history of this section supports the Bulk Oil court's conclusion.
In sum, a private right of action is not consistent with the legislative scheme provided for in the EAA. Plaintiff's arguments do not overcome the "'elemental canon' of statutory construction that where the statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies." Karahalios, 489 U.S. at 533 (quoting Lewis, 444 U.S. at 19.). "In such cases, 'in the absence of strong indicia of contrary congressional intent, [the court is] compelled to conclude that Congress provided precisely the remedies it considered appropriate.'" Id. (quoting Middlesex County Sewerage Authority v. Sea Clammers, 453 U.S. 1, 15, 69 L. Ed. 2d 435, 101 S. Ct. 2615 (1981)).
Relegation to State Law
The EAA expressly provides that the provisions of § 2407 preempt any state or local law, rule or regulation on the issue. 50 U.S.C. App. § 2407(c) (1979). Plaintiff argues that protecting citizens against discrimination has always been the role of the federal government and that is why § 2407 preempts state law. But section 2407 cannot be characterized as a discrimination law. At most, the preemption clause shows that implying a private federal cause of action would not "intrude into an area traditionally committed to state law." Cort, 422 U.S. at 85. This factor weighs in plaintiff's favor.
Only two courts have dealt with the issue of whether § 2407 implies a private right of action. Abrams v. Baylor College of Medicine, 581 F. Supp. 1570 (S.D. Tex. 1984), aff'd. in part and rev'd in part on other grounds, 805 F.2d 528 (5th Cir. 1986); and Bulk Oil, 583 F. Supp. at 1138-43. The court in Bulk Oil found there was no implied private right of action under § 2407--a result with which this Court agrees. Bulk Oil, 583 F. Supp. at 1143. The Abrams court reached the opposite conclusion. Abrams, 581 F. Supp. at 1581. The Abrams court based its finding of an implied right of action on the general purposes of the EAA. The court simply stated the statute's purpose, and on that basis concluded that grounds for implying a private right of action existed. Abrams, 581 F. Supp. at 1581. Because the analysis in Abrams falls short of what is required under Cort and its progeny, this Court declines to follow Abrams.
Plaintiff has the burden of proving that Congress intended to imply a private right of action, see Suter v. Artist, 118 L. Ed. 2d 1, 112 S. Ct. 1360, 1370 (1992), and has not met that burden. The legislative history of the EAA is, at best, silent on the question at issue. The statutory language does not set forth a class of persons to be protected by the statute or imply a private right of action in any other way. The complex administrative scheme set forth by the statute and its regulations creates a presumption that Congress did not intend to imply any other remedy. And the applicable case law provides little support for plaintiff's position. Against these factors, plaintiff can only argue that the purpose of the statute was to prevent the boycott against Israel, that Israel companies would benefit because of the anti-boycott provisions, and that an implied private right of action would complement the administrative scheme. Under the Supreme Court's formula for determining the existence of implied private causes of action, these factors are not sufficient to establish the requisite congressional intent.
II. Tortious Interference with Prospective Economic Advantage
In Counts III and IV, plaintiff alleges tortious interference with prospective economic advantage against defendants. Under Illinois law, the elements of this tort are: (1) plaintiff's reasonable expectation of entering into a valid business relationship; (2) knowledge of that relationship on the part of the defendant; (3) intentional and malicious interference by the defendant to defeat the expectancy; and (4) injury resulting from the interference. Fishman v. Estate of Wirtz, 807 F.2d 520, 546 (7th Cir. 1986); Downers Grove Volkswagen Inc. v. Wigglesworth Imports, Inc., 190 Ill. App. 3d 524, 546 N.E.2d 33, 137 Ill. Dec. 409 (2nd Dist. 1989). The tort requires "an allegation of conduct directed by the defendant toward a third party through which the defendant purposely causes that third party not to enter into or continue with a prospective contractual relationship with the plaintiff." Westland v. Sero of New Haven, Inc., 601 F. Supp. 163, 166 (ND. Ill. 1985); see also Parkway Bank & Trust Co. v. City of Darien, 43 Ill. App. 3d 400, 357 N.E.2d 211, 2 Ill. Dec. 234 (2d Dist. 1976). But "a party cannot be liable in tort for interfering with its own contract." F.E.L Publications Ltd. v. Catholic Bishop of Chicago, 754 F.2d 216, 221 (7th Cir.), cert. denied, 474 U.S. 824, 88 L. Ed. 2d 64, 106 S. Ct. 79 (1985).
Defendants have not purposely caused a third party to refrain from entering into a contract with plaintiff. Plaintiff's allegations reveal that defendants merely broke off negotiations with Quadrant and Israeli Aircraft, and then informed Quadrant of their reasons for taking this action. All defendants did was cut short their own contract negotiations. True, Israeli Aircraft's joint venture with Quadrant failed as a result of defendants' actions, but the failure was not because defendants directed some action at Quadrant that made Quadrant quit negotiating with Israeli Aircraft.
In addition, to prevail on this tort plaintiff must establish a reasonable expectancy of entering into a valid business relationship. The Court agrees with defendants that the speculative prospective business deals identified by plaintiff do not rise to the level of reasonable business expectancies. In Kemmerer v. John D. & Catherine T. MacArthur Found., 594 F. Supp. 121, 122-23 (N.D. Ill. 1984), the plaintiff sued defendant for tortiously interfering with plaintiff's reasonable expectation of obtaining a commission. The plaintiff and his client, the third party, had entered into an agreement under which plaintiff would receive a sales commission if the client succeeded in purchasing some property from the defendant. However, the plaintiff and his client never made an unconditional offer to purchase the property. The contract was, in essence, still being negotiated. The defendant subsequently sold the property to another party, and the plaintiff sued the defendant for his lost commission. The court held that because the parties were still negotiating and no firm offer had been made, "plaintiff's desire for a commission was not a reasonable expectancy in this case." Kemmerer, 594 F. Supp. at 122.
Here, Israeli Aircraft and Quadrant had signed a non-binding letter of intent which "summarized the present mutual understandings and preliminary agreements . . . reached between Israeli Aircraft and Quadrant." The letter of intent stated that Israeli Aircraft and Quadrant planned to form a company for the purpose of acquiring the assets of Fairchild. Plaintiff's valid business relationship with Quadrant, therefore, was dependent on the company's submitting a successful bid for the assets of Fairchild. Yet plaintiff alleges no facts that suggest it had a reasonable expectation of submitting a successful bid to the trustee of Fairchild. Plaintiff and Quadrant were still negotiating the formation of their own company, as well as the terms for restructuring Sanwa's debt. Plaintiff and Quadrant were not in a position to make a bid for Fairchild and never submitted a bid. As in Kemmerer, the "business" upon which plaintiff grounds its claims was a business relationship still under negotiation; the mere hope of submitting a successful bid was not a reasonable expectancy. Thus, plaintiff has failed to allege sufficient facts to establish the first and third elements of the tort of interference with prospective economic advantage.
Under Illinois Law, "civil conspiracy arises where two or more persons combine to accomplish by concerted action either a lawful purpose through unlawful means or an unlawful purpose through lawful means." Belkow v. Celotex Corp., 722 F. Supp. 1547, 1550 (N.D. Ill. 1989). A conspiracy cannot exist where the two or more persons involved in the alleged conspiracy were merely interchangeable entities or were essentially conducting a single act as a single entity. See Dombrowski v. Dowling, 459 F.2d 190, 196 (7th Cir. 1972); Thomas v. Rohner-Gehrig & Co., 582 F. Supp. 669, 673 (N.D. Ill. 1984). Similarly, a conspiracy cannot exist between a principal and an agent or servant. See Salaymeh v. Interqual, Inc., 155 Ill. App. 3d 1040, 1044, 508 N.E.2d 1155, 1158-59, 108 Ill. Dec. 578 (5th Dist. 1987).
In its complaint, plaintiff sets forth its conspiracy claim against Sanwa Bank and Sanwa by repeating and realleging facts contained in paragraphs 50-57 of the complaint. Paragraph 55 alleges that "Sanwa Bank controls the affairs of Sanwa to the extent that Sanwa is the mere instrumentality of Sanwa Bank, and accordingly, the observance of the fiction of separate corporate existences under these circumstances would promote injustice." Plaintiff's conspiracy claim thus incorporates an allegation that Sanwa and Sanwa Bank are the same entity. Sanwa and Sanwa Bank are the only parties plaintiff implicates in the conspiracy. Accepting as true all of the well-pleaded facts in the complaint, plaintiff fails to allege a claim for conspiracy because, under Illinois law, a conspiracy must involve two or more parties.
Defendants' motion to dismiss all five counts of the complaint for failure to state a claim is granted.
James B. Zagel
United States District Judge
Date: 18 March 1993