Background
Longwells (The Bar at the Yard, LLC) operated a restaurant and bar in Lincoln, Nebraska, near Memorial Stadium, capitalizing on the high foot traffic of Nebraska Cornhuskers home football game days. Its lease with the building’s landlord included an exclusivity provision prohibiting the landlord from allowing other tenants or third-party vendors to sell alcohol in the adjacent outdoor Common Area. Longwells sold food and beverages through a window facing that Common Area and alleged that game days were its most profitable.
Hiro 88 (Friends Family, LLC and Yin Family, LLC), which operated a nearby restaurant, entered into agreements with the same landlord to use a space directly adjacent to the Common Area, separated from it by a wall with windows. Hiro 88 paid $65,000 in the first year and $35,000 in the second for the right to operate from that space, selling alcohol through those windows to customers standing in the Common Area exclusively during peak hours on home game days. After receiving a cease-and-desist letter from Longwells, Hiro 88 continued operations for two football seasons.
Longwells sued Hiro 88 for tortious interference with contract and tortious interference with a business expectancy, seeking disgorgement of Hiro 88’s alcohol-sale proceeds and an injunction. After discovery, Hiro 88 moved for summary judgment. The Lancaster County District Court granted the motion, finding no evidence that Hiro 88 had done anything beyond engaging in valid competition. Longwells appealed.
The Court’s Holding
The Nebraska Supreme Court affirmed summary judgment for Hiro 88 on all tortious interference claims. On the tortious interference with contract claim under Restatement (Second) of Torts § 766, the court held that Longwells produced no evidence that Hiro 88 induced the landlord to breach the exclusivity provision. Even assuming a breach occurred, the court explained that merely entering into an agreement with knowledge that the other party cannot simultaneously honor an existing contract with a third party does not constitute inducement. Inducement requires affirmative conduct that operates on the mind of the party induced — such as offering unusually favorable terms to convince a breach — and the summary judgment record contained no evidence about the negotiations between Hiro 88 and the landlord that would permit such an inference. Counsel for Longwells conceded as much at oral argument.
The court also foreclosed any claim under § 766A — which imposes liability for making another’s contractual performance more burdensome — because the court had already declined to recognize that theory in Green Plains Trade Group v. Archer Daniels Midland Co., 320 Neb. 882, 31 N.W.3d 577 (2026), decided earlier in the same term.
On the tortious interference with business expectancy claim, the court held that Longwells failed to demonstrate that Hiro 88 employed improper means or did anything beyond valid competition. Hiro 88’s knowledge that the landlord might be breaching Longwells’ exclusivity clause was insufficient to establish improper means, because prospective economic interests receive less protection than enforceable contract rights. Hiro 88’s choice to operate only during peak game-day hours was characterized as a legitimate strategic business decision, and Longwells failed to substantiate its claim that Hiro 88 lacked the appropriate liquor license. The court also found that the district court’s evidentiary rulings striking portions of Longwells’ owner’s affidavit were harmless, as the excluded material would not have changed the outcome.
Key Takeaways
- Merely entering into an agreement with knowledge that the other contracting party cannot simultaneously honor a prior contract with a third party does not constitute “inducement” sufficient to support a tortious interference with contract claim under Nebraska law — affirmative conduct that operates on the mind of the breaching party is required.
- Nebraska does not recognize the § 766A theory of tortious interference (making another’s contract performance more burdensome or costly), as confirmed by Green Plains Trade Group v. Archer Daniels Midland Co. earlier in the 2026 term.
- A plaintiff alleging tortious interference with a business expectancy bears the burden of proving that the defendant’s conduct fell outside the competitor’s privilege; strategic business decisions such as targeted hours of operation do not satisfy that burden absent evidence of improper means.
- Because prospective economic interests are afforded less legal protection than enforceable contract rights, knowledge that a landlord may be breaching an exclusivity clause is insufficient, standing alone, to establish improper means for a business expectancy claim.
Why It Matters
This decision draws a clear and practically important line between tortious interference and ordinary business competition in Nebraska. Businesses that enter into agreements with counterparties — even knowing those counterparties may have conflicting obligations to third parties — face no tortious interference liability absent evidence of affirmative conduct designed to induce the breach. The ruling insulates a wide range of competitive behaviors, including aggressive market entry and strategic pricing, from tortious interference exposure so long as the competitor does not actively work to convince the other party to abandon its prior commitments.
For practitioners, the case reinforces that tortious interference plaintiffs must develop concrete evidence about the negotiations underlying the allegedly offending agreement — not merely evidence that the agreement was made. In the absence of discovery into those negotiations, summary judgment remains readily available to defendants. The decision also serves as a reminder that § 766A remains unavailable in Nebraska courts, limiting plaintiffs to the traditional inducement-based theory when seeking relief against third parties who complicate, but do not directly terminate, an existing contractual relationship.