Taylor Drye, ‘Along Came a Spider: Tortious Interference by a Parent Corporation with a Subsidiary’s Contract in the Age of Streaming’

Using actress Scarlet Johansson’s lawsuit against Disney as an analytical device, this comment examines whether a parent corporation is privileged to interfere with a subsidiary’s contract. The comment includes a deep exploration of the history and development of the law of tortious interference by tracing its influences back to its earliest roots.

Beginning with an early common law action inspired by Roman civil law and an ordinance passed to deal with labor shortages due to the plague, defining this tort has been rife with difficulty. Lumley v Gye and its progeny would later galvanize our modern conception of the tort. The writings of Justice Oliver Wendell Holmes and other contemporaries would then greatly influence the development of the tort and the American Law Institute’s first restatement of torts.

This work posits that large entertainment companies are uniquely at risk to claims of tortious interference due to how the law has developed. As large entertainment corporations vertically integrate and acquire more subsidiaries, they become more vulnerable to tortious interference claims. The subsidiary’s contracts with talent to make content for the parent corporation may be breached by the parent corporation’s actions. Such actions could pertain to the manner of release, such as putting the content on a streaming platform as opposed to a theatrical release. If the subsidiary had a contract with talent stipulating an exclusive theatrical release and backend compensation for the talent, the action of putting the film on streaming constitutes a breach. The question becomes whether the parent corporation tortiously interfered with the contract by inducing breach.

Using Supreme Court precedent in anti-trust law to define the relationship between a parent corporation and its wholly owned subsidiary, this comment concludes that a parent corporation is incapable of tortiously interfering with a wholly owned subsidiary’s contract with a third party.

Drye, Taylor, Along Came a Spider: Tortious Interference by a Parent Corporation with a Subsidiary’s Contract in the Age of Streaming (December 22, 2021). Southern University Law Review, forthcoming.

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