Machine Maintenance & Equipment Co. v. Cooper Industries, Inc.

Cooper Industries, Inc. (Cooper) (defendant) manufactured industrial compressors. Machine Maintenance & Equipment Co. (MM&E) (plaintiff) was a distributor for Cooper. The distributorship agreement permitted either party to terminate the agreement without cause upon 90 days’ notice, and Cooper could terminate with cause upon one day’s notice under certain circumstances, including MM&E’s breach of the agreement or any MM&E action that Cooper considered harmful to Cooper’s interests. On July 24, 1983, two key MM&E salesmen resigned and formed Power Supply, Inc. (PSI). Four days later, Cooper notified MM&E that the dealership agreement would be terminated for cause on August 3. On August 2, PSI proposed to Cooper that PSI be given MM&E’s distributorship, and Cooper accepted on August 19. MM&E sued Cooper for tortious interference with business relations between MM&E and its customers. MM&E presented evidence that Cooper had provided less than 90 days’ termination notice to make it difficult for MM&E to find another supplier, which would cause MM&E’s customers to become dissatisfied and switch to PSI. Before termination notice was given and during the notice period, Cooper, acting in concert with the salesmen who had formed PSI, contacted MM&E’s customers and told them that MM&E’s distributorship was terminated because MM&E was not doing its job and urged the customers to do business with PSI instead of MM&E. MM&E did not find an alternate supply of product until January 1984 and by that time had lost customers and profits. The jury found for MM&E. Cooper moved for judgment notwithstanding the verdict.