Route Four v. Hawthorne Hydroponics CA4/3

CourtCalifornia Court of Appeal
DecidedMarch 4, 2025
DocketG063106
StatusUnpublished

This text of Route Four v. Hawthorne Hydroponics CA4/3 (Route Four v. Hawthorne Hydroponics CA4/3) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Route Four v. Hawthorne Hydroponics CA4/3, (Cal. Ct. App. 2025).

Opinion

Filed 3/4/25 Route Four v. Hawthorne Hydroponics CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

ROUTE FOUR LLC,

Plaintiff and Appellant, G063106

v. (Super. Ct. No. 30-2020- 01129185) HAWTHORNE HYDROPONICS, LLC et al., OPINION

Defendants and Respondents.

Appeal from a judgment of the Superior Court of Orange County, Thomas S. McConville, Judge. Affirmed. BG Law, Steven T. Gubner, Philip J. Bonoli and Theodore G. Spanos for Plaintiff and Appellant. Call & Jensen, Jeffrey M. David, Lisa A. Wegner and Melinda Evans for Defendants and Respondents. * * * Plaintiff Route Four LLC (Route Four) is in the business of selling and marketing hydroponics equipment to cannabis retailers in California and Washington.1 It asserted a single claim for intentional interference with contract against defendants The Scotts Miracle-Gro Company, The Hawthorne Gardening Company, The Hawthorne Collective, Inc., and Hawthorne Hydroponics, LLC (collectively, Hawthorne defendants). Generally, it claimed Hawthorne defendants’ purchase of a hydroponics lighting company interfered with contracts Route Four had with several clients. The trial court granted summary judgment in Hawthorne defendants’ favor. Generally, it found the undisputed evidence showed Hawthorne defendants’ purchase of the lighting company did not cause any disruption to the relevant customer contracts. Rather, the alleged disruptions occurred years before Hawthorne defendants purchased the company. On appeal, we find no error in the trial court’s ruling. Route Four’s complaint and discovery responses confirm that Hawthorne defendants did not cause the alleged contractual disruptions. Rather, as the court found, the undisputed facts show these disruptions occurred well before Hawthorne defendants purchased the lighting company. As such, the judgment is affirmed.

1 Hydroponics is the technique of growing plants without soil. It

requires specialized lighting. Examples of hydroponics equipment include air purification and ventilation systems, lighting, and plant nutrients.

2 FACTS AND PROCEDURAL HISTORY I. THE 2018 AGREEMENT Route Four initially filed this lawsuit in 2020 against several defendants that did not include Hawthorne defendants. Hawthorne defendants were added to this lawsuit in 2023. We begin by describing the origins of this lawsuit, which trace back Route Four’s purchase of a hydroponics business in 2018. We then discuss Hawthorne Hydroponics, LLC’s (Hawthorne Hydroponics) purchase of a lighting company in 2021, which led to Hawthorne defendants’ inclusion in this lawsuit. This lawsuit traces back to a 2018 sale involving Route Four’s purchase of certain assets of Hydroponics, Inc., a company founded by Brandon Burkhart in 2012. Burkhart is a defendant in the underlying case but is not a party to this appeal. Hydroponics, Inc. started as a retail business with two stores in Riverside and San Bernardino specializing in hydroponic equipment and products. It initially attempted to sell products online but ceased having an online presence in 2018. In 2017, Burkhart founded Luxx Lighting, Inc. and Athena Products, Inc. (Athena) with Ivan Van Ortwick. Athena manufactured and distributed plant nutrients for use with hydroponic gardening. Luxx Lighting, Inc. manufactured and distributed wholesale hydroponic lighting equipment. In this opinion, “Luxx Lighting, Inc.” refers to the corporate entity owned by Burkhart and Van Ortwick. The term “Luxx brand” refers to the brand of lighting products originally made by Luxx Lighting, Inc., which was later sold to Hawthorne Hydroponics. Burkhart decided to focus his efforts on Luxx Lighting, Inc. and Athena. So, in 2018, he sold most of Hydroponics, Inc.’s assets to Route Four.

3 The sale was memorialized in an Asset Purchase Agreement dated July 23, 2018 (the 2018 Hydroponics agreement). Under this agreement, Route Four bought (1) Hydroponics, Inc.’s retail shops in Riverside and San Bernardino, (2) the right to conduct internet and phone sales of related equipment and supplies in California and Washington, and (3) the Hydroponics brand name and its related goodwill (but not the corporate entity Hydroponics, Inc.). The 2018 Hydroponics agreement contained a noncompetition clause (the noncompetition clause). It provided, “[Burkhart and Hydroponics, Inc.] agree[] that for a period of 5 years after the Closing Date [(July 23, 2018)], he or it will not, directly or indirectly, engage in or become interested financially in . . . any business (other than [Route Four]) that is engaged in the hydroponics retail, distribution or services in the states of California and Washington . . . .” After the sale, Hydroponics, Inc., i.e., the corporate entity still owned by Burkhart, changed its name to Canop Holdings, Inc. (Canop). Like Burkhart, Canop is a defendant in the underlying action but is not a party to this appeal. II. THE INITIAL COMPLAINT Demand for Luxx brand products allegedly grew following Route Four’s purchase of Hydroponics, Inc.’s assets in 2018. Burkhart claims he attempted to direct customers that wanted to purchase Luxx brand products to Route Four. But he maintains Route Four was unable to maintain

4 customer relationships because it overcharged and failed to maintain adequate inventory.2 In February 2020, Route Four filed this lawsuit against Burkhart and Canop. Among other things, Route Four alleged that “since early 2019,” Burkhart and Canop have “actively attempt[ed] to destroy Route Four’s business.” In particular, Route Four alleged Burkhart and Canop had allowed “[Luxx Lighting, Inc.] and Athena [to] embark[] on retail sales, distribution, and services both in person and over the internet, throughout Washington, California, and otherwise, of lighting, nutrient and additive products that are directly competitive with products offered by Route Four.” Route Four also claimed Burkhart had directed Luxx Lighting, Inc. to poach three of its customers. Based on the above allegations, Route Four claimed that Burkhart and Canop had (1) breached the 2018 Hydroponics agreement by violating the noncompetition provision, (2) interfered with Route Four’s contractual relationships with various customers, and (3) interfered with Route Four’s prospective economic advantage, among other claims. III. PURCHASE OF THE LUXX BRAND Respondents in this case are The Scotts Miracle-Gro Company (Scotts), The Hawthorne Gardening Company (Hawthorne Gardening), The Hawthorne Collective, Inc. (Hawthorne Collective), and Hawthorne Hydroponics.

2 These facts were disputed below, but they are immaterial to the

outcome of this case. We include them for context.

5 Scotts is a publicly traded company that sells branded consumer products for lawn and garden care. The three other Hawthorne defendants are all wholly owned subsidiaries of Scotts. Hawthorne Gardening sells nutrients, lighting, and other materials used in indoor and hydroponic gardening. Hawthorne Collective focuses on certain investments in the cannabis industry. Finally, Hawthorne Hydroponics is a wholesale distributor of various gardening products such as hydroponics equipment, nutrients, and additives. In December 2021, nearly two years after Route Four filed this lawsuit against Burkhart and Canop, Hawthorne Hydroponics entered into an agreement with Luxx Lighting, Inc., Burkhart, and Van Ortwick, to purchase the Luxx brand (the 2021 Luxx sale).

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Route Four v. Hawthorne Hydroponics CA4/3, Counsel Stack Legal Research, https://law.counselstack.com/opinion/route-four-v-hawthorne-hydroponics-ca43-calctapp-2025.