than actionable interference, and that neither below-cost selling nor an alleged intent to ruin a rival established liability without well-pleaded unlawful means; the dismissal was therefore affirmed.


Katz v. Kapper, 44 P.2d 1060 (Cal. Ct. App. 1935)