Lynch v. Matterport, Inc

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6

8 SHAWN LYNCH, 9 Plaintiff, No. C 22-03704 WHA

10 v.

11 MATTERPORT, INC., ORDER RE DEFENDANT’S MOTION FOR SUMMARY 12 Defendant. JUDGMENT

13 14 As stated on the record at the hearing today, defendant’s motion for summary judgment is 15 GRANTED. For clarity, defendant moved for summary judgment on the four individual claims 16 remaining: California’s Seller-Assisted Marketing Plan (“SAMP”) Act, Sections 17200 and 17 17500 of the California Business and Professions Code, and a breach of the implied covenant 18 of good faith and fair dealing. Plaintiff in opposition briefing withdrew the first three claims, 19 and defendant in reply briefing argued that the withdrawn claims should be dismissed with 20 prejudice. As explained in orders prior, this action is an attempt at a class action do-over, with 21 the same counsel bringing similar claims on the same fact pattern but with a different plaintiff. 22 See Lynch v. Matterport, Inc., No. C 22-03704 WHA, 2022 WL 17740301, at *2 (N.D. Cal. 23 Dec. 16, 2022). Indeed, all claims remaining in the present action were litigated in the prior 24 action through summary judgment. See Stemmelin v. Matterport, Inc., No. C 20-04168 WHA, 25 2022 WL 3226973, at *1 (N.D. Cal. Aug. 10, 2022). “‘[F]inal judgment on the merits’ is 26 synonymous with ‘dismissal with prejudice.’” Hells Canyon Pres. Council v. U.S. Forest 27 Serv., 403 F.3d 683, 686 (9th Cir. 2005) (citations omitted). In light of these circumstances, 1 As for the implied covenant claim, it is now clear plaintiff's business I.C. Progress Inc. 2 should be the proper plaintiff, and not Shawn Lynch in his individual capacity. This order will 3 honor the distinction between a corporate entity and its shareholders, particularly here where 4 the injury claimed is purely economic. Plaintiff has not made “a factual showing of perceptible 5 harm” independent of the alleged lost profits of I.C. Progress, and so summary judgment is 6 warranted for lack of standing alone. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 566 (1992). 7 Furthermore, under California law, the covenant of good faith and fair dealing cannot be 8 construed to add an affirmative duty not to compete for the same customers, given the “basic 9 principles relevant to contract law .. . that, with the exception of insurance contracts, 10 ‘[b]ecause the covenant is a contract term, . . . compensation for its breach has almost always 11 been limited to contract rather than tort remedies.’” Freeman & Mills, Inc. v. Belcher Oil Co., 12 900 P.2d 669, 674-75, 679-80 (Cal. 1995); see Cal. Civ. Code § 3423(e). Regardless, plaintiff 5 13 has not shown that such duty exists here, and the covenant “cannot impose substantive duties 14 or limits on the contracting parties beyond those incorporated in the specific terms of their 3 15 agreement.” Avidity Partners, LLC v. State, 165 Cal. Rptr. 3d 299, 320 (Cal. Ct. App. 2013) a 16 (citations omitted). Defendant’s motion for summary judgment as to the breach of implied 3 17 covenant claim is GRANTED. Judgment will be entered accordingly. 18 As explained on the record at the hearing, counsel may seek leave to amend the pleadings 19 to reflect the proper plaintiff. However, if counsel does so, they must provide a sworn 20 statement that I.-C. Progress is a corporation in good standing — both now and in the past — 21 under the laws of New York. Counsel must also explain how such amendment would cure the 22 core issues on the merits discussed above and as further expounded on the record. Counsel has 23 until DECEMBER 4, 2023, to so move. 24 IT IS SO ORDERED. 25 26 Dated: November 20, 2023. lA ne WILLIAM ALSUP 28 UNITED STATES DISTRICT JUDGE