Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-02898/USCOURTS-cand-3_06-cv-02898-3/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 28:1332 Diversity-Personal Injury

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United States District Court

For the Northern District of California

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1

 The Court has jurisdiction over this action because it is

alleged that complete diversity of citizenship exists between the

parties. Specifically, Plaintiff is incorporated in Florida with

its principal place of business therein. See Complaint ¶ 1. 

Defendant is incorporated in Delaware, with its principal place of

business in California. See id. ¶ 2. Furthermore, the amount in

controversy is alleged to be in excess of $75,000.00, exclusive of

interests and costs. See id. ¶ 4. 

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOHNSON & JOHNSON VISION CARE,

INC., a Florida corporation,

Plaintiff,

v.

GENENTECH, INC., a Delaware

corporation; and DOES 1 through 50,

inclusive, 

Defendants. 

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No. C-06-2898-SC

ORDER GRANTING

DEFENDANT'S MOTION TO

DISMISS 

I. INTRODUCTION

Plaintiff Johnson & Johnson Vision Care, Inc. ("Plaintiff" or

"Johnson") brought this action against Defendant Genentech, Inc.

("Defendant" or "Genentech") alleging causes of action under

California state law for, inter alia, unfair competition and

tortious interference with economic advantage.1

Presently before the Court is Defendant's motion to dismiss

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For the Northern District of California

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Plaintiff's claims pursuant to Federal Rule of Civil Procedure

("FRCP") 12(b)(6).

The Court, having reviewed the parties' submissions, GRANTS

Defendant's motion to dismiss Plaintiff's claims. Accordingly,

Plaintiff's claims are DISMISSED WITH LEAVE TO AMEND. The Court

GRANTS Plaintiff thirty days from the date of this Order to amend

and refile. If Plaintiff fails to amend and refile these claims

by that date, the Court will deem the claims waived.

II. BACKGROUND

The following allegations are taken from Plaintiff's papers

and will be assumed as true for purposes of this Order.

Plaintiff, a Florida corporation in the business of producing 

disposable contact lenses and ophthalmic pharmaceuticals and

products, asserts that Genentech has hired away Plaintiff's "key

employees" and is thereby "gaining an unfair competitive

advantage" and avoiding the "time and costs normally required to

establish and train its own effective sales and marketing force." 

Complaint ("Compl.") ¶¶ 7, 11. As part of training its employees

Plaintiff "entrusts its employees with J&J Vision's confidential

information, including...the particular purchasing nuances of its

customers...and the proprietary information regarding its products

and business plans." Id. ¶ 10. Plaintiff also asserts that

Genentech "recruited and hired such persons in a manner to disrupt

J&J Vision's competing business," and to promote Genentech's new

ocular product "Lucentis." See id. ¶¶ 11, 14. 

In the Complaint, Plaintiff alleges four causes of action: 

(1) tortious interference with Plaintiff's prospective economic

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advantage, (2) common law unfair competition, (3) statutory unfair

competition in violation of California Business and Professions

Code § 17200 et seq., and (4) injunctive relief. See Compl. 

III. LEGAL STANDARD

"[A] complaint should not be dismissed for failure to state a

claim unless it appears beyond doubt that the plaintiff can prove

no set of facts in support of his claim which would entitle him to

relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). "In

reviewing a 12(b)(6) motion, this Court must accept the factual

allegations of the complaint as true and must draw all reasonable

inferences in favor of the plaintiff." Bernheim v. Litt, 79 F.3d

318, 321 (2d Cir. 1996); see also Usher v. City of Los Angeles,

828 F.2d 556, 561 (9th Cir. 1987). The complaint need not set out

the facts in detail; what is required is a "short and plain

statement of the claim showing that the pleader is entitled to

relief." FRCP 8(a); see also La Salvia v. United Dairymen, 804

F.2d 1113, 1116 (9th Cir. 1986). Thus, the Court's task "is

merely to assess the legal feasibility of the complaint, not to

assay the weight of the evidence which might be offered in support

thereof." Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998). 

IV. DISCUSSION

A. First Claim: Tortious Interference with Prospective

Economic Advantage

Plaintiff contends that "employee raiding can amount to a

cognizable claim for interference with prospective economic

advantage." Plaintiff's Memorandum in Support of Motion to

Dismiss ("Pl's. Mem.") at 9. 

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2

 Wrongful acts are part of the third element of this tort. 

In full, the elements are (1) an economic relationship between the

plaintiff and some third party, with the probability of future

economic benefit to the plaintiff; (2) the defendant's knowledge of

the relationship; (3) intentional acts by the defendant designed to

disrupt the relationship; (4) actual disruption of the

relationship; and (5) economic harm to the plaintiff proximately

caused the acts of the defendant. See Witkin, Summary of

California Law (10th ed. 2005), Volume 5, Torts § 742. 

3 An "interference with an at-will contract properly is viewed

as an interference with a prospective economic advantage." Reeves

v. Hanlon, 33 Cal. 4th 1140, 1152 (Cal. 2004). 

-4-

Defendant contends that this claim fails as a matter of law

because Plaintiff fails to allege that Defendant committed an

independently wrongful act. See Defendant's Memorandum in Support

of Motion to Dismiss ("Def's. Mem.") at 8. Defendant also asserts

that hiring another's employees is permitted and encouraged by

California law and policy. See id. at 4.

To state a claim for tortious interference, a plaintiff must 

"must...plead and prove that the defendant engaged in an

independently wrongful act in disrupting the relationship."2

Reeves v. Hanlon, 33 Cal. 4th 1140, 1152 (Cal. 2004). There is no

actionable wrong committed "if the interference consists merely of

extending a job offer that induces an employee to terminate his or

her at-will employment."3 Id. at 1153. Rather, wrongful acts are

"[c]onduct that was wrongful by some legal measure other than the

fact of the interference itself." Witkin, Summary of California

Law (10th ed. 2005), Volume 5, Torts, § 742. More specifically,

the California Supreme Court has stated that "an act is

independently wrongful if it is proscribed by some constitutional,

statutory, regulatory, common law, or other determinable legal

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standard." Reeves, 33 Cal. 4th at 1145, quoting Korea Supply Co.

v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1158 (Cal. 2003). 

The Court finds that Plaintiff has not stated a claim for

which relief can be granted. Aside from stating watery notions

that their former employees will use their training and contacts

for the benefit of their new employers, Plaintiff points to no act

that is independently wrongful by some determinable legal

standard. Any former employee will use at his new job the skills

he's developed and the contacts he's made at his former job. Any

abrupt departure of employees will make it, for a time, difficult

to conduct business. If these occurrences were unlawful per se,

all cases of hiring away another's employees would be tortious. 

California law, however, requires that in order to be actionable,

Defendant would have had to commit an act that is legally

wrongful. 

Reeves is instructive on this. In Reeves, the defendants

"solicited plaintiffs' clients to discharge plaintiffs [as their

attorneys]...misappropriated plaintiffs' trade secrets, destroyed

computer files and data, and withheld plaintiffs' property,

including a corporate car." Reeves, 33 Cal. 4th at 1145-1146. 

The California Supreme Court found that these actions indicated

that "defendants did not simply extend job offers to plaintiffs'

at-will employees. Rather defendants purposely engaged in

unlawful acts that crippled plaintiff's business operations and

caused plaintiffs' personnel to terminate their at-will employment

contracts." Id. at 1155. 

In the instant case, Plaintiff has failed to plead that

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Defendant committed independently wrongful acts. Accordingly, the

Court GRANTS Defendant's motion to dismiss this cause of action. 

Plaintiff's first cause of action is DISMISSED WITH LEAVE TO

AMEND. The Court GRANTS Plaintiff thirty days from the date of

this Order to amend its Complaint as to this claim. If Plaintiff

fails to timely refile this claim, the Court will deem this claim

waived. 

B. Second Claim: Common Law Unfair Competition

Plaintiff contends that Defendant's hiring away of its key

employees constitutes unfair competition because it is now

"difficult [for Plaintiff] to provide services to its customers"

and the employees' abrupt departure deprived Plaintiff of "a

reasonable opportunity to hire and train replacements." Compl. 

¶ 25.

Defendant contends that Plaintiff fails to state a claim for

relief because Plaintiff fails to identify any particular unfair

competition theory and because "there is simply nothing 'unfair'

about what is claimed here." Def's. Mem. at 13. 

"The essence of the tort of [common law] unfair competition

is the inequitable pirating of the fruits of another's labor and

then either 'palming off' those fruits as one's own (deception) or

simply gaining from them an unearned commercial benefit." KGB,

Inc. v. Ted Giannoulas, 104 Cal. App. 3d 844, 850 (Cal. Ct. App.

1980). More specifically, the "tort of common law unfair

competition is limited to instances of 'passing off,' or acts

analogous to 'passing off,' one's goods as those of another." 

Sigma Dynamics, Inc. v. E. Piphany, Inc., No. C-04-569, 2004 U.S.

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4

 To state it another way, section 17200, the aim of which is

to preserve fair business competition, allows plaintiffs to bring

claims for acts that are not unlawful, but acts that are anticompetitive or injure consumer. See Cel-Tech Communications, Inc.

v. Los Angeles Cellular Telephone Company, 20 Cal. 4th 163, 179-180

(Cal. 1999). 

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Dist. LEXIS 24261 at *14 (N.D. Cal. May 21, 2004), citing

Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1147 (9th

Cir. 1997). 

Because Plaintiff makes no allegations of passing off or acts

analogous to passing off, the Court GRANTS Defendant's motion to

dismiss this claim. Accordingly, this claim is DISMISSED WITH

LEAVE TO AMEND. The Court GRANTS Plaintiff thirty days from the

date of this Order to amend its Complaint as to this claim. If

Plaintiff fails to timely refile this claim, the Court will deem

this claim waived. 

C. Third Claim: Unfair Competition, California Business

and Professions Code § 17200, et seq.

Plaintiff contends that Defendant's acts constitute an

unlawful and unfair competition in violation of California's

Business and Professions Code § 17200, et seq.

Section 17200 defines "unfair competition" as "any unlawful,

unfair or fraudulent business act or practice." Because it is

written in the disjunctive, one can bring claims that are unlawful

or unfair or fraudulent. See Gregory v. Albertson's Inc., 104

Cal. App. 4th 845, 851 (Cal. Ct. App. 2002).4

Because Plaintiff has not put forth factual allegations of

unlawful or fraudulent acts, the Court must look to whether

Plaintiff has alleged facts sufficient to state a claim for an

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unfair labor practice.

Plaintiff has failed to state a claim for relief. As the

California Supreme Court has stated, "[w]here no unlawful methods

are used, public policy generally supports a competitor's right to

offer more pay or better terms to another's employee, as long as

that employee is free to leave." Reeves, 33 Cal. 4th at 1151. 

The Court finds it legally unsupportable to allege that a practice

favored by public policy is unfair under California law. 

Based on this reasoning, the Court GRANTS the motion to

dismiss. Accordingly, this claim is DISMISSED WITH LEAVE TO

AMEND. The Court GRANTS Plaintiff thirty days from the date of

this Order to amend its Complaint as to this claim. If Plaintiff

fails to timely refile this claim, the Court will deem this claim

waived. 

D. Fourth Claim: Injunctive Relief

Because the legal feasibility of the claims is currently in

doubt, the Court finds that it cannot grant Plaintiff's request

for injunctive relief. Accordingly, the motion to dismiss is

GRANTED. Plaintiff's fourth claim is DISMISSED WITH LEAVE TO

AMEND. The Court GRANTS Plaintiff thirty days from the date of

this Order to amend its Complaint as to this claim. If Plaintiff

fails to timely refile this claim, the Court will deem this claim

waived. 

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V. CONCLUSION

The Court GRANTS Defendant's motion to dismiss Plaintiff's

claims. Accordingly, Plaintiff's claims are DISMISSED WITH LEAVE

TO AMEND. The Court GRANTS Plaintiff thirty days from the date of

this Order to amend and refile. If Plaintiff fails to amend and

refile these claims by that date, the Court will deem the claims

waived.

IT IS SO ORDERED.

Dated: August 3, 2006

 UNITED STATES DISTRICT JUDGE

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