Trident E&P, LLC v. HP, Inc.

• Court: District Court, N.D. California
• Decided: June 21, 2024
• Docket: 3:24-cv-00790
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division 11 TRIDENT E&P, LLC, Case No. 24-cv-00790-LB

12 Plaintiff, ORDER DISMISSING CASE 13 v. Re: ECF No. 58

14 HP INC., et al., 15 Defendants. 16 17 INTRODUCTION 18 Plaintiff Trident E&P contracted with the federal government to supply printers, copiers, and 19 related technical support and supplies for use on U.S. Navy ships, and it subcontracted with 20 defendant HP to provide the equipment. Trident claims that HP committed fraud, defamation, and 21 tortious interference with contract and prospective economic advantage by sending a letter to the 22 government in December 2021 saying that certain HP-provided devices were manufactured by 23 Canon, not HP. As a result, the government terminated Trident’s contract for violating the single- 24 manufacturer requirement in the government’s bid solicitation.1 HP moved to strike the complaint 25 under California’s Strategic Law Against Public Participation (SLAPP), Cal. Civ. Proc. Code § 26

27 1 Compl. – ECF 1 at 4–6, 32–45 (¶¶ 159–227). There are two HP defendants: HP, Inc. and HPI Federal 1 425.16(e)(2), because the letter was made in connection with a matter being considered by a 2 government entity. It also moved to dismiss the complaint for failure to state a claim under Federal 3 Rule of Civil Procedure 12(b)(6) because Trident cannot plausibly allege intentional torts 4 predicated on HP’s truthful letter.2 The court grants the motion on both grounds. 5 6 STATEMENT 7 The next sections summarize (1) Trident’s negotiations and contract with the federal 8 government, (2) provisions in the contract between Trident and HP for HP to supply hardware for 9 Trident’s contract with the federal government, and (3) the case’s procedural history. 10 11 1. Trident’s Negotiations and Contract 12 Xerox had a long-term contractual relationship with the federal Defense Logistics Agency 13 (referred to by the parties as DLA) to provide printers and copiers for use on U.S. Navy ships.3 In 14 February 2019, as one of Xerox’s contracts was ending, the agency solicited competitive bids for 15 the equipment.4 The solicitation stated that “the contract would be awarded to the offeror with the 16 lowest priced, technically acceptable proposal [], subject to testing approval.”5 The solicitation 17 had two relevant requirements: (1) “Equipment shall be in current production as new equipment 18 on the date of proposal submission and be in production for six months after contract award[] (the 19 ‘Current Production Requirement’)” (§ 21.1.15 of the solicitation) and (2) “Class I-IVC & 20 Production Devices must be a single manufacturer[] (the ‘Single Manufacturer Requirement’)” (§ 21 21.1.37 of the solicitation).6 The contract did not otherwise define the two requirements: “bidders 22 were left to independently interpret these performance specifications.”7 23

24 2 Mot. – ECF No. 58 at 10–12. 25 3 Compl. – ECF No. 1 at 4–5. 26 4 Id. at 8–9 (¶¶ 15–16). 5 Id. at 9 (¶ 21). 27 6 Id. at 10 (¶ 26) (quoting Solicitation, Ex. 3 to id. – ECF No. 1-1 at 80 (§ 21.1.15), 81 (§ 21.1.37)). 1 As part of its bid process, Trident identified HP as a supplier.8 HP proposed that it “source, 2 modify, re-brand and warranty production devices from a third-party entity [Canon] with whom 3 HP had an existing contractual relationship,” which is “a process generally known as ‘white 4 labeling.’”9 On April 19, 2019, Trident — “in consultation with HP” — submitted a bid to the 5 agency.10 Xerox did too.11 That day, Trident filed a “bid protest” before the GAO “challenging the 6 unduly restrictive Solicitation requirements,” which allegedly allowed only Xerox to meet the 7 “Single Manufacturer” requirement. The Agency made some modifications to the solicitation but 8 did not address the single-manufacturer requirement.12 9 In response to the modifications and other agency feedback, Trident prepared a revised 10 proposal.13 As part of that process, in August 2019, for the two device classes that were subject to 11 the single-manufacturer requirement, HP — which had entered into an agreement that month with 12 Trident to supply the hardware — again proposed using Canon devices (which were in current 13 production and available to HP through its thirty-five-year relationship with Canon) that could be 14 branded as HP products.14 HP would “modify and configure the [Canon-manufactured] machines 15 to meet the [agency’s] unique requirements and brand the machines as HP products, with HP 16 literature and warranties, thereby rendering them technically compliant with the Solicitation’s 17 single manufacturer requirement.”15 HP said that this was “a standard industry practice, acceptable 18 in bids on federal contract solicitations containing similar single manufacturer requirements.”16 19 Trident relied on this representation, and its “own investigation confirmed the reasonableness of 20 21 8 Id. at 11 (¶ 32). 22 9 Id. at 12 (¶ 38). 23 10 Id. (¶ 39). 24 11 Id. (¶ 40). 12 Id. at 12 (¶¶ 41, 43–44), 14 (¶54) (if the single-manufacturer requirement excludes contract 25 manufacturers, then only Xerox could fulfill that requirement). 26 13 Id. at 12 (¶ 45). 14 Id. at 13 (¶ 47). 27 15 Id. at 12–14 (¶¶ 45–51); HP U.S. Partner Agreement, Ex. A to Mot. – ECF No. 58-1. 1 its reliance.”17 HP’s specification sheets for the HP-branded devices “made it clear that these 2 proposed devices were Canon devices to be supplied under HP’s brand.”18 HP said that Canon 3 approved the proposal.19 In its September 2019 revised proposal to the agency, Trident submitted 4 HP’s two devices (the HP SPO8116b and HP SPO3305c) as the proposed production devices for 5 the two device classes.20 6 On August 2, 2020, the agency’s contracting officer issued an evaluation notice that identified a 7 deficiency in the current-production requirement (§ 21.1.15).21 It did not identify as a deficiency the 8 single-manufacturer requirement (§ 21.1.37) “despite the specification sheets included in the proposal 9 submission [that] made clear that certain devices were ‘white labeled’ Canon products.”22 On August 10 21, 2020, with HP’s “knowledge and consent,” Trident responded to the contracting officer’s notice 11 with a revised proposal “‘confirm[ing] that all proposed equipment is in current production and will 12 be in production for six (6) months post award’ in accordance with [§] 21.1.15 [the current- 13 production requirement].”23 14 On November 19, 2020, the agency issued a second evaluation notice that again cited § 21.1.15 15 as a “technical deficiency” and asked for documentation from HP that the devices “are in current 16 production by Hewlett Packard.”24 On November 25, 2020, “at the direction of and/or with the 17 approval of” of HPI Federal president Todd Gustafson, HP provided Trident with a draft response 18 to submit to the agency.25 The draft said that “the HP SPO8116b and HP SPO3305c are HP variants 19 of the Canon imageRUNNER ADVANCE DX 8705i and the Canon imageRUNNER Advance 20 21

22 17 Id. at 14–15 (¶¶ 56–57). 23 18 Id. at 15 (¶ 58). 19 Id. (¶ 60). 24 20 Id. at 16 (¶¶ 62, 65). 25 21 Id. at 18 (¶¶ 73–74). 26 22 Id. (¶ 74). 23 Id. (¶ 75). 27 24 Id. at 19 (¶ 79–80) (quoting Evaluation Notice, Ex. 8 to id. – ECF No. 1-2 at 366). 1 C7565i, respectively” and that the two devices were “in current production by Canon for HP.”26 2 Trident and HP then “collectively edited and refined the response.”27 In an email dated November 3 30, 2020, HPI’s CTO Thomas Gardner allegedly “confirmed that HP believed that the two Canon 4 devices [that were subject to the single-manufacturer requirement] met the agency’s solicitation 5 requirements.”28 Trident then quotes and attaches the Gardner email to support that allegation: Agree with your way forward. The way I look at Canon is they are just one of our 6 ten thousand parts and component suppliers for our products. We share IP with 7 several of the suppliers. Maybe one way to state this is as follows: HP is recognized as having a World Class Supply Chain. Currently they are the best in 8 the IT market. As such they have close relationship[s] among their ten[-]thousand part 9 suppliers and component manufacturers. Several of these suppliers share intellectual property with HP. HP certifies that the quoted equipment is in current production and 10 will be in production at least 6 months after [the] award.29 11 HP provided the full email, which shows that Mr. Gardner responded to this email from Trident 12 president John Zvarick: “We can maybe expand to say that HP has a broad range of agreements with 13 numerous manufacturers to produce equipment and components for machines without calling out 14 Canon by name. I think if we acknowledge Canon in our response[,] we risk being found technically 15 deficient as the PWS [the agency solicitation’s performance work statement] stands now.”30 16 On December 11, 2020, Trident submitted HP’s final certification (signed by HP CTO Thomas 17 Gardner and dated December 10, 2020) to the agency as part of Trident’s revision to its final 18 proposal.31 The letter does not reference Canon and states that the two HP devices (the HP SPO8116b 19 and HP SPO3305c) were “commercial items currently in production as new equipment as of the date 20 of Trident’s final revised proposal submission and will be in production for six months after [the] 21 contract award.”32 Trident’s December 11 final proposal included revised specification sheets for the 22 23 26 Id. at 19 (¶ 82); Draft Letter, Ex. 9 to id. – ECF No. 1-2 at 369. 24 27 Compl. – ECF No. 1 at 19 (¶ 83). 25 28 Id. at 20 (¶ 84). 26 29 Id. (quoting 11/30/2020 Email, Ex. 10 to id. – ECF No. 1-3 at 2). 30 Email, Ex. B to Mot. – ECF No. 58-2 at 2; Compl. – ECF No. 1 at 4 (defining PWS). 27 31 Compl. – ECF No. 1 at 21 (¶¶ 86–87). 1 HP SPO8116b and HP SPO3305c that “again made clear HP’s proposal to rebrand the Canon devices 2 referenced in Trident’s September 18, 2019 proposal.”33 “Thus, Trident and [HP] were certainly not 3 hiding from [the agency] the fact that they were proposing Canon devices specially configured to 4 satisfy the” agency’s performance-work statement.34 5 On April 20, 2021, the agency determined that those with technically acceptable bids — 6 including Trident — would participate in a reverse auction on April 26.35 Trident’s bid was 7 $131,530,317 and Xerox’s bid was $146,999,905, which meant that — as the agency determined on 8 May 4 — Trident was the presumptive awardee.36 Xerox filed protests before the GAO to eliminate 9 Trident’s bid, asserting that Trident’s inclusion of the white-labeled Canon devices violated the 10 single-manufacturer requirement.37 The agency opposed Xerox’s challenge in part by stating that 11 the devices were from a single supplier, HP.38 On August 16, 2021, the GAO denied Xerox’s 12 protests, quoting HP’s December 2020 letter and concluding that the letter “satisfied the agency’s 13 concerns, and we have no basis to object to the agency’s determination that the Trident proposal 14 was technically acceptable for this reason.”39 The agency thus awarded the contract to Trident.40 15 On September 9, 2021, Xerox filed another bid protest before the Court of Federal Claims, 16 again disputing whether Trident satisfied the single-manufacturer requirement by white-labeling 17 the Canon devices.41 On December 30, 2021, HP sent Trident a letter that said the following: 18 We are writing to Trident Engineering & Procurement, Inc. (Trident) to clarify the statements contained in a December 10, 2020 letter (the “December 10 Letter”) from 19 HPI Federal LLC’s (HP Federal) Chief Technology Officer to the Defense Logistics Agency (DLA), which was prepared at Trident’s request. . . . 20 * * * 21

22 33 Id. at 21 (¶ 89). 23 34 Id. (¶ 90). 35 Id. at 22 (¶¶ 91, 93–94). 24 36 Id. (¶¶ 95–97). 25 37 Id. at 23–24 (¶¶ 103–05). 26 38 Id. ¶ 106 (quoting Agency Rep., Ex. 15 to id. – ECF No. 1-4 at 345). 39 Id. at 24–25 (¶ 107–09) (quoting GAO Decision, Ex. 16 to id. – ECF No. 1-4 at 370 (p. 9)). 27 40 Id. at 25 (¶ 113) (citing Contract, Ex. 18 to id. – ECF No. 1-4 at 377–89). We understand that the December 10 Letter may have been interpreted by the 1 Government — including by the Government Accountability Office (GAO) in 2 addressing a post-award protest filed by Xerox Corporation — to mean that the SMDP Class PC and SMDP Class PBW printers proposed by Trident are currently in 3 production and branded by HP Inc.[] That is not the case; rather, the two devices are produced and branded by Canon, and as you were aware at the time we submitted the 4 December 10 Letter, HP Federal (and Trident) intended to resell those printers to satisfy the SDMP requirements. 5 HP Federal has recently been informed by a Trident representative that DLA is likely 6 aware that the two aforementioned devices will be manufactured by Canon. Nevertheless, out of an abundance of caution, HP Federal is providing this letter to 7 memorialize and clarify its intent with respect to these printers. 8 As a valued partner, HP Federal takes this matter seriously and are reviewing the business processes that led to submission of the December 10 Letter to Trident. We 9 will further supplement this submission as needed to the extent additional relevant facts are identified. In the meantime, you should feel free to contact me directly to 10 discuss this matter. HP Federal will concurrently inform DLA, as the recipient of [the] 11 December 2020 Letter, by forwarding this instant letter to the contracting officer.42 12 HP also sent the letter to the agency.43 In a letter dated January 5, 2022, the agency informed 13 Trident that if HP did not produce or brand the two models and instead was reselling Canon 14 products, then Trident’s proposal likely did not comply with the current-production and single- 15 manufacturer requirements.44 The agency asked Trident to explain how it met those 16 requirements.45 Trident asked HP to amend its letter, but after some back and forth, HP did not.46 17 The agency terminated Trident’s contract on January 26, 2022.47 18 19 2. Trident/HP Hardware-Supply Partner Agreement 20 The parties signed a supply agreement in early August 2019.48 In it, HP appointed Trident as a 21 non-exclusive partner for the purchase and resale of HP products.49 The contract had a choice-of- 22 23 42 Id. at 27–28 (¶ 129) (quoting HP Letter, Ex. 2 to id. – ECF No. 1-1 at 4–6). 43 Id. at 27 (¶ 128). 24 44 Id. at 28–29 (¶¶ 135–36). 25 45 Id. at 28 (¶ 135); Letter, Ex. 20 to id. – ECF No. 1-4 at 418–19. 26 46 Compl. – ECF No. 1. at 29–31 (¶¶ 138–51). 47 Id. at 31 (¶ 156). 27 48 HP U.S. Partner Agreement, Ex. A to Mot. – ECF No. 58-1 at 2. 1 law provision: “Governing Law. Disputes arising in connection with this Agreement will be 2 governed by the laws of California and locality in which we [HP] accept your order and the courts 3 of California will have jurisdiction, except that we may, at our option, bring suit for collection in 4 the country where you are located.”50 The contract limits HP’s liability to $1 million per incident 5 (except for claims under section 10 for intellectual-property indemnification).51 “Notwithstanding 6 the foregoing, in no event is HP liable to you for special, indirect, incidental, statutory, punitive or 7 consequential damages (including without limitation, any and all damages from business 8 interruption, loss of profits or revenue, cost of capital, or loss of any use of any property or 9 capital).”52 “To the extent allowed by local law, these limitations apply regardless of the basis of 10 liability, including negligence, misrepresentation, breach of any kind, or any other claims in 11 contract, tort or otherwise.”53 12 13 3. Procedural History 14 Trident sued HP in the Eastern District of Pennsylvania for (1) tortious interference with 15 contract, (2) tortious interference with prospective economic advantage, (3) fraud, (4) fraudulent 16 inducement, and (5) defamation.54 The case was transferred here, and HP moved to strike the 17 complaint or dismiss it.55 The parties do not dispute the court’s diversity jurisdiction under 28 18 U.S.C. § 1332 and consented to magistrate-judge jurisdiction under 28 U.S.C. § 636(c).56 The court 19 held a hearing on June 13, 2024. 20 21 22 23 50 Id. at 10 (§ 16.h.). 24 51 Id. at 7 (§ 11.b.). 25 52 Id. (changed from uppercase to lowercase). 26 53 Id. (§ 11.c.) (changed from uppercase to lowercase). 54 Id. at 32–45 (¶¶ 159–227). 27 55 Mot. – ECF No. 58. 1 ANALYSIS 2 HP moved to strike under California’s anti-SLAPP statute, Cal. Civ. Proc. Code § 3 425.16(e)(2), because the letter was made in connection with a matter being considered by a 4 government entity. It also moved to dismiss the complaint for failure to state a claim under Rule 5 12(b)(6) because Trident didn’t plausibly allege an intentional tort predicated on that letter.57 The 6 court dismisses the case on both grounds. 7 8 1. Anti-SLAPP Statute 9 A preliminary issue is whether California law applies. HP contends that it does under the 10 supply agreement’s choice-of-law provision.58 Trident counters that (1) contract interpretation 11 involves issues of fact better reserved for summary judgment, (2) the contract in any event does 12 not apply because it did not bind non-signatory HPI Federal (the HP entity that sent the letters), 13 (3) the contract also is void for lack of consideration because it was executed before the contract 14 award only because HP wanted to be ready to go, and there are no obligations for the parties 15 absent a federal contract award, (4) the choice-of-law provision is ambiguous, and (5) the contract 16 is unenforceable because it was fraudulently induced.59 17 The transferring court already held — when transferring the case under the same section based 18 on the forum-selection clause — that the partner agreement’s governing-law provisions apply.60 19 This result is correct. First, the agreement is not preliminary: it was effective on signing, there is 20 no condition limiting obligations to post-award conduct, and in any event, Trident was awarded 21 the federal contract. As the transferring court held, the contract applies to the bidding process.61 22 All the challenged conduct took place after the parties signed their contract in August 2019 and 23 involves their business agreement. Second, the choice-of-law provision applies to HPI. At 24

25 57 Mot. – ECF No. 58 at 10–12. 26 58 Id. at 18–20. 59 Opp’n – ECF No. 59 at 11–13. 27 60 Order – ECF No. 31. 1 minimum, it is a non-signatory that is bound by the contract because it derives benefit from the 2 contract. And the contract has a provision that HP can assign its rights or obligations to an HP 3 affiliate without notice.62 Third, the contract language is not ambiguous. 4 At the hearing, Trident argued that the claims do not relate to the contract between the parties 5 and instead are about conduct that interfered with its contract with the government. Put another 6 way, it can’t sue HP for breach of a contract to supply parts because that obligation applies only if 7 Trident won (and retained) the government contract. On this record and argument, this does not 8 change the outcome. The contract defines the parties’ obligations and extends to “[d]isputes arising 9 in connection with” the agreement.63 The letter was about the parties’ contract that was a predicate 10 for Trident’s bid, the resulting federal contract, and the termination of the contract.64 Thus, the anti- 11 SLAPP statute applies. (And as discussed below, even if it does not, the claims fail on their merits.) 12 HP’s main argument is that its December 2021 letter is protected under Cal. Civ. Proc. Code § 13 425.16(e)(2) because it was sent in connection with issues under consideration by a federal entity.65 14 California’s anti-SLAPP statute applies to state claims in federal court. Thomas v. Fry’s Elecs., 15 Inc., 400 F.3d 1206, 1206–07 (9th Cir. 2005). A two-step process applies. First, the court 16 determines whether the defendant has made a threshold showing that the challenged claim arises 17 from acts “in furtherance of the [defendant’s] right of petition or free speech under the United 18 States or California Constitution in connection with a public issue.” Equilon Enters. v. Consumer 19 Cause, Inc., 29 Cal. 4th 53, 67 (2002) (quoting Cal. Civ. Proc. Code § 425.16(b)(1)). Second, if 20 that showing is made, then the court “determines whether the plaintiff has demonstrated a 21 probability of prevailing on the claim.” Id. The claim is subject to dismissal only when the 22 23

24 62 Reply – ECF No. 60 at 8–9 (making these arguments, collecting cases, and citing HP U.S. Partner 25 Agreement, Ex. A to Mot. – ECF No. 58-1 at 9 (§ 16(a)). 63 HP U.S. Partner Agreement, Ex. A to Mot. – ECF No. 58-1 at 10 (§ 16(h)). 26 64 See Reply – ECF No. 60 at 8 (courts interpret “arising in connection with” broadly and citing primarily 27 cases involving arbitration agreements), 9 (two courts, including the transferring court, have upheld this choice-of-law and forum-selection clause at a motion to dismiss without finding any ambiguity). 1 defendant shows that the claim is based on protected conduct and the plaintiff fails to show a 2 probability of success on that claim. Navellier v. Sletten, 29 Cal. 4th 82, 88–89 (2002). 3 Trident does not contest that the letter “was made in connection with an issue under 4 consideration or review by” a government entity. Cal. Civ. Proc. Code § 425.16(e)(2). Instead, it 5 counters that the anti-SLAPP statute does not apply because the letter falls within the statute’s 6 commercial-speech exception.66 Id. § 425.17(c). The letter does not fall within that narrow 7 exemption because it is not an attempt to promote (read: advertise) HP’s products. 8 Section 425.17(c) says, in relevant part, that section 425.16 does not apply to a claim against a 9 person primarily engaged in the business of selling goods if two conditions are met: (1) the 10 “statement . . . consists of representations of fact about that person’s or a business competitor’s . . . 11 goods that is made for the purpose of obtaining approval for, promoting, or securing sales . . . of 12 the person’s goods or was made in the course of delivering the person’s goods[,]” and (2) the 13 “intended audience is an actual or potential buyer or customer, or a person likely to repeat the 14 statement to, or otherwise influence, an actual or potential buyer or customer, or the statement or 15 conduct arose out of or within the context of a regulatory approval process, proceeding, or 16 investigation. . . .” Cal. Civ. Proc. Code § 425.17(c). As the party invoking the commercial-speech 17 exemption, Trident has the burden of proof to establish its applicability. Simpson Strong-Tie Co., 18 Inc. v. Gore, 49 Cal. 4th 12, 26 (2010). The exemption excuses “only a subset of commercial 19 speech — specifically, comparative advertising.” FilmOn.com Inc. v. DoubleVerify Inc., 7 Cal. 5th 20 133, 147 (2019); JAMS, Inc. v. Super. Ct., 1 Cal. App. 5th 984, 995 (2016) (“What matters . . . is 21 whether the speech at issue is about the speaker’s product or about a competitor’s product or 22 service, whether the speech is intended to induce a commercial transaction, and whether the 23 intended audience includes an actual or potential buyer.”). 24 The letter here is not commercial advertising: it was sent in response to the GAO’s inquiry and 25 in the context of other agency action and on its face is a response to a compliance inquiry. Cal. Civ. 26 27 1 Proc. Code § 425.17(c)(1); FilmOn.com, Inc., 7 Cal. 5th 147–48. The commercial-speech exception 2 does not apply. 3 Under step two of the anti-SLAPP analysis, Trident must establish a probability that it will 4 prevail on the claims. Cal. Civ. Proc. Code § 425.16(b); Equilon Enters., 29 Cal. 4th at 67. It did not, 5 first because the only predicate act for all claims is HP’s December 2021 letter, which is privileged 6 under Cal. Civ. Code § 47, and second because Trident does not plausibly plead its claims.67 7 First, the letter is privileged under Cal. Civ. Code § 47. 8 “Section 47 establishes a privilege that bars liability … for communications made ‘[i]n any (1) 9 legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by 10 law, or (4) in the initiation or course of any other proceeding authorized by law and reviewable 11 pursuant to statutes [governing writs of mandates],’ with certain statutory exceptions that do not 12 apply to the present case. The privilege . . . often is referred to as an ‘absolute’ privilege, and it 13 bars all tort causes of action except for a claim of malicious prosecution.” Hagberg v. Cal. Fed. 14 Bank, 32 Cal. 4th 350, 360 (2004) (quoting Cal. Civ. Code § 47(b)); see Cal. Civ. Code § 47(b) 15 (listing exceptions, which do not apply here). “The absolute privilege attaches to any publication 16 that has any reasonable relation to the action and is made to achieve the objects of the litigation 17 even though published outside the court room and no function of the court or its officers is 18 involved. The publication need not be pertinent, relevant or material in a technical sense to any 19 issue if it has some connection or relation to the proceedings.” Pettitt v. Levy, 28 Cal. App. 3d 484, 20 489 (1972); Mandel v. Hafermann, 503 F. Supp. 3d 946, 968–69 (N.D. Cal. 2020) (dismissing 21 defamation claim because the privilege fell within this litigation privilege; “The privilege extends 22 to any communication that bears some relation to an ongoing or anticipated lawsuit.”). 23 Here, as set forth in the Statement, there were agency proceedings, a review by the GAO, and 24 a lawsuit before the Court of Federal Claims. HP’s compliance letter is privileged. 25 Second, in any event, Trident does not plausibly plead claims. When, as here, “a defendant 26 makes an anti-SLAPP motion based purely on legal arguments, then the analysis is made under 27 1 Fed. R. Civ. P. 8 and 12 standards.” Planned Parenthood Fed'n of Am., Inc. v. Ctr. for Med. 2 Progress, 890 F.3d 828, 833 (9th Cir.), amended, 897 F.3d 1224 (9th Cir. 2018). That analysis is 3 in the next section. 4 5 2. Failure to State Claims Under Rules 8, 12(b)(6), and 9(b) 6 The next two sections are the standard of review and its application to the five claims: tortious 7 interference with contract, tortious interference with prospective economic advantage, fraud, 8 fraudulent inducement, and defamation. Trident did not plausibly plead claims for two reasons. 9 First, the predicate act by HP for all claims is the December 2021 letter (which Trident does not 10 challenge as false in the complaint), and second, Trident does not allege any facts for necessary 11 elements of the claims (such as improper motive for the tortious-interference claim). 12 2.1 Standard of Review 13 A complaint must contain a “short and plain statement of the claim showing that the pleader is 14 entitled to relief” to give the defendant “fair notice” of (1) what the claims are and (2) the grounds 15 upon which they rest. Fed. R. Civ. P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 16 (2007). Thus, “[a] complaint may fail to show a right to relief either by lacking a cognizable legal 17 theory or by lacking sufficient facts alleged under a cognizable legal theory.” Woods v. U.S. Bank 18 N.A., 831 F.3d 1159, 1162 (9th Cir. 2016). 19 A complaint does not need detailed factual allegations, but “a plaintiff’s obligation to provide 20 the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a 21 formulaic recitation of the elements of a cause of action will not do. Factual allegations must be 22 enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (cleaned 23 up). A complaint must contain factual allegations that, when accepted as true, are sufficient to 24 “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); 25 NorthBay Healthcare Grp., Inc. v. Kaiser Found. Health Plan, Inc., 838 F. App’x 231, 234 (9th 26 Cir. 2020) (“[O]nly the claim needs to be plausible, and not the facts themselves. . . .”); see 27 Interpipe Contracting, Inc. v. Becerra, 898 F.3d 879, 886–87 (9th Cir. 2018) (the court must 1 favorable to the plaintiff”) (cleaned up). 2 Put another way, “[a] claim has facial plausibility when the plaintiff pleads factual content that 3 allows the court to draw the reasonable inference that the defendant is liable for the misconduct 4 alleged.” Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a ‘probability 5 requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” 6 Id. “Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops 7 short of the line between possibility and plausibility of ‘entitlement to relief.’” Id. (cleaned up). 8 Fraud allegations elicit a more demanding standard. “In alleging fraud. . . , a party must state 9 with particularity the circumstances constituting fraud. . . . Malice, intent, knowledge, and other 10 conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). This means that 11 “[a]verments of fraud must be accompanied by the ‘who, what, when, where, and how’ of the 12 misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003). “The 13 plaintiff must [also] set forth what is false or misleading about a statement, and why it is false.” Id. 14 (cleaned up). Like the basic “notice pleading” demands of Rule 8, a driving concern behind Rule 15 9(b) is that defendants be given fair notice of the charges against them. In re Lui, 646 F. App’x 16 571, 573 (9th Cir. 2016) (“Rule 9(b) demands that allegations of fraud be specific enough to give 17 defendants notice of the particular misconduct . . . so that they can defend against the charge and 18 not just deny that they have done anything wrong.”) (cleaned up); Odom v. Microsoft Corp., 486 19 F.3d 541, 553 (9th Cir. 2007) (Rule 9(b) requires particularity “so that the defendant can prepare 20 an adequate answer”). 21 If a court dismisses a complaint because of insufficient factual allegations, it should give leave 22 to amend unless “the pleading could not possibly be cured by the allegation of other facts.” Cook, 23 Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990). If a court 24 dismisses a complaint because its legal theory is not cognizable, the court should not give leave to 25 amend. U.S. v. United Healthcare Ins. Co., 848 F.3d 1161, 1184 (9th Cir. 2016); see Steele-Klein 26 v. Int’l Bhd. of Teamsters, Loc. 117, 696 F. App’x 200, 202 (9th Cir. 2017) (leave to amend may 27 be appropriate if the plaintiff “identifie[s] how she would articulate a cognizable legal theory if 1 2.2 Application 2 The predicate act for the claims is HP’s December 2021 letter, which was a truthful letter 3 designed to clarify a compliance issue. Other allegations support the conclusion that it was truthful: 4 HP was “always forthcoming about the fact that the special[-]order devices were modified Canon 5 products.”68 In its show-cause response to the agency’s January 2022 letter, Trident said that it “did 6 not believe” that HP’s December 2021 letter “was a repudiation of” HPI’s CTO Thomas Gardner’s 7 prior certification letter.69 The truthful letter does not establish plausible claims. 8 First, the elements of a claim for tortious interference with contract are as follows: “(1) the 9 existence of a valid contract between the plaintiff and a third party; (2) the defendant’s knowledge 10 of that contract; (3) the defendant’s intentional acts designed to induce a breach or disruption of 11 the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) 12 resulting damage.” Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal. 5th 1130, 1141 (2020). “A person 13 cannot incur liability for interfering with contractual or economic relations by giving truthful 14 information to a third party.” ComputerXpress, Inc. v. Jackson, 93 Cal. App. 4th 993, 1014 (2001) 15 (cleaned up); accord Savage v. Pac. Gas & Elec. Co., 21 Cal. App. 4th 434, 449–50 (1993). HP’s 16 truthful letter is not an actionable intentional act designed to induce a breach of Trident’s federal 17 contract. 18 Trident does allege that the December 2021 letter caused the agency to terminate the contract 19 because it “expressly state[d] and/or directly impl[ied] that Trident’s and the Defendant’s prior 20 representations that the SPO devices complied with the single manufacturer requirement as well as 21 the ‘in production’ requirement were false.”70 But the letter — see supra Statement — does not 22 say that. Moreover, the allegations in the complaint are that Trident never misled the agency in its 23 bid proposal, HP did not either (both in its specifications in support of that proposal or in the 24 December 2021 letter), and the government got it wrong when it concluded that the bid proposal 25 26 68 Compl. – ECF No. 1 at 28–29 (¶ 136). 27 69 Id. at 31 (¶ 154) & Letter, Ex. 23 to id. – ECF No. 1-4 at 427 (p. 3). 1 violated the single-manufacturer requirement. The government may be wrong (as a matter of fact). 2 But that does not make a claim against HP. Trident recasts the argument slightly in its opposition: 3 HP’s “priority was to foster their own ‘valued partner’ relationship with [the agency], and . . . 4 avoid ‘compliance issues’ with [the agency].”71 But that compliance issue was advanced to 5 address an issue raised by the GAO. It also must be read in the context of the complaint’s 6 allegations that the parties did not hide the ball: Trident did not in its bid proposal, and HP did not 7 in its specifications submitted in support of that proposal. 8 Trident also contends that truth is a defense that is not cognizable on a motion to dismiss.72 But 9 the non-conclusory allegations of the complaint establish that HP’s statements were true. The 10 complaint thus does not contain factual allegations that, when accepted as true, are sufficient to 11 “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678. 12 Second, the elements of a claim for tortious interference with prospective economic damage 13 generally are the factors for tortious interference with contract: (1) the existence of an economic 14 relationship between the plaintiff and a third party; (2) the defendant’s knowledge of the 15 relationship; (3) the defendant’s intentional acts to disrupt the relationship; (4) actual disruption; 16 and (5) economic harm proximately harmed by the disruption. O’Connor v. Uber Techs., Inc., 58 F. 17 Supp. 3d 989, 996 (N.D. Cal. 2014). The claim thus fails for the reasons above. Also, for this claim, 18 a plaintiff must plead the commission of an independently wrongful act, meaning that HP’s conduct 19 was “wrongful by some measure other than the fact of interference itself.” Ixchel Pharma, LLC, 9 20 Cal. 5th at 1142. “An act is independently wrongful if it is unlawful, that is if it is proscribed by 21 some constitutional, statutory, regulatory, common law, or other determinable legal standard.” Id.; 22 accord Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1159 (2003). Trident does 23 not allege independently wrongful conduct proscribed by a determinable legal standard. 24 Trident nonetheless contends that it need not plead an independently wrongful act because 25 pleading that element is required only when alleging interference with an at-will contract, not for 26

27 71 Opp’n – ECF No. 59 at 29. 1 tortious interference with prospective economic advantage. On this record and briefing, [xchel 2 || holds otherwise: a party must plead this element. 9 Cal. Sth at 1142. Even if the court accepted the 3 || unpled allegation that HP sent the letter to preserve its relationship with the agency, it does not 4 || follow that there was any interference, including an independently wrongful act. 5 Third, Trident does not plead fraud with the requisite particularity for claims three and four. 6 || Trident’s allegations are about whether the Canon devices met the government’s requirements for 7 || the bid solicitation. The fraud claims thus rest on whether HP’s assurances about “white labeling” 8 (that it met the single-manufacturer requirement) were fraudulent. On this record, considering 9 || the allegations in the complaint that the assurances were truthful, there is no plausible claim. Fraud 10 || claims “cannot be predicated on misrepresentations of law. .. .” Miller v. Yokohama Tire Corp., 1] 358 F.3d 616, 621 (9th Cir. 2004). 12 Fourth, the elements of a claim for defamation are as follows: “(1) a publication that is (2) 13 false, (3) defamatory, (4), unprivileged, and (5) has a natural tendency to injury or causes special 14 || damage.” John Doe 2 v. Super. Ct., 1 Cal. App. 5th 1300, 1312 (2016). As discussed above, on 3 || this record and on these allegations in the complaint, the letter is truthful. Trident does not plead a 16 || any false statement. The letter also is privileged (see above). Mandel, 503 F. Supp. 3d at 968-69.

Z 18 CONCLUSION 19 Successful anti-SLAPP motions require an award of attorney’s fees and costs. Cal. Civ. Proc. 20 || Code § 425.16(c)(1); Verizon Del., Inc. vy. Covad Commc’ns, 377 F.3d 1081, 1091 (9th Cir. 2004). 21 The issue is deferred in favor of Trident’s submitting an amended complaint within three weeks. It 22 || must attach a blackline compare of the amended complaint against the current complaint. 23 IT IS SO ORDERED. EC 24 Dated: June 21, 2024 Lit LAUREL BEELER 25 United States Magistrate Judge 26

28 || ™ Id. at 32-35.