ORDER RE: (1) MOTION TO DISMISS COUNTERCLAIMS; (2) MOTION TO STRIKE COUNTERCLAIMS; AND (3) MOTION TO TRANSFER BOND
INTRODUCTION
Real Action Paintball, Inc. and its principal, K.T. Tran (collectively ‘Real Action”)
BACKGROUND
UTS and Real Action sell irritant filled projectiles. Compl. ¶ 2, Dkt. No. 1; FACC ¶¶ 20, 29. Typically used by law enforcement or military, these projectiles are nonlethal capsules that contain a pepper substance and can be shot like paintballs. FACC ¶ 19. UTS’s predecessor in interest, Advanced Tactical Ordnance Systems, LLC (‘ATO”), an Indiana corporation, previously brought suit against Real Action, a California company, in a case styled Advanced Tactical Ordinance Systems, LLC v. Real Action Paintball, Inc., et al., Case No. 12-00296-JVB-RBC (N.D. Ind.) (the ‘Indiana Action”), alleging Real Action infringed on its ‘PepperBall” trademark by making statements implying that Real Action sold PepperBall projectiles, among other things. Compl. ¶¶ 1, 36; FACC ¶¶ 30: 31, 48. ATO alleges it acquired PepperBall Technologies, Inc. in 2012, procuring the use of the PepperBall mark, among other things. Compl. ¶ 2. ATO obtained a temporary restraining order and later a preliminary injunction in the Indiana Action to stop Real Action’s use of the PepperBall mark and related acts by Real Action. Compl. ¶ 36; FACC ¶¶ 36, 51.
ATO also sued Conrad Sun, Sun LLC, and Apon in the Indiana Action. FACC ¶¶ 86-87. Apon manufactured irritant projectiles, while Conrad Sun and his company Sun LLC had previously helped broker a deal for the sale of irritant filled projectiles from Apon to Real Action. Compl. ¶¶ 11, 12, 14-16; FACC ¶ 28. Real Action alleges ATO settled with Sun, Sun LLC, and Apon in the Indiana Action ‘on abusive terms,” which made it so that Real Action was unable to acquire the irritant projectiles it contracted for from Sun LLC and Apon, and consequently harmed Real Action’s position in the marketplace. FACC ¶ 96.
Meanwhile, Real Action challenged whether the Northern District of Indiana (the ‘Indiana Court”) properly invoked personal jurisdiction over it. Id. ¶ 44. The Court of Appeals for the Seventh Circuit confirmed the Indiana Court did not have personal jurisdiction over Real Action, and the Indiana Court consequently dismissed the suit. Id.; see also Advanced Tactical
The case has found new residence in this Court. Real Action filed the first suit, styled as Real Action Paintball, Inc. v. Advanced Tactical Ordnance Systems, LLC et al., Case No. 14-2435-MEJ (N.D. Cal.) (the ‘ATO Case”). It asserted 17 claims against ATO, including claims for wrongful injunction, declaratory relief, unfair competition, and restraint of trade. Real Action also sued attorneys Michael Blumenthal and David Piell, who represented ATO in the Indiana Action, and the persons and entities who had formed ATO. ATO Case, Dkt. No. 1. Specifically, Real Action sued Gary Gibson and Perfect Circle Projectiles LLC as well as Tyler Tiberius and Tiberius Arms LLC. Id. Gibson' owns or owned Perfect Circle, which in turn owns or owned 50% of ATO. FACC ¶¶ 23, 25. Perfect Circle also once supplied irritant projectiles to Pepperball Technologies. Id. ¶ 20. Tiberius is or was a co-owner of Tiberius Arms, which Real Action alleges owns or owned the other 50% of ATO. Id. ¶¶ 24-25. Finally, Real Action also sued Robert N. Trgovich in his capacity as clerk of the United States District Court for the Northern District of Indiana. ATO Case, Dkt. No. 1; see also FACC ¶ 11.
After Real Action filed suit in this Court, UTS was formed and purchased ATO and the PepperBall mark. Compl. ¶ 2. UTS then filed the present lawsuit against Real Action (the ‘UTS Case”), and moved for a temporary restraining order. Dkt. No. 27. The Court denied that motion but construed it as a motion for a preliminary injunction. Dkt. No. 34. The Court ultimately granted in part and denied in part UTS’s motion for a preliminary injunction, which enjoined Real Action from using the PepperBall name to refer to its irritant projectiles. Dkt. No. 85. Real Action subsequently counter-sued UTS for various claims (many of which are similar to those asserted against ATO), as well as Blumen-thal and Piell for misappropriation of trade secrets related to information published with the filing of UTS’s motion for a temporary restraining order. Dkt. No. 51.
The Court subsequently consolidated the ATO and UTS actions under the UTS Case. Dkt. No. 140. In light of this consolidation, the Court denied Real Action’s Motion to Amend its Complaint, and denied without prejudice UTS’s and ATO’s pending Motions to Dismiss and Motions to Strike,
On June 16, 2015, Real Action filed its First Amended Counterclaims against Counter-Defendants as well as Trgovich. Dkt. No. 152. Real Action brings a total of 18 claims;
1. Wrongful Injunction (under Federal law of the Seventh Circuit) — ATO and Trgovich
2. Wrongful Injunction (under Indiana law) — ATO and Trgovich
3. Wrongful Seizure (under Federal law) — ATO, Gibson, Tiberius, and Trgovich
4. Abuse of Process (under Indiana law) — ATO, Gibson, Tiberius, Blu-menthal, and Piell
5. Malicious Prosecution (under Indiana law) — ATO, Gibson, Tiberius, Blu-menthal, and Piell
6. Intentional Interference with Contractual Relations (under Indiana and California laws) — ATO, Perfect Circle, Gibson, Tiberius, Tactical Air,5 Tiberius Arms, Blumenthal, and Piell
7. Intentional or Negligent Interference with Prospective Economic Advantage (under Indiana and California laws) — ATO, Gibson, Tiberius, Blu-menthal, and Piell
8. Tortious Conversion (under Indiana and California laws) — ATO, Gibson, and Blumenthal
9. Criminal Conversion (under Indiana law) — ATO, Gibson, and Blumenthal
10. False Designation of Origin (under 15 U.S.C. § 1125) — ATO, Gibson, Tiberius, and UTS
11. Monopoly and Combination in Restraint of Trade (under the Sherman Act) — ATO, Perfect Circle, and Tiberius Arms
12. Combination in Restraint of Trade (under California’s Cartwright Act) — ATO, Perfect Circle, and Tiberius
13. Unfair Competition and False Advertising (under California Business and Professions Code sections 17200 and 17500) — ATO, Perfect Circle, and UTS
14. Declaratory Judgment of No Violation of the Lanham Act nor of Common Law Trademark nor Trade Dress — ATO and UTS
15. Declaratory Judgment of No Trade Secret Misappropriation — ATO and UTS
16. Unjust Enrichment (under Indiana law) — ATO and Perfect Circle
17. Conspiracy (under Indiana and California laws) — ATO, Perfect Circle, Gibson, Tactical Air, Tiberius Arms, Tiberius, Blumenthal, and Piell
18.Successor Liability — UTS, UTSIH, and UTSH6
After filing the FACC, Real Action filed a Second Motion for the Court to Accept and Hold the Bond from the Indiana Action. Dkt. No. 158. The Court previously dismissed without prejudice Real Action’s First Motion to Accept and Hold the Bond, finding the motion premature as ‘the Court ha[d] not yet determined its role in assessing the Northern District of Indiana’s earlier injunction against Real Action.” Dkt. No. 148. On October 28, 2015, Counter-Defendants filed a Notice stating the Indiana Court released the bond, presumably back to ATO. Dkt. No. 184. Real Action has not responded to this notice.
This Order considers the Court’s power to hear Real Action’s Wrongful Injunction counterclaims under the circumstances and also considers Counter-Defendants’ Motions to Dismiss Real Action’s Counterclaims pursuant to Rule 12(b)(6) or alternatively to Strike those counterclaims pursuant to California Code of Civil Procedure section 425.16, California’s anti-SLAPP law. See Dkt. Nos. 159 (Mot. to Dismiss); 162 (Motion to Strike) (filed July 9, 2015).
LEGAL STANDARDS
A. Motion to Dismiss
Rule 8(a) requires that a complaint contain a ‘short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A eom-
A court may dismiss a complaint under Rule 12(b)(6) when it does not contain enough facts to state a claim to relief that is plausible on its face. Id. at 570,
In considering a motion to dismiss, a court must accept all of the plaintiffs allegations as true and construe them in the light most favorable to the plaintiff. Id. at 550,
If a Rule 12(b)(6) motion is granted, the ‘court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith,
B. Anti-SLAPP Motion to Strike
California Code of Civil Procedure section 425.16 provides a procedure for a court ‘to dismiss at an early stage nonmeritorious litigation meant to chill the valid exercise of the constitutional rights of freedom of speech and petition in connection with a public issue.” Sipple v. Found. for Nat’l Progress,
A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that there is a probability that the plaintiff will prevail on the claim.
Cal. Civ. Proc. Code § 425.16(b)(1). Section 425.16 thus ‘allows a court to strike any cause of action that arises from the defendant’s exercise of his or her constitutionally protected free speech rights or petition for redress of grievances.” Flatley v. Mauro,
California’s anti-SLAPP statute is available to litigants in federal court. In re NCAA Student-Athlete Name & Likeness Licensing Litig.,
In ruling on a motion to strike brought under Section 425.16, the trial court must engage in a two-step process that involves shifting burdens. Kearney v. Foley & Lardner LLP,
Second, ‘[i]f the court determines that the defendant has met this burden, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the merits.” Kearney,
PRELIMINARY ISSUES
A number of substantive legal issues have arisen in the context of assessing Counter-Defendants’ Motions, which the Court addresses as a preliminary matter before discussing the individual counterclaims.
A. Federal Conflicts
As an initial matter, the Court notes that Real Action did not address the substance of Counter-Defendants’ anti-SLAPP arguments as to its individual counterclaims. Instead, it has challenged the Counter-Defendants’ anti-SLAPP motion on threshold legal grounds, first arguing the Court should not strike any claims under California’s anti-SLAPP law until discovery is complete. MTS Opp’n at 9, Dkt. No. 172. In support, Real Action cites a case stating: ‘If a defendant makes an anti-SLAPP motion based on the plaintiffs failure to submit evidence to substantiate its claims, the motion is treated as a motion for summary judgment, and discovery must be developed sufficiently to permit summary judgment under Rule 56.” Id. at 10 (citing Lauter v. Anoufrieva,
Although there is some dispute about this issue within the Ninth Circuit and among the judges of our Court of Appeals itself, the Ninth Circuit has recently reiterated its long held assessment that section 425.16 applies in federal courts in the absence of ‘direct collusion” between the state enactment and the Federal Rules of Civil Procedure 8, 12, and 56. See Makaeff,
B. Mixed Claims Asserted Under Both California and Indiana Law
Real Action contends that California’s anti-SLAPP law applies only to California state law claims and not claims grounded in the law of another state. MTS Opp’n at 7. As such, Real Action asserts its claims
Although neither the California Supreme Court nor the Ninth Circuit has addressed the exact issue posed by Real Action, the Second Circuit Court of Appeals recently considered the issue and found California’s anti-SLAPP law could apply to other states’ substantive causes of action. See Liberty Synergistics Inc. v. Microflo Ltd.,
This case presents a simpler question. The Court sits in California and this case was filed in California; as such, the Court applies California choice-of-law rules. The Second Circuit’s conclusion that California courts would apply the California anti-SLAPP law even where the cause of action is based on another state’s substantive law appears reasonable to this Court. While Real Action cites case law establishing that California’s anti-SLAPP law applies to California state claims (MTS Opp’n at 7) (a self-evident proposition), these cases do not conflict with the Liberty court’s analysis or show that California’s anti-SLAPP law should not apply to other state’s claims. While the Liberty court recognized that, ‘[t]o be sure, the Due Process Clause and the Full Faith and Credit Clause, among other constitutional provisions, provide some.limitations to the application of state conflict-of-law rules in ways that would frustrate causes of action defined by other states’ laws,” having carefully reviewed and considered the counterclaims and legal issues present in this case, the Court finds no reason indicating this case ‘approach[es] those constitutional boundaries.”
Accordingly, the Court agrees with the Second Circuit and holds that California’s anti-SLAPP law can be applied to Real Action’s counterclaims brought pursuant to Indiana law. In considering
C. “Mixed” Causes of Action Arising from Protected and Unprotected Activities
The other issue implicitly raised by the parties’ arguments is whether California’s anti-SLAPP law applies to a cause of action that involves claims arising from both protected and unprotected activities. Counter-Defendants assert that ‘[wjhere a single cause of action alleges both acts protected under the statute and unprotected acts, the entire cause of action may be stricken under California Code of Civil Procedure section 425.16[,]” arguing that ‘RAP4 ‘cannot frustrate the purpose of the SLAPP statute through a pleading, tactic of combining allegations of protected and nonprotected activity under the label of one ‘cause of action.’” MTS Br. at 12 (quoting Fox Searchlight Pictures, Inc. v. Paladino,
Specifically, in several of its counterclaims, Real Action asserts wrongdoing by the Counter-Defendants both for bringing and litigating the Indiana Action against Real Action as well as for legal violations associated with the settlement agreements with Sun LLC and Apon. The Court agrees with Counter-Defendants that actions arising from their litigation of the Indiana Action are protected activities. See Soukup v. Law Offices of Herbert Hafif,
One recent California Court of Appeal challenged the foregoing viewpoints, refusing to read the statement in Oasis ‘so broadly” and finding that ‘the better view.. .is that the trial court may strike the allegations in the cross-complaint attacking the protected activity while allowing the unprotected theories to remain.” Cho,
Subsequent courts have disagreed with the approaches taken in both Colton and Cho. For instance, in Baral v. Schnitt, the Court of Appeal considered ‘whether section 425.16 (anti-SLAPP statute) authorizes excision of allegations subject to the anti-SLAPP statute (protected activity) in a cause of action that also contains meritorious allegations not within the purview of that statute (mixed cause of action).”
In doing so, the Baral court again relied on Mann and Oasis, siding against Colton and Cho and with Burrill and another California Court of Appeal case, Wallace v. McCubbin,
The California Supreme Court granted review of the Baral decision on May 13, 2015. Baral v. Schnitt, — Cal.4th -,
The Court has carefully considered whether it should wait to decide some of these claims until the California Supreme Court weighs in on Baral, but
Having conducted a careful survey of California law and related treatises, the Court agrees with the thorough analysis of the Baral court. California’s legislature has maintained specific language in the anti-SLAPP statute, despite multiple amendments, such that the statute applies to a ‘cause of action” as a whole. See Cal. Civ. Proc. Code § 425.16(b)(1). Numerous courts have relied on this as well as the California Supreme Court’s citation of Mann in Oasis to hold that where a cause of action is based on protected activity, the entire cause of action may proceed as long as the plaintiff shows a probability of prevailing on at least one of the asserted bases for liability. If the legislature or California Supreme Court believed a different result was proper, the Court believes those bodies would have said as much. As such, the Court agrees with Baral and concludes that Real Action’s mixed causes of action containing potentially meritorious claims may proceed unencumbered by the special procedures of the anti-SLAPP statute. See also Kenne v. Stennis,
DISCUSSION — INDIVIDUAL COUNTERCLAIMS
Counter-Defendants have challenged each of Real Action’s counterclaims under Rule 12(b)(6), California’s anti-SLAPP law, or both. This Order thus addresses each of Real Action’s counterclaims and each of Counter-Defendants’ related arguments below.
Real Action brings two Wrongful Injunction claims: (1) a claim based on federal law of the Seventh Circuit (Counterclaim 1) and (2) a claim based on Indiana law (Counterclaim 2). Counter-Defendants’ Motion to Dismiss only challenges the Federal Wrongful Injunction claim, while they challenge both Wrongful Injunction claims under California’s anti-SLAPP law. Real Action’s third claim is for Wrongful Seizure pursuant to 15 U.S.C. § 1116(d)(ll). Counter-Defendants challenge the Wrongful Seizure claim in their Motion to Dismiss as well as their Motion to Strike. The Court considers these claims together as they address issues related to actions the Indiana Court took in the Indiana Action.
1. Federal Wrongful Injunction Claim
As an initial matter, Counter-Defendants assert there is no federally recognized claim for Wrongful Injunction, and even if there were, only the court issuing the injunction should be permitted to hear it. MTD Br. at 5. Real Action disagrees, noting that Counter-Defendants have cited no case law in support of their arguments. MTS Opp’n at 3.
28 U.S.C. § 1352 ‘grants jurisdiction to hear an ‘action on a bond’ executed pursuant to Rule 65(c), Fed. R. Civ. P. (security required for issuance of preliminary injunction).” Buddy Sys., Inc. v. Exer-Genie, Inc.,
But a court’s ability to exercise jurisdiction over a wrongful injunction claim comes with one critical limitation: ‘there is no jurisdiction under section 1352 over a suit.. .independent of the security instrument.” Buddy Sys.,
Real Action filed a Motion requesting that this Court ‘authorize” the
Real Action is not without a remedy, however. It has presented a number of other theories for relief, including causes of action for abuse of process and related claims, under which it may recover its damages, if so warranted, regardless of the bond. See Buddy Sys.,
2. Wrongful Seizure Claim
Counter-Defendants also move to dismiss Real Action’s Wrongful Seizure claim, first arguing only the Indiana Court may assess whether the seizure was wrongful as it was the court that permitted the seizure. Real Action brings its Wrongful Seizure claims under 15 U.S.C. § 1116(d)(11), which provides: ‘A person who suffers damage by reason of a wrongful seizure.. .has a cause of action against the applicant.. .to recover such relief as may be appropriate, including damages for lost profits, cost of materials, loss of good will and punitive damages in instances where the seizure was sought in bad faith, and, unless the court finds extenuating circumstances, to recover a reasonable attorney’s fee.” There is nothing in this statute suggesting that only the court which issued the seizure order may review its effects.
Counter-Defendants additionally challenge Real Action’s seizure claim on
B. Malicious Prosecution and Abuse of Process
Real Action brings Abuse of Process and Malicious Prosecution counterclaims pursuant to Indiana law. FACC ¶¶ 72-82. Counter-Defendants contend the Court should strike these claims because they both challenge activity Counter-Defendants assert is protected — namely, their right to petition and seek relief in the Indiana Action. MTS Br. at 9. They urge the Court to find Real Action has not shown a probability of prevailing on these claims. Id. at 9,15-16.
1. Malicious Prosecution
First, Counter-Defendants have met their burden of showing Real Action’s malicious prosecution claim challenges protected activities. Soukup,
Second is the issue of whether Real Action has shown a probability it will prevail on this claim. Under Indiana Law, to prevail on a malicious prosecution claim, the plaintiff must establish that ‘(1) the defendant.. .instituted or caused to be instituted an action against the plaintiff...; (2) the defendant acted with malice in doing so; (3) the defendant had no probable
The Court agrees with Counter-Defendants that Real Action has not shown a probability of prevailing on the merits for its Malicious Prosecution claims because it has not shown that Counter-Defendants did not have probable cause to file suit against it. Two courts now — including this one — found that Counter-Defendants were likely to succeed with claims against Real Action for its alleged misuse of the Pepperball name. See Dkt. No. 85 (Order re: Preliminary Injunction); Dkt. No. 164, Exs. C & F (TRO and Preliminary Injunction Order in the Indiana Action).
In sum, the Court GRANTS Counter-Defendant’s Motion to Strike Real Action’s Malicious Prosecution WITHOUT LEAVE TO AMEND.
2. Abuse of Process
As to the first prong of the anti-SLAPP requirements, the Court finds Real Action’s Abuse of Process Claim arises from protected activities. Raining Data Corp. v. Barrenechea,
The Court thus turns to the second prong: whether Real Action has shown a probability of prevailing on this claim. The elements for an abuse of process claim under Indiana law are (1) an ulterior purpose or motive, and (2) a willful act in the use of process not proper in the regular conduct of a proceeding. Estate of Mayer v. Lax, Inc.,
‘Thus, the starting point of inquiry is not motive or intent, but whether the counter-defendant used an improper process to accomplish a goal other than that which the law was designed to accomplish.” Bell v. Taylor,
The Court finds Real Action has established there is a probability it will prevail on the abuse of process claim. ‘A complaint that is filed for a purpose other than resolving a dispute or seeking damages. . .is substantively improper and may give rise to an abuse of process claim.” Estate of Mayer,
Real Action has thus provided allegations that, if credited, establish at least minimal merit and a probability of prevailing on an abuse of process claim. See West v. West,
C. Intentional and/or Negligent Inference Claims
Real Action asserts claims against several Counter-Defendants for (1) intentional inference with contractual relations under Indiana and California law (FACC ¶¶ 83-97); and (2) intentional or negligent
The issue then is whether Real Action has established a probability of prevailing on its interference claims.
1. Interference with Contractual Relations
Under Indiana law, ‘proof of five elements is necessary to recover for tortious interference with a contract: (i) existence of a valid and enforceable contract; (ii) defendant’s knowledge of the existence of the contract; (iii) defendant’s intentional inducement of breach of the contract; (iv) the absence of justification; and (v) damages resulting from defendant’s wrongful inducement of the breach.” DIRECTV, Inc. v. Ferguson,
Under California law, ‘to state the cause of action for intentional interference with contractual relations” a plaintiff must plead ‘(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” Pac. Gas & Elec. Co. v. Bear Stearns & Co.,
The Court finds Real Action has shown a probability of prevailing on its interference with contractual relations claim. Specifically, Real Action alleges it had a contract with Sun LLC to procure projectiles from Apon and includes as attachments to the FACC numerous documents that purport to show the Counter-Defendants named in this claim knew about this contract and acted to facilitate a settlement agreement between ATO and Sun LLC that forbade Sun and Sun LLC from honoring its pre-existing agreement with Real Action. See FACC ¶¶ 85-87, 89-94; see also Compl. ¶ 16 (acknowledging ‘RAP4 and Tran accepted Sun’s proposal and entered into an agreement to buy projectiles sold by Sun from APON”). Real Action alleges Sun and Sun LLC did in fact settle in the Indiana Action, and provides evidence of that agreement, which caused Sun LLC to breach its agreement with Real Action and in turn ‘caused Real Action to lose significant profits from sales of irritant projectiles and related products, and has damaged Real Action’s good name and reputation in this business.” FACC ¶¶ 94-97. The FACC also alleges Counter-Defendants named in this claim interfered with Real Action’s contract with Sun LLC ‘to maintain ATO’s unlawful monopoly on the irritant projectile market through improper means, [and],. .to drive a competitor out of business.” Id. ¶ 95.
Counter-Defendants assert a number of unpersuasive arguments to undermine these allegations and the documents submitted, including that Real Action ‘cannot prove that ATO, Gibson, Tiberius, Piell, or Blumenthal acted intentionally to induce a breach or disruption of [it]s contractual relationships[,]” noting ATO was the only plaintiff in the Indiana Action. MTS Br. at 17. Regardless of who was the plaintiff in the Indiana Action, the issue is whether the named Counter-Defendants in this claim intentionally interfered with Real Action’s contractual relationship with Sun LLC (and potentially Apon). Real Action’s allegations and supporting evidence show that the Counter-Defendants named in this claim took actions resulting in the interference of the contract with Sun LLC (and potentially Apon), regardless of whether their ‘intent was proper[.]” MTS Br. at 17; Quelimane,
2. Interference with Prospective Economic Advantage
‘Under Indiana law, the elements of a cause of action for tortious interference with a prospective economic advantage include: (1) the existence of a business relationship, (2) the defendant’s knowledge of the existence of the relationship, (3) the defendant’s intentional interference in the relationship, (4) the absence of any justification, and (5) damages resulting from the defendant’s interference.” Butts v. Oce-USA, Inc.,
Under California law, the elements of a claim for intentional interference with prospective advantage are: (1) ‘an economic relationship” with a third party ‘which offered the probability of future economic benefit” to plaintiff; (2) ‘defendants’ knowledge of this relationship; (3) defendants’ intentional acts designed to disrupt that relationship; (4) actual disruption of the relationship; and (5) economic harm.. .proximately caused by defendants’ acts.” San Jose Const., Inc. v. S.B.C.C., Inc.,
As discussed above in relation to Real Action’s claims for interference with contractual relations, the Court finds Real Action has alleged facts and provided supporting evidence to make out a prima facie case that the Counter-Defendants named in this claim intentionally interfered with a prospective economic advantage by interfering with the contract between Real Action and Sun LLC. See supra, Discussion, part C.l. Furthermore, Real Action has alleged facts and provided supporting evidence, which if ultimately credited, could demonstrate the named Counter-Defendants interfered with the contract between Real Action and Sun LLC in order to restrain trade and maintain ATO’s monopoly, which would be considered wrongful conduct. See Visto,
However, Real Action has also alleged a negligent interference with prospective economic advantage claim under California law
Counter-Defendants argue Real'Action cannot establish ‘ATO, Gibson, Tiberius, Piell or Blumenthal negligently interfered with RAP4’s prospective economic advantage because RAP4 cannot prove, and has not alleged, that ATO, Gibson, Tiberius, Piell or Blumenthal owed RAP4 a duty of care.” MTS Br. at 19 (citing AccuImage Diagnostics Corp. v. Terarecon, Inc.,
3. Summary of Interference Claims
In light of the foregoing analysis, the Court DENIES Counter-Defendants’ Motion to Strike Real Action’s Interference Claims.
D. Tortious and Criminal Conversion Claims
Real Action also brings claims for tortious and criminal conversion under both Indiana and California law, alleging ATO, Gibson, and Blumenthal wrongfully converted RAP4’s property by ‘unlawfully seizing” over 180,000 irritant and training projectiles from Real Action. FACC ¶¶ 110-11, 115-16. Under Indiana law, to prove criminal conversion, a plaintiff must demonstrate the defendant ‘knowingly or intentionally exert[ed] unauthorized control over property of another.” Ind. Code § 35-43-4-3(a,).
Counter-Defendants only sought to strike this claim under California’s anti-SLAPP law— not to dismiss under Rule 12(b)(6)—despite their primary argument being that Real Action cannot show ‘the Indiana Action or any seizure of RAP4’s property was wrongful.” MTS Br. at 19. Although the Court is not entirely convinced that Real Action’s conversion claims ‘arise from” from acts in furtherance of the Counter-Defendants’ rights of petition or free speech, Braun v. Chronicle Publishing Co.,
Accordingly, Real Action’s conversion claims are DISMISSED WITHOUT LEAVE TO AMEND.
E. False Designation of Origin
Counter-Defendants challenge Real Action’s False Designation of Origin counterclaim only on Rule 12(b)(6) grounds. The parties agree that in order to succeed on an infringement/false designation of origin claim under 15 U.S.C. § 1125(a)(1)(A), a plaintiff must prove each of the following elements: (1) defendant uses a designation (any word, term, name, device, or any combination thereof) or false designation of origin; (2) the use was in interstate commerce; (3) the use was in connection with goods or services; (4) the designation or false designation is likely to cause confusion, mistake, or deception as to (a) the affiliation, connection, or association of defendant with another person, or (b) as to the origin, sponsorship, or approval of defendant’s goods, services, or commercial activities by another person; and (5) the plaintiff has been or is likely to be damaged by these acts. See MTD Br. at 7 and FACC ¶ 119 (both citing Summit Tech, Inc. v. High-Line Med. Instruments, Co.,
Counter-Defendants contend this counterclaim fails because UTS is the registered and true owner of the Pepperball mark, and before that, ATO was the registered and true owner of the Pepperball mark, and ‘[a] published registration for a trademark with the United States Patent and Trademark Office is prima facie evidence of the existence of a trademark[.]” MTD Br. at 8 (citations omitted). They assert Real Action’s counterclaim ‘contains no facts that challenge ATO’s ownership of the Pepperball Mark or the more recent assignment from ATO to UTS. Therefore, [it] has not pled a claim for false designation of origin of products and services associated with the assets formerly owned by [Pepperball Technologies].” Id.
However, Real Action correctly points out its counterclaim contains facts alleging ATO ‘failed to properly and lawfully acquire” the Pepperball trademark
While the Court finds Real Action has stated a claim against ATO and UTS, Counter-Defendants also challenge Real Action’s attempts to assert this counterclaim against Tiberius and Gibson. MTD Br. at 8. Counter-Defendants assert Real Action ‘states no facts that sufficiently support the conclusion that Gibson and/or Tiberius acted outside of their capacities as officers or employees when they ‘induced’ ATO to designate the origin of its products or services” or that Gibson and Tiberius themselves designated the origins of any product or service. Id. Real Action did not respond to this argument.
A corporate ‘officer or director is, in general, personally liable for all torts which he authorizes or directs or in which he participates, notwithstanding that he acted as an agent of the corporation and not on his own behalf.” Murphy Tugboat Co. v. Shipowners & Merchants Towboat Co.,
Real Action alleges ‘[u]pon information and belief, Gibson and Tiberius induced ATO to misrepresent itself as Pepperball Tech and to use Pepperball Tech’s government ID of GS07F0067M” and ‘ATO has misrepresented itself as Pepperball Tech in interstate commerce and sold its products in interstate commerce, including sales to various state and federal governmental agencies. Upon information and belief, Gibson and Tiberius have induced ATO so misrepresent itself.” FACC ¶¶ 121-22. It does not explain how it claims to hold this information or belief.
At least one district court in this circuit has adopted the Second Circuit Court of Appeals’ test concerning how to interpret the Twombly plausibility standard in light of allegations made ‘upon information and belief.” Specifically, that court noted ‘[t]he Second Circuit has held that the Twombly plausibility standard allows factual allegations made ‘upon information and belief where ‘(1) the facts are peculiarly within the possession and control of the defendant, or (2) where the belief is based on
Even accepting as true that Gibson and Tiberius own Perfect Circle and Tiberius Arms, respectively, and even though those companies owned ATO, there are no allegations in Real Action’s Counterclaim that suggest Gibson and Tiberius actually played any role in directing or participating in ATO’s decision to use the Pepperball name. While Real Action alleges these Counter-Defendants induced ATO to make this decision, there are no facts alleged indicating they played an active role in ATO’s decision-making process or why they might be ejected to play such a role (i.e., if such activity would be expected as a function of their positions within ATO, etc.). At present, Real Action’s allegations fail to state a claim for false designation of origin against Gibson and Tiberius.
Accordingly, Counter-Defendants’ Motion to Dismiss as to the False Designation of Origin Claim is DENIED as to ATO and UTS, but GRANTED WITH LEAVE TO AMEND as to Gibson and Tiberius.
F. Sherman Act Claim
The Counter-Defendants only challenge Real Action’s Sherman Act claim on Rule 12(b)(6) grounds. Specifically, they contend Real Action’s allegations state ‘only bare conclusions” and fail to ‘sufficiently state facts suggesting that ATO has a monopoly in any defined market.” MTD Br. at 8-9. They further assert that, as a matter of law, ATO’s prosecution of the Indiana Action cannot be the basis for a Sherman Act claim because there are no plausible allegations that lawsuit was a sham. Id. at 9-10. Finally, they contend Rule 9(b)’s heightened pleading standard applies because this claim risks chilling of the exercise of First Amendment rights. Id. at 10 (citing Kottle v. N.W. Kidney Ctrs.,
Section 2 of the Sherman Act forbids ‘monopolization” and ‘attempted monopolization.” 15 U.S.C. § 2. A claim brought under Section 2 requires the ‘possession of monopoly power in the relevant market” and ‘the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.” United States v. Grinnell Carp.,
Real Action alleges ‘ATO has been able to perpetuate a de facto monopoly in the irritant projectile market[,]” and that ATO itself recognized it had such monopoly power, ‘braggfing] about their longstanding monopoly in numerous court filings in the Indiana Action.” FACC ¶¶ 43, 130. Thus, while Real Action identifies the relevant product market — irritant filled projectiles — it has not alleged facts identifying a relevant geographic market. Without allegations plausibly establishing ATO’s monopoly power in a relevant geographic market, Real Action has failed to state a claim on which relief can be granted. See Tanaka v. Univ. of S. Cal.,
As to Counter-Defendants’ argument that Real Action can never state a claim based on their litigation activities in the Indiana Action, the Court disagrees. Counter-Defendants cite Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc.,
Finally, Counter-Defendants contend Real Action ‘does not state facts sufficient to suggest that Perfect Circle or Tiberius Arms engaged in any ‘concerted action,’ and fails to allege a meeting of the minds between Perfect Circle or Tiberius Arms and any other entity.” MTD Br. at 12. In response, Real Action contends it did in fact allege ‘concerted action” among ATO, Perfect Circle and Tiberius. ■ MTD Opp’n at 9. The Court agrees. Real Action alleges ‘[w]ith the concerted agreement of Tiberius, and ATO’s partner and supplier, Perfect Circle, ATO [] entered into an agreement with Conrad Sun and Sun LLC by which they agreed to refrain from competing in the irritant projectile market and to refrain from buying or selling irritant projectiles from Real Action or to Real Action.” FACC ¶ 134. It further alleges ‘Tiberius and Perfect Circle were parties to that agreement by virtue of the Guaranty...., which Sun LLC required Tiberius and Perfect Circle to provide as a condition to entering into the Agreement.” Id. Taken as true, these allegations sufficiently allege concerted action.
Nonetheless, given Real Action’s failure to sufficiently allege plausible facts supporting the elements of this claim, Real Action’s claim under Section 2 of the Sherman Act is DISMISSED WITH LEAVE TO AMEND.
G. California Cartwright Act Claim
Counter-Defendants assert that under California’s anti-SLAPP law, the Court should strike Real Action’s claim under the Cartwright Act, Cal. Bus. & Prof. Code §§ 16700 et seq. MTS Br. at 10-11. They contend Real Action’s Cartwright Act claim arises out of the filing of the Indiana Action, which constitutes a protected activity. Id. Real Action did not address this argument.
Having reviewed the allegations in the FACC, the Court disagrees with Counter-Defendants’ argument that Real Action’s Cartwright Act claim arises from protected activities. In its FACC, Real Action supports its Cartwright Act claim not on allegations about actions taken in the Indiana Action generally, but on the contracts ATO entered into with Apon, Sun, and Sun LLC to stay out of the less lethal projectile market and to discontinue their relationships with Real Action. FACC ¶¶ 138-40. Counter-Defendants argue these contracts were ‘entered into in order to settle claims between ATO and Apon and ATO and Sun LLC' — not as a concerted agreement between such parties to unreasonably restrain trade.” MTS Br. at 20. But as the California Supreme Court has recognized, ‘[i]n the anti-SLAPP context, the critical poiiit is whether the plaintiffs cause of action itself was based on an act in furtherance of the defendant’s right of petition or free speech.” City of Cotati,
Unlike Real Action’s Interference Claims, which rely at least in part on the filing of the Indiana Action as a basis for those claims (see, e.g., FACC ¶¶ 86, 101), Real Action’s Cartwright Act claim is only based on the agreements between ATO and Sun, Sun LLC, and Apon. These agreements settled the claims in the Indiana Action, but Real Action alleges the agreements also went further, establishing an agreement to restrain trade in the process. These agreements may be ‘collateral” to protected activities, but the Court does not find this claim is based on protected activities. See also In re Episcopal Church Cases,
H. Unfair Competition and False Advertising
Counter-Defendants move to strike Real Action’s counterclaim for Unfair Competition and False Advertising under California Business and Professions Code sections 17200 and 17500, noting its allegations focus on statements and actions taken by Counter-Defendants in connection with the Indiana Action. MTS Br. at 11 (citing FACC ¶¶ 143-145 (ATO and Perfect Circle ‘wrongfully seiz[ed] [RAP4’s] property, and prevented] [RAP4] from competing with ATO and Perfect Circle in the marketplace,” ‘[i]n the context of the Indiana Action, ATO made false statements in furtherance of acquiring injunctions that stopped [RAP4] from competing with ATO in the market” and using the word ‘Pepperball,” and ‘entered into agreements with APON and Sun LLC to exclude [RAP4] and its suppliers from the market.”)).
Real Action argues ‘the California Anti-SLAPP statute provides for an exemption applicable here.” MTS Opp’n at 8 (citing Cal. Civ. Proc. Code § 425.17).
The intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual or potential buyer or customer, or the statement or conduct arose out of or within the context of a regulatory approval process, proceeding, or investigation, except where the statement or conduct was made by a telephone corporation in the course of a proceeding before the California Public Utilities Commission and is the subject of a lawsuit brought by a competitor, notwithstanding that the conduct or statement concerns an important public issue.
Cal. Civ. Proc. Code § 425.17(c)(2) (emphasis added). The full text shows Real Action’s counterclaims may be exempted under section 425.17(c) and are not as limited as Counter-Defendants claim.
Having reviewed Real Action’s allegations for this counterclaim, the Court finds the claims satisfy both prongs of section 425.17(c). As to the first prong, i.e, section 425.17(c)(1),
I.Declaratory Judgment
Real Action asserts two declaratory judgment claims: (1) declaratory judgment of no violation of the Lanham Act nor of common law trademark nor trade dress; and (2) declaratory judgment of no trade secret misappropriation. FACC ¶¶ 150-60.
1. Motion to Dismiss
First, Counter-Defendants argue Real Action’s Declaratory Judgment claims should be dismissed for the same reasons as its False Designation of Origin claims, namely because they believe Real Action has not alleged facts challenging ATO and UTS’s ownership of the Pepperball mark, and Real Action cannot show that it was entitled to use the mark. MTD Br. at 12. But as described above, Real Action has alleged facts challenging ownership of the mark. Furthermore, Real Action ‘contends that it has done nothing wrong and that ATO/UTS have no trademark or trade secret rights that Real Action has violated.” MTD Opp’n at 9. If Real Action can prove the allegations in its FACC, it may be entitled to Declaratory Judgment. Accordingly, the Court DENIES Counter-Defendants’ Motion to - Dismiss these claims at this time.
2. Motion to Strike Under California’s Anti-SLAPP Law
Second, Counter-Defendants challenge Real Action’s Declaratory Judgment counterclaims under California’s anti-SLAPP law. MTS Br. at 11. It is unclear, however, how Counter-Defendants contend these Declaratory Judgment claims threaten their protected activity. Real Action’s Declaratory Judgment counterclaims seek declarations that Real Action did not infringe on Counter-Defendants’ trademarks or misappropriate their trade secrets. FACC ¶¶' 151-60. Even if some of the allegations in the FACC refer to actions Counter-Defendants took in the Indiana Action, those allegations are largely superfluous to Real Action’s primary allegations, which make it clear Real Action’s Declaratory Judgment claims focus on its belief it did not violate Counter-Defendants’ trademarks or misappropriate their trade secrets. These claims do not risk chilling Counter-Defendants’ valid exercise of their constitutional rights. Accordingly, the Court DENIES Counter-Defendants’ Motion to Strike these claims.
3.Motion to Strike as Redundant
Third, Counter-Defendants assert Plaintiffs declaratory judgment claims should be stricken under Rule 12(f) as redundant. See MTD Br. at 13 (citing Fed. R. Civ. P. 12(f) (the Court may strike from a pleading any ‘insufficient defense” or any material that is ‘redundant, immaterial, impertinent or scandalous.”)). Real Action’s Declaratory Judgment counterclaims seek declarations it did not violate the Lanham Act by infringing on ATO/ UTS’s trademark and it did not misappropriate trade secrets. Counter-Defendants contend these claims are ‘entirely redundant” with Real Action’s affirmative defenses. Real Action’s Opposition did not address Counter-Defendants’ Rule 12(f) arguments.
The Court does not find it appropriate to strike Real Action’s Declaratory Judgment counterclaims under Rule 12(f) at this time. First, while Counter-Defendants are correct that Real Action’s Answer briefly states Real Action requests findings and declarations from the Court that Real Action has not infringed on trademarks held by UTS, the Answer does not specifically refer to Real Action’s request for declaratory judgment that it did not misappropriate trade secrets. See Answer at 35, Dkt. No. 52. Second, courts have
Finally, ‘[a]ny doubt about whether the challenged material is redundant, immaterial, impertinent, or scandalous should be resolved in favor of the non-moving party.” 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1382 (3d ed.) (citations omitted); Park v. Welch Foods, Inc.,
J. Unjust Enrichment
Counter-Defendants argue Real Action’s Unjust Enrichment claim should be stricken under California’s anti-SLAPP law. They note Real Action alleges ‘ATO and Perfect Circle conferred ‘a measurable benefit’ by ‘obtaining the TRO and preliminary injunction in the Indiana Action,’ which allowed them to ‘make profits that they would not otherwise have made.’” MTS Br. at 16 (quoting FACC ¶¶ 163, 164). Given these allegations, Counter-Defendants contend Real Action’s Unjust Enrichment claim arises from protected activities stemming from the TRO and Preliminary Injunction Order entered in the Indiana Action.
The Court agrees that Real Action’s unjust enrichment claims arise from allegations involving protected activities and thus turns to the second prong of the anti-SLAPP analysis. A claim for unjust enrichment ‘is a legal fiction invented by the common law courts in order to permit a recovery.. .where the circumstances are such that under the law of natural and immutable justice there should be a recovery...” Bayh v. Sonnenburg,
Counter-Defendants argue ‘RAP4’s claim for unjust enrichment fails because RAP4 cannot prove that any ‘benefit’ ATO and Perfect Circle received as a result of the TRO and preliminary injunction, including a settlement with Apon, was unjust.” MTS Br. at 23. They contend there was nothing about the Indiana Court’s decisions that were unjust and
K. Conspiracy Under Indiana and California Law
Counter-Defendants also move to strike Real Action’s Conspiracy counterclaims. Like several of Real Action’s other claims, its Conspiracy claims arise from protected activities related to Counter-Defendants’ filing and pursuit of the Indiana Action. See FACC ¶¶ 169-171. Accordingly, the issue is whether Real Action has shown a probability of prevailing on its Conspiracy claims.
Under both California and Indiana law, conspiracy ‘is not an independent tort.” Applied Equipment Corp. v. Litton Saudi Arabia Ltd.,
Counter-Defendants challenge Real Action’s Conspiracy claims on one ground: namely, they contend Real Action’s Conspiracy claims are based only on the ‘tort” of filing the Indiana Action, i.e., malicious prosecution. See MTS Br. at 23-24. But Real Action’s Conspiracy claims go beyond relying only on the tort of malicious prosecution. Real Action also alleges it was prevented ‘from even procuring irritant projectiles from its contracted suppliers Apon and Sun LLC,” and as noted above, Real Action has alleged and demonstrated a probability of prevailing on the underlying torts of inference with contractual relations and prospective economical advantage. As such, the Court finds Real Action has demonstrated a probability of prevailing at least as to this part of the claim and DENIES Counter-Defendants’ Motion to Strike.
L. Successor Liability
Counter-Defendants challenge Real Action’s successor liability claim under California’s anti-SLAPP law, noting ‘this cause
‘[Successor liability is not a separate claim independent of [other] claims.” Brown Bark III, L.P. v. Haver,
M. Attorneys’ Fees
A defendant who prevails on an anti-SLAPP motion is entitled to recover attorney’s fees and costs. Cal. Civ. Proc. Code § 425.16(c); S. B. Beach Prop. v. Berti,
Real Action, however, asserts it too is entitled to fees, noting ‘[t]he Anti-SLAPP statute provides ‘If the court finds that a special motion to strike is frivolous or is solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney’s fees to a plaintiff prevailing on the motion, pursuant to Section 128.5.’” MTS Opp’n at 11-12 (citing Cal. Civ. Proc. Code § 425.16(c)(1) and Cal. Civ. Proc. Code § 128.5 (‘Every trial court may order a party, the party’s attorney, or both to pay any reasonable expenses, including attorney’s fees, incurred by another party as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay.”)). ‘Frivolous” is defined as: ‘totally or completely without merit, or for the sole purpose of harassing an opposing party.” Cal. Civ. Proc. Code § 128.5(b)(2).
As described above, the Court has found some merit in Counter-Defendants’ anti-SLAPP motion, and as such, the Court does not find that Counter-Defendants’ Motion to Strike is frivolous nor intended to cause unnecessary delay. Accordingly, Real Action’s claim for fees and costs associated with defending this Motion is DENIED.
CONCLUSION
Based on the foregoing analysis, the Court (1) GRANTS IN PART and DENIES IN PART Counter-Defendants’ Motion to Strike (Dkt. No. 162); (2) GRANTS IN PART and DENIES IN PART Counter-Defendants’ Motion to Dismiss (Dkt. No. 159); and (3) DENIES AS MOOT
• Wrongful Injunction claim — Federal law (Counterclaim 1)
• Wrongful Injunction claim — Indiana law (Counterclaim 2)
• Malicious Prosecution claim — Indiana law (Counterclaim 5)
• Tortious Conversion claim — Indiana and California laws (Counterclaim 8)
• Criminal Conversion claim — Indiana law (Counterclaim 9)
The following counterclaims are dismissed with leave to amend :
• False Designation of Origin claim against Gibson and Tiberius (part of Counterclaim 10) (claims against ATO and UTS remain)
• Sherman Act claim (Counterclaim 11)
• Successor Liability (stylized as Counterclaim 19) (leave to amend to allege successor liability as to specific causes of action, not as a separate claim)
If Real Action decides to file any amended counterclaims -in accordance with this Order, it must do so by November 25, 2015.
IT IS SO ORDERED.
Notes
. The Court refers to both K.T. Tran and Real Action Paintball, Inc. as 'Real Action” as there is no material difference between the company and its principal for purposes of this Order. Counter-Defendants also sometimes refer to Real Action as 'RAP4.”
. ‘Counter-Defendants” refers to Advanced Tactical Ordnance Systems, LLC, Perfect Circle Projectiles LLC, Gary Gibson, Tiberius Arms, LLC, Tactical Air Games, Inc., Tyler . Tiberius, Michael Blumenthal, David Piell, United Tactical Systems, LLC, United Tactical Systems Holdings, LLC ('UTSH”), and United Tactical Systems Intermediate Holdings, LLC ('UHSIH”).
. As indicated, the Court cites Counter-Defendants' Briefs rather than their Motions; Counter-Defendants filed their Motions separately from their points and authorities. In the future, all parties are admonished to comply with Civil Local Rule 7-2(b), which requires a motion, notice of motion, and the related points and authorities be filed in ‘one document.” See Civil L.R. 7-2(b).
. These Motions include the following: ATO Case, Dkt. No. 49 (Motion to Dismiss); ATO Case, Dkt. No. 50 (Motion to Strike); UTS Case, Dkt. No. 93 (Motion to Strike Counterclaim); and UTS Case, Dkt. No. 101 (Motion to Dismiss Counterclaim).
. Real Action’s FACC adds Tactical Air Games, Inc. or ‘Tactical Air” as a Counter-
. Real Action’s FACC also added as Counter-Defendants UTSH and UHSIH. Real Action alleges 'Upon information and belief, ATO has ceased operations and transferred its assets and business to UTS, UTSH, and UTSIH.” FACC ¶¶ 47. Additionally, Real Action’s eighteenth counterclaim is mislabeled as its 'Nineteenth Cause of Action.”
. ‘[T]he purpose of an anti-SLAPP motion is to determine whether the defendant is being forced to defend against a meritless claim, not to determine whether the defendant actually committed the relevant tort.” Makaeff,
. As noted above, Real Action opposed Counter-Defendants’ Motion to Strike under California's anti-SLAPP law almost entirely on procedural grounds, rather than addressing the substance of each counterclaim or related challenge by Counter-Defendants. Counter-Defendants argue that '[b]y adopting this risky strategy of relying only upon its procedural objections, RAP4 has waived arguments that its causes of action arise from Counter-Defendants’ protected activity, namely the filing of and participation in the Indiana Action. RAP4 has further abandoned any arguments that these causes of action were adequately stated, or that it has a probability of prevailing on its claims.” MTS Reply at 7-8. Given the allegations in the FACC and the evidence already in the record, the Court will not find that Real Action has waived any arguments at this time. However, Real Action and all parties are admonished that, in the future, failure
. The cases cited by Counter-Defendants in support of their argument that only the issuing court may hear a wrongful seizure claim are not on point. See MTD Br. at 6 (citing Clorox Co. v. Inland Empire Wholesale Grocers, Inc.,
. Counter-Defendants assert the Court should apply California's anti-SLAPP law to Real Action’s Wrongful Seizure claim because 'at [its] essence” this claim is 'for conversion under state law simply re-labeled to have the appearance of federal claims.” MTS Reply at 2. This argument is meritless. Real Action has a cause of action under 15 U.S.C. § 1116(d)(11), and the Court will not twist and contort this claim into something it is not. Moreover, Real Action separately alleged state law conversion claims, which demonstrate its decision to seek relief under a variety of different claims, one of which is a federal claim. As California’s anti-SLAPP law does not apply to federal claims, Hilton,
. The Court grants judicial notice to these documents as matters of public record. See Fed. R. Evid. 201(c); Reyn's Pasta Bella, LLC v. Visa USA, Inc.,
. The parties did not discuss whether Real Action properly brings claims under both Indiana and California law, or which state’s laws properly apply to these claims. As this issue was not raised by the parties, the Court considers both states’ laws for the time being. However, '[w]hen this matter is briefed again, the parties should explain either which law they think applies to which claims or why they cannot do so because of lack of discovery.” Cover v. Windsor Surry Co.,
. Even as to Indiana’s 'absence of justification” requirement, the Court finds Real Action has established a probability of prevailing. Lack of justification is established 'only if the interferer acted intentionally, without a legitimate business purpose, and the breach is malicious and exclusively directed to the injury and damage of another.” Bilimoria Computer Sys.,
. Counter-Defendants have not raised California's Litigation Privilege, Cal. Civ. Code § 47(b), in discussing whether Real Action has demonstrated probability of prevailing on this claim. ‘Case law interprets Section 47(b) as applying to 'any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.”' G & C Auto Body Inc v. Geico Gen. Ins. Co.,
. Again, Counter-Defendants did not raise California’s Litigation Privilege, Cal. Civ. Code § 47(b), in challenging this claim.
. As discussed above, Indiana law recognizes a cause of action for 'tortious interference with prospective economic advantage” but, unlike California, does not appear to explicitly differentiate between negligent and intentional interference causes of action.
. Counter-Defendants contend 'Indiana law on conversion should not apply because the allegedly wrongful act occurred in California where the infringing projectiles were seized.” MTS Br. at 19 n.7. Real Action did not respond to this argument.
. Real Action alleges 'ATO, Gibson, Tiberius and Blumenthal sued Mr. Sun and Sun LLC alleging bogus and unjustified claims and conducted settlement negotiations with Mr. Sun and Sun LLC threatening further abusive legal process with the intent of killing any agreement that Mr. Sun or Sun LLC had with Real Action.” FACC ¶ 86. Elsewhere it alleges ATO 'initiat[ed] and maintain[ed] a bogus legal action in Indiana against Real Action and its supplier Sun LLC.” Id. ¶ 131. But Real Action does not provide allegations as to the legal action against Apon.
. The Supreme Court also recently considered antitrust liability in the context of 'reverse payment settlements,” in which 'a party with no claim for damages.. .walks away with money simply so it will stay away from the patentee’s market.” F.T.C. v. Actavis, Inc., - U.S. -,
. 'Under the two-pronged test of section 425.16, whether a section 425.17 exemption applies is a first-prong determination.” Demetriades v. Yelp, Inc.,
. Specifically, Counter-Defendants cite Club Members For An Honest Election v. Sierra Club, a California Supreme Court case stating, '[i]f any part of the complaint seeks relief to directly benefit the plaintiff, by securing relief greater than or different from that sought on behalf of the general public, the section 425.17(b) exception does not apply.”
. Section 425.17(c)(1) provides: ‘The statement or conduct consists of representations of fact about that person’s or a business competitor’s business operations, goods, or services, that is made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person’s goods or services, or the statement or conduct was made in the course of delivering the person’s- goods or services.” Cal. Civ. Proc. Code § 425.17(c)(1).
. The Court, however, makes no findings about whether Real Action will properly be able to allege successor liability for any claims.