Opinion
A098451
7-22-2003
GB PRODUCTS INTERNATIONAL CORPORATION, Plaintiff and Appellant, v. WEYERHAEUSER CO. et al., Defendants and Respondents.
In a previous action plaintiff GB Products International Corporation entered into a stipulated injunction prohibiting certain of its former employees (the Blankenship Defendants) from doing certain kinds of business with certain of plaintiffs customers. Plaintiff later brought this action seeking damages from several of the named customers (the Customer Defendants) on the ground that they aided and abetted the Blankenship Defendants violation of the stipulated injunction by doing business with them. On plaintiffs appeal from a judgment on demurrer, we have concluded that the Customer Defendants cannot be barred by the stipulated injunction from engaging in otherwise lawful business activities where they were neither named in the injunction nor parties to the proceeding which gave rise to it, where the conduct prohibited by the stipulated injunction had never been adjudged tortious or unlawful in any respect, and where the Customer Defendants did not personally engage in any prohibited conduct. Accordingly, we will affirm the judgment.
BACKGROUND
We glean the operative facts from the first amended complaint in this action (No. C01-01850) and other judicially noticeable materials included in the appellate record. We do not take judicial notice of matters outside the record, whether or not they might otherwise be judicially noticeable on a proper showing. We thus deny the request by Vegetable Growers Supply for judicial notice of supposed bankruptcy proceedings against William Blankenship. We do, however, take notice of pleadings and papers included in the present record that were originally filed in the two related actions described more fully below. Both of these related actions were, on plaintiffs motion, consolidated with this third action in the trial court.
From the materials thus properly before us it appears that on June 5, 1996, plaintiff filed action No. C96-02467 (the 1996 Action) against Bill Blankenship and Alan Padilla, alleging that they had committed various torts and breaches of contract by, among other things, competing with plaintiff, appropriating trade secrets, and soliciting plaintiffs customers, all while employed by plaintiff. The prayer sought damages and injunctive relief. The named defendants and one Joe Alvarez filed a cross-complaint. In January 1998, all parties, joined by Franklin Graphics, Franklin Digital Imaging, and Heath Blankenship, entered into a settlement agreement. In addition to mutual releases and waivers of claims, and an undertaking to dismiss the action, the agreement called for the payment of $ 20,000 into the trust account of the attorneys for the Blankenship Defendants, and for entry of a stipulated injunction.
These three parties along with William Blankenship and Joe Alvarez comprise the Blankenship Defendants.
Pursuant to the settlement agreement, the parties submitted to the court a "Stipulated Order Granting Injunction" (the stipulated injunction). Attached to the injunction as exhibits were lists of names bearing the heading "Customer List GB Products International." The injunction decreed that, by stipulation of the parties, the Blankenship Defendants and "all persons acting in concert or participating with them" were restrained for stated periods from (1) soliciting or contacting the listed customers, directly or indirectly, "for the purpose of performing, creating, selling, manufacturing, or otherwise providing art work, negatives, printing plates, print cards or plate mounting"; (2) providing art work, etc., to the listed customers; (3) profiting or otherwise deriving income from the provision of art work to the listed customers; (4) hiring employees of plaintiffs, or soliciting them for hire; and (5) engaging any third person to perform any of the prohibited acts for the benefit of any of the Blankenship Defendants. The injunction declared that, in addition to any other available remedy, any violation of its terms would render the Blankenship Defendants, or some of them, liable to plaintiff for $ 750 per violation.
Some of the restraints expired in 11 months, others in 15 months.
The trial court executed and filed the stipulated injunction on January 26, 1998. The Blankenship Defendants promptly violated the injunction, plaintiff alleges, by (1) communicating with listed customers for purposes of providing art work to them, (2) providing art work to them, (3) deriving income from such activities, and (4) retaining two other defendants, Robert Cartagena and Packaging Products Supply, Inc. (the Cartagena Defendants), to perform acts prohibited by the injunction for the benefit of the Blankenship Defendants. The complaint goes on to allege that the Blankenship Defendants participated in the "subterfuge" of telling listed customers that Cartagena was in business for himself when in fact he was an employee of the Blankenship Defendants. Plaintiff alleges that "by virtue of this subterfuge," the Blankenship Defendants and Cartagena Defendants contacted and did business with listed customers in violation of the stipulated injunction.
In April 1998 plaintiff initiated contempt proceedings against the Blankenship Defendants. When the matter first came up for trial, the trial court vacated the stipulated injunction. By opinion dated March 23, 2000, we reversed that order on procedural grounds. (G. B. Products International Corporation v. Bill Blankenship, March 23, 2000, No. A084275 [nonpub. opn.].) On remand, when the contempt matter again neared a trial date, plaintiff dismissed it.
Meanwhile, in December 2000, Plaintiff brought a second action, No. C00-05251, apparently asserting claims for damages based upon the Blankenship Defendants alleged violations of the injunction (the 2000 Action). The present record reveals little detail about this action, which apparently has little if any pertinence to the issues now before us.
Plaintiff filed the present action on May 11, 2001. Plaintiff did not join the Blankenship Defendants as parties, but instead asserted claims against the Cartagena Defendants and the respondents here, all of whom are identified as customers with whom the Blankenship Defendants allegedly dealt in violation of the stipulated injunction. Plaintiff alleged that after the court entered the injunction in the 1996 action, a copy thereof was given to each of the Customer Defendants along with "a letter advising them about the injunction and the prohibition of the [Blankenship Defendants] and the [Customer Defendants] from doing business with one another as provided" in the injunction. The Customer Defendants were thus aware, plaintiff alleges, that the Blankenship Defendants, and those acting in concert with them, were prohibited from doing specified kinds of business with the Customer Defendants. The Customer Defendants were also aware, according to plaintiff, "that they were prohibited from directly or indirectly conducting business with the [Blankenship Defendants]." (Italics added.) Despite this knowledge, they violated the injunction "including by doing business with the [Blankenship Defendants], communicating with them, and utilizing the services of them."
The Customer Defendants objected to the complaint by general demurrers, motions to strike, and motions for judgment on the pleadings. The trial court sustained the objections, reasoning in pertinent part that the Customer Defendants could not be liable for violating the prohibition against solicitation except as aiders and abettors, and that as the parties who were solicited, they could not be viewed as aiders and abettors. The court went on to note serious doubts about the constitutionality of the injunction insofar as it might be understood to restrain the Customer Defendants from communicating with the Blankenship Defendants. The court allowed plaintiff 20 days leave to amend.
Plaintiff then filed an amended complaint, which is the pleading now before us. It differs from the original complaint primarily in its attempt to allege facts supporting the assertion that the Customer Defendants aided and abetted the Blankenship Defendants violation of the stipulated injunction. Thus it alleges that, with knowledge of the injunction and its supposed application to them, the Customer Defendants "aided and assisted the [Blankenship Defendants] and the Cartagena Defendants in their efforts to circumvent and evade the prohibitions of the Injunction Judgment," and "aided and abetted the violation of the Injunction Judgment by the [Blankenship Defendants]," in that the Customer Defendants "knowingly and intentionally allowed, permitted and encouraged the [Blankenship Defendants] and the Cartagena Defendants[] solicitations of business and providing of services and products, all in violation of the Injunction Judgment." Plaintiff further alleges that the Customer Defendants "accepted business visits, telephone and written contacts from the [Blankenship Defendants] and/or the Cartagena Defendants which were for purposes violative of the Injunction Judgment," "accepted invoices . . . and paid such invoices, which were for services and products obtained in violation of the Injunction Judgment," "having been solicited and contacted by the [Blankenship Defendants] and/or the Cartagena Defendants caused the . . . providing of art work . . . for themselves by the [Blankenship Defendants] and/or the Cartagena Defendants," "with . . . advance knowledge that the [Blankenship Defendants] were prohibited from the acts and conduct identified in the Injunction Judgment[,] acquiesced in and participated in the violation of that Injunction Judgment by the [Blankenship Defendants] and the Cartagena Defendants," and "paid monies to the [Blankenship Defendants] and the Cartagena Defendants for . . . provision of art work . . ., thereby permitting, assisting and/or aiding the [Blankenship Defendants] in violating the Injunction Judgment by profiting or otherwise deriving income from such prohibited activities."
Plaintiff further alleges that the acts of defendants "were performed or otherwise undertaken with advance knowledge of the [stipulated injunction], and not as the innocent act of an unknowing third party . . . . Without the [Customer Defendants] active and willing participation the [Blankenship Defendants] and the Cartagena Defendants would have been unable to profitably violate the Injunction Judgment. Further, the [Customer Defendants] . . . took no action and made no effort to attack the application of the Injunction Judgment to them, and made no effort to obtain any further explanation of the limits of the Injunction Judgment or its meaning, prior to the acts alleged herein . . . . The [Customer Defendants], and/or one or more of them, . . . were aware at all relevant times that the Cartagena Defendants were . . . communicating [and] selling for and on behalf of the [Blankenship Defendants] for the purpose of evading the prohibitions of the Injunction Judgment."
In sum, the Customer Defendants, with knowledge that the Blankenship Defendants were violating the injunction, failed to prevent such violation but rather accepted communications from the Blankenship Defendants (or their proxies, the Cartagena Defendants), placed orders with them, and paid for the goods or services ordered, thus making it possible for the Blankenship Defendants (and Cartagena Defendants) to violate the injunction.
The second, third, and fourth causes of action seek to state claims, respectively, for statutory and common law unfair competition, conspiracy to violate the stipulated injunction, and negligent or intentional interference with contractual or economic advantage. In the first cause of action plaintiff alleges that it was damaged as a result of the stated conduct in the amounts of "$ 750.00 per violation." In that and each succeeding cause of action plaintiff also alleges damages "in an amount according to proof . . . but in excess of $ 25,000.00." Plaintiff further alleges that the Customer Defendants acted wilfully, and with intent to frustrate the processes of the court and deny plaintiff the benefits of the judgment, so as to warrant an award of exemplary damages.
In response to this pleading the Customer Defendants again demurred. The trial court sustained the demurrers without leave to amend and ordered the action dismissed. Plaintiff filed this timely appeal.
The trial courts order sustaining the demurrers would ordinarily be followed by a separate judgment of dismissal, in which case an appeal would lie only from the latter. (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 119, p. 183.) However the trial courts written decision here concluded with the statement, "The action is ORDERED DISMISSED . . . ." We view this order as tantamount to a judgment for purposes of appeal. (See Kirkpatrick v. City of Oceanside (1991) 232 Cal. App. 3d 267, 270, fn. 1, 283 Cal. Rptr. 191; 9 Witkin, supra, Cal. Procedure, § 120, p. 184.)
I.
DAMAGES FOR VIOLATION OF STIPULATED INJUNCTION
Plaintiffs first cause of action is entitled "Tort Claim for Damages . . . for Violations of Injunction." The question is whether it states facts sufficient to constitute a cause of action, or could be amended to do so. We agree with the trial court that the answer to both questions is "No."
California law is unsettled as to the extent to which a violation of an injunction gives rise to a claim for compensatory damages. (See Freeman v. San Diego Assn. of Realtors (1999) 77 Cal.App.4th 171, 203, fn. 36 ["some courts have stated in dicta that such an action is available"]; 6 Witkin, Cal. Procedure (2003 supp.) Provisional Remedies, § 395A, p. 53 [to same effect].) We know of only one case which has actually permitted such a claim. (Kirby v. San Francisco Sav. & Loan Soc. (1928) 95 Cal.App. 757, 273 P. 609 (Kirby).) Later in this opinion we express doubts about another aspect of that decision. (See p. 13, below.) Nonetheless we will assume for present purposes that if plaintiff proved a violation of the injunction by the Customer Defendants, plaintiff would be entitled to recover compensatory damages.
It is undisputed that the injunction did not, by its terms, purport to restrain the conduct of the Customer Defendants. They were identified in exhibits to the injunction as persons with whom the Blankenship Defendants were forbidden to do business, but the injunction did not purport to name them as persons whose own conduct was restrained. They were therefore subject to the injunction, if at all, only as "persons acting in concert or participating with" the Blankenship Defendants. The question thus presented is whether this phrase operated to subject the Customer Defendants to liability for engaging in business transactions from which, as they allegedly knew, the Blankenship Defendants were forbidden to participate.
An ordinary civil injunction, such as the one before us, is in no sense binding on the world, but is a private remedy between, and generally affecting only, the parties to the litigation from which it issues. "An injunction, by its very nature, applies only to a particular group (or individuals) and regulates the activities . . . of that group. It does so . . . because of the groups past actions in the context of a specific dispute between real parties . . . . The court hearing the action is charged with fashioning a remedy for a specific deprivation, not with the drafting of a statute addressed to the general public." (Madsen v. Womens Health Center, Inc. (1994) 512 U.S. 753, 762, 129 L. Ed. 2d 593, 114 S. Ct. 2516 (Madsen); see People ex rel. Gwinn v. Kothari (2000) 83 Cal.App.4th 759, 765 (Gwinn) ["`"An injunction is obviously a personal decree . . . ." [P] Injunctions are not effective against the world at large."].)
An injunction must be limited in its reach, in part because it is "fashioned and enforced without the safeguards that attend the passage and govern the enforcement of more general prohibitions" (People v. Conrad (1997) 55 Cal.App.4th 896, 902 (Conrad)), and also because it poses greater risks of "discriminatory application" than are presented by "general ordinances" (Madsen, supra, 512 U.S. at p. 764). The limited reach of injunctions also reflects fundamental limitations on judicial power. As Judge Learned Hand wrote, a court of equity "is not vested with sovereign powers to declare conduct unlawful; its jurisdiction is limited to those over whom it gets personal service, and who therefore can have their day in court." (Alemite Mfg. Corp. v. Staff (2d Cir. 1930) 42 F.2d 832, 832-833; see Planned Parenthood Golden Gate v. Garibaldi (2003) 107 Cal.App.4th 345, 357 (Garibaldi), ["an injunction is a `judicial remedy tailored to specific circumstances rather than "a legislative choice regarding the promotion of particular societal interests""].)
It has never been held, however, that courts of equity are powerless to restrain the conduct of persons who, with notice of an injunction, participate directly in its violation under circumstances justifying its application to them. Thus, providing the persons sought to be charged have notice of the injunction, a decree may be found to restrain the conduct of unnamed members of an enjoined group or class of persons-such as a labor union or unincorporated association-who possess a common interest or occupy a common position in relation to the matters at issue. (People ex rel. Gallo v. Acuna (1997) 14 Cal.4th 1090, 1124, 929 P.2d 596 (Gallo).) This is because "such groups can act only through the medium of their membership," so that the decree may be rendered ineffectual if it is unable to reach "`classes of persons through whom the enjoined person may act, such as agents, servants, employees, aiders [and] abettors . . . ." (Ibid.) Similarly, an injunction running against a corporation or similar entity may bind officers or directors through whom the entity must necessarily act. (See Katenkamp v. Superior Court (1940) 16 Cal.2d 696, 700, 108 P.2d 1.)
These principles have no application to plaintiffs effort to bind the Customer Defendants to the stipulated injunction at issue here. There is no suggestion that the Customer Defendants and the Blankenship Defendants belonged to the same group or class or were similarly situated and aligned with respect to the matters embraced in the stipulated injunction. Nor is it suggested that the Customer Defendants acted as a medium for, or representatives of, the Blankenship Defendants. We note that the complaint contains the familiar boilerplate allegation that each defendant was acting as an agent for all of the other defendants. However plaintiff places no reliance on this allegation on appeal. Furthermore, as a matter "pleaded in general or conclusionary terms," such an allegation must yield to any "inconsistent specific allegation" appearing elsewhere in the pleading. (Clack v. State of California ex rel. Dept. Pub. Wks. (1969) 275 Cal. App. 2d 743, 748, 80 Cal. Rptr. 274; see Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, 827 ["specific allegations control general pleadings"]; Stowe v. Fritzie Hotels, Inc. (1955) 44 Cal.2d 416, 422, 282 P.2d 890 ["Where there is any inconsistency between the specific allegations upon which a conclusion must be based and the conclusion, the specific allegations control."]; see also Moore v. Regents of University of California (1990) 51 Cal.3d 120, 134, fn. 12, 271 Cal. Rptr. 146, 793 P.2d 479 [describing similar allegation as "egregious boilerplate"].) Here the general conclusory assertion of agency must give way to the more specific allegations predicating defendants liability on acceptance of solicitations from, placement of orders with, receipt of deliveries from, and payment of funds to the Blankenship Defendants. These allegations reveal a relationship of purchaser and vendor, not agent and principal. Plaintiff can thus bring defendants within the injunction only by competently alleging that by purchasing goods and services from the Blankenship Defendants, the Customer Defendants acted in concert with them, or aided and abetted their violations of the injunction.
It appears that, for present purposes, the phrases "acting in concert" and "aiding and abetting" are substantially synonymous. The criminal cases recognize a potential divergence in meaning, but we have been directed to no case actually drawing a meaningful distinction between the two concepts. (See People v. Calimee (1975) 49 Cal. App. 3d 337, 340, 122 Cal. Rptr. 658; People v. Wheeler (1977) 71 Cal. App. 3d 902, 906-907, 139 Cal. Rptr. 737; People v. Adams (1993) 19 Cal.App.4th 412, 445-446; 1 Witkin & Epstein, Cal. Criminal Law (3d ed. 2000) Introduction to Crimes, § 80, p. 128; cf. Rest.2d, Torts, § 876. p. 315 [liability in tort for acting in concert].)
We have already noted that basic conceptions of due process and judicial power are implicated when an injunction is extended to persons who were neither named in it nor represented in the proceedings from which it arose. Such extension marks a potential departure from the general rule that an injunction is a private remedy intended only to adjust the rights of the parties participating in the litigation, and from the even more basic principle that courts may not adjudicate the rights of persons not before them. Any extension of the injunctive power to unnamed third parties must therefore be carefully constrained by the purposes that justify it, so as to avoid violating these fundamental principles.
A primary rationale for extending an injunction to unnamed persons is to prevent named parties from evading its effect by violating it through agents, substitutes, or proxies. "Enjoined parties may not play jurisdictional shell games; they may not nullify an injunctive decree by carrying out prohibited acts with or through nonparties to the original proceeding." (Gwinn, supra, 83 Cal.App.4th at p. 767, italics added.) We have no doubt that an unnamed party who knowingly acts in the place and stead of an enjoined party thereby aids and abets the latters violation in a manner which justifies appropriate relief. This is the precise situation presented in one of the cases on which plaintiff most heavily relies, i.e., In re Morford (1934) 137 Cal.App. 662, 31 P.2d 406 (Morford). There the court upheld a finding of contempt as against parties who, after entry of an injunction against former employees of the plaintiff, "entered into a plan or conspiracy with the enjoined defendants to disobey and evade such order" by, in essence, assuming the business and accounts of the former employees. (Id. at pp. 664-665, italics added.) The court quoted Mayor of the City of New York v. New York & Staten Is. Ferry Co. (1876) 64 N.Y. 622, 624, as follows: "`Injunction orders must be fairly and honestly obeyed, and not defeated by subterfuges and tricks on the part of those bound to obey them. They may be violated by aiding, countenancing and abetting others in violation thereof as well as doing it directly; and courts do not look with indulgence upon schemes, however skillfully devised, designed to thwart their orders." (Morford, supra, at p. 666, italics added.)
So cited in New York caselaw. (E.g., Ellenberg v. Brach (1982) 450 N.Y.S.2d 589, 591 [88 App.Div.2d 899, 901].) The decision is cited in Morford as People v. Pendleton (1876) 64 N.Y. 622, 624.
These principles would seem to apply to plaintiffs allegations concerning the Cartagena Defendants, who are said to have joined the Blankenship Defendants in a "subterfuge," engaging in prohibited acts on their behalf while pretending to be in business for themselves. Such an allegation, if proven, falls squarely within the precedent of Morford and points to the type of "jurisdictional shell game" which justifies viewing an unnamed third party as an aider and abettor in an enjoined partys violation of an injunction.
However there is no suggestion that the Customer Defendants sought to engage in prohibited conduct on behalf or instead of, or as a screen or proxy for, the Blankenship Defendants. Indeed there is no suggestion that the Customer Defendants themselves engaged in any prohibited conduct. It is not alleged that they contacted listed customers, received prohibited profits, or attempted to hire plaintiffs employees. They performed no act prohibited by the injunction; they are alleged only to have failed to reject commercial solicitations by the Blankenship and Cartagena Defendants.
Nor does the complaint suggest that the Blankenship Defendants attempted to use the Customer Defendants to evade, circumvent, or subvert the injunction. There is no suggestion that, in doing so, the Customer Defendants acted on behalf, for the benefit, of anyone other than themselves. Nor did any conduct attributed to the Customer Defendants have any tendency to impede enforcement of the injunction against the persons named in it. So far as the complaint suggests, the conduct of the Customer Defendants had no effect whatever on any claim or remedy plaintiff might have against the Blankenship Defendants.
The concept of "jurisdictional shell games" thus appears wholly inapplicable to anything alleged against these defendants. Rather, the claim of aiding and abetting rests entirely on their having incidentally facilitated the Blankenship Defendants violations of the injunction by engaging in business transactions on their own behalf. To view such conduct as "aiding and abetting" would go beyond anything we find in the caselaw. Instead courts have repeatedly spoken of the power of an injunction to reach unnamed persons "through" whom a named person may act to accomplish its violation. In the leading case of Berger v. Superior Court (1917) 175 Cal. 719, 721, 167 P. 143, the court wrote, "It has been a common practice to make the injunction run also to classes of persons through whom the enjoined party may act, such as agents, servants, employees, aiders, abetters, etc., though not parties to the action, and this practice has always been upheld by the courts, and any of such parties violating its terms with notice thereof are held guilty of contempt for disobedience of the judgment. But the whole effect of this is simply to make the injunction effectual against all through whom the enjoined party may act, and to prevent the prohibited action by persons acting in concert with or in support of the claim of the enjoined party, who are in fact his aiders and abetters." (Italics added, some italics omitted; see Gallo, supra, 14 Cal.4th at p. 1125, italics added [quoting this passage and referring to "the familiar rule that both the organization and the members through which it acts are subject to injunctive relief"]; Ross v. Superior Court (1977) 19 Cal.3d 899, 906, 916, 141 Cal. Rptr. 133, 569 P.2d 727 [quoting the passage and holding that county supervisors, as agents for enjoined department of state government, were properly held in contempt for refusing to obey injunction].)
The allegations here do not fall within the pattern thus contemplated by the cases. Instead, plaintiff seeks to predicate liability on mere participation in an arms length business transaction from which the other party has been enjoined. No authority known to us supports such an extension of the injunctive power. Plaintiff places great reliance on Kirby, supra, 95 Cal.App. 757, where a wife sought to hold a bank liable for permitting her husband to withdraw sums from a community bank account after notice that he had been enjoined from such withdrawal in the course of the wifes divorce action. The reviewing court held that the wife adequately pleaded a cause of action against the bank for aiding and abetting the husbands violation of the injunction: "The complaint averred that the withdrawal of the deposit by Kirby was enjoined, and it sufficiently appears therefrom that the defendant knew the fact. It is also manifest from the situation disclosed by the pleading that without the defendants aid and co-operation such withdrawal was impossible. Taken in connection with these facts, the averment that `in violation and disregard of said restraining order and in prejudice to the rights of the plaintiff said defendant paid over and delivered to said Michael J. Kirby and said Michael J. Kirby received from said defendant the whole of said deposit . . .,[] was nevertheless sufficient to meet the objection raised by the general demurrer." (Id. at p. 760.) The court also rejected the banks contention that its conduct was blameless because the husband had the power under the then-governing statutes to make the withdrawal. "That the husband had such power may be conceded; but that, in the face of the restraining order he had not the right to do so as against his wife is, we think, equally clear." (Id. at 261.)
We decline to apply Kirby beyond its facts. No later case has followed it in actually imposing liability in comparable circumstances. We question the soundness of its reasoning, which seems to sidestep several difficult issues presented by the wifes claim. No attempt is made to analyze the banks obligations to the husband or the potential dilemma in which it was seemingly placed by his demand for withdrawal. Nor does the opinion provide any explanation for the wifes failure to join the bank in her request for an injunction. We think a failure to join foreseeable defendants in the injunction proceeding is itself a factor weighing against the later imposition of responsibility on them for alleged violations of the injunction. Because an injunction is a private remedy, the party seeking it has considerable control over its scope. In Kirby the wife could presumably have sought a restraining order against the bank where the account was obviously known to be held; here, plaintiff could have joined the Customer Defendants, who were identified in exhibits to the injunction but who were denied any opportunity to appear and defend their interests. In both cases the foreseeability of the potential involvement by the third party should militate against holding that party subject to the injunction on a theory of aiding and abetting.
This factor also distinguishes the situations involving evasion by proxy and those involving group or class defendants. In these situations the plaintiff may compellingly argue that he or she has no way of determining the identities of individuals who may later be recruited to violate the injunction, and that the court must have some flexibility to reach such persons. Here and in Kirby, however, the opposite is true: the plaintiff obviously knew in fact that any violation of the injunction would necessarily involve a third party whose identity was known. We can think of no reason to excuse plaintiff from its failure to name and join the parties it now seeks to bind.
This brings us to a critical feature of the present injunction, one that not only distinguishes it from Kirby but also furnishes a primary basis for our conclusion that it cannot support the cause of action plaintiff seeks to assert. An injunction constitutes a substantial impairment of the enjoined partys liberty. This curtailment of rights is typically justified, at least in part, by a judicial determination that the party enjoined has "abused those rights in the past." (Conrad, supra, 55 Cal.App.4th at p. 902; Garibaldi, supra, 107 Cal.App.4th at p. 352.) "`The courts . . . may not grant an . . . injunction so broad as to make punishable the conduct ofpersons who act independently and whose rights have not been adjudged according to law." (Gwinn, supra, 83 Cal.App.4th at p. 769, quoting Regal Knitwear Co. v. Board (1945) 324 U.S. 9, 13, 89 L. Ed. 661, 65 S. Ct. 478, italics added.)
The injunction in Kirby was issued by the court in the course of an ongoing adversary proceeding. It presumptively rested on an adjudication, if only a preliminary one, that the contemplated restraints were justified by past or threatened harm. The injunction before us is an entirely different creature. It is the product of a stipulation, which in turn resulted from a private agreement intended to compromise the settling parties conflicting claims. The injunction did not embody, and indeed there has never been, an adjudication that the conduct restrained was wrongful or unlawful, or that the injunction was warranted or justified on any other ground-any ground, that is, apart from the agreement of the persons immediately before the court. Such an agreement presumably reflects a private calculus concerning the effectiveness of the injunction to further or protect the stipulating parties interests. This is no substitute for the judicial weighing of evidence and equitable considerations on which a contested injunction must rest. The present injunction does not forcibly imply an admission by the Blankenship Defendants that their conduct was subject to restraint without their consent. The record affirmatively shows that they received other inducements than the compromise of potential liability, including a payment of $ 20,000. Nor does the conduct enjoined appear clearly wrongful or subject to restraint. On the contrary, as several respondents strenuously urge, prohibitions such as those reflected in the injunction arguably offend Business and Professions Code section 16600, which limits the power of an employer to restrain the competitive activities of former employees.
We mention this issue only to point out the debatable validity of the restraints embodied in the injunction. For purposes of this appeal, we need not and do not decide whether the injunction is enforceable against anyone other than the Customer Defendants. Nor did we impliedly decide any such issue in our previous decision. The only question then before us was whether the procedure employed in vacating the injunction was sound. It is fundamental that "a decision does not stand for a proposition not considered by the court." (People v. Harris (1989) 47 Cal.3d 1047, 1071, 255 Cal. Rptr. 352, 767 P.2d 619; Agnew v. State Bd. of Equalization (1999) 21 Cal.4th 310, 332, 981 P.2d 52.) We therefore emphatically reject plaintiffs assertions that we "carefully reviewed and upheld" the stipulated injunction and "gave it [our] blessing."
Even if it could be inferred from the stipulated injunction that the Blankenship Defendants had abused their rights in the past, or threatened to do so in the future, there was no basis for such an inference with respect to the Customer Defendants. So far as anything in this record shows, they were simply persons in business for themselves who, in purchasing certain commodities or services, "acted independently" of other defendants. (Gwinn, supra, 83 Cal.App.4th at p. 769.) Before they were charged with violation of the injunction, their own rights had never been "adjudged according to law." (Ibid.) No court had ever determined that they, or anyone in their position, should be restrained from entering lawful commercial transactions with whomever they chose. We do not believe that they could be subjected to the restraints of the present injunction on the mere stipulation of the parties to proceedings to which these defendants were strangers.
We recognize that numerous cases uphold stipulated injunctions and acknowledge their potential applicability to nonsignatories. We do not here take issue with those cases. We do hold that in this case, liability on the part of the defendants presently before us is and should be precluded by a combination of factors: (1) the failure to provide these defendants with prior notice or opportunity to be heard, despite obvious knowledge of their identities and their necessary involvement in any violation by the named defendants; (2) the absence from the injunction proceedings of any representative of these defendants or person similarly situated to them who might be expected to adequately protect their interests; (3) the provenance of the injunction as the product of a stipulation rather than a remedy crafted by the court in an adversary proceeding; (4) the absence of any adjudication that anyone subject to the injunction was guilty of any past abuse of rights; (5) the absence of any suggestion that these defendants themselves engaged in acts prohibited by the injunction, as distinct from incidentally facilitating such acts by others; and (6) the absence of any allegation that the conduct alleged against these defendants was, apart from the claimed violation of the injunction, wrongful or unlawful in any respect. We have no occasion to consider whether any lesser combination of these factors might warrant the result we reach here. We hold only that given the confluence of all of these factors, no cause of action is or can be stated against these defendants for violation of the stipulated injunction underlying the first cause of action.
II.
UNFAIR COMPETITION
Plaintiffs second cause of action incorporates all preceding allegations by reference and further alleges that defendants violated Business and Professions Code section 17200 (§ 17200) and committed common law unfair competition "by consummating an unlawful, unfair, and fraudulent business practice, designed to deprive Plaintiff of business, business opportunities, good will and of the protections and benefits of the Injunction Judgment." Plaintiff provides no more specific factual allegation in support of this assertion. The cause of action therefore necessarily rests on defendants supposed violation of the injunction. As we have already held, the complaint fails to competently allege a violation of the injunction by the Customer Defendants. Nor does plaintiff offer any satisfactory reason to suppose that the conduct alleged in the first cause of action-purchasing goods or services from the Blankenship Defendants-should be deemed unfair competition merely because the Blankenship Defendants thereby violated the injunction.
In any event it is now settled that "nonrestitutionary disgorgement of profits is not an available remedy in an individual action" under section 17200. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1152 (Korea Supply).) Rather, a private plaintiff suing on its own behalf is entitled to a money recovery only insofar as the relief sought is restitutionary, i.e., returns to the plaintiff monies given to the defendant or in which the plaintiff has an ownership interest. (Id. at pp. 1144-1145, 1148-1152.) Plaintiff does not seek any such relief here and we discern no basis to think that it could amend the complaint to do so. At most plaintiff prays for "disgorgement" of sums paid by these defendants to the Blankenship Defendants in supposed derogation of plaintiffs rights. (See id. at pp. 1144-1145, 1148-1149.) Such relief is unavailable to plaintiff under the statute.
Nor does plaintiff offer any basis to conclude that it has stated a cause of action under the common law of unfair competition. Indeed the Customer Defendants are not alleged to have been competitors of plaintiffs.
III.
CONSPIRACY
In its third cause of action plaintiff alleges that the defendants "knowingly and willfully conspired among themselves and the [Blankenship Defendants] to violate the Injunction Judgment, to aid the [Blankenship Defendants] in their effort to evade the effects and prohibitions of the Injunction Judgment, [and] to deprive Plaintiff of the protections which the Injunction Judgment was intended to provide." Defendants performed the acts previously alleged, plaintiff continues, "pursuant to, and in furtherance of, the conspiracy and above-alleged agreement. Defendants furthered the conspiracy by cooperation with, lending aid and encouragement to and/or ratifying and adopting the acts of the other defendants" to this action (i.e., the Cartagena Defendants) as well as the Blankenship Defendants.
"Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. [Citation.] By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy. [Citation.] In this way, a coconspirator incurs tort liability co-equal with the immediate tortfeasors." (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511, 869 P.2d 454 (Applied Equipment).) However, "tort liability arising from conspiracy presupposes that the coconspirator is legally capable of committing the tort, i.e., that he or she owes a duty to plaintiff recognized by law and is potentially subject to liability for breach of that duty." (Id. at p. 511; see id. at p. 514 ["Conspiracy is not an independent tort; it cannot create a duty or abrogate an immunity. It allows tort recovery only against a party who already owes the duty . . . ."].) In Chavers v. Gatke Corp. (2003) 107 Cal.App.4th 606, 614, we construed Applied Equipment to mean that an actionable civil conspiracy "can, as a matter of law, only be formed by parties who are already under a duty to the plaintiff, the breach of which will support a cause of action against them-individually and not as conspirators-in tort." (Italics omitted; see id. at p. 615, fn. 3 ["the defendant must have owed an independent duty of care running to the plaintiff"].)
Here the only arguable underlying tort is the violation of the injunction by the Blankenship and Cartagena Defendants, and the only arguable duty owed by the Customer Defendants to plaintiff is one arising from that injunction. In Section I, ante, we have set forth at length our reasons for holding that the conduct of the Customer Defendants, as alleged in the complaint, cannot furnish a basis for holding them bound by the injunction. The corollary is that the injunction imposed no duty on them on which to predicate a conspiracy claim. To conclude otherwise would permit plaintiff, by the simple expedient of charging a "conspiracy," to circumvent the concerns we have previously expressed. So far as is competently alleged, the Customer Defendants were guilty only of engaging in business transactions, entirely on their own account and behalf, with the Blankenship Defendants, the Cartagena Defendants, or both. There is no suggestion that this breached any duty owed to plaintiff by the Customer Defendants, apart from the discredited assertion that such a duty arose from the stipulated injunction.
See footnote 4, ante, concerning the dubiety of tort claims based upon violation of an injunction.
We also note that the gist of an action for civil conspiracy is "a civil wrong . . . resulting in damage." (Wise v. Southern Pacific Co. (1963) 223 Cal. App. 2d 50, 64, 35 Cal. Rptr. 652, italics added, disapproved on another point in Applied Equipment, supra, 7 Cal.4th at p. 510.) Here the only damage conceivably resulting from the alleged conspiracy is plaintiffs loss of the business of the Customer Defendants. But there is no suggestion that plaintiff could or would have kept that business in the absence of the supposed conspiracy. The cause of action rests on the tacit assumption that had the Blankenship Defendants complied with the stipulated injunction, the Customer Defendants would have continued to patronize plaintiff. But there is no allegation to this effect, nor does the complaint suggest any reason to believe that the Customer Defendants would have been compelled, economically or otherwise, to continue to patronize a business that was apparently more willing to sue them than to compete effectively in the marketplace.
In its brief here plaintiff seems to equate its conspiracy theory with one resting on "aider and abettor liability." Under that view, the conspiracy cause of action is purely redundant of the cause of action for violation of injunction, and falls automatically with it.
IV.
INTERFERENCE
Finally plaintiff alleges that defendants "intentionally and/or negligently, and unlawfully, interfered with the contractual and/or business relationships between Plaintiff and the [Blankenship Defendants], and specifically of the underlying lawsuit, the Injunction Judgment and the settlement agreement which resulted in the Injunction Judgment." Defendants engaged in this interference "knowing, or in a position such that they should have known, that such interferences would damage and harm Plaintiff. The Defendants . . . intended to induce the [Blankenship Defendants] to breach or otherwise violate their contractual relationships with Plaintiff, including to violate the Injunction Judgment."
For present purposes we will assume that these allegations are competent to plead that the Customer Defendants engaged in business with the Blankenship Defendants, knowing that by engaging in these transactions the Blankenship Defendants breached a contract with plaintiff.
"To recover in tort for intentional interference with the performance of a contract, a plaintiff must prove: (1) a valid contract between plaintiff and another party; (2) defendants knowledge of the contract; (3) defendants intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage." (Applied Equipment, supra, 7 Cal.4th at p. 514, fn. 5, italics added.) Here there is no suggestion of conduct by the Customer Defendants tending to "induce a breach or disruption" of the posited contract between plaintiff and the Blankenship Defendants. On the contrary, it appears from the complaint that the Customer Defendants passively accepted solicitations from the Blankenship Defendants who were, according to plaintiff, bent on violating their agreement. Nothing in the complaint suggests that the Customer Defendants were "`intermeddlers," officious or otherwise. (Ibid., quoting Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1128, 270 Cal. Rptr. 1, 791 P.2d 587.)
In addition, as we have already noted, plaintiff fails to competently allege that it suffered any damages as the proximate result of the Customer Defendants conduct. Plaintiff merely states that it was damaged in some unknown manner and amount. Again, there is no suggestion that plaintiff would have continued to enjoy the patronage of the Customer Defendants but for their dealings with the Blankenship Defendants. For all the complaint shows, the Customer Defendants had already decided to take their business elsewhere when the Blankenship Defendants solicited it.
As for interference with prospective advantage, such a cause of action requires allegations that (1) the plaintiff had an economic relationship with a third party, which carried with it the probability of future economic benefit to plaintiff; (2) the defendants knew of that relationship; (3) defendant intentionally acted in a manner designed (i.e., substantially certain) to disrupt the relationship; (4) defendants conduct was wrongful apart from its tendency to interfere with the relationship; (5) the relationship was actually disrupted; and (6) the plaintiff suffered economic harm as the proximate result of the defendants acts. (Korea Supply, supra, 29 Cal.4th at pp. 1153-1154.) For reasons we have already stated, none of these elements is competently alleged except that the Customer Defendants knew of plaintiffs relationship with the Blankenship Defendants. In particular the complaint fails to sufficiently allege any independently wrongful conduct by the Customer Defendants, any disruption by them of a probable advantageous
relationship, or any damages as a proximate result of their conduct. Again, we have no reason to believe that these deficiencies could be cured by amendment.
The judgment is affirmed.
We concur: Kay, P.J., Reardon, J.