Albert's Organics, Inc. v. Holzman ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALBERT'S ORGANICS, INC., Case No. 19-cv-07477-PJH 8 Plaintiff, 9 v. ORDER GRANTING IN PART AND DENYING IN PART MOTION TO 10 GREG HOLZMAN, et al., DISMISS 11 Defendants. Re: Dkt. No. 26 12 13 Defendants Greg Holzman, Steve Akagaki, and Jason Laffer, Terrafresh Organics, 14 LLC’s (“TFO”) motion to dismiss came on for hearing before this court on March 4, 2020. 15 Plaintiff Albert’s Organics, Inc. (“Albert’s”) appeared through its counsel, Dan Forman. 16 Defendants Holzman, Akagaki, and Laffer appeared through their counsel, Stephen 17 Henry, and defendant TFO appeared through its counsel, Crystal Gaudette. Having read 18 the papers filed by the parties and carefully considered their arguments and relevant 19 authority, and good cause appearing, the court hereby rules as follows for the following 20 reasons. 21 BACKGROUND 22 On November 13, 2019, plaintiff Albert’s filed a complaint (“Compl.”) against 23 defendants asserting nine causes of action: (1) Violation of the Defend Trade Secrets 24 Act against Holzman, Akagaki, and TFO; (2) Violation of the California Uniform Trade 25 Secrets Act against Holzman, Akagaki, and TFO; (3) Breach of Contract against 26 Holzman, Akagaki, and Laffer; (4) Tortious Inducement to Breach Contract against 27 Holzman, Akagaki, and TFO; (5) Tortious Interference with Business Relations/Contract 1 Laffer; (7)Tortious Inducement to Breach Duty of Loyalty against Holzman, Akagaki, and 2 TFO; (8) Unfair Competition against Holzman, Akagaki, and TFO; and (9) Interference 3 with Prospective Economic Advantage against all defendants. Dkt. 1. On November 27, 4 2019, this court heard plaintiff’s motion for temporary restraining order and on the same 5 day denied the TRO motion, denied plaintiff’s motion for expedited discovery, and 6 granted plaintiff’s motion to preserve evidence. Dkt. 19. Then, on January 10, 2020, 7 defendants filed the present motion to dismiss and move to dismiss all claims pursuant to 8 Federal Rule of Civil Procedure 12(b)(6). Dkt. 26. 9 Albert’s is a California corporation that imports and distributes specialty produce 10 throughout the United States. In May 2011, Albert’s entered into negotiations to 11 purchase Purity Organic Holdings, Inc. d/b/a Pacific Organic Produce (“PACO”), a 12 California corporation, which was a broker and distributor of produce. PACO was owned 13 by defendants Holzman and Akagaki, who are both California citizens. Compl. ¶¶ 3, 11– 14 12. In August 2012, the parties executed an asset purchase agreement pursuant to 15 which Albert’s purchased substantially all of PACO’s assets, including its intellectual 16 property and trade secrets. Id. ¶ 4. As a condition of the purchase agreement, Albert’s 17 offered employment to Holzman and Akagaki. 18 Holzman and Akagaki entered into Employment Agreements with Albert’s on or 19 about August 16, 2012. Id. ¶¶ 19–20. Laffer, a California citizen and a PACO employee, 20 signed an Employment Agreement with Albert’s in September 2012. Id. ¶¶ 13, 22. The 21 Employment Agreements required defendants to only use Albert’s confidential and 22 proprietary information and trade secrets for Albert’s legitimate business purposes. Id. 23 ¶ 23. Holzman, Akagaki, and Laffer also agreed that should they desire to work in a 24 competing business while employed by Albert’s, that they would seek Albert’s permission 25 to proceed. Id. They also agreed to return all of Albert’s confidential, proprietary and 26 trade secret information at the termination of their employment. Id. Holzman, Akagaki, 27 and Laffer worked for Albert’s for years and continued to develop and expand Albert’s 1 distribution and marketing of organic produce. 2 In March 2018, Holzman was terminated from employment with Albert’s. Id. ¶ 31. 3 Within days, he corresponded with one or more competitors of Albert’s, disclosing 4 confidential, proprietary, and trade secret information in an effort to recruit Albert’s 5 customers, suppliers, and key employees and announcing that he intended to launch his 6 own competing business. Id. ¶ 32. Holzman’s correspondence included the names of 7 Albert’s customers and suppliers, employees, pricing and financing resources, potential 8 venture partners, key confidential business relationships, and key business information 9 such as Albert’s plans to expand and develop certain markets, Albert’s investment 10 commitments, profitability, Albert’s business model, product sources, and import 11 volumes. Id. ¶ 33. 12 In addition, Holzman enlisted Akagaki in his efforts to establish a competing 13 business while Akagaki was still employed by Albert’s. Id. ¶ 34. The two attempted to 14 enlist other highly experienced Albert’s employees to compete against Albert’s. Id. At 15 some point, Holzman commenced competition with Albert’s through solicitation of 16 business partners and investors that he learned as an employee at Albert’s. Id. ¶ 36. 17 Holzman eventually formed a new competing company called TerraFresh Organics, LLC. 18 Plaintiff alleges that Akagaki joined Holzman in and around March 2018. Id. ¶ 34. 19 Akagaki remained employed at Albert’s until on or about January 4, 2019, when 20 Akagaki’s employment with Albert’s ended. Id. ¶ 37. 21 By spring 2019, TFO hired Laffer, while Laffer was still employed by Albert’s, as 22 TFO’s Vice-President of Sales. Id. ¶ 38. Prior to June 17, 2019, while still employed by 23 Albert’s, Laffer registered to attend an industry summit as a TFO representative and TFO 24 publicized that Laffer and Holzman would attend the summit as TFO representatives. Id. 25 ¶¶ 39, 42. Laffer sent in his letter of resignation on June 20, 2019. Id. ¶ 43. Albert’s 26 alleges, on information and belief, that defendants utilized Albert’s confidential, 27 proprietary and trade secret information to solicit business relationship for the benefit of 1 DISCUSSION 2 A. Legal Standard 3 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests for the 4 legal sufficiency of the claims alleged in the complaint. Ileto v. Glock, 349 F.3d 1191, 5 1199–1200 (9th Cir. 2003). Under Federal Rule of Civil Procedure 8, which requires that 6 a complaint include a “short and plain statement of the claim showing that the pleader is 7 entitled to relief,” Fed. R. Civ. P. 8(a)(2), a complaint may be dismissed under Rule 8 12(b)(6) if the plaintiff fails to state a cognizable legal theory, or has not alleged sufficient 9 facts to support a cognizable legal theory. Somers v. Apple, Inc., 729 F.3d 953, 959 (9th 10 Cir. 2013). 11 While the court is to accept as true all the factual allegations in the complaint, 12 legally conclusory statements, not supported by actual factual allegations, need not be 13 accepted. Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009). The complaint must proffer 14 sufficient facts to state a claim for relief that is plausible on its face. Bell Atlantic Corp. 15 v. Twombly, 550 U.S. 544, 555, 558–59 (2007). 16 “A claim has facial plausibility when the plaintiff pleads factual content that allows 17 the court to draw the reasonable inference that the defendant is liable for the misconduct 18 alleged.” Iqbal, 556 U.S. at 678. “[W]here the well-pleaded facts do not permit the court 19 to infer more than the mere possibility of misconduct, the complaint has alleged—but it 20 has not ‘show[n]’—‘that the pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. 21 P. 8(a)(2)). Where dismissal is warranted, it is generally without prejudice, unless it is 22 clear the complaint cannot be saved by any amendment. Sparling v. Daou, 411 F.3d 23 1006, 1013 (9th Cir. 2005). 24 B. Analysis 25 1. First and Second Claims: Misappropriation of Trade Secrets 26 Plaintiff’s first and second causes of action are brought against Holzman, Akagaki, 27 and TFO for violations of the federal Defend Trade Secrets Act (“DTSA”) and the 1 secret misappropriation under the DTSA and the CUTSA, a plaintiff must allege that: ‘(1) 2 the plaintiff owned a trade secret; (2) the defendant misappropriated the trade secret; and 3 (3) the defendant’s actions damaged the plaintiff.’” Alta Devices, Inc. v. LG Elecs., Inc., 4 343 F. Supp. 3d 868, 877 (N.D. Cal. 2018). 5 a. Whether Albert’s Owned a Trade Secret 6 The DTSA defines “trade secret” as: 7 all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, 8 plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, 9 programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, 10 electronically, graphically, photographically, or in writing if—(A) the owner thereof has taken reasonable measures to keep 11 such information secret; and (B) the information derives independent economic value, actual or potential, from not being 12 generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic 13 value from the disclosure or use of the information. 14 18 U.S.C. § 1839(3). The California UTSA defines a “[t]rade secret” as “information, 15 including a formula, pattern, compilation, program, device, method, technique, or 16 process, that: (1) Derives independent economic value, actual or potential, from not 17 being generally known to the public or to other persons who can obtain economic value 18 from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the 19 circumstances to maintain its secrecy.” Cal. Civ. Code § 3426.1(d). “‘Information’ has a 20 broad meaning under the [CUTSA].” Altavion, Inc. v. Konica Minolta Sys. Lab., Inc., 226 21 Cal. App. 4th 26, 53 (Ct. App. 2014). 22 The definition of trade secret is . . . unlimited as to any particular class or kind of matter and may be contrasted with 23 matter eligible for patent or copyright protection, which must fall into statutorily defined categories. A trade secret may consist 24 of any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an 25 opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical 26 compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device or list of 27 customers. 1 CUTSA’s pleading requirements together. Alta Devices, 343 F. Supp. 3d at 880–81. 2 “[C]ourts are ‘in general agreement that trade secrets need not be disclosed in 3 detail in a complaint alleging misappropriation for the simple reason that such a 4 requirement would result in public disclosure of the purported trade secrets.” Autodesk, 5 Inc. v. ZWCAD Software Co., No. 5:14-CV-01409-EJD, 2015 WL 2265479, at *6 (N.D. 6 Cal. May 13, 2015). Accordingly, a “plaintiff need not spell out the details of the trade 7 secret,” but it must “describe the subject matter of the trade secret with sufficient 8 particularity to separate it from matters of general knowledge in the trade or of special 9 persons who are skilled in the trade, and to permit the defendant to ascertain at least the 10 boundaries within which the secret lies.” Alta Devices, 343 F. Supp. 3d at 881 (citations, 11 internal quotation marks and alterations omitted); see also Vendavo, Inc. v. Price f(x) AG, 12 No. 17-cv-06930-RS, 2018 WL 1456697, at *3–4 (N.D. Cal. Mar. 23, 2018) (rejecting the 13 following allegations as insufficiently-specific: “source code, customer lists and customer 14 related information, pricing information, vendor lists and related information, marketing 15 plans and strategic business development initiatives, ‘negative knowhow’ learned through 16 the course of research and development, and other information related to the 17 development of its price-optimization software, including ideas and plans for product 18 enhancements). 19 Here, defendants argue that the allegations lack specificity to put them on notice of 20 the trade secret. Mtn. at 5. Plaintiff alleges the following as its trade secrets: “customer 21 information, supplier information, pricing, financing, sales volume, potential customer and 22 venture partners, import volumes, personnel files and records, customer lists, proposed 23 or contemplated investments, financial records, other internally generated studies and 24 reports, among other things, to protect its investments and trade secret information.” 25 Compl. ¶ 27. Several of the categories lack particularity to put defendants on notice as to 26 the specific trade secret at issue. These include supplier information, pricing, financing, 27 personnel files and records, proposed and contemplated investments, financial records, 1 purported trade secrets that the district court rejected in Vendavo and, thus, are not pled 2 with sufficient particularity to constitute trade secrets. A few items—potential customer 3 and venture partners and import volumes—are more specific, but ultimately reflect broad, 4 categorical terms. 5 Plaintiff’s customer-related information requires a more detailed review. Courts 6 have frequently held that customer-related information qualifies as a trade secret, 7 especially if a plaintiff has spent “considerable time, effort, and resources,” in developing 8 some of that information. MAI Sys. Corp. v. Peak Comput., Inc., 991 F.2d 511, 521 (9th 9 Cir. 1993) (holding that, under CUTSA, soliciting of customers of former firm constituted 10 trade secret misappropriation); see also H.Q. Milton, Inc. v. Webster, No. 17-CV-06598- 11 PJH, 2017 WL 5625929, at *3 (N.D. Cal. Nov. 22, 2017) (finding “customer list and 12 contact information, sales leads, customer interests, and [plaintiff’s] proprietary pricing” 13 constituted trade secrets); Henry Schein, Inc. v. Cook, No., 16-03166C, 2016 WL 14 3418537, at *4 (N.D. Cal. June 22, 2016) (holding customer information, margins, and 15 profit percentages used to gain an advantage over competitors were protectable as trade 16 secrets); Brocade Commc’n Sys. Inc. v. A10 Networks, Inc., 873 F. Supp. 2d 1192, 1214 17 (N.D. Cal. 2012) (“[C]ustomer-related information including . . . pricing guidelines . . . and 18 customers’ business needs/preferences . . . is routinely given trade secret protection.”). 19 Similarly, California courts have held that where a party made reasonable efforts to 20 maintain the secrecy of its customer list, then such a list would constitute a trade secret. 21 Morlife, Inc. v. Perry, 56 Cal. App. 4th 1517, 1521 (Ct. App. 1997) (“As a general 22 principle, the more difficult information is to obtain, and the more time and resources 23 expended by an employer in gathering it, the more likely a court will find such information 24 constitutes a trade secret.” (citing Courtesy Temporary Serv., Inc. v. Camacho, 222 Cal. 25 App. 3d 1278, 1287 (Ct. App. 1990))). 26 Applying here, plaintiff alleges that it developed, maintained, and safeguarded its 27 customer information at great expense. Compl. ¶ 27. Defendants Holzman, Akagaki, 1 specific customers. Id. ¶ 29. Finally, plaintiff identifies the customer information in more 2 detail in paragraph 33 alleging that Holzman sent to prospective business partners “the 3 names of Albert’s customers and suppliers, the names of key employees to be poached 4 and the total percentage of annual corporate sales made by those key employees, pricing 5 and financing resources, potential venture partners, key confidential business 6 relationships, including Albert’s plans to expand and develop certain markets, Albert’s 7 investment commitments, [and] profitability.” Id. ¶ 33. These allegations are sufficient to 8 demonstrate that plaintiff took efforts to keep its customer information secret. They are 9 also sufficient to demonstrate specificity regarding the customer information. In MAI 10 Systems, 991 F.2d at 521, the Ninth Circuit affirmed a finding that a customer database 11 constituted a trade secret because the database “allow[ed] a competitor . . . to direct its 12 sales efforts to those potential customers already using the [plaintiff’s] computer system. 13 Further, [the plaintiff] took reasonable steps to insure the secrecy to this information as 14 required by UTSA.” Similar reasoning is applicable here: Albert’s customer information 15 could be used to solicit its customers and Albert’s took reasonable steps to insure the 16 secrecy of the customer information. 17 Accordingly, plaintiff has established a trade secret with regard to its customer 18 information but has not established a trade secret in the remaining items listed in 19 paragraph 27. 20 b. Whether Defendants Misappropriated Plaintiff’s Trade Secrets 21 “Under the DTSA and CUTSA, ‘misappropriation’ means either the ‘(1) 22 [a]cquisition of a trade secret by another person who knows or has reason to know that 23 the trade secret was acquired by improper means;’ or the ‘(2) [d]isclosure or use of a 24 trade secret of another without express or implied consent.’” Alta Devices, 343 F. Supp. 25 3d at 882 (quoting 18 U.S.C. § 1839(5); Cal. Civ. Code § 3426.1(b)). 26 Here, defendants argue that the complaint lacks a clear statement of how 27 defendants are alleged to have used any information from Albert’s. Mtn. at 6. Plaintiff 1 partners describing a proposed plan to create a competing business. Compl. ¶ 32. 2 Plaintiff further alleges that Holzman’s correspondence included the names of Albert’s 3 customers and suppliers, the names of key employees to be “poached” and the total 4 percentage of annual corporate sales made by those key employees, pricing and 5 financing resources, potential venture partners, key confidential business relationships, 6 and other confidential information. Id. ¶ 33. Holzman disclosed Albert’s trade secret—its 7 customer information—without Albert’s consent. Accordingly, plaintiff has sufficiently 8 alleged that defendants misappropriated its trade secret. 9 c. Resulting Damage 10 “California courts have presumed irreparable harm when proprietary information is 11 misappropriated.” TMX Funding, Inc. v. Impero Techs., Inc., No. C 10-00202 JF (PVT), 12 2010 WL 1028254, at *8 (N.D. Cal. Mar. 18, 2010). Plaintiff alleges that it has lost 13 business and client relationships as a result of the harm. Compl. ¶ 50. This allegation, 14 combined with the presumption of irreparable harm, is a sufficient allegation of damage. 15 For the foregoing reasons, defendants’ motion to dismiss plaintiff’s first and 16 second causes of action for misappropriation of trade secrets is DENIED. 17 2. CUTSA Supersession 18 Having determined that plaintiff has stated a claim under CUTSA, the court must 19 determine whether CUTSA supersedes plaintiff’s other claims. Defendants contend that 20 CUTSA is a comprehensive statutory scheme that displaces plaintiff’s remaining claims 21 (other than those based on contractual remedies, which are recoverable under CUTSA). 22 Mtn. at 14. “Under California law, CUTSA provides the exclusive civil remedy for conduct 23 falling within its terms and supersedes other civil remedies based upon misappropriation 24 of a trade secret. It therefore supersedes claims—including section 17200 claims— 25 based on the same nucleus of facts as trade secret misappropriation.” Waymo LLC v. 26 Uber Tech., Inc., 256 F. Supp. 3d 1059, 1062 (N.D. Cal. 2017); see Cal. Civ. Code 27 § 3426.7; Alta Devices, Inc. v. LG Elecs., Inc., No. 18-CV-00404-LHK, 2019 WL 1 Corp., No. 12-CV-00694-LHK, 2013 WL 6160472, at *3 (N.D. Cal. Dec. 11, 2012) (“If 2 there is no material distinction between the wrongdoing alleged in a [C]UTSA claim and 3 that alleged in a different claim, the [C]UTSA claim preempts the other claim.”). “At the 4 pleadings stage, the supersession analysis asks whether, stripped of facts supporting 5 trade secret misappropriation, the remaining factual allegations can be reassembled to 6 independently support other causes of action.” Waymo, 256 F. Supp. 3d at 1062. 7 Additionally, courts in this district, relying on Silvaco Data Systems v. Intel Corp., 8 184 Cal. App. 4th 210, 239 n.22 (Ct. App. 2010), overruled on other grounds by Kwikset 9 Corp., 51 Cal. 4th at 337, hold that CUTSA preempts non-trade secret confidential 10 information misappropriation claims. See, e.g., Alta Devices, 2019 WL 1924992, at *6 11 (collecting cases). Silvaco Data Systems stated “[i]f the plaintiff identifies no property 12 right outside of trade secrets law, then he has no remedy outside that law, and there is 13 nothing unsound or unjust about holding other theories superseded.” 184 Cal. App. 4th 14 at 239. There are two exceptions. First, a non-trade secret claim is not superseded if the 15 plaintiff’s property right in the confidential information “stems from some provision of 16 positive law on grounds qualitatively different from grounds upon which trade secrets are 17 considered property,” or, second, there is no supersession where the claim alleges 18 “wrongdoing materially distinct from the wrongdoing alleged in a CUTSA claim.” Waymo, 19 256 F. Supp. 3d at 1063. However, claims relying on misappropriation of non-trade- 20 secret confidential information and not meeting one of the two exceptions are 21 superseded. Avago Techs. U.S. Inc. v. Nanoprecision Prod., Inc., No. 16-CV-03737- 22 JCS, 2017 WL 412524, at *6 (N.D. Cal. Jan. 31, 2017) (“CUTSA preemption extends to 23 claims based on the misappropriation of confidential and proprietary information, 24 regardless of whether it qualifies as a ‘trade secret.’”). 25 Finally, CUTSA does not affect “contractual remedies” whether or not based upon 26 misappropriation and further does not prohibit “civil remedies” so long as the civil 27 remedies “are not based upon misappropriation of a trade secret.” Civ. Code 1 Defendants argue supersession applies to plaintiff’s fourth through ninth causes of 2 action because they all rely on plaintiff’s misappropriation claim. Mtn. at 14. Plaintiff 3 contends that the question of whether claims are displaced by CUTSA is a fact-based 4 inquiry better suited for summary judgment or trial. Opp. at 10–11. While the court 5 discusses the preemption analysis in greater depth below, CUTSA supersedes plaintiff’s 6 fifth, eighth and ninth claims. 7 Plaintiff’s fifth claim alleges defendants used wrongful means—misappropriated 8 trade secrets, confidential information, and unlawful business tactics—to induce Albert’s 9 clients. Compl. ¶ 85. The factual allegations all involve misappropriation of trade secrets 10 and non-trade secret confidential information. Plaintiff’s eighth claim is based entirely on 11 defendants’ stealing “confidential and trade secret information.” Id. ¶ 106. Plaintiff’s 12 ninth claim relies on soliciting trade secrets and confidential information as the intentional 13 act to disrupt plaintiff’s business relationships with its customers and suppliers. Id. ¶ 112. 14 Finally, plaintiff has not demonstrated either an independent, positive-law property right 15 or wrongdoing materially distinct from the misappropriation; therefore, CUTSA 16 supersession applies. However, because the court is not convinced that amendment of 17 these superseded claims would necessarily be futile, plaintiffs shall have leave to amend 18 their complaint. 19 Plaintiff’s fourth claim requires Albert’s to allege an independent wrongful act—it 20 has identified two: misappropriation of trade secrets and breach of defendants’ 21 contractual obligations to disclose and seek Albert’s permission before pursuing outside 22 economic opportunities. To the extent the claim is based on misappropriation of trade 23 secrets or confidential information, CUTSA supersedes the claim. However, to the extent 24 the claim relies on breach of contractual obligations other than misappropriation, it is not 25 superseded. Plaintiff’s sixth and seventh claims are based on Akagaki and Laffer’s 26 fiduciary duty to Albert’s. The alleged breach of their fiduciary duty was broader than 27 disclosing trade secrets or confidential information and included a duty not to compete 1 Health, Inc., 369 F. Supp. 3d 983, 989 (C.D. Cal. 2019) (“CUTSA does not preempt 2 breach of fiduciary duty claims where those claims are not premised on the taking or use 3 of confidential information.” (citing Angelica Textile Servs., Inc. v. Park, 220 Cal. App. 4th 4 495, 506 (Ct. App. 2013)). Therefore, the sixth and seventh survive CUTSA preemption. 5 3. Third Claim: Breach of Contract 6 Plaintiff’s third claim is for breach of contract against Holzman, Akagaki, and 7 Laffer. To plead a claim for breach of contract under California law, a plaintiff must 8 allege: “(1) existence of the contract; (2) plaintiff’s performance or excuse for 9 nonperformance; (3) defendant’s breach; and (4) damages to plaintiff as a result of the 10 breach.” Appling v. Wachovia Mortg., FSB, 745 F. Supp. 2d 961, 974 (N.D. Cal. 2010) 11 (quoting CDF Firefighters v. Maldonado, 158 Cal. App. 4th 1226, 1239 (Ct. App. 2008)). 12 Defendants advance two arguments why the breach of contract claim should be 13 dismissed. 14 First, defendants contend that plaintiff has not attached the operative agreements 15 to the complaint, nor has plaintiff sufficiently alleged the legal effect of the agreements. 16 Mtn. at 8. “To state a cause of action for breach of contract, it is absolutely essential to 17 plead the terms of the contract either in haec verba or according to legal effect.” Langan 18 v. United Servs. Auto. Ass’n, 69 F. Supp. 3d 965, 979 (N.D. Cal. 2014) (citing Twaite v. 19 Allstate Ins. Co., 216 Cal. App. 3d 239, 252 (Ct. App. 1989)). “A plaintiff fails to 20 sufficiently plead the terms of the contract if he does not allege in the complaint the terms 21 of the contract or attach a copy of the contract to the complaint.” Id. (citing Twaite, 216 22 Cal. App. 3d at 252). “While it is unnecessary for a plaintiff to allege the terms of the 23 alleged contract with precision, the Court must be able generally to discern at least what 24 material obligation of the contract the defendant allegedly breached.” Id. (citing James 25 River Ins. Co. v. DCMI, Inc., C 11–06345 WHA, 2012 WL 2873763 at *3 (N.D. Cal. July 26 12, 2012)). 27 Plaintiff alleges that Holzman, Akagaki, and Laffer each entered into an 1 ¶¶ 19–20, 22. The complaint further alleges that each agreement required the respective 2 party to only use Albert’s confidential, proprietary, and trade secret information for 3 legitimate business purposes, safeguard such information, comply with Albert’s 4 acceptable use policies, return all of Albert’s information in their possession when their 5 employment ceased, and disclose and obtain approval for engaging in competing 6 business activities during the term of their employment. Id. ¶ 23. These allegations are 7 sufficient to permit defendants to discern the material obligations (i.e., complying with 8 acceptable use policy or safeguarding trade secrets and confidential information) that 9 they allegedly breached and, thus, are sufficient to meet the first element, the existence 10 of a contract. 11 Second, defendants argue that plaintiff’s breach of contract claim is coextensive 12 with (or derivative of) its trade secret claims. Mtn. at 8. Accordingly, defendants contend 13 that, to the extent there is no plausible allegation of a trade secret, there is no breach of 14 the contract. Id. Because plaintiff has alleged a valid misappropriation of trade secrets 15 claim, then defendants’ argument fails. Moreover, the breach of contract claim is not 16 coextensive with the misappropriation of trade secret claims. Plaintiff alleges that the 17 employment agreements required defendants to safeguard not just Albert’s trade secrets, 18 but also any “confidential and proprietary information.” Compl. ¶ 23. Trade secrets are 19 defined by statute, but terms such as confidential and proprietary information are defined 20 by the contract. Thus, a defendant may breach a contract for disclosing confidential 21 information that does not constitute a trade secret. Because there are two independent 22 bases for finding breach, plaintiff has met the third element of a breach of contract claim. 23 With regard to the second element, neither party disputes that plaintiff performed 24 its obligations. With regard to the fourth element, plaintiff alleges that it has been 25 damaged by the breach of contract and defendants do not dispute the damages element. 26 For the foregoing reasons, defendants’ motion to dismiss plaintiff’s third cause of action 27 for breach of contract is DENIED. 1 Plaintiff brings a claim for tortious inducement to breach of contract against 2 defendants Holzman, Akagaki, and TFO. To state a cause of action for intentional 3 interference (i.e., tortious inducement) with contractual relations, a plaintiff must show: 4 “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this 5 contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the 6 contractual relationship; (4) actual breach or disruption of the contractual relationship; 7 and (5) resulting damage.” Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal. 3d 1118, 8 1126 (1990) (citations omitted). 9 Defendants advance two arguments in response to this claim. First, they argue 10 plaintiff’s allegations are vague and conclusory. Mtn. at 8–9. Second, defendants 11 contend that, because California presumes an “at-will” employment relationship, plaintiff 12 cannot, as a matter of law, maintain a claim for tortious inducement to breach of contract. 13 Id. at 9. 14 First, the complaint is not so vague and conclusory as to warrant dismissal. 15 Plaintiff alleges that employment agreements existed between Albert’s and its employees 16 and that defendants knew of the terms of those agreements. Compl. ¶¶ 74–75. These 17 allegations are sufficient to meet the first and second elements of the claim. On 18 information and belief, plaintiff contends that Holzman induced Akagaki to breach his 19 contractual obligations to Albert’s and that Holzman, Akagaki, and TFO induced Laffer to 20 breach his obligations. Id. ¶¶ 76–79. These allegations are conclusory and restate the 21 elements of the claim. 22 However, the complaint goes beyond these conclusory allegations to allege the 23 following wrongful, intentional acts: in and around March 2018, Holzman recruited 24 Akagaki to join him in the plan to compete against Albert’s, while Akagaki remained 25 employed at Albert’s. Id. ¶ 34. Holzman and Akagaki then directly recruited other 26 Albert’s employees to provide trade secrets to Holzman to develop a business model for 27 competing with Albert’s. Id. These factual allegations, which the court must accept as 1 their contracts by sharing trade secrets and confidential information and that Akagaki and 2 Laffer did not receive permission to pursue outside economic opportunities. This is 3 sufficient to meet the third element. Because plaintiff has stated a claim for breach of 4 contract, it meets the fourth element with respect to Akagaki and Laffer’s breach of their 5 contracts.1 6 Second, defendants argue a tortious inducement claim cannot be brought with 7 regard to “at-will” employment. Mtn. at 9. Because California law presumes at-will 8 employment, defendants argue plaintiff’s fourth claim cannot be brought as a matter of 9 law under the theory that if an employee can end his or her employment at will, a 10 defendant cannot improperly induce that employee to end employment that can be 11 terminated at any time. 12 The California Supreme Court’s opinion in Reeves v. Hanlon, 33 Cal. 4th 1140, 13 1144 (2004), is particularly relevant to this claim. Reeves examined whether a plaintiff 14 could state a claim for intentional interference with contractual relations in the context of 15 an at-will employment. There, the court held 16 that a plaintiff may recover damages for intentional interference with an at-will employment relation under the same California 17 standard applicable to claims for intentional interference with prospective economic advantage. That is, to recover for a 18 defendant’s interference with an at-will employment relation, a plaintiff must plead and prove that the defendant engaged in an 19 independently wrongful act—i.e., an act “proscribed by some constitutional, statutory, regulatory, common law, or other 20 determinable legal standard”—that induced an at-will employee to leave the plaintiff. 21 22 Reeves, 33 Cal. 4th at 1152–53 (emphasis added) (quoting Korea Supply Co. v. 23 Lockheed Martin Corp., 29 Cal. 4th 1134, 1159 (2003)). Thus, to maintain a cause of 24 action for intentional inducement of contractual relations, plaintiff must plead that 25 defendants engaged in an independently wrongful act. See also Ixchel Pharma, LLC v. 26 1 The complaint alleges that “TFO, Holzman and Akagaki knowingly and intentionally 27 induced Laffer and other of Albert’s employees to breach contractual obligations.” 1 Biogen, Inc., 930 F.3d 1031, 1037 (9th Cir. 2019) (“The California Supreme Court 2 subsequently determined [in Reeves] that in order to state a claim for an intentional 3 interference with contractual relations in the context of an at-will employment contract, a 4 plaintiff also has to plead an independently wrongful act.” (citation omitted)). 5 Plaintiff has pled two independently wrongful acts. First, plaintiff alleges 6 misappropriation of trade secret claims. For example, plaintiff alleges that Holzman 7 induced Akagaki and Laffer to breach their respective confidentiality obligations to 8 Albert’s. Compl. ¶¶ 76–77. As noted above, CUTSA supersedes this portion of the claim 9 because it relies entirely on misappropriation. However, plaintiff also alleges that 10 Akagaki and Laffer breached their contracts by failing to disclose and seek permission 11 from Albert’s before pursuing economic opportunities in competition with Albert’s. Id. 12 ¶¶ 78–79. This wrongful conduct does not involve misappropriation of trade secrets or 13 confidential information and is not superseded. Finally, plaintiff alleges defendants’ 14 conduct caused it harm, which is sufficient to meet the fifth element. 15 For foregoing reasons, defendants’ motion to dismiss plaintiff’s fourth cause of 16 action for tortious inducement to breach of contract is DENIED. 17 5. Fifth Claim: Tortious Interference with Business 18 Relationship/Contract 19 Plaintiff’s fifth cause of action is for tortious interference with business 20 relationship/contract between Albert’s and its customers and business partners alleged 21 against defendants Holzman, Akagaki, and TFO. As with the fourth claim, the elements 22 to state a cause of action for intentional interference with contractual relations are: “(1) a 23 valid contract between plaintiff and a third party; (2) defendant’s knowledge of this 24 contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the 25 contractual relationship; (4) actual breach or disruption of the contractual relationship; 26 and (5) resulting damage.” Pac. Gas & Elec., 50 Cal. 3d at 1126. A plaintiff may bring a 27 tortious interference tort where the defendant induces “a party to a contract to terminate 1 where a defendant’s interference “makes enjoyment of a contract more expensive or 2 burdensome.” Id. 3 As an initial matter, the law is not clear whether Reeves requires plaintiff to plead 4 an independent wrongful act where, as here, the contract at issue is not employment 5 related. See Ixchel Pharma, 930 F.3d at 1038 (certifying question to California Supreme 6 Court whether Reeves’ wrongful-act requirement applies only in the context of at-will 7 employment contracts). Regardless of how the California Supreme Court answers this 8 question, CUTSA supersedes plaintiff’s claim. 9 To demonstrate defendant’s intentional acts, plaintiff alleges misappropriation of 10 trade secrets, wrongful use of confidential information, and unlawful business tactics. 11 Paragraph 85 sums up the wrongful means defendants used: 12 Albert’s is informed and believes and, based thereon, alleges that Defendants have induced or attempted to induce Albert’s 13 customers, suppliers, and current venture partners to work with Defendants instead of Albert’s, using wrongful means. Upon 14 information and belief, Defendants’ interference has been accomplished using wrongful means including, but not limited 15 to, Defendants’ wrongful use of misappropriated trade secrets, Albert’s confidential information and unlawful business tactics. 16 17 Compl. ¶ 85. These allegations demonstrate that misappropriation and use of 18 confidential information are necessary to plaintiff’s claim. While the complaint references 19 “unlawful business tactics,” it does not further elaborate on what such conduct entailed or 20 how it supports the claim. Without the misappropriation-related conduct, plaintiff has not 21 alleged an intentional act and, therefore, the claim is preempted by CUTSA. 22 For the foregoing reasons, defendants’ motion to dismiss plaintiff’s fifth claim for 23 tortious interference with business relationships/contract is GRANTED. 24 6. Sixth Claim: Breach of Duty of Loyalty 25 Plaintiff alleges a breach of duty of loyalty claim against Akagaki and Laffer based 26 on their conduct while employed by Albert’s. “To establish a breach of fiduciary duty, a 27 plaintiff must show ‘(1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and 1 Supp. 3d 961, 979 (N.D. Cal. 2015) (quoting People ex rel. Harris v. Rizzo, 214 Cal. App. 2 4th 921, 950 (Ct. App. 2013)). 3 a. Existence of Fiduciary Duty 4 Defendants do not contest that Akagaki and Laffer had a fiduciary duty to Albert’s. 5 See Mtn. at 10–11. Because defendants do not oppose this element, the court finds that 6 plaintiff has sufficiently alleged the existence of a fiduciary duty.2 7 b. Breach of Fiduciary Duty 8 With respect to breach of the fiduciary duty, the parties both contend Bancroft- 9 Whitney help their respective cases. There, the California Supreme Court dealt with the 10 extent to which a corporate officer may prepare to leave his current employer before such 11 conduct amounts to a breach of the officer’s fiduciary duty. See Bancroft-Whitney, 64 12 Cal. 2d at 345–46. In Bancroft-Whitney, the president of a publishing company signed a 13 contract with a competitor but remained employed with his first employer for a month. 14 During that time, he provided the competitor with a list of employees, their current 15 salaries, and solicited those employees to come work with him at the new company. Id. 16 at 330–31. The court noted that, generally, an officer may prepare to compete prior to 17 resigning his office. Id. at 346. However, the court reasoned that an officer may not 18 19 2 Plaintiff cites California Labor Code sections 2860 and 2863 as the source of the fiduciary duty. “There are two kinds of fiduciary duties—those imposed by law and those 20 undertaken by agreement.” GAB Bus. Servs., Inc. v. Lindsey & Newsom Claim Servs., Inc., 83 Cal. App. 4th 409, 416 (Ct. App. 2000) (citations omitted), overruled on other 21 grounds by Reeves v. Hanlon, 33 Cal. 4th 1140 (2004). “Fiduciary duties are imposed by law in certain technical, legal relationships such as those between partners or joint 22 venturers, husbands and wives, guardians and wards, trustees and beneficiaries, principals and agents, and attorneys and clients.” Id. The court notes that California law 23 does not clearly state whether all employees (including lower-level employees) owe a fiduciary duty to their employer. Compare GAB Bus. Servs., 84 Cal. App. 4th at 420–21 24 (“[A]n officer who participates in management of the corporation, exercising some discretionary authority, is a fiduciary of the corporation as a matter of law. Conversely, a 25 ‘nominal’ officer with no management authority is not a fiduciary. Whether a particular officer participates in management is a question of fact.”), with Erhart v. BofI Holding, 26 Inc., 387 F. Supp. 3d 1046, 1055 (S.D. Cal. 2019) (“During the term of employment, an employer is entitled to its employees’ ‘undivided loyalty.’” (quoting Fowler v. Varian 27 Assocs., Inc., 196 Cal. App. 3d 34, 41 (Ct. App. 1987))). However, because defendants 1 solicit customers or do other acts in direct competition to the current business prior to 2 leaving that business. Id. at 346 n.10. The court determined that the officer breached his 3 fiduciary duty when “he supplie[d] the competitor with a selective list of the corporation’s 4 employees . . . together with the salary the corporation [was] paying the employee and a 5 suggestion as to the salary the competitor should offer in order to be successful in 6 recruitment.” Id. at 350–51. 7 Defendants argue that Akagaki and Laffer were only working with Holzman to 8 identify business opportunities (i.e., preparing to compete) and therefore did not breach 9 their duty to Albert’s. Mtn. at 10. Plaintiff responds that the complaint includes several 10 factual allegations of actions by Laffer and Akagaki, while employed by Albert’s, that go 11 beyond preparing to leave. Opp. at 16–17. 12 The facts here are similar to the direct competition outlined in and prohibited by 13 Bancroft-Whitney. For instance, plaintiff alleges that Laffer “commenced working for 14 TFO” while employed by Albert’s and did not disclose his employment with TFO to 15 Albert’s. Compl. ¶ 92. Akagaki and Holzman recruited other Albert’s employees to 16 provide trade secrets to Holzman in order for Holzman to develop a competing business 17 model. Id. ¶ 34; cf. Bancroft-Whitney, 64 Cal. 2d at 346 n.10 (“Comment e of section 393 18 of the Restatement Second of Agency provides that an agent can make arrangements to 19 compete with his principal even before the termination of the agency, but that he cannot 20 properly use confidential information peculiar to his employer’s business and acquired 21 therein.”). Therefore, plaintiff meets the second element. 22 c. Damage and Economic Loss Rule 23 Plaintiff alleges that it was proximately damaged by Akagaki and Laffer’s acts, 24 which defendants do not contest. Rather, defendants contend that the economic loss 25 rule bars a duty of loyalty claim because the claim is actually a breach of contract claim. 26 Mtn. at 10. 27 The economic loss rule provides: because the product he bought is not working properly, his 1 remedy is said to be in contract alone, for he has suffered only “economic losses.” This doctrine hinges on a distinction drawn 2 between transactions involving the sale of goods for commercial purposes where economic expectations are 3 protected by commercial and contract law, and those involving the sale of defective products to individual consumers who are 4 injured in a manner which has traditionally been remedied by resort to the law of torts. 5 6 Robinson Helicopter Co. v. Dana Corp., 34 Cal. 4th 979, 988 (2004) (internal quotation 7 marks omitted) (quoting Neibarger v. Universal Coops., Inc., 486 N.W.2d 612, 615 (Mich. 8 1992)). The predicate for applying the economic loss rule is breach of a contract. See id. 9 at 989–90; see also Giles v. Gen. Motors Acceptance Corp., 494 F.3d 865, 873 (9th Cir. 10 2007) (“The economic loss doctrine provides that certain economic losses are properly 11 remediable only in contract.”). 12 Here, plaintiff’s breach of duty of loyalty claim is a based on a breach of fiduciary 13 duty and plaintiff does not allege the duty arose by contractual obligation. The fiduciary 14 duty, therefore, arises as a matter of law. See GAB Bus. Servs., 83 Cal. App. 4th at 416. 15 Accordingly, the economic loss rule is not applicable. For the foregoing reasons, 16 defendants’ motion to dismiss plaintiff’s sixth claim for breach of fiduciary duty is 17 DENIED. 18 7. Seventh Claim: Tortious Inducement to Breach of Duty of Loyalty 19 Defendants argue that there is no cause of action for tortious inducement to 20 breach the duty of loyalty. Mtn. at 12. Plaintiff responds that inducement to breach the 21 duty is recognized and cites cases that purport to stand for that proposition. Opp. at 18. 22 “Under California law, inducement of breach of fiduciary duty is not a cognizable 23 cause of action.” Dung Dang v. Citimortgage, Inc., No. SACV09-00858-CJC, 2010 WL 24 11520161, at *2 (C.D. Cal. Mar. 11, 2010) (citing 1–800 Contacts, Inc. v. Steinberg, 107 25 Cal. App. 4th 568, 588 (Ct. App. 2003)). Instead, California courts construe inducement 26 claims as either conspiracy to breach a fiduciary duty or aiding and abetting a breach of 27 fiduciary duty. See 1-800 Contacts, 107 Cal. App. 4th at 588 & n.15. Indeed, a case 1 an aiding and abetting framework. Opp. at 18 (citing Nasrawi v. Buck Consultants LLC, 2 231 Cal. App. 4th 328 (Ct. App. 2014)). 3 “The elements of a claim for aiding and abetting a breach of fiduciary duty are: (1) 4 a third party’s breach of fiduciary duties owed to plaintiff; (2) defendant’s actual 5 knowledge of that breach of fiduciary duties; (3) substantial assistance or encouragement 6 by defendant to the third party’s breach; and (4) defendant’s conduct was a substantial 7 factor in causing harm to plaintiff.” Nasrawi, 231 Cal. App. 4th 328, 343 (citations 8 omitted). 9 Because plaintiff sufficiently pleads its sixth claim for breach of fiduciary duty by 10 Akagaki and Laffer, that finding establishes the first element here. With regard to the 11 second element, Holzman, as a former Albert’s employee, had actual knowledge of 12 Akagaki and Laffer’s duty to Albert’s. E.g., Compl. ¶ 19. With respect to the third 13 element, plaintiff alleges an affirmative step by Holzman because: “Holzman recruited 14 Akagaki to join him in the plan to compete against Albert’s” and “Holzman and Akagaki 15 then directly recruited other of Albert’s key employees to provide Albert’s Trade Secrets.” 16 Id. ¶ 34. Further, Laffer attended an industry summit while he was employed by Albert’s, 17 but TFO paid for Laffer’s registration to attend the summit. Id. ¶ 40. Plaintiff alleges that 18 Laffer registered to attend as a vice president for TFO and TFO publicized that Laffer and 19 Holzman would attend the summit as representatives of TFO. Id. ¶¶ 39, 41. These 20 allegations are sufficient to demonstrate substantial assistance or encouragement from 21 Holzman and TFO to Akagaki and Laffer to breach their respective duties meeting the 22 third element. 23 This claim is also brought against Akagaki, but plaintiff only alleges that he 24 assisted or encouraged unnamed Albert’s employees to breach their duties. Id. ¶ 101. 25 Because the details as to Akagaki’s role are unclear, there are not sufficient allegations to 26 show substantial assistance or encouragement. Finally, it is plausible that Holzman’s 27 actions resulting in Akagaki’s and Laffer’s breaches were a substantial factor in causing 1 For the foregoing reasons, defendants’ motion to dismiss plaintiff’s seventh cause 2 of action for inducement of breach of fiduciary duty (properly understood as aiding and 3 abetting a breach of fiduciary duty) as alleged against Holzman and TFO is DENIED. 4 Defendants’ motion to dismiss plaintiff’s seventh claim as alleged against Akagaki is 5 GRANTED. 6 8. Eighth Claim: Unfair Competition 7 Plaintiff’s eighth cause of action is for a violation of California’s unfair competition 8 law (“UCL”). Defendants argue that the unfair competition law only remedies a loss of 9 money or property and because plaintiff seeks restitution of profits, then its claim under 10 the unfair competition law is barred. Mtn. at 12. 11 The UCL creates a cause of action for business practices that are (1) unlawful, (2) 12 unfair, or (3) fraudulent. Cal. Bus. & Prof. Code. § 17200. Each “prong of the UCL 13 [provides] a separate and distinct theory of liability.” Lozano v. AT & T Wireless Servs., 14 Inc., 504 F.3d 718, 731 (9th Cir. 2007); see also Imax Corp. v. Cinema Techs., Inc., 152 15 F.3d 1161, 1169 (9th Cir. 1998) (discussing common law unfair competition). Here, 16 plaintiff’s UCL claim is premised on Akagaki and Holzman’s theft of “confidential and 17 proprietary trade secret information” and use of that information to induce Albert’s clients 18 to conduct business with TFO instead. Compl. ¶ 106. The complaint goes on to state 19 “[d]efendants knew that by stealing Albert’s confidential and proprietary information 20 without express permission . . . they were engaging in unfair business practice in violation 21 of California law, including in violation of California Civil Code sections 3426 et seq. and 22 the Defend Trade Secrets Act.” Id. ¶ 107. These allegations rely exclusively on 23 misappropriation of trade secrets and confidential information. Accordingly, CUTSA 24 supersedes the UCL claim. 25 For the foregoing reasons, defendants’ motion to dismiss plaintiff’s eighth cause of 26 action for violation of UCL is GRANTED. 27 9. Ninth Claim: Interference with Prospective Economic Advantage 1 elements of interference with prospective economic advantage are: 2 (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the 3 plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt 4 the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts 5 of the defendant. 6 Korea Supply, 29 Cal. 4th at 1153. “[I]nterference with prospective economic advantage 7 requires a plaintiff to allege an act that is wrongful independent of the interference itself.” 8 CRST Van Expedited, Inc. v. Werner Enters., Inc., 479 F.3d 1099, 1108 (9th Cir. 2007) 9 (citing Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal. 4th 376, 392–93 (1995)). 10 The dispositive element here is the independently wrongful act. Plaintiff alleges 11 that on or about March 3, 2018, “Holzman sent correspondence to prospective business 12 partners laying out a proposed plan to recreate PACO by poaching Albert’s customers, 13 suppliers and key employees.” Compl. ¶ 32. The correspondence included the names of 14 Albert’s customers and suppliers. Id. ¶ 33. These allegations are sufficiently factual to 15 allege an independent wrongful act. Yet these allegations demonstrate that the 16 independent wrongful act here was the misappropriation of trade secrets and non-trade 17 secret confidential information. 18 Plaintiff contends that the complaint alleges disruption to its business relationships 19 as an independent wrong. Opp. at 21. However, there are no factual allegations 20 elaborating or explaining what “intentional conduct” supports such a business disruption, 21 other than the misappropriation alleged in paragraphs 32 and 33. Because the 22 independent wrongful act involves misappropriation of trade secrets, CUTSA supersedes 23 plaintiff’s ninth claim. 24 For the foregoing reasons, defendants’ motion to dismiss plaintiff’s ninth cause of 25 action for intentional interference with prospective economic advantage is GRANTED. 26 CONCLUSION 27 For the foregoing reasons, defendants’ motion to dismiss plaintiff’s first and 1 motion to dismiss plaintiff’s third cause of action for breach of contract is DENIED; 2 defendants’ motion to dismiss plaintiff’s fourth cause of action for tortious inducement to 3 breach contract is DENIED; defendants’ motion to dismiss plaintiff’s fifth cause of action 4 for tortious interference with business relations/conduct is GRANTED and the claim is 5 DISMISSED WITH LEAVE TO AMEND; defendants’ motion to dismiss plaintiff’s sixth 6 cause of action for breach of fiduciary duty is DENIED; defendants’ motion to dismiss 7 plaintiff’s seventh cause of action for inducement of breach of fiduciary duty as alleged 8 against Holzman and TFO is DENIED and as alleged against Akagaki is GRANTED and 9 the claim against Akagaki is DISMISSED WITH LEAVE TO AMEND; defendants’ motion 10 to dismiss plaintiff’s eighth cause of action for UCL is GRANTED and the claim is 11 DISMISSED WITH LEAVE TO AMEND; and defendants’ motion to dismiss plaintiff’s 12 ninth claim for interference with prospective economic advantage is GRANTED and the 13 claims is DISMISSED WITH LEAVE TO AMEND. Plaintiff shall file any amended 14 complaint within 21 days of the date of this order. No new parties or causes of action 15 may be pleaded without leave of court or the agreement of all defendants. 16 IT IS SO ORDERED. 17 Dated: March 23, 2020 18 /s/ Phyllis J. Hamilton PHYLLIS J. HAMILTON 19 United States District Judge 20 21 22 23 24 25 26 27