Can improper purpose alone support an intentional interference claim? SIRQ, Inc. v. Layton Cos. Explained

In a significant ruling affecting both tort liability and trial procedure, the Utah Supreme Court in SIRQ, Inc. v. Layton Cos. eliminated the improper purpose branch of Utah’s intentional interference with economic relations tort while establishing important gatekeeping requirements for false light invasion of privacy claims.

Background and Facts

Peterson, the former president of Layton Companies, founded competing construction company SIRQ after a contentious departure in 2002. Layton subsequently required management-level employees to sign noncompetition agreements specifically prohibiting work with SIRQ while permitting employment with other competitors. Layton also circulated memoranda containing allegedly defamatory statements about SIRQ and Peterson. The trial court submitted both tortious interference and false light claims to the jury, which awarded SIRQ $7.2 million in compensatory damages and $5 million in punitive damages on the interference claim, plus $1 million to Peterson on the false light claim.

Key Legal Issues

The court addressed two critical issues: (1) whether Utah’s intentional interference tort can be sustained solely on proof of improper purpose without improper means, and (2) whether trial courts must perform a gatekeeping function to prevent juries from considering non-defamatory statements in false light claims.

Court’s Analysis and Holding

Applying the newly decided Eldridge v. Johndrow retroactively, the court eliminated Utah’s improper purpose branch of intentional interference, holding that such claims now require proof of improper means and cannot stand on improper purpose alone. The court found SIRQ’s pervasive emphasis on Layton’s allegedly malicious motives undermined confidence in the verdict. Regarding the false light claim, the court held that trial judges must either screen statements pretrial for defamatory capacity or use special verdict forms requiring juries to identify specific statements supporting their verdicts.

Practice Implications

This decision fundamentally restructures intentional interference claims in Utah, requiring plaintiffs to prove improper means rather than relying on allegations of bad faith or malicious intent. For false light and defamation cases, practitioners should expect courts to exercise stronger gatekeeping roles, and defendants should request special verdict forms to preserve appellate review rights when non-defamatory statements are submitted to juries.