Herbalife International of America, Inc. v. Eastern Computer Exchange, Inc.

• Court: District Court, C.D. California
• Decided: March 18, 2024
• Docket: 2:22-cv-00347
• Status: Unknown

Opinion

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8 United States District Court 9 Central District of California

11 HERBALIFE INTERNATIONAL OF Case № 2:22-cv-00347-ODW (AGRx) AMERICA, INC., 12 ORDER RE: MOTIONS FOR Plaintiff and 13 Counter-Defendant, SUMMARY JUDGMENT [127] [133] 14 v.

15 EASTERN COMPUTER EXCHANGE, INC., 16

17 Defendant and Counterclaimant. 18 19 I. INTRODUCTION 20 Herbalife International of America, Inc. and Eastern Computer Exchange, Inc., 21 each bring suit against the other, alleging breach of the parties’ agreements and equitable 22 claims. (Herbalife First Am. Compl. (“HC”) ¶ 5, ECF No. 35; Eastern First Am. 23 Countercl. (“ECC”) ¶¶ 34–71, ECF No. 38.) Both parties move for summary judgment. 24 (See Eastern Mot. Summ. J. (“EMSJ”), ECF No. 127; Herbalife Mot. Summ. J. 25 (“HMSJ”), ECF No. 133.) For the reasons below, the Court DENIES Eastern’s motion 26 and GRANTS IN PART and DENIES IN PART Herbalife’s motion.1 27

28 1 Having carefully considered the papers filed in connection with the motions, the Court deemed the matters appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 II. BACKGROUND2 2 Herbalife is a global nutrition company. (HC ¶ 6.) Eastern is a technology 3 company that partners with original equipment manufacturers to resell equipment to 4 end users like Herbalife for their business operating needs. (Id. ¶ 13.) 5 A. Agreements 6 In early December 2019, Herbalife and Eastern entered into a Non-Disclosure 7 Agreement (“NDA”) in anticipation of Herbalife engaging Eastern’s services. (Decl. 8 Scott E. Shapiro ISO EMSJ (“Shapiro Decl.”), Ex. F (“HC”), Ex. 1 (“NDA”), ECF 9 Nos. 130 (redacted), 131 (unredacted).) Herbalife and Eastern then entered into a 10 Master Services Agreement (“MSA”), wherein Eastern agreed to provide Herbalife 11 professional services. (Eastern SUF (“ESUF”) 1, 11, ECF No. 129; Shapiro Decl. 12 Ex. F, Ex. 2 (“MSA”), ECF Nos. 130 (redacted), 131 (unredacted).) The “Services” are 13 broadly described in the MSA’s Schedule A as architecture, design, implementation, 14 and project management for Herbalife’s IT systems. (ESUF 11.) The MSA requires 15 Eastern to perform the Services “in a conscientious and professional manner,” “to the 16 best of [its] ability,” and in a “workmanlike manner.” (ESUF 2; MSA §§ 2, 5.) Later, 17 in June 2020, Herbalife and Eastern entered into an Enterprise License Agreement 18 (“ELA”), for Herbalife’s potential purchases of licenses and technology support 19 through Eastern’s licensing program. (Herbalife SUF (“HSUF”) 54, ECF No. 133-1.)3 20 B. Herbalife’s Procurement Policies 21 In 2020 and 2021, Herbalife’s procurement policies required a multi-part prior 22 authorization before approval of any capital expenditure exceeding $200,000. 23 2 The Court derives the factual background, some of which is disputed, from the parties’ Statements 24 of Uncontroverted Facts (“SUF”), Statements of Genuine Disputes and Additional Material Facts 25 (“SGD” and “AMF”), and Responses thereto (collectively, the “Statements”), in addition to the parties’ clearly and specifically cited evidence. See C.D. Cal. L.R. 56-1 to 56-4. 26 3 The parties do not cite to a complete unredacted copy of the ELA, and the Court is unable to locate one in the voluminous evidence or the pleadings. Therefore, the Court cites to the only ELA that the 27 parties clearly identify, which consists of redacted excerpts in Herbalife’s Compendium. The Court 28 pincites Herbalife’s Compendium pagination for clarity. (See Decl. Donald Brown ISO HMSJ ¶ 3, Ex. B (“E. Dep.”), Ex. 5 (“ELA”), HMSJ Comp. 331–38, ECF No. 133-2.) 1 (HSUF 5.) That process included approval of, first, a project authorization request 2 (“PAR”), and then, a purchase requisition or purchase order (“PO”) for specific 3 purchases tied to the project. (Id.) 4 Eastern disputes that it ever agreed to be bound by these procedures. (Eastern 5 SGD (“ESGD”) & AMF (“EAMF”) 5, ECF Nos. 146 (redacted), 147 (unredacted).) 6 Eastern also contends that Herbalife did not consistently follow these policies and 7 sometimes directed Eastern to provide goods or services first, before Herbalife’s 8 approval process was completed. (EAMF 149–52.) Herbalife disputes these assertions. 9 (Herbalife Resp. EAMF (“H. Resp. EAMF”) 149–52, ECF Nos. 150 (redacted), 151 10 (unredacted).) 11 C. Business Continuity and Disaster Recovery Project 12 In April 2020, Herbalife retained Eastern to perform a risk-mitigation assessment 13 of Herbalife’s applications, known as an “application impact analysis,” including those 14 that supported Herbalife’s business continuity and disaster recovery (“BCDR”). 15 (ESUF 5, 12; HSUF 9–11.) 16 1. Proposals & Equipment Order 17 Subsequently, Eastern sent Herbalife a proposed Scope of Work (“SOW”) for a 18 potential BCDR project intended to “modernize” Herbalife’s IT systems. (HSUF 9.) 19 The proposal included implementing “Phase 1” of the BCDR project. (Id.) Eastern 20 also sent Herbalife a proposed bill of materials for $10.5 million in Phase 1 equipment. 21 (HSUF 13.) Although the parties never executed the Phase 1 SOW or bill of materials, 22 (HSUF 10, 12, 14), and Herbalife never issued any PAR, PR, or PO for any part of the 23 BCDR project, (HSUF 16), Eastern contends that Herbalife awarded Eastern Phase 1 24 of the BCDR project in May 2020. (EAMF 122.) Herbalife disagrees. 25 (H. Resp. EAMF 122.) 26 According to Eastern, at an October 28, 2020, in-person meeting, Herbalife VP 27 Peter Bray instructed Eastern representatives Marty O’Brien and Brendan Lynch to 28 order the BCDR equipment so that Herbalife would have it before the end of the year. 1 (EAMF 126–27.) On October 30, 2020, Eastern ordered approximately $22 million of 2 BCDR equipment from Dell Technologies for Herbalife (the “Equipment Order”). 3 (HSUF 19; EAMF 128.) Herbalife disputes that its representatives directed Eastern to 4 order the equipment. (H. Resp. EAMF 126–27.) 5 In November 2020, Eastern helped Herbalife draft a PAR for Herbalife board 6 approval based on Eastern’s proposals. (Herbalife SGD (“HSGD”) & AMF 7 (“HAMF”) 36, ECF No. 134-1.) In December 2020, Eastern responded to Herbalife’s 8 request for proposal (“RFP”) on Phase 2 of the BCDR project, proposing more than 9 $40 million in services and equipment, including the equipment that Eastern had 10 already ordered. (HSUF 27–30; HAMF 38.) In late January 2021, Eastern’s Brendan 11 Lynch sent Herbalife an “Offer Letter” and updated “proposal,” for the entire BCDR 12 project, offering to reduce Eastern’s overall updated proposal fee. (HSUF 34.) 13 On January 29, 2021, Herbalife informed Eastern the BCDR project was “on hold 14 from top management.” (HSUF 41.) 15 2. Deloitte Review 16 In February 2021, Herbalife retained Deloitte Consulting to review Eastern’s 17 overall BCDR proposal. (HSUF 45; HAMF 43–44.) The Deloitte review cost 18 Herbalife $300,000. (ESUF 17; HAMF 44.) Deloitte advised Herbalife that 19 “alternative solutions” to Eastern’s BCDR proposal were available and “should be 20 considered.” (HSUF 46.) Later in 2021, Herbalife hired Deloitte again, at a cost of 21 $450,000, to explore and propose those alternative solutions. (HSUF 47; HAMF 45.) 22 To date, Herbalife has not implemented any BCDR plans. (EAMF 190; ESUF 28.) 23 3. Dell Technologies 24 On February 23, 2021, in response to Dell’s requests for confirmation of the 25 BCDR Equipment Order, Eastern sent Dell an apparent Herbalife purchase order 26 reflecting the October 2020 Equipment Order. (HAMF 46; Decl. Donald Brown ISO 27 Opp’n EMSJ (“Brown Decl. Opp’n EMSJ”) ¶ 11, Ex. J (“E. Dep.”) 170:15, Ex. 19, 28 ECF No. 134-2.) The February 23, 2021 PO is unsigned and lists the price of every 1 item as “1.00.” (Id.) Between July 13, 2021, and July 22, 2021, Dell corresponded 2 directly with Herbalife regarding the Equipment Order, and Herbalife opened an 3 investigation into the Equipment Order and the February 23, 2021 PO. (HAMF 49; 4 Brown Decl. Opp’n EMSJ ¶ 17, Ex. P (“Dell Email Chain”), ECF No. 134-2.) 5 On July 27, 2021, Dell and Eastern entered into a settlement agreement in which 6 Dell agreed to accept the return of the equipment Eastern had ordered and refunded the 7 purchase price to Eastern. (HSUF 26.) Eastern sent Herbalife a bill for $57 million that 8 included a charge for the Equipment Order. (HAMF 53.) 9 D. MSA Termination & Improper Disclosures 10 On January 14, 2022, Herbalife notified Eastern in writing that Herbalife was 11 terminating the MSA. (HAMF 54.) Herbalife later learned, and Eastern does not 12 dispute, that Eastern improperly disclosed one of Herbalife’s confidential Deloitte 13 reports to Dell. (HAMF 56.) Similarly, Eastern asserts that an Herbalife employee 14 improperly disclosed Eastern’s pricing information to a competitor, but Herbalife 15 disputes this. (EAMF 69; H. Resp. EAMF 69.) 16 E. This Lawsuit 17 On January 17, 2022, Herbalife initiated this lawsuit against Eastern. (Compl., 18 ECF No. 1.) Herbalife asserts that Eastern breached the MSA and NDA, and 19 fraudulently concealed the Equipment Order. (HC ¶¶ 57–77.) Eastern counterclaims 20 and asserts that Herbalife breached verbal agreements for the BCDR project and 21 Equipment Order, breached the MSA, NDA, and ELA, and in the alternative to the 22 contract claims, asserts that Herbalife should be estopped from breaking its promises. 23 (ECC ¶¶ 34–50.)4 24 On March 13, 2023, the parties filed cross motions for summary judgment. 25 (Herbalife First Mot. Summ. J., ECF No. 79; Eastern First Mot. Summ. J., ECF No. 82.) 26 Due to the noncompliant and unmanageable filings, the Court struck the motions. 27

28 4 These are the claims and counterclaims surviving at the time of the motions for summary judgment. (See Order Pl.’s Mot. Dismiss, ECF No. 52; Order Granting Stip. Dismiss, ECF No. 74.) 1 (Order Striking, ECF No. 105 (“Plaintiffs dump this heaping mess outside of chambers 2 and leave the Court to muddle through their briefs’ dreamlike associations.” (quoting 3 Premier Constr. & Remode, Inc. v. Mesa Underwriters Special Ins. Co., No. 5:18-cv- 4 02852-JGB (KKx), 2020 WL 5498072, at *2 (C.D. Cal. July 8, 2020))).) Only after the 5 parties substantially complied with the Court’s directive to coordinate their applications 6 to file materials under seal did the Court permit the present motions. (Order Granting 7 Am. Joint Appl. Seal & Setting Briefing, ECF No. 126.) 8 The parties have now refiled their motions for summary judgment, Statements, 9 and compendia of evidence. In light of the still-voluminous filings, and the specific 10 history concerning the parties’ submissions related to the summary judgment motions, 11 the Court directed the parties to confirm the relevant filings for the Court’s 12 consideration. (See Mins., ECF No. 172; Joint Report, ECF No. 173.)5 Thus, the Court 13 may now turn to resolving the cross motions for summary judgment. 14 III. EVIDENTIARY OBJECTIONS 15 Herbalife objects to portions of Eastern’s opposition evidence. (See Herbalife 16 Evid. Objs. ISO HMSJ, ECF No. 149.) Much of the material to which Herbalife objects 17 is unnecessary to the resolution of the motions and the Court need not resolve those 18 objections. For similar reasons, relevance- and foundation-based objections are moot 19 in the context of summary judgment motions. Burch v. Regents of Univ. of Cal., 433 F. 20 Supp. 2d 1110, 1119 (E.D. Cal. 2006). Moreover, the Court does not consider improper 21 argument and legal conclusions in the parties’ Statements, (see Scheduling & Case 22 Management Order (“Scheduling Order”) 7–9, ECF No. 28), so Herbalife’s objections 23 on that basis are also moot. As for hearsay, a court may not grant a summary judgment 24 5 For the sake of clarity, the Court considers the following submissions in resolving the cross motions, 25 as confirmed by the parties’ Joint Report: Eastern motion papers, ECF Nos. 127–32; Herbalife opposition papers, ECF No. 134; Eastern reply papers, ECF Nos. 143–45; Herbalife motion papers, 26 ECF No. 133; Eastern opposition papers, ECF Nos. 135, 138–39, 146–47; Herbalife reply papers, ECF No. 148–51. (See Joint Report.) Each ECF listed here includes all sub-filings within that docket entry. 27 The Court does not consider evidence or argument from the prior motion submissions, despite the 28 parties’ repeated citations thereto. Those submissions have been stricken from the record and provide no support for the current motions. 1 motion on the basis of hearsay evidence, but it may deny a summary judgment motion 2 on the basis of hearsay evidence as long as it finds that the hearsay evidence would be 3 admissible at trial. Fed. R. Civ. P. 56(e); Fraser v Goodale, 342 F.3d 1032, 1036–37 4 (9th Cir. 2003). Finally, to the extent the Court relies on objected-to evidence in this 5 order without further discussion, those objections have been thoroughly considered and 6 are overruled. See Burch, 433 F. Supp. 2d at 1122 (proceeding with only necessary 7 evidentiary rulings). 8 IV. LEGAL STANDARD 9 A court “shall grant summary judgment if the movant shows that there is no 10 genuine dispute as to any material fact and the movant is entitled to judgment as a matter 11 of law.” Fed. R. Civ. P. 56(a). A disputed fact is “material” where it might affect the 12 outcome of the suit under the governing law, and the dispute is “genuine” where “the 13 evidence is such that a reasonable jury could return a verdict for the nonmoving party.” 14 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The burden of establishing 15 the absence of a genuine issue of material fact lies with the moving party. See Celotex 16 Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). 17 Once the moving party satisfies its initial burden, the nonmoving party cannot 18 simply rest on the pleadings or argue that any disagreement or “metaphysical doubt” 19 about a material issue of fact precludes summary judgment. See id. at 324; Matsushita 20 Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The non-moving party 21 must show that there are “genuine factual issues that . . . may reasonably be resolved in 22 favor of either party.” Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, 23 Inc., 818 F.2d 1466, 1468 (9th Cir. 1987) (quoting Anderson, 477 U.S. at 250) 24 (emphasis omitted). Provided the moving party has satisfied its burden, the court should 25 grant summary judgment against a party who fails to make a sufficient showing on an 26 element essential to her case when she will ultimately bear the burden of proof at trial. 27 Celotex, 477 U.S. at 322–23. 28 1 In ruling on summary judgment motions, courts “view the facts and draw 2 reasonable inferences in the light most favorable” to the nonmoving party, without 3 making credibility determinations or weighing conflicting evidence. Scott v. Harris, 4 550 U.S. 372, 378 (2007) (internal quotation marks omitted). Thus, when parties file 5 cross-motions for summary judgment, the court “evaluate[s] each motion separately, 6 giving the nonmoving party in each instance the benefit of all reasonable inferences.” 7 A.C.L.U. of Nev. v. City of Las Vegas, 466 F.3d 784, 790–91 (9th Cir. 2006). The court 8 considers each party’s cited evidence, “regardless under which motion the evidence is 9 offered.” Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011). 10 Conclusory, speculative, or “uncorroborated and self-serving” testimony will not raise 11 genuine issues of fact to defeat summary judgment. Villiarimo v. Aloha Island Air, Inc., 12 281 F.3d 1054, 1061 (9th Cir. 2002); Thornhill Publ’g Co. v. GTE Corp., 594 F.2d 730, 13 738 (9th Cir. 1979). The nonmoving party must provide more than a “scintilla” of 14 contradictory evidence to survive summary judgment. Anderson, 477 U.S. at 251–52; 15 Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000). 16 The Court may assume that material facts claimed and adequately supported are 17 undisputed except to the extent that such material facts are (a) included in the opposing 18 party’s responsive statement of disputes and (b) controverted by declaration or 19 competent written evidence. C.D. Cal. L.R. 56-4. The Court is not obligated to look 20 any further in the record for supporting evidence other than what is actually and 21 specifically referenced. Id. 22 V. EASTERN’S MOTION 23 The Court begins with Eastern’s motion before turning to Herbalife’s motion 24 below. Eastern moves for summary judgment on Herbalife’s causes of action for breach 25 of contract and fraudulent concealment. (See generally EMSJ 2, 9–15.) 26 A. Breach of Contract—MSA & NDA 27 Herbalife asserts that Eastern breached the MSA by failing to provide services in 28 a professional and workmanlike manner because, among other things, Herbalife 1 retained Eastern to provide an assessment of Herbalife’s BCDR applications, but 2 Eastern instead developed an over-budget proposal for a BCDR system that overlooked 3 alternatives more suited to Herbalife’s objectives, and then aggressively pressured 4 Herbalife to approve and implement Eastern’s BCDR proposal. (Herbalife Opp’n 5 (“H. Opp’n”) 3–4, ECF No. 134; see also HC ¶¶ 72–77.) Herbalife also contends that 6 Eastern breached the MSA by refusing to permit Herbalife to audit Eastern’s books and 7 records, and that Eastern breached the MSA and NDA by disclosing a confidential 8 Deloitte report. (H. Opp’n 8–9.) 9 Eastern moves for summary judgment on Herbalife’s breach of contract cause of 10 action on the grounds that Herbalife has no recoverable contract damages. (EMSJ 2.) 11 Under California law,6 to prove a cause of action for breach of contract, the plaintiff 12 must prove damages resulting from the breach. See Oasis W. Realty, LLC v. Goldman, 13 51 Cal. 4th 811, 821 (2011). 14 1. NDA 15 Eastern argues Herbalife cannot prove damages resulting from the breach of the 16 NDA because Herbalife’s economic damages expert does not mention monetary harm 17 attributable to that breach. (EMSJ 11.) However, Herbalife does not seek 18 compensatory damages on its NDA claim. (H. Opp’n 9.) Rather, Herbalife seeks 19 injunctive relief and specific performance. (HC, Prayer for Relief ¶ 1.) The NDA 20 expressly authorizes a non-breaching party to pursue injunctive relief “without needing 21 to prove damages.” (NDA § 8; HAMF 55.) As such, Eastern’s NDA argument fails. 22 2. MSA 23 As to the MSA, Eastern first contends that Herbalife has no damages resulting 24 from the breach of the MSA because: (1) Herbalife lacked any BCDR capabilities; 25 (2) the design Eastern proposed met Herbalife’s objectives; and (3) Herbalife cannot 26 recover under the MSA simply because it “chang[ed] its mind” about the goals of the 27 project. (EMSJ 12–13.) Herbalife disputes each of these points and argues the fees 28 6 The MSA and NDA are governed by California law. (MSA § 12; NDA § 10.) 1 paid to Deloitte, to review Eastern’s proposal and develop appropriate alternative 2 designs, constitute recoverable contract damages resulting from Eastern’s breach. 3 (H. Opp’n 3–5.) 4 Eastern’s moving arguments address performance or causation, not damages. 5 Regardless, however, they raise a host of disputed material facts, including whether: 6 (1) Herbalife had any BCDR capabilities, (see ESUF 23; HSGD 23 (disputed)); 7 (2) Eastern’s proposal met Herbalife’s BCDR objectives, (see ESUF 20, 27; HSGD 20, 8 27 (disputed)); and (3) Eastern’s proposal adequately considered relevant alternatives, 9 (see ESUF 13, 20; HSDG 20 (disputed); HAMF 43). As such, even assuming Eastern 10 has made a preliminary showing on this point—which the Court does not find— 11 Herbalife raises ample genuine disputes of material fact. Drawing all reasonable 12 inferences in favor of Herbalife as the nonmoving party, Scott, 550 U.S. at 378, a 13 reasonable jury could find in favor of Herbalife on Eastern’s arguments, Anderson, 14 477 U.S. at 248. Therefore, summary judgment is not appropriate on this basis. 15 Next, Eastern contends section 4(C) of the MSA limits Herbalife’s remedies and 16 excludes the cost of the Deloitte reviews as contract damages. (EMSJ 11–12.) 17 Contract interpretation is a matter of law where it does not rely on inadmissible 18 extrinsic evidence. Am. Alt. Ins. Corp. v. Superior Ct., 135 Cal. App. 4th 1239, 1245 19 (2006). Where “contractual language is clear and explicit and does not involve an 20 absurdity, the plain meaning governs.” Id. Contracting parties may limit the available 21 remedies in the event of a breach. See Robinson Helicopter Co., Inc. v. Dana Corp., 22 34 Cal. 4th 979, 992–93 (2004). However, unless the contract clearly indicates that the 23 specified remedies are exclusive, “the injured party may seek any other remedy 24 provided by law.” McDonald v. Stockton Met. Transit Dist., 36 Cal. App. 3d 436, 442 25 (1973); see also Brandon & Tibbs v. George Kevorkian Acct. Corp., 226 Cal. App. 3d 26 442, 454 (1990) (“The rules of law governing the recovery of damages for breach of 27 contract are very flexible.”). 28 1 Section 4(C) of the MSA is part of the “Term and Termination” clause, and 2 provides, “In the event that [Eastern] fails to provide the Services hereunder, [Eastern] 3 shall provide Herbalife with a full refund of any deposits or prepayments made by 4 Herbalife, plus any financial penalties incurred by Herbalife due to such cancellation.” 5 (MSA § 4(C) (emphasis added).) Eastern argues this provision limits Herbalife to 6 recover only these “very specific and limited remedies.” (EMSJ 12.) 7 Eastern is mistaken. Nothing in section 4(C) suggests it is intended to limit 8 Herbalife’s remedies in the event of Eastern’s breach. Rather than taking any remedies 9 off the table, it affirmatively requires Eastern to refund certain types of prepayments 10 and cover any consequent penalties. No language expressly or impliedly makes this 11 remedy exclusive, and Herbalife may therefore seek “any other remedy provided by 12 law.” Aquamen Ent. LLC v. Pigmental, LLC, No. 2:17-cv-58-GW (GJSx), 2017 WL 13 7806619, at *7 (C.D. Cal. May 8, 2017) (quoting McDonald, 36 Cal. App. 3d at 442). 14 As such, Eastern’s argument that section 4(C) of the MSA limits Herbalife’s contract 15 damages fails. 16 Accordingly, Eastern is not entitled to summary judgment on Herbalife’s breach 17 of contract cause of action for either the NDA or MSA. 18 B. Fraudulent Concealment 19 Herbalife alleges that Eastern fraudulently concealed the Equipment Order from 20 Herbalife, and Herbalife would not have retained Deloitte to review Eastern’s BCDR 21 proposal if Herbalife had known that Eastern already placed the order. (HC ¶¶ 57–71; 22 H. Opp’n 13; HAMF 51.) Eastern argues the economic loss rule bars the cause of 23 action. (EMSJ 14–15.)7 24

25 7 Eastern also makes a passing comment that this cause of action fails because Herbalife cannot prove reliance or damages. (EMSJ 15 (“[D]espite never being able to produce evidence of justifiable 26 reliance or even detrimental reliance, Herbalife cannot escape the fact it has no damages.”).) The Court “decline[s] to address this undeveloped argument, which is not supported by citations to the 27 record, argument, or any legal authority.” Ventress v. Japan Airlines, 747 F.3d 716, 723 n.8 (9th Cir. 28 2014); United States v. Graf, 610 F.3d 1148, 1166 (9th Cir. 2010) (“Arguments made in passing and not supported by citations to the record or to case authority are generally deemed waived.”). 1 Fraudulent concealment is an intentional tort. Nissan Motor Acceptance Cases, 2 63 Cal. App. 5th 793, 829 (2021). “The economic loss rule generally bars tort claims 3 for contract breaches, thereby limiting contracting parties to contract damages.” United 4 Guar. Mortg. Indem. Co. v. Countrywide Fin. Corp., 660 F. Supp. 2d 1163, 1180 5 (C.D. Cal. 2009). In cases concerning a breach of contract, limiting the recovery to 6 breach of contract damages “makes it easier for parties to ‘estimate in advance the 7 financial risks of their enterprise.’” Id. (quoting Freeman & Mills, Inc. v. Belcher Oil 8 Co., 11 Cal. 4th 85, 106 (1995)). Consequently, “the rule is particularly strong when a 9 party alleges ‘commercial activities that negligently or inadvertently [went] awry.’” Id. 10 (quoting Robinson, 34 Cal. 4th at 991 n.7) (alteration in original). 11 However, an exception applies where commercial activities go awry as a 12 consequence of conduct that is intentional or beyond the contract. See Robinson, 13 34 Cal. 4th at 988. A harm goes “above and beyond” the contract, and thus becomes 14 tortious, “when it also violates a duty independent of the contract arising from principles 15 of tort law.” Id. at 989; see also Erlich v. Menezes, 21 Cal. 4th 543, 551 (1999) (“An 16 omission to perform a contract obligation is never a tort, unless that omission is also an 17 omission of a legal duty.” (emphasis added)). For instance, “when one party commits 18 a fraud during the contract formation or performance, the injured party may recover in 19 contract and tort.” Harris v. Atl. Richfield Co., 14 Cal. App. 4th 70, 78 (1993) (emphasis 20 added). This is because “[n]o rational party would enter into a contract anticipating that 21 they are or will be lied to.” Dhital v. Nissan N. Am., Inc., 84 Cal. App. 5th 828, 840 22 (2022) (quoting Robinson, 34 Cal. 4th at 993). 23 Here, Herbalife asserts that the duty and conduct involved in Eastern’s alleged 24 fraudulent concealment of the Equipment Order are separate from those involved in 25 Eastern’s alleged breach of the MSA. (H. Opp’n 10.) Herbalife contends Eastern 26 breached the MSA by proposing a BCDR design that was unreasonably overbudget and 27 failed to consider more suitable alternatives. (Id. at 12.) Herbalife claims it was harmed 28 by the contract breach because it had to retain Deloitte to review Eastern’s overbudget 1 design. (Id.; HAMF 44–45.) The duty and conduct involved in the alleged breach of 2 the MSA thus revolve around Eastern’s contractual obligation to provide services in a 3 professional and workmanlike manner. 4 In contrast, Herbalife contends that Eastern ordered the BCDR equipment 5 without authorization and then fraudulently concealed the order by continuing to 6 negotiate and support the BCDR project proposal as if the Equipment Order had not 7 already been placed. (H. Opp’n 10–12.) Herbalife claims it was harmed by Eastern’s 8 concealment because Herbalife only retained Deloitte to review Eastern’s BCDR 9 proposal in reliance on Eastern acting as if it was still in the negotiating and proposal 10 phase. (Id.) Herbalife asserts it never would have retained Deloitte to review Eastern’s 11 design had it known Eastern already ordered $22 million in equipment. (Id.) The duty 12 and conduct involved in the alleged fraudulent concealment thus revolve around 13 Eastern’s duty to disclose the allegedly unauthorized Equipment Order. See Graham v. 14 Bank of Am., N.A., 226 Cal. App. 4th 594, 606 (2014) (noting that a cause of action for 15 fraudulent concealment requires the defendant to have concealed a material fact it is 16 was under a duty to disclose to the plaintiff). 17 Many of the facts underlying these arguments are disputed and clearly material, 18 as relevant here, to the fraudulent concealment claim. For instance, Herbalife raises 19 material disputes regarding whether the Equipment Order was unauthorized, 20 (HAMF 34, 42), whether Eastern concealed the Equipment Order by continuing to 21 negotiate and support the presentation to Herbalife’s board, (HAMF 34, 36–41), and 22 whether Herbalife would not have retained Deloitte to review Eastern’s proposal had it 23 known that Eastern ordered the equipment, (HAMF 51). Making no credibility 24 determinations, the Court finds that Herbalife submits sufficient evidence in support of 25 these factual disputes such that they may reasonably be resolved in favor of either party. 26 Accordingly, drawing all reasonable inferences in Herbalife’s favor as the nonmoving 27 party, Scott, 550 U.S. at 378, a reasonable jury could find that Eastern “violate[d] a duty 28 1 independent of the contract arising from principles of tort law,” Robinson, 34 Cal. 4th 2 at 989, specifically the duty to disclose the Equipment Order to Herbalife. 3 Eastern argues that the fraudulent conduct exception to the economic loss rule 4 does not apply here because the California Supreme Court in Robinson held that only 5 affirmative fraudulent misrepresentations are excepted, and Herbalife asserts fraudulent 6 omissions and concealment. (EMSJ 14–15.) Eastern is correct that the California 7 Supreme Court held only that the economic loss doctrine did not prohibit recovering for 8 purely economic injury due to affirmative fraudulent misrepresentations. Robinson, 9 34 Cal. 4th at 991–92. The court in Robinson found the affirmative misrepresentations 10 sufficient to resolve the issue before it, and therefore the court explicitly did not consider 11 whether fraudulent concealment was also excepted from the bar of the economic loss 12 rule. Id. (“Because Dana’s affirmative intentional misrepresentations of fact . . . are 13 dispositive . . . , we need not address the issue of whether Dana’s intentional 14 concealment constitutes an independent tort.”). 15 Following Robinson, courts have widely diverged on whether fraudulent 16 omission or concealment is excepted from the economic loss rule. See Dhital, 84 Cal. 17 App. 5th at 843 (“We acknowledge the differing views taken by courts that have 18 considered this issue.”) (collecting cases). “To date, ‘[t]here is no controlling state 19 precedent’ indicating ‘whether fraudulent concealment claims are exempted from the 20 economic loss rule.’” Kroutilin v. FCA US, LLC, No. 8:22-cv-00929-FWS (DFMx), 21 2022 WL 18278602, at *4 (C.D. Cal. Dec. 7, 2022) (quoting Rattagan v. Uber Techs., 22 Inc., 19 F.4th 1188, 1992 (9th Cir. 2021)). The Ninth Circuit certified the question to 23 the California Supreme Court, which granted the request; the question remains pending. 24 See Rattagan, 19 F.4th at 1992; Rattagan v. Uber Techs., Inc., No. S272113, 2022 Cal. 25 LEXIS 490 (Cal. Sup. Ct. Feb. 9, 2022). However, the California Court of Appeal,8 26

8 “When interpreting state law, federal courts are bound by decisions of the state’s highest court.” 27 PSM Holding Corp. v. Nat’l Farm Fin. Corp., 884 F.3d 812, 820 (9th Cir. 2018). “In the absence of 28 such a decision, a federal court must predict how the highest state court would decide the issue using intermediate appellate court decisions . . . .” Id. 1 recently addressed the issue in Dhital, 84 Cal. App. 5th at 843, and reasoned that the 2 rationale in Robinson supporting an exception for affirmative fraudulent 3 misrepresentations applied equally to fraudulent inducement by concealment. 4 The reasons supporting Robinson’s holding excepting affirmative 5 misrepresentations from the economic loss bar, and Dhital’s holding excepting 6 fraudulent inducement from the economic loss bar, also support excepting fraudulent 7 concealment and omissions made during performance of a contract from the economic 8 loss bar. See Anderson v. Apple Inc., 500 F. Supp. 3d 993, 1022 (N.D. Cal. 2020) 9 (holding that Robinson’s “reasoning compels finding that recovery for fraudulent 10 omissions is not barred by the economic loss rule”). The Court finds “no principled 11 reason . . . for distinguishing between the two types of intentional misrepresentations.” 12 Id. at 1020. “[A] fraudulent omission is, by its nature, just as deceptive as a fraudulent 13 affirmative misrepresentation.” Id. (citing Robinson, 34 Cal. 4th at 992). Fraudulent 14 concealment constitutes conduct independent of contract performance, and causes harm 15 “above and beyond” the breach of contract because “it also violates a duty independent 16 of the contract arising from principles of tort law.” See Robinson, 34 Cal. 4th at 989. 17 The Court finds that Herbalife raises genuine disputes of material fact regarding 18 whether Eastern committed fraud by concealment “above and beyond” any contractual 19 breach. See id. Accordingly, Herbalife’s cause of action for fraudulent concealment is 20 not foreclosed by the economic loss rule and Eastern is not entitled to summary 21 judgment on this cause of action. 22 C. Conclusion—Eastern’s Motion 23 For the reasons discussed above, the Court DENIES Eastern’s Motion for 24 Summary Judgment in its entirety. (ECF No. 127.) 25 VI. HERBALIFE’S MOTION 26 As the Court turns to Herbalife’s motion, the burdens and inferences applied on 27 summary judgment are reversed. See Celotex, 477 U.S. at 322–23 (burden on moving 28 party); Scott, 550 U.S. at 378 (reasonable inferences for nonmoving party). 1 Herbalife moves for summary judgment on Eastern’s causes of action for breach 2 of verbal BCDR agreements, breach of the MSA, NDA, and ELA, and promissory 3 estoppel. (HMSJ 1–2.) 4 A. Verbal BCDR Agreements 5 Eastern alleges that Herbalife breached verbal agreements to award Eastern the 6 BCDR project and pay for BCDR equipment that Herbalife executives directed Eastern 7 to order. (ECC ¶¶ 34–39.) Herbalife moves for summary judgment on this cause of 8 action on several grounds: lack of mutual assent, statute of frauds, Eastern’s material 9 breach, Eastern’s repudiation, and Eastern’s failure to mitigate damages. (HMSJ 6–13.) 10 After reviewing the parties’ arguments, Statements, and relevant evidence, the Court 11 finds genuine factual disputes exist as to each of these grounds, with the exception of 12 the statute of frauds, which bars the alleged verbal agreements here. Consequently, 13 Herbalife is entitled to summary judgment on this cause of action and the Court does 14 not address Herbalife’s additional arguments. 15 In California, the statute of frauds provides that a contract for the sale of goods 16 valued over $500 is unenforceable unless there is some writing “sufficient to indicate 17 that a contract for sale has been made between the parties and signed by the party against 18 whom enforcement is sought.” Cal. Comm. Code § 2201(1); Virgin Scent, Inc. v. BT 19 Supplies W., Inc., 615 F. Supp. 3d 1118, 1132 (C.D. Cal. 2022). The writing “functions 20 only as evidence of the contract and need not contain every term.” Kerner v. Hughes 21 Tool Co., 56 Cal. App. 3d 924, 934 (1976). 22 Eastern does not dispute that the verbal agreements alleged are for goods valued 23 over $500.9 (See generally E. Opp’n 11–12.) Rather, Eastern argues the statute of 24 frauds does not bar its verbal contract claim because (1) the MSA serves as the required 25 9 In its reply, Herbalife addresses the issue of whether the verbal agreements alleged concern both 26 goods and services. (See Herbalife Reply 7–8, ECF No. 148 (citing Eastern Opp’n (“E. Opp’n”) 7, ECF No. 135).) However, the Court does not find that Eastern raised this argument in its opposition. 27 To the contrary, Eastern specifies that “a reasonable jury could find . . . a separate oral agreement 28 existed as to the ordered goods.” (E. Opp’n 7 (emphasis added).) Thus, the Court finds that Eastern does not dispute that the verbal agreements alleged are for goods. 1 writing; (2) the BCDR equipment was specially manufactured and therefore the 2 agreement is exempt from the statute of frauds; and (3) Herbalife is estopped from 3 asserting the statute of frauds. (Id.) 4 Eastern first argues: “The MSA is a written agreement, which if determined to be 5 the written agreement for the [Equipment Order] takes the matter outside the Statute of 6 Frauds.” (Id. at 11.) This is the entirety of Eastern’s position on the point. Eastern cites 7 no law or evidence supporting this “argument,” and fails to explain how the MSA 8 separately supports both the breach of verbal agreements claim and the breach of written 9 contracts claim. The Court declines to develop Eastern’s argument on its behalf. 10 Ventress, 747 F.3d at 723; Graf, 610 F.3d at 1166. Consequently, Eastern fails to 11 establish that the MSA removes the verbal agreements from the statute of frauds. 12 Eastern’s second argument is not much more developed, but it does cite 13 California Commercial Code section 2201(3)(a). (E. Opp’n 11.) That provision 14 provides an exception to the statute of frauds when the goods are “specially 15 manufactured” for the buyer, are not suitable for resale in the ordinary course of the 16 seller’s business, and the seller has made “commitments for their procurement” before 17 repudiation and “under circumstances which reasonably indicate that the goods are for 18 the buyer.” Cal. Comm. Code § 2201(3)(a). This exception to the statute of frauds does 19 not help Eastern. Again, Eastern cites no facts or evidence supporting that the 20 equipment was “specially manufactured” and “not suitable for resale.” (See generally 21 E. Opp’n 11.) To the contrary, the undisputed facts establish that Eastern was able to 22 return the equipment to Dell for a refund of the purchase price. (HSUF 26.) This 23 suggests the equipment could be resold and is therefore not subject to the “specially 24 manufactured” exception. 25 Finally, Eastern argues Herbalife should be estopped from asserting the statute of 26 frauds because “Eastern detrimentally relied on Herbalife’s promises,” and “Herbalife 27 accepted the benefits of Eastern’s implementation work as to Phase 2” of the BCDR 28 project. (E. Opp’n 11–12.) Estoppel can prevent a party from relying on the statute of 1 frauds to avoid an agreement where “an unconscionable injury would result from 2 denying enforcement after one party has been induced to make a serious change of 3 position in reliance on the contract,” or “unjust enrichment would result if a party who 4 has received the benefits of the other’s performance were allowed to invoke the statute.” 5 Virgin Scent, 615 F. Supp. 3d at 1134 (quoting Chavez v. Indymac Mortg. Servs., 6 219 Cal. App. 4th 1052, 1058 (2013)). 7 As with the arguments above, Eastern also does not develop its statute of frauds 8 estoppel argument. For instance, Eastern does not describe what “unconscionable 9 injury” it will suffer if the Court denies enforcement, how Herbalife will be “unjustly 10 enriched” by “Eastern’s implementation work as to Phase 2,” or what that 11 “implementation work” entailed. (See generally E. Opp’n 11–12.) Absent a scintilla of 12 this information or evidence to support it, Eastern fails to establish that Herbalife should 13 be estopped from relying on the statute of frauds to avoid the alleged verbal agreements. 14 In conclusion, Herbalife establishes that the statute of frauds bars Eastern’s cause 15 of action for breach of verbal agreements, and Eastern fails to raise a genuine issue of 16 material fact or law in dispute. Drawing all reasonable inferences in favor of Eastern 17 as the nonmoving party, Scott, 550 U.S. at 378, no reasonable jury could find in favor 18 of Eastern here, Anderson, 477 U.S. at 248. Accordingly, Herbalife is entitled to 19 summary judgment as a matter of law on Eastern’s first cause of action, for breach of 20 verbal agreements. 21 B. Breach of Contract—MSA, NDA, ELA 22 To prevail on a claim for breach of written contract, the plaintiff must prove the 23 “(1) existence of the contract; (2) plaintiff’s performance or excuse for 24 nonperformance; (3) defendant’s breach; and (4) damages to plaintiff as a result of the 25 breach.” Blizzard Ent. Inc. v. Ceiling Fan Software LLC, 28 F. Supp. 3d 1006, 1017 26 (C.D. Cal. 2013) (quoting Oasis W. Realty, 51 Cal. 4th at 821). “When a contract is 27 reduced to writing, the intention of the parties is to be ascertained from the writing 28 alone, if possible,” Cal. Civ. Code § 1639, and “[t]he words of a contract are to be 1 understood in their ordinary and popular sense,” unless used in a legal, technical, or 2 special sense, id. § 1644. “Where the existence of a contract is at issue and the evidence 3 is conflicting or admits of more than one inference, it is for the trier of fact to determine 4 whether the contract actually existed.” Bustamante v. Intuit, Inc., 141 Cal. App. 4th 5 199, 208 (2006). However, “if the material facts are certain or undisputed, the existence 6 of a contract is a question for the court to decide.” Id. 7 “[A] contract will be enforced if it is sufficiently definite (and this is a question 8 of law) for the court to ascertain the parties’ obligations and to determine whether those 9 obligations have been performed or breached.” Id. at 209. “To be enforceable, a 10 promise must be definite enough that a court can determine the scope of the duty[,] and 11 the limits of performance must be sufficiently defined to provide a rational basis for the 12 assessment of damages.” Id. (alteration in original). A contract will not be enforced 13 where it is “so uncertain and indefinite that the intention of the parties in material 14 particulars cannot be ascertained.” Id. 15 1. MSA 16 Eastern alleges that Herbalife breached section three of the MSA by failing to pay 17 for Eastern’s BCDR project services and Equipment Order, and by not moving forward 18 with the BCDR project. (See ECC ¶ 42(c); E. Opp’n 2–8.) Herbalife moves for 19 summary judgment on this claim on several grounds: (a) the MSA creates no obligations 20 for Herbalife on the BCDR project, (b–c) Eastern materially breached and repudiated 21 the MSA, (d) and Eastern failed to mitigate its damages. (HMSJ 6–13.) 22 It is undisputed that the parties entered into the MSA. (HSUF 1.) As such, the 23 Court must determine whether the material particulars are sufficiently definite as a 24 matter of law that the Court may enforce them. As relevant here, section three of the 25 MSA provides: 26 3. Billing and Payment. 27 As full compensation for the Services, Herbalife agrees to pay Contractor the Fees set forth on Schedule A. If Contractor is able to perform the 28 Services for less than the Fees set forth on Schedule A the Fees shall be reduced accordingly. Contractor’s Fees may not be increased above the 1 amount set forth on Schedule A without Herbalife’s express written 2 consent. 3 (MSA § 3.) From this provision, the Court can ascertain that Herbalife agreed to pay 4 Eastern the fees set forth in Schedule A in exchange for Eastern’s provision of certain 5 “Services.” However, things fall apart for Eastern when the Court turns to 6 “Schedule A,” because it does not “set forth” any discernable particular “Fees” or 7 clarify that the “Services” related to BCDR. (See generally MSA, Schedule A §§ 1–5.) 8 Schedule A begins with “1. Description of Services,” which lists two categories 9 of services: “Engineering Technical,” and “Program/Project Management.” (Id. § 1.) 10 These categories contain a number of broad groupings with general descriptions of the 11 services to be provided. (Id.) While the Court does not doubt that Eastern’s listed 12 services would provide value, it cannot say with certainty, based on the express terms 13 of the MSA, that the MSA or Schedule A pertains specifically to services related to the 14 BCDR project. And even if it did, Schedule A does not specify what fees Herbalife is 15 obligated to pay. The only term pertaining to fees in Schedule A states: 16 3. Contractor’s Fees. 17 Custom Services are addressed via documented Scope of Work (SOW) per Services Engagement. Each Scope of Work is created to align to mutually 18 agreed Herbalife’s desired Scope, Deliverables, Timelines, and Budget. 19 Eastern’s standard payment terms are Net 30. 20 (Id. § 3.) The plain language of this provision requires a separate documented Scope of 21 Work or Services Engagement to determine Contractor’s Fees, but Herbalife 22 establishes—and Eastern fails to effectively dispute—that no such separate 23 authorization was ever executed. 24 On April 8, 2020, Eastern sent Herbalife a proposed SOW for Phase 1 BCDR 25 project services. (HSUF 9 (undisputed).) The proposal was good for thirty days and 26 would become binding if Herbalife executed it during that time. (HSUF 10 27 (undisputed).) It stated that any purchases made thereunder would be governed by “a 28 separate master agreement or other purchase agreement that will be negotiated and 1 signed between the parties.” (HSUF 11 (undisputed).) However, the proposed SOW 2 was never executed by Herbalife, (HSUF 12 (effectively undisputed)),10 and Eastern 3 does not submit any “separate master agreement or other purchase agreement” that was 4 negotiated and signed in relation to the proposed SOW. Similarly, Herbalife never 5 signed Eastern’s proposed bill of materials for BCDR equipment. (HSUF 13 6 (undisputed), 14 (effectively undisputed)). And Herbalife submits evidence that it 7 never sent Eastern any writing authorizing the Equipment Order. (HSUF 22 8 (effectively undisputed).) In sum, the plain language of the MSA Schedule A requires 9 a separate engagement to determine Herbalife’s obligation to pay Eastern fees, but 10 Herbalife establishes—and Eastern fails to materially dispute—that no separate written 11 engagement for the BCDR project was ever executed. 12 Finally, to the extent that Eastern argues the parties amended the MSA through 13 subsequent conduct, (see E. Opp’n 3, 5–7), the MSA expressly requires a signed writing 14 for any amendment or modification, (MSA § 16). As neither party submits such a 15 written, signed amendment, the Court concludes based on the present record that the 16 MSA must stand alone. And standing alone, the MSA is not sufficiently certain or 17 definite with respect to services to be provided or fees to be paid for the Court to 18 conclude it pertains to the BCDR project or Equipment Order. See Bustamante, 19 141 Cal. App. 4th at 209. Accordingly, Eastern’s cause of action for breach of the MSA 20 must fail as a matter of law.11 21 22

23 10 The Court disregards the improper legal argument and conclusions in Eastern’s statement of dispute, which in any event do not materially respond to Herbalife’s statement of fact. (Compare HSUF 12, 24 with ESGD 12.) The Court also declines to excavate Eastern’s undifferentiated evidence to unearth a 25 reason to deny summary judgment on this cause of action. See Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1031 (9th Cir. 2001) (requiring that counsel lay out their support clearly); Forsberg v. 26 Pac. Nw. Bell Tel. Co., 840 F.2d 1409, 1418 (9th Cir. 1988) (“The district judge is not required to comb the record to find some reason to deny a motion for summary judgment.”). Accordingly, the 27 Court considers this fact, and other facts with similarly presented “disputes,” effectively undisputed. 28 11 As Eastern’s breach of MSA claim fails for this reason, the Court does not reach Herbalife’s remaining arguments or its motion for partial summary judgment on specified damages on this claim. 1 Drawing all reasonable inferences in Eastern’s favor as the nonmoving party, 2 Scott, 550 U.S. at 378, no reasonable jury could find in favor of Eastern here, Anderson, 3 477 U.S. at 248. Accordingly, Herbalife is entitled to summary judgment as a matter of 4 law on Eastern’s claim for breach of the MSA. 5 2. NDA 6 Eastern alleges that Herbalife breached the NDA by disclosing Eastern’s 7 confidential BCDR project bids to a competitor. (ECC ¶ 42(b); E. Opp’n 8–10.) 8 Herbalife moves for summary judgment on this claim on the grounds that the NDA 9 protects only Herbalife’s confidential information, not Eastern’s. (HMSJ 15.) 10 As above, the Court considers the plain meaning of the NDA’s clear and explicit 11 language in its ordinary and popular sense and strives to ascertain the parties’ intent 12 from the writing alone. Am. Alt. Ins. Corp., 135 Cal. App. 4th at 1245; Cal. Civ. Code 13 §§ 1639, 1644. 14 The parties entered into the NDA, entitled “Mutual Non-Disclosure Agreement,” 15 because they found “it may be necessary for Herbalife (the ‘Disclosing Party’) to 16 disclose or make available certain Confidential Information” to the “Receiving Party in 17 connection with the Services.” (NDA §§ 1, 2; HSUF 51.) The NDA defines 18 “Confidential Information” as “Confidential Information of the Disclosing Party,” and 19 as “any nonpublic, confidential or proprietary information that the Disclosing Party . . . 20 make[s] available to the Receiving Party in connection with the Services.” (NDA § 2; 21 HSUF 52.) The Receiving Party agrees not to use, copy, distribute, or disclose the 22 Confidential Information, to which the Disclosing Party owns all rights and interest. 23 (NDA § 5.) These provisions indicate that only the Disclosing Party’s information is 24 protected as Confidential Information. 25 The NDA defines “Disclosing Party” exclusively as Herbalife. (NDA § 1; 26 HSUF 53 (effectively undisputed).) The NDA does not define Eastern or its 27 relationship to the NDA; it also does not define “Receiving Party.” (See generally 28 NDA.) However, in light of Herbalife’s defined role as “Disclosing Party,” and the 1 defined protections for the “Confidential Information,” the plain language of the NDA 2 does not support a reasonable reading that would also make Herbalife the “Receiving 3 Party.” (Id. §§ 1, 2.) Thus, the NDA expressly protects only Herbalife’s confidential 4 information. 5 Eastern argues the parties intended the NDA to be mutually binding, and points 6 to three provisions it contends support this mutual intent: (1) the heading, “Mutual 7 Non-Disclosure Agreement”; (2) the “Term” section, which provides when the 8 obligations of the “Parties” terminate; and (3) the “Remedies” section, which defines 9 the remedies to which a “non-breaching party” will be entitled in the event a “party” 10 breaches the NDA. (H. Opp’n 8–10 (referencing NDA §§ 6, 8).) However, these 11 general references do not vitiate the NDA’s express definitions, of Herbalife as the 12 “Disclosing Party,” and of “Confidential Information” as information the Disclosing 13 Party, i.e., Herbalife, discloses. Nor do they undermine the NDA’s clear directive that 14 the defined “Confidential Information,” i.e., the “nonpublic, confidential or proprietary 15 information” that Herbalife makes available, is not to be used, copied, distributed, or 16 disclosed. Contrary to Eastern’s urging, the Court will not “reform” the NDA to replace 17 “Herbalife” as the Disclosing Party with “‘a party’ or words to that effect.” (See 18 H. Opp’n 9–10.) 19 The clear and explicit language of the NDA establishes that it protects Herbalife’s 20 confidential information, and Eastern fails to raise a genuine issue of fact or law in 21 dispute. Accordingly, drawing all reasonable inferences in Eastern’s favor as the 22 nonmoving party, Scott, 550 U.S. at 378, the Court finds that Herbalife is entitled to 23 summary judgment as a matter of law on Eastern’s claim for breach of the NDA. 24 3. ELA 25 Eastern alleges that Herbalife breached the ELA by failing to pay for licenses and 26 tokens related to the BCDR project. (ECC ¶ 42(a).) Herbalife moves for summary 27 judgment on this claim on the grounds that the ELA does not obligate Herbalife 28 purchase the licenses or tokens from Eastern, and it never did so. (HMSJ 15–16.) 1 In its opposition brief, Eastern includes a section heading that mentions the ELA, 2 but does not include any argument, analysis, law, or evidence. (See E. Opp’n 10 (listing 3 subheading including “The ELA” followed by blank lines).) Accordingly, the Court 4 finds Eastern has waived or abandoned this claim. See Am. Int’l Enters., Inc. v. FDIC, 5 3 F.3d 1263, 1266 n.5 (9th Cir. 1993) (“Issues raised in the brief that are not supported 6 by argument are deemed abandoned.”); Graf, 610 F.3d at 1166 (“Arguments made in 7 passing and not supported by citations to the record or to case authority are generally 8 deemed waived.”). 9 The Court has reviewed the evidence and finds that Herbalife establishes the ELA 10 imposes no obligation on it to purchase tokens or licenses. See Fed. R. Civ. P. 56(e)(3). 11 Specifically, the ELA specifies that Eastern, in its sole discretion, would purchase 12 software licenses and tokens (which operate like credits under Eastern’s licensing 13 program), and make them available in Herbalife’s client portal. (HSUF 55, 60; ELA, 14 HMSJ Comp. 332.) Herbalife had the “option, in its sole discretion, but not the 15 obligation, to redeem” the tokens and licenses. (HSUF 56, 60; ELA, HMSJ Comp. 332, 16 337.) “Should Herbalife not receive corporate approval” or “not need any new . . . 17 licenses over the term, then they will not be obligated to purchase them.” (HSUF 60; 18 ELA, HMSJ Comp. 337.) The licenses and tokens would remain Eastern’s property 19 until Herbalife issued a PO to Eastern to purchase them. (HSUF 56, 60; ELA, HMSJ 20 Comp. 332, 337.) Herbalife never issued a PO for the tokens or licenses. (HSUF 58, 21 62 (effectively undisputed).) 22 Drawing all reasonable inferences in Eastern’s favor as the nonmoving party, 23 Scott, 550 U.S. at 378, no reasonable jury could find in favor of Eastern here, Anderson, 24 477 U.S. at 248. Accordingly, Herbalife is entitled to summary judgment as a matter of 25 law on Eastern’s claim for breach of the ELA. 26 C. Promissory Estoppel 27 Herbalife moves for summary judgment on Eastern’s promissory estoppel cause 28 of action on the grounds that (1) there was no clear and unambiguous promise; 1 (2) Eastern’s reliance was unreasonable as a matter of law; (3) Eastern alleges 2 bargained-for consideration; and (4) Eastern failed to mitigate its alleged damages. 3 (HMSJ 17–20; cf. HCC ¶¶ 44–50; E. Opp’n 17–20.) 4 To prevail on a claim for promissory estoppel, Eastern must prove that: 5 (a) Herbalife made a clear and unambiguous promise; (b) Eastern reasonably and 6 foreseeably relied on the promise; and (c) Eastern was injured by that reliance. Jones 7 v. Wachovia Bank, 230 Cal. App. 4th 935, 944 (2014). Such a promise will be binding 8 if injustice can be avoided only by enforcement of the promise. Kajima/Ray Wilson v. 9 L.A. Cnty. Metro. Transp. Auth., 23 Cal. 4th 305, 310 (2000). Although promissory 10 estoppel is an equitable doctrine and courts are given wide discretion in its application, 11 Jones, 230 Cal. App. 4th at 945, the “existence of an estoppel is generally a question of 12 fact,” Flintco Pac., Inc. v. TEC Mgmt. Consultants, Inc., 1 Cal. App. 5th 727, 734 13 (2016). 14 1. Clear and unambiguous promise 15 “[A] promise must be definite enough that a court can determine the scope of the 16 duty and the limits of performance must be sufficiently defined to provide a rational 17 basis for the assessment of damages.” Glen Holly Ent. Inc. v. Tektronix, Inc., 343 F.3d 18 1000, 1017 (9th Cir. 2003) (quoting Ladas v. Cal. State Auto. Ass’n, 19 Cal. App. 4th 19 761, 770 (1993)). 20 Herbalife argues that the various verbal “awards” to which Eastern cites all lack 21 the necessary terms to stand in as viable unambiguous promises. (HMSJ 18.) For 22 support, Herbalife points to purported verbal promises by Herbalife representatives in 23 April, October, and December 2020, as well as the Equipment Order and the awards of 24 Phases 1 and 2 of the BCDR project. (HMSJ 18–19.) However, Eastern submits 25 admissible evidence raising a dispute of material fact regarding whether the promise(s) 26 were sufficiently clear in the terms. For instance, Eastern provides evidence that 27 Herbalife employees verbally informed Eastern representatives, as early as May 2020 28 “and many times thereafter,” that Herbalife “awarded Phase 1” of the BCDR project to 1 Eastern. (Decl. Martin O’Brien ISO E. Opp’n (“O’Brien Decl. E. Opp’n”) ¶¶ 10–11, 2 ECF No. 139-1; see also Decl. Brendan Lynch ISO E. Opp’n (“Lynch Decl. E. Opp’n”) 3 ¶ 20, ECF No. 139-1.) Eastern also presents evidence that it submitted a detailed BCDR 4 Phase 1 proposal and bill of materials to Herbalife prior to these verbal awards, 5 providing specific and detailed terms. (See O’Brien Decl. E. Opp’n ¶¶ 8–11; Lynch 6 Decl. E. Opp’n ¶¶ 19–20; see also HSUF 9–11, 13 (undisputed).) Finally, Eastern 7 submits evidence supporting that, in October 2020, Herbalife representatives directed 8 Eastern representatives to order the BCDR equipment so that Herbalife would have it 9 before the end of that year. (See EAMF 126–27 (disputed) (citing O’Brien Decl. 10 E. Opp’n ¶¶ 20–21, 23–24; Lynch Decl. E. Opp’n ¶¶ 38–44).) 11 Drawing all reasonable inferences in Eastern’s favor as the nonmoving party, 12 Scott, 550 U.S. at 378, a reasonable jury could find in Eastern’s favor here, Anderson, 13 477 U.S. at 248. Accordingly, Eastern’s cause of action for promissory estoppel does 14 not fail on the basis of an unclear promise. 15 2. Reasonable reliance 16 Promissory estoppel requires that the promisee’s reliance on the alleged promise 17 be reasonable. Flintco Pac, 1 Cal. App. 5th at 734. “[W]hether the reliance was 18 reasonable is a question of fact unless reasonable minds could reach only one conclusion 19 based on the evidence, in which case the question is one of law.” Id. 20 Herbalife argues Eastern could not have reasonably relied on the alleged 21 promises because Herbalife’s words and conduct make any reliance unreasonable as a 22 matter of law. (HMSJ 19–20.) In particular, Herbalife notes that the Equipment Order 23 would have been one of the largest in Herbalife’s history, (HSUF 24), yet there was no 24 PAR or PO for the Equipment Order or BCDR services, (HSUF 21). Herbalife also 25 highlights that Herbalife conducted an RFP for the second phase of the BCDR project, 26 (HSUF 27), and Eastern continued to support Herbalife’s bid for corporate approval and 27 negotiate the BCDR proposal after the alleged promises, (HSUF 17, 29, 34–38, 40). 28 1 Again, Eastern submits admissible evidence which raises a genuine dispute of 2 material fact regarding whether its reliance on Herbalife’s alleged promises was 3 reasonable. For instance, Eastern supports that it attended numerous meetings over 4 many months on the BCDR project, (see EAMF 74, 75, 120, 121, 125, 147, 150), and 5 received directives and reassurances from Herbalife consistent with the promises, 6 (E. Opp’n 12–13; EAMF 87, 90, 126–28, 154, 159; see also E. Resp. HAMF 46–48 7 (citing E. Dep. 165–72 (Herbalife representative provided Eastern an informal PO to 8 send Dell to confirm Equipment Order)). Eastern also supports its contention that 9 Herbalife was inconsistent in following its professed procurement requirements. 10 (ESGD 5, 7, 8, 15, 16; EAMF 81 (Herbalife email confirming Eastern is authorized to 11 order certain equipment before PO), 151 (Herbalife had previously ordered equipment 12 without a PO from Eastern).) 13 Drawing all reasonable inferences in Eastern’s favor as the nonmoving party, 14 Scott, 550 U.S. at 378, a reasonable jury could find in Eastern’s favor here, Anderson, 15 477 U.S. at 248. Accordingly, whether Eastern’s reliance was reasonable remains a 16 question of fact and this cause of action does not fail on the basis of reliance. 17 3. Bargained-for consideration 18 Herbalife also contends this cause of action fails because Eastern alleges 19 bargained-for consideration. (HMSJ 20.) “A cause of action for promissory estoppel 20 is a claim in equity that substitutes reliance on a promise for consideration ‘in the usual 21 sense of something bargained for and given in exchange.’” Fleet v. Bank of Am. N.A., 22 229 Cal. App. 4th 1403, 1412–13 (2014). “If actual consideration was given by the 23 promisee, promissory estoppel does not apply.” Id. at 1413. Modern pleading practice 24 allows a party to plead promissory estoppel in the alternative to breach of contract based 25 on the same facts. Id. As such, Eastern’s allegation of bargained-for consideration does 26 not defeat its cause of action for promissory estoppel on summary judgment. Further, 27 Herbalife fails to establish the absence of genuine dispute regarding whether either party 28 actually provided the alleged consideration. (See generally HMSJ 20); Celotex, 1 || 477 U.S. at 322-23 (stating that the burden to show the absence of a genuine issue of 2 | material fact lies with the moving party). Thus, Eastern’s promissory estoppel cause of 3 || action does not fail on this basis. 4 4. Failure to mitigate damages 5 Finally, Herbalife also contends this cause of action fails because Eastern did not 6 || mitigate it damages. (HMSJ 20.) Herbalife’s argument here is that Eastern should have 7 || known the promises were not valid and therefore any damages incurred are Eastern’s 8 | fault. (HMSJ 12-13.) This argument rests on the same disputed material facts as 9 || Herbalife’s reasonable reliance argument and therefore fails for the same reasons. 10] D. Conclusion—Herbalife’s Motion 11 For the reasons discussed above, the Court GRANTS in part Herbalife’s motion 12 || as to Eastern’s causes of action for breach of oral contract and breach of the MSA, NDA, 13 | and ELA, and DENIES in part Herbalife’s motion as to Eastern’s cause of action for 14 || promissory estoppel. (ECF No. 133.) 15 VU. CONCLUSION 16 For the reasons discussed above, the Court DENIES Eastern’s Motion for 17 || Summary Judgment, (ECF No. 127), and GRANTS in part and DENIES in part 18 || Herbalife’s Motion for Summary Judgment, (ECF No. 133), as set forth above. 19 20 IT IS SO ORDERED. 21 22 March 18, 2024 N . 23 Ye hie 5 OTIS D. HT, II UNITED STATES DISTRICT JUDGE

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