J.B. Hughes And Associates v. Giunio Santi Engineering et al

MOTION to Dismiss for Failure to State a Claim First Amended Complaint with Prejudice

S.D. Cal.July 20, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Notice of Motion and Motion to Dismiss Timothy Perry (SBN 248543) Elaine Zhong (SBN 286394) WILMER CUTLER PICKERING HALE AND DORR LLP 350 South Grand Avenue, Suite 2100 Los Angeles, CA 90071 Telephone: (213) 443-5300 Facsimile: (213) 443-5400 Attorneys for Defendant Electric Boat Corporation (identified as “General Dynamics Electric Boat”) UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA J.B. HUGHES AND ASSOCIATES, Plaintiff, vs. GIUNIO SANTI ENGINEERING and GENERAL DYNAMICS ELECTRIC BOAT, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 16-cv-0114-DMS-JMA DEFENDANT ELECTRIC BOAT CORPORATION’S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT WITH PREJUDICE Hon. Dana M. Sabraw Date: Friday, September 9, 2016 Time: 1:30 p.m. Location: Courtroom 13A Case 3:16-cv-00114-DMS-JMA Document 22 Filed 07/20/16 Page 1 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 1 - PLEASE TAKE NOTICE THAT , on September 9, 2016 at 1:30 p.m., or as soon thereafter as the matter can be heard, in the courtroom of the Honorable Dana M. Sabraw, Defendant Electric Boat Corporation’s Motion t Dismiss First Amended Complaint with Prejudice will be heard. This Motion will be and hereby is made pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff’s claims detailed at Counts II-IV of the First Amended Complaint, Dkt. No. 20, should be dismissed with prejudice because Plaintiff fails to state claims for intentional interference with contrac ual relations, intentional interference with prospective economic advantage, or unjust enrichment. The basis for granting Defendant’s Motion is described in detail in the accompanying Memorandum of Points and Authorities in Support of De endant Electric Boat Corporation’s Motion to Dismiss First Amended Complaint with Prejudice. This Motion is based upon this Notice, the Memorandum of Points and Authorities, and such evidence and arguments that may be adduced at the hearing of this matter. WHEREFORE, Defendant Electric Boat Corporation respectfully requests that the Court enter an Order dismissing Counts II-IV of the First Amended Complaint as to Defendant Electric Boat Corporation with prejudice. Dated: July 20, 2016 Respectfully submitted, __/s/ Timothy Perry________________ Timothy Perry (SBN 248543) Elaine Zhong (SBN 286394) WILMER CUTLER PICKERING HALE AND DORR LLP Attorneys for Defendant Electric Boat Corporation Case 3:16-cv-00114-DMS-JMA Document 22 Filed 07/20/16 Page 2 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 2 - CERTIFICATE OF SERVICE I hereby certify that I am an attorney at Wilmer Cutler Pickering Hale and Dorr LLP. My business address is 350 S. Grand Ave., Suite 2100, Los Angeles, CA, and I am over the age of eighteen years and not a party to the above-titled action. I certify that on July 20, 2016, I served the following documents: • DEFENDANT ELECTRIC BOAT CORPORATION’S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT WITH PREJUDICE • MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT ELECTRIC BOAT CORPORATION’S MOTION TO DISMISS FIRST AMENDED COMPLAINT WITH PREJUDICE • [PROPOSED] ORDER The documents were served by electronic means via the Court’s CM/ECF system to those on the Court’s Electronic Mail Notice List who are currently signed up to receive e-mail notices for this case. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Dated: July 20, 2016 __/s/ Timothy Perry________________ Timothy Perry Case 3:16-cv-00114-DMS-JMA Document 22 Filed 07/20/16 Page 3 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMO. IN SUPPORT OF MOTION TO DISMISS Timothy Perry (SBN 248543) Elaine Zhong (SBN 286394) WILMER CUTLER PICKERING HALE AND DORR LLP 350 South Grand Avenue, Suite 2100 Los Angeles, CA 90071 Telephone: (213) 443-5300 Facsimile: (213) 443-5400 Attorneys for Defendant Electric Boat Corporation (identified as “General Dynamics Electric Boat”) UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA J.B. HUGHES AND ASSOCIATES, Plaintiff, vs. GIUNIO SANTI ENGINEERING and GENERAL DYNAMICS ELECTRIC BOAT, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 16-cv-0114-DMS-JMA MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT ELECTRIC BOAT CORPORATION’S MOTION TO DISMISS FIRST AMENDED COMPLAINT WITH PREJUDICE Hon. Dana M. Sabraw Date: Friday, September 9, 2016 Time: 1:30 p.m. Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 1 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - i - MEMO. IN SUPPORT OF MOTION TO DISMISS TABLE OF CONTENTS INTRODUCTION……………………………………………………………………..1 SUMMARY OF PERTINENT ALLEGATIONS……………………………………..2 ARGUMENT…………………………………………………………………………..5 I. LEGAL STANDARD ..................................................................................... 5 II. JBHA’S INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS CLAIM (COUNT II) SHOULD BE DISMISSED ....................... 6 A. JBHA fails to allege that GDEB had sufficient knowledge of the Agreement. ...................................................................................... 6 B. JBHA fails to allege that GDEB intended to induce breach or disruption of the Agreement. ............................................................... 9 C. JBHA cannot plead facts showing that GDEB’s alleged intentional acts caused breach or disruption of the Agreement. ....... ........................ 11 III. JBHA’S INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE CLAIM (COUNT III) FAILS ........................... 16 A. JBHA fails to allege independently wrongful conduct on the part of GDEB. ............................................................................................ 16 B. JBHA fails to allege additional elements that are common to Counts II and III. .............................................................................. 18 1. JBHA fails to allege that GDEB had knowledge of the economic relationship between GSE and JBHA. ........ ........... 18 2. JBHA fails to allege GDEB intended to interfere with JBHA and GSE’s economic relationship. .......................................... 19 3. JBHA has not and cannot allege causation. ....... ..................... 20 IV. JBHA’S UNJUST ENRICHMENT CAUSE OF ACTION (COUNT IV) IS NOT A STANDALONE CAUSE OF ACTION IN CALIFORNIA .. ......... 21 V. THE FAC SHOULD BE DISMISSED WITH PREJUDICE ........................ 23 CONCLUSION ................................................................................................... 23 Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 2 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - ii - MEMO. IN SUPPORT OF MOTION TO DISMISS TABLE OF AUTHORITIES Page(s) CASES Ashcroft v. Iqbal, 556 U.S. 662 (2009) ..................................................................... 5 Bank of New York v. Fremont Gen. Corp., 523 F.3d 902 (9th Cir. 2008) ........... 2, 6, 11 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ..................................................... 5 Cal. Med. Ass’n, Inc. v. Aetna U.S. Healthcare of Calif., 94 Cal. App. 4th 151 (2001) ................................................................................................ 21, 22 Curley v. Wells Fargo & Co., No. 13-cv-03805NC, 2014 WL 7336462 (N.D. Cal. Dec. 23, 2014) ........................................................................ 14 Davis v. Nadrich, 174 Cal. App. 4th 1 (2009) ........................................ 6, 10, 11, 20 Della Penna v. Toyota Motor Sales, U.S.A., 11 Cal. 4th 376 (1995) .......................... 16 Diehl v. Starbucks Corp., No. 12CV2432 AJB (BGS), 2014 WL 295468 (S.D. Cal. Jan. 27, 2014) ............................................................................... 17 Dollar Tree Stores Inc. v. Oyama Partners, LLC, No. C 10 – 00325 SI, 2010 WL 1688583 (N.D. Cal. Apr. 26, 2010) ................................... 9, 17, 18 Dryden v. Tri-Valley Growers, 65 Cal. App. 3d 990 (1977) ...................... 11, 13, 15 Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350 (2010) ......................... 2, 3, 21 Franklin v. Dyn. Details, Inc., 116 Cal. App. 4th 375 (2004) ................................ 11 Griffith Co. v. Hofues, 201 Cal. App. 2d 502 (1962) ............................................. 22 Iezza v. Saxon Mortg. Servs., Inc., No. 10-03634 DDP, 2010 WL 3834041 (C.D. Cal. Sept. 28, 2010) ............................................................ 21 Johns v. Bayer Corp., No. 09CV1935 DMS (JMA), 2010 WL 476688 (S.D. Cal. Feb. 9, 2010) ........................................................................... 21 Kasparian v. Cty. of Los Angeles, 38 Cal. App. 4th 242 (1995) ............................ 20 Klein v. Chevron U.S.A., Inc., 202 Cal. App. 4th 1342 (2012) .............................. 21 Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003) ................ passim Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 3 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - iii - MEMO. IN SUPPORT OF MOTION TO DISMISS LiMandri v. Judkins, 52 Cal. App. 4th 326 (1997) ........................................... 16, 17 Low v. LinkedIn Corp., 900 F. Supp. 2d 1010 (N.D. Cal. 2012) .......................... 21 Melchior v. New Line Prods., Inc., 106 Cal. App. 4th 779 (2003)......................... 21 Muse Brands, LLC v. Gentil, No. 15-cv-01744-JSC, 2015 WL 4572975 (N.D. Cal. July 29, 2015) .............................................................................. 17 Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal.3d 1118 (1990) ........................... 6 Parrino v. FHP, Inc., 146 F.3d 699 (9th Cir. 1988) ................................................. 2 Pellerin v. Honeywell Intern. Inc., 877 F. Supp. 2d 983 (S.D. Cal. 2012) .............. 6 Rutherford v. Owens–Illinois, Inc., 16 Cal. 4th 953 (1997) ................................... 11 Salameh v. Tarsadia Hotel, 726 F.3d 1124 (9th Cir. 2013) ................................... 23 Sisseton-Wahpeton Sioux Tribe v. United States, 90 F.3d 351 (9th Cir. 1996) .............................................................................................................. 23 Starlite Dev. (China) Ltd. v. Textron Fin. Corp., No. CV-F-07-1767 OWW/DLB, 2008 WL 2705395 (E.D. Cal. July 8, 2008) ................................. 11 Swipe & Bite, Inc. v. Chow, No. 15-cv-03997-JST, 2015 WL 7423244 (N.D. Cal. Nov. 23, 2015) ............................................................................. 16 Trindade v. Reach Media Grp., LLC, No. 12-cv-4759-PSG, 2013 WL 3977034 (N.D. Cal. July 31, 2013) ....................................................... passim Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136 (9th Cir. 2003) .................. 5, 12 Weiland Sliding Doors & Windows, Inc. v. Panda Windows & Doors, LLC, 814 F. Supp. 2d 1033 (S.D. Cal. 2011) .............................................. 17 Winchester Mystery House, LLC v. Global Asylum, Inc., 210 Cal. App. 4th 579 (2012) ................................................................................. 6, 9, 18 Wofford v. Apple Inc., No. 11-cv-0034, 2011 WL 5445054 (S.D. Cal. Nov. 9, 2011 ....................................................................................... 6, 10, 19, 20 Wynn v. Nat’l Broadcasting Co., 234 F. Supp. 2d 1067 (C.D. Cal. 2002) ........... passim Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 4 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - iv - MEMO. IN SUPPORT OF MOTION TO DISMISS FEDERAL RULES Fed. R. Civ. P. 12 ................................................................................................. 5 Fed. R. Civ. P. 15 ........................................................................................... 5, 23 OTHER AUTHORITIES 55 Cal. Jur. 3d Restitution § 2 ....................................................................... 2, 21 Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 5 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 1 - MEMO. IN SUPPORT OF MOTION TO DISMISS INTRODUCTION Electric Boat Corporation (identified in the First Amended Complaint as “General Dynamics Electric Boat,” hereinafter referred to as “GDEB”) should not be a party to this litigation. In its First Amended Complaint (“FAC”) (Dkt. No. 20), J.B. Hughes and Associates (“JBHA” or “Plaintiff”) claims that an Italian company, Giunio Santi Engineering (“GSE”), failed to pay it a 10% commission for helping GSE win a subcontract to furnish mini-submarines for the U.S. Special Operations Command (“USSOCOM” or “SOCOM”). Although the FAC levies two new causes of action against GDEB, the core allegations remain the same as before: JBHA performed all of its contractual duties to GSE, but GSE has refused to pay a commission to JBHA. What the FAC fails to plead is how GDEB played any role in the alleged injury to JBHA, or possibly could have. According to the FAC, GDEB intentionally interfered with the JBHA-GSE contractual relationship, and JBHA’s prospective economic advantage, by committing certain disruptive acts. Although JBHA spreads multiple allusions to such acts across a 44-page complaint and over 160 pages of “exhibits,” GDEB’s supposedly tortious conduct boils down to two acts: (1) in January 2011, meeting with GSE and U.S. government representatives in Italy, after informing JBHA of the trip; and (2) in March 2011, entering into a non-disclosure agreement (“NDA”) with GSE that did not include JBHA. As a result, it is claimed, GDEB was unjustly enriched because GSE did not pay JBHA a commission. JBHA’s claim of intentional interference with contractual relations (Count II) fails for several reasons. First, JBHA does not allege that GDEB had sufficient knowledge of the relevant contractual provisions—in particular, GSE’s obligation to pay a 10% commission—which is a necessary element of this tort. Second, because GDEB cannot intend the breach of a contractual provisi n of which it is unaware, the FAC likewise fails to allege the requisite intentioal conduct. Third, by JBHA’s own pleadings, there is no causal connection between GDEB’s supposedly intentional acts Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 6 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 2 - MEMO. IN SUPPORT OF MOTION TO DISMISS and GSE’s decision not to pay JBHA a commission—let alone facts sufficient to meet the “but for” standard of causation for this tort. Bank of New York v. Fremont Gen. Corp., 523 F.3d 902, 909 (9th Cir. 2008) (applying California law). JBHA’s claim of intentional interference with prospective economic advantage fares no better. First, JBHA neglects to allege that GDEB engaged in any independently wrongful conduct—part of the “more rigo ous pleading burden” for this tort. Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1158 (2003). Second, as in the case of the intentional interference with contractual relations tort, the FAC fails to allege GDEB had the requisite knowledg and intent, or that there is a sufficient causal connection between GDEB’s supposedly disruptive acts and the alleged economic harm. Finally, JBHA’s claim of unjust enrichment fails because it is not a standalone claim under California law. See, e.g., 55 Cal. Jur. 3d Restitution § 2 (“[T]here is no separate cause of action in this state for unjust enrichment[.]”); Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350, 1370 (2010) (“[T]here is no cause of action in California for unjust enrichment.”) (internal citations omitted). In short, all of JBHA’s claims fail. Because another round of amendments would be futile, this Court should dismiss the FAC with prejudice as to GDEB. SUMMARY OF PERTINENT FACTUAL ALLEGATIONS 1 According to the FAC, “[o]n or about January 21, 1996, GSE contracted with JBHA, appointing JBHA as GSE’s exclusive representative in North America to sell 1 The factual allegations below are drawn from the FAC, which GDEB is legally required to accept as true for purposes of the motion only. Additionally, JBHA filed four exhibits with its FAC which purport to be documents related to JBHA’s claims. Although GDEB disputes the authenticity and admissib lity of these documents, the Court may consider documents attached to the FAC for the purposes of this motion. See, e.g., Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1988). Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 7 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 3 - MEMO. IN SUPPORT OF MOTION TO DISMISS all of its product[s] and services related to its line of flexible hyperbaric chambers” (referred to in the FAC as “The Agreement”). (FAC ¶ 12.) The FAC alleges that, on or about November 7, 2010, GSE extended the Agreement and offered JBHA a 10% commission if JBHA successfully facilitated the sale of GSE mini-submarines to USSOCOM. (Id. ¶¶ 14-15.) Pursuant to the Agreement, between July 2009 and November 2010, JBHA assisted GSE with gathering information about a $43 million government contract with USSOCOM for the building and delivering of a mini-submarine under its Dry Combat Submersible program. (Id. ¶¶ 15-50.) In November 2010, JBHA introduced to GSE the “concept of using GDEB” as the prime contractor to USSOCOM and “GSE would be a subcontractor to GDEB.” (Id. ¶ 51.) Thereafter, the FAC alleges, JBHA “invited” GDEB to visit GSE’s facilities in Italy, passed along information about GSE’s mini-submarines to GDEB, “coordinated” a meeting in Italy between GDEB and GSE in December 2010, and generally “promote[d]” teaming negotiations between GDEB and GSE. (Id. ¶¶ 52-73, 85.) GSE and GDEB, along with some government officials, also met in January 2011 regarding GSE’s mini-submarines, a meeting which JBHA did not attend or coordinate. (Id. ¶¶ 82-86.) Around March 2011, GDEB and GSE entered into an NDA. (Id. ¶ 96.) On or about March 4, 2011, Mr. Santi of GSE emailed JBHA stating that “while the gentlemen’s agreement between us till stands, unfortunately [the NDA] does not empower you to dialogue with [GDEB staff] directly on our [GSE’s] behalf.” (Id.) (emphasis added). JBHA desired to join the NDA “not to be part of the [GDEB] team, but to represent GSE” and clarified to GDEB that it would “simply support GSE—no other reason.” (Id. ¶¶ 99-101.) Later, when it was decided that JBHA would not be a party to the NDA, GSE did not object, but instead told JBHA that it would ask GDEB to “include JBHA on the GSE NDA when the need comes up.” (Id. ¶ 105.) Around this time, the FAC claims, JBHA was advised by another individual that it should not “worry about [GDEB] . . .Work on Santi [of GSE]. He needs us (all Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 8 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 4 - MEMO. IN SUPPORT OF MOTION TO DISMISS 3 of us), and we must get a contract out of him for our support.” (Id. ¶ 105; Ex. 4 at 67.) On or about March 25, 2011, GSE reported to JBHA that i formed a “teaming agreement” with GDEB during their January 2011 meeting and agreed to submit a proposal to USSOCOM for a contract related to mini-submarines. According to the FAC, in forming this teaming agreement and providing other services to GSE, “JBHA performed all of the requisite obligations and duties required by the Agreement.” (FAC ¶ 133.) Then, according to the FAC, “[t]he Government Awarded a Contract to General Dynamics Electric Boat (GDEB) [sic] on Decemb r 7, 2012 not to Exceed $44,269,290 including all options (the ‘Prime Contrac ’), for building and delivering a mini-submarine User Operational Evaluation System (the ‘UOES3’) including a mini- submarine (the ‘Mini-sub’) to SOCOM, under SOCOM’s Dry Combat Submersible- Light (DCS-L) program.” (Id. ¶ 112.) The FAC alleges that GSE is GDEB’s subcontractor under the Prime Contract. (Id. ¶ 113.) Since JBHA had “performed all of the requisite obligat ons and duties” (FAC ¶ 133) under the Agreement, the only remaining unexecuted contractual obligation was GSE’s obligation to pay JBHA a commission. Pursuant to the Agreement, JBHA sent an invoice2 to GSE for “10% of all monies paid to GSE by [GDEB], between December 11, 2012 and May 31, 2016, for design, engin ering, production, testing, and all related data and information associated [with] the mini-submarine(s) . . . delivered under the [Dry Combat Submersible program] . . . comprising at least 10% of $44,269,290.00.” (Id. ¶ 15.) According to JBHA, GSE has refused to pay the invoice. (Id. ¶ 119.) JBHA filed its Complaint on January 16, 2016, alleging a single cause of action against GDEB for unjust enrichment. (Dkt. No. 1.) After GDEB sought to dismiss 2 The invoice is dated June 15, 2016, five months after JBHA initiated this litigation. (Ex. 3 at 74.) Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 9 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 5 - MEMO. IN SUPPORT OF MOTION TO DISMISS the unjust enrichment claim, on June 1, 2016, the Court held a telephonic conference with the parties and ordered JBHA to amend its Complaint, as a matter of course pursuant to Federal Rule of Civil Procedure 15(a), by June 29, 2016. (Dkt. No. 19.) On June 29, 2016, JBHA filed its FAC asserting three causes of action against GDEB: (1) intentional interference with contractual relations (Count II); (2) intentional interference with prospective economic advantage (Count III); and (3) unjust enrichment under California law (Count IV). ARGUMENT I. LEGAL STANDARD To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), JBHA must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). It must, in other words, allege facts sufficient to infer “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although the Court generally accepts all allegations of fact as true and construes them in the light most favorable to the plaintiff, Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (internal citations omitted), mere conclusory allegations are insufficient; a pleading with “no more than conclusions” is “not entitled to the assumption of truth.” Iqbal, 556 U.S. at 679; Warren, 328 F.3d at 1139 (holding that the court is not required to accept as true conclusory allegations nor does the court “necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations”) (internal citations and quotations omitted); Wynn v. Nat’l Broadcasting Co., 234 F. Supp. 2d 1067, 1121-22 (C.D. Cal. 2002) (holding, in regards to a claim of intentional interference with contract, that “a court need not accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences,” including when the plaintiff’s claim is “contrary to the facts that are alleged in the complaint”). Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 10 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 6 - MEMO. IN SUPPORT OF MOTION TO DISMISS II. JBHA’S INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS CLAIM (COUNT II) SHOULD BE DISMISSED The FAC fails to plead facts sufficient to support a claim for intentional interference with contractual relations. In particular, the FAC fails to sufficiently allege: (1) GDEB had any knowledge of the alleged contractual relationship between GSE and JBHA; (2) GDEB had any intent to induce a breach or disruption of the relationship; or (3) any of GDEB’s alleged acts caused breach or disruption of the contractual relationship. See Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal.3d 1118, 1126 (1990); Bank of New York, 523 F.3d at 909 (applying California law). JBHA’s failure to do so is fatal to the FAC. A. JBHA fails to allege that GDEB had sufficient knowledge of the Agreement. The FAC fails to allege any facts demonstrating that GDEB had sufficient knowledge of the relevant contractual obligations. In particular, nowhere does the FAC allege GDEB knew of GSE’s obligation to pay JBHA a commission—the only contractual obligation that could have been interfer d with, since JBHA claims it “performed all of [its] requisite obligations and duties” to completion. (FAC ¶ 133.) To plead intentional interference with contractual relations, a plaintiff must go beyond allegations that a defendant had “generalized knowledge” that the plaintiff was “a party to contracts.” Trindade v. Reach Media Grp., LLC, No. 12-cv-4759- PSG, 2013 WL 3977034, at *15 (N.D. Cal. July 31, 2013). Rather, the plaintiff must allege the defendant knew of the “specific obligations” with which it purportedly interfered. Wofford v. Apple Inc., No. 11-cv-0034 AJBNLS, 2011 WL 5445054, at *3 (S.D. Cal. Nov. 9, 2011) (Battaglia, J.) (citing Davis v. Nadrich, 174 Cal. App. 4th 1, 10-11 (2009)); see also Winchester Mystery House, LLC v. Global Asylum, Inc., 210 Cal. App. 4th 579, 596-97 (2012); Pellerin v. Honeywell Intern. Inc., 877 F. Supp. 2d 983, 991 (S.D. Cal. 2012). Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 11 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 7 - MEMO. IN SUPPORT OF MOTION TO DISMISS In the FAC, JBHA conclusorily alleges that “GDEB had knowledge of the existence of the JBHA-GSE Contractual Relationship and related ‘course of dealing.’” (FAC ¶ 145.) In support, JBHA cites, without explanation, to “fact numbers” 23, 25, 39, 41, 44-46, 49-56, 63-66, 69, 72-73, 78-79, and 83, that span over 20 pages of Exhibit 4 of the FAC (Dkt. No. 20-4). (FAC ¶ 145.) On closer inspection, however, these “facts” are tangential to JBHA’s tort claim, let alone allegations that plausibly show GDEB’s knowledge of the JBHA-GSE contract’s details. For instance, “fact” 23, though cited as support, reads “[r]eserved for future use.” (Ex. 4 at 24.)3 “Facts” 25, 44, and 46 appear to reflect communications, taken from emails, about the specifications of certain GSE submarines. (Id. at 26, 38-42.) “Facts” 41, 45, and 49 through 53 allegedly reproduce email correspondence related to logistics for GDEB’s trip to GSE in Italy in December 2010. (Id. at 36-37, 40-41, 44-46.) In sum, these 3 The other cited “facts” are similarly not germane. “Fact” 39 appears to reflect an email in which one party forwards his contact information and expresses interest in “seeing the vehicle.” (Ex. 4 at 35-36.) “Fact” 54 seems to be an email in which a “John A. Schiltz” thanks GDEB personnel for meeting with GSE in December 2010 and their interest in GSE. (Id. at 46-47.) “Facts” 55 and 56 purport to reflect email communications between principals at JBHA and a third-party regarding the December 2010 meeting between GSE and GDEB. (Id. at 47-49.) “Facts” 63 through 65 appear to reflect communications regarding trip logistics for a meeting in January 2011 between GSE, GDEB, and government representatives. (Id. at 51-52.) “Facts” 69, 72, and 73 purport to be email correspondence regarding the outcome of the January 2011 meeting. (Id. at 55, 57-58.) “Fact” 78 appears to be an email discussing Congress’s fiscal year 2011 budget, and “fact” 79 appe rs to be a discussion regarding funding for SOCOM’s submarine program. (Id. at 59-60.) “Fact” 83 appears to be an email from one party to another regarding contact information for the principals of JBHA for a potential NDA. (Id. at 62-63.) Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 12 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 8 - MEMO. IN SUPPORT OF MOTION TO DISMISS “facts” at best show that JBHA introduced GSE and its submarine specifications to GDEB, and coordinated one meeting between GDEB and GSE. Of all the “facts” that JBHA cites, only number 66 is even remotely relevant to the element of GDEB’s knowledge. It purports to memorialize a telephone call in which “John A. Schiltz” explained that he and “Joe Hughes” were “representing GSE and working to ensure a business relationship between GSE and GD EB [sic] can be established for the SOCOM Dry Combat Submersible (DCS) Program.” (Ex. 4 at 53.) But this general allegation that JBHA told GDEB it was “representing” GSE falls far short of establishing that GDEB specifically knew that GSE-JBHA had an agreement whereby GSE would pay JBHA a commission for its work in connection with the USSOCOM project. Trindade is instructive. In that case, a publishing network, Research Media Group (“RMG”) entered into contracts with third-party advertisers so that the advertisers could have access to RMG’s network. Trindade, 2013 WL 3977034 at *1- 2. Among other things, the advertisers warranted to RMG that any members of RMG’s network who would receive the advertisers’ ads had “opted in.” Id. at *2. When recipients of the ads filed a putative class action suit against RMG for violations of the Telephone Communications Protection Act, RMG demanded that advertisers cease sending messages to its network. Id. According to RMG’s complaint, one of the advertisers then published negative statements about RMG on Facebook, harming RMG’s contractual relationships with affiliates. Id. at *2-3. RMG brought claims against the advertisers as third-party defendants, lleging, among other things, tortious interference with contract and prospective economic advantage. Id. at *3, 15-16. The advertisers moved to dismiss the complaint, arguing in part that RMG failed to sufficiently allege they had specific knowledge of the provisions of RMG’s contracts with their affiliates. Id. at *15-16. In defense of its complaint, RMG argued that “because of its position in the ‘performance based publisher network,’ the advertiser must have known of the existence of RMG’s contracts with affiliates.” Id. Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 13 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 9 - MEMO. IN SUPPORT OF MOTION TO DISMISS at *15. The district court, however, found RMG’s pleadings to be lacking, and so dismissed RMG’s claims of tortious interference. The court held that RMG merely alleged that the advertiser had “generalized knowledge” of RMG’s contractual relationships, and not knowledge of “specific contrac s or details about the contracts.” Id. (citing, inter alia, Winchester Mystery House, LLC v. Global Asylum, Inc., 210 Cal. App. 4th 579, 596-97 (2012)). Just as the Trindade court dismissed RMG’s claims, so too should this Court dismiss JBHA’s. Here, JBHA has failed to allege that GDEB had knowledge of GSE’s supposed obligation to pay JBHA a commission for its work in connection with the USSOCOM project—the only contractual obligation that could have been interfered with. Because JBHA has failed to sufficiently allege knowledge, JBHA’s claim must be dismissed. B. JBHA fails to allege that GDEB intended to induce breach or disruption of the Agreement. The FAC also fails to allege that GDEB acted with the requisite intent. To sufficiently plead intent, a plaintiff must allege that the defendant “acted with the purpose or desire to interfere” or “acted with the knowledge that the interference was certain or substantially certain to occur as a result of its action.” Korea Supply Co., 29 Cal. 4th at 1155-57; Dollar Tree Stores Inc. v. Oyama Partners, LLC, No. C 10 – 00325 SI, 2010 WL 1688583, at *2 (N.D. Cal. Apr. 26, 010). In the FAC, JBHA alleges that certain unspecified “[i]ntentional acts on the part of GDEB were disruptive of the JBHA-GSE Contractual Re ationship,” and that those acts are “shown by Exhibit 4, fact numbers [82-89] and 93.” (FAC ¶ 146.) But “facts” 82 through 89 appear to reflect email communications about an NDA that GDEB and GSE entered into prior to discussing submarine technology. (Ex. 4 at 61- 65.) And “fact” 93 appears to show an email from “Giunio” to “Joe Hughes” stating, among other things, that “we were left on our own with EB when we agreed to team with them” and “signed the first agreement with them, agreement [sic] which did not Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 14 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 10 - MEMO. IN SUPPORT OF MOTION TO DISMISS mention your involvement at all since yourself and John both cho[]se to be absent notwithstanding our invitation to attend.” (Ex. 4 at 67-68.) None of these “facts” support an inference that GDEB acted with “the purpose to interfere” or knowledge that the supposed “interference was certain or substantially certain to occur as a result . . . .” Korea Supply Co., 29 Cal. 4th at 1156-57. To the contrary, these alleg tions tend to undermine JBHA’s claims by suggesting JBHA “cho[]se to be absent” from a meeting between GSE and GDEB “notwithstanding [Giunio’s] invitation to attend.” (Ex. 4 at 67-68.) That JBHA’s allegations tend to undermine its own claims is particularly important in the context of a motion to dismiss because the Court “need not accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences,” including when the plaintiff’s claim is “contrary to the facts that are alleged in the complaint.” Wynn, 234 F. Supp. 2d at 1121-22 (emphasis added). Even if these “facts” had any connection to GDEB’s supposed intent to interfere, JBHA would still face another logical hurdle. As noted above, nowhere does the FAC allege that GDEB knew of the specific ontractual provision that was breached—here, GSE’s alleged obligation to pay a commission to JBHA. If GDEB did not know of the contractual provision that was breached, then it could not have intended to cause the breach or disruption in the first place. Again, Trindade is instructive. In Trindade, the district court reasoned that because plaintiff failed to sufficiently allege tha defendant had specific knowledge of plaintiff’s contractual relationships, plaintiff consequently failed to allege that defendant had the “requisite intent to disrupt those relationships.” Trindade, 2013 WL 3977034 at *16. Similarly, in Wofford, the court dismissed plaintiff’s contractual relations claim because plaintiff “failed to identify any specific obligations” of which Apple was aware, and therefore, “they have not provided any facts demonstrating that . . . [Apple] intended to prevent those obligations from being fulfilled.” Wofford, 2011 WL 5445054 at *3 (Battaglia, J.) (internal citation omitted); see also Davis, 174 Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 15 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 11 - MEMO. IN SUPPORT OF MOTION TO DISMISS Cal. App. 4th at 10-11 (“Davis cannot prove the tort of interference with contract because he has not brought forth any facts to show t at Nadrich was sufficiently aware of the details of the Davis/Heubeck partnership contract to form an intent to harm it.”). C. JBHA cannot plead facts showing that GDEB’s alleged intentional acts caused breach or disruption of the Agreement. Furthermore, the FAC fails to allege that any of GDEB’s alleged intentional acts caused GSE’s failure to pay JBHA’s commission pursuant to the Agreement. None of GDEB’s supposedly intentional acts—including entering into the NDA and meeting with GSE—has any logical connection to GSE’s alleged refusal to pay JBHA a commission. There is a high bar to pleading causation in the context of intentional interference with contractual relations. In particular, “California employs the ‘substantial factor’ test for determining causation in intentional torts cases.” Bank of New York, 523 F.3d at 909 (citing Franklin v. Dyn. Details, Inc., 116 Cal. App. 4th 375, 391 (2004)) (holding that substantial factor test applies in action for intentional interference with contractual relations and that “a cause of . . . damage . . . is something that is a substantial factor in bringing about . . . damage”). “The substantial factor standard generally produces the same results as does the ‘but for’ rule of causation which states that a defendant’s conduct is a cause of the injury if the injury would not have occurred ‘but for’ that conduct.” Id. (citing Rutherford v. Owens– Illinois, Inc., 16 Cal. 4th 953, 969 (1997)). Put another way, JBHA must allege that absent GDEB’s conduct, “the contract would otherwise have been performed, and that it was breached and abandoned by reason of the defendant’s wrongful act and that such act was the moving cause thereof.” Dryden v. Tri-Valley Growers, 65 Cal. App. 3d 990, 997 (1977) (emphasis added); see also Wynn, 234 F. Supp. 2d at 1121-22; Starlite Dev. (China) Ltd. v. Textron Fin. Corp., No. CV-F-07-1767 OWW/DLB, 2008 WL 2705395, at *15-18 (E.D. Cal. July 8, 2008). Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 16 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 12 - MEMO. IN SUPPORT OF MOTION TO DISMISS The FAC alleges that the “acts of GDEB,” as shown by Exhibit 4, “fact numbers [82-89] and 93,” were the “but for” cause of the disruption of the “JBHA- GSE Contractual Relationship and related ‘course of dealing.’” (FAC ¶ 148.) As discussed above, “facts” 82 through 89 appear to reflect alleged email communications about the NDA. (Ex. 4 at 61-65.) “Fact” 93 seems to reflect an email from “Giunio” to “Joe Hughes” regarding GSE’s teaming agreement with GDEB. (Ex. 4 at 67-68.) In short, the FAC essentially alleges that by entering into the NDA and meeting with GSE, GDEB somehow disrupted th relationship between JBHA and GSE, and caused GSE not to pay JBHA a commission for the contractual obligations it had fully performed. (Id. ¶ 149.) There are at least two deficiencies in how JBHA pleads this element. First, JBHA’s assertion that GDEB engaged in “but for acts” is nothing more than a conclusory assertion, cast as a factual allegation, that JBHA’s conduct meets the legal standard of causation. This Court need not—and should not—accept such bare and conclusory allegations as true. Warren, 328 F.3d at 1139. Second, JBHA does not—and cannot—allege a plausible causal connection between the NDA and GSE’s purported failure to pay a commission. Indeed, by the terms of the FAC itself, such a causal connection is logically impossible. According to the FAC, JBHA completed the contractual duties “a sociated with the June 15, 2016 invoice . . . on or about [March 25, 2011], when GSE reported to JBHA that GSE [had] ‘agreed to team with them [GDEB] during their second visit, visit [sic] during which we [GSE] discussed and signed the first agreement with them [GDEB].” (FAC ¶ 127.) After JBHA completed these duties, GSE’s corresponding “duty to pay . . . under the June 15, 2016 invoice ripen[ed] when GSE was paid by GDEB for GSE’s delivery of good and services under SOCOM’s Dry Combat Submersible-Light (DCS-L) contract with GDEB”—five years after the sign ng of the NDA. (Id. ¶ 129.) In short, by JBHA’s own allegations, GDEB had nothing to do with whether GSE paid JBHA a commission, or for that matter, whether any party complied with its Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 17 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 13 - MEMO. IN SUPPORT OF MOTION TO DISMISS obligations under the Agreement. GDEB’s alleged intentional acts—meeting with GSE and entering into the NDA—did not cause JBHA to fail to complete its obligations under the Agreement because, according to JBHA, it had already “performed all of [its] requisite obligations and duties” to completion. (Id. at ¶ 133.) Nor did the NDA prevent GSE from performing the corresponding duty to pay a commission for JBHA’s work because there is no plausible connection between the NDA and GSE’s supposed refusal to pay a commission; the two are independent events. And, as the FAC makes clear, the NDA was signed five years before GSE’s obligation to pay “ripen[ed].” (Id. ¶ 129.) There is similarly no causal connection between GDEB’s meeting with GSE in 2011 and GSE’s purported failure to pay a commission in 2016. Not only does the FAC fail to allege any causal connection between the NDA and GSE’s supposed failure to pay a commission, it falls far short of alleging that “the contract would otherwise have been performed” absent the NDA. Dryden, 65 Cal. App. 3d at 997 (emphasis added). To the contrary, the FAC contains multiple allegations that undermine any inference that the NDA interfered with the GSE-JBHA contractual relationship. For example, the FAC actually shows that GSE and JBHA viewed the NDA as irrelevant to their mutual contrac u l obligations. According to the FAC, GSE promised that the “gentlemen’s agreement b tween us still stands” even though the NDA “does not empower [JBHA] to dialogue” with GDEB directly. (FAC ¶ 96.) In addition, according to the FAC, GSE told JBHA that it “will ask [GDEB] to include JBHA on the GSE NDA when the need comes up.” (Ex. 4 at 66.) This shows that GSE considered JBHA’s continued involvement as consistent with the signing of an NDA between GSE and GDEB. Indeed, the FAC contains allegations suggesting that GSE, not GDEB, sought to exclude JBHA from the NDA. For example, the FAC alleges that GSE told JBHA: we were left on our own with EB when we agreed to team with them during their second visit, visit [sic] during which we Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 18 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 14 - MEMO. IN SUPPORT OF MOTION TO DISMISS discussed and signed the first agreement with them, agreement which did not mention your involvement at all since yourself and John both choose to be absent notwithstanding our invitation to attend. As I told you before, it seems to me a bit awkward at this stage to introduce a third party. . . . and therefore let’s leave things as they are in order to avoid further misunderstandings and see how things develop. (Ex. 4 at 67-68.) The allegations suggest that the ultimate decision to perform the terms of the Agreement was GSE’s, and that any disruption to the Agreement did not stem from any intentional act by GDEB. See Curley v. Wells Fargo & Co., No. 13- cv-03805NC, 2014 WL 7336462, at *9 (N.D. Cal. Dec. 23, 2014) (“[T]he decision to foreclose may just well have been Wells Fargo’s. In other words, Wells Fargo’s decision may have resulted from its adherence to ‘investor guidelines’ that ‘dictate[d] that it could not postpone the sale,’ and not from an intentional act by Freddie Mac to induce Well’s [sic] Fargo’s alleged breach.”). Furthermore, these contradictions between JBHA’s claims and the “facts” as characterized in Exhibit 4 are particularly relevant to the motion to dismiss. Where, as here, JBHA makes conclusory allegations “without any factual support, and actually contrary to the facts that are alleged in the complaint,” Wynn, 234 F. Supp. 2d at 1122, the Court need not—and here, should not—accept themas true. Wynn is illustrative. In that case, plaintiffs, a group of television show writers, alleged that certain talent agency defendants interfered with their collective bargaining agreement (“CBA”) with television entities by refusing to represent or refer work to plaintiffs due to the talent agency defendants’ ageist policies. 234 F. Supp. 2d at 1122. The talent agency defendants moved to dismiss plaintiffs’ complaint for failure to state a claim of intentional interference with contractual relations. In response, plaintiffs argued that they adequately stated a claim in the complaint when they alleged that the defendants “purposefully and intentionally interfered with the [television entities’] performance of [the] obligations [under the CBA].” Id. (second alteration in original.) Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 19 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 15 - MEMO. IN SUPPORT OF MOTION TO DISMISS The court in Wynn rejected these arguments and granted defendants’ moion t dismiss. Id. The court ruled that plaintiffs’ “conclusory” allegations were insufficient and plaintiffs “failed to allege facts sufficient to allow an inference that the [television entities] would have performed had the [talent agency defendants] not interfered, which is a requirement to establish causation.” Id at 1121 (internal citations omitted). The court reasoned that the allegations in the complaint made causation implausible, and that “by their own admission” plaintiffs indicated they could have applied for jobs with the television entities without the assistance of defendants and those entities could have hired plaintiffs. Id. Therefore, the court held, defendants could not be the but for cause of the breach of contract. Id Just as the Wynn court dismissed these claims, so too should this Court dismiss JBHA’s claim for failure to sufficiently allege causation. Like the Wynn plaintiffs, JBHA conclusorily asserts “but for” causation, alleging no facts from which causation can be plausibly inferred. In addition, similar to the Wynn plaintiffs’ complaint, the FAC’s own allegations make clear that JBHA still could have been paid its commission regardless of whether GDEB met with GSE or entered into an NDA. In sum, simply stated, to have caused any injury to JBHA, GDEB had to have interfered with JBHA’s performance of the Agreement (so that it could not earn its commission) or with GSE’s performance (of its obligat on to pay a commission). Since JBHA claims it “performed all of [its] requisite obligations and duties required by the Agreement” (FAC ¶ 133), the only remaining obligation with which GDEB could have interfered is GSE’s alleged obligation t pay JBHA a commission. But there is no conceivable way GDEB’s supposedly tortious acts—the meeting and NDA—could have prevented or in the least impeded GSE from paying the commission if it wished to. “But for” causation is lacking as a matter of law, and the FAC should be dismissed. Dryden, 65 Cal. App. 3d at 997-98 (granting demurrer where plaintiff could not establish causation under facts as plead). Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 20 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 16 - MEMO. IN SUPPORT OF MOTION TO DISMISS III. JBHA’S INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE CLAIM (COUNT III) FAILS The FAC fails to sufficiently allege the requisite el ments for the interference with prospective economic advantage tort, which are similar to those of the intentional interference with contractual relations tort. Korea Supply Co., 29 Cal. 4th at 1157; LiMandri v. Judkins, 52 Cal. App. 4th 326, 339 (1997); Swipe & Bite, Inc. v. Chow, No. 15-cv-03997-JST, 2015 WL 7423244, at *8 (N.D. Cal. Nov. 23, 2015). In the FAC, JBHA fails to allege facts demonstrating: (1) GDEB acted in an unlawful manner outside of the alleged interference itself; (2) GDEB had any specific knowledge of the economic relationship with prospectiv economic advantage between GSE and JBHA; (3) GDEB had any intent to interfere with that relationship; or (4) that any of GDEB’s alleged acts caused JBHA’s economic harm. JBHA must plead each of these; its failure to do so is fatal to its claim. Korea Supply Co., 29 Cal. 4th at 1153. A. JBHA fails to allege independently wrongful conduct on the part of GDEB. The FAC fails to state a claim of intentional interference with prospective economic advantage because it neglects to allege that GDEB engaged in independently wrongful conduct. At most, the FAC alleges that GDEB entered into an NDA and met with GSE—both entirely lawful acts. (FAC ¶ 155.) The California Supreme Court has held that a “plaintiff that chooses to bring a claim for interference with prospective economic advantage has a more rigorous pleading burden since it must show that the defendant’s conduct was independently wrongful.” Korea Supply Co., 29 Cal. 4th at 1158. This additional element is what distinguishes the prospective economic advantage tort from the contractual relations tort. Id. In particular, a plaintiff must show that the defenda t “engaged in conduct that was wrongful by some legal measure beyond the fact of the interference itself.” Della Penna v. Toyota Motor Sales, U.S.A., 11 Cal. 4th 376, 393 (1995); see also Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 21 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 17 - MEMO. IN SUPPORT OF MOTION TO DISMISS LiMandri, 52 Cal. App. 4th at 341. An act is independently wrongful “if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard” an must be “independently actionable.” Korea Supply., 29 Cal. 4th at 1159. “For example, courts have held that a plaintiff can state a claim for intentional interference by pleading violation of California’s Unfair Competition Law, the Foreign Corrupt Practices Act, . . . or some other independent tort, such as making a knowingly false statement about the plaintiff’s product, or making threats of sham litigation.” Muse Brands, LLC v. Gentil, No. 15-cv-01744-JSC, 2015 WL 4572975, at *7 (N.D. Cal. July 29, 2015) (internal citations omitted). Courts dismiss claims for the prospective economic tort where plaintiffs fail to allege that defendant’s interfering act was independently wrongful. See, e.g., Dollar Tree Stores Inc., 2010 WL 1688583, at *4 (dismissing complaint for failure to plead independent wrongful act); Diehl v. Starbucks Corp., No. 12CV2432 AJB (BGS), 2014 WL 295468, at *9 (S.D. Cal. Jan. 27, 2014) (dismissing complaint for failure to plead independt wrongfulness); Weiland Sliding Doors & Windows, Inc. v. Panda Windows & Doors, LLC, 814 F. Supp. 2d 1033, 1042 (S.D. Cal. 2011) (same). Here, JBHA’s intentional interference with prospective economic advantage claim is based on the same allegations as its claim for intentional interference with contractual relations—that GDEB’s meeting with GSE and signing of an NDA somehow prevented GSE or JBHA from performing their obligations pursuant to the Agreement. But these actions were not independently wrongful; to the contrary, the meeting and NDA represented GDEB and GSE’s legitimate and lawful pursuit of a contract to supply mini-submarines to USSOCOM. Accordingly, JBHA has failed to allege any “wrongful” act beyond the “interference” itself, and on this basis alone, its claim for tortious interference with economic relations should be dismissed. Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 22 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 18 - MEMO. IN SUPPORT OF MOTION TO DISMISS B. JBHA fails to allege additional elements that are common to Counts II and III. Although the intentional torts levied in Counts II and III are distinct, they share some elements, including knowledge, intent and causation. Korean Supply Co., 29 Cal. 4th at 1157; Dollar Tree Stores Inc., 2010 WL 1688583, at *4. Just as JBHA fails to sufficiently allege these elements under Count II, so too does JBHA fail under Count III. 1. JBHA fails to allege that GDEB had knowledge of the economic relationship between GSE and JBHA. As in JBHA’s claim of intentional interference with contractual relations, here too it fails to allege that GDEB knew of any obligation that GSE and JBHA owed to each other in connection with the USSOCOM project. In particular, nowhere does JBHA allege that GDEB knew of GSE’s alleged agreement to pay a commission to JBHA. To establish this element, a plaintiff must allege that the defendant had knowledge of the specific economic relationship that defendant allegedly disrupted. See, e.g., Winchester Mystery House, 210 Cal. App. 4th at 596-97; Trindad, 2013 WL 3977034, at *15-16. According to the FAC, GDEB had sufficient knowledge of the JBHA-GSE economic relationship because “GDEB acknowledged to JBHA that GDEB responded—with the GSE mini-sub—to [the Broad Agency Announcement for the SOCOM Dry Combat Submersibles]”; JBHA “communicated o GDEB’s President, John Casey, that GSE is a ‘viable candidate to satisfy the recent SOCOM requirement for commercial minisubs’”; JBHA invited GDEB to visit GSE in December 2010; and, finally, Gordon England, “past [General Dynamics] executive . . . indicated his recognition of JBHA’s efforts” and stated that “EB will now integrate this [GSE] knowledge with other program inputs to decide how t proceed.” (FAC ¶ 153.) The FAC also cites to “facts” across 20 pages of Exhibit 4 purporting to “show” GDEB’s Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 23 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 19 - MEMO. IN SUPPORT OF MOTION TO DISMISS knowledge—the same pages that JBHA cites to for its intentional interference with contractual relations claim. (Id.) In leveling these scattershot allegations, JBHA fails to sufficiently allege GDEB knew of the specific economic relationship that it interfered with. Trindade, 2013 WL 3977034, at *15-16. As discussed above, at best, the FAC broadly alleges that JBHA “explained” to GDEB that it was “representing GSE and working to ensure a business relationship between GSE and GD EB [sic] can be establi hed for the SOCOM Dry Combat Submersible (DCS) Program.” (Ex. 4 at 53.) This allegation is too general to establish that GDEB had awareness of the specific eonomic relationship between GSE and JBHA, and in particular that GSE was obligated to pay JBHA a commission. These allegations amount only to “generalized knowledge,” Trindade, 2013 WL 3977034 at *16-17, well short of the “specific obligations” standard, Wofford, 2011 WL 5445054, at *3, required here. 2. JBHA fails to allege GDEB intended to interfere with JBHA and GSE’s economic relationship. The FAC further fails to allege that GDEB acted with the requisite intent. According to JBHA, GDEB’s “intentional acts” include GDEB informing JBHA that it would bring government officials to GSE’s facilities for a visit (FAC ¶ 154), and “additional acts to disrupt the JBHA-GSE economic relationship are shown by Exhibit 4, fact numbers [82-89] and 93,” which appear to reflect email communications regarding the NDA between GDEB and GSE that did not include JBHA. None of these “facts” support an inference that GDEB acted with “the purpose to interfere,” or knowledge that the supposed “interference was certain or substantially certain to occur as a result . . . .” Korea Supply Co., 29 Cal. 4th at 1156-57. As discussed above, even if these allegations had any connection to GDEB’s supposed intent, JBHA would still face another logical hurdle. As noted above, nowhere does the FAC allege that GDEB knew of the specific contractual provision that was breached—here, GSE’s alleged obligation to pay a commission to JBHA. If Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 24 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 20 - MEMO. IN SUPPORT OF MOTION TO DISMISS GDEB did not know of the contractual provision that was breached, then it could not have intended to cause the breach in the first place. Under similar reasoning, the district court in Trindade dismissed plaintiff’s tortious interference with prospective economic advantage claim, because plaintiff failed to allege knowledge of “any specific” relationships, plaintiff also failed to allege that defendant had intent to disrupt that relationship. Trindade, 2013 WL 3977034 at *16-17; cf. Wofford, 2011 WL 5445054 at *3; Davis, 174 Cal. App. 4th at 10-11. 3. JBHA has not and cannot allege causation. The FAC fails to allege causation. As in the case of JBHA’s intentional interference with contract claim, none of GDEB’s supposedly intentional acts— including entering into the NDA and meeting with GSE—has any logical connection to GSE’s alleged refusal to pay JBHA a commission. To establish causation, JBHA must demonstrate “thati is reasonably probable that the lost economic advantage would have been realized but for the defendant’s interference.” Kasparian v. Cty. of Los Angeles, 38 Cal. App. 4th 242, 271 (1995). However, JBHA fails to allege a causal connection between any of GDEB’s acts and any injury to JBHA. As described above, to have caused any injury to JBHA, GDEB had to have interfered with JBHA’s economic relationship by preventing its performance of the Agreement (so that it could not earn its commission) or with GSE’s performance (of its obligation to pay a commission). Since JBHA claims it “performed all of [its] requisite obligations and duties required by the Agreement” (FAC ¶ 133), the only remaining economic advantage with which GDEB could have interfered is GSE’s alleged obligation to pay JBHA a commission. But there is no conceivable way GDEB’s supposedly tortious acts—the me ting and NDA—could have prevented or in the least impeded GSE from paying the commission if it wished to. Accordingly, JBHA fails to allege “but for” causation and its claim must be dismissed. Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 25 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 21 - MEMO. IN SUPPORT OF MOTION TO DISMISS IV. JBHA’S UNJUST ENRICHMENT CAUSE OF ACTION (COUNT IV) IS NOT A STANDALONE CAUSE OF ACTION IN CALIFORNIA JBHA’s unjust enrichment should be dismissed because it i not a viable cause of action. This cause of action fails for at least three reasons. First, California does not recognize unjust enrichment as a standalone claim. See, e.g., 55 Cal. Jur. 3d Restitution § 2 (“[T]here is no separate cause of action in this state for unjust enrichment[.]”); Durell, 183 Cal. App. 4th at 1370 (“[T]here is no cause of action in California for unjust enrichment.”); Melchior v. New Line Prods., Inc., 106 Cal. App. 4th 779, 793 (2003) (same); Johns v. Bayer Corp., No. 09CV1935 DMS (JMA), 2010 WL 476688, at *6 (S.D. Cal. Feb. 9, 2010); Iezza v. Saxon Mortg. Servs., Inc., No. 10-03634 DDP (JCGx), 2010 WL 3834041, at *2 (C.D. Cal. Sept. 28, 2010) (same); Low v. LinkedIn Corp., 900 F. Supp. 2d 1010, 1031 (N.D. Cal. 2012) (citing cases). On this basis alone, the unjust enrichment claim must be dismissed. Second, as a matter of law, a claim based on an unjust enrichment theory cannot lie where express agreements exist and define the parties’ rights. See, e.g., Cal. Med. Ass’n, Inc. v. Aetna U.S. Healthcare of Calif., 94 Cal. App. 4th 151, 172 (2001); Durell, 183 Cal. App. 4th at 1370-71; Klein v. Chevron U.S.A., Inc., 202 Cal. App. 4th 1342, 1388-90 (2012). Here, the subject of the claim—whether JBHA was entitled to payment for its efforts—was governed by an express contract, the Agreement, which did not involve GDEB. Morever, JBHA’s unjust enrichment theory fails because any benefit conferred upon GDEB was “simply incident to” JBHA’s performance of its own obligations to GSE under the Agreement. Aetna, 94 Cal. App. 4th at 174 (“A person who, incidentally to the performance of his own duty or to the protection or the improvement of his own things, has conferred a benefit upon another, is not thereby entitled to contribution . . . Where the plaintiff acts in performance of his own duty or in protection or improvement of his own property, any incidental benefit conferred on the defendant is not unjust enrichment”) (internal citations omitted). Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 26 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 22 - MEMO. IN SUPPORT OF MOTION TO DISMISS The facts in this case are analogous to those in Aet a. There, plaintiffs, a group of physicians, had contracts with one health care plan operator defendant, but not the other plan operator defendant, defining how plaintiffs would be paid for their services. Aetna, 183 Cal. App. 4th at 156-57. The two defendants had separate agreements between themselves. Id. The court held that plaintiff’s unjust enrichment theory failed because “express binding agreements exist and define the parties’ rights.” Id. at 172. Third, one who confers benefits on another as “a mere volunteer” or confers benefits on another officiously is not entitled to restitution under a theory of unjust enrichment. 1 Witkin, Summary 10th Contracts, §§ 1016; 1020; see also Aetna, 94 Cal. App. 4th at 173 n. 23 (“The mere fact that a person benefits another is not of itself sufficient to require the other to make restitution therefor. Thus, “[e]ven when a person has received a benefit from another, he is rquired to make restitution ‘only if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for him to retain it.’”) (internal cita ions omitted). For example, in Griffith Co. v. Hofues, 201 Cal. App. 2d 502 (1962), a contractor (plaintiff) agreed to do paving work for the purported owner of a piece of property, but that property did not belong to that individual. The court held that theplaintiff could not recover from defendant, the true owner, under a theory of unjust enrichment because the defendant had no relationship with plaintiff and did not induce him into entering into the contract with the third-party. Id. at 506. Similarly, the FAC here does not allege that GDEB requested JBHA to assist with facilitating therelationship between GSE and GDEB. By the terms of the FAC, JBHA acknowledged to GDEB that it would “simply support GSE—no other reason.” (FAC ¶¶ 99-101.) Therefore, any alleged enrichment that GDEB obtained from JBHA’s efforts was the conferred voluntarily upon GDEB. Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 27 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 23 - MEMO. IN SUPPORT OF MOTION TO DISMISS V. THE FAC SHOULD BE DISMISSED WITH PREJUDICE Although JBHA received 30 days to amend its Complaint by right under F.R.C.P. 15, JBHA still fails to state any viable caims against GDEB. As discussed above, for example, JBHA’s own factual allegations demonstrate that GDEB’s supposed intentional acts did not cause any disrupton or breach of the relationship between JBHA and GSE. The FAC contains an unjust enrichment count even when courts have repeatedly held that such claim does not exist in California. Because any further amendment would be futile, the FAC should be dismissed in its entirety without leave to amend. Salameh v. Tarsadia Hotel, 726 F.3d 1124, 1133 (9th Cir. 2013) (holding that “[d]ismissal without leave to amend is proper if it is clear that the complaint could not be saved by amendment” and a district court’s “discretion to deny leave to amend is ‘particularly broad’ where the plaintiff has previously amended.”) (internal citations omitted); Sisseton-Wahpeton Sioux Tribe v. United States, 90 F.3d 351, 355 (9th Cir. 1996) (holding that the district court did not err in denying leave to amend where amendment would be futile). JBHA should not be allowed to maintain this litigation against GDEB, when by its own terms, the FAC makes clear that GDEB should not be a party to this case. CONCLUSION For the foregoing reasons, JBHA has failed to state any viable claim against GDEB. The FAC against GDEB should be dismissed in its entirety. Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 28 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 24 - MEMO. IN SUPPORT OF MOTION TO DISMISS Dated: July 20, 2016 Respectfully submitted, __/s/ Timothy Perry________________ Timothy Perry (SBN 248543) Elaine Zhong (SBN 286394) WILMER CUTLER PICKERING HALE AND DORR LLP Attorneys for Defendant Electric Boat Corporation Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 29 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - i - MEMO. IN SUPPORT OF MOTION TO DISMISS CERTIFICATE OF SERVICE I hereby certify that I am an attorney at Wilmer Cutler Pickering Hale and Dorr LLP. My business address is 350 S. Grand Ave., Suite 2100, Los Angeles, CA, and I am over the age of eighteen years and not a party to the above-titled action. I certify that on July 20, 2016, I served the following document: MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT ELECTRIC BOAT CORPORATION’S MOTION TO DIS MISS FIRST AMENDED COMPLAINT WITH PREJUDICE The document was served by electronic means via the Court’s CM/ECF system to those on the Court’s Electronic Mail Notice List who are currently signed up to receive e-mail notices for this case. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Dated: July 20, 2016 __/s/ Timothy Perry________________ Timothy Perry Case 3:16-cv-00114-DMS-JMA Document 22-1 Filed 07/20/16 Page 30 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [Proposed] Order UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA J.B. HUGHES AND ASSOCIATES, Plaintiff, vs. GIUNIO SANTI ENGINEERING and GENERAL DYNAMICS ELECTRIC BOAT, Defendants. Case No. 16-cv-00114-DMS-JMA [PROPOSED] ORDER GRANTING DEFENDANT ELECTRIC BOAT CORPORATION’S MOTION TO DISMISS FIRST AMENDED COMPLAINT WITH PREJUDICE Hon. Dana M. Sabraw ORDER The Motion to Dismiss First Amended Complaint With Prejudice of Defendant Electric Boat Corporation (identified in the Complaint as “General Dynamics Electric Boat”) having been considered, IT IS HEREBY ORDERED THAT : 1. The motion is GRANTED ; 2. Plaintiff’s causes of action for intentional interfrence with contractual relations (Count II); intentional interference with prospective economic advantage (Count III); and unjust enrichment (Count IV) are dismissed with prejudice as to Electric Boat Corporation. Case 3:16-cv-00114-DMS-JMA Document 22-2 Filed 07/20/16 Page 1 of 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [Proposed] Order IT IS SO ORDERED. Dated: _______________________ Hon. Dana M. Sabraw Case 3:16-cv-00114-DMS-JMA Document 22-2 Filed 07/20/16 Page 2 of 2