1038-00007 · Cascade Retail Holdings · Motions

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

VANTOR HOLDINGS CORP., a California corporation,

Plaintiff,

CASCADE RETAIL HOLDINGS INC., a Delaware corporation,

Defendant.

Case No. 21STCV-34872

Assigned to the Honorable Margaret S. Reyes, Dept. 14

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT CASCADE RETAIL HOLDINGS INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT

[Second Cause of Action: Tortious Interference with Prospective Economic Advantage; Third Cause of Action: Unfair Business Practices Under Cal. Bus. & Prof. Code § 17200]

Date: April 14, 2023 Time: 9:00 a.m. Dept.: 14

Complaint Filed: September 7, 2021 Trial Date: September 11, 2023

CALDERWOOD & HARKNESS LLP Douglas Carmichael (SBN 184726) Francesca Morano (SBN 237014) Yuki Nakamura (SBN 289461) Carlos Espinoza (SBN 312587) 600 South Grand Avenue, Suite 3200 Los Angeles, California 90071 Telephone: (213) 486-7200 Facsimile: (213) 486-7201

Attorneys for Defendant Cascade Retail Holdings Inc.

TABLE OF AUTHORITIES

CASES

STATUTES

OTHER AUTHORITIES

I. INTRODUCTION

Defendant Cascade Retail Holdings Inc. ("Cascade"), a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHI," with its principal executive offices at 2200 Elliott Avenue West, Suite 1400, Seattle, Washington 98119, respectfully submits this Memorandum of Points and Authorities in support of its Motion for Partial Summary Judgment. By this motion, Cascade seeks summary adjudication of two of the three remaining causes of action asserted by Plaintiff Vantor Holdings Corp. ("Vantor"), a California corporation headquartered at 18500 Von Karman Avenue, Suite 600, Irvine, California 92612.

Specifically, Cascade moves for summary adjudication of the following causes of action:

Second Cause of Action: Tortious Interference with Prospective Economic Advantage; and

Third Cause of Action: Unfair Business Practices under California Business and Professions Code section 17200 et seq.

Cascade does not seek summary adjudication of the First Cause of Action for Tortious Interference with Contractual Relations, which will remain for trial.

This case arises from Vantor's dissatisfaction with the outcome of ordinary marketplace competition. Vantor alleges that Cascade "systematically poached" three of Vantor's key consumer-goods suppliers — Hemsworth Consumer Products LLC ("Hemsworth"), Tridale Manufacturing Inc. ("Tridale"), and Orion Lifestyle Brands Corp. ("Orion") — by inducing each supplier to breach its exclusive supply agreement with Vantor, thereby causing Vantor approximately $87.4 million in alleged damages. Stripped of its rhetoric, however, Vantor's complaint describes nothing more than a competitor offering superior commercial terms to suppliers who independently chose to pursue more lucrative business opportunities. That is the free market at work. It is not tortious conduct.

The undisputed material facts, established through extensive discovery encompassing 78,412 documents produced by Cascade, 41,308 documents produced by Vantor, 23,567 documents produced by the three supplier third parties, and the depositions of key fact witnesses on both sides, demonstrate conclusively that Vantor's second and third causes of action fail as a matter of law.

With respect to the Second Cause of Action — tortious interference with prospective economic advantage — the critical deficiency is straightforward. Under long-settled California law, a claim for interference with prospective economic advantage requires proof that the defendant engaged in conduct that was "independently wrongful" — that is, wrongful apart from the fact of the interference itself. della Penna v. Crowne Albany Industries (1995) 11 Cal.4th 376, 393. This requirement was adopted by the California Supreme Court specifically to distinguish actionable interference from ordinary competitive activity that, while harmful to a rival, is a legitimate and expected feature of a market economy. Glenrock Corporation (2003) 29 Cal.4th 1134, 1153.

Vantor cannot satisfy this element. Despite two years of aggressive litigation, including the production and review of hundreds of thousands of documents and numerous depositions, Vantor has uncovered no evidence — none — that Cascade engaged in fraud, misrepresentation, threats, coercion, bribery, violation of any statute or regulation, or any other independently wrongful act in connection with its supplier outreach. To the contrary, Vantor's own Vice President of Supplier Relations, Thomas Brennecke, testified at his deposition that he had no evidence that Cascade used any improper means to induce the three suppliers to enter into new agreements. The suppliers' own documents and testimony confirm that each independently decided to pursue a commercial relationship with Cascade based on the materially superior financial terms Cascade offered — $28.0 million annually for Hemsworth (compared to Vantor's $12.5 million), $19.5 million annually for Tridale (compared to $8.3 million), and $31.0 million annually for Orion (compared to $14.6 million).

Offering a supplier more money is not tortious. It is competition.

With respect to the Third Cause of Action — unfair business practices under Business and Professions Code section 17200 — the claim fails for multiple independent reasons. First, the section 17200 claim is entirely duplicative of and derivative from the tortious interference claims. Vantor's complaint alleges no factual conduct in support of its section 17200 claim that is separate from or in addition to the conduct underlying the interference claims. The same operative facts — Cascade's entry into supply agreements with Hemsworth, Tridale, and Orion — form the sole basis for all three causes of action. Second, none of the three prongs of section 17200 is satisfied: the "unlawful" prong requires a predicate violation of some other law, and no such violation exists; the "unfair" prong, as applied to competitor suits, requires conduct tethered to a legislatively declared policy or an incipient violation of an antitrust law, and no such tether exists; and the "fraudulent" prong requires deceptive conduct, of which there is no evidence whatsoever. Third, even if the tort claims were to survive trial, the section 17200 claim provides no independent remedy beyond what is already available under the tort theories.

The Court should grant this motion and adjudicate the second and third causes of action in Cascade's favor, streamlining the trial to the single remaining claim — tortious interference with contractual relations — on which genuine factual disputes may exist.

II. STATEMENT OF THE CASE

A. The Parties

Cascade Retail Holdings Inc. is a Delaware corporation that operates as a multi-channel retail and e-commerce company. Cascade operates more than 340 retail locations across 22 states and maintains a substantial e-commerce platform serving customers nationwide. For fiscal year 2021, Cascade reported annual revenue of approximately $6.8 billion. As of September 2021, Cascade's approximate market capitalization was $14.2 billion. Cascade's shares are listed and traded on the Nasdaq Stock Market under the ticker symbol "CRHI." (Separate Statement of Undisputed Material Facts ("SS") ¶¶ 1–3.)

The key Cascade personnel relevant to this motion are: Margaret Prumvane, who serves as Chief Executive Officer and President; Lena Torvik, who serves as Senior Vice President of Supply Chain and Procurement; Annika Bergström, who serves as Vice President of Strategic Sourcing; and David Pruitt, who serves as General Counsel and Corporate Secretary. (SS ¶ 4.)

Vantor Holdings Corp. is a California corporation that operates as a mid-market wholesale distributor and specialty retailer. Vantor operates approximately 85 retail locations in California, Arizona, Nevada, and Oregon. For fiscal year 2021, Vantor reported annual revenue of approximately $1.1 billion. Vantor is privately held. (SS ¶¶ 5–7.)

The key Vantor personnel relevant to this motion are: Richard "Rick" Ellsworth, who is Vantor's Founder and Chief Executive Officer; and Thomas Brennecke, who serves as Vantor's Vice President of Supplier Relations. (SS ¶ 8.)

B. The Three Supplier Relationships at Issue

The operative complaint identifies three supplier relationships as the basis for all three causes of action. Each of these relationships is described below, along with the undisputed facts regarding the relevant agreements.

1. Hemsworth Consumer Products LLC

Hemsworth Consumer Products LLC ("Hemsworth") is an Oregon limited liability company headquartered at 4720 NW Yeon Avenue, Portland, Oregon 97210. Its Chief Executive Officer is Janet Kohler. Hemsworth manufactures and distributes home goods and kitchen accessories. (SS ¶ 9.)

Hemsworth and Vantor entered into an exclusive supply agreement on March 15, 2019, for a three-year term expiring on March 14, 2022 (the "Hemsworth Agreement"). Under the Hemsworth Agreement, Vantor committed to a minimum annual purchase of $12.5 million in Hemsworth products, and Hemsworth agreed to supply those products exclusively to Vantor within specified distribution channels. The Hemsworth Agreement contained a termination-for-convenience clause permitting either party to terminate the agreement upon ninety (90) days' written notice. (SS ¶¶ 10–13; Declaration of Douglas Carmichael ("Carmichael Decl."), Ex. A [Hemsworth Agreement].)

Hemsworth and Cascade entered into a new supply agreement on June 1, 2021 (the "Hemsworth–Cascade Agreement"). The Hemsworth–Cascade Agreement has a five-year term and provides for an annual purchase commitment by Cascade of $28.0 million — more than double Vantor's annual commitment under the Hemsworth Agreement. (SS ¶¶ 14–15; Carmichael Decl., Ex. B [Hemsworth–Cascade Agreement].)

At the time the Hemsworth–Cascade Agreement was executed, approximately nine months remained on the term of the Hemsworth Agreement. (SS ¶ 16; Expert Report of Dr. Vivian Ostrowski ("Ostrowski Report") at 18.)

2. Tridale Manufacturing Inc.

Tridale Manufacturing Inc. ("Tridale") is a Nevada corporation headquartered at 6300 South Pecos Road, Suite 210, Las Vegas, Nevada 89120. Its President is Gregory Fontaine. Tridale manufactures and distributes consumer electronics accessories, including cables, chargers, and protective cases. (SS ¶ 17.)

Tridale and Vantor entered into an exclusive supply agreement on January 10, 2020, for a two-year term expiring on January 9, 2022 (the "Tridale Agreement"). Under the Tridale Agreement, Vantor committed to a minimum annual purchase of $8.3 million in Tridale products, and Tridale agreed to supply those products exclusively to Vantor within specified distribution channels. The Tridale Agreement contained a termination-for-convenience clause permitting either party to terminate the agreement upon sixty (60) days' written notice. (SS ¶¶ 18–21; Carmichael Decl., Ex. C [Tridale Agreement].)

Tridale and Cascade entered into a new supply agreement on August 15, 2021 (the "Tridale–Cascade Agreement"). The Tridale–Cascade Agreement has a three-year term and provides for an annual purchase commitment by Cascade of $19.5 million — more than twice Vantor's annual commitment under the Tridale Agreement. (SS ¶¶ 22–23; Carmichael Decl., Ex. D [Tridale–Cascade Agreement].)

At the time the Tridale–Cascade Agreement was executed, approximately five months remained on the term of the Tridale Agreement. (SS ¶ 24; Ostrowski Report at 19.)

3. Orion Lifestyle Brands Corp.

Orion Lifestyle Brands Corp. ("Orion") is a California corporation headquartered at 1900 Avenue of the Stars, Suite 1050, Los Angeles, California 90067. Its Chief Executive Officer is Simone Alvarez. Orion manufactures and distributes personal care and wellness products. (SS ¶ 25.)

Orion and Vantor entered into an exclusive supply agreement on July 1, 2018, for a four-year term expiring on June 30, 2022 (the "Orion Agreement"). Under the Orion Agreement, Vantor committed to a minimum annual purchase of $14.6 million in Orion products, and Orion agreed to supply those products exclusively to Vantor within specified distribution channels. The Orion Agreement contained a termination-for-convenience clause permitting either party to terminate the agreement upon one hundred twenty (120) days' written notice. (SS ¶¶ 26–29; Carmichael Decl., Ex. E [Orion Agreement].)

Orion and Cascade entered into a new supply agreement on May 10, 2021 (the "Orion–Cascade Agreement"). The Orion–Cascade Agreement has a four-year term and provides for an annual purchase commitment by Cascade of $31.0 million — more than double Vantor's annual commitment under the Orion Agreement. (SS ¶¶ 30–31; Carmichael Decl., Ex. F [Orion–Cascade Agreement].)

At the time the Orion–Cascade Agreement was executed, approximately thirteen months remained on the term of the Orion Agreement. (SS ¶ 32; Ostrowski Report at 20.)

C. Project Atlas

In February 2021, Cascade launched an internal strategic initiative designated "Project Atlas." Project Atlas was designed to identify and onboard twenty-five (25) new suppliers across the home goods, consumer electronics accessories, and personal care product categories as part of Cascade's broader strategy to diversify and strengthen its supply chain. The initiative was led by Annika Bergström, Vice President of Strategic Sourcing, who reported to Lena Torvik, Senior Vice President of Supply Chain and Procurement. Cascade allocated a budget of $4.2 million for supplier transition costs associated with Project Atlas. (SS ¶¶ 33–36.)

During the course of discovery, Cascade produced internal documents related to Project Atlas, including electronic communications among members of the Project Atlas team. The discovery record reflects that 2,847 internal emails were exchanged among Project Atlas team members referencing potential new suppliers across all categories. Of those 2,847 emails, only fourteen (14) — representing approximately 0.5% of the total — specifically referenced Vantor's existing supplier relationships with Hemsworth, Tridale, or Orion. (SS ¶¶ 37–38; Carmichael Decl., Ex. G [representative sample of 14 emails].)

As discussed in detail in Section IV below, those fourteen emails reflect standard competitive intelligence gathering and market analysis. None of the fourteen emails directs, instructs, or encourages any Cascade employee to induce any supplier to breach its agreements with Vantor. None contains any reference to the specific exclusivity terms, termination provisions, or other contractual details of any Vantor supplier agreement. (SS ¶¶ 39–41.)

D. Procedural History

Vantor commenced this action on September 7, 2021, by filing a complaint in this Court asserting three causes of action: (1) Tortious Interference with Contractual Relations; (2) Tortious Interference with Prospective Economic Advantage; and (3) Unfair Business Practices under California Business and Professions Code section 17200. (SS ¶ 42.)

Cascade filed its answer and affirmative defenses on October 18, 2021. (SS ¶ 43.) The Court held an initial case management conference on November 5, 2021, and entered a scheduling order on January 14, 2022, establishing deadlines for discovery, dispositive motions, and trial. (SS ¶¶ 44–45.)

The parties engaged in extensive document discovery from March 2022 through August 2022. A total of 452,316 documents were collected from Cascade's custodians and data sources. Of those, 198,740 were reviewed for relevance and privilege, and 78,412 documents were ultimately produced to Vantor. Vantor, in turn, produced 41,308 documents to Cascade. The three supplier third parties — Hemsworth, Tridale, and Orion — produced a combined total of 23,567 documents in response to subpoenas duces tecum served by both parties. (SS ¶¶ 46–49.)

On June 15, 2022, Vantor filed a motion to compel expanded discovery regarding Cascade's relationships with additional Vantor suppliers beyond the three identified in the complaint. The Court ruled on that motion on August 3, 2022, granting it in part and ordering expanded discovery limited to fifteen (15) additional supplier relationships, bringing the total number of supplier relationships subject to discovery to eighteen (18). (SS ¶¶ 50–51.) As discussed below, even this expanded discovery yielded no evidence of independently wrongful conduct by Cascade in connection with any of the eighteen supplier relationships examined.

Key fact witness depositions were taken in the fall of 2022. Annika Bergström was deposed on October 12, 2022. (Carmichael Decl., Ex. H [Bergström Dep. Tr.].) Thomas Brennecke was deposed on October 26, 2022. (Carmichael Decl., Ex. I [Brennecke Dep. Tr.].) Lena Torvik was deposed on November 18, 2022. (Carmichael Decl., Ex. J [Torvik Dep. Tr.].)

The parties exchanged expert reports in December 2022. Dr. Harold Pryce of Meridian Forensic Economics LLC served Vantor's damages report on December 9, 2022, opining that Vantor suffered total damages of approximately $87.4 million as a result of Cascade's alleged conduct. (SS ¶ 52.) Dr. Vivian Ostrowski of Archer & Colvin Consulting Group served Cascade's rebuttal damages report on December 22, 2022, opining that the range of reasonably attributable damages, if any, was between $6.1 million and $11.3 million. (SS ¶ 53; Carmichael Decl., Ex. K [Ostrowski Report].) Expert depositions followed: Dr. Pryce was deposed on January 20, 2023, and Dr. Ostrowski was deposed on February 3, 2023. (SS ¶¶ 54–55.)

III. LEGAL STANDARD FOR SUMMARY JUDGMENT

A party may move for summary judgment or, in the alternative, summary adjudication of individual causes of action, affirmative defenses, or issues of duty, pursuant to California Code of Civil Procedure section 437c. See Cal. Civ. Proc. Code § 437c(a), (f)(1).

A defendant moving for summary judgment bears the initial burden of showing that one or more elements of the plaintiff's cause of action cannot be established, or that there is a complete defense to the cause of action. Cal. Civ. Proc. Code § 437c(p)(2); Meridian Commerce Bank v. Superior Court (1992) 2 Cal.4th 1254, 1261. A defendant may meet this burden by presenting evidence that negates an essential element of the plaintiff's claim, or by demonstrating that the plaintiff does not possess, and cannot reasonably obtain, evidence sufficient to establish a required element. Veltara Ins. Co. v. Superior Court (1993) 13 Cal.App.4th 1472, 1478.

Once the moving party has met its initial burden, the burden shifts to the opposing party to show, by admissible evidence, that a triable issue of one or more material facts exists as to the cause of action or defense. Cal. Civ. Proc. Code § 437c(p)(2). The opposing party "shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists." Id. A triable issue of material fact exists only if the evidence would permit a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion, in accordance with the applicable standard of proof. Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 383.

Summary adjudication of individual causes of action is available under section 437c(f)(1), which provides that a party may move for summary adjudication as to one or more causes of action within an action if the party contends that the cause of action has no merit or that there is no merit to a defense to the cause of action. The standards and procedures governing summary adjudication are the same as those governing summary judgment. Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 924.

In ruling on a motion for summary judgment or summary adjudication, the Court must consider all of the evidence set forth in the moving and opposing papers, except evidence to which objections have been made and sustained. The Court must view the evidence and draw all reasonable inferences in the light most favorable to the opposing party. However, the Court is not required to draw unreasonable or speculative inferences in favor of the non-moving party, and the non-moving party may not rely on conjecture, speculation, or unsupported conclusory assertions to demonstrate the existence of a triable issue. Scripps Clinic, supra, 108 Cal.App.4th at 924.

Cascade respectfully submits that it has met its burden of demonstrating that essential elements of Vantor's second and third causes of action cannot be established as a matter of law.

IV. ARGUMENT

A. The Second Cause of Action for Tortious Interference with Prospective Economic Advantage Fails as a Matter of Law

1. Elements of Tortious Interference with Prospective Economic Advantage Under California Law

Under California law, the elements of a cause of action for tortious interference with prospective economic advantage are well established. A plaintiff must prove each of the following five elements:

(a) An economic relationship between the plaintiff and a third party, with a probability of future economic benefit to the plaintiff;

(b) The defendant's knowledge of the relationship;

(d) Actual disruption of the relationship; and

(e) Economic harm to the plaintiff proximately caused by the defendant's wrongful acts.

Glenrock Corporation (2003) 29 Cal.4th 1134, 1153; della Penna v. Crowne Albany Industries (1995) 11 Cal.4th 376, 389–392.

This tort is critically distinct from its sibling — tortious interference with contractual relations — in one essential respect. In a claim for interference with an existing contract, a plaintiff need only show that the defendant's conduct was intentionally designed to induce a breach or disruption of the contract; there is no requirement that the defendant's means be independently wrongful. della Penna, supra, 11 Cal.4th at 392. By contrast, in a claim for interference with prospective economic advantage, the California Supreme Court has imposed the additional requirement that the defendant's conduct be "independently wrongful" — meaning "wrongful by some legal measure other than the fact of interference itself." Id. at 393.

The Supreme Court adopted this heightened requirement in della Penna after a thorough analysis of the policy considerations at stake. The Court recognized that "the legal protections against interference with a party's existing contract are considerably broader than those against interference with a party's mere expectation of future economic relations." Id. at 392. The reason is intuitive: existing contractual rights are vested interests that the law affords strong protection; mere expectations of future economic relationships, by contrast, exist in the competitive marketplace, where the law encourages — rather than restricts — rivalry among market participants. Without the independently wrongful conduct requirement, "the tort of interference with prospective advantage could become a handy vehicle for carrying out a competitive vendetta in the guise of a lawsuit." Id. at 393.

The Supreme Court elaborated on the independently wrongful conduct requirement in Korea Supply Co., explaining that it "refers to conduct that is itself actionable, e.g., conduct 'proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.'" Korea Supply Co., supra, 29 Cal.4th at 1159 (quoting della Penna, 11 Cal.4th at 393). The Court emphasized that "an act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." Id. In other words, the act must be "wrongful apart from the fact of interference itself." Id.; see also 5 Witkin, Summary of California Law (11th ed. 2023) Torts § 834.

Subsequent decisions have consistently reaffirmed this standard. In Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1152, the Supreme Court held that the independently wrongful conduct requirement was satisfied where the defendant law firm had engaged in "separately actionable" conduct — specifically, systematic raiding of employees through misrepresentation and breach of fiduciary duty. The Court made clear, however, that the tort could not rest on "mere competitive activity" alone. See also Westside Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 507, 527–528 (affirming dismissal of prospective economic advantage claim where defendant's conduct amounted to "legitimate business competition"); Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 122 (independently wrongful conduct requirement "acts as a gatekeeper" to prevent ordinary competitive behavior from being transformed into tort liability).

2. Vantor Cannot Establish Independently Wrongful Conduct

The independently wrongful conduct element is the dispositive issue on this motion. Vantor cannot satisfy it, and its second cause of action fails as a matter of law.

Vantor's complaint alleges, in substance, that Cascade "systematically poached" Vantor's suppliers — Hemsworth, Tridale, and Orion — by making competitive offers of higher purchase commitments, thereby inducing those suppliers to abandon their exclusive supply relationships with Vantor. (Complaint ¶¶ 47–63.) But this allegation, even taken at face value, describes nothing more than vigorous marketplace competition. It does not describe independently wrongful conduct.

The undisputed facts are straightforward. In each case, Cascade offered the supplier a materially superior annual purchase commitment:

• Hemsworth: Cascade offered an annual commitment of $28.0 million, compared to Vantor's commitment of $12.5 million — a differential of $15.5 million, or 124% more than Vantor's commitment. (SS ¶¶ 12, 15.)

• Tridale: Cascade offered an annual commitment of $19.5 million, compared to Vantor's commitment of $8.3 million — a differential of $11.2 million, or 135% more than Vantor's commitment. (SS ¶¶ 20, 23.)

• Orion: Cascade offered an annual commitment of $31.0 million, compared to Vantor's commitment of $14.6 million — a differential of $16.4 million, or 112% more than Vantor's commitment. (SS ¶¶ 28, 31.)

In each instance, the supplier — an independent business entity acting in its own economic self-interest — independently decided to enter into a supply agreement with Cascade. In each instance, the existing Vantor agreement contained a termination-for-convenience clause that permitted the supplier to exit the Vantor relationship upon notice. And in each instance, the supplier communicated its intent to exercise its termination rights under the Vantor agreement before or contemporaneously with entering into the Cascade agreement. (SS ¶¶ 56–61.)

Offering a supplier more favorable commercial terms — more volume, a longer commitment, or a higher price — is not fraud. It is not a misrepresentation. It is not a threat. It is not coercion. It is not bribery. It is not a violation of any statute, regulation, or constitutional provision. It is competition. And competition, however injurious to a rival, is not independently wrongful conduct under California law. della Penna, supra, 11 Cal.4th at 393; Westside Center Associates, supra, 42 Cal.App.4th at 527–528.

Throughout this litigation, Vantor has been given every opportunity to uncover evidence of independently wrongful conduct. The discovery process was extensive and searching. Cascade produced 78,412 documents. The three supplier third parties produced an additional 23,567 documents. Three key fact witnesses were deposed at length. Fifteen additional supplier relationships were examined under the Court's August 3, 2022, order expanding discovery. Yet after all of this, Vantor has identified no evidence that Cascade engaged in any act that qualifies as independently wrongful under della Penna, Korea Supply Co., or their progeny. The absence of such evidence is fatal to the second cause of action.

3. The Undisputed Deposition Testimony Confirms the Absence of Independently Wrongful Conduct

The depositions of the three most relevant fact witnesses — Annika Bergström of Cascade, Thomas Brennecke of Vantor, and Lena Torvik of Cascade — uniformly confirm that Cascade's conduct was lawful competitive activity, devoid of any independently wrongful means.

a. Deposition of Annika Bergström (October 12, 2022). Annika Bergström, Cascade's Vice President of Strategic Sourcing and the leader of Project Atlas, was deposed on October 12, 2022. Her testimony establishes the following undisputed facts:

Ms. Bergström testified that Project Atlas was designed to expand and diversify Cascade's supplier network across multiple product categories — specifically, home goods, consumer electronics accessories, and personal care — as part of a broader strategic initiative to strengthen Cascade's competitive position in those rapidly growing segments. She testified that Cascade's objective was to onboard approximately twenty-five new suppliers and that the outreach to Hemsworth, Tridale, and Orion was part of that broader initiative, not a targeted campaign against Vantor. (Carmichael Decl., Ex. H [Bergström Dep. Tr.] at 47:3–48:15, 52:8–53:12.)

Ms. Bergström testified unequivocally that she did not engage in any threats, coercion, fraud, or misrepresentation in her communications with any supplier, including Hemsworth, Tridale, and Orion. She stated that her team's approach to supplier outreach followed Cascade's standard competitive procurement processes, which involve identifying potential suppliers, initiating introductory communications, presenting Cascade's purchasing needs and capabilities, and negotiating mutually acceptable commercial terms. She testified that at no time did she or any member of her team direct, instruct, or encourage any supplier to breach its existing agreements with Vantor or any other party. (Bergström Dep. Tr. at 63:4–64:22, 71:10–72:18.)

Critically, Ms. Bergström testified that she was not aware of the specific exclusivity terms, termination provisions, or other contractual details of the Vantor agreements with Hemsworth, Tridale, or Orion at the time Cascade initiated negotiations with each supplier. She testified that her team's standard practice was to inquire generally about whether a potential supplier had existing obligations that might affect its ability to enter into a new agreement, and to allow the supplier to manage its own pre-existing contractual obligations. (Bergström Dep. Tr. at 78:3–79:17.)

With respect to the fourteen internal Project Atlas emails that referenced Vantor's supplier relationships, Ms. Bergström testified that those emails reflected standard competitive landscape analysis. She explained that when evaluating potential suppliers, it was routine for the Project Atlas team to note which suppliers had existing relationships with competitors, including Vantor, as part of the team's market intelligence gathering. She testified that none of the fourteen emails referenced specific contractual terms or exclusivity provisions in any Vantor agreement, and that the emails did not direct or encourage any action designed to interfere with Vantor's relationships. (Bergström Dep. Tr. at 84:7–86:24.)

b. Deposition of Thomas Brennecke (October 26, 2022). Thomas Brennecke, Vantor's own Vice President of Supplier Relations, was deposed on October 26, 2022. Mr. Brennecke's testimony is particularly significant because it comes from the plaintiff's senior executive most directly responsible for managing the very supplier relationships at issue in this case.

Mr. Brennecke testified that he had no evidence that Cascade used any improper means — such as fraud, threats, bribery, or misrepresentation — to induce the three suppliers to enter into new agreements with Cascade. When asked directly whether he was aware of any fraudulent statement made by any Cascade representative to any of the three suppliers, he responded: "Not that I'm aware of." When asked whether he was aware of any threat made by Cascade to any supplier, he responded: "No." When asked whether he was aware of any bribe or improper financial inducement offered by Cascade, he responded: "No, nothing like that." (Carmichael Decl., Ex. I [Brennecke Dep. Tr.] at 112:8–113:21.)

Mr. Brennecke acknowledged that each of the three suppliers had independently decided to pursue a commercial relationship with Cascade. He testified that, based on his communications with the suppliers' representatives, the suppliers' decisions were driven by the substantially more favorable financial terms that Cascade had offered. He stated: "They were getting significantly more money from Cascade. I understood why they made the business decision they made. It's just — it hurt us." (Brennecke Dep. Tr. at 118:4–119:2.)

Mr. Brennecke further conceded that each supplier had communicated its intent to exercise its termination-for-convenience rights under its Vantor agreement before entering into its Cascade agreement. He testified that Hemsworth provided Vantor with a ninety-day termination notice, Tridale provided a sixty-day termination notice, and Orion provided a one-hundred-twenty-day termination notice — each in accordance with the applicable contractual requirements. (Brennecke Dep. Tr. at 124:15–126:8.)

Perhaps most significantly, Mr. Brennecke testified that Vantor's fundamental concern was with the competitive outcome — the loss of three valuable suppliers — rather than with any specific unlawful or tortious act by Cascade. When asked to describe the "wrongful conduct" by Cascade that formed the basis of Vantor's claims, he stated: "They went after our suppliers. They offered them more money. They took them from us." (Brennecke Dep. Tr. at 131:3–10.) When pressed further about what specific wrongful act Cascade committed, he stated: "I think the wrongfulness is in the systematic nature of it. They didn't just go after one supplier. They went after all three." (Brennecke Dep. Tr. at 131:14–19.) This testimony — from Vantor's own key witness — confirms that Vantor's claim rests on competitive conduct, not independently wrongful acts.

c. Deposition of Lena Torvik (November 18, 2022). Lena Torvik, Cascade's Senior Vice President of Supply Chain and Procurement and the executive to whom Annika Bergström reported, was deposed on November 18, 2022.

Ms. Torvik testified regarding Cascade's standard supplier onboarding process and confirmed that Project Atlas followed Cascade's ordinary procurement protocols. She testified that Project Atlas was one of several concurrent strategic sourcing initiatives and that it was not conceived as a campaign to target Vantor or any other specific competitor's suppliers. (Carmichael Decl., Ex. J [Torvik Dep. Tr.] at 36:5–37:18.)

Ms. Torvik testified that Cascade's corporate policy was to refrain from directing suppliers to breach their existing agreements with other parties. She stated: "It's not our practice to tell a supplier to breach a contract. We present our business opportunity, and we expect suppliers to manage their own obligations. If they have a contract that prevents them from doing business with us, then we wait until they're available." (Torvik Dep. Tr. at 44:12–45:3.)

Ms. Torvik further testified that she was not aware of any instance in which any Cascade employee directed a supplier to breach its agreement with Vantor, made a fraudulent or misleading statement to a supplier, or engaged in any form of coercive conduct. She testified that the decision by Hemsworth, Tridale, and Orion to enter into agreements with Cascade was, in each case, a voluntary and independent business decision by the supplier. (Torvik Dep. Tr. at 52:7–53:19.)

No evidence in the deposition record contradicts the testimony of Ms. Bergström, Mr. Brennecke, or Ms. Torvik on these critical points.

4. The Documentary Record Confirms the Absence of Independently Wrongful Conduct

The documentary record — comprising 78,412 documents produced by Cascade, 41,308 documents produced by Vantor, and 23,567 documents produced by the three supplier third parties — is entirely consistent with the deposition testimony summarized above.

Among the more than 143,000 documents produced in this litigation, there is no evidence of:

(a) Any fraud or misrepresentation by Cascade to any supplier — whether Hemsworth, Tridale, Orion, or any of the fifteen additional suppliers examined under the Court's expanded discovery order;

(b) Any threat or coercive conduct directed by Cascade at any supplier;

(d) Any instruction, directive, or encouragement from Cascade to any supplier to breach its agreements with Vantor;

(e) Any violation of any statute, regulation, or other legal standard by Cascade in connection with its supplier outreach; or

(f) Any other conduct by Cascade that is independently actionable under any constitutional, statutory, regulatory, common law, or other determinable legal standard.

(SS ¶¶ 62–67.)

The fourteen internal Project Atlas emails that specifically reference Vantor's existing supplier relationships — the only documents in the entire production that even mention Vantor in connection with the three suppliers at issue — reflect standard competitive intelligence gathering and market analysis. A representative sample of these emails has been lodged with the Court. (Carmichael Decl., Ex. G.) The emails contain notations such as "Hemsworth currently supplies Vantor — home goods category — potential opportunity for Atlas" and "Tridale has existing relationship with Vantor, consumer electronics accessories — market analysis suggests room for competitive offer." None of the fourteen emails contains any direction, instruction, or encouragement to induce a breach of any Vantor agreement. None references any specific contractual terms — whether exclusivity provisions, termination clauses, or otherwise — in any Vantor agreement. None proposes or contemplates any improper means of securing a supplier relationship. (SS ¶¶ 39–41.)

In short, the documentary record confirms what the deposition testimony establishes: Cascade engaged in lawful competitive activity. It identified potential suppliers, made competitive offers, and allowed the suppliers to make their own business decisions. Nothing in the documentary record rises to the level of independently wrongful conduct as required under della Penna and Korea Supply Co.

5. Legitimate Competition Is Not Independently Wrongful Conduct

The foregoing evidentiary record compels a single conclusion: Cascade engaged in legitimate competitive conduct by offering Hemsworth, Tridale, and Orion superior commercial terms, and each supplier independently chose to enter into a supply relationship with Cascade. Under well-established California law, this conduct is not independently wrongful and cannot support a claim for tortious interference with prospective economic advantage.

The California Supreme Court has recognized that the tort of interference with prospective economic advantage must be applied with particular care in the context of competitive business relationships. In della Penna, the Court cautioned that "the world of commerce would be a sorry place if competitors were free to sue one another whenever one gained a commercial advantage at the expense of another." 11 Cal.4th at 392. The independently wrongful conduct requirement exists precisely to "draw a bright line" between actionable interference and "the damage that is the ordinary byproduct of competitive business operations." Id. at 393.

The Restatement (Second) of Torts, which the Court found persuasive in della Penna, likewise recognizes the competition privilege. Section 768 of the Restatement provides that "[o]ne who intentionally causes a third person not to enter into a prospective contractual relation with another who is his competitor ... does not interfere improperly with the other's relation if (a) the relation concerns a matter involved in the competition between the actor and the other and (b) the actor does not employ wrongful means." Restatement (Second) of Torts § 768(1) (1979). The comment to section 768 explains that "wrongful means" include "physical violence, fraud, civil suits and criminal prosecutions," but do not include "persuasion alone" or the offering of "more favorable business terms." Id. cmt. e.

California courts have consistently applied these principles to dismiss claims for interference with prospective economic advantage where the alleged conduct amounted to nothing more than competitive activity. In Westside Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 507, the Court of Appeal affirmed dismissal of a prospective economic advantage claim where the defendant's conduct consisted of entering into a competing lease arrangement. The court held that such competitive conduct was not independently wrongful and could not sustain the claim, even though it resulted in economic harm to the plaintiff. Id. at 527–528.

In Korea Supply Co., the Supreme Court further clarified the boundaries of the tort, holding that the independently wrongful conduct requirement is "not satisfied by a showing that a defendant's conduct was merely 'unfair' or 'improper' in the colloquial sense." 29 Cal.4th at 1159. The Court explained that the requirement "acts as a check against potentially boundless liability" and ensures that tort law does not "deter legitimate competitive practices." Id. As the Court stated: "Competition inevitably produces winners and losers. The losing competitor cannot transform its loss into a tort merely by alleging that the winner's competitive conduct was 'unfair.'" Id.

The Court of Appeal has likewise held that the tort requires more than evidence of aggressive — even ruthless — competitive conduct. In Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, the court held that a competitor's systematic efforts to recruit the plaintiff's employees and secure its client relationships did not constitute independently wrongful conduct where the means employed — offering superior compensation and business terms — were lawful. Id. at 122. The court observed that "[t]he independently wrongful act requirement serves as a necessary gatekeeper to ensure that the tort does not sweep in ordinary competitive behavior that may be disagreeable to a plaintiff but does not transgress any legal boundary." Id.

In Reeves v. Hanlon (2004) 33 Cal.4th 1140, the Supreme Court emphasized that independently wrongful conduct must be independently actionable — meaning that the conduct must give rise to a cause of action in its own right, apart from the interference claim. Id. at 1152–1153. The Court found independently wrongful conduct where the defendant had engaged in "systematic raiding" of employees through misrepresentation and breach of fiduciary duty. Id. at 1153. Critically, the Court noted that the independently wrongful acts in that case were "actionable in their own right" — they were "recognized torts." Id. Mere competitive overtures, without more, would not have sufficed.

In the present case, the contrast with Reeves is stark. There is no misrepresentation. There is no breach of fiduciary duty. There is no threat, no coercion, no bribery, no violation of statute. There is only the offering of superior commercial terms to suppliers in a competitive marketplace — precisely the kind of conduct that della Penna, Korea Supply Co., and their progeny have held is privileged and not independently wrongful.

The Supreme Court's articulation of the independently wrongful conduct standard in Voris v. Lampert (2019) 7 Cal.5th 1141, further reinforces this point. In Voris, the Court reaffirmed that "the independently wrongful conduct requirement serves an important function: it prevents the tort of interference with prospective economic advantage from becoming a catchall for any competitive harm suffered in the marketplace." Id. at 1155. The Court reiterated that the requirement "demands more than a showing that the defendant acted with the intent to gain a competitive advantage." Id.

Cascade's conduct — offering Hemsworth, Tridale, and Orion annual purchase commitments of $28.0 million, $19.5 million, and $31.0 million, respectively — is the paradigm of lawful competition. The undisputed evidence establishes that Cascade acted through ordinary commercial channels, following standard procurement processes, without resort to any wrongful means. Summary adjudication of the second cause of action is warranted.

6. Vantor's "Pattern and Practice" Theory Does Not Create Independently Wrongful Conduct

Cascade anticipates that Vantor may argue that even if Cascade's conduct with respect to each individual supplier was lawful standing alone, the "systematic targeting" of multiple Vantor suppliers — three of which are identified in the complaint, and up to eighteen of which were examined in discovery — creates a "pattern and practice" that itself constitutes independently wrongful conduct. This argument should be rejected.

The independently wrongful conduct requirement, as articulated in della Penna and Korea Supply Co., focuses on the nature and quality of the defendant's acts, not their frequency or volume. The relevant question is whether the defendant employed means that are "proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." Korea Supply Co., supra, 29 Cal.4th at 1159. If the acts are lawful — as offering superior commercial terms indisputably is — then repeating those acts ten or one hundred times does not transform them into independently wrongful conduct. One lawful act, multiplied, remains lawful.

This principle is well-grounded in precedent and policy. The California Supreme Court has consistently declined to hold that the volume or scope of competitive activity, standing alone, can satisfy the independently wrongful conduct requirement. In della Penna, the Court's analysis focused entirely on the character of the defendant's conduct, not the number of instances in which it occurred. See 11 Cal.4th at 392–393. In Korea Supply Co., the Court likewise examined the nature of the defendant's acts — finding independently wrongful conduct only because the acts constituted bribery of foreign officials, an independently actionable legal violation. 29 Cal.4th at 1159–1160. And in Reeves, the independently wrongful conduct consisted of specific, independently actionable torts — misrepresentation and breach of fiduciary duty — not merely a "pattern" of competitive activity. 33 Cal.4th at 1152–1153.

Moreover, the expanded discovery ordered by this Court on August 3, 2022, provided Vantor with a full opportunity to test its "pattern and practice" theory against the evidence. The Court's order permitted Vantor to explore Cascade's relationships with fifteen additional Vantor suppliers beyond the three identified in the complaint — for a total of eighteen supplier relationships subject to scrutiny. Despite this expanded discovery, Vantor has not identified independently wrongful conduct by Cascade in connection with any of the eighteen relationships examined. (SS ¶¶ 68–69.) The "pattern and practice" theory fails not merely as a matter of law, but as a matter of fact: there is no pattern or practice of wrongful conduct to be found.

The "pattern and practice" theory is, at bottom, a repackaging of Vantor's fundamental complaint — that Cascade competed aggressively and successfully for supplier relationships. But this Court should not allow artful pleading or creative labeling to circumvent the independently wrongful conduct requirement that the California Supreme Court deliberately imposed to protect legitimate competitive activity from tort liability. The second cause of action should be adjudicated in Cascade's favor.

B. The Third Cause of Action Under Cal. Bus. & Prof. Code § 17200 Fails as a Matter of Law

1. Overview of § 17200

California Business and Professions Code section 17200 defines "unfair competition" as "any unlawful, unfair or fraudulent business act or practice." The statute's coverage is stated in the disjunctive, meaning that a practice may be proscribed as "unfair" or "fraudulent" even if it is not "unlawful," and vice versa. Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.

However, while section 17200 sweeps broadly, it is not without limits. The statute does not create substantive liability ex nihilo. Rather, it provides a procedural vehicle for enforcing other legal standards and prohibitions. A section 17200 claim must be predicated on conduct that is independently actionable or violative of some underlying law, regulation, or public policy; it does not create a standalone cause of action for conduct that is otherwise lawful and does not transgress any other legal standard. See Cel-Tech, supra, 20 Cal.4th at 182–183; Levine v. Westvale Assurance of California (2010) 189 Cal.App.4th 1117, 1136.

Vantor's section 17200 claim fails under all three prongs of the statute.

2. The § 17200 Claim Is Entirely Derivative of the Tortious Interference Claims

As a threshold matter, Vantor's section 17200 claim is entirely duplicative of and derivative from the tortious interference claims that form the first and second causes of action. This alone warrants dismissal.

Vantor's complaint alleges no factual conduct in support of its section 17200 claim that is separate from or additional to the conduct alleged in connection with the tortious interference claims. A review of the complaint confirms this: Paragraphs 64 through 78 of the complaint, which set forth the section 17200 cause of action, incorporate by reference the same factual allegations that underlie the first and second causes of action and add no independent allegations of "unlawful," "unfair," or "fraudulent" conduct beyond the alleged tortious interference. The operative facts are identical across all three causes of action: Cascade's entry into supply agreements with Hemsworth, Tridale, and Orion.

Where a section 17200 claim is predicated entirely on the same facts and same alleged wrongful conduct as a companion tort claim, and adds no independent basis for liability, it should be dismissed as duplicative and superfluous. See Agosta v. Astor (2004) 120 Cal.App.4th 596, 603 (affirming dismissal of section 17200 claim that was "predicated on the same primary right" and "adds nothing to the other causes of action"); see also Camberwell Corporation (1998) 19 Cal.4th 26, 44 (section 17200 does not independently "provide additional remedies for conduct that is already fully addressed by other established causes of action"). Allowing a duplicative section 17200 claim to proceed to trial alongside the tort claims would serve no legitimate purpose and would risk confusion for the trier of fact and prejudice to Cascade.

Even setting aside the duplicative nature of the claim, however, each of the three prongs of section 17200 independently fails on the merits. The Court addresses each prong in turn.

3. The "Unlawful" Prong Is Not Satisfied

The "unlawful" prong of section 17200 "borrows" violations of other laws and treats them as independently actionable under the statute. Cel-Tech, supra, 20 Cal.4th at 180. "By proscribing 'any unlawful' business practice, section 17200 'borrows' violations of other laws and treats them as independently actionable." Id. (quoting Blank v. Kirwan (1985) 39 Cal.3d 311, 329).

To state a claim under the unlawful prong, a plaintiff must identify a predicate violation of some other law — whether a statute, regulation, constitutional provision, or other determinable legal standard — that the defendant's conduct transgressed. See National Rural Telecommunications Cooperative v. DIRECTV, Inc. (2004) 319 F.Supp.2d 1059, 1074 (C.D. Cal.) ("The 'unlawful' prong of [section] 17200 requires a plaintiff to identify a predicate statutory or regulatory violation.").

Vantor has identified no such violation. The complaint does not allege that Cascade violated any statute, regulation, or other legal standard in connection with its conduct. There is no allegation of antitrust violation, no allegation of trade secret misappropriation, no allegation of securities fraud, no allegation of violation of any industry-specific regulation, and no allegation of violation of any consumer protection statute. The tortious interference claims themselves — which are common law tort theories — do not constitute "statutory violations" that can serve as predicate violations under the unlawful prong. The unlawful prong requires a violation of an existing law, not a mere allegation of common law tort liability. Agosta, supra, 120 Cal.App.4th at 604.

Because Vantor has identified no predicate statutory or regulatory violation, the unlawful prong of section 17200 is not satisfied.

4. The "Unfair" Prong Is Not Satisfied

The "unfair" prong of section 17200 has been the subject of considerable judicial development, and the applicable standard differs depending on whether the action is brought by a consumer or by a competitor. In a non-consumer action — that is, an action brought by a business competitor, as this case is — the California Supreme Court in Cel-Tech Communications adopted a more restrictive standard for the "unfair" prong to avoid transforming the statute into a vehicle for litigating ordinary competitive disputes.

Under Cel-Tech, when a competitor brings an action under the "unfair" prong, the challenged practice must be "tethered to some legislatively declared policy or proof of some actual or threatened impact on competition." Cel-Tech, supra, 20 Cal.4th at 187. The Supreme Court explained that in the competitor context, an "unfair" practice is one that "threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition." Id. at 187.

This "tethering" requirement was adopted to prevent the unfair prong from becoming "a means of imposing an amorphous and unpredictable standard of business ethics on one competitor's challenge to the business practices of another." Id. at 184. As the Court observed: "An unfair business practice claim under section 17200 by one competitor against another should not be used merely to challenge the outcome of otherwise lawful competition." Id. at 186.

Some courts have alternatively applied a balancing test derived from the Federal Trade Commission's criteria, requiring that the alleged unfairness (a) be "substantial," (b) outweigh any countervailing benefits to consumers or competition, and (c) not be remediable by consumers or competitors through their own actions. See Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 839; Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 412. However, even under this alternative formulation, the result is the same.

Vantor's claim fails under either standard.

Under the Cel-Tech tethering requirement, Vantor cannot identify any legislatively declared policy that Cascade's conduct violated or threatened. There is no statute, regulation, or legislative enactment that prohibits a retailer from offering suppliers more favorable purchase commitments than a competitor. To the contrary, such conduct is the essence of a competitive market economy — the very thing that legislative policies supporting free competition are designed to encourage. There is no antitrust violation at issue; Cascade is not alleged to have engaged in price-fixing, market allocation, tying arrangements, predatory pricing, or any other conduct that implicates antitrust law. Vantor has not alleged, and cannot show, that Cascade's conduct "threatens an incipient violation of an antitrust law" or "significantly threatens or harms competition." Cel-Tech, supra, 20 Cal.4th at 187.

Under the alternative balancing test, the claim fares no better. The "substantial" injury that Vantor alleges — the loss of three supplier relationships — is the natural and ordinary result of marketplace competition, not of any unfair business practice. Vantor's suppliers were not locked into perpetual relationships with Vantor; each of the three agreements contained a termination-for-convenience clause, meaning the suppliers had the contractual right to exit at any time upon notice. Moreover, any harm to Vantor is easily counterbalanced by the benefits of the competitive dynamic that produced it — namely, the benefits to the suppliers of receiving substantially higher purchase commitments and to consumers of having goods distributed through a broader and more competitive retail network. Finally, the harm was eminently remediable by Vantor through its own competitive efforts: Vantor could have matched Cascade's offers, renegotiated its supplier agreements to include longer lock-up periods or higher purchase commitments, or sought alternative suppliers. The unfair prong does not exist to protect competitors from the consequences of their own competitive positioning. See Kestrel Indemnity Co. Casualty Insurance Co. of America v. Hirsh (N.D. Cal. 2016) 831 F.3d 1179, 1186 (applying California law and holding that a competitor cannot satisfy the unfair prong merely by showing that a rival's superior competitive position caused economic harm).

The "unfair" prong of section 17200 is not satisfied.

5. The "Fraudulent" Prong Is Not Satisfied

The "fraudulent" prong of section 17200 requires conduct that is "likely to deceive" members of the public. See Cel-Tech, supra, 20 Cal.4th at 180. A section 17200 claim based on the fraudulent prong requires a showing that the defendant's conduct was likely to mislead or deceive, even if it does not rise to the level of common law fraud. Lazar v. Superior Court (1996) 12 Cal.4th 631, 638; Lingsch v. Savage (1963) 213 Cal.App.2d 729, 735.

There is no evidence of any deceptive or misleading statement by Cascade — to any supplier, to Vantor, to the public, or to any other party. The undisputed deposition testimony of all three key fact witnesses confirms the absence of any fraud or misrepresentation:

• Annika Bergström testified that she did not engage in any fraud or misrepresentation in her communications with suppliers. (Bergström Dep. Tr. at 63:4–64:22.)

• Thomas Brennecke, Vantor's own VP of Supplier Relations, testified that he was not aware of any fraudulent statement made by any Cascade representative to any supplier. (Brennecke Dep. Tr. at 112:8–113:21.)

• Lena Torvik testified that she was not aware of any instance in which any Cascade employee made a fraudulent or misleading statement to a supplier. (Torvik Dep. Tr. at 52:7–53:19.)

The documentary record — comprising more than 143,000 documents — is devoid of any evidence of fraud, misrepresentation, or deceptive conduct by Cascade. There are no false statements, no misleading communications, no deceptive pricing representations, no concealment of material facts — nothing that could support a finding that Cascade's conduct was "likely to deceive."

The "fraudulent" prong of section 17200 is not satisfied.

6. Even If the Tort Claims Survive, § 17200 Provides No Independent Relief and Should Be Dismissed

Even if Vantor were to prevail on its first cause of action for tortious interference with contractual relations — the only cause of action not subject to this motion — the section 17200 claim would still provide no independent relief and should be dismissed.

The remedies available under sectio

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
VANTOR HOLDINGS CORP., a California corporation,
Plaintiff,
v.
CASCADE RETAIL HOLDINGS INC., a Delaware corporation,
Defendant.
Case No. 21STCV-34872
Assigned to the Honorable Margaret S. Reyes, Dept. 14
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT CASCADE RETAIL HOLDINGS INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT
[Second Cause of Action: Tortious Interference with Prospective Economic Advantage; Third Cause of Action: Unfair Business Practices Under Cal. Bus. & Prof. Code § 17200]
Date: April 14, 2023 Time: 9:00 a.m. Dept.: 14
Complaint Filed: September 7, 2021 Trial Date: September 11, 2023
CALDERWOOD & HARKNESS LLP Douglas Carmichael (SBN 184726) Francesca Morano (SBN 237014) Yuki Nakamura (SBN 289461) Carlos Espinoza (SBN 312587) 600 South Grand Avenue, Suite 3200 Los Angeles, California 90071 Telephone: (213) 486-7200 Facsimile: (213) 486-7201
Attorneys for Defendant Cascade Retail Holdings Inc.
TABLE OF CONTENTS
TABLE OF AUTHORITIES
CASES
STATUTES
OTHER AUTHORITIES
I. INTRODUCTION
Defendant Cascade Retail Holdings Inc. ("Cascade"), a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHI," with its principal executive offices at 2200 Elliott Avenue West, Suite 1400, Seattle, Washington 98119, respectfully submits this Memorandum of Points and Authorities in support of its Motion for Partial Summary Judgment. By this motion, Cascade seeks summary adjudication of two of the three remaining causes of action asserted by Plaintiff Vantor Holdings Corp. ("Vantor"), a California corporation headquartered at 18500 Von Karman Avenue, Suite 600, Irvine, California 92612.
Specifically, Cascade moves for summary adjudication of the following causes of action:
Second Cause of Action: Tortious Interference with Prospective Economic Advantage; and
Third Cause of Action: Unfair Business Practices under California Business and Professions Code section 17200 et seq.
Cascade does not seek summary adjudication of the First Cause of Action for Tortious Interference with Contractual Relations, which will remain for trial.
This case arises from Vantor's dissatisfaction with the outcome of ordinary marketplace competition. Vantor alleges that Cascade "systematically poached" three of Vantor's key consumer-goods suppliers — Hemsworth Consumer Products LLC ("Hemsworth"), Tridale Manufacturing Inc. ("Tridale"), and Orion Lifestyle Brands Corp. ("Orion") — by inducing each supplier to breach its exclusive supply agreement with Vantor, thereby causing Vantor approximately $87.4 million in alleged damages. Stripped of its rhetoric, however, Vantor's complaint describes nothing more than a competitor offering superior commercial terms to suppliers who independently chose to pursue more lucrative business opportunities. That is the free market at work. It is not tortious conduct.
The undisputed material facts, established through extensive discovery encompassing 78,412 documents produced by Cascade, 41,308 documents produced by Vantor, 23,567 documents produced by the three supplier third parties, and the depositions of key fact witnesses on both sides, demonstrate conclusively that Vantor's second and third causes of action fail as a matter of law.
With respect to the Second Cause of Action — tortious interference with prospective economic advantage — the critical deficiency is straightforward. Under long-settled California law, a claim for interference with prospective economic advantage requires proof that the defendant engaged in conduct that was "independently wrongful" — that is, wrongful apart from the fact of the interference itself. della Penna v. Crowne Albany Industries (1995) 11 Cal.4th 376, 393. This requirement was adopted by the California Supreme Court specifically to distinguish actionable interference from ordinary competitive activity that, while harmful to a rival, is a legitimate and expected feature of a market economy. Glenrock Corporation (2003) 29 Cal.4th 1134, 1153.
Vantor cannot satisfy this element. Despite two years of aggressive litigation, including the production and review of hundreds of thousands of documents and numerous depositions, Vantor has uncovered no evidence — none — that Cascade engaged in fraud, misrepresentation, threats, coercion, bribery, violation of any statute or regulation, or any other independently wrongful act in connection with its supplier outreach. To the contrary, Vantor's own Vice President of Supplier Relations, Thomas Brennecke, testified at his deposition that he had no evidence that Cascade used any improper means to induce the three suppliers to enter into new agreements. The suppliers' own documents and testimony confirm that each independently decided to pursue a commercial relationship with Cascade based on the materially superior financial terms Cascade offered — $28.0 million annually for Hemsworth (compared to Vantor's $12.5 million), $19.5 million annually for Tridale (compared to $8.3 million), and $31.0 million annually for Orion (compared to $14.6 million).
Offering a supplier more money is not tortious. It is competition.
With respect to the Third Cause of Action — unfair business practices under Business and Professions Code section 17200 — the claim fails for multiple independent reasons. First, the section 17200 claim is entirely duplicative of and derivative from the tortious interference claims. Vantor's complaint alleges no factual conduct in support of its section 17200 claim that is separate from or in addition to the conduct underlying the interference claims. The same operative facts — Cascade's entry into supply agreements with Hemsworth, Tridale, and Orion — form the sole basis for all three causes of action. Second, none of the three prongs of section 17200 is satisfied: the "unlawful" prong requires a predicate violation of some other law, and no such violation exists; the "unfair" prong, as applied to competitor suits, requires conduct tethered to a legislatively declared policy or an incipient violation of an antitrust law, and no such tether exists; and the "fraudulent" prong requires deceptive conduct, of which there is no evidence whatsoever. Third, even if the tort claims were to survive trial, the section 17200 claim provides no independent remedy beyond what is already available under the tort theories.
The Court should grant this motion and adjudicate the second and third causes of action in Cascade's favor, streamlining the trial to the single remaining claim — tortious interference with contractual relations — on which genuine factual disputes may exist.
II. STATEMENT OF THE CASE
A. The Parties
Cascade Retail Holdings Inc. is a Delaware corporation that operates as a multi-channel retail and e-commerce company. Cascade operates more than 340 retail locations across 22 states and maintains a substantial e-commerce platform serving customers nationwide. For fiscal year 2021, Cascade reported annual revenue of approximately $6.8 billion. As of September 2021, Cascade's approximate market capitalization was $14.2 billion. Cascade's shares are listed and traded on the Nasdaq Stock Market under the ticker symbol "CRHI." (Separate Statement of Undisputed Material Facts ("SS") ¶¶ 1–3.)
The key Cascade personnel relevant to this motion are: Margaret Prumvane, who serves as Chief Executive Officer and President; Lena Torvik, who serves as Senior Vice President of Supply Chain and Procurement; Annika Bergström, who serves as Vice President of Strategic Sourcing; and David Pruitt, who serves as General Counsel and Corporate Secretary. (SS ¶ 4.)
Vantor Holdings Corp. is a California corporation that operates as a mid-market wholesale distributor and specialty retailer. Vantor operates approximately 85 retail locations in California, Arizona, Nevada, and Oregon. For fiscal year 2021, Vantor reported annual revenue of approximately $1.1 billion. Vantor is privately held. (SS ¶¶ 5–7.)
The key Vantor personnel relevant to this motion are: Richard "Rick" Ellsworth, who is Vantor's Founder and Chief Executive Officer; and Thomas Brennecke, who serves as Vantor's Vice President of Supplier Relations. (SS ¶ 8.)
B. The Three Supplier Relationships at Issue
The operative complaint identifies three supplier relationships as the basis for all three causes of action. Each of these relationships is described below, along with the undisputed facts regarding the relevant agreements.
1. Hemsworth Consumer Products LLC
Hemsworth Consumer Products LLC ("Hemsworth") is an Oregon limited liability company headquartered at 4720 NW Yeon Avenue, Portland, Oregon 97210. Its Chief Executive Officer is Janet Kohler. Hemsworth manufactures and distributes home goods and kitchen accessories. (SS ¶ 9.)
Hemsworth and Vantor entered into an exclusive supply agreement on March 15, 2019, for a three-year term expiring on March 14, 2022 (the "Hemsworth Agreement"). Under the Hemsworth Agreement, Vantor committed to a minimum annual purchase of $12.5 million in Hemsworth products, and Hemsworth agreed to supply those products exclusively to Vantor within specified distribution channels. The Hemsworth Agreement contained a termination-for-convenience clause permitting either party to terminate the agreement upon ninety (90) days' written notice. (SS ¶¶ 10–13; Declaration of Douglas Carmichael ("Carmichael Decl."), Ex. A [Hemsworth Agreement].)
Hemsworth and Cascade entered into a new supply agreement on June 1, 2021 (the "Hemsworth–Cascade Agreement"). The Hemsworth–Cascade Agreement has a five-year term and provides for an annual purchase commitment by Cascade of $28.0 million — more than double Vantor's annual commitment under the Hemsworth Agreement. (SS ¶¶ 14–15; Carmichael Decl., Ex. B [Hemsworth–Cascade Agreement].)
At the time the Hemsworth–Cascade Agreement was executed, approximately nine months remained on the term of the Hemsworth Agreement. (SS ¶ 16; Expert Report of Dr. Vivian Ostrowski ("Ostrowski Report") at 18.)
2. Tridale Manufacturing Inc.
Tridale Manufacturing Inc. ("Tridale") is a Nevada corporation headquartered at 6300 South Pecos Road, Suite 210, Las Vegas, Nevada 89120. Its President is Gregory Fontaine. Tridale manufactures and distributes consumer electronics accessories, including cables, chargers, and protective cases. (SS ¶ 17.)
Tridale and Vantor entered into an exclusive supply agreement on January 10, 2020, for a two-year term expiring on January 9, 2022 (the "Tridale Agreement"). Under the Tridale Agreement, Vantor committed to a minimum annual purchase of $8.3 million in Tridale products, and Tridale agreed to supply those products exclusively to Vantor within specified distribution channels. The Tridale Agreement contained a termination-for-convenience clause permitting either party to terminate the agreement upon sixty (60) days' written notice. (SS ¶¶ 18–21; Carmichael Decl., Ex. C [Tridale Agreement].)
Tridale and Cascade entered into a new supply agreement on August 15, 2021 (the "Tridale–Cascade Agreement"). The Tridale–Cascade Agreement has a three-year term and provides for an annual purchase commitment by Cascade of $19.5 million — more than twice Vantor's annual commitment under the Tridale Agreement. (SS ¶¶ 22–23; Carmichael Decl., Ex. D [Tridale–Cascade Agreement].)
At the time the Tridale–Cascade Agreement was executed, approximately five months remained on the term of the Tridale Agreement. (SS ¶ 24; Ostrowski Report at 19.)
3. Orion Lifestyle Brands Corp.
Orion Lifestyle Brands Corp. ("Orion") is a California corporation headquartered at 1900 Avenue of the Stars, Suite 1050, Los Angeles, California 90067. Its Chief Executive Officer is Simone Alvarez. Orion manufactures and distributes personal care and wellness products. (SS ¶ 25.)
Orion and Vantor entered into an exclusive supply agreement on July 1, 2018, for a four-year term expiring on June 30, 2022 (the "Orion Agreement"). Under the Orion Agreement, Vantor committed to a minimum annual purchase of $14.6 million in Orion products, and Orion agreed to supply those products exclusively to Vantor within specified distribution channels. The Orion Agreement contained a termination-for-convenience clause permitting either party to terminate the agreement upon one hundred twenty (120) days' written notice. (SS ¶¶ 26–29; Carmichael Decl., Ex. E [Orion Agreement].)
Orion and Cascade entered into a new supply agreement on May 10, 2021 (the "Orion–Cascade Agreement"). The Orion–Cascade Agreement has a four-year term and provides for an annual purchase commitment by Cascade of $31.0 million — more than double Vantor's annual commitment under the Orion Agreement. (SS ¶¶ 30–31; Carmichael Decl., Ex. F [Orion–Cascade Agreement].)
At the time the Orion–Cascade Agreement was executed, approximately thirteen months remained on the term of the Orion Agreement. (SS ¶ 32; Ostrowski Report at 20.)
C. Project Atlas
In February 2021, Cascade launched an internal strategic initiative designated "Project Atlas." Project Atlas was designed to identify and onboard twenty-five (25) new suppliers across the home goods, consumer electronics accessories, and personal care product categories as part of Cascade's broader strategy to diversify and strengthen its supply chain. The initiative was led by Annika Bergström, Vice President of Strategic Sourcing, who reported to Lena Torvik, Senior Vice President of Supply Chain and Procurement. Cascade allocated a budget of $4.2 million for supplier transition costs associated with Project Atlas. (SS ¶¶ 33–36.)
During the course of discovery, Cascade produced internal documents related to Project Atlas, including electronic communications among members of the Project Atlas team. The discovery record reflects that 2,847 internal emails were exchanged among Project Atlas team members referencing potential new suppliers across all categories. Of those 2,847 emails, only fourteen (14) — representing approximately 0.5% of the total — specifically referenced Vantor's existing supplier relationships with Hemsworth, Tridale, or Orion. (SS ¶¶ 37–38; Carmichael Decl., Ex. G [representative sample of 14 emails].)
As discussed in detail in Section IV below, those fourteen emails reflect standard competitive intelligence gathering and market analysis. None of the fourteen emails directs, instructs, or encourages any Cascade employee to induce any supplier to breach its agreements with Vantor. None contains any reference to the specific exclusivity terms, termination provisions, or other contractual details of any Vantor supplier agreement. (SS ¶¶ 39–41.)
D. Procedural History
Vantor commenced this action on September 7, 2021, by filing a complaint in this Court asserting three causes of action: (1) Tortious Interference with Contractual Relations; (2) Tortious Interference with Prospective Economic Advantage; and (3) Unfair Business Practices under California Business and Professions Code section 17200. (SS ¶ 42.)
Cascade filed its answer and affirmative defenses on October 18, 2021. (SS ¶ 43.) The Court held an initial case management conference on November 5, 2021, and entered a scheduling order on January 14, 2022, establishing deadlines for discovery, dispositive motions, and trial. (SS ¶¶ 44–45.)
The parties engaged in extensive document discovery from March 2022 through August 2022. A total of 452,316 documents were collected from Cascade's custodians and data sources. Of those, 198,740 were reviewed for relevance and privilege, and 78,412 documents were ultimately produced to Vantor. Vantor, in turn, produced 41,308 documents to Cascade. The three supplier third parties — Hemsworth, Tridale, and Orion — produced a combined total of 23,567 documents in response to subpoenas duces tecum served by both parties. (SS ¶¶ 46–49.)
On June 15, 2022, Vantor filed a motion to compel expanded discovery regarding Cascade's relationships with additional Vantor suppliers beyond the three identified in the complaint. The Court ruled on that motion on August 3, 2022, granting it in part and ordering expanded discovery limited to fifteen (15) additional supplier relationships, bringing the total number of supplier relationships subject to discovery to eighteen (18). (SS ¶¶ 50–51.) As discussed below, even this expanded discovery yielded no evidence of independently wrongful conduct by Cascade in connection with any of the eighteen supplier relationships examined.
Key fact witness depositions were taken in the fall of 2022. Annika Bergström was deposed on October 12, 2022. (Carmichael Decl., Ex. H [Bergström Dep. Tr.].) Thomas Brennecke was deposed on October 26, 2022. (Carmichael Decl., Ex. I [Brennecke Dep. Tr.].) Lena Torvik was deposed on November 18, 2022. (Carmichael Decl., Ex. J [Torvik Dep. Tr.].)
The parties exchanged expert reports in December 2022. Dr. Harold Pryce of Meridian Forensic Economics LLC served Vantor's damages report on December 9, 2022, opining that Vantor suffered total damages of approximately $87.4 million as a result of Cascade's alleged conduct. (SS ¶ 52.) Dr. Vivian Ostrowski of Archer & Colvin Consulting Group served Cascade's rebuttal damages report on December 22, 2022, opining that the range of reasonably attributable damages, if any, was between $6.1 million and $11.3 million. (SS ¶ 53; Carmichael Decl., Ex. K [Ostrowski Report].) Expert depositions followed: Dr. Pryce was deposed on January 20, 2023, and Dr. Ostrowski was deposed on February 3, 2023. (SS ¶¶ 54–55.)
III. LEGAL STANDARD FOR SUMMARY JUDGMENT
A party may move for summary judgment or, in the alternative, summary adjudication of individual causes of action, affirmative defenses, or issues of duty, pursuant to California Code of Civil Procedure section 437c. See Cal. Civ. Proc. Code § 437c(a), (f)(1).
A defendant moving for summary judgment bears the initial burden of showing that one or more elements of the plaintiff's cause of action cannot be established, or that there is a complete defense to the cause of action. Cal. Civ. Proc. Code § 437c(p)(2); Meridian Commerce Bank v. Superior Court (1992) 2 Cal.4th 1254, 1261. A defendant may meet this burden by presenting evidence that negates an essential element of the plaintiff's claim, or by demonstrating that the plaintiff does not possess, and cannot reasonably obtain, evidence sufficient to establish a required element. Veltara Ins. Co. v. Superior Court (1993) 13 Cal.App.4th 1472, 1478.
Once the moving party has met its initial burden, the burden shifts to the opposing party to show, by admissible evidence, that a triable issue of one or more material facts exists as to the cause of action or defense. Cal. Civ. Proc. Code § 437c(p)(2). The opposing party "shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists." Id. A triable issue of material fact exists only if the evidence would permit a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion, in accordance with the applicable standard of proof. Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 383.
Summary adjudication of individual causes of action is available under section 437c(f)(1), which provides that a party may move for summary adjudication as to one or more causes of action within an action if the party contends that the cause of action has no merit or that there is no merit to a defense to the cause of action. The standards and procedures governing summary adjudication are the same as those governing summary judgment. Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 924.
In ruling on a motion for summary judgment or summary adjudication, the Court must consider all of the evidence set forth in the moving and opposing papers, except evidence to which objections have been made and sustained. The Court must view the evidence and draw all reasonable inferences in the light most favorable to the opposing party. However, the Court is not required to draw unreasonable or speculative inferences in favor of the non-moving party, and the non-moving party may not rely on conjecture, speculation, or unsupported conclusory assertions to demonstrate the existence of a triable issue. Scripps Clinic, supra, 108 Cal.App.4th at 924.
Cascade respectfully submits that it has met its burden of demonstrating that essential elements of Vantor's second and third causes of action cannot be established as a matter of law.
IV. ARGUMENT
A. The Second Cause of Action for Tortious Interference with Prospective Economic Advantage Fails as a Matter of Law
1. Elements of Tortious Interference with Prospective Economic Advantage Under California Law
Under California law, the elements of a cause of action for tortious interference with prospective economic advantage are well established. A plaintiff must prove each of the following five elements:
(a) An economic relationship between the plaintiff and a third party, with a probability of future economic benefit to the plaintiff;
(b) The defendant's knowledge of the relationship;
(c) Intentional acts on the part of the defendant designed to disrupt the relationship;
(d) Actual disruption of the relationship; and
(e) Economic harm to the plaintiff proximately caused by the defendant's wrongful acts.
Glenrock Corporation (2003) 29 Cal.4th 1134, 1153; della Penna v. Crowne Albany Industries (1995) 11 Cal.4th 376, 389–392.
This tort is critically distinct from its sibling — tortious interference with contractual relations — in one essential respect. In a claim for interference with an existing contract, a plaintiff need only show that the defendant's conduct was intentionally designed to induce a breach or disruption of the contract; there is no requirement that the defendant's means be independently wrongful. della Penna, supra, 11 Cal.4th at 392. By contrast, in a claim for interference with prospective economic advantage, the California Supreme Court has imposed the additional requirement that the defendant's conduct be "independently wrongful" — meaning "wrongful by some legal measure other than the fact of interference itself." Id. at 393.
The Supreme Court adopted this heightened requirement in della Penna after a thorough analysis of the policy considerations at stake. The Court recognized that "the legal protections against interference with a party's existing contract are considerably broader than those against interference with a party's mere expectation of future economic relations." Id. at 392. The reason is intuitive: existing contractual rights are vested interests that the law affords strong protection; mere expectations of future economic relationships, by contrast, exist in the competitive marketplace, where the law encourages — rather than restricts — rivalry among market participants. Without the independently wrongful conduct requirement, "the tort of interference with prospective advantage could become a handy vehicle for carrying out a competitive vendetta in the guise of a lawsuit." Id. at 393.
The Supreme Court elaborated on the independently wrongful conduct requirement in Korea Supply Co., explaining that it "refers to conduct that is itself actionable, e.g., conduct 'proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.'" Korea Supply Co., supra, 29 Cal.4th at 1159 (quoting della Penna, 11 Cal.4th at 393). The Court emphasized that "an act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." Id. In other words, the act must be "wrongful apart from the fact of interference itself." Id.; see also 5 Witkin, Summary of California Law (11th ed. 2023) Torts § 834.
Subsequent decisions have consistently reaffirmed this standard. In Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1152, the Supreme Court held that the independently wrongful conduct requirement was satisfied where the defendant law firm had engaged in "separately actionable" conduct — specifically, systematic raiding of employees through misrepresentation and breach of fiduciary duty. The Court made clear, however, that the tort could not rest on "mere competitive activity" alone. See also Westside Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 507, 527–528 (affirming dismissal of prospective economic advantage claim where defendant's conduct amounted to "legitimate business competition"); Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 122 (independently wrongful conduct requirement "acts as a gatekeeper" to prevent ordinary competitive behavior from being transformed into tort liability).
2. Vantor Cannot Establish Independently Wrongful Conduct
The independently wrongful conduct element is the dispositive issue on this motion. Vantor cannot satisfy it, and its second cause of action fails as a matter of law.
Vantor's complaint alleges, in substance, that Cascade "systematically poached" Vantor's suppliers — Hemsworth, Tridale, and Orion — by making competitive offers of higher purchase commitments, thereby inducing those suppliers to abandon their exclusive supply relationships with Vantor. (Complaint ¶¶ 47–63.) But this allegation, even taken at face value, describes nothing more than vigorous marketplace competition. It does not describe independently wrongful conduct.
The undisputed facts are straightforward. In each case, Cascade offered the supplier a materially superior annual purchase commitment:
•  Hemsworth: Cascade offered an annual commitment of $28.0 million, compared to Vantor's commitment of $12.5 million — a differential of $15.5 million, or 124% more than Vantor's commitment. (SS ¶¶ 12, 15.)
•  Tridale: Cascade offered an annual commitment of $19.5 million, compared to Vantor's commitment of $8.3 million — a differential of $11.2 million, or 135% more than Vantor's commitment. (SS ¶¶ 20, 23.)
•  Orion: Cascade offered an annual commitment of $31.0 million, compared to Vantor's commitment of $14.6 million — a differential of $16.4 million, or 112% more than Vantor's commitment. (SS ¶¶ 28, 31.)
In each instance, the supplier — an independent business entity acting in its own economic self-interest — independently decided to enter into a supply agreement with Cascade. In each instance, the existing Vantor agreement contained a termination-for-convenience clause that permitted the supplier to exit the Vantor relationship upon notice. And in each instance, the supplier communicated its intent to exercise its termination rights under the Vantor agreement before or contemporaneously with entering into the Cascade agreement. (SS ¶¶ 56–61.)
Offering a supplier more favorable commercial terms — more volume, a longer commitment, or a higher price — is not fraud. It is not a misrepresentation. It is not a threat. It is not coercion. It is not bribery. It is not a violation of any statute, regulation, or constitutional provision. It is competition. And competition, however injurious to a rival, is not independently wrongful conduct under California law. della Penna, supra, 11 Cal.4th at 393; Westside Center Associates, supra, 42 Cal.App.4th at 527–528.
Throughout this litigation, Vantor has been given every opportunity to uncover evidence of independently wrongful conduct. The discovery process was extensive and searching. Cascade produced 78,412 documents. The three supplier third parties produced an additional 23,567 documents. Three key fact witnesses were deposed at length. Fifteen additional supplier relationships were examined under the Court's August 3, 2022, order expanding discovery. Yet after all of this, Vantor has identified no evidence that Cascade engaged in any act that qualifies as independently wrongful under della Penna, Korea Supply Co., or their progeny. The absence of such evidence is fatal to the second cause of action.
3. The Undisputed Deposition Testimony Confirms the Absence of Independently Wrongful Conduct
The depositions of the three most relevant fact witnesses — Annika Bergström of Cascade, Thomas Brennecke of Vantor, and Lena Torvik of Cascade — uniformly confirm that Cascade's conduct was lawful competitive activity, devoid of any independently wrongful means.
a. Deposition of Annika Bergström (October 12, 2022).  Annika Bergström, Cascade's Vice President of Strategic Sourcing and the leader of Project Atlas, was deposed on October 12, 2022. Her testimony establishes the following undisputed facts:
Ms. Bergström testified that Project Atlas was designed to expand and diversify Cascade's supplier network across multiple product categories — specifically, home goods, consumer electronics accessories, and personal care — as part of a broader strategic initiative to strengthen Cascade's competitive position in those rapidly growing segments. She testified that Cascade's objective was to onboard approximately twenty-five new suppliers and that the outreach to Hemsworth, Tridale, and Orion was part of that broader initiative, not a targeted campaign against Vantor. (Carmichael Decl., Ex. H [Bergström Dep. Tr.] at 47:3–48:15, 52:8–53:12.)
Ms. Bergström testified unequivocally that she did not engage in any threats, coercion, fraud, or misrepresentation in her communications with any supplier, including Hemsworth, Tridale, and Orion. She stated that her team's approach to supplier outreach followed Cascade's standard competitive procurement processes, which involve identifying potential suppliers, initiating introductory communications, presenting Cascade's purchasing needs and capabilities, and negotiating mutually acceptable commercial terms. She testified that at no time did she or any member of her team direct, instruct, or encourage any supplier to breach its existing agreements with Vantor or any other party. (Bergström Dep. Tr. at 63:4–64:22, 71:10–72:18.)
Critically, Ms. Bergström testified that she was not aware of the specific exclusivity terms, termination provisions, or other contractual details of the Vantor agreements with Hemsworth, Tridale, or Orion at the time Cascade initiated negotiations with each supplier. She testified that her team's standard practice was to inquire generally about whether a potential supplier had existing obligations that might affect its ability to enter into a new agreement, and to allow the supplier to manage its own pre-existing contractual obligations. (Bergström Dep. Tr. at 78:3–79:17.)
With respect to the fourteen internal Project Atlas emails that referenced Vantor's supplier relationships, Ms. Bergström testified that those emails reflected standard competitive landscape analysis. She explained that when evaluating potential suppliers, it was routine for the Project Atlas team to note which suppliers had existing relationships with competitors, including Vantor, as part of the team's market intelligence gathering. She testified that none of the fourteen emails referenced specific contractual terms or exclusivity provisions in any Vantor agreement, and that the emails did not direct or encourage any action designed to interfere with Vantor's relationships. (Bergström Dep. Tr. at 84:7–86:24.)
b. Deposition of Thomas Brennecke (October 26, 2022).  Thomas Brennecke, Vantor's own Vice President of Supplier Relations, was deposed on October 26, 2022. Mr. Brennecke's testimony is particularly significant because it comes from the plaintiff's senior executive most directly responsible for managing the very supplier relationships at issue in this case.
Mr. Brennecke testified that he had no evidence that Cascade used any improper means — such as fraud, threats, bribery, or misrepresentation — to induce the three suppliers to enter into new agreements with Cascade. When asked directly whether he was aware of any fraudulent statement made by any Cascade representative to any of the three suppliers, he responded: "Not that I'm aware of." When asked whether he was aware of any threat made by Cascade to any supplier, he responded: "No." When asked whether he was aware of any bribe or improper financial inducement offered by Cascade, he responded: "No, nothing like that." (Carmichael Decl., Ex. I [Brennecke Dep. Tr.] at 112:8–113:21.)
Mr. Brennecke acknowledged that each of the three suppliers had independently decided to pursue a commercial relationship with Cascade. He testified that, based on his communications with the suppliers' representatives, the suppliers' decisions were driven by the substantially more favorable financial terms that Cascade had offered. He stated: "They were getting significantly more money from Cascade. I understood why they made the business decision they made. It's just — it hurt us." (Brennecke Dep. Tr. at 118:4–119:2.)
Mr. Brennecke further conceded that each supplier had communicated its intent to exercise its termination-for-convenience rights under its Vantor agreement before entering into its Cascade agreement. He testified that Hemsworth provided Vantor with a ninety-day termination notice, Tridale provided a sixty-day termination notice, and Orion provided a one-hundred-twenty-day termination notice — each in accordance with the applicable contractual requirements. (Brennecke Dep. Tr. at 124:15–126:8.)
Perhaps most significantly, Mr. Brennecke testified that Vantor's fundamental concern was with the competitive outcome — the loss of three valuable suppliers — rather than with any specific unlawful or tortious act by Cascade. When asked to describe the "wrongful conduct" by Cascade that formed the basis of Vantor's claims, he stated: "They went after our suppliers. They offered them more money. They took them from us." (Brennecke Dep. Tr. at 131:3–10.) When pressed further about what specific wrongful act Cascade committed, he stated: "I think the wrongfulness is in the systematic nature of it. They didn't just go after one supplier. They went after all three." (Brennecke Dep. Tr. at 131:14–19.) This testimony — from Vantor's own key witness — confirms that Vantor's claim rests on competitive conduct, not independently wrongful acts.
c. Deposition of Lena Torvik (November 18, 2022).  Lena Torvik, Cascade's Senior Vice President of Supply Chain and Procurement and the executive to whom Annika Bergström reported, was deposed on November 18, 2022.
Ms. Torvik testified regarding Cascade's standard supplier onboarding process and confirmed that Project Atlas followed Cascade's ordinary procurement protocols. She testified that Project Atlas was one of several concurrent strategic sourcing initiatives and that it was not conceived as a campaign to target Vantor or any other specific competitor's suppliers. (Carmichael Decl., Ex. J [Torvik Dep. Tr.] at 36:5–37:18.)
Ms. Torvik testified that Cascade's corporate policy was to refrain from directing suppliers to breach their existing agreements with other parties. She stated: "It's not our practice to tell a supplier to breach a contract. We present our business opportunity, and we expect suppliers to manage their own obligations. If they have a contract that prevents them from doing business with us, then we wait until they're available." (Torvik Dep. Tr. at 44:12–45:3.)
Ms. Torvik further testified that she was not aware of any instance in which any Cascade employee directed a supplier to breach its agreement with Vantor, made a fraudulent or misleading statement to a supplier, or engaged in any form of coercive conduct. She testified that the decision by Hemsworth, Tridale, and Orion to enter into agreements with Cascade was, in each case, a voluntary and independent business decision by the supplier. (Torvik Dep. Tr. at 52:7–53:19.)
No evidence in the deposition record contradicts the testimony of Ms. Bergström, Mr. Brennecke, or Ms. Torvik on these critical points.
4. The Documentary Record Confirms the Absence of Independently Wrongful Conduct
The documentary record — comprising 78,412 documents produced by Cascade, 41,308 documents produced by Vantor, and 23,567 documents produced by the three supplier third parties — is entirely consistent with the deposition testimony summarized above.
Among the more than 143,000 documents produced in this litigation, there is no evidence of:
(a) Any fraud or misrepresentation by Cascade to any supplier — whether Hemsworth, Tridale, Orion, or any of the fifteen additional suppliers examined under the Court's expanded discovery order;
(b) Any threat or coercive conduct directed by Cascade at any supplier;
(c) Any bribe, kickback, or other improper financial inducement offered by Cascade to any supplier;
(d) Any instruction, directive, or encouragement from Cascade to any supplier to breach its agreements with Vantor;
(e) Any violation of any statute, regulation, or other legal standard by Cascade in connection with its supplier outreach; or
(f) Any other conduct by Cascade that is independently actionable under any constitutional, statutory, regulatory, common law, or other determinable legal standard.
(SS ¶¶ 62–67.)
The fourteen internal Project Atlas emails that specifically reference Vantor's existing supplier relationships — the only documents in the entire production that even mention Vantor in connection with the three suppliers at issue — reflect standard competitive intelligence gathering and market analysis. A representative sample of these emails has been lodged with the Court. (Carmichael Decl., Ex. G.) The emails contain notations such as "Hemsworth currently supplies Vantor — home goods category — potential opportunity for Atlas" and "Tridale has existing relationship with Vantor, consumer electronics accessories — market analysis suggests room for competitive offer." None of the fourteen emails contains any direction, instruction, or encouragement to induce a breach of any Vantor agreement. None references any specific contractual terms — whether exclusivity provisions, termination clauses, or otherwise — in any Vantor agreement. None proposes or contemplates any improper means of securing a supplier relationship. (SS ¶¶ 39–41.)
In short, the documentary record confirms what the deposition testimony establishes: Cascade engaged in lawful competitive activity. It identified potential suppliers, made competitive offers, and allowed the suppliers to make their own business decisions. Nothing in the documentary record rises to the level of independently wrongful conduct as required under della Penna and Korea Supply Co.
5. Legitimate Competition Is Not Independently Wrongful Conduct
The foregoing evidentiary record compels a single conclusion: Cascade engaged in legitimate competitive conduct by offering Hemsworth, Tridale, and Orion superior commercial terms, and each supplier independently chose to enter into a supply relationship with Cascade. Under well-established California law, this conduct is not independently wrongful and cannot support a claim for tortious interference with prospective economic advantage.
The California Supreme Court has recognized that the tort of interference with prospective economic advantage must be applied with particular care in the context of competitive business relationships. In della Penna, the Court cautioned that "the world of commerce would be a sorry place if competitors were free to sue one another whenever one gained a commercial advantage at the expense of another." 11 Cal.4th at 392. The independently wrongful conduct requirement exists precisely to "draw a bright line" between actionable interference and "the damage that is the ordinary byproduct of competitive business operations." Id. at 393.
The Restatement (Second) of Torts, which the Court found persuasive in della Penna, likewise recognizes the competition privilege. Section 768 of the Restatement provides that "[o]ne who intentionally causes a third person not to enter into a prospective contractual relation with another who is his competitor ... does not interfere improperly with the other's relation if (a) the relation concerns a matter involved in the competition between the actor and the other and (b) the actor does not employ wrongful means." Restatement (Second) of Torts § 768(1) (1979). The comment to section 768 explains that "wrongful means" include "physical violence, fraud, civil suits and criminal prosecutions," but do not include "persuasion alone" or the offering of "more favorable business terms." Id. cmt. e.
California courts have consistently applied these principles to dismiss claims for interference with prospective economic advantage where the alleged conduct amounted to nothing more than competitive activity. In Westside Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 507, the Court of Appeal affirmed dismissal of a prospective economic advantage claim where the defendant's conduct consisted of entering into a competing lease arrangement. The court held that such competitive conduct was not independently wrongful and could not sustain the claim, even though it resulted in economic harm to the plaintiff. Id. at 527–528.
In Korea Supply Co., the Supreme Court further clarified the boundaries of the tort, holding that the independently wrongful conduct requirement is "not satisfied by a showing that a defendant's conduct was merely 'unfair' or 'improper' in the colloquial sense." 29 Cal.4th at 1159. The Court explained that the requirement "acts as a check against potentially boundless liability" and ensures that tort law does not "deter legitimate competitive practices." Id. As the Court stated: "Competition inevitably produces winners and losers. The losing competitor cannot transform its loss into a tort merely by alleging that the winner's competitive conduct was 'unfair.'" Id.
The Court of Appeal has likewise held that the tort requires more than evidence of aggressive — even ruthless — competitive conduct. In Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, the court held that a competitor's systematic efforts to recruit the plaintiff's employees and secure its client relationships did not constitute independently wrongful conduct where the means employed — offering superior compensation and business terms — were lawful. Id. at 122. The court observed that "[t]he independently wrongful act requirement serves as a necessary gatekeeper to ensure that the tort does not sweep in ordinary competitive behavior that may be disagreeable to a plaintiff but does not transgress any legal boundary." Id.
In Reeves v. Hanlon (2004) 33 Cal.4th 1140, the Supreme Court emphasized that independently wrongful conduct must be independently actionable — meaning that the conduct must give rise to a cause of action in its own right, apart from the interference claim. Id. at 1152–1153. The Court found independently wrongful conduct where the defendant had engaged in "systematic raiding" of employees through misrepresentation and breach of fiduciary duty. Id. at 1153. Critically, the Court noted that the independently wrongful acts in that case were "actionable in their own right" — they were "recognized torts." Id. Mere competitive overtures, without more, would not have sufficed.
In the present case, the contrast with Reeves is stark. There is no misrepresentation. There is no breach of fiduciary duty. There is no threat, no coercion, no bribery, no violation of statute. There is only the offering of superior commercial terms to suppliers in a competitive marketplace — precisely the kind of conduct that della Penna, Korea Supply Co., and their progeny have held is privileged and not independently wrongful.
The Supreme Court's articulation of the independently wrongful conduct standard in Voris v. Lampert (2019) 7 Cal.5th 1141, further reinforces this point. In Voris, the Court reaffirmed that "the independently wrongful conduct requirement serves an important function: it prevents the tort of interference with prospective economic advantage from becoming a catchall for any competitive harm suffered in the marketplace." Id. at 1155. The Court reiterated that the requirement "demands more than a showing that the defendant acted with the intent to gain a competitive advantage." Id.
Cascade's conduct — offering Hemsworth, Tridale, and Orion annual purchase commitments of $28.0 million, $19.5 million, and $31.0 million, respectively — is the paradigm of lawful competition. The undisputed evidence establishes that Cascade acted through ordinary commercial channels, following standard procurement processes, without resort to any wrongful means. Summary adjudication of the second cause of action is warranted.
6. Vantor's "Pattern and Practice" Theory Does Not Create Independently Wrongful Conduct
Cascade anticipates that Vantor may argue that even if Cascade's conduct with respect to each individual supplier was lawful standing alone, the "systematic targeting" of multiple Vantor suppliers — three of which are identified in the complaint, and up to eighteen of which were examined in discovery — creates a "pattern and practice" that itself constitutes independently wrongful conduct. This argument should be rejected.
The independently wrongful conduct requirement, as articulated in della Penna and Korea Supply Co., focuses on the nature and quality of the defendant's acts, not their frequency or volume. The relevant question is whether the defendant employed means that are "proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." Korea Supply Co., supra, 29 Cal.4th at 1159. If the acts are lawful — as offering superior commercial terms indisputably is — then repeating those acts ten or one hundred times does not transform them into independently wrongful conduct. One lawful act, multiplied, remains lawful.
This principle is well-grounded in precedent and policy. The California Supreme Court has consistently declined to hold that the volume or scope of competitive activity, standing alone, can satisfy the independently wrongful conduct requirement. In della Penna, the Court's analysis focused entirely on the character of the defendant's conduct, not the number of instances in which it occurred. See 11 Cal.4th at 392–393. In Korea Supply Co., the Court likewise examined the nature of the defendant's acts — finding independently wrongful conduct only because the acts constituted bribery of foreign officials, an independently actionable legal violation. 29 Cal.4th at 1159–1160. And in Reeves, the independently wrongful conduct consisted of specific, independently actionable torts — misrepresentation and breach of fiduciary duty — not merely a "pattern" of competitive activity. 33 Cal.4th at 1152–1153.
Moreover, the expanded discovery ordered by this Court on August 3, 2022, provided Vantor with a full opportunity to test its "pattern and practice" theory against the evidence. The Court's order permitted Vantor to explore Cascade's relationships with fifteen additional Vantor suppliers beyond the three identified in the complaint — for a total of eighteen supplier relationships subject to scrutiny. Despite this expanded discovery, Vantor has not identified independently wrongful conduct by Cascade in connection with any of the eighteen relationships examined. (SS ¶¶ 68–69.) The "pattern and practice" theory fails not merely as a matter of law, but as a matter of fact: there is no pattern or practice of wrongful conduct to be found.
The "pattern and practice" theory is, at bottom, a repackaging of Vantor's fundamental complaint — that Cascade competed aggressively and successfully for supplier relationships. But this Court should not allow artful pleading or creative labeling to circumvent the independently wrongful conduct requirement that the California Supreme Court deliberately imposed to protect legitimate competitive activity from tort liability. The second cause of action should be adjudicated in Cascade's favor.
B. The Third Cause of Action Under Cal. Bus. & Prof. Code § 17200 Fails as a Matter of Law
1. Overview of § 17200
California Business and Professions Code section 17200 defines "unfair competition" as "any unlawful, unfair or fraudulent business act or practice." The statute's coverage is stated in the disjunctive, meaning that a practice may be proscribed as "unfair" or "fraudulent" even if it is not "unlawful," and vice versa. Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.
However, while section 17200 sweeps broadly, it is not without limits. The statute does not create substantive liability ex nihilo. Rather, it provides a procedural vehicle for enforcing other legal standards and prohibitions. A section 17200 claim must be predicated on conduct that is independently actionable or violative of some underlying law, regulation, or public policy; it does not create a standalone cause of action for conduct that is otherwise lawful and does not transgress any other legal standard. See Cel-Tech, supra, 20 Cal.4th at 182–183; Levine v. Westvale Assurance of California (2010) 189 Cal.App.4th 1117, 1136.
Vantor's section 17200 claim fails under all three prongs of the statute.
2. The § 17200 Claim Is Entirely Derivative of the Tortious Interference Claims
As a threshold matter, Vantor's section 17200 claim is entirely duplicative of and derivative from the tortious interference claims that form the first and second causes of action. This alone warrants dismissal.
Vantor's complaint alleges no factual conduct in support of its section 17200 claim that is separate from or additional to the conduct alleged in connection with the tortious interference claims. A review of the complaint confirms this: Paragraphs 64 through 78 of the complaint, which set forth the section 17200 cause of action, incorporate by reference the same factual allegations that underlie the first and second causes of action and add no independent allegations of "unlawful," "unfair," or "fraudulent" conduct beyond the alleged tortious interference. The operative facts are identical across all three causes of action: Cascade's entry into supply agreements with Hemsworth, Tridale, and Orion.
Where a section 17200 claim is predicated entirely on the same facts and same alleged wrongful conduct as a companion tort claim, and adds no independent basis for liability, it should be dismissed as duplicative and superfluous. See Agosta v. Astor (2004) 120 Cal.App.4th 596, 603 (affirming dismissal of section 17200 claim that was "predicated on the same primary right" and "adds nothing to the other causes of action"); see also Camberwell Corporation (1998) 19 Cal.4th 26, 44 (section 17200 does not independently "provide additional remedies for conduct that is already fully addressed by other established causes of action"). Allowing a duplicative section 17200 claim to proceed to trial alongside the tort claims would serve no legitimate purpose and would risk confusion for the trier of fact and prejudice to Cascade.
Even setting aside the duplicative nature of the claim, however, each of the three prongs of section 17200 independently fails on the merits. The Court addresses each prong in turn.
3. The "Unlawful" Prong Is Not Satisfied
The "unlawful" prong of section 17200 "borrows" violations of other laws and treats them as independently actionable under the statute. Cel-Tech, supra, 20 Cal.4th at 180. "By proscribing 'any unlawful' business practice, section 17200 'borrows' violations of other laws and treats them as independently actionable." Id. (quoting Blank v. Kirwan (1985) 39 Cal.3d 311, 329).
To state a claim under the unlawful prong, a plaintiff must identify a predicate violation of some other law — whether a statute, regulation, constitutional provision, or other determinable legal standard — that the defendant's conduct transgressed. See National Rural Telecommunications Cooperative v. DIRECTV, Inc. (2004) 319 F.Supp.2d 1059, 1074 (C.D. Cal.) ("The 'unlawful' prong of [section] 17200 requires a plaintiff to identify a predicate statutory or regulatory violation.").
Vantor has identified no such violation. The complaint does not allege that Cascade violated any statute, regulation, or other legal standard in connection with its conduct. There is no allegation of antitrust violation, no allegation of trade secret misappropriation, no allegation of securities fraud, no allegation of violation of any industry-specific regulation, and no allegation of violation of any consumer protection statute. The tortious interference claims themselves — which are common law tort theories — do not constitute "statutory violations" that can serve as predicate violations under the unlawful prong. The unlawful prong requires a violation of an existing law, not a mere allegation of common law tort liability. Agosta, supra, 120 Cal.App.4th at 604.
Because Vantor has identified no predicate statutory or regulatory violation, the unlawful prong of section 17200 is not satisfied.
4. The "Unfair" Prong Is Not Satisfied
The "unfair" prong of section 17200 has been the subject of considerable judicial development, and the applicable standard differs depending on whether the action is brought by a consumer or by a competitor. In a non-consumer action — that is, an action brought by a business competitor, as this case is — the California Supreme Court in Cel-Tech Communications adopted a more restrictive standard for the "unfair" prong to avoid transforming the statute into a vehicle for litigating ordinary competitive disputes.
Under Cel-Tech, when a competitor brings an action under the "unfair" prong, the challenged practice must be "tethered to some legislatively declared policy or proof of some actual or threatened impact on competition." Cel-Tech, supra, 20 Cal.4th at 187. The Supreme Court explained that in the competitor context, an "unfair" practice is one that "threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition." Id. at 187.
This "tethering" requirement was adopted to prevent the unfair prong from becoming "a means of imposing an amorphous and unpredictable standard of business ethics on one competitor's challenge to the business practices of another." Id. at 184. As the Court observed: "An unfair business practice claim under section 17200 by one competitor against another should not be used merely to challenge the outcome of otherwise lawful competition." Id. at 186.
Some courts have alternatively applied a balancing test derived from the Federal Trade Commission's criteria, requiring that the alleged unfairness (a) be "substantial," (b) outweigh any countervailing benefits to consumers or competition, and (c) not be remediable by consumers or competitors through their own actions. See Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 839; Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 412. However, even under this alternative formulation, the result is the same.
Vantor's claim fails under either standard.
Under the Cel-Tech tethering requirement, Vantor cannot identify any legislatively declared policy that Cascade's conduct violated or threatened. There is no statute, regulation, or legislative enactment that prohibits a retailer from offering suppliers more favorable purchase commitments than a competitor. To the contrary, such conduct is the essence of a competitive market economy — the very thing that legislative policies supporting free competition are designed to encourage. There is no antitrust violation at issue; Cascade is not alleged to have engaged in price-fixing, market allocation, tying arrangements, predatory pricing, or any other conduct that implicates antitrust law. Vantor has not alleged, and cannot show, that Cascade's conduct "threatens an incipient violation of an antitrust law" or "significantly threatens or harms competition." Cel-Tech, supra, 20 Cal.4th at 187.
Under the alternative balancing test, the claim fares no better. The "substantial" injury that Vantor alleges — the loss of three supplier relationships — is the natural and ordinary result of marketplace competition, not of any unfair business practice. Vantor's suppliers were not locked into perpetual relationships with Vantor; each of the three agreements contained a termination-for-convenience clause, meaning the suppliers had the contractual right to exit at any time upon notice. Moreover, any harm to Vantor is easily counterbalanced by the benefits of the competitive dynamic that produced it — namely, the benefits to the suppliers of receiving substantially higher purchase commitments and to consumers of having goods distributed through a broader and more competitive retail network. Finally, the harm was eminently remediable by Vantor through its own competitive efforts: Vantor could have matched Cascade's offers, renegotiated its supplier agreements to include longer lock-up periods or higher purchase commitments, or sought alternative suppliers. The unfair prong does not exist to protect competitors from the consequences of their own competitive positioning. See Kestrel Indemnity Co. Casualty Insurance Co. of America v. Hirsh (N.D. Cal. 2016) 831 F.3d 1179, 1186 (applying California law and holding that a competitor cannot satisfy the unfair prong merely by showing that a rival's superior competitive position caused economic harm).
The "unfair" prong of section 17200 is not satisfied.
5. The "Fraudulent" Prong Is Not Satisfied
The "fraudulent" prong of section 17200 requires conduct that is "likely to deceive" members of the public. See Cel-Tech, supra, 20 Cal.4th at 180. A section 17200 claim based on the fraudulent prong requires a showing that the defendant's conduct was likely to mislead or deceive, even if it does not rise to the level of common law fraud. Lazar v. Superior Court (1996) 12 Cal.4th 631, 638; Lingsch v. Savage (1963) 213 Cal.App.2d 729, 735.
There is no evidence of any deceptive or misleading statement by Cascade — to any supplier, to Vantor, to the public, or to any other party. The undisputed deposition testimony of all three key fact witnesses confirms the absence of any fraud or misrepresentation:
•  Annika Bergström testified that she did not engage in any fraud or misrepresentation in her communications with suppliers. (Bergström Dep. Tr. at 63:4–64:22.)
•  Thomas Brennecke, Vantor's own VP of Supplier Relations, testified that he was not aware of any fraudulent statement made by any Cascade representative to any supplier. (Brennecke Dep. Tr. at 112:8–113:21.)
•  Lena Torvik testified that she was not aware of any instance in which any Cascade employee made a fraudulent or misleading statement to a supplier. (Torvik Dep. Tr. at 52:7–53:19.)
The documentary record — comprising more than 143,000 documents — is devoid of any evidence of fraud, misrepresentation, or deceptive conduct by Cascade. There are no false statements, no misleading communications, no deceptive pricing representations, no concealment of material facts — nothing that could support a finding that Cascade's conduct was "likely to deceive."
The "fraudulent" prong of section 17200 is not satisfied.
6. Even If the Tort Claims Survive, § 17200 Provides No Independent Relief and Should Be Dismissed
Even if Vantor were to prevail on its first cause of action for tortious interference with contractual relations — the only cause of action not subject to this motion — the section 17200 claim would still provide no independent relief and should be dismissed.
The remedies available under sectio

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

TABLE OF CONTENTS

TABLE OF AUTHORITIES

STATUTES

OTHER AUTHORITIES

I. INTRODUCTION

II. STATEMENT OF THE CASE

III. LEGAL STANDARD FOR SUMMARY JUDGMENT

IV. ARGUMENT

Record

Parties

Dates

Amounts