Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003)

Korea Supply Company (KSC) sued Lockheed Martin for violation of California‘s Unfair Competition Law (UCL) and for interference with prospective economic relations after Lockheed Martin’s predecessor, Loral Corporation, was awarded a contract to provide military equipment to the Republic of Korea. KSC alleged that the contract was awarded to Loral because Loral had offered bribes and sexual favors to key Korean officials. KSC sought disgorgement of the profits that Lockheed Martin realized on the sale to Korea as well as the amount of the expected commission KSC would have earned if its client had been awarded the contract instead of Loral. The California Supreme Court reversed the judgment of the Court of Appeal and held that KSC could not recover Lockheed Martin’s profits by way of the UCL claim because “disgorgement of money obtained through an unfair business practice is an available remedy…only to the extent that it constitutes restitution.” Since KSC never had an ownership interest in Lockheed Martin’s profits, it was not entitled to restitution under the UCL. However, the Supreme Court affirmed the Court of Appeal’s judgment upholding the tortious interference claim on the ground that KSC needed only to allege that Lockheed Martin knew that the interference was certain or substantially certain to occur as a result of its actions – a specific intent to disrupt KSC’s prospective business relationship with Korea was not required.