1038-00007 · Cascade Retail Holdings · Motions

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

Defendant Cascade Retail Holdings Inc. ("Cascade") respectfully submits this Separate Statement of Undisputed Material Facts pursuant to California Code of Civil Procedure § 437c(b)(1) and California Rules of Court, Rule 3.1350, in support of its concurrently filed Motion for Partial Summary Judgment on Plaintiff Vantor Holdings Corp.'s ("Vantor") Second Cause of Action (Tortious Interference with Prospective Economic Advantage) and Third Cause of Action (Unfair Business Practices under Cal. Bus. & Prof. Code § 17200). This Separate Statement is filed concurrently with Cascade's Notice of Motion and Motion for Partial Summary Judgment, Memorandum of Points and Authorities in Support Thereof, and the Declaration of Yuki Nakamura with accompanying exhibits.

Each material fact set forth herein is undisputed and is supported by citations to specific, admissible evidence in the record, including deposition transcripts, documentary exhibits, verified interrogatory responses, and expert reports produced during the course of discovery in this matter. Unless otherwise indicated, all cited deposition transcripts, exhibits, and discovery responses are attached to the concurrently filed Declaration of Yuki Nakamura.

I. FACTS REGARDING THE PARTIES

Undisputed Material Fact No. 1:

Cascade Retail Holdings Inc. is a corporation duly organized and existing under the laws of the State of Delaware, with its principal place of business located at 2200 Elliott Avenue West, Suite 1400, Seattle, Washington 98119. Cascade is publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHI." Cascade operates more than 340 retail locations across 22 states and maintains a major e-commerce platform that serves customers nationwide. For fiscal year 2021, Cascade reported annual revenues of approximately $6.8 billion.

Supporting Evidence: Cascade's Verified Responses to Vantor's First Set of Form Interrogatories (served May 20, 2022), Response to Interrogatory No. 1.1 (Nakamura Decl., Exh. 1); Cascade's Annual Report on Form 10-K for Fiscal Year Ended December 31, 2021 (Nakamura Decl., Exh. 2); Deposition of Raj Subramanian (Chief Financial Officer, Cascade) (November 2, 2022) at 14:3–16:22 (Nakamura Decl., Exh. 3).

Undisputed Material Fact No. 2:

Vantor Holdings Corp. is a corporation organized and existing under the laws of the State of California, with its principal place of business located at 18500 Von Karman Avenue, Suite 600, Irvine, California 92612. Vantor is a privately held wholesale distributor and specialty retailer that operates approximately 85 retail locations across four states: California, Arizona, Nevada, and Oregon. For fiscal year 2021, Vantor reported annual revenues of approximately $1.1 billion.

Supporting Evidence: Vantor's Complaint for Damages and Injunctive Relief (filed September 7, 2021) ("Complaint") at ¶¶ 1–3 (Nakamura Decl., Exh. 4); Vantor's Verified Responses to Cascade's First Set of Form Interrogatories (served June 17, 2022), Response to Interrogatory No. 1.1 (Nakamura Decl., Exh. 5); Deposition of Deborah Marcelino (Chief Financial Officer, Vantor) (November 9, 2022) at 11:8–13:14 (Nakamura Decl., Exh. 6).

Undisputed Material Fact No. 3:

The following individuals serve as key personnel of Cascade relevant to this action: (a) Margaret Prumvane serves as Chief Executive Officer and President of Cascade; (b) Lena Torvik serves as Senior Vice President of Supply Chain & Procurement; (c) Annika Bergström serves as Vice President of Strategic Sourcing and was the primary Cascade employee responsible for supplier outreach and engagement under the internal initiative known as "Project Atlas," which is discussed in detail below; and (d) David Pruitt serves as General Counsel and Corporate Secretary. Ms. Bergström reported directly to Ms. Torvik during the time period relevant to this action.

Supporting Evidence: Deposition of Annika Bergström (October 12, 2022) at 8:15–10:4, 22:7–23:19 (Nakamura Decl., Exh. 7); Deposition of Lena Torvik (November 18, 2022) at 9:2–11:17 (Nakamura Decl., Exh. 8).

Undisputed Material Fact No. 4:

The following individuals serve as key personnel of Vantor relevant to this action: (a) Richard "Rick" Ellsworth is the Founder and Chief Executive Officer of Vantor; and (b) Thomas Brennecke serves as Vice President of Supplier Relations and was the primary Vantor employee responsible for managing the three supplier relationships at issue in this litigation — namely, the relationships with Orion Lifestyle Brands Corp., Hemsworth Consumer Products LLC, and Tridale Manufacturing Inc.

Supporting Evidence: Deposition of Thomas Brennecke (October 26, 2022) at 7:11–9:8, 15:22–17:6 (Nakamura Decl., Exh. 9); Complaint at ¶¶ 8–10 (Nakamura Decl., Exh. 4).

II. FACTS REGARDING THE THREE EXCLUSIVE SUPPLY AGREEMENTS BETWEEN VANTOR AND THE SUPPLIERS

Undisputed Material Fact No. 5:

On or about July 1, 2018, Vantor and Orion Lifestyle Brands Corp. ("Orion"), a California corporation headquartered at 1900 Avenue of the Stars, Suite 1050, Los Angeles, California 90067, entered into a written exclusive supply agreement (the "Orion–Vantor Supply Agreement"). The Orion–Vantor Supply Agreement had a four-year term, commencing on July 1, 2018 and expiring on June 30, 2022. Under the terms of the agreement, Vantor was required to satisfy a minimum annual purchase commitment of $14.6 million in Orion products. Orion, whose Chief Executive Officer is Simone Alvarez, is a supplier of personal care and wellness products, including skin care items, bath accessories, and nutritional supplements.

Supporting Evidence: Orion–Vantor Supply Agreement, dated July 1, 2018 (attached as Exhibit A to Vantor's Complaint; also produced in third-party subpoena production, Bates Nos. ORION-000001 through ORION-000047) (Nakamura Decl., Exh. 10).

Undisputed Material Fact No. 6:

On or about March 15, 2019, Vantor and Hemsworth Consumer Products LLC ("Hemsworth"), an Oregon limited liability company headquartered at 4720 NW Yeon Avenue, Portland, Oregon 97210, entered into a written exclusive supply agreement (the "Hemsworth–Vantor Supply Agreement"). The Hemsworth–Vantor Supply Agreement had a three-year term, commencing on March 15, 2019 and expiring on March 14, 2022. Under the terms of the agreement, Vantor was required to satisfy a minimum annual purchase commitment of $12.5 million in Hemsworth products. Hemsworth, whose Chief Executive Officer is Janet Kohler, is a supplier of home goods and kitchen accessories, including cookware, small appliances, and decorative housewares.

Supporting Evidence: Hemsworth–Vantor Supply Agreement, dated March 15, 2019 (attached as Exhibit B to Vantor's Complaint; also produced in third-party subpoena production, Bates Nos. HEM-000001 through HEM-000039) (Nakamura Decl., Exh. 11).

Undisputed Material Fact No. 7:

On or about January 10, 2020, Vantor and Tridale Manufacturing Inc. ("Tridale"), a Nevada corporation headquartered at 6300 South Pecos Road, Suite 210, Las Vegas, Nevada 89120, entered into a written exclusive supply agreement (the "Tridale–Vantor Supply Agreement"). The Tridale–Vantor Supply Agreement had a two-year term, commencing on January 10, 2020 and expiring on January 9, 2022. Under the terms of the agreement, Vantor was required to satisfy a minimum annual purchase commitment of $8.3 million in Tridale products. Tridale, whose President is Gregory Fontaine, is a supplier of consumer electronics accessories, including cables, chargers, and protective cases for electronic devices.

Supporting Evidence: Tridale–Vantor Supply Agreement, dated January 10, 2020 (attached as Exhibit C to Vantor's Complaint; also produced in third-party subpoena production, Bates Nos. TRI-000001 through TRI-000032) (Nakamura Decl., Exh. 12).

III. FACTS REGARDING TERMINATION-FOR-CONVENIENCE CLAUSES

Undisputed Material Fact No. 8:

The Hemsworth–Vantor Supply Agreement contained a termination-for-convenience clause, set forth in Section 12.3 of that agreement, which permitted either party to terminate the agreement upon ninety (90) days' prior written notice to the other party, without cause and without the payment of any termination fee or penalty. This provision was mutual, affording both Vantor and Hemsworth the unilateral right to terminate the agreement at any time during the contract term, provided that the requisite notice period was satisfied.

Supporting Evidence: Hemsworth–Vantor Supply Agreement, Section 12.3 (Exhibit B to Vantor's Complaint, Bates No. HEM-000018) (Nakamura Decl., Exh. 11); Deposition of Janet Kohler (September 21, 2022) at 34:16–36:9 (Nakamura Decl., Exh. 13).

Undisputed Material Fact No. 9:

The Tridale–Vantor Supply Agreement contained a termination-for-convenience clause, set forth in Section 11.2 of that agreement, which permitted either party to terminate the agreement upon sixty (60) days' prior written notice to the other party, without cause and without the payment of any termination fee or penalty. Like the Hemsworth–Vantor agreement, this provision was mutual, affording both Vantor and Tridale the unilateral right to terminate the agreement at any time during the contract term, subject to the requisite notice period.

Supporting Evidence: Tridale–Vantor Supply Agreement, Section 11.2 (Exhibit C to Vantor's Complaint, Bates No. TRI-000015) (Nakamura Decl., Exh. 12); Deposition of Gregory Fontaine (October 5, 2022) at 28:11–30:22 (Nakamura Decl., Exh. 14).

Undisputed Material Fact No. 10:

The Orion–Vantor Supply Agreement contained a termination-for-convenience clause, set forth in Section 14.4 of that agreement, which permitted either party to terminate the agreement upon one hundred twenty (120) days' prior written notice to the other party, without cause and without the payment of any termination fee or penalty. As with the other two supply agreements at issue, this provision was mutual, affording both Vantor and Orion the unilateral right to terminate the agreement at any time during the contract term, provided that the requisite notice period was satisfied.

Supporting Evidence: Orion–Vantor Supply Agreement, Section 14.4 (Exhibit A to Vantor's Complaint, Bates No. ORION-000022) (Nakamura Decl., Exh. 10); Deposition of Simone Alvarez (September 28, 2022) at 41:3–43:18 (Nakamura Decl., Exh. 15).

Undisputed Material Fact No. 11:

Each of the three suppliers — Hemsworth, Tridale, and Orion — exercised its termination-for-convenience clause and provided the contractually required written notice to Vantor prior to entering into new supply agreements with Cascade. Specifically, Hemsworth provided its 90-day termination notice to Vantor on or about May 28, 2021; Tridale provided its 60-day termination notice to Vantor on or about August 10, 2021; and Orion provided its 120-day termination notice to Vantor on or about May 5, 2021. Thomas Brennecke, Vantor's Vice President of Supplier Relations, confirmed at his October 26, 2022 deposition that Vantor received termination notices from all three suppliers and that, at the time of receipt, he understood that each supplier was exercising its contractual right to terminate for convenience.

Supporting Evidence: Deposition of Thomas Brennecke (October 26, 2022) at 78:14–82:3, 96:7–99:21 (Nakamura Decl., Exh. 9); Hemsworth's termination notice, dated May 28, 2021 (Bates No. HEM-000035) (Nakamura Decl., Exh. 16); Tridale's termination notice, dated August 10, 2021 (Bates No. TRI-000029) (Nakamura Decl., Exh. 17); Orion's termination notice, dated May 5, 2021 (Bates No. ORION-000041) (Nakamura Decl., Exh. 18); Deposition of Janet Kohler at 52:8–54:14 (Nakamura Decl., Exh. 13); Deposition of Gregory Fontaine at 44:17–46:9 (Nakamura Decl., Exh. 14); Deposition of Simone Alvarez at 59:2–61:20 (Nakamura Decl., Exh. 15).

IV. FACTS REGARDING PROJECT ATLAS AND CASCADE'S SUPPLIER OUTREACH

Undisputed Material Fact No. 12:

In February 2021, Cascade launched an internal strategic initiative known as "Project Atlas," the purpose of which was to diversify and strengthen Cascade's supplier network, with a particular focus on the home goods, consumer electronics accessories, and personal care product categories. Project Atlas was led by Annika Bergström, Cascade's Vice President of Strategic Sourcing, who reported directly to Lena Torvik, Cascade's Senior Vice President of Supply Chain & Procurement. The initiative was conceived and approved by Cascade's executive leadership team in late January 2021 as part of Cascade's broader post-pandemic supply chain resilience strategy. Cascade allocated a total budget of $4.2 million for supplier transition costs under Project Atlas, encompassing vendor onboarding, quality assurance testing, logistics integration, and related expenses.

Supporting Evidence: Deposition of Annika Bergström (October 12, 2022) at 31:5–37:22, 42:14–48:9 (Nakamura Decl., Exh. 7); Deposition of Lena Torvik (November 18, 2022) at 19:8–25:17, 28:3–31:14 (Nakamura Decl., Exh. 8); Project Atlas Planning Documents, including Project Charter (dated February 3, 2021), Budget Approval Memorandum (dated February 12, 2021), and Supplier Outreach Strategy Deck (dated February 18, 2021) (Cascade production, Bates Nos. CRH-014201 through CRH-014289) (Nakamura Decl., Exh. 19).

Undisputed Material Fact No. 13:

Project Atlas was designed to identify and onboard approximately 25 new suppliers across multiple product categories as part of a company-wide diversification effort. The initiative was not targeted at Vantor or at Vantor's specific supplier relationships. During the course of discovery, Cascade collected and processed internal electronic communications relating to Project Atlas. A total of 2,847 internal Cascade emails related to Project Atlas were reviewed during discovery. Of those 2,847 emails, only 14 contained any reference whatsoever to Vantor or to any of Vantor's existing supplier relationships. The forensic review and search term analysis was performed by Krane Investigations LLC, the independent e-discovery vendor retained by Cascade.

Supporting Evidence: Deposition of Annika Bergström at 53:11–56:8, 62:4–64:19 (Nakamura Decl., Exh. 7); Deposition of Lena Torvik at 34:6–38:22 (Nakamura Decl., Exh. 8); Krane Investigations LLC Search Term Hit Report and Statistical Summary (dated July 22, 2022) (Nakamura Decl., Exh. 20); discovery Production Records and Privilege Log (Nakamura Decl., Exh. 21).

Undisputed Material Fact No. 14:

None of the 14 internal Project Atlas emails that reference Vantor or Vantor's supplier relationships demonstrates actual knowledge by any Cascade employee of the specific exclusivity provisions, minimum purchase commitments, contract terms, or contract durations contained in the Vantor–Hemsworth, Vantor–Tridale, or Vantor–Orion supply agreements. The 14 emails reference Vantor only in the context of general competitive landscape analysis — for example, identifying Vantor as a competitor that carried certain product lines — and do not discuss, reference, or evidence awareness of the existence of exclusive supply terms between Vantor and any of the three suppliers at issue. Ms. Bergström confirmed at her deposition that she reviewed these emails and that none of them reflects any awareness on Cascade's part that the three suppliers were bound by exclusive supply agreements with Vantor.

Supporting Evidence: The 14 Project Atlas emails referencing Vantor (Cascade production, Bates Nos. CRH-018742 through CRH-018755) (Nakamura Decl., Exh. 22); Deposition of Annika Bergström at 71:9–78:3 (Nakamura Decl., Exh. 7).

V. FACTS REGARDING THE THREE CASCADE–SUPPLIER AGREEMENTS

Undisputed Material Fact No. 15:

On or about May 10, 2021, Cascade and Orion Lifestyle Brands Corp. entered into a supply agreement (the "Cascade–Orion Supply Agreement") with a four-year term and an annual purchase commitment by Cascade of $31.0 million, representing an increase of approximately 112% over Vantor's annual purchase commitment to Orion of $14.6 million under the Orion–Vantor Supply Agreement. At the time the Cascade–Orion Supply Agreement was executed, the Orion–Vantor Supply Agreement (which had been executed on July 1, 2018, for a four-year term expiring June 30, 2022) had approximately 13 months remaining on its contractual term.

Supporting Evidence: Cascade–Orion Supply Agreement, dated May 10, 2021 (Cascade production, Bates Nos. CRH-021304 through CRH-021351) (Nakamura Decl., Exh. 23); Orion–Vantor Supply Agreement (Exhibit A to Vantor's Complaint) (Nakamura Decl., Exh. 10).

Undisputed Material Fact No. 16:

On or about June 1, 2021, Cascade and Hemsworth Consumer Products LLC entered into a supply agreement (the "Cascade–Hemsworth Supply Agreement") with a five-year term and an annual purchase commitment by Cascade of $28.0 million, representing an increase of approximately 124% over Vantor's annual purchase commitment to Hemsworth of $12.5 million under the Hemsworth–Vantor Supply Agreement. At the time the Cascade–Hemsworth Supply Agreement was executed, the Hemsworth–Vantor Supply Agreement (which had been executed on March 15, 2019, for a three-year term expiring March 14, 2022) had approximately nine months remaining on its contractual term.

Supporting Evidence: Cascade–Hemsworth Supply Agreement, dated June 1, 2021 (Cascade production, Bates Nos. CRH-022107 through CRH-022158) (Nakamura Decl., Exh. 24); Hemsworth–Vantor Supply Agreement (Exhibit B to Vantor's Complaint) (Nakamura Decl., Exh. 11).

Undisputed Material Fact No. 17:

On or about August 15, 2021, Cascade and Tridale Manufacturing Inc. entered into a supply agreement (the "Cascade–Tridale Supply Agreement") with a three-year term and an annual purchase commitment by Cascade of $19.5 million, representing an increase of approximately 135% over Vantor's annual purchase commitment to Tridale of $8.3 million under the Tridale–Vantor Supply Agreement. At the time the Cascade–Tridale Supply Agreement was executed, the Tridale–Vantor Supply Agreement (which had been executed on January 10, 2020, for a two-year term expiring January 9, 2022) had approximately five months remaining on its contractual term.

Supporting Evidence: Cascade–Tridale Supply Agreement, dated August 15, 2021 (Cascade production, Bates Nos. CRH-023415 through CRH-023462) (Nakamura Decl., Exh. 25); Tridale–Vantor Supply Agreement (Exhibit C to Vantor's Complaint) (Nakamura Decl., Exh. 12).

VI. FACTS REGARDING CASCADE'S LACK OF KNOWLEDGE OF EXCLUSIVITY PROVISIONS

Undisputed Material Fact No. 18:

At the time Cascade entered into its supply agreements with Orion (May 10, 2021), Hemsworth (June 1, 2021), and Tridale (August 15, 2021), no person employed by or acting on behalf of Cascade had actual knowledge of the exclusivity provisions contained in the Vantor–Orion, Vantor–Hemsworth, or Vantor–Tridale supply agreements. Annika Bergström, the Cascade employee who led the negotiations with all three suppliers on behalf of Cascade, testified at her October 12, 2022 deposition that she was not aware, at the time she negotiated and executed the Cascade supply agreements, that any of the three suppliers had exclusive supply agreements with Vantor or with any other retailer. Lena Torvik, Ms. Bergström's direct supervisor and the executive with overall responsibility for supply chain and procurement at Cascade, corroborated this testimony at her November 18, 2022 deposition, confirming that she had no knowledge of any exclusivity arrangements between the three suppliers and Vantor at any time prior to Cascade being served with Vantor's complaint in this action.

Supporting Evidence: Deposition of Annika Bergström at 84:2–89:17, 102:11–106:4 (Nakamura Decl., Exh. 7); Deposition of Lena Torvik at 52:8–57:14, 63:19–66:3 (Nakamura Decl., Exh. 8); Cascade's Verified Responses to Vantor's First Set of Special Interrogatories (served May 20, 2022), Response to Interrogatory No. 14 (Nakamura Decl., Exh. 26).

Undisputed Material Fact No. 19:

Janet Kohler, Chief Executive Officer of Hemsworth Consumer Products LLC, testified at her September 21, 2022 deposition that she did not disclose to Cascade the existence or terms of the Hemsworth–Vantor Supply Agreement during the course of Hemsworth's negotiations with Cascade. Gregory Fontaine, President of Tridale Manufacturing Inc., testified at his October 5, 2022 deposition that he did not disclose to Cascade the existence or terms of the Tridale–Vantor Supply Agreement during the course of Tridale's negotiations with Cascade. Simone Alvarez, Chief Executive Officer of Orion Lifestyle Brands Corp., testified at her September 28, 2022 deposition that she did not disclose to Cascade the existence or terms of the Orion–Vantor Supply Agreement during the course of Orion's negotiations with Cascade. Each of the three supplier witnesses confirmed that Cascade did not inquire about, and was not informed of, the exclusivity provisions in their respective agreements with Vantor.

Supporting Evidence: Deposition of Janet Kohler at 62:4–66:18 (Nakamura Decl., Exh. 13); Deposition of Gregory Fontaine at 51:9–55:22 (Nakamura Decl., Exh. 14); Deposition of Simone Alvarez at 71:14–76:8 (Nakamura Decl., Exh. 15).

VII. FACTS REGARDING SUPPLIERS' INDEPENDENT DECISION-MAKING

Undisputed Material Fact No. 20:

Each of the three suppliers — Hemsworth, Tridale, and Orion — independently decided to enter into supply agreements with Cascade based on commercially favorable terms that Cascade offered, including significantly higher annual purchase commitments than those contained in their respective agreements with Vantor. Specifically, Cascade offered Hemsworth an annual purchase commitment of $28.0 million compared to Vantor's commitment of $12.5 million (an increase of approximately 124%); Cascade offered Tridale an annual purchase commitment of $19.5 million compared to Vantor's commitment of $8.3 million (an increase of approximately 135%); and Cascade offered Orion an annual purchase commitment of $31.0 million compared to Vantor's commitment of $14.6 million (an increase of approximately 112%). All three supplier executives testified that the decision to contract with Cascade was driven by ordinary commercial considerations, including the substantially higher purchase volumes, Cascade's national retail footprint, and access to Cascade's e-commerce platform. No Cascade employee offered any improper inducement, kickback, exclusive dealing arrangement, or other improper means to persuade any of the three suppliers to terminate their agreements with Vantor or to enter into supply agreements with Cascade.

Supporting Evidence: Deposition of Janet Kohler at 72:3–78:19 (Nakamura Decl., Exh. 13); Deposition of Gregory Fontaine at 61:8–67:14 (Nakamura Decl., Exh. 14); Deposition of Simone Alvarez at 82:5–89:11 (Nakamura Decl., Exh. 15); Cascade–Orion Supply Agreement (Nakamura Decl., Exh. 23); Cascade–Hemsworth Supply Agreement (Nakamura Decl., Exh. 24); Cascade–Tridale Supply Agreement (Nakamura Decl., Exh. 25); Orion–Vantor Supply Agreement (Nakamura Decl., Exh. 10); Hemsworth–Vantor Supply Agreement (Nakamura Decl., Exh. 11); Tridale–Vantor Supply Agreement (Nakamura Decl., Exh. 12).

VIII. FACTS REGARDING VANTOR'S DAMAGES CLAIMS

Undisputed Material Fact No. 21:

In this action, Vantor claims total damages of $87.4 million arising from the loss of the three supplier relationships at issue. This damages figure is comprised of three components: (a) $34.2 million in alleged lost profits from the Hemsworth relationship, calculated based on a projected five-year revenue stream discounted to present value at a rate of 8.5%; (b) $22.8 million in alleged lost profits from the Tridale relationship, calculated based on a projected four-year revenue stream discounted to present value at a rate of 8.5%; and (c) $30.4 million in alleged lost profits from the Orion relationship, calculated based on a projected six-year revenue stream discounted to present value at a rate of 8.5%. Vantor's damages calculation was prepared by its retained expert, Dr. Harold Pryce of Meridian Forensic Economics LLC. Dr. Pryce's expert report was served on Cascade on December 9, 2022.

Supporting Evidence: Expert Report of Dr. Harold Pryce, Meridian Forensic Economics LLC (dated December 9, 2022), at pp. 14–31 (Nakamura Decl., Exh. 27); Complaint at ¶¶ 48–52 (Nakamura Decl., Exh. 4).

Undisputed Material Fact No. 22:

Cascade's retained expert, Dr. Vivian Ostrowski of Archer & Colvin Consulting Group, prepared a rebuttal expert report served on Vantor on December 22, 2022. Dr. Ostrowski opines that Vantor's actual provable damages, assuming liability were to be established (which Cascade disputes), fall within the range of $6.1 million to $11.3 million. Dr. Ostrowski's analysis limits recoverable damages to the remaining exclusive contract terms that were in effect at the time of the alleged interference by Cascade, calculated as follows: (a) for the Hemsworth relationship, approximately nine months of remaining contract term, yielding estimated damages of $2.8 million to $4.9 million; (b) for the Tridale relationship, approximately five months of remaining contract term, yielding estimated damages of $1.4 million to $2.7 million; and (c) for the Orion relationship, approximately thirteen months of remaining contract term, yielding estimated damages of $1.9 million to $3.7 million. Dr. Ostrowski's analysis further reduces these damage figures by an estimated 40% to 55% based on Vantor's failure to mitigate its damages by seeking and securing alternative suppliers for the product categories at issue within a commercially reasonable time frame.

Supporting Evidence: Expert Report of Dr. Vivian Ostrowski, Archer & Colvin Consulting Group (dated December 22, 2022), at pp. 8–24 (Nakamura Decl., Exh. 28); Deposition of Dr. Vivian Ostrowski (February 3, 2023) at 22:7–38:14, 45:3–52:19 (Nakamura Decl., Exh. 29).

Undisputed Material Fact No. 23:

Following the termination of the Hemsworth, Tridale, and Orion supply relationships, Vantor did not undertake commercially reasonable efforts to identify and secure alternative suppliers for the personal care, home goods, and consumer electronics accessories product categories at issue. Thomas Brennecke, Vantor's Vice President of Supplier Relations, testified at his October 26, 2022 deposition that Vantor did not engage in a formal alternative supplier search until at least six months after the suppliers had terminated their agreements with Vantor. Mr. Brennecke further testified that, during this six-month period, Vantor did not issue requests for proposals, attend industry trade shows for the purpose of sourcing replacement suppliers, or engage a procurement consultant to assist in identifying alternative supply sources. Vantor's interrogatory responses confirm that no formal supplier replacement process was initiated until early 2022.

Supporting Evidence: Deposition of Thomas Brennecke at 112:4–119:17, 124:8–128:3 (Nakamura Decl., Exh. 9); Vantor's Verified Responses to Cascade's First Set of Special Interrogatories, Response to Interrogatory No. 22 (Nakamura Decl., Exh. 30).

IX. FACTS REGARDING THE § 17200 CLAIM

Undisputed Material Fact No. 24:

Vantor's Third Cause of Action, asserted under California Business and Professions Code § 17200 (the "Unfair Competition Law" or "UCL"), alleges unfair business practices based entirely on the same conduct that forms the basis of Vantor's First Cause of Action (intentional interference with contractual relations) and Second Cause of Action (tortious interference with prospective economic advantage). Vantor's complaint does not identify any statutory or regulatory violation independent of the tortious interference allegations. Vantor's complaint does not allege that Cascade engaged in any unlawful conduct apart from the alleged supplier poaching, does not allege any fraudulent representations made to consumers or the public, and does not identify any business practice by Cascade that is unfair within the meaning of the UCL independent of the interference claims. The UCL claim is, in all material respects, entirely derivative of the tortious interference causes of action.

Supporting Evidence: Complaint at ¶¶ 68–79 (Nakamura Decl., Exh. 4); Vantor's Verified Responses to Cascade's First Set of Special Interrogatories, Response to Interrogatory No. 28 (Nakamura Decl., Exh. 31).

Undisputed Material Fact No. 25:

With respect to the Second Cause of Action for tortious interference with prospective economic advantage, Vantor has not identified any independently wrongful conduct — that is, conduct that is wrongful by some legal measure other than the fact of the interference itself — committed by Cascade. Specifically, Vantor has not identified any evidence that Cascade engaged in fraud, misrepresentation, threats, intimidation, bribery, unfair trade practices, or any other independently wrongful act in connection with its outreach to and negotiations with Hemsworth, Tridale, or Orion. Vantor's opposition to discovery requests and the deposition testimony of Thomas Brennecke confirm that Vantor's prospective advantage claim rests exclusively on the same alleged supplier-poaching conduct that underlies the contractual interference claim — namely, that Cascade offered the three suppliers more favorable commercial terms and entered into supply agreements with them. The 14 internal Project Atlas emails that reference Vantor do not evidence any improper or independently wrongful conduct by any Cascade employee.

Supporting Evidence: Deposition of Thomas Brennecke at 134:8–141:22, 148:3–152:17 (Nakamura Decl., Exh. 9); Vantor's Verified Responses to Cascade's First Set of Special Interrogatories, Response to Interrogatory No. 19 (Nakamura Decl., Exh. 32); The 14 Project Atlas emails referencing Vantor (Cascade production, Bates Nos. CRH-018742 through CRH-018755) (Nakamura Decl., Exh. 22).

X. FACTS REGARDING THE PROCEDURAL HISTORY

Undisputed Material Fact No. 26:

Vantor filed its Complaint for Damages and Injunctive Relief on September 7, 2021 in the Superior Court of the State of California, County of Los Angeles, and this action was assigned Case No. 21STCV-34872. The complaint asserts three causes of action: (1) intentional interference with contractual relations; (2) tortious interference with prospective economic advantage; and (3) unfair business practices under California Business and Professions Code § 17200. Cascade was served with the summons and complaint on September 28, 2021, and timely filed its answer on October 28, 2021.

Supporting Evidence: Court docket (Nakamura Decl., Exh. 33); Proof of Service of Summons (filed October 1, 2021) (Nakamura Decl., Exh. 34); Cascade's Answer to Complaint (filed October 28, 2021) (Nakamura Decl., Exh. 35).

Undisputed Material Fact No. 27:

During the course of discovery in this action, Cascade collected a total of 452,316 documents from custodians and data sources, reviewed 198,740 documents for relevance and privilege, and produced 78,412 documents to Vantor. Vantor produced a total of 41,308 documents to Cascade. Third-party subpoena productions received from Hemsworth, Tridale, and Orion totaled 23,567 documents in the aggregate. A total of 14 depositions were taken during the discovery period — eight depositions noticed by Vantor and six depositions noticed by Cascade. Discovery was managed with the assistance of Krane Investigations LLC, which served as the independent e-discovery vendor for Cascade's document collection, processing, review, and production.

Supporting Evidence: Court orders regarding discovery (Nakamura Decl., Exh. 36); discovery production logs (Nakamura Decl., Exh. 37); Krane Investigations LLC production records and certification (Nakamura Decl., Exh. 38).

Undisputed Material Fact No. 28:

On August 3, 2022, the Court (Hon. Patricia L. Gutierrez) issued an order granting in part and denying in part Vantor's motion to compel, which had been filed on June 15, 2022 and which sought class-certification-style consolidated discovery across all of Cascade's supplier relationships nationwide. The Court limited expanded discovery to 15 additional supplier relationships beyond the three supplier relationships directly at issue in this action, for a total of 18 supplier relationships subject to discovery. The expanded discovery encompassed document productions and depositions of supplier representatives conducted between September and November 2022. The expanded discovery did not reveal any pattern of "supplier poaching" or any independently wrongful conduct by Cascade with respect to any of the 15 additional supplier relationships examined. No evidence of improper inducements, threats, misrepresentations, or other independently wrongful conduct was identified in the expanded discovery.

Supporting Evidence: Court's Order on Vantor's Motion to Compel (dated August 3, 2022) (Nakamura Decl., Exh. 39); Expanded discovery productions from additional suppliers (Nakamura Decl., Exhs. 40–42); Deposition testimony from expanded supplier discovery (September–November 2022) (Nakamura Decl., Exhs. 43–47).

CONCLUSION

Based on the foregoing undisputed material facts, Cascade respectfully submits that there is no triable issue of material fact with respect to Vantor's Second Cause of Action for tortious interference with prospective economic advantage or Vantor's Third Cause of Action for unfair business practices under California Business and Professions Code § 17200. The undisputed evidence demonstrates that: (a) each of the three supplier agreements contained mutual termination-for-convenience clauses that each supplier independently exercised; (b) Cascade did not have actual knowledge of the exclusivity provisions in Vantor's supplier agreements; (c) the suppliers independently chose to contract with Cascade based on commercially superior terms; (d) Cascade engaged in no independently wrongful conduct; and (e) Vantor's UCL claim is entirely derivative of the tortious interference claims and identifies no independent statutory or regulatory violation.

Cascade respectfully requests that the Court grant summary adjudication in Cascade's favor on Vantor's Second Cause of Action (Tortious Interference with Prospective Economic Advantage) and Third Cause of Action (Unfair Business Practices under Cal. Bus. & Prof. Code § 17200).

Dated: February 28, 2023

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Carmichael (SBN 187452) Partner Calderwood & Harkness LLP 600 South Grand Avenue, Suite 3200 Los Angeles, California 90071 Telephone: (213) 555-7400 Facsimile: (213) 555-7401

Email: dcarmichael@calderwoodharkness.com

Francesca Morano (SBN 214887) Partner

Yuki Nakamura (SBN 298134) Senior Associate

Carlos Espinoza (SBN 312456) Associate

Attorneys for Defendant Cascade Retail Holdings Inc.

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

I, Yuki Nakamura, declare as follows:

I am a citizen of the United States and am employed in the County of Los Angeles, State of California. I am over the age of eighteen years and am not a party to the within action. My business address is Calderwood & Harkness LLP, 600 South Grand Avenue, Suite 3200, Los Angeles, California 90071.

On February 28, 2023, I served the following document:

DEFENDANT CASCADE RETAIL HOLDINGS INC.'S SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT

on the interested parties in this action by transmitting a true copy via electronic service through the Court's approved electronic filing and service provider to the following persons at the electronic service addresses indicated below:

Martin Kessler (SBN 165203) Natalie Whitfield (SBN 201478) Jason Okafor (SBN 278941) Kessler, Brandt & Whitfield LLP 1999 Avenue of the Stars, Suite 2800 Los Angeles, California 90067 Telephone: (310) 555-3200

Email: mkessler@kbwlaw.com

Email: nwhitfield@kbwlaw.com

Email: jokafor@kbwlaw.com

Attorneys for Plaintiff Vantor Holdings Corp.

Diana Prescott (SBN 192644) Wortham & Adair LLP 611 West Sixth Street, Suite 2400 Los Angeles, California 90017 Telephone: (213) 555-6100

Email: dprescott@worthamadair.com

Local Counsel for Defendant Cascade Retail Holdings Inc.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on February 28, 2023, at Los Angeles, California.

________________________________________

Yuki Nakamura

VANTOR HOLDINGS CORP., a California corporation,	Case No. 21STCV-34872
Plaintiff,	DEFENDANT CASCADE RETAIL HOLDINGS INC.'S SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF 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]

CASCADE RETAIL HOLDINGS INC., a Delaware corporation,

Date: April 14, 2023

Defendant.

Dept.: 34

Judge: Hon. Patricia L. Gutierrez

Filed: February 28, 2023

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
Defendant Cascade Retail Holdings Inc. ("Cascade") respectfully submits this Separate Statement of Undisputed Material Facts pursuant to California Code of Civil Procedure § 437c(b)(1) and California Rules of Court, Rule 3.1350, in support of its concurrently filed Motion for Partial Summary Judgment on Plaintiff Vantor Holdings Corp.'s ("Vantor") Second Cause of Action (Tortious Interference with Prospective Economic Advantage) and Third Cause of Action (Unfair Business Practices under Cal. Bus. & Prof. Code § 17200). This Separate Statement is filed concurrently with Cascade's Notice of Motion and Motion for Partial Summary Judgment, Memorandum of Points and Authorities in Support Thereof, and the Declaration of Yuki Nakamura with accompanying exhibits.
Each material fact set forth herein is undisputed and is supported by citations to specific, admissible evidence in the record, including deposition transcripts, documentary exhibits, verified interrogatory responses, and expert reports produced during the course of discovery in this matter. Unless otherwise indicated, all cited deposition transcripts, exhibits, and discovery responses are attached to the concurrently filed Declaration of Yuki Nakamura.
I. FACTS REGARDING THE PARTIES
Undisputed Material Fact No. 1:
Cascade Retail Holdings Inc. is a corporation duly organized and existing under the laws of the State of Delaware, with its principal place of business located at 2200 Elliott Avenue West, Suite 1400, Seattle, Washington 98119. Cascade is publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHI." Cascade operates more than 340 retail locations across 22 states and maintains a major e-commerce platform that serves customers nationwide. For fiscal year 2021, Cascade reported annual revenues of approximately $6.8 billion.
Supporting Evidence: Cascade's Verified Responses to Vantor's First Set of Form Interrogatories (served May 20, 2022), Response to Interrogatory No. 1.1 (Nakamura Decl., Exh. 1); Cascade's Annual Report on Form 10-K for Fiscal Year Ended December 31, 2021 (Nakamura Decl., Exh. 2); Deposition of Raj Subramanian (Chief Financial Officer, Cascade) (November 2, 2022) at 14:3–16:22 (Nakamura Decl., Exh. 3).
Undisputed Material Fact No. 2:
Vantor Holdings Corp. is a corporation organized and existing under the laws of the State of California, with its principal place of business located at 18500 Von Karman Avenue, Suite 600, Irvine, California 92612. Vantor is a privately held wholesale distributor and specialty retailer that operates approximately 85 retail locations across four states: California, Arizona, Nevada, and Oregon. For fiscal year 2021, Vantor reported annual revenues of approximately $1.1 billion.
Supporting Evidence: Vantor's Complaint for Damages and Injunctive Relief (filed September 7, 2021) ("Complaint") at ¶¶ 1–3 (Nakamura Decl., Exh. 4); Vantor's Verified Responses to Cascade's First Set of Form Interrogatories (served June 17, 2022), Response to Interrogatory No. 1.1 (Nakamura Decl., Exh. 5); Deposition of Deborah Marcelino (Chief Financial Officer, Vantor) (November 9, 2022) at 11:8–13:14 (Nakamura Decl., Exh. 6).
Undisputed Material Fact No. 3:
The following individuals serve as key personnel of Cascade relevant to this action: (a) Margaret Prumvane serves as Chief Executive Officer and President of Cascade; (b) Lena Torvik serves as Senior Vice President of Supply Chain & Procurement; (c) Annika Bergström serves as Vice President of Strategic Sourcing and was the primary Cascade employee responsible for supplier outreach and engagement under the internal initiative known as "Project Atlas," which is discussed in detail below; and (d) David Pruitt serves as General Counsel and Corporate Secretary. Ms. Bergström reported directly to Ms. Torvik during the time period relevant to this action.
Supporting Evidence: Deposition of Annika Bergström (October 12, 2022) at 8:15–10:4, 22:7–23:19 (Nakamura Decl., Exh. 7); Deposition of Lena Torvik (November 18, 2022) at 9:2–11:17 (Nakamura Decl., Exh. 8).
Undisputed Material Fact No. 4:
The following individuals serve as key personnel of Vantor relevant to this action: (a) Richard "Rick" Ellsworth is the Founder and Chief Executive Officer of Vantor; and (b) Thomas Brennecke serves as Vice President of Supplier Relations and was the primary Vantor employee responsible for managing the three supplier relationships at issue in this litigation — namely, the relationships with Orion Lifestyle Brands Corp., Hemsworth Consumer Products LLC, and Tridale Manufacturing Inc.
Supporting Evidence: Deposition of Thomas Brennecke (October 26, 2022) at 7:11–9:8, 15:22–17:6 (Nakamura Decl., Exh. 9); Complaint at ¶¶ 8–10 (Nakamura Decl., Exh. 4).
II. FACTS REGARDING THE THREE EXCLUSIVE SUPPLY AGREEMENTS BETWEEN VANTOR AND THE SUPPLIERS
Undisputed Material Fact No. 5:
On or about July 1, 2018, Vantor and Orion Lifestyle Brands Corp. ("Orion"), a California corporation headquartered at 1900 Avenue of the Stars, Suite 1050, Los Angeles, California 90067, entered into a written exclusive supply agreement (the "Orion–Vantor Supply Agreement"). The Orion–Vantor Supply Agreement had a four-year term, commencing on July 1, 2018 and expiring on June 30, 2022. Under the terms of the agreement, Vantor was required to satisfy a minimum annual purchase commitment of $14.6 million in Orion products. Orion, whose Chief Executive Officer is Simone Alvarez, is a supplier of personal care and wellness products, including skin care items, bath accessories, and nutritional supplements.
Supporting Evidence: Orion–Vantor Supply Agreement, dated July 1, 2018 (attached as Exhibit A to Vantor's Complaint; also produced in third-party subpoena production, Bates Nos. ORION-000001 through ORION-000047) (Nakamura Decl., Exh. 10).
Undisputed Material Fact No. 6:
On or about March 15, 2019, Vantor and Hemsworth Consumer Products LLC ("Hemsworth"), an Oregon limited liability company headquartered at 4720 NW Yeon Avenue, Portland, Oregon 97210, entered into a written exclusive supply agreement (the "Hemsworth–Vantor Supply Agreement"). The Hemsworth–Vantor Supply Agreement had a three-year term, commencing on March 15, 2019 and expiring on March 14, 2022. Under the terms of the agreement, Vantor was required to satisfy a minimum annual purchase commitment of $12.5 million in Hemsworth products. Hemsworth, whose Chief Executive Officer is Janet Kohler, is a supplier of home goods and kitchen accessories, including cookware, small appliances, and decorative housewares.
Supporting Evidence: Hemsworth–Vantor Supply Agreement, dated March 15, 2019 (attached as Exhibit B to Vantor's Complaint; also produced in third-party subpoena production, Bates Nos. HEM-000001 through HEM-000039) (Nakamura Decl., Exh. 11).
Undisputed Material Fact No. 7:
On or about January 10, 2020, Vantor and Tridale Manufacturing Inc. ("Tridale"), a Nevada corporation headquartered at 6300 South Pecos Road, Suite 210, Las Vegas, Nevada 89120, entered into a written exclusive supply agreement (the "Tridale–Vantor Supply Agreement"). The Tridale–Vantor Supply Agreement had a two-year term, commencing on January 10, 2020 and expiring on January 9, 2022. Under the terms of the agreement, Vantor was required to satisfy a minimum annual purchase commitment of $8.3 million in Tridale products. Tridale, whose President is Gregory Fontaine, is a supplier of consumer electronics accessories, including cables, chargers, and protective cases for electronic devices.
Supporting Evidence: Tridale–Vantor Supply Agreement, dated January 10, 2020 (attached as Exhibit C to Vantor's Complaint; also produced in third-party subpoena production, Bates Nos. TRI-000001 through TRI-000032) (Nakamura Decl., Exh. 12).
III. FACTS REGARDING TERMINATION-FOR-CONVENIENCE CLAUSES
Undisputed Material Fact No. 8:
The Hemsworth–Vantor Supply Agreement contained a termination-for-convenience clause, set forth in Section 12.3 of that agreement, which permitted either party to terminate the agreement upon ninety (90) days' prior written notice to the other party, without cause and without the payment of any termination fee or penalty. This provision was mutual, affording both Vantor and Hemsworth the unilateral right to terminate the agreement at any time during the contract term, provided that the requisite notice period was satisfied.
Supporting Evidence: Hemsworth–Vantor Supply Agreement, Section 12.3 (Exhibit B to Vantor's Complaint, Bates No. HEM-000018) (Nakamura Decl., Exh. 11); Deposition of Janet Kohler (September 21, 2022) at 34:16–36:9 (Nakamura Decl., Exh. 13).
Undisputed Material Fact No. 9:
The Tridale–Vantor Supply Agreement contained a termination-for-convenience clause, set forth in Section 11.2 of that agreement, which permitted either party to terminate the agreement upon sixty (60) days' prior written notice to the other party, without cause and without the payment of any termination fee or penalty. Like the Hemsworth–Vantor agreement, this provision was mutual, affording both Vantor and Tridale the unilateral right to terminate the agreement at any time during the contract term, subject to the requisite notice period.
Supporting Evidence: Tridale–Vantor Supply Agreement, Section 11.2 (Exhibit C to Vantor's Complaint, Bates No. TRI-000015) (Nakamura Decl., Exh. 12); Deposition of Gregory Fontaine (October 5, 2022) at 28:11–30:22 (Nakamura Decl., Exh. 14).
Undisputed Material Fact No. 10:
The Orion–Vantor Supply Agreement contained a termination-for-convenience clause, set forth in Section 14.4 of that agreement, which permitted either party to terminate the agreement upon one hundred twenty (120) days' prior written notice to the other party, without cause and without the payment of any termination fee or penalty. As with the other two supply agreements at issue, this provision was mutual, affording both Vantor and Orion the unilateral right to terminate the agreement at any time during the contract term, provided that the requisite notice period was satisfied.
Supporting Evidence: Orion–Vantor Supply Agreement, Section 14.4 (Exhibit A to Vantor's Complaint, Bates No. ORION-000022) (Nakamura Decl., Exh. 10); Deposition of Simone Alvarez (September 28, 2022) at 41:3–43:18 (Nakamura Decl., Exh. 15).
Undisputed Material Fact No. 11:
Each of the three suppliers — Hemsworth, Tridale, and Orion — exercised its termination-for-convenience clause and provided the contractually required written notice to Vantor prior to entering into new supply agreements with Cascade. Specifically, Hemsworth provided its 90-day termination notice to Vantor on or about May 28, 2021; Tridale provided its 60-day termination notice to Vantor on or about August 10, 2021; and Orion provided its 120-day termination notice to Vantor on or about May 5, 2021. Thomas Brennecke, Vantor's Vice President of Supplier Relations, confirmed at his October 26, 2022 deposition that Vantor received termination notices from all three suppliers and that, at the time of receipt, he understood that each supplier was exercising its contractual right to terminate for convenience.
Supporting Evidence: Deposition of Thomas Brennecke (October 26, 2022) at 78:14–82:3, 96:7–99:21 (Nakamura Decl., Exh. 9); Hemsworth's termination notice, dated May 28, 2021 (Bates No. HEM-000035) (Nakamura Decl., Exh. 16); Tridale's termination notice, dated August 10, 2021 (Bates No. TRI-000029) (Nakamura Decl., Exh. 17); Orion's termination notice, dated May 5, 2021 (Bates No. ORION-000041) (Nakamura Decl., Exh. 18); Deposition of Janet Kohler at 52:8–54:14 (Nakamura Decl., Exh. 13); Deposition of Gregory Fontaine at 44:17–46:9 (Nakamura Decl., Exh. 14); Deposition of Simone Alvarez at 59:2–61:20 (Nakamura Decl., Exh. 15).
IV. FACTS REGARDING PROJECT ATLAS AND CASCADE'S SUPPLIER OUTREACH
Undisputed Material Fact No. 12:
In February 2021, Cascade launched an internal strategic initiative known as "Project Atlas," the purpose of which was to diversify and strengthen Cascade's supplier network, with a particular focus on the home goods, consumer electronics accessories, and personal care product categories. Project Atlas was led by Annika Bergström, Cascade's Vice President of Strategic Sourcing, who reported directly to Lena Torvik, Cascade's Senior Vice President of Supply Chain & Procurement. The initiative was conceived and approved by Cascade's executive leadership team in late January 2021 as part of Cascade's broader post-pandemic supply chain resilience strategy. Cascade allocated a total budget of $4.2 million for supplier transition costs under Project Atlas, encompassing vendor onboarding, quality assurance testing, logistics integration, and related expenses.
Supporting Evidence: Deposition of Annika Bergström (October 12, 2022) at 31:5–37:22, 42:14–48:9 (Nakamura Decl., Exh. 7); Deposition of Lena Torvik (November 18, 2022) at 19:8–25:17, 28:3–31:14 (Nakamura Decl., Exh. 8); Project Atlas Planning Documents, including Project Charter (dated February 3, 2021), Budget Approval Memorandum (dated February 12, 2021), and Supplier Outreach Strategy Deck (dated February 18, 2021) (Cascade production, Bates Nos. CRH-014201 through CRH-014289) (Nakamura Decl., Exh. 19).
Undisputed Material Fact No. 13:
Project Atlas was designed to identify and onboard approximately 25 new suppliers across multiple product categories as part of a company-wide diversification effort. The initiative was not targeted at Vantor or at Vantor's specific supplier relationships. During the course of discovery, Cascade collected and processed internal electronic communications relating to Project Atlas. A total of 2,847 internal Cascade emails related to Project Atlas were reviewed during discovery. Of those 2,847 emails, only 14 contained any reference whatsoever to Vantor or to any of Vantor's existing supplier relationships. The forensic review and search term analysis was performed by Krane Investigations LLC, the independent e-discovery vendor retained by Cascade.
Supporting Evidence: Deposition of Annika Bergström at 53:11–56:8, 62:4–64:19 (Nakamura Decl., Exh. 7); Deposition of Lena Torvik at 34:6–38:22 (Nakamura Decl., Exh. 8); Krane Investigations LLC Search Term Hit Report and Statistical Summary (dated July 22, 2022) (Nakamura Decl., Exh. 20); discovery Production Records and Privilege Log (Nakamura Decl., Exh. 21).
Undisputed Material Fact No. 14:
None of the 14 internal Project Atlas emails that reference Vantor or Vantor's supplier relationships demonstrates actual knowledge by any Cascade employee of the specific exclusivity provisions, minimum purchase commitments, contract terms, or contract durations contained in the Vantor–Hemsworth, Vantor–Tridale, or Vantor–Orion supply agreements. The 14 emails reference Vantor only in the context of general competitive landscape analysis — for example, identifying Vantor as a competitor that carried certain product lines — and do not discuss, reference, or evidence awareness of the existence of exclusive supply terms between Vantor and any of the three suppliers at issue. Ms. Bergström confirmed at her deposition that she reviewed these emails and that none of them reflects any awareness on Cascade's part that the three suppliers were bound by exclusive supply agreements with Vantor.
Supporting Evidence: The 14 Project Atlas emails referencing Vantor (Cascade production, Bates Nos. CRH-018742 through CRH-018755) (Nakamura Decl., Exh. 22); Deposition of Annika Bergström at 71:9–78:3 (Nakamura Decl., Exh. 7).
V. FACTS REGARDING THE THREE CASCADE–SUPPLIER AGREEMENTS
Undisputed Material Fact No. 15:
On or about May 10, 2021, Cascade and Orion Lifestyle Brands Corp. entered into a supply agreement (the "Cascade–Orion Supply Agreement") with a four-year term and an annual purchase commitment by Cascade of $31.0 million, representing an increase of approximately 112% over Vantor's annual purchase commitment to Orion of $14.6 million under the Orion–Vantor Supply Agreement. At the time the Cascade–Orion Supply Agreement was executed, the Orion–Vantor Supply Agreement (which had been executed on July 1, 2018, for a four-year term expiring June 30, 2022) had approximately 13 months remaining on its contractual term.
Supporting Evidence: Cascade–Orion Supply Agreement, dated May 10, 2021 (Cascade production, Bates Nos. CRH-021304 through CRH-021351) (Nakamura Decl., Exh. 23); Orion–Vantor Supply Agreement (Exhibit A to Vantor's Complaint) (Nakamura Decl., Exh. 10).
Undisputed Material Fact No. 16:
On or about June 1, 2021, Cascade and Hemsworth Consumer Products LLC entered into a supply agreement (the "Cascade–Hemsworth Supply Agreement") with a five-year term and an annual purchase commitment by Cascade of $28.0 million, representing an increase of approximately 124% over Vantor's annual purchase commitment to Hemsworth of $12.5 million under the Hemsworth–Vantor Supply Agreement. At the time the Cascade–Hemsworth Supply Agreement was executed, the Hemsworth–Vantor Supply Agreement (which had been executed on March 15, 2019, for a three-year term expiring March 14, 2022) had approximately nine months remaining on its contractual term.
Supporting Evidence: Cascade–Hemsworth Supply Agreement, dated June 1, 2021 (Cascade production, Bates Nos. CRH-022107 through CRH-022158) (Nakamura Decl., Exh. 24); Hemsworth–Vantor Supply Agreement (Exhibit B to Vantor's Complaint) (Nakamura Decl., Exh. 11).
Undisputed Material Fact No. 17:
On or about August 15, 2021, Cascade and Tridale Manufacturing Inc. entered into a supply agreement (the "Cascade–Tridale Supply Agreement") with a three-year term and an annual purchase commitment by Cascade of $19.5 million, representing an increase of approximately 135% over Vantor's annual purchase commitment to Tridale of $8.3 million under the Tridale–Vantor Supply Agreement. At the time the Cascade–Tridale Supply Agreement was executed, the Tridale–Vantor Supply Agreement (which had been executed on January 10, 2020, for a two-year term expiring January 9, 2022) had approximately five months remaining on its contractual term.
Supporting Evidence: Cascade–Tridale Supply Agreement, dated August 15, 2021 (Cascade production, Bates Nos. CRH-023415 through CRH-023462) (Nakamura Decl., Exh. 25); Tridale–Vantor Supply Agreement (Exhibit C to Vantor's Complaint) (Nakamura Decl., Exh. 12).
VI. FACTS REGARDING CASCADE'S LACK OF KNOWLEDGE OF EXCLUSIVITY PROVISIONS
Undisputed Material Fact No. 18:
At the time Cascade entered into its supply agreements with Orion (May 10, 2021), Hemsworth (June 1, 2021), and Tridale (August 15, 2021), no person employed by or acting on behalf of Cascade had actual knowledge of the exclusivity provisions contained in the Vantor–Orion, Vantor–Hemsworth, or Vantor–Tridale supply agreements. Annika Bergström, the Cascade employee who led the negotiations with all three suppliers on behalf of Cascade, testified at her October 12, 2022 deposition that she was not aware, at the time she negotiated and executed the Cascade supply agreements, that any of the three suppliers had exclusive supply agreements with Vantor or with any other retailer. Lena Torvik, Ms. Bergström's direct supervisor and the executive with overall responsibility for supply chain and procurement at Cascade, corroborated this testimony at her November 18, 2022 deposition, confirming that she had no knowledge of any exclusivity arrangements between the three suppliers and Vantor at any time prior to Cascade being served with Vantor's complaint in this action.
Supporting Evidence: Deposition of Annika Bergström at 84:2–89:17, 102:11–106:4 (Nakamura Decl., Exh. 7); Deposition of Lena Torvik at 52:8–57:14, 63:19–66:3 (Nakamura Decl., Exh. 8); Cascade's Verified Responses to Vantor's First Set of Special Interrogatories (served May 20, 2022), Response to Interrogatory No. 14 (Nakamura Decl., Exh. 26).
Undisputed Material Fact No. 19:
Janet Kohler, Chief Executive Officer of Hemsworth Consumer Products LLC, testified at her September 21, 2022 deposition that she did not disclose to Cascade the existence or terms of the Hemsworth–Vantor Supply Agreement during the course of Hemsworth's negotiations with Cascade. Gregory Fontaine, President of Tridale Manufacturing Inc., testified at his October 5, 2022 deposition that he did not disclose to Cascade the existence or terms of the Tridale–Vantor Supply Agreement during the course of Tridale's negotiations with Cascade. Simone Alvarez, Chief Executive Officer of Orion Lifestyle Brands Corp., testified at her September 28, 2022 deposition that she did not disclose to Cascade the existence or terms of the Orion–Vantor Supply Agreement during the course of Orion's negotiations with Cascade. Each of the three supplier witnesses confirmed that Cascade did not inquire about, and was not informed of, the exclusivity provisions in their respective agreements with Vantor.
Supporting Evidence: Deposition of Janet Kohler at 62:4–66:18 (Nakamura Decl., Exh. 13); Deposition of Gregory Fontaine at 51:9–55:22 (Nakamura Decl., Exh. 14); Deposition of Simone Alvarez at 71:14–76:8 (Nakamura Decl., Exh. 15).
VII. FACTS REGARDING SUPPLIERS' INDEPENDENT DECISION-MAKING
Undisputed Material Fact No. 20:
Each of the three suppliers — Hemsworth, Tridale, and Orion — independently decided to enter into supply agreements with Cascade based on commercially favorable terms that Cascade offered, including significantly higher annual purchase commitments than those contained in their respective agreements with Vantor. Specifically, Cascade offered Hemsworth an annual purchase commitment of $28.0 million compared to Vantor's commitment of $12.5 million (an increase of approximately 124%); Cascade offered Tridale an annual purchase commitment of $19.5 million compared to Vantor's commitment of $8.3 million (an increase of approximately 135%); and Cascade offered Orion an annual purchase commitment of $31.0 million compared to Vantor's commitment of $14.6 million (an increase of approximately 112%). All three supplier executives testified that the decision to contract with Cascade was driven by ordinary commercial considerations, including the substantially higher purchase volumes, Cascade's national retail footprint, and access to Cascade's e-commerce platform. No Cascade employee offered any improper inducement, kickback, exclusive dealing arrangement, or other improper means to persuade any of the three suppliers to terminate their agreements with Vantor or to enter into supply agreements with Cascade.
Supporting Evidence: Deposition of Janet Kohler at 72:3–78:19 (Nakamura Decl., Exh. 13); Deposition of Gregory Fontaine at 61:8–67:14 (Nakamura Decl., Exh. 14); Deposition of Simone Alvarez at 82:5–89:11 (Nakamura Decl., Exh. 15); Cascade–Orion Supply Agreement (Nakamura Decl., Exh. 23); Cascade–Hemsworth Supply Agreement (Nakamura Decl., Exh. 24); Cascade–Tridale Supply Agreement (Nakamura Decl., Exh. 25); Orion–Vantor Supply Agreement (Nakamura Decl., Exh. 10); Hemsworth–Vantor Supply Agreement (Nakamura Decl., Exh. 11); Tridale–Vantor Supply Agreement (Nakamura Decl., Exh. 12).
VIII. FACTS REGARDING VANTOR'S DAMAGES CLAIMS
Undisputed Material Fact No. 21:
In this action, Vantor claims total damages of $87.4 million arising from the loss of the three supplier relationships at issue. This damages figure is comprised of three components: (a) $34.2 million in alleged lost profits from the Hemsworth relationship, calculated based on a projected five-year revenue stream discounted to present value at a rate of 8.5%; (b) $22.8 million in alleged lost profits from the Tridale relationship, calculated based on a projected four-year revenue stream discounted to present value at a rate of 8.5%; and (c) $30.4 million in alleged lost profits from the Orion relationship, calculated based on a projected six-year revenue stream discounted to present value at a rate of 8.5%. Vantor's damages calculation was prepared by its retained expert, Dr. Harold Pryce of Meridian Forensic Economics LLC. Dr. Pryce's expert report was served on Cascade on December 9, 2022.
Supporting Evidence: Expert Report of Dr. Harold Pryce, Meridian Forensic Economics LLC (dated December 9, 2022), at pp. 14–31 (Nakamura Decl., Exh. 27); Complaint at ¶¶ 48–52 (Nakamura Decl., Exh. 4).
Undisputed Material Fact No. 22:
Cascade's retained expert, Dr. Vivian Ostrowski of Archer & Colvin Consulting Group, prepared a rebuttal expert report served on Vantor on December 22, 2022. Dr. Ostrowski opines that Vantor's actual provable damages, assuming liability were to be established (which Cascade disputes), fall within the range of $6.1 million to $11.3 million. Dr. Ostrowski's analysis limits recoverable damages to the remaining exclusive contract terms that were in effect at the time of the alleged interference by Cascade, calculated as follows: (a) for the Hemsworth relationship, approximately nine months of remaining contract term, yielding estimated damages of $2.8 million to $4.9 million; (b) for the Tridale relationship, approximately five months of remaining contract term, yielding estimated damages of $1.4 million to $2.7 million; and (c) for the Orion relationship, approximately thirteen months of remaining contract term, yielding estimated damages of $1.9 million to $3.7 million. Dr. Ostrowski's analysis further reduces these damage figures by an estimated 40% to 55% based on Vantor's failure to mitigate its damages by seeking and securing alternative suppliers for the product categories at issue within a commercially reasonable time frame.
Supporting Evidence: Expert Report of Dr. Vivian Ostrowski, Archer & Colvin Consulting Group (dated December 22, 2022), at pp. 8–24 (Nakamura Decl., Exh. 28); Deposition of Dr. Vivian Ostrowski (February 3, 2023) at 22:7–38:14, 45:3–52:19 (Nakamura Decl., Exh. 29).
Undisputed Material Fact No. 23:
Following the termination of the Hemsworth, Tridale, and Orion supply relationships, Vantor did not undertake commercially reasonable efforts to identify and secure alternative suppliers for the personal care, home goods, and consumer electronics accessories product categories at issue. Thomas Brennecke, Vantor's Vice President of Supplier Relations, testified at his October 26, 2022 deposition that Vantor did not engage in a formal alternative supplier search until at least six months after the suppliers had terminated their agreements with Vantor. Mr. Brennecke further testified that, during this six-month period, Vantor did not issue requests for proposals, attend industry trade shows for the purpose of sourcing replacement suppliers, or engage a procurement consultant to assist in identifying alternative supply sources. Vantor's interrogatory responses confirm that no formal supplier replacement process was initiated until early 2022.
Supporting Evidence: Deposition of Thomas Brennecke at 112:4–119:17, 124:8–128:3 (Nakamura Decl., Exh. 9); Vantor's Verified Responses to Cascade's First Set of Special Interrogatories, Response to Interrogatory No. 22 (Nakamura Decl., Exh. 30).
IX. FACTS REGARDING THE § 17200 CLAIM
Undisputed Material Fact No. 24:
Vantor's Third Cause of Action, asserted under California Business and Professions Code § 17200 (the "Unfair Competition Law" or "UCL"), alleges unfair business practices based entirely on the same conduct that forms the basis of Vantor's First Cause of Action (intentional interference with contractual relations) and Second Cause of Action (tortious interference with prospective economic advantage). Vantor's complaint does not identify any statutory or regulatory violation independent of the tortious interference allegations. Vantor's complaint does not allege that Cascade engaged in any unlawful conduct apart from the alleged supplier poaching, does not allege any fraudulent representations made to consumers or the public, and does not identify any business practice by Cascade that is unfair within the meaning of the UCL independent of the interference claims. The UCL claim is, in all material respects, entirely derivative of the tortious interference causes of action.
Supporting Evidence: Complaint at ¶¶ 68–79 (Nakamura Decl., Exh. 4); Vantor's Verified Responses to Cascade's First Set of Special Interrogatories, Response to Interrogatory No. 28 (Nakamura Decl., Exh. 31).
Undisputed Material Fact No. 25:
With respect to the Second Cause of Action for tortious interference with prospective economic advantage, Vantor has not identified any independently wrongful conduct — that is, conduct that is wrongful by some legal measure other than the fact of the interference itself — committed by Cascade. Specifically, Vantor has not identified any evidence that Cascade engaged in fraud, misrepresentation, threats, intimidation, bribery, unfair trade practices, or any other independently wrongful act in connection with its outreach to and negotiations with Hemsworth, Tridale, or Orion. Vantor's opposition to discovery requests and the deposition testimony of Thomas Brennecke confirm that Vantor's prospective advantage claim rests exclusively on the same alleged supplier-poaching conduct that underlies the contractual interference claim — namely, that Cascade offered the three suppliers more favorable commercial terms and entered into supply agreements with them. The 14 internal Project Atlas emails that reference Vantor do not evidence any improper or independently wrongful conduct by any Cascade employee.
Supporting Evidence: Deposition of Thomas Brennecke at 134:8–141:22, 148:3–152:17 (Nakamura Decl., Exh. 9); Vantor's Verified Responses to Cascade's First Set of Special Interrogatories, Response to Interrogatory No. 19 (Nakamura Decl., Exh. 32); The 14 Project Atlas emails referencing Vantor (Cascade production, Bates Nos. CRH-018742 through CRH-018755) (Nakamura Decl., Exh. 22).
X. FACTS REGARDING THE PROCEDURAL HISTORY
Undisputed Material Fact No. 26:
Vantor filed its Complaint for Damages and Injunctive Relief on September 7, 2021 in the Superior Court of the State of California, County of Los Angeles, and this action was assigned Case No. 21STCV-34872. The complaint asserts three causes of action: (1) intentional interference with contractual relations; (2) tortious interference with prospective economic advantage; and (3) unfair business practices under California Business and Professions Code § 17200. Cascade was served with the summons and complaint on September 28, 2021, and timely filed its answer on October 28, 2021.
Supporting Evidence: Court docket (Nakamura Decl., Exh. 33); Proof of Service of Summons (filed October 1, 2021) (Nakamura Decl., Exh. 34); Cascade's Answer to Complaint (filed October 28, 2021) (Nakamura Decl., Exh. 35).
Undisputed Material Fact No. 27:
During the course of discovery in this action, Cascade collected a total of 452,316 documents from custodians and data sources, reviewed 198,740 documents for relevance and privilege, and produced 78,412 documents to Vantor. Vantor produced a total of 41,308 documents to Cascade. Third-party subpoena productions received from Hemsworth, Tridale, and Orion totaled 23,567 documents in the aggregate. A total of 14 depositions were taken during the discovery period — eight depositions noticed by Vantor and six depositions noticed by Cascade. Discovery was managed with the assistance of Krane Investigations LLC, which served as the independent e-discovery vendor for Cascade's document collection, processing, review, and production.
Supporting Evidence: Court orders regarding discovery (Nakamura Decl., Exh. 36); discovery production logs (Nakamura Decl., Exh. 37); Krane Investigations LLC production records and certification (Nakamura Decl., Exh. 38).
Undisputed Material Fact No. 28:
On August 3, 2022, the Court (Hon. Patricia L. Gutierrez) issued an order granting in part and denying in part Vantor's motion to compel, which had been filed on June 15, 2022 and which sought class-certification-style consolidated discovery across all of Cascade's supplier relationships nationwide. The Court limited expanded discovery to 15 additional supplier relationships beyond the three supplier relationships directly at issue in this action, for a total of 18 supplier relationships subject to discovery. The expanded discovery encompassed document productions and depositions of supplier representatives conducted between September and November 2022. The expanded discovery did not reveal any pattern of "supplier poaching" or any independently wrongful conduct by Cascade with respect to any of the 15 additional supplier relationships examined. No evidence of improper inducements, threats, misrepresentations, or other independently wrongful conduct was identified in the expanded discovery.
Supporting Evidence: Court's Order on Vantor's Motion to Compel (dated August 3, 2022) (Nakamura Decl., Exh. 39); Expanded discovery productions from additional suppliers (Nakamura Decl., Exhs. 40–42); Deposition testimony from expanded supplier discovery (September–November 2022) (Nakamura Decl., Exhs. 43–47).
CONCLUSION
Based on the foregoing undisputed material facts, Cascade respectfully submits that there is no triable issue of material fact with respect to Vantor's Second Cause of Action for tortious interference with prospective economic advantage or Vantor's Third Cause of Action for unfair business practices under California Business and Professions Code § 17200. The undisputed evidence demonstrates that: (a) each of the three supplier agreements contained mutual termination-for-convenience clauses that each supplier independently exercised; (b) Cascade did not have actual knowledge of the exclusivity provisions in Vantor's supplier agreements; (c) the suppliers independently chose to contract with Cascade based on commercially superior terms; (d) Cascade engaged in no independently wrongful conduct; and (e) Vantor's UCL claim is entirely derivative of the tortious interference claims and identifies no independent statutory or regulatory violation.
Cascade respectfully requests that the Court grant summary adjudication in Cascade's favor on Vantor's Second Cause of Action (Tortious Interference with Prospective Economic Advantage) and Third Cause of Action (Unfair Business Practices under Cal. Bus. & Prof. Code § 17200).
Dated: February 28, 2023
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Carmichael (SBN 187452) Partner Calderwood & Harkness LLP 600 South Grand Avenue, Suite 3200 Los Angeles, California 90071 Telephone: (213) 555-7400 Facsimile: (213) 555-7401
Email: dcarmichael@calderwoodharkness.com
Francesca Morano (SBN 214887) Partner
Yuki Nakamura (SBN 298134) Senior Associate
Carlos Espinoza (SBN 312456) Associate
Attorneys for Defendant Cascade Retail Holdings Inc.
PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
I, Yuki Nakamura, declare as follows:
I am a citizen of the United States and am employed in the County of Los Angeles, State of California. I am over the age of eighteen years and am not a party to the within action. My business address is Calderwood & Harkness LLP, 600 South Grand Avenue, Suite 3200, Los Angeles, California 90071.
On February 28, 2023, I served the following document:
DEFENDANT CASCADE RETAIL HOLDINGS INC.'S SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT
on the interested parties in this action by transmitting a true copy via electronic service through the Court's approved electronic filing and service provider to the following persons at the electronic service addresses indicated below:
Martin Kessler (SBN 165203) Natalie Whitfield (SBN 201478) Jason Okafor (SBN 278941) Kessler, Brandt & Whitfield LLP 1999 Avenue of the Stars, Suite 2800 Los Angeles, California 90067 Telephone: (310) 555-3200
Email: mkessler@kbwlaw.com
Email: nwhitfield@kbwlaw.com
Email: jokafor@kbwlaw.com
Attorneys for Plaintiff Vantor Holdings Corp.
Diana Prescott (SBN 192644) Wortham & Adair LLP 611 West Sixth Street, Suite 2400 Los Angeles, California 90017 Telephone: (213) 555-6100
Email: dprescott@worthamadair.com
Local Counsel for Defendant Cascade Retail Holdings Inc.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on February 28, 2023, at Los Angeles, California.
________________________________________
Yuki Nakamura
VANTOR HOLDINGS CORP., a California corporation, | Case No. 21STCV-34872
Plaintiff, | DEFENDANT CASCADE RETAIL HOLDINGS INC.'S SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT
v.
[Second Cause of Action: Tortious Interference with Prospective Economic Advantage; Third Cause of Action: Unfair Business Practices under Cal. Bus. & Prof. Code § 17200]
CASCADE RETAIL HOLDINGS INC., a Delaware corporation,
Date: April 14, 2023
Defendant. | Time: 9:00 a.m.
Dept.: 34
Judge: Hon. Patricia L. Gutierrez
Filed: February 28, 2023