Howard v. Tanium, Inc., 3:21-cv-09703

Background

Plaintiff Daniel Howard, a former technical writer and California barred attorney, left Fortinet in 2016 after accepting a Tanium offer that included 30,000 RSUs and a $165,000 salary.
Tanium hiring manager James Evans orally told Howard the RSUs had a “current fair market value of $5.00” per share (30,000 × $5 = $150,000); the written offer listed 30,000 RSUs but did not state a per-share valuation.
Grant Thornton had prepared a February 2016 409A valuation valuing Tanium common stock at $2.01 per share as of December 31, 2015; Tanium’s internal practice was to reference the last private transaction price (effectively $5 after a 3-for-1 split).
Howard accepted the Tanium offer, later discovered the 409A $2.01 figure in the employee portal, and alleges he was fraudulently induced to leave Fortinet (where he had ~ $90,000 in unvested RSUs) and therefore lost greater future compensation.
The district court found disputed issues on whether Evans’ statement was factual, deceptive, intended to induce reliance, and whether Howard’s reliance was reasonable and caused harm—but granted summary judgment to Tanium because Howard produced no evidence Tanium knew the $5 representation was false or made it recklessly.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was Evans’ $5/share statement an actionable factual representation or mere opinion?	Howard: statement described a current value and was presented as a fact (30,000 × $5 = $150k).	Tanium: valuation statements are opinions; not actionable.	Court: Could be fact — triable issue for jury given private-company context and Evans’ calculation.
Was the $5/share statement false or misleading?	Howard: the 409A report ($2.01) shows the $5 price was inaccurate or misleading.	Tanium: $5 derives from a recent private sale (post split) and is a reasonable fair-market marker.	Court: Disputed material fact remains; not resolved on summary judgment.
Did Tanium know the representation was false or make it recklessly?	Howard: Tanium should have disclosed the 409A value; nondisclosure supports knowledge/recklessness.	Tanium: Evans didn’t know 409A; company legitimately relied on last transaction price; no evidence of actual knowledge or reckless disregard.	Held for Tanium — no evidence Tanium knew or recklessly disregarded falsity, so this element fails as a matter of law.
Was there intent, reliance, and causation (damages)?	Howard: Tanium intended to induce him to change jobs; he relied ("150 is more than 90") and claims lost future earnings (~$1.4M).	Tanium: disclaimers and Howard’s sophistication make reliance unreasonable; he suffered no compensable harm because RSUs later appreciated.	Court: Intent and reliance present factual disputes for a jury; damages theory arguable, but overall fraud claim fails because of lack of proof on knowledge element.

Key Cases Cited

Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard)
Manderville v. PCG & S Grp., Inc., 146 Cal. App. 4th 1486 (2007) (elements of intentional misrepresentation/deceit)
Neu-Visions Sports, Inc. v. Soren/McAdam/Bartells, 86 Cal. App. 4th 303 (2000) (when opinion may be treated as fact; superior access to information)
Kahn v. Lischner, 128 Cal. App. 2d 480 (1954) (statements of value are generally opinion)
Lazar v. Superior Court, 12 Cal. 4th 631 (1996) (fraud in inducement and remedies for lost employment opportunities)
Beckwith v. Dahl, 205 Cal. App. 4th 1039 (2012) (actual and justifiable reliance principles)
All. Mortg. Co. v. Rothwell, 10 Cal. 4th 1226 (1995) (reasonableness of reliance is usually a question of fact)
Hinesley v. Oakshade Town Center, 135 Cal. App. 4th 289 (2005) (contract disclaimers can undermine reasonable reliance)