Infectolab Ams. LLC v. ArminLabs GmbH
| Decision Date | 21 April 2021 |
| Docket Number | Case No. 20-cv-03318-VKD |
| Court | U.S. District Court — Northern District of California |
| Parties | INFECTOLAB AMERICAS LLC, et al., Plaintiffs, v. ARMINLABS GMBH, Defendant. |
Plaintiffs Infectolab Americas LLC ("Infectolab") and IGeneX, Inc. ("IGeneX") filed this action alleging violation of the Lanham Act, 41 U.S.C. § 1125(a)(1), and asserting several state law claims for relief.1 The Court previously granted a Rule 12(b)(6) motion by defendant ArminLabs GmbH ("ArminLabs") to dismiss three claims asserted only by Infectolab for intentional and negligent interference with prospective economic advantage and tortious interference with contract. Infectolab conceded the motion with respect to its claim for negligent interference with prospective economic advantage, which was dismissed without leave to amend. The Court dismissed the claims for intentional interference with prospective economic advantage and for tortious interference with contract with leave to amend. Dkt. No. 43.
Plaintiffs filed a Second Amended Complaint ("SAC") in which Infectolab reasserts its claims for intentional interference with prospective economic advantage (Count IV) and tortiousinterference with contract (Count V). Dkt. No. 50. Infectolab also adds a claim for declaratory relief (Count VI), seeking "judgment that its contract with AID [Autoimmun Diagnostika GmbH] gives it the exclusive right to use the Products to test residents of the United States," and that ArminLabs's "continued use of the Products to provide testing services to residents of the United States both tortuously [sic] interferes with [Infectolab's] contractual rights with AID as well as interferes with [Infectolab's] business relationships." Id. ¶ 85. ArminLabs moves once again, pursuant to Rule 12(b)(6) to dismiss the interference claims for failure to allege sufficient facts stating a plausible claim for relief. Specifically, ArminLabs argues that the SAC fails to sufficiently allege the disruption of any contract or economic relationship or demonstrating any economic harm. Additionally, ArminLabs moves to dismiss the declaratory judgment claim as needlessly duplicative and on the ground that Infectolab has not plausibly alleged any claim for interference. Infectolab opposes the motion. Upon consideration of the moving and responding papers,2 as well as the arguments presented at the motion hearing, the Court grants ArminLabs's motion to dismiss in part and denies it in part.3
A motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) tests the legal sufficiency of the claims in the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is appropriate where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory. Id. (citing Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990)). In such a motion, all material allegations in the complaint must be taken as true and construed in the light most favorable to the claimant. Id.
However, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Moreover,"the court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged." Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994).
Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." This means that the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). However, only plausible claims for relief will survive a motion to dismiss. Iqbal, 556 U.S. at 679. A claim is plausible if its factual content permits the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. A plaintiff does not have to provide detailed facts, but the pleading must include "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. at 678.
Documents appended to or incorporated into the complaint or which properly are the subject of judicial notice may be considered along with the complaint when deciding a Rule 12(b)(6) motion. Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010).
The tort of intentional interference with contract is closely related to the tort of intentional interference with prospective economic advantage, and the two causes of action share many of the same elements. Robi v. Five Platters, Inc., 918 F.3d 1439, 1442 n.4 (9th Cir. 1990); Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal. 3d 1118, 1126 (1990). "The chief practical distinction between interference with contract and interference with prospective economic advantage is that a broader range of privilege to interfere is recognized when the relationship or economic advantage interfered with is only prospective." Pac. Gas & Elec. Co., 50 Cal. 3d at 1126; see also AlterG, Inc. v. Boost Treadmills LLC, 388 F. Supp. 3d 1133, 1151 (N.D. Cal. 2019) (same).
To state a claim for intentional interference with prospective economic advantage, Infectolab must allege (1) an economic relationship between Infectolab and some third party, with the probability of future economic benefit to Infectolab; (2) ArminLabs's knowledge of the relationship; (3) intentional acts by ArminLabs designed to disrupt the relationship; (4) actualdisruption of the relationship; and (5) economic harm to Infectolab proximately caused by the acts of ArminLabs. Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1153 (2003). Additionally, the third element requires Infectolab to "plead intentional wrongful acts on the part of the defendant designed to disrupt the relationship," and those wrongful acts must be separate and apart from the interference itself. Id. at 1154. The tort of "interference with prospective advantage does not require proof of a legally binding contract." Pac. Gas & Elec. Co., 50 Cal. 3d at 1126. "Nevertheless, courts have made clear that '[t]he law precludes recovery for overly speculative expectancies by initially requiring proof' that it is 'reasonably probable that the prospective economic advantage would have been realized but for defendant's interference.'" AlterG, Inc., 388 F. Supp. 3d at 1149 (quoting Westside Ctr. Assocs. v. Safeway Stores 23, Inc., 42 Cal. App. 4th 507, 522 (1996)).
At the motion hearing, Infectolab confirmed that this claim is based solely on its economic relationships with customers, and not on Infectolab's February 26, 2020 "Exclusive Supply Agreement" ("Agreement") or relationship with AID. Dkt. No. 55. Here, Infectolab says that there are at least nine United States customers who previously used ArminLabs's testing services, but who began using Infectolab's services after March 2020 when ArminLabs stopped accepting blood samples from the United States due to the COVID-19 pandemic. Dkt. No. 50 ¶¶ 44-45. Of these nine customers, the SAC alleges that there are two clinics—one in the northeastern United States and another in Florida—to which Infectolab previously had marketed its services. Although the northeastern clinic reportedly expressed interest in Infectolab's services, both clinics declined Infectolab's business in favor of ArminLabs's cheaper prices. The SAC further alleges that when ArminLabs stopped accepting blood samples from the United States, these two clinics began using Infectolab's services. Id. Infectolab claims that these customers' current use of Infectolab's services "demonstrates that there is a substantial portion of the market that would use [Infectolab]'s testing services (for which the Products would be used) but for [ArminLabs]'s improper use of the Products." Id. ¶ 45.
ArminLabs moves to dismiss this claim, arguing that Infectolab fails to identify any customers with whom it had an existing relationship, or any protected expectancy of business, atthe time of ArminLabs's alleged interference. Indeed, courts have held that "that the 'relationship' that forms the basis of the intentional interference tort must have existed at the time of the allegedly tortious conduct." O'Connor v. Uber Techs., Inc., 58 F. Supp. 3d 989, 997 (N.D. Cal. 2014) (citing cases). Here, the SAC suggests that the alleged interference occurred at least as recently as 2019, when Infectolab says it marketed its testing services to the clinic in the northeastern United States. Dkt. No. 50 ¶ 44. There is no allegation that Infectolab had an existing relationship with that clinic, or any other customer referred to in the SAC, at the time of ArminLabs's alleged interference. And at oral argument, Infectolab confirmed that it is not claiming that it had any such existing relationships at that time. Dkt. No. 55. Simply alleging relationships with potential customers is insufficient to state a claim because " Rheumatology Diagnostics Lab., Inc. v. Aetna, Inc., No. 12-cv-05847-WHO, 2013 WL 5694452 at *21 (N.D. Cal. Oct. 18, 2013) (quoting Westside Ctr. Assocs, 42 Cal. App. 4th at 523).
Infectolab nonetheless contends that it has alleged a plausible claim based on a "protected expectancy" of business with customers in the United States. See Swingless Golf v. Taylor, No. C 08-05574 WHA, 2009 WL...
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