Infectolab Americas LLC v. ArminLabs GmbH

• Court: District Court, N.D. California
• Decided: January 28, 2021
• Docket: 5:20-cv-03318
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 INFECTOLAB AMERICAS LLC, et al., Case No. 20-cv-03318-VKD

9 Plaintiffs, ORDER GRANTING DEFENDANT'S 10 v. MOTION TO DISMISS FIRST AMENDED COMPLAINT 11 ARMINLABS GmbH, Re: Dkt. No. 22 Defendant. 12

13 14 Plaintiffs Infectolab Americas LLC (“Infectolab”) and IGeneX, Inc. (“IGeneX”) filed this 15 action alleging violation of the Lanham Act, 41 U.S.C. § 1125(a)(1), and asserting several state 16 law claims for relief. Pursuant to stipulation (Dkt. No. 19), plaintiffs filed a First Amended 17 Complaint (“FAC”), the operative pleading (Dkt. No. 20). 18 Defendant ArminLabs GmbH (“ArminLabs”) now moves pursuant to Rule 12(b)(6) to 19 dismiss three claims asserted only by Infectolab for intentional and negligent interference with 20 prospective economic advantage and tortious interference with contract. Infectolab concedes the 21 motion with respect to its claim for negligent interference with prospective economic advantage, 22 but otherwise opposes ArminLabs’s motion. Upon consideration of the moving and responding 23 papers, as well as the arguments presented at the January 26, 2021 hearing, the Court grants 24 ArminLabs’s motion to dismiss with leave to amend.1 25 26

27 1 All parties have expressly consented that all proceedings in this matter may be heard and finally 1 I. BACKGROUND 2 According to the FAC, Infectolab provides comprehensive laboratory testing for tick-borne 3 infections and assists health care providers in diagnosing tick-borne diseases. Dkt. No. 20 ¶ 1. 4 The FAC alleges that IGeneX also provides comprehensive laboratory testing services in the 5 United States for tick-borne diseases. Id. ¶¶ 2, 17. ArminLabs, located in Augsburg, Germany, is 6 alleged to be a competitor of Infectolab and IGeneX that provides diagnostic and testing services 7 for tick-borne diseases. Id. ¶¶ 3, 7, 23. 8 The FAC alleges that Infectolab “has for years had the right to be the exclusive United 9 States partner for various antigens and reagents (the ‘Products’) used to diagnose tickborne 10 diseases developed by Autoimmun Diagnostika GmbH (‘AID’), a German manufacturer.” Id. 11 ¶ 13. Further, Infectolab alleges that “[t]his understanding was reaffirmed” in a February 26, 2020 12 “Exclusive Supply Agreement” (“Agreement”), a copy of which is appended to the FAC. Id. 13 According to the FAC, the Agreement “precludes the sale of the Products to any other third party 14 who will ‘directly or indirectly’ use the Products to serve customers in the United States.” Id. 15 Infectolab claims that ArminLabs markets its testing services to customers in the United States, 16 without proper compliance with federal regulations, and in violation of Infectolab’s rights under 17 the Agreement. Id. ¶¶ 3, 19-30. Relevant to the claims at issue in the present motion to dismiss, 18 Infectolab alleges that ArminLabs markets its services and distributes blood test kits to physicians 19 and patients in the United States, and sends drawn blood samples to its laboratory in Germany for 20 testing, “us[ing] the Products to test the blood for various tick-borne illnesses.” Id. ¶¶ 3, 22-23. 21 As noted, Infectolab agrees that its claim for negligent interference with prospective 22 economic advantage should be dismissed without leave to amend. As for the claims for 23 intentional interference with prospective economic advantage and tortious interference with 24 contract, ArminLabs moves to dismiss pursuant to Rule 12(b)(6), arguing that both claims are 25 based on a mischaracterization of the Agreement, as well as unsupported conclusory allegations. 26 For the reasons discussed below, the Court grants ArminLabs’s motion to dismiss with leave to 27 amend. 1 II. LEGAL STANDARD 2 A motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) tests the legal 3 sufficiency of the claims in the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 4 Dismissal is appropriate where there is no cognizable legal theory or an absence of sufficient facts 5 alleged to support a cognizable legal theory. Id. (citing Balistreri v. Pacifica Police Dep’t, 901 6 F.2d 696, 699 (9th Cir. 1990)). In such a motion, all material allegations in the complaint must be 7 taken as true and construed in the light most favorable to the claimant. Id. 8 However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere 9 conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Moreover, 10 “the court is not required to accept legal conclusions cast in the form of factual allegations if those 11 conclusions cannot reasonably be drawn from the facts alleged.” Clegg v. Cult Awareness 12 Network, 18 F.3d 752, 754-55 (9th Cir. 1994). 13 Rule 8(a)(2) requires only “a short and plain statement of the claim showing that the 14 pleader is entitled to relief.” This means that the “[f]actual allegations must be enough to raise a 15 right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 16 (2007) (citations omitted). However, only plausible claims for relief will survive a motion to 17 dismiss. Iqbal, 556 U.S. at 679. A claim is plausible if its factual content permits the court to 18 draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. A plaintiff 19 does not have to provide detailed facts, but the pleading must include “more than an unadorned, 20 the-defendant-unlawfully-harmed-me accusation.” Id. at 678. 21 Documents appended to or incorporated into the complaint or which properly are the 22 subject of judicial notice may be considered along with the complaint when deciding a Rule 23 12(b)(6) motion. Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010).2 24 III. DISCUSSION 25 A. Terms of the Agreement 26 As an initial matter, ArminLabs argues that Infectolab’s claims are not plausibly alleged 27 1 because they are based on allegations that are inconsistent with the terms of the Agreement. 2 ArminLabs contends that those allegations need not be accepted as true. See Sprewell v. Golden 3 State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (stating that on a Rule 12(b)(6) motion, “[t]he 4 court need not . . . accept as true allegations that contradict matters properly subject to judicial 5 notice or by exhibit.”); see also Nguyen v. Bank of America, N.A., 563 F. Appx. 558 (9th Cir. 6 2014) (stating that “when an exhibit to a complaint is inconsistent with the complaint’s 7 allegations, the exhibit controls.”). Infectolab maintains that its allegations are consistent with the 8 Agreement. However, even if the Agreement may be subject to more than one interpretation, 9 Infectolab argues that the scope and meaning of the Agreement’s terms present “mixed questions 10 of fact and law that cannot be properly determined at this stage in the proceedings; such issues are 11 more appropriately addressed on a motion for summary judgment.” Beatty v. Tribune Media 12 Services, Inc., No. CV 05-03938 DDP (SSx), 2005 WL 6132339, at *4 (C.D. Cal. Aug. 10, 2005). 13 The parties’ arguments focus on section 2.01 of the Agreement, which provides: 14 2. APPOINTMENT OF INFECTOLAB AS EXLCUSIVE 15 CUSTOMER

16 2.01 Relationship. Subject to the terms and conditions of this Agreement, Manufacturer [AID] hereby appoints Customer 17 [Infectolab] as its exclusive customer of the Products in the Territory during the Term, and Customer hereby accepts such appointment 18 (hereinafter the Subject to the terms and conditions of this Agreement, Customer shall have the sole right to use the Products in the Territory, 19 and Manufacturer may not sell the Products to any third party, directly or indirectly. Except, Manufacturer can sell Products to other third 20 parties exclusively for research studies and FDA approval studies. 21 Dkt. No. 20-1 at 3. The term “Products” refers to specific products listed in Schedule A to the 22 Agreement. Id. at 2, 9. The term “Territory” is defined as “the states and territories of the United 23 States of America.” Id. at 3. The Agreement is fully integrated, with an initial term of five years 24 from the February 26, 2020 effective date. Id. at 4, 7. In a clause beginning with the word 25 “Whereas” and appearing at the end of the Agreement just above the signatures of AID’s and 26 Infectolab’s representatives, the Agreement states that Infectolab “has been the exclusive customer 27 1 of [AID]’s Products (as such terms are defined below) since 13th of June 2018.”3 Dkt. No. 20-1 at 2 7. 3 ArminLabs takes issue with a number of purported inconsistencies between the FAC’s 4 allegations and the Agreement’s terms. See Dkt. No. 22 at 7-8. For present purposes, the Court 5 focuses on the key allegations that ArminLabs contends are contradicted by section 2.01 of the 6 Agreement. Here, ArminLabs argues that while the FAC alleges that the Agreement prohibits a 7 third party, including ArminLabs, from using the Products “directly or indirectly” in the United 8 States (see Dkt. No. 20 ¶¶ 13, 19, 40, 79), the Agreement does not say anything about a third 9 party’s use of the Products “directly or indirectly” in the United States. As noted above, section 10 2.01 of the Agreement contains two clauses, one of which grants Infectolab “the sole right to use 11 the Products in the Territory,” and the other which prohibits AID from selling the Products 12 “directly or indirectly” to any third party, except for “research studies and FDA approval studies.” 13 Dkt. No. 20-1 at 3. At the motion hearing, Infectolab acknowledged that section 2.01, on its face, 14 says that AID is prohibited from selling the Products “directly or indirectly.” Infectolab 15 nevertheless maintains that if the Agreement is considered as a whole, section 2.01 means that 16 AID cannot sell Products to any third party for use directly or indirectly in the United States. 17 ArminLabs argues that because this matter is not before the Court on a claim for breach of 18 contract, no contract interpretation is necessary; and, in ArminLabs’s view, section 2.01 19 unambiguously does not prohibit a third party’s use of Products at all. Yet both sides seem to 20 acknowledge that the Agreement generally, and section 2.01 in particular, is not a model of clarity. 21 And inasmuch as each side’s competing interpretation of the Agreement’s terms pertain to the 22 merits of Infectolab’s claims that ArminLabs is interfering with Infectolab’s rights under the 23 Agreement, the Court does not find it appropriate to decide that question on a Rule 12(b)(6) 24 motion. 25 However, even if the Court were to credit Infectolab’s proffered interpretation of the 26 Agreement, ArminLabs argues, persuasively, that the FAC’s allegations are deficient for another 27 1 reason: the FAC does not provide a factual basis for conclusory allegations that ArminLabs uses 2 the reagents and antigens, i.e., the Products, developed by AID. In its papers Infectolab argued 3 that it is “obviously implicit” from the FAC’s allegations that ArminLabs “provides services to 4 United States residents ‘using’ the Products.” Dkt. No. 36 at 4. The FAC, however, does not 5 allege that ArminLabs obtains Products from AID or any facts giving rise to a plausible inference 6 that ArminLabs uses the Products to service customers in the United States. Given Infectolab’s 7 central premise that ArminLabs somehow interfered with its rights or relationship(s) that may be 8 evidenced by the Agreement, Infectolab cannot simply leave such matters to inference. At oral 9 argument, Infectolab represented that it does have additional facts that may be asserted in an 10 amended pleading to address these issues. For the reasons discussed, the Court finds that 11 amendment is warranted to clarify what specific conduct by ArminLabs interferes with which 12 provisions of the Agreement, and how such conduct interferes with Infectolab’s rights. 13 B. Intentional Interference with Prospective Economic Advantage 14 To plead a claim for intentional interference with prospective economic advantage, 15 Infectolab must allege (1) an economic relationship between Infectolab and some third party, with 16 the probability of future economic benefit to Infectolab; (2) ArminLabs’s knowledge of the 17 relationship; (3) intentional acts by ArminLabs designed to disrupt the relationship; (4) actual 18 disruption of the relationship; and (5) economic harm to Infectolab proximately caused by the acts 19 of ArminLabs. Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1153 (2003). 20 Additionally, the third element requires Infectolab to “plead intentional wrongful acts on the part 21 of the defendant designed to disrupt the relationship,” and those wrongful acts must be separate 22 and apart from the interference itself. Id. at 1154. “The tort of interference with prospective 23 economic advantage does not require proof of a legally binding contract[.]” Milne Emp. Ass’n v. 24 Sun Carriers, 960 F.2d 1401, 1411 (9th Cir. 1991). “‘The chief practical distinction between 25 interference with contract and interference with prospective economic advantage is that a broader 26 range of privilege to interfere is recognized when the relationship or economic advantage 27 interfered with is only prospective.’” AlterG, Inc. v. Boost Treadmills LLC, 388 F. Supp. 3d 1133, 1 1126 (1990)). Even so, California law precludes recovery for overly speculative claims by 2 “requir[ing] ‘proof that it is reasonably probable that the lost economic advantage would have 3 been realized but for the defendant’s interference.’” Transcription Commc’ns Corp. v. John Muir 4 Health, No. C 08-4418 TEH, 2009 WL 666943, at *10 (N.D. Cal. Mar. 13, 2009) (quoting Youst 5 v. Longo, 43 Cal. 3d 64, 71 (1987)); see also AlterG, Inc., 388 F. Supp. 3d at 1151 (same). 6 ArminLabs contends that Infectolab has not pled sufficient facts to support any element of 7 its claim for intentional interference with prospective economic advantage. With respect to the 8 first element, ArminLabs argues that the FAC’s allegations are too vague and conclusory to 9 support the existence of an economic relationship with the probability of future economic benefit 10 to Infectolab. Contending that the temporal scope of Infectolab’s claim is unclear, ArminLabs 11 expresses uncertainty whether the claim is based on the Agreement itself, or on the relationship 12 allegedly existing prior to February 26, 2020 whereby Infectolab says that “for years” it had the 13 “right to be the exclusive United States partner” for the Products. See Dkt. No. 20 ¶ 13. At oral 14 argument, ArminLabs also noted that while Infectolab seems to claim interference based on 15 Infectolab’s relationship with AID, Infectolab’s alleged harm appears to be based on the disruption 16 to Infectolab’s purported customer relationships.4 The FAC alleges that Infectolab and AID 17 entered into the Agreement, which purportedly reaffirmed a prior understanding between them. 18 Infectolab has appended a copy of the entire Agreement to the FAC, and as discussed above the 19 Agreement recites that Infectolab “has been the exclusive customer of [AID]’s Products . . . since 20 13th of June 2018.” Dkt. No. 20-1 at 7. These allegations give rise to a reasonable inference of an 21 economic relationship between Infectolab and AID, with the probability of future economic 22 benefit to Infectolab based on its “sole right to use the Products” the United States. Dkt. No. 20 23 ¶¶ 64, 65, 79; Dkt. No. 20-1 at 3. However, to the extent the FAC suggests that this claim is based 24 on ArminLabs’s alleged interference with some other relationship, i.e., “Infectolab’s relationships 25 4 Additionally, ArminLabs questions Infectolab’s use of the term “United States partner,” the 26 meaning of the term “exclusive customer” appearing in the Agreement, and whether any relationship prior to the Agreement’s February 26, 2020 effective date may have belonged to 27 Infectolab’s parent company, Infectolab GmbH, which is not a party to this action. Such matters, 1 with potential customers” (Dkt. No. 20 ¶ 43), for the reasons discussed below the FAC’s 2 allegations need to be clarified on amendment. 3 As for the remaining elements of a claim for intentional interference with economic 4 advantage, Infectolab has not alleged sufficient facts supporting a plausible claim for relief. With 5 respect to the second element, knowledge of an injured party’s identity or name is not a 6 prerequisite for recovery for intentional interference with prospective economic advantage. 7 Ramona Manor Convalescent Hosp. v. Care Enters., 177 Cal. App. 3d 1120, 1133 (1986); see 8 also Altera Corp. v. Clear Logic, Inc., 424 F.3d 1079, 1092 (9th Cir. 2005 (stating that for a claim 9 for interference with contractual relations, “[w]hen the defendant performs the act that causes the 10 interference, the defendant need not know exactly who is a party to the contract, so long as he 11 knows he is interfering with a contractual relationship.”). Nevertheless, Infectolab’s allegations 12 regarding ArminLabs’s knowledge of the relationship between Infectolab and AID are entirely 13 conclusory. See, e.g., Dkt. No. 20 ¶ 41 (“With full knowledge of that relationship, Defendant has 14 intentionally engaged in the above scheme to use the Products to serve customers in the United 15 States.”), ¶ 68 (“Defendant knew of Infectolab’s contractual rights . . .”). Infectolabs contends that 16 the requisite knowledge may reasonably be inferred from the FAC’s allegations that ArminLabs 17 had “prior dealings with Infectolab” and ArminLabs’s “status as a competitor in the industry.” 18 Dkt. No. 20 ¶ 80; see also ¶¶ 1, 3, 13, 19. At the motion hearing, Infectolab also argued that it has 19 alleged substantive facts concerning a years-long business relationship between Dr. Schwarzbach 20 (ArminLabs’s founder) and Dr. Carsten Nicolaus (Infectolab’s founder). However, the FAC 21 contains only a single conclusory allegation that Dr. Schwarzbach started ArminLabs “[a]fter 22 working with Dr. Carsten Nicolaus.” Id. ¶ 18. These highly generalized allegations are 23 insufficient to plausibly establish ArminLab’s knowledge of the relationship between Infectolab 24 and AID. See, e.g., Go Daddy Operating Company, LLC v. Ghaznavi, No. 17-cv-06545-PJH, 25 2018 WL 1091257, at *10 (N.D. Cal. Feb. 28, 2018) (finding allegations that defendants queried a 26 public database were insufficient to plead defendants’ knowledge of plaintiff’s customer 27 relationships); GSI Tech. v. United Memories, Inc., No. 5:13-cv-01081-PSG, 2014 WL 1572358, 1 participant,” knew that non-compete agreements “are common” was not sufficient to support 2 defendant’s knowledge); Trindade v. Reach Media Group, LLC, No. 12-cv-04759-PSG, 2013 WL 3 3977034, at *15 (N.D. Cal. July 31, 2013) (finding that allegations that defendant was “aware of 4 [plaintiff]’s strong reputation in the advertising industry” and the existence of [the multiple 5 contractual relations with customers]” insufficient to establish knowledge). Moreover, to the 6 extent Infectolab’s claim is based on knowledge of the Agreement with AID (see Dkt. No. 20 ¶ 7 65), the FAC does not contain facts plausibly alleging ArminLabs’s knowledge of that contract, 8 where the Agreement itself contains a confidentiality clause prohibiting Infectolab and AID from 9 disclosing the terms or the existence of the contract. Dkt. No. 20-1 at 1. 10 Having failed to sufficiently allege ArminLabs’s knowledge of any economic relationship, 11 Infectolab also fails to allege ArminLabs’s intent to disrupt any such relationship. Trindade, 2013 12 WL 3977034 at *16. Additionally, to the extent Infectolab’s claim rests on its contention that 13 ArminLabs wrongfully used the Products, for the reasons discussed above the FAC’s allegations 14 are insufficient to state a plausible claim for relief. 15 Infectolab also does not allege sufficient facts supporting the actual disruption of an 16 economic relationship or the harm to Infectolab proximately caused by ArminLabs’s conduct. The 17 FAC alleges, in conclusory fashion, that ArminLabs “has caused breach or disruption of [the 18 Agreement] and resulted in damages to Infectolab” and that ArminLabs’s conduct “constitutes an 19 injurious interference with Infectolab’s prospective business advantage” based on its “existing and 20 prospective business relationship with AID[.]” Dkt. No. 20 ¶¶ 42, 64, 66. However, Infectolab 21 does not allege sufficient facts demonstrating how its relationship with AID (contractual or 22 otherwise) has been affected, if at all, to Infectolab’s economic detriment. Indeed, the FAC 23 indicates that Infectolab continues to enjoy an ongoing business relationship with AID. See, e.g., 24 AlterG, Inc., 388 F. Supp. 3d at 1151-52 (concluding that the plaintiff failed to allege actual 25 disruption or harm where it had an ongoing contract with the third party). 26 Emphasizing that it “is the exclusive entity that may use the Products to offer services to 27 United States customers,” Infectolab argues that it has sufficiently alleged that it suffered financial 1 unable to enjoy the fruits of its exclusive Agreement with AID and that it has suffered economic 2 harm as a result.” Dkt. No. 36 at 9. Infectolab correctly notes that courts have not required a 3 plaintiff to plead the specific identity of lost customers and that, for claims of interference with 4 contractual relationships, it may suffice for a plaintiff to plead that the defendant’s conduct made 5 the plaintiff’s contract performance more expensive or more difficult. See Park Miller, LLC v. 6 Durham Group, Ltd., No. 19-cv-04185-WHO, 2020 WL 1955652, at * (N.D. Cal. Apr. 23, 2020) 7 (finding that plaintiff stated a claim for interference with contractual relations where plaintiff 8 alleged that defendant’s conduct made plaintiff’s contract performance more expensive and 9 difficult, leading to the loss of at least six clients); Storm Mfg. Group Inc. v. Weather Tec Corp., 10 No. CV 12–10849(CAS) (FFMx), 2013 WL 5352698, at *7-*8 (C.D. Cal. Sept. 23, 2013) (finding 11 that plaintiff stated a claim for intentional interference with prospective economic advantage 12 where the plaintiff alleged that defendant’s conduct led to the loss of existing relationships with 13 various customers and distributors, and did not merely allege interference with plaintiff’s 14 relationship with the general market). Infectolab, however, has not alleged facts supporting its 15 claims of lost sales, and has not even alleged that its sales have decreased. Nor has Infectolab 16 alleged facts demonstrating that ArminLabs’s conduct has made Infectolab’s contractual 17 performance more difficult or expensive. Instead, Infectolab’s allegations of harm are entirely 18 conclusory and are based on Arminlabs’s alleged “interfere[nce] with Infectolab’s relationships 19 with potential customers.” Dkt. No. 20 ¶ 43. Such allegations are insufficient. See Silicon 20 Knights, Inc. v. Crystal Dynamics, Inc., 983 F. Supp. 1303, 1312 (N.D. Cal. 1997) (“Even if 21 interference with potential customers is a legitimate basis for tortious interference with economic 22 relations, the complaint alleges only conclusory statements and no facts in support of its 23 contention that it lost potential customers.”). While the FAC also alleges that ArminLabs “has 24 unlawfully captured a share of the market that should belong to Infectolab” (Dkt. No. 20 ¶ 43), 25 other allegations indicate that any purported lost customers or market share do not necessarily 26 belong to Infectolab. See Dkt. No. 20 ¶ 39 (“Upon information and belief, at least some of those 27 consumers would not have purchased Defendant’s services, and would have instead purchased 1 For these reasons, ArminLabs’s motion to dismiss Infectolab’s claim for intentional 2 interference with prospective economic advantage is granted. 3 C. Tortious Interference with Contract 4 To state a claim for tortious interference with contractual relations, Infectolab must plead 5 facts demonstrating (1) a valid contract between plaintiff and a third party; (2) ArminLabs’s 6 knowledge of this contract; (3) ArminLabs’s intentional acts designed to induce a breach or 7 disruption of the contractual relationship; (4) actual breach or disruption of the contractual 8 relationship; and (5) resulting damage. AlterG, Inc., 388 F. Supp. 3d at 1149. The tort of 9 intentional interference with contract is closely related to the tort of intentional interference with 10 prospective economic advantage, and the two causes of action share many of the same elements. 11 Transcription Commc’ns Corp., 2009 WL 666943 at *8; see also Robi v. Five Platters, Inc., 918 12 F.3d 1439, 1442 n.4 (9th Cir. 1990). 13 For the same reasons discussed above, while Infectolab has pled the existence of a contract 14 with AID, it has otherwise failed to plead sufficient facts plausibly supporting the remaining 15 elements required for the tort of interference with that contractual relationship. ArminLabs’s 16 motion to dismiss this claim is granted. 17 D. Leave to Amend 18 Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely 19 given when justice so requires,” because “the court must remain guided by the underlying purpose 20 of Rule 15 . . . to facilitate decisions on the merits, rather than on the pleadings or technicalities.” 21 Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation 22 marks omitted). “The decision of whether to grant leave to amend nevertheless remains within the 23 discretion of the district court,” which may deny leave to amend if allowing amendment would 24 unduly prejudice the opposing party, cause undue delay, or be futile, or if the party seeking 25 amendment has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th 26 Cir. 2008) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). 27 At oral argument, Infectolab indicated that there are additional facts it can allege to clarify 1 has suffered as a result of ArminLabs’s conduct. Because the Court cannot rule out the possibility 2 || that the FAC’s allegations may be clarified on amendment, Infectolab is given leave to amend. 3 || IV. CONCLUSION 4 Based on the foregoing, ArminLabs’s Rule 12(b)(6) motion is granted as follows: 5 Infectolab’s claim for negligent interference with prospective economic advantage is dismissed 6 || without leave to amend. Infectolab’s claims for intentional interference with prospective 7 economic advantage and tortious interference with contract are dismissed with leave to amend. If 8 Infectolab chooses to amend these two claims, its Second Amended Complaint must be filed by 9 February 11, 2021. 10 IT IS SO ORDERED. 11 Dated: January 28, 2021 12

VIRGINIA K. DEMARCH United States Magistrate Judge

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