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Pacific Institute for Research and Evaluation v. Procter & Gamble Co.

*fn* submitted san francisco california: November 2, 1993.

PACIFIC INSTITUTE FOR RESEARCH AND EVALUATION, PLAINTIFF-APPELLANT,
v.
PROCTER & GAMBLE CO.; PROCTER & GAMBLE CO., DISTRIBUTING CO., DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Northern District of California. D.C. No. CV-89-02107-BAC. Barbara A. Caulfield, District Judge, Presiding

Before: Kozinski and O'scannlain, Circuit Judges; Kelleher,*fn* District Judge.

MEMORANDUM

The Pacific Institute for Research and Evaluation brought suit against the Procter & Gamble Company and the Procter & Gamble Distributing Company for tortiously interfering with contractual relations and prospective economic advantage. The district court granted partial summary judgment and excluded evidence concerning events taking place after the contractual breach. Appellant seeks reversal of the grant of partial summary judgment and the decision to exclude evidence, and requests a new trial. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

I

Appellant Pacific Institute for Research and Evaluation ("PIRE") is a non-profit corporation formed to establish and to study drug abuse prevention programs. In 1986, PIRE spun off the Just Say No Foundation ("the Foundation") as a separate non-profit entity. Two PIRE employees, Tom Adams and Joan Brann, left to head the Foundation. PIRE contends that the Foundation (through Adams and Brann) and PIRE agreed, inter alia, that upon incorporation: (1) the Foundation would be obligated to repay PIRE for its pre-incorporation expenses; (2) PIRE would advance money after incorporation subject to reimbursement; and (3) all loans would be repaid by the Foundation as revenue became available.

In February 1987, Procter & Gamble ("P&G") approached the Foundation with an ad campaign. In May 1987, Adams hired former P&G employee, Ivy Cohen, as the Foundation's Executive Director. PIRE's fiscal agency with the Foundation concluded on September 30, 1987. On December 1, 1987, Tom Adams and Ivy Cohen wrote a letter informing PIRE that the Foundation would not pay PIRE for pre-incorporation expenses, but would pay its net post-incorporation expenses, allegedly breaching the 1986 pre-incorporation agreement.

In March 1988, Wallace Abbott, a Senior Vice-President at P&G, was selected to be Chairman of the Foundation's Board of Directors. In August 1988, Adams was apparently forced to resign. In October 1988, Brann was excluded from a Board of Directors' meeting and removed from the Board.

II

The district court granted P&G's motion in limine to exclude evidence from the trial concerning the selection of Wallace Abbott as the Foundation's Chairman of the Board. The district Judge determined that the evidence was irrelevant because these events took place in 1988, after the alleged breach of the pre-incorporation agreement in 1987.

PIRE contends that this evidence is relevant to P&G's intent to interfere with the Foundation/PIRE contract. PIRE argues that under Federal Rule of Evidence 404(b), evidence of subsequent acts may be admissible to show intent or plan. PIRE cites cases where courts have admitted evidence of a party's subsequent acts in order to show intent with respect to a previous act. However, at best this shows that it is not an abuse of discretion to admit such evidence; it does not prove the converse. PIRE cites no cases where a district court was held to have abused its discretion for not admitting evidence of subsequent acts.

PIRE argues that in addition to the partial breach on December 1, 1987, there was another breach on November 15, 1988. PIRE contends that the excluded evidence went to the intent and proximate cause of this later breach. This argument contrasts with PIRE's position before the district court that the breach occurred in the fall of 1987, when the Foundation repudiated its debt obligations. Although subsequent actions may have been consistent with a breach in 1987, PIRE presents no evidence or case law explaining why this would constitute an independent breach after the fall 1987 debt repudiation. This court has held that a district court does "not abuse its discretion by excluding evidence that 'was only slightly relevant, if at all, and [that] was clearly collateral to the central issues of the trial.'" Brown v. Sierra Nevada Memorial Miners Hosp., 849 F.2d 1186, 1191 (9th Cir. 1988) (quoting United States v. Stewart, 770 F.2d 825, 830 (9th Cir. 1985), cert. denied, 474 U.S. 1103, 88 L. Ed. 2d 922, 106 S. Ct. 888 (1986)). We conclude that the district court did not abuse its discretion; the evidence of subsequent events was, at best, only slightly relevant and was clearly collateral.

PIRE also contends that the district court's order is based on the mistaken belief that no damages were sought other than pre-incorporation expenses. PIRE claims it also sought certain post-incorporation damages. But the excluded evidence does not concern the amount of damages; rather, it goes to breach and intent to induce breach. The district court did not abuse its discretion in determining that this evidence was irrelevant to these issues.

III

The district court also granted P&G's motions in limine to exclude evidence regarding the circumstances by which Joan Brann was removed from the Foundation's Vice-Presidency and Tom Adams was apparently forced to resign. The district court held that the evidence was irrelevant and that, to the extent that it might be relevant, it should be excluded under Federal Rule of Evidence 403 because its probative ...


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