No Bluff: Texas' Full Tilt Poker Accused of Tortious Interference

October 15, 2010 (Press-News.org) On September 7, Deliverance Poker filed suit against Full Tilt Poker and Michael Mizrachi, claiming breach of contact. He is alleged to have signed a contract with Full Tilt (parent Tiltware, LLC) and breached his obligation to Deliverance Poker. His contract with Deliverance Poker required he wear logoed shirts and caps during all tournaments and public appearances.

Mizrachi is alleged to have appeared on Full Tilt's website, also a violation of the Deliverance Poker agreement. Deliverance claims Full Tilt tortiously interfered with their contract with Mizrachi by signing him to a contract when they were fully aware of his contract with Deliverance.

Tortious Interference with Contractual Relations

Under Texas law, the elements of tortious interference with a contract are: 1) the existence of a contract subject to interference; 2) willful and intentional interference; 3) interference that proximately caused damage; and 4) actual damage or loss.

There was a contract, and it appears likely there was interference. The more difficult issues to determine may be the proof of damages, as Deliverance Poker appears to be claiming a large amount of damages.

The party alleging interference must show that the other party acted with willful and intentional interference. The interfering party must have had either actual knowledge of the existence of the contract or relationship and of the plaintiff's interest, or knowledge of such facts and circumstances as would lead a reasonable person to believe in their existence. Deliverance Poker alleges that Full Tilt knew Mizrachi participated in numerous tournaments while wearing memorabilia prominently featuring Plaintiff's logo.

The contract with Full Tilt would satisfy the 'proximate damage' requirement. Last, they need to show the actual damage they suffered because of Mizrachi's defection.

Temporary Restraining Order

To stop Mizrachi from appearing on behalf of Full Tilt, Deliverance Poker filed a motion for a temporary restraining order (TRO). A temporary injunction's purpose is to preserve the status quo of the litigation's subject matter pending a trial on the merits. Courts are quick to point out that a temporary injunction is an extraordinary remedy and they do not grant them easily.

The motion was denied by United States District Judge James Nowlin. Judge Nowlin noted in his decision "The Court again finds that Plaintiff has failed to satisfy the four-part test for the entry of an ex parte Temporary Restraining Order."

Texas courts look to multiple requirements to grant a temporary restraining order:
- a cause of action against the defendant
- a probable right to the relief sought, and
- a probable, imminent, and irreparable injury in the interim

In this context, irreparable injury generally means an injury not covered by money damages. Judge Nowlin ruled against Deliverance Poker based on their failure to adequately show they could prevail on the merits of the case and evidence appeared to be lacking on an element of the contract agreement. He wrote, "Even with the additional support attached to the Plaintiff's amended pleadings, (they forgot to attach the contract to their first motion) this Court is still not convinced there is 'substantial likelihood' that Plaintiff will prevail on the merits.

Also at issue is the "Effective Date" in Mizrachi's contract, which is given as "immediately upon the closing of Deliverance of an offering of debt or equity interests in Deliverance which raises no less than One Million Dollars." But, there appeared to be no evidence in the filings that this had occurred.

Deliverance Poker wanted to stop Mizrachi from appearing on Full Tilt's website or wearing their logos on his clothing during poker tournaments by obtaining a temporary restraining order.

Next Step

With the denial of the temporary restraining order, the case will move to the factual claims of the original complaint. If the contract is found to have been fully performed by Deliverance, it is possible Full Tilt will have to pay some amount of money damage for 'interfering' with Deliverance's contract with Mizrachi.

If your business has suffered interference from another business with your contracts or prospect, you may have a claim for tortious interference. An experienced business law attorney can examine your facts and help you determine if you have a viable claim and how you should proceed.

Article provided by John McDuff, Attorney at Law
Visit us at www.johnmcduff.com/