Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-00428/USCOURTS-cand-5_05-cv-00428-22/pdf.json

Nature of Suit Code: 423
Nature of Suit: Bankruptcy Withdrawal 28 USC 157
Cause of Action: 28:0157 Motion for Withdrawal of Reference

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

Carramerica Realty Corp., et al.,

Plaintiffs,

 v.

NVIDIA Corporation, et al.,

Defendants. /

NO. C 05-00428 JW 

AMENDED ORDER GRANTING

DEFENDANTS’ MOTION FOR

SUMMARY JUDGMENT

Presently before the Court is nVidia Defendants’ (“nVidia”) Motion for Summary Judgment,

or in the Alternative, Partial Summary Judgment. (hereafter, “Motion,” Docket Item No. 262.) The

Court conducted a hearing on May 3, 2010. Based on the papers submitted to date and oral

argument, the Court GRANTS nVidia’s Motion for Summary Judgment.

A. Background

A detailed outline of the procedural history of this case can be found in the Court’s January

27, 2010 Order Denying Defendants’ Motion to Dismiss and Motion for Sanctions. (hereafter,

“January 27 Order,” Docket Item No. 260.) The Court reviews the procedural history to the extent

that it implicates the present motion.

In its January 27, 2010 Order, the Court found that taking the allegations in Plaintiffs’ Fifth

Amended Complaint as true, Plaintiffs had adequately pleaded causes of action for interference with

contractual relations, conspiracy, and tort of another. (January 27 Order at 3-8.) However, since

Defendants presented substantial evidence disputing the existence of a secret agreement to mislead

Plaintiffs with regard to 3dfx’s ability to honor its lease agreement, the Court invited the parties to

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file cross-motions for summary judgment to provide the Court with a full opportunity to examine the

evidentiary bases for Plaintiffs’ Claims. (Id. at 8.)

The Court will address the facts of the case in the Discussion section of this Order to the

extent that they are relevant to the present motion.

B. Standards

Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(c). The purpose of summary judgment “is to isolate and dispose of factually unsupported claims

or defenses.” Celotex v. Catrett, 477 U.S. 317, 323-24 (1986).

The moving party “always bears the initial responsibility of informing the district court of

the basis for its motion . . . .” Id. at 323. “The judgment sought should be rendered if the pleadings,

the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue

as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ.

P. 56(c). The non-moving party “may not reply merely on allegations or denials in its own pleading;

rather, its response must–by affidavits or as otherwise provided in this rule–set out specific facts

showing a genuine issue for trial.” Fed. R. Civ. P. 56(e).

When evaluating a motion for summary judgment, the court views the evidence through the

prism of the evidentiary standard of proof that would pertain at trial. Anderson v. Liberty Lobby

Inc., 477 U.S. 242, 255 (1986). The court draws all reasonable inferences in favor of the nonmoving party, including questions of credibility and of the weight that particular evidence is

accorded. See, e.g., Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520 (1992). The court

determines whether the non-moving party’s “specific facts,” coupled with disputed background or

contextual facts, are such that a reasonable jury might return a verdict for the non-moving party. 

T.W. Elec. Serv. v. Pac. Elec. Contractors, 809 F.2d 626, 631 (9th Cir. 1987). In such a case,

summary judgment is inappropriate. Anderson, 477 U.S. at 248. However, where a rational trier of

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fact could not find for the non-moving party based on the record as a whole, there is no “genuine

issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986).

C. Discussion

nVidia moves for summary judgment on the ground that there is no evidence that the alleged

secret agreement upon which all of Plaintiffs’ claims are premised ever actually existed. (Motion at

5-6.) Since the Ninth Circuit affirmed the Court’s dismissal of all of Plaintiffs’ claims for lack of

standing, except for those arising from the alleged secret agreement, Plaintiffs’ standing to bring any

claims depends upon the existence of that secret agreement. (Motion at 17.)

Under the law of the case doctrine, “the decision of an appellate court on a legal issue must

be followed in all subsequent proceedings in the same case.” Herrington v. County of Sonoma, 12

F.3d 901, 904 (9th Cir. 1993). In this case, the Ninth Circuit previously upheld the Court’s

conclusion that “the Trustee has exclusive standing to sue with respect to all claims asserted by

Creditors based on an underlying injury to 3dfx.” CarrAmerica Realty Corp. v. Nvidia Corp., 302 F.

App’x 514, 516 (9th Cir. 2008). However, the Ninth Circuit further found that the Court erred in

dismissing Plaintiffs’ claims “based on an alleged ‘secret agreement’ between 3dfx and nVidia,

pursuant to which agreement 3dfx continued to pay rent to CarrAmerica although nVidia had taken

possession of the premises CarrAmerica leased to 3dfx.” Id. Since Plaintiffs’ claims arising out of

the alleged secret agreement “are based on an injury to CarrAmerica by nVidia, which is neither

bankrupt nor protected by any stay of actions, and not an underlying injury to the bankruptcy estate

of 3dfx, CarrAmerica has standing to assert these claims.” Id.

At the pleading stage, the Court was required to accept as true Plaintiffs’ allegation that 

[i]n December, 2000, unbeknownst to Carr, nVidia entered into a secret agreement

with 3dfx whereby–despite the fact that 3dfx knew it was going to cease its operations and

terminate all of its employees in Austin as of December 15, 2000–3dfx was directed to

continue making lease payments at a future date. By entering into this secret agreement,

nVidia and 3dfx sought to create the false impression that 3dfx or a successor would

continue to perform the rent obligations under the Lease. The purpose and effect of the

secret agreement was to lull Carr into inaction with respect to the Lease. . . . 

(Fifth Amended Complaint ¶ 19, Docket Item No. 211.)

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1

 (Deposition of Richard A. Heddleson at 466:24-468:20, hereafter, “Heddleson Depo.,”

Declaration of Jonathan S. O’Donnell in Opposition to nVidia Defendants’ Motion for Summary

Judgment, or in the Alternative, Partial Summary Judgment, hereafter, “O’Donnell Decl.,” Ex. A,

Docket Item No. 264.) nVidia points out that Mr. Heddleson’s precise words in response to the

question, “Did you tell anybody at CarrAmerica about this deal with Chris Hoberg?” was “No, we

did not.” (Heddleson Depo. at 468:18-20.) nVidia contends that Heddleson’s statement is

ambiguous as to whether he is referring solely to 3dfx or to 3dfx and nVidia collectively, and that

Heddleson cannot properly testify as to what nVidia did or did not say to CarrAmerica. (nVidia

Defendants’ Reply in Support of Motion for Summary Judgment at 4, hereafter, “Reply,” Docket

Item No. 270.) The Court finds that Heddleson’s statement can only serve as evidence that 3dfx,

and not nVidia, failed to tell CarrAmerica about the rent reimbursement agreement.

2

 (Deposition of Jensen Huang at 491:14-17, 494: 7-23, hereafter, “Huang Depo.,”

O’Donnell Decl., Ex. B.)

4

At the summary judgment stage, however, Plaintiffs must present sufficient evidence

supporting their allegations of a secret agreement to create a triable issue of fact. To that effect,

Plaintiffs present the deposition testimony of 3dfx Chief Financial Officer Richard Heddleson

(“Heddleson”), stating that he struck a deal with Chris Hoberg of nVidia whereby nVidia agreed to

reimburse 3dfx for rent payments made to Carramerica on its Austin office space, and that 3dfx did

not inform anyone at CarrAmerica about this deal.1

 

Plaintiffs further present the deposition testimony of nVidia CEO Jensen Huang as evidence

of what Plaintiffs contend is nVidia’s motive to lull CarrAmerica into complacency with respect to

3dfx’s ability to meet its obligations under its Lease for office space. Huang stated that he did not

want to acquire 3dfx’s Lease because “their office buildings looked like a bar” and had the

appearance of “a place to play, not a place to work.”2

 Huang further testified that he was

“concerned” about securing adequate office space in Austin and that “it was critical for [nVidia] to

get the Austin operation set up and productive as quickly as possible.” (Id. at 519:2-8.)

In response, nVidia presents evidence that its agreement to offset 3dfx’s rental payments was

no secret at all, and that in fact, Plaintiffs were made aware of nVidia’s intentions with respect to the

office space long before 3dfx breached the Lease. First, Plaintiffs present a press release that 3dfx

issued on December 15, 2000 and filed with the SEC as part of its Form 425 on December 18, 2000,

in which it announced (1) plans to “substantially reduce all of its workforce,” (2) its

recommendation that its board of directors approve a sale of most of the company’s assets to nVidia

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3

 (nVidia Defendants’ Request for Judicial Notice in Support of Motion for Summary

Judgment, hereafter, “nVidia’s RJN,” Ex. A, Docket Item No. 263.) Since 3dfx’s press release is a

public document filed with the SEC, the Court GRANTS nVidia’s Request for Judicial Notice with

respect to that document pursuant to Fed. R. Evid. 201. Defendant CarrAmerica objects to

admission of the press release on the grounds that it is irrelevant, constitutes inadmissible hearsay,

and is not a judicially noticeable public document. (Carramerica Realty Corp.’s Evidentiary

Objections and Motions to Strike Evidence Submitted by nVidia Defendants in Support of their

Motion for Summary Judgment at 2, hereafter, “CarrAmerica’s Objections,” Docket Item No. 267.) 

The Court finds that the press release is relevant because it undermines a contention at the heart of

Plaintiffs’ case–that nVidia and 3dfx attempted to keep the APA and plans for winding down 3dfx’s

operations from CarrAmerica. Furthermore, the Court finds that the press release is not hearsay

because it is not admitted for the truth of its contents, but to show that 3dfx and nVidia made no

attempt to conceal their plans from the public. Finally, Defendant CarrAmerica relies on In re Wet

Seal, Inc. Securities Litigation for the proposition that the Court may only take judicial notice of

matters of public record “where they are relied upon by the complaint.” 518 F. Supp. 2d 1148, 1157

(C.D. Cal. 2007). The Court finds that unlike here, In re Wet Seal was decided on a motion to

dismiss, and the Court is not bound on summary judgment to only consider documents referenced in

the Complaint. Furthermore, In re Wet Seal specifically acknowledges that documents filed with the

SEC, like the press release here, are judicially noticeable. Id. Since the press release is relevant, not

hearsay, and judicially noticeable, the Court OVERRULES Defendant CarrAmerica’s objection as

to that document. 

4

 (Response to Interrogatory No. 2, Declaration of Karen G. Johnson-McKewan in Support

of nVidia Defendants’ Motion for Summary Judgment, hereafter, “KGJ Decl.,” Ex. D at 4, Docket

Item No. 262.) Defendant CarrAmerica objects to admission of its own interrogatory answers on the

ground that they are unverified and thus have no evidentiary value. (CarrAmerica’s Objections at 3.) 

In support of its objection, Defendant CarrAmerica relies on an out-of-jurisdiction case, Saria v.

Massachusetts, which found certain interrogatory answers inadmissible because they were signed by

the attorney but not by the client. 228 F.R.D. 536, 538 (S.D. W. Va. 2005). That case is

distinguishable, however, because it involves an individual failing to verify her answers, as required

by Fed. R. Civ. P. 33(b)(1)(A), rather than a corporation, whose answers may be furnished “by any

officer or agent” pursuant to Fed. R. Civ. P. 33(b)(1)(B). It is well established that the signature of a

corporation’s attorney satisfies the verification requirement for interrogatory answers. See, e.g., Rea

v. Wichita Mortgage Corp., 747 F.2d 567, 574 n.6 (10th Cir. 1984); Wilson v. Volkswagen of

America, 561 F.2d 494, 508 (4th Cir. 1977); United States v. 42 Jars, 264 F.2d 666, 670 (3d Cir.

1959). Accordingly, the Court OVERRULES Defendant CarrAmerica’s objection as to admission

of its interrogatory answers.

5

and a plan to dissolve the company upon completion of the asset sale, and (3) a plan to reduce office

space.3

Second, in a response to nVidia’s interrogatory, Plaintiffs stated, “In late December or early

January 2001, various individuals at CarrAmerica learned that 3dfx had sold some or all of its assets

to nVidia.”4

 In the same interrogatory response, Plaintiffs stated, 

On or about February 22, 2001, an nVidia employee told a representative of CarrAmerica

that nVidia would be moving from the Premises and that they hoped to move soon. When

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5

 (Declaration of James N. Kramer in Support of nVidia Defendants’ Motion for Summary

Judgment, hereafter, “Kramer Decl.,” Ex. A, Ex. 322, Docket Item No. 262.) Defendant

CarrAmerica objects to admission of the internal CarrAmerica emails on the grounds that they have

not been authenticated, and that they are inadmissible hearsay. (CarrAmerica’s Objections at 2-3.) 

The Court finds that the emails were authenticated by Plaintiffs’ own Rule 30(b)(6) witness during

the course of his deposition. (See Kramer Decl. ¶¶ 3-11.) Furthermore, the emails are admitted not

for the truth of their contents, but to demonstrate CarrAmerica’s knowledge of nVidia’s intentions

regarding 3dfx’s office space. Since the emails have been authenticated and are not admitted for the

truth of their contents, the Court OVERRULES Defendant CarrAmerica’s objection with regard to

those documents.

6

asked, the nVidia employee responded that all former 3dfx employees (who had been hired

by nVidia) would also be leaving the Premises. 

Id.

Third, nVidia presents a series of internal CarrAmerica emails that also demonstrate

Plaintiffs’ knowledge of the asset sale and nVidia’s intentions with respect to the Austin office

space. In one of these emails, dated December 20, 2000, a CarrAmerica employee stated that Huang

was “in Austin yesterday to meet with the employees and assess the Austin 3dfx operation,” Huang

told them that “they would deal with the real estate issues after the new year,” and “nVidia is now

paying all of the 3dfx bills.”5

 In another email dated February 23, 2001, a CarrAmerica employee

stated, “My hunch is we eventually get the 3dfx space back, so we will quietly start marketing it.” 

(Id., Ex. 326.)

Finally, Plaintiffs’ Rule 30(b)(6) witness, David Weaver, admitted in his deposition

testimony that by March 2007 at the latest, CarrAmerica knew definitively that nVidia was “not

going to take the 3dfx space,” that “3dfx was not going to need its space anymore,” and that in the

face of this knowledge, the company “continued to treat 3dfx as [it] did before.” (Deposition of

David C. Weaver, Kramer Decl., Ex. A at 100:21-101:11, 112:7-14, 114:12-115:3.) 

The Court finds that the evidence does not create a triable issue of fact that nVidia and 3dfx

entered into a secret agreement with the purpose of lulling CarrAmerica into inaction with respect to

its Lease with 3dfx. Plaintiffs’ sole evidence supporting their allegation of such a secret agreement

consists of Heddleson’s testimony that 3dfx did not inform CarrAmerica of its arrangement with

nVidia, whereby nVidia would offset the rent payments that 3dfx made to CarrAmerica for office

space, and Huang’s testimony that he had a low opinion of the 3dfx office space but needed to

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6

 (CarrAmerica Realty Corporation’s Opposition to nVidia Defendants’ Motion for

Summary Judgment at 8, hereafter, “Opposition,” Docket Item No. 264 (citing Weaver Depo. at

59:3-6).)

7

secure alternative office space for nVidia’s Austin operation as quickly as possible. In the face of

substantial evidence that 3dfx and nVidia publicized the details of their Asset Purchase Agreement

(“APA”) and plans to downsize and find new office space, and further evidence that CarrAmerica

was at least aware of the APA and that nVidia had no immediate plans to acquire 3dfx’s Lease, the

fact that 3dfx did not directly disclose to CarrAmerica its rent-payment arrangement with nVidia

does not transform that arrangement into a “secret agreement.” Nor can evidence that nVidia had a

possible motive to keep its agreement with 3dfx a secret by itself create a triable issue of fact that

nVidia intended to deceive CarrAmerica as to 3dfx’s ability to continue to meet its obligations under

the Lease. See Serfecz v. Jewel Food Stores, 67 F.3d 591, 600-01 (7th Cir. 1995) (holding that

evidence of motive, “by itself, does not tend to exclude the possibility of independent, legitimate

action and supplies no basis for inferring a conspiracy”); Alvord-Polk, Inc. v. F. Schumacher & Co.,

37 F.3d 996, 1013 (3d Cir. 1994). 

Plaintiffs contend that the fact that 3dfx issued a press release announcing the APA and

downsizing plans does not prove that CarrAmerica knew about 3dfx’s impending sale and

dissolution.6

 Plaintiffs further contend that none of CarrAmerica’s emails definitively prove that

Plaintiffs knew of the APA or the dissolution plan prior to March 2007. (Id. at 9-13.) The Court

finds, however, that regardless of whether CarrAmerica found out about the APA as a result of

3dfx’s press release, the press release demonstrates that 3dfx was not attempting to keep its deal

with nVidia or its downsizing plans secret. Moreover, the fact that nVidia did not unequivocally tell

CarrAmerica that it did not plan to assume 3dfx’s Lease does not mean that nVidia proactively

attempted to conceal its intentions. In the absence of any evidence that nVidia prevaricated or

misrepresented itself to CarrAmerica, it would be mere speculation to conclude that nVidia and 3dfx

had an agreement to keep their true plans hidden. 

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7

 Assuming Plaintiffs do have standing to bring their claims, the Court finds that they have

not provided sufficient evidence to create a genuine issue of material fact as to any of their causes of

action. For example, one of the necessary elements of Plaintiffs’ claim for tortious interference with

contractual relationship is proof of intentional acts designed to induce a breach or disruption of the

contract. See, e.g., Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal.3d 1118, 1126 (Cal. 1990). 

Just as Plaintiffs fail to present sufficient evidence of a secret agreement between nVidia and 3dfx,

Plaintiffs also fail to present sufficient evidence that nVidia acted with the intention of causing 3dfx

to breach its contract. If anything, it appears to the Court that nVidia’s actions allowed 3dfx to

fulfill at least some of its obligations under the contract, by reimbursing 3dfx for rental payments

that it did make, and that 3dfx’s inability to fully meet the terms of its Lease was the result of its

bankruptcy, not of any action taken by nVidia. Since Plaintiffs’ conspiracy and tort of another

claims are both premised on their tortious interference claim, both of those claims also fail as a

matter of law.

8

Thus, the Court finds that no reasonable jury could conclude that a secret agreement existed

between nVidia and 3dfx to lull CarrAmerica into complacency with regard to 3dfx’s ability to meet

its obligations under the Lease. Since the Ninth Circuit found that Plaintiffs only have standing to

bring claims that arise out of that secret agreement, the lack of any evidence that such an agreement

ever actually existed is fatal to Plaintiffs’ action. 

Accordingly, the Court GRANTS Defendants’ Motion for Summary Judgment.7

D. Conclusion

The Court GRANTS Defendants’ Motion for Summary Judgment. Judgment shall be

entered accordingly. 

The Court refers Defendants’ anticipated Motion for Attorney Fees to Magistrate Judge

Trumbull for a Report and Recommendation. Defendants shall notice their Motion before Judge

Trumbull in accordance with the Judge’s civil calendar.

Dated: June 29, 2010 

JAMES WARE

United States District Judge

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THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO:

Betty Malka Shumener betty.shumener@dlapiper.com

Douglas A. Applegate daa@sezalaw.com

Douglas G. Boven dboven@reedsmith.com

Dwight Craig Donovan Dwight@mbvlaw.com

George M. Lee gml@sezalaw.com

Henry H. Oh henry.oh@dlapiper.com

James Neil Kramer jkramer@orrick.com

Jimmy S McBirney jmcbirney@orrick.com

John Laurence Fitzgerald jfitzgerald@pinnaclelawgroup.com

Jonathan B. Gaskin jgaskin@orrick.com

Jonathan Steven O’Donnell jon@mbvlaw.com

Justin Myer Lichterman jlichterman@orrick.com

Karen G. Johnson-McKewan kjohnson-mckewan@orrick.com

Kim Y. Arnone karnone@buchalter.com

Leah Anne Nutting lnutting@orrick.com

Leland Peter Ryan pete@mbvlaw.com

Morgan William Tovey morgantovey@quinnemanuel.com

Peter Gerard Bertrand pbertrand@buchalter.com

Raymond A. Cardozo rcardozo@reedsmith.com

Richard C. Darwin rdarwin@buchalter.com

Robert E. Izmirian rizmirian@buchalter.com

Robert Jacob Odson robert.odson@dlapiper.com

Robert P. Varian rvarian@orrick.com

Ruth Young Kwon rkwon@orrick.com

William R. Overend woverend@reedsmith.com

Dated: June 29, 2010 Richard W. Wieking, Clerk

By: /s/ JW Chambers 

Elizabeth Garcia

Courtroom Deputy

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