Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_14-cv-03656/USCOURTS-cand-5_14-cv-03656-8/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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Case No. 14-CV-03656-LHK 

ORDER GRANTING IN PART AND DENYING IN PART CROSS-MOTIONS FOR SUMMARY JUDGMENT

AND DENYING CROSS-MOTIONS FOR SANCTIONS

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

LUXUL TECHNOLOGY INC.,

Plaintiff,

v.

NECTARLUX, LLC, et al.,

Defendants.

Case No. 14-CV-03656-LHK 

ORDER GRANTING IN PART AND 

DENYING IN PART CROSS-MOTIONS 

FOR SUMMARY JUDGMENT AND 

DENYING CROSS-MOTIONS FOR 

SANCTIONS

Re: Dkt. Nos. 85, 92, 93, 94

Plaintiff and Counterdefendant Luxul Technology, Inc. (“Luxul”) moves for summary 

judgment and for sanctions against Defendants and Counterclaimants NectarLux LLC, JKenney 

Consulting, Inc., and James Keeney (collectively, “NectarLux”). ECF Nos. 85 (“Luxul Sanctions 

Mot.”), 94 (“Luxul Summ. J. Mot.”). NectarLux also moves for summary judgment and for 

sanctions against Luxul. ECF Nos. 92 (“NectarLux Sanctions Mot.”), 93 (“NectarLux Summ. J. 

Mot.”). For the reasons explained below, the Court GRANTS IN PART and DENIES IN PART 

Luxul’s Motion for Summary Judgment; DENIES Luxul’s Motion for Sanctions; GRANTS IN 

PART and DENIES IN PART NectarLux’s Motion for Summary Judgment; and DENIES 

NectarLux’s Motion for Sanctions. 

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ORDER GRANTING IN PART AND DENYING IN PART CROSS-MOTIONS FOR SUMMARY JUDGMENT

AND DENYING CROSS-MOTIONS FOR SANCTIONS

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I. BACKGROUND

A. Factual Background

Plaintiff Luxul Technology Inc. is a California corporation with a principal place of 

business in Santa Clara, California. Sec. Am. Compl. (“SAC”), ECF No. 38, ¶ 1. Defendant 

NectarLux, LLC is a New York limited liability company with a principal place of business in 

Syracuse, New York. Id. ¶ 2. Luxul is a producer of energy efficient light emitting diode 

(“LED”) products. Id. ¶ 9.

1. Luxul’s Allegations against NectarLux

On April 6, 2014, Luxul entered into a written “Sales Representation and Marketing 

Consulting Agreement” (“April 2014 Agreement”) with Defendant NectarLux. Id. ¶ 13.; see ECF 

No. 116-2, Ex. 2. Under the Agreement, NectarLux served as Luxul's “exclusive, independent 

representative for the sale of Luxul products” in certain regions, for certain customers. SAC ¶ 13.

NectarLux and Luxul were jointly obligated to “work together to ensure that Sales Commitments” 

were achieved and to meet regularly. April 2014 Agreement ¶ 1.a.

The Agreement also provided for Luxul to disclose certain confidential information to 

NectarLux, including information relating to building science technologies, trade secrets, product 

design, manufacturing, pricing, marketing, distribution, business opportunities and relationships, 

industry experts, legal entities, and individuals. SAC ¶ 16. Under Section 3 of the Agreement, 

NectarLux agreed that Luxul was “the owner of all right, title, and interest in the Confidential 

information, including all tangible copies and . . . electronic versions thereof.” Id. ¶ 17. 

NectarLux agreed that it would not disclose confidential information unless necessary to satisfy its 

obligations under the Agreement. Id. ¶ 18.

In April 2014, James Pan (“Pan”), Luxul’s chief executive officer, and Adam Lilien, 

NectarLux’s Managing Director of Nectar Energy, met with a potential manufacturer in New 

York. Id. ¶ 27. Luxul continued to negotiate directly with the New York manufacturer. Id.

Luxul alleges that in July 2014, Lilien and Keeney contacted the same New York manufacturer to 

discuss alternative proposals and set up meetings with competing LED companies. Id. ¶ 28.

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ORDER GRANTING IN PART AND DENYING IN PART CROSS-MOTIONS FOR SUMMARY JUDGMENT

AND DENYING CROSS-MOTIONS FOR SANCTIONS

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On August 12, 2014, Luxul terminated the Agreement with NectarLux. Id. ¶ 30. 

2. NectarLux’s Allegations Against Luxul

NectarLux presents a different version of the allegations summarized above. NectarLux

agrees that parties entered into an Agreement related to sales of Luxul’s LED bulbs through 

NectarLux’s distribution network. Countercl. ¶ 1. However, NectarLux alleges that Luxul 

acquired NectarLux’s propriety information, including “pricing, marketing and distribution, 

business opportunities, business relationships influential in purchasing decisions, business entities 

who may be interested in OEM/resale relationships, as well as other like terms,” and then Luxul 

wrongfully terminated the parties’ contracts. Id. ¶ 1. NectarLux alleges that Luxul 

“misappropriated NectarLux’s information to employ these confidential strategies and to market 

and sell light bulbs in NectarLux’s exclusive territorial regions and to NectarLux’s protected 

clients without compensating NectarLux for the sales.” Id. 

Additionally, NectarLux begins the allegations in its countercomplaint with reference to an 

earlier contract, entered into on January 29, 2014 (“January 2014 Agreement”). Id. ¶ 20 & Ex. 1. 

The counterclaims allege that the January 2014 Agreement was negotiated by Adam Lilien; 

Shawn Colvin, a Luxul representative; and Dennis Malone of DM Lighting. Id. ¶¶ 15, 18, 19 

(“Colvin, Malone, and Lilien discussed and negotiated a potential partnership between Luxul and 

NectarLux.”). According to the counterclaims, the January 2014 Agreement “appointed 

NectarLux as the exclusive representative for the sale of Luxul products” for certain clients and 

certain geographic areas. Id. ¶ 20. The counterclaims further allege that “[o]n or about March 18, 

2014, Luxul informed NectarLux the contract was invalid because Colvin had no authority to 

execute contracts on behalf of Luxul.” Id. ¶ 22. Thereafter, the parties entered into the April 2014 

Agreement discussed above, but “Luxul and Pan used duress and wrongfully coerced NectarLux 

to materially modify the terms of the contract to Luxul’s and Pan’s benefit.” Id. ¶ 25. 

The parties now agree that NectarLux was never a party to the January 2014 Agreement 

because the January 2014 Agreement was executed by Adam Lilien on behalf of a different 

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company named Nectar Partners and its affiliate Nectar Energy. See January 2014 Agreement; 

Luxul Summ. J. Mot. at 4 (“NectarLux is not named as a party to the January 29, 2014 contract.”); 

ECF No. 106 (“Opp. to Luxul Summ. J. Mot.”) at 1 (“The first contract was executed by Nectar 

Partners and Luxul on January 29, 2014”); ECF No. 104 (“Opp. to Luxul Sanctions Mot.”) at 3 

(“The first contract was executed by Nectar Partners and [Luxul] on January 29, 2014. There is 

no dispute the first contract was executed by these parties.”). The parties additionally agree that 

the April 2014 Agreement was a binding contract between Luxul and NectarLux. Compl. ¶ 13 

(“On or about April 6, 2014, Luxul entered into a written ‘Sales Representation and Marketing 

Consulting Agreement’ (‘the Agreement’) with NectarLux.”); Ans. ¶ 13 (“Defendants admit the 

allegations in Paragraph 13”); see also Luxul Sanctions Mot. at 2 (“Luxul and NectarLux entered 

into a written ‘Sales Representation and Marketing Consulting Agreement’ dated April 6, 2014.”); 

Opp. to Luxul Sanctions Mot. at 4 (“It is beyond dispute that Luxul and NectarLux agreed to terms 

and executed the second contract.”).

NectarLux alleges that following execution of the April 2014 Agreement, “NectarLux 

continued to act in good faith” under the terms of the April 2014 Agreement. Countercl. ¶ 26. 

NectarLux alleges that in August 2014, NectarLux discovered that Luxul had registered a 

fraudulent purchase order from NectarLux and “that Luxul was selling light bulbs directly and/or 

through third parties in NectarLux’s territory and to NectarLux’s clients without compensating 

NectarLux for the sales.” Id. ¶ 31. When NectarLux requested compensation for these sales, 

“Luxul refused, terminated the contract, and severed all business ties with NectarLux.” Id.

B. Procedural History

Luxul filed its original Complaint on August 12, 2014. ECF No. 1. Luxul filed a First 

Amended Complaint (“FAC”) pursuant to stipulation on October 31, 2014. ECF No. 19. 

NectarLux filed a motion to dismiss on November 21, 2014. ECF No. 21. The Court granted in 

part and denied in part the motion to dismiss on January 26, 2015, ECF No. 36, and Luxul filed a 

Second Amended Complaint (“SAC”) on February 13, 2015, ECF No. 38. NectarLux filed an 

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Answer to the Second Amended Complaint, Third Party Complaint against Pan, and 

Counterclaims against Luxul on February 27, 2015. ECF No. 42. NectarLux’s Answer alleged 

four counterclaims against Luxul and four cross-claims against Pan. Id. 

Luxul and Pan filed a motion to strike and motion to dismiss on March 27, 2015. ECF No. 

45. Luxul and Pan moved to strike portions of NectarLux’s counterclaims and moved to dismiss 

one of NectarLux’s counterclaims and all of NectarLux’s cross-claims. Id. The Court denied the 

motion to strike and granted the motion to dismiss NectarLux’s third counterclaim and all of 

NectarLux’s cross-claims. ECF No. 61.

Luxul then filed an Answer to NectarLux’s counterclaims on August 20, 2015, ECF No. 

62, and an Amended Answer to NectarLux’s counterclaims on September 10, 2015, ECF No. 65.

Luxul filed a motion for sanctions on April 11, 2016. ECF No. 85 (“Luxul Sanctions 

Mot.”). NectarLux filed an opposition on April 25, 2016. ECF No. 104 (“Opp. to Luxul 

Sanctions Mot.”). Luxul filed a reply on May 2, 2016. ECF No. 128 (“Reply to Luxul Sanctions 

Mot.”).

Luxul filed a motion for summary judgment on April 12, 2016. ECF No. 94 (“Luxul 

Summ. J. Mot.”). NectarLux filed an opposition on April 26, 2016. ECF No. 106 (“Opp. to Luxul 

Summ. J. Mot.”). Luxul filed a reply on May 3, 2016. ECF No. 138 (“Reply to Luxul Summ. J. 

Mot.”).

NectarLux filed a motion for sanctions on April 12, 2016. ECF No. 92 (“NectarLux 

Sanctions Mot.”). Luxul filed an opposition on April 26, 2016. ECF No. 111 (“Opp. to 

NectarLux Sanctions Mot.”). NectarLux filed a reply on May 3, 2016. ECF No. 132 (“Reply to 

NectarLux Sanctions Mot.”).

NectarLux filed a motion for summary judgment on April 12, 2016. ECF No. 93 

(“NectarLux Summ. J. Mot.”). Luxul filed an opposition on April 26, 2016. ECF No. 112 (“Opp. 

to NectarLux Summ. J. Mot.”). NectarLux filed a reply on May 3, 2016. ECF No. 134 (“Reply to 

NectarLux Summ. J. Mot.”).

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ORDER GRANTING IN PART AND DENYING IN PART CROSS-MOTIONS FOR SUMMARY JUDGMENT

AND DENYING CROSS-MOTIONS FOR SANCTIONS

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On April 28, 2016, the Court granted the parties’ joint stipulation for dismissal with 

prejudice of Luxul’s first, fifth, and sixth causes of action. ECF No. 121.

Thus, Luxul’s SAC has five remaining causes of action against NectarLux: (1) Claim Two 

for violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et 

seq.; (2) Claim Three for breach of contract; (3) Claim Four for breach of the implied covenant of 

good faith and fair dealing; (4) Claim Seven for copyright infringement in violation of 17 U.S.C. 

§ 101 et seq.; (5) Claim Eight for account stated. NectarLux’s counterclaims have three remaining

causes of action against Luxul: (1) Counterclaim One for breach of contract; (2) Counterclaim 

Two for breach of the implied covenant of good faith and fair dealing; (3) Counterclaim Four for 

an accounting.

II. LEGAL STANDARD

A. Summary Judgment

Summary judgment is appropriate if, viewing the evidence and drawing all reasonable 

inferences in the light most favorable to the nonmoving party, there are no genuine issues of 

material fact, and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); 

Celotex Corp. v. Catrett, 477 U.S. 317, 321 (1986). At the summary judgment stage, the Court 

“does not assess credibility or weigh the evidence, but simply determines whether there is a 

genuine factual issue for trial.” House v. Bell, 547 U.S. 518, 559-60 (2006). A fact is “material” 

if it “might affect the outcome of the suit under the governing law,” Anderson v. Liberty Lobby, 

Inc., 477 U.S. 242, 248 (1986), and a dispute as to a material fact is “genuine” if there is sufficient 

evidence for a reasonable trier of fact to decide in favor of the nonmoving party, id. “If the 

evidence is merely colorable, or is not significantly probative, summary judgment may be 

granted.” Id. (citations omitted).

The moving party bears the initial burden of identifying those portions of the pleadings, 

discovery, and affidavits that demonstrate the absence of a genuine issue of material fact. Celotex 

Corp., 477 U.S. at 323. Where the moving party will have the burden of proof on an issue at trial, 

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it must affirmatively demonstrate that no reasonable trier of fact could find other than for the 

moving party, but on an issue for which the opposing party will have the burden of proof at trial, 

the party moving for summary judgment need only point out “that there is an absence of evidence 

to support the nonmoving party’s case.” Id. at 325; accord Soremekun v. Thrifty Payless, Inc., 509 

F.3d 978, 984 (9th Cir. 2007). Once the moving party meets its initial burden, the nonmoving 

party must set forth, by affidavit or as otherwise provided in Rule 56, “specific facts showing that 

there is a genuine issue for trial.” Anderson, 477 U.S. at 250.

B. Sanctions

1. Rule 11 Sanctions

Rule 11 sanctions are appropriate “when a filing is frivolous, legally unreasonable, or 

without factual foundation, or is brought for an improper purpose.” Estate of Blue v. Cty. of L.A.,

120 F.3d 982, 985 (9th Cir. 1997). Accordingly, Rule 11 sanctions may be imposed: “[(1)] where 

a litigant makes a ‘frivolous filing,’ that is where he files a pleading or other paper which no 

competent attorney could believe was well grounded in fact and warranted by law; and [(2)] where 

a litigant files a pleading or paper for an ‘improper purpose,’ such as personal or economic 

harassment.” Greenberg v. Sala, 822 F.2d 882, 885 (9th Cir. 1987). 

A frivolous filing is one that is “both baseless and made without a reasonable and 

competent inquiry.” In re Keegan Mgmt. Co., Sec. Litig., 78 F.3d 431, 434 (9th Cir. 1996). Thus, 

when a complaint is challenged under Rule 11, a district court must conduct a two-prong inquiry 

to determine whether the complaint is frivolous: “(1) whether the complaint is legally or factually 

baseless from an objective perspective, and (2) if the attorney has conducted a reasonable and 

competent inquiry before signing and filing it.” Holgate v. Baldwin, 425 F.3d 671, 676 (9th Cir.

2005); see also Conn v. Borjorquez, 967 F.2d 1418, 1421 (9th Cir. 1992) (noting that courts look 

to whether “a reasonable basis for the position exist[ed] in both law and in fact at the time the 

position [was] adopted”). The “baseless” and “reasonable inquiry” requirements are conjunctive, 

not disjunctive. Therefore, “[a]n attorney may not be sanctioned for a [filing] that is not wellCase 5:14-cv-03656-LHK Document 186 Filed 06/16/16 Page 7 of 38
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founded, so long as she conducted a reasonable inquiry.” In re Keegan, 78 F.3d at 434. By the 

same token, an attorney cannot “be sanctioned for a complaint which is well-founded, solely 

because she failed to conduct a reasonable inquiry.” Id. (emphasis omitted).

When Rule 11 sanctions are party-initiated, the burden is on the moving party to 

demonstrate why sanctions are justified. See Tom Growney Equip., Inc. v. Shelley Irrigation Dev., 

Inc., 834 F.2d 833, 837 (9th Cir. 1987). The Ninth Circuit has held that Rule 11 sanctions are “an 

extraordinary remedy, one to be exercised with extreme caution.” Operating Eng’rs Pension 

Trust v. A-C Co., 859 F.2d 1336, 1345 (9th Cir. 1988). Sanctions are reserved for “rare and 

exceptional case[s] where the action is clearly frivolous, legally unreasonable or without legal 

foundation, or brought for an improper purpose.” Id. at 1344. “Rule 11 must not be construed so 

as to conflict with the primary duty of an attorney to represent his or her client zealously.” Id.

2. Discovery Sanctions

“There are two sources of authority under which a district court can sanction a party who 

has despoiled evidence: [1] the inherent power of federal courts to levy sanctions in response to 

abusive litigation practices, and [2] the availability of sanctions under Rule 37 against a party who 

‘fails to obey an order to provide or permit discovery.’” Leon v. IDX Sys. Corp., 464 F.3d 951, 

958 (9th Cir. 2006) (quoting Fed. R. Civ. P. 37(b)(2)). Where the conduct for which sanctions are 

sought is not in violation of a specific discovery order governed by Rule 37, the district court must 

rely on its “inherent authority” to impose sanctions. Id.

The Court may dismiss a party’s claims pursuant to the Court’s inherent authority “when a 

party has engaged deliberately in deceptive practices that undermine the integrity of judicial 

proceedings.” Id. (citing Anheuser-Busch, Inc. v. Natural Beverages Distribs., 69 F.3d 337, 348 

(9th Cir. 1995)). Because dismissal is a harsh sanction, the Court must weigh five factors to 

determine whether dismissal is an appropriate sanction:

(1) the public’s interest in expeditious resolution of litigation; (2) the 

court’s need to manage its docket; (3) the risk of prejudice to the 

party seeking sanctions; (4) the public policy favoring disposition of 

cases on their merits; and (5) the availability of less drastic 

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sanctions.

Anheuser-Busch, 69 F.3d at 348 (citing Henry v. Gill Indus., Inc., 983 F.2d 943, 948 (9th Cir. 

1993)). Dismissal is appropriate only upon a finding of “willfulness, fault, or bad faith.” Leon, 

464 F.3d at 958. Additionally, “[d]ue process concerns further require that there exist a 

relationship between the sanctioned party’s misconduct and the matters in controversy such that 

the transgression threatens to interfere with the rightful decision of the case.” Anheuser-Busch, 69 

F.3d at 348 (internal quotation marks and brackets omitted).

III. DISCUSSION

NectarLux moves for summary judgment on all eight of Luxul’s claims and on all three of 

NectarLux’s counterclaims. NectarLux also moves for sanctions against Luxul. Luxul moves for 

summary judgment on all three of NectarLux’s counterclaims and for sanctions against 

NectarLux. In opposition to NectarLux’s motion, Luxul also raises evidentiary objections to 

several declarations submitted by NectarLux in support of NectarLux’s motions and moves for 

additional sanctions against NectarLux. 

The Court begins by addressing Luxul’s evidentiary objections. The Court next addresses 

both parties’ summary judgment motions together. The Court then turns to each of the motions 

for sanctions.

A. Luxul’s Evidentiary Objections to Declarations Submitted by NectarLux in Support 

of NectarLux’s Motions for Summary Judgment and Sanctions

In Luxul’s opposition to NectarLux’s motion for summary judgment, Luxul raises 

evidentiary objections to and moves to strike six of the declarations filed by NectarLux in support 

of NectarLux’s motions for summary judgment and sanctions. Opp. to NectarLux Summ. J. Mot. 

at 21-25. Because the Court’s conclusions on Luxul’s evidentiary objections affect the evidence 

the Court considers in ruling on the pending motions, the Court begins its analysis by addressing 

Luxul’s evidentiary objections to the NectarLux declarations.

1. Declaration of Michael C. McKay in Support of Motion for Summary Judgment

Luxul moves to strike the declaration of Michael C. McKay filed in support of 

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NectarLux’s motion for summary judgment (“McKay Declaration”), ECF No. 176-1, for failing to 

comply with 28 U.S.C. § 1746.

To satisfy 28 U.S.C. § 1746, a declaration must include a statement in “substantially the 

following form: . . . ‘I declare (or certify, verify, or state) under penalty of perjury that the 

foregoing is true and correct.’” The Ninth Circuit has held that a declaration need only 

“substantially comply with the statute’s suggested language” for the Court to consider the 

declaration as evidence. Commodity Futures Trading Com’n v. Topworth Intern., Ltd., 205 F.3d 

1107, 1112 (9th Cir. 1999) (internal quotation marks omitted). Substantial compliance requires 

the declarant to make two assertions in the declaration: (1) that the statements in the declaration 

were made “under penalty of perjury,” and (2) “that the contents were true and correct.” 

Schroeder v. McDonald, 55 F.3d 454, 460 n.10 (9th Cir. 1995); see also Nissho-Iwai Am. Corp. v. 

Kline, 845 F.2d 1300, 1306 (5th Cir. 1988) (28 U.S.C. § 1746 “permits unsworn declarations to 

substitute for an affiant’s oath if the statement contained therein is made ‘under penalty of perjury’ 

and verified as ‘true and correct.’ . . . [The declarant] never declared her statement to be true and 

correct; therefore, her affidavit must be disregarded as summary judgment proof.”); Aviles v. 

Quick Pick Express, LLC, No. CV-15-5214-MWF (AGR), 2015 WL 5601824, at *2 (C.D. Cal. 

Sept. 23, 2015) (refusing to consider declarations made “under penalty of perjury” with the 

promise that the declarant “could and would testify” to the contents of the declaration if called as a 

witness but missing an attestation of truth because “the notation of ‘under penalty of perjury’ 

requires the corollary attestation that the declaration is true”); United States v. 8 Gilcrease Lane, 

Quincy Fla. 32351, 587 F. Supp. 2d 133, 139 (D.D.C. 2008) (“[T]here are two statements that are 

essential to a proper verification under § 1746: (i) an assertion that the facts are true and correct; 

and (ii) an averment that the first assertion is made under penalty of perjury.”); Barroca v. Santa 

Rita Jail, No. C04-0482 VRW (PR), 2006 WL 571355 (N.D. Cal. Mar. 3, 2006) (“A declaration is 

not admissible as evidence if not verified as true and correct and signed under penalty of 

perjury.”); Sterling Fifth Assocs. v. Carpentile Corp., Inc., No. 03 Civ. 6569(HB), 2003 WL 

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22227960, at *5 (S.D.N.Y. Sept. 26, 2003) (“Section 1746 permits an unsworn declaration made 

under penalty of perjury to substitute for a sworn affidavit, but only if the claimant states that its 

contents are true and correct.”); Kersting v. United States, 865 F. Supp. 669, 676 (D. Haw. 1994) 

(“As long as an unsworn declaration contains the phrase ‘under penalty of perjury’ and states that 

the document is true, the verification requirements of 28 U.S.C. § 1746 are satisfied.”).

Luxul objects to the McKay Declaration for failing to comply with Section 1746. 

However, Luxul does not explain in what way the McKay Declaration fails to comply with 

Section 1746. Opp. to NectarLux Summ. J. Mot. at 22. McKay states in the declaration: “I 

declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge 

and subject to the penalty of perjury under the laws of California.” This satisfies both of the 

requirements of Section 1746. See 28 U.S.C. § 1746; Commodity Futures Trading Com’n, 205 

F.3d at 1112. Therefore, Luxul’s objection on this basis is overruled.

Luxul additionally objects to the contents of certain paragraphs within the McKay 

Declaration for “improperly characteriz[ing] the contents” of various exhibits attached to the 

McKay Declaration and for making “conclusory and argumentative statements regarding the 

contents of these exhibits.” Opp. to NectarLux Summ. J. Mot. at 22. The Court concludes that the 

McKay Declaration accurately describes the exhibits attached to the declaration and that the 

descriptions are neither conclusory nor argumentative. For example, Luxul objects to the 

statement “A true and correct copy of Greg Frank’s email thanking NectarLux and Luxul for 

visiting HTC is attached as Exhibit 24.” McKay Declaration ¶ 25. Exhibit 24 is an email from 

Greg Frank of HTC (also known as Human Technologies Corporation) to Adam Lilien of 

NectarLux and James Pan of Luxul in which Greg Frank states “THANK YOU for visiting and for 

showing the confidence in Human Technologies, our mission, and our people.” ECF No. 175-10,

Ex. 24. Luxul does not explain why McKay’s description of this email as “Greg Frank’s email 

thanking NectarLux and Luxul for visiting HTC” is inaccurate, conclusory, or argumentative, and 

the Court concludes that the description is not inaccurate, conclusory, or argumentative. 

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Moreover, in its analysis, the Court does not rely upon McKay’s description of the exhibits but 

instead relies upon the exhibits themselves.

Therefore, the Court DENIES Luxul’s motion to strike the declaration of Michael C. 

McKay in support of NectarLux’s motion for summary judgment.1 Many objections to the 

McKay Declaration were made without a legal basis. Accordingly, given the fact that trial is only 

six weeks away, Luxul is strongly discouraged from renewing any such objections which have 

caused an unnecessary expenditure of Court and party resources. 

2. Declaration of Scott Evans in Support of Motion for Summary Judgment

Luxul moves to strike the declaration of Scott Evans in support of NectarLux’s motion for 

summary judgment (“Evans Declaration”), ECF No. 176-2, for failure to comply with 28 U.S.C. 

§ 1746 because the “declaration lacks any attestation of truth required under 28 U.S.C. § 1746.” 

Opp. to NectarLux Summ. J. Mot. at 23. The Evans Declaration serves to authenticate two 

exhibits: Evans’ Expert Report and Rebuttal Report prepared for the instant case. Evans Decl. 

ISO NectarLux Summ. J. Mot. ¶¶ 2-4. Evans states in his declaration that the declaration is made 

“under penalty of perjury,” and for each of the attached exhibits, Evans declares that the attached 

exhibit is “[a] true and correct copy” of the relevant report. Id. ¶¶ 2-3. Evans additionally 

declares that his “qualifications to serve as an expert in this case, along with [his] opinions and the 

basis for those opinions as well as the facts and data [he] considered are accurately set forth” in the 

attached reports. Id. ¶ 4. Thus, although Evans does not use the exact language suggested by 

Section 1746, the Evans Declaration contains a statement that the declaration is made “under 

penalty of perjury” and multiple statements that the declaration’s contents—in this case, the 

attached exhibits—are true and correct. This satisfies the requirement that the declaration 

substantially comply with Section 1746. See Commodity Futures Trading Com’n, 205 F.3d at 

 

1 Additionally, Luxul has filed evidentiary objections to NectarLux’s Reply to its Motion for 

Sanctions and the Declaration of Michael McKay in Support of NectarLux’s Reply to its Motion 

for Sanctions. ECF No. 145. Because the Court denies NectarLux’s Motion for Sanctions on 

other grounds, the Court does not reach the merits of these evidentiary objections.

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1112 (declarations need only substantially comply with 28 U.S.C. § 1746 to be admissible); 

Schroeder, 55 F.3d at 460 n.10 (substantial compliance with 28 U.S.C. § 1746 requires two 

assertions: (1) that the statements in the declaration were made “under penalty of perjury,” and (2) 

“that the contents were true and correct”).

Additionally, Evans filed a second declaration in support of NectarLux’s reply to 

NectarLux’s motion for summary judgment, in which Evans incorporated by reference the entirety 

of the Evans declaration in support of NectarLux’s motion for summary judgment. ECF No. 134-

3. Evans’ reply declaration attests that it was made “under penalty of perjury” and that the 

statements in the declaration are “true and correct,” thus satisfying 28 U.S.C. § 1746. Id. Luxul 

did not file any objections to Evans’ reply declaration.

Therefore, the Court DENIES Luxul’s motion to strike the declaration of Scott Evans in 

support of NectarLux’s motion for summary judgment. The objection to the Evans Declaration 

was made without a legal basis. Accordingly, given the fact that trial is only six weeks away, 

Luxul is strongly discouraged from renewing any such objections which have caused an 

unnecessary expenditure of Court and party resources.

3. Declaration of Adam Lilien in Support of Motion for Summary Judgment

Luxul moves to strike the declaration of Adam Lilien in support of NectarLux’s motion for 

summary judgment (“Lilien Declaration”), ECF No. 93-5, for failure to comply with 28 U.S.C. 

§ 1746 because the “declaration lacks any attestation of truth required under 28 U.S.C. § 1746.” 

Opp. to NectarLux Summ. J. Mot. at 23. 

The Lilien Declaration consists primarily of Lilien’s account of his dealings with Luxul on 

behalf of NectarLux. Lilien Decl. ISO NectarLux Summ. J. Mot. The Lilien Declaration states 

that it was made “under penalty of perjury,” but the only attestations of truth in the declaration are 

that the four exhibits attached to the declaration are “true and correct” copies of the original 

documents. Id. 

However, Lilien filed a second declaration in support of NectarLux’s reply to NectarLux’s 

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motion for summary judgment, in which Lilien incorporated by reference the entirety of Lilien’s 

declaration in support of NectarLux’s motion for summary judgment. ECF No. 134-2. Lilien’s 

reply declaration attests that it was made “under penalty of perjury” and that the statements in the 

declaration, including all of the statements in Lilien’s original declaration incorporated by 

reference, are “true and correct,” thus satisfying 28 U.S.C. § 1746. Id. Luxul did not file any 

objections to Lilien’s reply declaration.

Therefore, based on the attestations of truthfulness made under penalty of perjury in the 

Lilien declaration in support of NectarLux’s reply to NectarLux’s motion for summary judgment, 

the Court DENIES Luxul’s motion to strike the Lilien declaration in support of NectarLux’s 

motion for summary judgment.

Luxul additionally objects to the contents of paragraphs 11 and 12 of the Lilien declaration 

in support of NectarLux’s motion for summary judgment as lacking documentary support, 

impermissible hearsay not subject to an exception, irrelevant, lacking foundation, and contrary to 

the best evidence rule. As the Court does not rely upon paragraphs 11 and 12 in its analysis, the 

Court does not reach the merits of Luxul’s objections.

4. Declaration of Joshua Novak in Support of Motion for Summary Judgment

Luxul moves to strike the declaration of Joshua Novak in support of NectarLux’s motion 

for summary judgment (“Novak Decl.”), ECF No. 93-7, for failure to comply with 28 U.S.C. 

§ 1746 because the “declaration lacks any attestation of truth required under 28 U.S.C. § 1746.” 

Opp. to NectarLux Summ. J. Mot. at 24. 

The Novak Declaration does not contain any attestation of truthfulness. However, Novak 

filed a second declaration in support of NectarLux’s reply to NectarLux’s motion for summary 

judgment, in which Novak incorporated by reference the entirety of Novak’s declaration in 

support of NectarLux’s motion for summary judgment. ECF No. 134-4. Novak’s reply 

declaration attests that it was made “under penalty of perjury” and that the statements in the 

declaration, including all of the statements in Novak’s original declaration incorporated by 

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reference, are “true and correct,” thus satisfying 28 U.S.C. § 1746. Id. Luxul did not file any 

objections to Novak’s reply declaration.

Therefore, based on the attestations of truthfulness made under penalty of perjury in the 

Novak declaration in support of NectarLux’s reply to NectarLux’s motion for summary judgment, 

the Court DENIES Luxul’s motion to strike the Novak declaration in support of NectarLux’s 

motion for summary judgment.

Luxul additionally objects to paragraph 5 of the Novak Declaration as irrelevant. In 

paragraph 5 of the Novak Declaration, Novak, who is the president of Hillcrest America 

(“Hillcrest”), declares that prior to Luxul’s termination of its relationship with NecterLux, 

“Hillcrest anticipated working with NectarLux to market and sell Luxul products.” Novak Decl. 

¶ 5. This is relevant to NectarLux’s claim for damages from Luxul’s allegedly wrongful 

termination of the April 2014 Agreement. Therefore, the Court overrules Luxul’s objection to 

paragraph 5 of the Novak Declaration.

5. Declaration of Enzo Caruso in Support of Motion for Summary Judgment

Luxul moves to strike the declaration of Enzo Caruso in support of NectarLux’s motion for 

summary judgment (“Caruso Declaration”), ECF No. 93-8, for failure to comply with 28 U.S.C. 

§ 1746 because the “declaration lacks any attestation of truth required under 28 U.S.C. § 1746.” 

Opp. to NectarLux Summ. J. Mot. at 24. 

The Caruso Declaration does not contain any attestation of truthfulness, and unlike Evans, 

Lilien, and Novak, Caruso has not filed a further declaration attesting to the truthfulness of the 

Caruso declaration. Therefore, the Court GRANTS Luxul’s motion to strike the Caruso 

Declaration. Schroeder, 55 F.3d at 460 n.10 (substantial compliance with 28 U.S.C. § 1746 

requires statements (1) that the statements in the declaration were made “under penalty of 

perjury,” and (2) “that the contents were true and correct”); see also Aviles, 2015 WL 5601824, at 

*2 (refusing to consider declarations made “under penalty of perjury” with the promise that the 

declarant “could and would testify” to the contents of the declaration if called as a witness but 

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missing an attestation of truth because “the notation of ‘under penalty of perjury’ requires the 

corollary attestation that the declaration is true”).

6. Declaration of Alycia Singleton in Support of Motion for Sanctions

Luxul moves to strike the declaration of Alycia Singleton in support of NectarLux’s 

motion for sanctions (“Singleton Declaration”), ECF No. 172-1, for failure to comply with 28 

U.S.C. § 1746 because the “declaration lacks any attestation of truth required under 28 U.S.C. 

§ 1746.” Opp. to NectarLux Summ. J. Mot. at 25. 

The Singleton Declaration does not contain any attestation of truthfulness, and unlike 

Evans, Lilien, and Novak, Singleton has not filed a further declaration attesting to the truthfulness 

of the Singleton declaration. Therefore, the Court GRANTS Luxul’s motion to strike the 

Singleton declaration in support of NectarLux’s motion for sanctions. Schroeder, 55 F.3d at 460 

n.10 (substantial compliance with 28 U.S.C. § 1746 requires statements (1) that the statements in 

the declaration were made “under penalty of perjury,” and (2) “that the contents were true and 

correct”); see also Aviles, 2015 WL 5601824, at *2 (refusing to consider declarations made “under 

penalty of perjury” with the promise that the declarant “could and would testify” to the contents of 

the declaration if called as a witness but missing an attestation of truth because “the notation of 

‘under penalty of perjury’ requires the corollary attestation that the declaration is true”).

With the foregoing rulings on Luxul’s objections to NectarLux’s declarations in mind, the 

Court turns to the merits of the parties’ motions for summary judgment.

B. Cross-Motions for Summary Judgment

NectarLux moves for summary judgment on each of Luxul’s eight claims against 

NectarLux and on each of NectarLux’s three counterclaims against Luxul. Luxul moves for 

summary judgment on each of NectarLux’s three counterclaims against Luxul. The Court first 

addresses each of Luxul’s eight claims and then addresses each of NectarLux’s three

counterclaims.

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1. Luxul’s Claims One, Five, and Six

NectarLux’s motion for summary judgment asks the Court to grant summary judgment to 

NectarLux on Luxul’s Claims One, Five, and Six for false designation of origin in violation of 15 

U.S.C. § 1125(a), false advertising in violation of 15 U.S.C. § 1125(a), and false advertising in 

violation of Cal. Bus. & Prof. Code § 17500 et seq. NectarLux Summ. J. Mot at 17. After the 

parties filed their oppositions to the cross-motions for summary judgment, the parties filed a 

stipulation dismissing Luxul’s Claims One, Five, and Six with prejudice. ECF No. 117. The 

Court approved the parties’ stipulation. ECF No. 121. Accordingly, NectarLux’s motion for 

summary judgment is DENIED AS MOOT as to Luxul’s Claims One, Five, and Six. 

2. Luxul’s Claim Two: Violation of the UCL

NectarLux moves for summary judgment as to Luxul’s Claim Two for violation of the 

UCL on the grounds that Luxul has failed to establish that it suffered an economic injury in 

connection with the conduct Luxul alleges constitutes a UCL violation. NectarLux Summ. J. Mot. 

at 18.

To have standing to pursue a claim under the UCL, a plaintiff must “have suffered injury 

in fact and have lost money or property as a result of the unfair competition.” Hinojos v. Kohl’s 

Corp., 718 F.3d 1098, 1104 (9th Cir. 2013) (quoting Cal. Bus. & Prof. Code § 17204) (internal 

quotation marks and alterations omitted). The “lost money or property” requirement “requires a 

plaintiff to demonstrate some form of economic injury as a result of his transactions with the 

defendant.” Id. (citing Kwikset Corp. v. Super. Ct., 51 Cal.4th 310, 323 (2011).

In the instant case, Luxul’s claim for violation of the UCL is based on the following 

alleged conduct by NectarLux: “(1) without permission, license or consent, rebranding Luxul LED 

tubular lamps as ‘Nectar’ products; and (2) wrongfully and unfairly represented [sic] to third 

parties that Luxul’s business and/or products are affected by legal issues which do not exist.” 

SAC ¶ 42. NectarLux argues that the record is devoid of any evidence of economic injury to 

Luxul as a result of the foregoing alleged wrongful conduct. NectarLux Summ. J. Mot. at 18. In 

support of its motion for summary judgment, NectarLux attaches Luxul’s interrogatory response. 

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In response to an interrogatory asking Luxul to identify the basis and amount of its damages 

associated with its UCL claim, Luxul stated that NectarLux “will obtain the requested information 

through Luxul’s expert report.” McKay Decl., Ex. 3 at 3:26-27, 4:6-9. NectarLux additionally 

proffers the report of Luxul’s damages expert, Bonnie J. Goldsmith. Id.; see also ECF No. 162-27 

(“Goldsmith Report”).

In the SAC, Luxul alleges that NectarLux violated the UCL by: “(1) without permission, 

license or consent, rebranding Luxul LED tubular lamps as ‘Nectar’ products; and (2) wrongfully 

and unfairly represented [sic] to third parties that Luxul’s business and/or products are affected by 

legal issues which do not exist.” SAC ¶ 42. However, Goldsmith does not identify any damages 

owed to Luxul as a result of NectarLux “rebranding Luxul LED tubular lamps as ‘Nectar’ 

products” or “wrongfully and unfairly represent[ing] to third parties that Luxul’s business and/or 

products are affected by legal issues which do not exist.” See id.; Goldsmith Report ¶¶ 15-25. 

By contrast, Goldsmith opined that Luxul is entitled to $36,489 in damages from 

NectarLux stemming from three alleged wrongful acts: (1) $13,477 to account for 

undercompensation to Luxul from NectarLux’s alleged wrongful purchase of Luxul products from 

a third party—Tim Gayvert—using a discount available to Gayvert but not to NectarLux; (2) 

$7,797 in invoices for Luxul products allegedly purchased by NectarLux through Gayvert for 

which Gayvert did not pay Luxul; and (3) $15,215 in unpaid invoices for Luxul products allegedly 

purchased by NectarLux directly from Luxul. See Goldsmith Report ¶¶ 15-25. Likewise, at 

Goldsmith’s deposition, Goldsmith confirmed that Luxul’s damages for “unfair competition” 

stemmed from NectarLux’s “purchasing product through another distributor [Gayvert] at a lower 

price than it would have gotten if it had purchased directly from Luxul,” and did not identify any 

bases for UCL damages other than those identified in the Goldsmith Report. ECF No. 162-35 at 

40:6-9. None of the conduct identified by Goldsmith as a basis for damages is identified in the 

SAC as a basis for Luxul’s UCL claim, and indeed, no allegations related to alleged purchases of 

Luxul products from Gayvert, or any other third party, appear in the SAC at all. See SAC.

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In opposition, Luxul has not identified any evidence in the record that Luxul suffered an 

economic injury in connection with NectarLux “rebranding Luxul LED tubular lamps as ‘Nectar’ 

products” or “wrongfully and unfairly represent[ing] to third parties that Luxul’s business and/or 

products are affected by legal issues which do not exist.” Instead, Luxul argues that the conduct 

identified by Goldsmith in her expert report constitutes the “unfair business practices” supporting 

Luxul’s UCL claim. Opp. to NectarLux Summ. J. Mot. at 8-9. However, the conduct identified 

by Goldsmith is not the conduct alleged in the SAC as a UCL violation. 

The Ninth Circuit has held that “when issues are raised in opposition to a motion to 

summary judgment that are outside the scope of the complaint,” the Court should “construe[] the 

matter raised as a request . . . to amend the pleadings out of time.” Desertrain v. City of L.A., 754 

F.3d 1147, 1154 (9th Cir. 2014). Because the deadline to amend the pleadings was April 3, 

2015—more than a year prior to the date Luxul filed its opposition to NectarLux’s motion for 

summary judgment—Luxul must first show “good cause” for amendment under Rule 16(b), then 

if “good cause” is shown, Luxul must demonstrate that amendment is proper under Rule 15. 

Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992). Under Rule 15, the 

Court may deny leave to amend due to “undue delay, bad faith or dilatory motive on the part of the 

movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice 

to the opposing party by virtue of allowance of the amendment, and futility of the amendment.” 

Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 532 (9th Cir. 2008) (brackets and internal 

quotation marks omitted).

In the instant case, Luxul has made no showing of good cause to amend the SAC, nor has 

Luxul shown that amendment would be proper under Rule 15. Furthermore, the Court finds that 

Luxul unduly delayed by waiting until more than a year after the April 3, 2015 deadline to amend 

the complaint. Fact discovery closed eight months ago on October 16, 2015, and expert discovery 

closed five months ago on January 22, 2016. The pretrial conference is in three weeks on July 7, 

2016. Trial begins in six weeks on August 1, 2016. The Court finds that it would unduly 

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prejudice NectarLux to permit Luxul to amend the SAC at this late stage of the proceedings. 

Accordingly, the Court will not permit Luxul to amend the SAC to assert Luxul’s new, previously 

unalleged bases for its UCL claim.

Because NectarLux’s purchases from Gayvert and NectarLux’s allegedly unpaid invoices 

do not form the basis of Luxul’s UCL claim, and because there is no evidence in the record of any 

economic injury to Luxul from the conduct that does form the basis of Luxul’s UCL claim, Luxul 

has not demonstrated economic injury resulting from the alleged UCL violation. Therefore, Luxul 

lacks standing to pursue its UCL claim against NectarLux, and the Court GRANTS NectarLux’s 

motion for summary judgment as to Luxul’s Claim Two for violation of the UCL. See Kwikset 

Corp., 51 Cal.4th at 323 (plaintiff must demonstrate economic injury to have standing to bring a 

UCL claim).

3. Luxul’s Claims Three and Four: Breach of Contract and Breach of the Implied 

Covenant of Good Faith and Fair Dealing

NectarLux argues that it is entitled to summary judgment on Luxul’s claims for breach of 

contract and breach of the implied covenant of good faith and fair dealing because Luxul has not 

shown that it suffered any damages as a result of the alleged breaches. NectarLux Summ. J. Mot. 

at 18-19.

Under California law, “the elements of a cause of action for breach of contract are (1) the 

existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) 

defendant’s breach, and (4) the resulting damages to the plaintiff.” Oasis W. Realty, LLC v. 

Goldman, 51 Cal. 4th 811, 821 (2011). To establish contractual damages, a plaintiff must 

establish “appreciable and actual damage.” Aguilera v. Pirelli Armstrong Tire Corp., 223 F.3d 

1010, 1015 (9th Cir. 2000); Patent Scaffolding Co. v. William Simpson Const. Co., 256 Cal. App. 

2d 506, 511 (1967) (“A breach of contract without damage is not actionable.”). Nominal 

damages, speculative harm, or threat of future harm do not suffice to show legally cognizable 

injury. See Aguilera, 223 F.3d at 1015; see also Ruiz v. Gap, Inc., 622 F. Supp. 2d 908, 917 (N.D. 

Cal. 2009).

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In the SAC, Luxul alleges that NectarLux breached the explicit and implied terms of the 

April 2014 Agreement by engaging in the following conduct:

 “[A]ltering Luxul LED tubular lamp products to bear the name ‘Nectar’ without permission, 

consent or license from Luxul.” SAC ¶ 48.

 “[D]isplaying images derived from Luxul marketing materials and the Luxul website and 

without permission, representing said images as those of and/or affiliated with NectarLux.” 

Id.

 “[R]epresenting that Mr. Pan, as the inventor of the technology, had conducted research and 

development for NectarLux by including statements on the NectarLux website purportedly 

made by Dr. Pan about LED tubular lamp technology.” Id.

 “[M]isrepresenting Luxul technology as developed, manufactured and branded by NectarLux.” 

Id.

 “[S]elling or offering to sell Luxul products to customers by misappropriating the Luxul name 

and logo in order to profit from the sale directly.” Id.

 “[R]epresenting that NectarLux has the license, consent and authority to duplicate Luxul 

promotional material and set it forth as its own.” Id.

 “[F]ailing to ‘manage and maintain a positive brand image in the lighting industry’ by falsely 

representing to third parties that Luxul had legal problems when no such problems existed.” 

Id. ¶ 49.

 “[A]pproaching Luxul customers and attempting to sell, offer to sell and/or broker the sale of 

LED lighting products by third parties that were not Luxul.” Id. ¶¶ 50, 58.

 “[M]odifying Luxul product images and marketing materials and passing them off as ‘Nectar’ 

branded products and materials, thereby attempting to obtain a direct financial benefit and 

frustrate Luxul’s ability to realize sales of its own products.” Id. ¶ 57.

 “[F]alsely representing to third parties that Luxul was experiencing ‘legal problems’ when no 

such legal issues existed.” Id. ¶ 59.

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NectarLux argues that the record is devoid of any evidence of damages incurred by Luxul as a 

result of any of the foregoing conduct, and that all of Luxul’s evidence of damages pertains to 

conduct not related to the conduct alleged in the SAC.

Luxul argues that it has produced evidence of damages pertaining to its claims for breach 

of contract and breach of the implied covenant of good faith and fair dealing. Opp. to NectarLux 

Summ. J. Mot. at 16. Specifically, Luxul argues that the expert report of Bonnie Goldsmith sets 

forth Luxul’s breach of contract damages. Id. However, as described in Section III.B.2, supra, 

the Goldsmith Report describes damages related only to NectarLux’s alleged wrongful purchase of 

Luxul products from Tim Gayvert, Gayvert’s failure to pay certain invoices, and NectarLux’s 

failure to pay certain invoices. See Goldsmith Report ¶¶ 15-25. The Goldsmith Report contains 

no evidence of any damages associated with any of the conduct alleged in the SAC as a breach of 

contract or breach of the implied covenant of good faith and fair dealing. See id. Luxul has not 

identified any evidence in the record of any damages associated with the conduct alleged in the 

SAC as a breach of contract, nor has the Court in its own review of the record.

Instead, Luxul appears to argue that the Court should treat the conduct upon which 

Goldsmith relied as the basis of Luxul’s claims for breach of contract and breach of the implied 

covenant of good faith and fair dealing, despite the fact that none of that conduct was alleged in 

the SAC as a breach of contract or breach of the implied covenant of good faith and fair dealing, 

and despite the fact that the SAC in fact contains no allegations related to the alleged purchases 

from Gayvert.2 The Court treats this as a request “to amend the pleadings out of time,” 

Desertrain, 754 F.3d at 1154, which requires Luxul to show both “good cause” for amendment 

under Rule 16(b) and that amendment is proper under Rule 15, Johnson, 975 F.2d at 607-08 (9th 

Cir. 1992). 

In the instant case, Luxul has made no showing of good cause to amend the SAC, nor has 

 

2

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allegations pertain to Luxul’s Claim Eight for an account stated, not to Luxul’s Claims Three and 

Four for breach of contract and breach of the implied covenant of good faith and fair dealing.

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Luxul shown that amendment would be proper under Rule 15. Furthermore, the Court finds that 

Luxul unduly delayed by waiting until more than a year after the April 3, 2015 deadline to amend 

the complaint, and that it would unduly prejudice NectarLux to permit Luxul to amend the SAC at 

this late stage of the proceedings. The case has been pending for nearly two years, fact and expert 

discovery have closed, and the trial is scheduled to begin in six weeks. Accordingly, the Court 

will not permit Luxul to amend the SAC to assert Luxul’s new, previously unalleged bases for its 

breach of contract and breach of the implied covenant of good faith and fair dealing claims. See 

Leadsinger, 512 F.3d at 532.

Because NectarLux’s purchases from Gayvert and NectarLux’s allegedly unpaid invoices 

do not form the basis of Luxul’s claims for breach of contract and breach of the implied covenant

of good faith and fair dealing, and because there is no evidence in the record of any damages to 

Luxul from the conduct that does form the basis of Luxul’s breach of contract and breach of the 

implied covenant of good faith and fair dealing claims, Luxul has not demonstrated that 

NectarLux’s alleged breaches resulted in damage to Luxul. Therefore, Luxul cannot show 

damages, an essential element of Luxul’s breach of contract claims, and the Court GRANTS 

NectarLux’s motion for summary judgment as to Luxul’s Claims Three and Four for breach of 

contract and breach of the implied covenant of good faith and fair dealing. See Patent Scaffolding, 

256 Cal. App. 2d at 511 (“A breach of contract without damage is not actionable.”).

4. Luxul’s Claim Seven: Copyright Infringement

NectarLux argues that it is entitled to summary judgment on Luxul’s Claim Seven for 

copyright infringement on the grounds that Luxul has no damages or other available relief 

associated with the alleged copyright infringement. NectarLux Summ. J. Mot. at 17; Reply to 

NectarLux Summ. J. Mot. at 2-4. Although NectarLux does not concede that it infringed Luxul’s 

copyrights, Reply to NectarLux Summ. J. Mot. at 4 n.13, NectarLux argues that summary 

judgment is appropriate solely because the undisputed facts show that Luxul is not entitled to 

damages or any equitable relief. 

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In support of its argument that Luxul has no available remedy for alleged copyright 

infringement, NectarLux directs the Court to the testimony of Luxul’s Rule 30(b)(6) deponent, 

James Pan, who was unable to identify any damages associated with Luxul’s copyright 

infringement claim when asked to do so at his deposition. McKay Decl., ECF No. 178, Ex. 33 at 

203:1-205:15. NectarLux also proffers the testimony of Luxul’s damages expert, Bonnie 

Goldsmith, who testified that she did not calculate any damages associated with copyright 

infringement despite having been asked to do so because any such damages were “too speculative 

to consider.” McKay Decl., Ex. 1 at 26:7-27:1. Goldsmith accordingly did not include any 

damages for copyright infringement in her expert report. See Goldsmith Report ¶¶ 15-25. 

Furthermore, in response to an interrogatory asking Luxul to identify the basis and amount of its 

damages associated with the copyright infringement claim, Luxul stated that NectarLux “will 

obtain the requested information through Luxul’s expert report.” McKay Decl., Ex. 3 at 7:22-23. 

The expert report, however, contains no calculation of damages for copyright infringement, and no 

other calculation of copyright damages has been identified. 

NectarLux additionally argues that Luxul is not entitled to equitable relief because 

NectarLux has already “removed and/or destroyed all of the allegedly infringing materials.” 

Lilien Decl. ISO Reply to NectarLux Summ. J. Mot., ECF No. 134-2, ¶ 6. Indeed, at the Rule 

30(b)(6) deposition of James Pan, Pan and Luxul’s attorney both acknowledged that NectarLux’s 

website, where the alleged infringement had occurred, was no longer available online. McKay 

Decl. ISO NectarLux Summ. J. ¶ 34, Ex. 33 at 203:10-204:1 (“[Question:] [D]o you know 

whether these images are even on the NectarLux website? [Objection from Luxul’s attorney:] I’m 

just going to object on the grounds that the website doesn’t exist anymore. It’s not up on the Web 

at all. . . . [Question:] But you understand you’re asking the judge to force NectarLux to take the 

website down, and the website is not even in existence? [Answer:] Because, even if it does not 

exist today doesn’t mean that it cannot exist tomorrow.”).

Although Luxul states in its opposition that “Plaintiff submits there is sufficient evidence 

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produced in discovery that creates a material fact dispute” regarding whether Luxul is entitled to 

relief on its copyright infringement claim, Luxul identifies no such evidence in the record. Opp. to 

NectarLux Summ. J. Mot. at 7-8. The Court in its review of the record also has not identified any 

evidence that Luxul is entitled to damages on its copyright infringement claim. The Court thus 

concludes that the undisputed evidence shows that Luxul is not entitled to damages on its 

copyright infringement claim. Additionally, the undisputed evidence shows that NectarLux has 

already removed and destroyed all of the allegedly infringing materials, such that Luxul’s request 

for injunctive relief is now moot. See Seven Words LLC v. Network Solutions, 260 F.3d 1089, 

1100 (9th Cir. 2001) (claim for injunctive relief is moot when injunctive relief is no longer 

available). Therefore, the Court GRANTS NectarLux’s motion for summary judgment as to 

Luxul’s Claim 7 for copyright infringement.

5. Luxul’s Claim Eight: Account Stated

NectarLux moves for summary judgment on Luxul’s claim for an account stated because, 

according to NectarLux, Luxul’s accounts are inaccurate, and NectarLux does not owe Luxul for 

any unpaid invoices due to Luxul’s recall of the covered products. NectarLux’s sole evidentiary 

support for NectarLux’s argument that Luxul keeps inaccurate accounts is the Singleton 

Declaration, which the Court does not consider as evidence in ruling on NectarLux’s motion, see

Section III.C.6, supra. 

As to whether Luxul recalled the products covered by the allegedly unpaid invoices, 

NectarLux has produced an email from Luxul dated July 25, 2014 in which Luxul offered to 

refund NectarLux for any products recalled by Luxul. McKay Decl., Ex. 6. The email 

specifically states that Luxul “decide[d] to be responsible and withdraw from all of your projects, 

and recall all of the products we have shipped to you. . . . Luxul will refund all of the payments we 

received from your projects. . . . Please give me a list of projects and Luxul products you would 

like to return to us, Luxul will take full charge and recall all of the products you would like to 

return.” Id. NectarLux also attaches the declaration of Adam Lilien stating that “[w]hen James 

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Pan recalled all of the products Luxul shipped to NectarLux and offered to refund all of the 

payments Luxul received from NectarLux, I accepted his offer. . . . Luxul, however, did not refund 

any of the payments NectarLux made for those products.” Lilien Decl. ISO Reply to NectarLux 

Summ. J. Mot., ECF No. 134-2, ¶ 7. Although the recall offer from Luxul gave NectarLux 

discretion to decide which “Luxul products you would like to return to us,” McKay Decl., Ex. 6, 

Lilien does not explain which or how many products NectarLux returned to Luxul. In opposition, 

Luxul submits evidence that, as of July 18, 2014, NectarLux owed Luxul a balance of $18,764.47. 

Morton Decl. ISO Opp. to NectarLux Summ. J. Mot, ECF No. 162, Ex. 25. Thus, there is 

evidence in the record that Luxul shipped products to NectarLux for which NectarLux had not

reimbursed Luxul as of July 18, 2014, and that NectarLux subsequently returned at least some or 

all of Luxul’s products to Luxul pursuant to Luxul’s recall offer. However, the parties have not 

identified, and the Court has not found evidence in the record showing what products NectarLux 

returned to Luxul, nor what the offset would be on the unpaid invoices for the recalled products. 

Accordingly, there is a material factual dispute regarding what, if anything, remains to be paid by 

NectarLux to Luxul on the July 18, 2014 invoice, so summary judgment is not appropriate on 

Luxul’s claim for an account stated. 

Thus, the Court DENIES NectarLux’s motion for summary judgment on Luxul’s Claim 

Eight for account stated.

6. NectarLux’s Counterclaim One: Breach of Contract

Luxul argues that it is entitled to summary judgment on NectarLux’s first counterclaim for 

breach of contract because, according to Luxul, NectarLux’s counterclaim addresses breach of 

only the January 2014 Agreement to which NectarLux was not a party. See Luxul Summ. J. Mot. 

at 7-9; Reply to Luxul Summ. J. Mot. at 2-6. 

The parties now agree that NectarLux was not a party to the January 2014 Agreement, and 

that NectarLux accordingly may not seek damages for any breach by Luxul of the January 2014 

Agreement. See Luxul Summ. J. Mot. at 4 (“NectarLux is not named as a party to the January 29, 

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2014 contract.”); Opp. to Luxul Summ. J. Mot. at 1 (“The first contract was executed by Nectar 

Partners and Luxul on January 29, 2014”); Opp. to Luxul Summ. J. Mot. at 2 (“NectarLux, 

however, is only seeking damages associated with Luxul’s breach of the second contract.”). 

However, Luxul is correct that portions of NectarLux’s first counterclaim appear to seek damages 

for Luxul’s alleged breach of the January 2014 Agreement. Specifically, NectarLux alleges that 

“Luxul materially breached the contract in March when it claimed that Colvin was not authorized 

to execute contracts on behalf of Luxul and thereafter Luxul refused to honor the contract.” 

Countercl. ¶ 34. This allegation refers exclusively to the January 2014 Agreement and the events 

that led the parties to enter into the April 2014 Agreement. Because NectarLux was not a party to 

the January 2014 Agreement, however, NectarLux may not recover damages for any breach of the 

January 2014 Agreement. See Hatchwell v. Blue Shield of Cal., 198 Cal. App. 3d 1027, 1034 

(1988) (“Someone who is not a party to the contract has no standing to enforce the contract or to 

recover extra-contract damages for wrongful withholding of benefits to the contracting party.”). 

Therefore, the Court GRANTS Luxul’s motion for summary judgment as to NectarLux’s 

allegations regarding breach of the January 2014 Agreement.

However, NectarLux’s counterclaim for breach of contract additionally alleges that Luxul 

breached the April 2014 Agreement. Specifically, NectarLux admits in its Answer to the SAC 

that it entered the April 2014 Agreement with Luxul. Ans. ¶ 13. NectarLux then alleges that 

“NectarLux continued to act in good faith” under the April 2014 Agreement. Countercl. ¶ 26. 

NectarLux alleges that NectarLux took numerous steps to perform pursuant to the April 2014 

Agreement, including successfully securing customers on behalf of Luxul in May 2014. Id. ¶¶ 26-

30. NectarLux alleges, however, that in August 2014, NectarLux discovered a fraudulent 

purchase order entered in Luxul’s records in NectarLux’s name, and that NectarLux discovered 

that “Luxul was selling light bulbs directly and/or through third parties in NectarLux’s territory 

and to NectarLux’s clients without compensating NectarLux for the sales.” Id. ¶ 31. These 

allegations, if true, would violate the April 2014 Agreement, which was the operative contract in 

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summer 2014. See April 2014 Agreement ¶ 1. Accordingly, NectarLux alleges that Luxul 

“materially breached the contract when it sold light bulbs in NectarLux’s territory and to 

NectarLux’s protected clients without providing NectarLux with an accounting or any 

compensation for the sales.” Countercl. ¶ 34. These allegations that Luxul breached the contract 

in August 2014 correspond to a breach of the April 2014 Agreement, which was the operative 

contract at the time.

NectarLux further alleges that Luxul breached the contract by failing to: (1) “[m]aintain 

manufacturing quality;” (2) “[m]anage and maintain a positive brand presence;” (3) “[w]ork with 

NectarLux to resolve challenges with product performance in a timely manner;” (4) “[m]anage 

other Representative/Partner agreements to not conflict with the NectarLux contract;” (5) “[w]ork 

together with NectarLux to ensure that sales commitments were achieved;” (6) “[m]eet regularly 

to successfully work through challenges;” (7) “[m]aintain confidential information for the sole 

purpose of advancing both parties’ profitability;” (8) “[m]aintain non-compete covenants;” and (9) 

“[m]aintain non-circumvent covenants.” Id. ¶ 35. Although NectarLux’s counterclaim does not 

specify whether these alleged breaches occurred under the January 2014 Agreement or the April 

2014 Agreement, all of these alleged breaches correspond to explicit contract terms in the April 

2014 Agreement. See April 2014 Agreement ¶¶ 1-7, 9.

Therefore, because NectarLux’s counterclaim for breach of contract alleges that Luxul 

breached the April 2014 Agreement, the Court DENIES Luxul’s motion for summary judgment as 

to NectarLux’s allegations regarding breach of the April 2014 Agreement.

NectarLux additionally argues that it is entitled to summary judgment because the 

undisputed evidence is that Luxul breached the April 2014 Agreement. See NectarLux Summ. J. 

Mot. at 20-24. Luxul disputes NectarLux’s evidence that Luxul breached the April 2014 

Agreement. Opp. to NectarLux Summ. J. Mot. at 17-20. The Court finds that there are material 

factual disputes regarding whether Luxul breached the April 2014 Agreement such that summary 

judgment for NectarLux is not appropriate. 

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For example, there is a material factual dispute regarding whether Luxul breached the 

April 2014 Agreement by paying NectarLux a commission for sales Luxul made to AT&T. The 

April 2014 Agreement provides that NectarLux would be the “exclusive independent 

representative of Luxul for . . . the solicitation of sales of the Luxul products” within NectarLux’s 

defined territory and for NectarLux’s defined accounts. April 2014 Agreement ¶ 1. The contract 

permitted NectarLux to be compensated through NectarLux’s direct profits or through a 

commission “to be negotiated in good faith.” Id. NectarLux has produced a Luxul internal email 

chain from June 2014 in which Luxul executives, including James Pan, discussed Luxul’s plan to 

sell Luxul products to AT&T (a protected NectarLux account) through a sale that was not solicited 

by NectarLux. McKay Decl., ECF No. 178, Ex. 12. NectarLux argues that Luxul breached the 

April 2014 Agreement by proceeding with the AT&T sales because the sales were not solicited by 

NectarLux and NectarLux did not agree to receive a commission in exchange for Luxul 

proceeding with the AT&T sales. NectarLux Summ. J. Mot. at 21. 

By contrast, Luxul provides evidence that, in June 2014 prior to the AT&T sales, 

NectarLux and Luxul engaged in email negotiations regarding appropriate commissions. Morton 

Decl. ISO Opp. to NectarLux Summ. J. Mot., ECF No. 162, Ex. 48. Luxul argues that the 

commission paid to NectarLux for the AT&T sales was the highest commission amount requested 

by NectarLux in these negotiations, supporting the conclusion that the commission paid to 

NectarLux on the AT&T sales was the product of good faith negotiations. Opp. to NectarLux 

Summ. J. Mot. at 17. Luxul further provides an email chain between Luxul and NectarLux 

purportedly showing commissions paid to NectarLux after the AT&T sales. Morton Decl. ISO 

Opp. to NectarLux Summ. J. Mot., Ex. 25. Thus, the evidence in the record creates a material 

factual dispute regarding whether NectarLux and Luxul negotiated a commission pursuant to the 

April 2014 Agreement that would apply to the AT&T sales. 

Therefore, because there is a material factual dispute regarding whether Luxul breached 

the April 2014 Agreement, the Court DENIES NectarLux’s motion for summary judgment as to 

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NectarLux’s allegations regarding breach of the April 2014 Agreement.

7. NectarLux’s Counterclaim Two: Breach of the Implied Covenant of Good Faith 

and Fair Dealing

Luxul argues that NectarLux’s counterclaim for breach of the implied covenant of good 

faith and fair dealing should be dismissed because it is based upon the January 2014 Agreement to 

which NectarLux was not a party and because it is duplicative of NectarLux’s breach of contract 

counterclaim. Luxul Summ. J. Mot. at 9-12.

Every contract contains an implied-in-law covenant of good faith and fair dealing. Foley v. 

Interactive Data Corp., 47 Cal. 3d 654, 683-84 (1988). “Simply stated, the burden imposed is that 

neither party will do anything which will injure the right of the other to receive the benefits of the 

agreement . . . the implied covenant imposes upon each party the obligation to do everything that 

the contract presupposes they will do to accomplish its purpose.” Careau & Co. v. Sec. Pac. Bus. 

Credit, Inc., 222 Cal. App. 3d 1371, 1393 (1990) (citations, quotations, and alterations omitted). 

However, the law is clear that there can be no duty of good faith arising from the implied covenant 

where there is no underlying contract. See Foley, 47 Cal. 3d at 684; Smith v. City & Cty. of S.F., 

225 Cal. App. 3d 38, 49 (1990) (“The prerequisite for any action for breach of the implied 

covenant of good faith and fair dealing is the existence of a contractual relationship between the 

parties, since the covenant is an implied term in the contract.”).

Like NectarLux’s breach of contract counterclaim, NectarLux’s implied covenant 

counterclaim includes certain allegations—namely that Luxul breached the implied covenant by 

“claiming that Colvin was not authorized to execute the contract,” NectarLux Countercl. ¶ 40—

that relate to the January 2014 Agreement. Because NectarLux was not a party to the January 

2014 Agreement, see supra, the Court GRANTS Luxul’s motion for summary judgment as to 

NectarLux’s implied covenant counterclaim as to the January 2014 Agreement.

However, NectarLux’s implied covenant counterclaim also includes allegations that relate 

to the April 2014 Agreement. In particular, NectarLux alleges that “[i]mplicit in the NectarLux 

contract are provisions prohibiting Luxul from terminating the contract without good cause, or 

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from terminating the contract to circumvent paying NectarLux for light bulb sales.” NectarLux 

Countercl. ¶ 39. NectarLux additionally alleges that the April 2014 Agreement “implicitly 

prohibits Luxul from acquiring NectarLux’s labor, client lists, marketing strategy, sales 

presentations, and other intellectual property and then terminating the contract so it can profit from 

NectarLux’s labor and intellectual property without compensating NectarLux as anticipated by the 

contract.” Id. Accordingly, NectarLux alleges in its implied covenant counterclaim that “Luxul 

breached the implied covenant of good faith and fair dealing by refusing to honor the NectarLux 

contract, . . . and misappropriating [NectarLux’s] labor and intellectual property for its own profit 

without compensating NectarLux as anticipated by the contract.” Id. ¶ 40. NectarLux further 

alleges that Luxul terminated the contract in August 2014; the operative contract at that time was

the April 2014 Agreement. Id. ¶ 31. Thus, these allegations of Luxul’s breach of the implied 

covenant of good faith and fair dealing pertain to the April 2014 Agreement, not the January 2014 

Agreement.

Furthermore, NectarLux’s implied covenant counterclaim is not duplicative of its breach of 

contract counterclaim. Although the California Supreme Court has held that a plaintiff may bring 

both a claim for breach of contract and a claim for breach of the implied covenant of good faith 

and fair dealing, the California Supreme Court has made clear that when both causes of action cite 

the same underlying breach, the implied covenant cause of action will be superfluous with the 

contract cause of action. See Guz v. Bechtel Nat. Inc., 24 Cal. 4th 317, 327 (2000) (“[W]here 

breach of an actual term is alleged, a separate implied covenant claim, based on the same breach is 

superfluous.”). In other words, a claim alleging breach of the implied covenant of good faith and 

fair dealing cannot be “‘based on the same breach’ as the contract claim.” Daly v. United 

Healthcare Ins. Co., No. 10-CV-03032-LHK, 2010 WL 4510911, at *4 (N.D. Cal. Nov. 1, 2010) 

(quoting Guz, 24 Cal. 4th at 327). However, a claim for breach of the implied covenant of good 

faith and fair dealing is not superfluous with a breach of contract claim when the covenant claim is 

based “on a different breach than the contract claim.” Id.

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Here, NectarLux’s counterclaim for breach of the implied covenant of good faith and fair 

dealing is based on a different breach than the contract claim. NectarLux’s breach of contract 

counterclaim is based on Luxul’s alleged breach of the explicit terms of the April 2014 Agreement 

from April through August 2014, while the April 2014 Agreement was still in effect. See Section 

III.B.6, supra. By contrast, NectarLux’s implied covenant counterclaim is based primarily on 

Luxul’s alleged wrongful termination of the April 2014 Agreement in August 2014 without good 

cause. See Countercl. ¶¶ 39-40. Although the April 2014 Agreement specifies that its duration 

would be until at least January 29, 2016, the April 2014 Agreement does not contain any explicit 

discussion of what would constitute good cause to terminate the contract. April 2014 Agreement 

¶ 11 (discussing contract duration). Thus, because no explicit contract term discusses good cause 

for termination, NectarLux’s allegations that Luxul breached the April 2014 Agreement by 

terminating the contract without good cause in order to avoid paying NectarLux allege a violation 

of the implied covenant of good faith and fair dealing.

Therefore, the Court DENIES Luxul’s motion for summary judgment as to NectarLux’s 

allegations regarding breach of the implied covenant of good faith and fair dealing with respect to 

the April 2014 Agreement.

NectarLux additionally argues that it is entitled to summary judgment on NectarLux’s 

counterclaim for breach of the implied covenant of good faith and fair dealing based on the same 

evidence NectarLux proffers in support of NectarLux’s motion for summary judgment on 

NectarLux’s counterclaim for breach of contract. NectarLux Summ. J. Mot. at 20-24. As 

described in Section III.B.6, supra, there are material factual disputes regarding whether Luxul 

breached the April 2014 Agreement. Therefore, the Court DENIES NectarLux’s motion for 

summary judgment as to NectarLux’s counterclaim for breach of the implied covenant of good 

faith and fair dealing.

8. NectarLux’s Counterclaim Four: Accounting

Luxul moves for summary judgment on NectarLux’s counterclaim for an accounting on 

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the grounds that the accounting counterclaim, like the breach of contract and breach of the implied 

covenant counterclaims, is based exclusively on the January 2014 Agreement to which NectarLux 

was not a party and on the grounds that NectarLux has an adequate remedy at law and thus may 

not bring a claim for an accounting. Luxul Summ. J. Mot. at 12-14. NectarLux moves for 

summary judgment on NectarLux’s accounting counterclaim on the grounds that the Singleton 

Declaration demonstrates that Luxul is hiding evidence regarding NectarLux’s damages. 

NectarLux Summ. J. Mot. at 24-25.

NectarLux’s accounting counterclaim seeks an accounting based on the breaches of 

contract and the implied covenant of good faith and fair dealing described in NectarLux’s first two 

counterclaims. See Countercl. ¶¶ 41-43. For the reasons described above, NectarLux’s first two 

counterclaims are not based exclusively on the January 2014 Agreement. See Sections III.B.6-7, 

supra. Accordingly, the Court turns to address the parties’ arguments regarding whether 

NectarLux has an adequate remedy at law.

A claim for accounting “may be brought to require a defendant to account to a plaintiff for 

money or property: (1) where a fiduciary relationship exists between the parties, or (2) where, 

though no fiduciary relationship exists, the accounts are so complicated that an ordinary legal 

action demanding a fixed sum is impracticable.” Lee v. U.S. Bank, No. C 10-1434 RS, 2010 WL 

2635777, at *12 (N.D. Cal. June 30, 2010) (citing Civic W. Corp. v. Zila Indus., Inc., 66 Cal. App. 

3d 1 (1977)). “[N]o action for accounting may be maintained if there is an adequate remedy at 

law.” Cty. of Santa Clara v. Astra USA, Inc., No. C 05-03740 WHA, 2006 WL 2193343, at *5 

(N.D. Cal. July 28, 2006) (citing Faivre v. Daley, 93 Cal. 664, 673 (1892); Civic W. Corp., 66 Cal. 

App. 3d at 14). 

Luxul argues that it is entitled to summary judgment because the undisputed facts show 

that no fiduciary relationship exists between the parties, the accounts in question are not “so 

complicated that an ordinary legal action demanding a fixed sum is impracticable,” and NectarLux 

has an adequate remedy at law. Luxul Summ. J. Mot. at 12-13. There is no evidence in the record 

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of a fiduciary relationship between the parties, and NectarLux does not contend otherwise in its 

counterclaims or briefing. See Countercl.; Opp. to Luxul Summ. J. Mot.; NectarLux Summ. J. 

Mot. 

Additionally, NectarLux’s own evidence includes the report of NectarLux’s damages 

expert, Scott E. Evans, in which Evans calculates NectarLux’s contract damages. ECF No. 176-2 

(“Decl. of Scott Evans ISO NectarLux Summ. J. Mot.”), Ex. 1. NectarLux’s sole argument to the 

contrary is that the declaration of Alycia Singleton in support of NectarLux’s motion for summary 

judgment shows that Luxul is hiding evidence of damages such that an accounting is necessary. 

However, for the reasons discussed in Section III.A.6, supra, the Court strikes the Singleton 

Declaration and does not consider the Singleton Declaration in its analysis. 

Moreover, to the extent NectarLux argues that an accounting is necessary because Luxul 

failed to produce documents related to Radiant Lighting, NectarLux is incorrect because the 

undisputed evidence shows that Luxul did produce documents related to Radiant Lighting. ECF 

No. 163-13 ¶¶ 3-9 (describing production of Radiant Lighting documents to NectarLux and 

attaching exhibits documenting the production). To the extent NectarLux’s argument is instead 

that an accounting is necessary because the Singleton Declaration is evidence that NectarLux is 

entitled to damages for sales of products to Radiant Lighting as part of NectarLux’s claims for 

breach of contract and breach of the covenant of good faith and fair dealing, this is an argument 

only that NectarLux is entitled to additional contract damages, not that “the accounts are so 

complicated that an ordinary legal action demanding a fixed sum is impracticable.” Lee, 2010 WL 

2635777, at *12 NectarLux may present its evidence that it is entitled to damages for sales Luxul 

made to Radiant Lighting to the fact-finder at trial as part of NectarLux’s request for contract 

damages. Thus, the undisputed evidence demonstrates that the accounts in question may be 

settled by ordinary contract damages, such that NectarLux has an adequate remedy at law for any 

breach and is not entitled to an accounting. See Cty. of Santa Clara, 2006 WL 2193343, at *5 

(“[N]o action for accounting may be maintained if there is an adequate remedy at law.”).

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Therefore, the Court GRANTS Luxul’s motion for summary judgment and DENIES 

NectarLux’s motion for summary judgment as to NectarLux’s counterclaim for an accounting.

The Court turns now to the parties’ motions for sanctions.

C. Luxul’s Motion for Sanctions

Luxul moves for sanctions against NectarLux and NectarLux’s attorneys under Rule 11 on 

the grounds that NectarLux’s counterclaims “are factually frivolous, legally frivolous, and 

presented for an improper purpose because NectarLux was not—nor could it have been—a party 

to the January 29, 2014 contract.” Luxul Sanctions Mot. at 8.

In the instant case, Luxul has not met its burden of showing that sanctions are justified. 

See Tom Growney Equip., Inc., 834 F.2d at 837. The Court has found that NectarLux’s 

counterclaims are not based exclusively on the January 2014 Agreement. See supra. 

Additionally, the Court has found that NectarLux’s counterclaims are not factually or legally 

frivolous because the Court has denied Luxul’s motion for summary judgment as to NectarLux’s 

first two counterclaims for breach of contract and breach of the implied covenant of good faith and 

fair dealing. Id. Therefore, the Court DENIES Luxul’s motion for sanctions.

D. NectarLux’s Motion for Sanctions

In NectarLux’s motion for sanctions, NectarLux asks the Court to dismiss all of Luxul’s 

claims against NectarLux as a sanction for Luxul’s alleged failure to produce documents related to 

Radiant Lighting. NectarLux Sanctions Mot. NectarLux’s sole evidence of Luxul’s purported 

despoliation of evidence is the Singleton Declaration. See id. at 2-4. However, the Court has 

granted Luxul’s motion to strike the Singleton Declaration for failure to comply with 28 U.S.C. 

§ 1746 because the Singleton Declaration does not contain any attestation that its contents are true. 

See Section III.A.6, supra. 

Moreover, the Court notes that, contrary to Singleton’s statement in her declaration that 

she does not believe Luxul produced any documents related to Radiant Lighting during discovery, 

Singleton Decl. ¶ 12, and contrary to NectarLux’s assertion in its motion for sanctions that “Luxul 

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produced no documents that relate to Radiant Lighting,” NectarLux Sanctions Mot. at 4, the 

evidence shows that Luxul did produce documents related to Radiant Lighting to NectarLux 

during discovery. See ECF No. 163-13 ¶¶ 3-9 (describing production of Radiant Lighting 

documents to NectarLux and attaching exhibits documenting the production). Indeed, in its reply 

brief, NectarLux does not dispute that Luxul produced documents related to Luxul’s sales to 

Radiant Lighting. Reply to NectarLux Sanctions Mot. at 2. Therefore, NectarLux’s alleged basis 

for its request for sanctions is belied by the undisputed facts in the record. Accordingly, the Court 

DENIES NectarLux’s motion for sanctions.

E. Luxul’s Request for Sanctions in Opposition to NectarLux’s Motion for Sanctions

In Luxul’s opposition to NectarLux’s motion for sanctions, Luxul requests that the Court 

sanction NectarLux’s attorneys pursuant to 28 U.S.C. § 1927 for “fail[ing] to take basic, simple 

steps to verify whether [Luxul] produced documents regarding Radiant.” Opp. to NectarLux 

Sanctions Mot. at 14-18. Civil Local Rule 7-8 requires all requests for sanctions to be filed as 

separate motions. Luxul’s request for sanctions, which is included within Luxul’s opposition to 

NectarLux’s motion for sanctions, does not comply with this requirement. Accordingly, the Court 

DENIES Luxul’s request for sanctions. See Haar v. City of Mountain View, No. 10-CV-02995-

LHK, 2010 WL 4919478, at *4 (N.D. Cal. Nov. 12, 2010) (denying request for sanctions because 

it was not separately filed).

Furthermore, the Court notes that both parties’ requests for sanctions caused an 

unnecessary expenditure of Court and party resources and should not have been filed. As we 

approach the August 1, 2016 trial, the Court requests that the parties be mindful of the limited 

resources of the Court. 

IV. CONCLUSION

For the foregoing reasons, the Court rules as follows on the parties’ cross-motions for 

summary judgment and cross-motions for sanctions:

 The Court DENIES AS MOOT NectarLux’s motion for summary judgment as to Luxul’s 

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Claims One, Five, and Six for false designation of origin in violation of 15 U.S.C. § 1125, 

false advertising in violation of 15 U.S.C. § 1125(a), and false advertising in violation of Cal. 

Bus. & Prof. Code § 17500 et seq. because the parties filed a stipulation to dismiss these 

claims with prejudice after the parties filed oppositions to the cross-motions for summary

judgment, and the Court approved the parties’ stipulation.

 The Court GRANTS NectarLux’s motion for summary judgment as to Luxul’s Claim Two for 

violation of the UCL.

 The Court GRANTS NectarLux’s motion for summary judgment as to Luxul’s Claim Three 

for breach of contract.

 The Court GRANTS NectarLux’s motion for summary judgment as to Luxul’s Claim Four for 

breach of the implied covenant of good faith and fair dealing.

 The Court GRANTS NectarLux’s motion for summary judgment as to Luxul’s Claim Seven 

for copyright infringement.

 The Court DENIES NectarLux’s motion for summary judgment as to Luxul’s Claim Eight for 

an account stated.

 The Court GRANTS Luxul’s motion for summary judgment as to NectarLux’s Counterclaim 

One for breach of the January 2014 Agreement. The Court DENIES Luxul’s motion for 

summary judgment as to NectarLux’s Counterclaim One for breach of the April 2014 

Agreement. The Court DENIES NectarLux’s motion for summary judgment as to 

NectarLux’s Counterclaim One for breach of contract.

 The Court GRANTS Luxul’s motion for summary judgment as to NectarLux’s Counterclaim 

Two for breach of the implied covenant of good faith and fair dealing as to the January 2014 

Agreement. The Court DENIES Luxul’s motion for summary judgment as to NectarLux’s 

Counterclaim Two for breach of the implied covenant of good faith and fair dealing as to the 

April 2014 Agreement. The Court DENIES NectarLux’s motion for summary judgment as to 

NectarLux’s Counterclaim Two for breach of the implied covenant of good faith and fair 

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dealing.

 The Court GRANTS Luxul’s motion for summary judgment and DENIES NectarLux’s motion 

for summary judgment as to NectarLux’s Counterclaim Three for an accounting.

 The Court DENIES Luxul’s motion for sanctions.

 The Court DENIES NectarLux’s motion for sanctions.

Thus, the following three claims remain for trial:

1. Luxul’s Claim Eight for an account stated.

2. NectarLux’s Counterclaim One for breach of the April 2014 Agreement.

3. NectarLux’s Counterclaim Two for breach of the implied covenant of good faith and fair 

dealing as to the April 2014 Agreement.

IT IS SO ORDERED.

Dated: June 16, 2016

______________________________________

LUCY H. KOH

United States District Judge

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