Unraveling Civil Conspiracy to Protect Businesses in Florida

When you hear the word conspiracy, you may think of clandestine plots or secret schemes. However, there exists a legal concept known as civil conspiracy, which holds particular relevance for businesses in Florida. Civil conspiracy involves two or more individuals or entities colluding to commit a business tort or illegal act, such as misrepresentation, tortious interference, deceptive trade practices, misappropriation, fraud, theft, or defamation.

Suppose, for example, a group of disgruntled employees conspire to damage their employer’s business reputation by spreading false rumors about the company to its clients or customers through social media channels. The customers see the terrible rumors and stop working with the company as a direct result of this misinformation, causing irreparable damage to the company’s reputation.

In this example, the essential components of a civil conspiracy claim in Florida are present: an agreement between multiple parties to engage in an unlawful act, the execution of overt actions in furtherance of that agreement, and damages suffered by the plaintiff due to the conspiracy.

In Florida, a civil conspiracy claim necessitates that the underlying unlawful act or means be tortious. What does this mean? The plaintiff must also demonstrate the underlying tort the parties conspired to commit, such as fraud, defamation, or interference with business relationships.

If a plaintiff successfully substantiates a civil conspiracy claim, they may be entitled to recover damages from all parties involved in the conspiracy who participated in the tortious conduct. However, establishing such a claim can be challenging and time-consuming, as it requires compelling evidence of both an agreement and overt actions to advance that agreement.

In this article, we’ll explore civil conspiracy in-depth, providing real-world examples, discussing its impact on businesses, and offering advice on how to protect against it.

What is required to prove a case of civil conspiracy in Florida?

In Florida, a civil conspiracy involves several key elements:

1. A conspiracy between two or more parties.
2. The intention to carry out an unlawful act or to achieve a lawful act through unlawful means.
3. The commission of overt acts in furtherance of the conspiracy.
4. Damage to the plaintiff resulting from the conspiracy (Walters v. Blankenship).

For a civil conspiracy claim to be actionable, there must be a separate underlying tort or wrongful act. Each co-conspirator need not commit acts in furtherance of the conspiracy; it is enough if they are aware of the scheme and assist in some manner (Charles v. Fla. Foreclosure). The essence of a civil conspiracy claim lies not in the conspiracy itself but in the civil wrong done as a result of the conspiracy, causing harm to the plaintiff (Blatt v. Green, Rose, Kahn & Piotrkowski).

Typically, a company cannot conspire with its officers, employees, or agents (Mancinelli v. Davis, 2017 WL 1278074, *2 (Fla. 4th DCA 2017)). However, exceptions apply if an agent has a personal stake in the underlying activities, resulting in more than an incidental benefit to the agent.

Another basis for a civil conspiracy claim arises when the plaintiff can demonstrate a “peculiar power of coercion” possessed by the conspirators, which an individual acting alone would not have (Churruca v. Miami Jai-Alai, Inc.).

It’s important to note that when someone sues a co-conspirator for conspiracy, that co-conspirator could be liable for the entire amount of damages, even if they weren’t directly involved in the initial wrongdoing. This becomes significant when the co-conspirator has assets to cover a potential judgment, whereas the main perpetrator may not. Additionally, alleging civil conspiracy can lead to an exception to the hearsay rule, meaning statements made by co-conspirators in furtherance of the conspiracy could be admitted as evidence during trial.

Common examples of civil conspiracy

This can be quite complex and challenging for many to grasp. To make it easier, let’s look at some real-world examples of civil conspiracy that can impact businesses in Florida:

• Price-fixing: This occurs when multiple companies conspire to set prices for their products or services, violating antitrust laws and restricting competition, ultimately harming consumers. For instance, imagine executives from various pharmaceutical companies colluding to fix prices on certain medications, artificially inflating prices and harming consumers. Those affected could file civil lawsuits against the involved companies, seeking compensation for the overcharged prices.
• Trade secret theft: When an employee or ex-employee teams up with a competitor to steal confidential information or trade secrets from their employer, it constitutes civil conspiracy. This can give the competitor an unfair edge in the market, harming the original business. Consider a scenario where engineers from a tech company conspire with a rival firm to steal proprietary algorithms and product designs, intending to use them for competitive advantage. The original company may file a civil lawsuit against the conspirators, seeking damages for the stolen trade secrets and resulting harm to its business.
• Fraud: When individuals conspire to commit fraud, whether among investors or contractors, aiming to deceive a government agency, it constitutes a civil conspiracy. Such actions can lead to significant financial losses. For instance, envision real estate developers in Florida colluding with appraisers and lenders to inflate property values, deceiving financial institutions and buyers. This manipulation through false appraisals and financial information constitutes civil conspiracy, potentially leading to lawsuits seeking compensation for financial damages suffered by investors and homebuyers.
• Defamation: If two or more individuals collaborate to spread false statements about a third party, it constitutes civil conspiracy. This tarnishes the reputation of the third party and can result in monetary losses. Imagine two competing businesses spreading false rumors about a smaller rival company, damaging its reputation and causing decreased sales. The affected company could pursue legal action, seeking compensation for the damage to its reputation and resulting financial losses.
• Breach of contract: When parties conspire to breach a contract with a third party, they engage in civil conspiracy. This deprives the third party of the contract’s benefits. In many cases, this may also lead to a claim for tortious interference with the third-party contract. For example, suppose two suppliers collude to breach their contracts with a manufacturer by failing to deliver agreed-upon quantities of raw materials. This concerted action disrupts the manufacturer’s operations and may lead to financial losses. The manufacturer could pursue legal action against the suppliers for civil conspiracy and breach of contract, seeking damages for the harm caused to its business and reputation.

These examples underscore the risks of civil conspiracy that businesses in Florida should be mindful of and take appropriate steps to safeguard against.

What should businesses in Florida do if they believe they are victims of civil conspiracy?

If a business in Florida becomes entangled in a civil conspiracy, there are several legal avenues to pursue. It’s crucial to first seek guidance from a seasoned business litigation attorney to assess the situation and determine the best course of action. Below are some potential actions they may recommend:

1. File a civil lawsuit: The business can initiate a civil lawsuit against the individuals or entities involved in the conspiracy, seeking compensation for any damages incurred due to their actions.
2. File a criminal complaint: If the conspiracy encompasses criminal activities, the business can lodge a criminal complaint with law enforcement authorities, leading to potential criminal charges against the conspirators.
3. Seek an injunction: Pursuing an injunction can halt the conspirators from continuing their detrimental actions. An injunction might mandate ceasing anti-competitive behaviors or returning misappropriated trade secrets or confidential data.
4. Report to regulatory agencies: Should the conspiracy breach regulations or laws, the business can report it to pertinent regulatory bodies, triggering investigations and potential regulatory actions against the conspirators.
5. Prevent future harm: Following the discovery of a civil conspiracy, the business must take preventive measures against future harm. This might involve enhancing security protocols to safeguard confidential information or implementing compliance programs to deter anti-competitive practices.

Conclusion

To wrap up, civil conspiracy poses significant risks to businesses in Florida, potentially resulting in financial losses, damage to reputation, and legal complications. Understanding the elements of civil conspiracy, such as the agreement between parties, the intent to commit an unlawful act, and the resulting harm to the plaintiff, is crucial for businesses to protect themselves against such dastardly schemes.

If a business believes it has fallen victim to civil conspiracy, seeking legal counsel is absolutely critical. Experienced business litigation attorneys, like those at The Campbell Law Group, can assess the situation, recommend appropriate legal actions, and guide your business through the complexities of litigation, enforcement actions, and regulatory reporting.

Our firm has extensive experience in handling civil conspiracy cases and is dedicated to providing assistance to businesses in Florida that have fallen victim to civil conspiracy. With a team of knowledgeable and experienced attorneys, we understand the serious implications of civil conspiracy on businesses and strive to offer effective legal support.

Fortunately, by understanding civil conspiracy and taking proactive measures to mitigate risks, businesses in Florida can protect their interests, uphold their reputation, and maintain compliance with relevant laws and regulations.