Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-05380/USCOURTS-cand-4_06-cv-05380-6/pdf.json

Nature of Suit Code: 196
Nature of Suit: Franchise
Cause of Action: 28:1332 Diversity-Breach of Contract

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CITY OF OAKLAND,

Plaintiff,

v.

COMCAST CORPORATION; COMCAST OF

CALIFORNIA/COLORADO, LLC; and DOES 1

through 20, inclusive,

Defendants.

 /

No. C 06-5380 CW

ORDER GRANTING IN

PART AND DENYING

IN PART

DEFENDANTS’

MOTION TO DISMISS

Defendants Comcast Corporation (Comcast Corp.) and Comcast of

California/Colorado, LLC (Comcast LLC) move under Federal Rule of

Civil Procedure 12(b)(6) to dismiss the fifth, sixth, seventh,

eighth, and ninth causes of action in Plaintiff the City of

Oakland’s first-amended complaint (FAC) as to Comcast Corp. for

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1

 In their motion, Defendants argued that the City’s claim for

punitive damages as to the eighth and ninth causes of action should

be stricken, but in their reply, Defendants concede that the City’s

prayer for punitive damages was sufficiently plead and they withdraw

their motion as to the punitive damages claim.

2

failure to state a claim upon which relief can be granted.1 The

City opposes the motion. The matter was heard on February 2, 2007. 

Having considered all of the papers filed by the parties and oral

argument, the Court GRANTS Defendants’ motion in part and DENIES it

in part. 

BACKGROUND

The City's FAC and the attached exhibits allege the following. 

The City grants franchises to cable television operators

authorizing the construction, operation, and repair of cable

systems in public rights-of-way for the provision of cable services

within the City’s jurisdictional boundaries, under the Federal

Cable Act, 47 U.S.C. §§ 521, et. seq., and California Government

Code § 53966. FAC at ¶ 9. In 1983, the City adopted Ordinance No.

10399 (Franchise Agreement), which stated the terms and conditions

of a cable franchise granted to Lenfest West, Inc., including a

requirement that the City approve any assignment or transfer of the

franchise or control of the franchisee. FAC at ¶ 10. In February,

1996, the franchise was transferred to Heritage Cablevision of

Delaware, Inc. (Heritage), which was owned and controlled by TeleCommunications Inc. (TCI). Id.

The Franchise Agreement was set to expire at the end of

December, 1998, but TCI initiated formal franchise renewal

proceedings prior to the expiration date. FAC at ¶ 11. On June

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23, 1998, TCI merged with AT&T Corporation (AT&T), and in

September, 1998, AT&T and TCI filed an application requesting that

the City approve the transfer of control of the franchisee,

Heritage, from TCI to AT&T. FAC at ¶ 12. On February 16, 1999,

the City agreed to approve the transfer if AT&T would “resolve

certain on-going issues” of TCI’s non-compliance with the terms and

conditions of the Franchise Agreement, a deal which was

memorialized in a settlement agreement between the City, TCI, and

AT&T (1999 Agreement). FAC at ¶ 13. After signing the 1999

Agreement, the City approved the transfer, and AT&T converted the

franchisee, Heritage, to a limited liability company and renamed it

AT&T Broadband of Delaware, LLC (AT&T Broadband). Id. 

In preparation for franchise renewal negotiations with AT&T

Broadband, the City reviewed Heritage’s past performance under the

Franchise Agreement and discovered ongoing material violations of

the Franchise Agreement and the 1999 Agreement. FAC at ¶¶ 14, 15. 

As a result, the City instituted administrative proceedings against

AT&T Broadband, as Heritage’s successor, seeking liquidated damages

under the terms of the 1999 Agreement. FAC at ¶ 15. On December

19, 2001, AT&T and Comcast Corp. entered into a merger agreement

under which all cable systems controlled by AT&T would come under

the control of Comcast Corp. FAC at ¶ 16. In February, 2002, AT&T

and Comcast Corp. filed an application with the City requesting

approval of the transfer of control over franchisee AT&T Broadband

from AT&T to Comcast Corp. Id. Franchise renewal negotiations

between the City and AT&T Broadband had been bogged down over key

terms, including the length of renewal, the amount of funding for

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public, educational, and government access channel production

facilities, and a fiber-optic network connecting schools. FAC at 

¶ 17. The City notified AT&T and Comcast Corp. that it would not

approve the application to transfer control of AT&T Broadband until

all of the compliance and franchise renewal issues were resolved. 

FAC at ¶ 18. 

The City, AT&T, and Comcast Corp. eventually reached an

agreement on a complex global settlement. FAC at ¶ 18-19. The

agreement provided that the City would approve transfer of control

over AT&T Broadband to Comcast Corp., and waive its non-compliance

claims against AT&T Broadband, in exchange for AT&T Broadband’s

agreement to provide cash and non-cash consideration, and to

consent to key terms of the franchise renewal. FAC at ¶ 19. 

During the negotiations, Comcast Corp. was aware of the City’s

concerns over the transfer of control and the franchise renewal

terms. FAC at ¶ 25. Comcast Corp. facilitated the final

negotiations between the City and AT&T Broadband, and made “certain

assurances” and “affirmative representations” concerning AT&T

Broadband’s future performance of its obligations once Comcast

Corp. took control. FAC at ¶¶ 19, 25. On July 16, 2002, this

global settlement was memorialized in three separate writings

(together referred to as the 2002 Agreements): a Change of Control

Agreement (CCA) between the City, AT&T Broadband, and Comcast

Corp.; a Settlement Agreement (2002 Settlement Agreement) between

the City and AT&T Broadband; and a Memorandum of Understanding

(MOU) between the City and AT&T Broadband. FAC at ¶ 20. Based on

these agreements, the City approved the change of control over AT&T

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Broadband from AT&T to Comcast Corp. FAC at ¶¶ 21, 27. 

Subsequently, Comcast Corp. changed the name of AT&T Broadband to

Comcast of California/Colorado, LLC (Comcast LLC). Id.

The MOU states that any future franchise renewal agreement

will incorporate the substantive terms and principles set forth in

the consolidated proposal described in a letter from AT&T Broadband

to the Oakland City Manager dated June 12, 2002 (2002 Letter). FAC

at ¶ 23-24. The MOU further states that the City and AT&T

Broadband would use their “best efforts” to complete negotiations

on a final franchise agreement by October 30, 2002. FAC at ¶ 26. 

Following the transfer of control, the City repeatedly requested

that Comcast LLC resume negotiations to finalize the franchise

renewal, but Comcast Corp. informed the City that, due to issues

associated with the change of control, Comcast LLC would not be in

a position to negotiate until December, 2002. FAC at ¶ 28. In

December, 2002, negotiations began between the City and

representatives from Comcast Corp. and Comcast LLC, and they

continued until March 21, 2005, when the parties formalized a final

agreement on the franchise renewal and regulatory issues, which

incorporated the terms of the MOU. FAC at ¶ 29-30. The agreements

were forwarded in the form of ordinances to the City Council for

approval. FAC at ¶ 30.

On October 11 and November 8, 2005, the City Council held

public hearings on the franchise renewal and regulatory ordinances,

and at the October 11 meeting, Comcast LLC representatives publicly

agreed to accept the ordinances if the City Council adopted them in

the form and substance upon which Comcast LLC had agreed. FAC at 

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2

 Based on its subsequent actions, it appears the City adopted

these two ordinances along with the labor ordinance to which

Defendants objected.

6

¶ 31. At the public hearings, speakers expressed concerns over

Comcast Corp. and Comcast LLC’s labor policies. FAC at ¶ 32. In

reaction to this testimony, the City approached Comcast LLC about

the possibility of a “side letter” agreement regarding Comcast

LLC’s compliance with labor laws, which would not affect the

agreements already reached by the negotiating teams. Id. Comcast

LLC declined the City’s request to add the side letter agreement. 

Id. On December 6, 2005, the City and Comcast Corp. held a

telephone conference in which Comcast Corp. stated that it would

not allow Comcast LLC to accept the franchise renewal or cable

regulatory ordinance, even in the form and substance that was

originally agreed upon, unless the City would add language to the

franchise ordinance that would “effectively cede[] the City’s

authority to adopt practices and policies affecting labor.” FAC at

¶ 33. The City refused to accede to Comcast Corp.’s request. Id.

On December 20, 2005, the City Council preliminarily adopted

the franchise renewal and regulatory ordinances, “unchanged in form

or substance” from what “the City and Comcast LLC had agreed and

Comcast Corp. had promised to support.”2 FAC at ¶ 36. In a letter

to the City Attorney dated February 15, 2006, Comcast Corp. stated

that Comcast LLC would not accept the franchise renewal ordinance

due to “the significant changes that had occurred” since the

negotiation of the draft agreement, but offered the City the option

of returning to negotiations. FAC at ¶ 37, Ex. 3. On February 21,

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3

 The City alleges in the FAC that these letters were sent by

Comcast Corp., a claim which is not obviously contradicted by the

letters themselves, and thus the Court must treat the City’s

allegation as true.

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2006, the City Council finalized its adoption of the cable

franchise renewal and regulatory ordinances, including the labor

ordinance, which commenced a thirty day window for Comcast LLC to

execute its acceptance. FAC at ¶ 39. In a second letter to the

City Attorney, dated March 1, 2006 (together with the February 15

letter, referred to as the Repudiation Letters3), Comcast Corp.

reiterated its refusal to cause Comcast LLC to accept the

ordinances. FAC at ¶ 40. On July 6, 2006, Comcast Corp. repeated

the position stated in the Repudiation Letters and represented that

Comcast LLC would not honor its obligations under the MOU in any

future agreements, but invited the City to return to the

negotiating table. FAC at ¶ 41.

As a result of these events, the City brought suit alleging

various state law contract and tort claims against Defendants in

state court. Defendants removed to district court on the grounds

of diversity jurisdiction.

LEGAL STANDARD

A motion to dismiss for failure to state a claim will be

denied unless it is “clear that no relief could be granted under

any set of facts that could be proved consistent with the

allegations.” Falkowski v. Imation Corp., 309 F.3d 1123, 1132 (9th

Cir. 2002), citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512

(2002). All material allegations in the complaint will be taken as

true and construed in the light most favorable to the plaintiff. 

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NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 

Although the court is generally confined to consideration of the

allegations in the pleadings, when the complaint is accompanied by

attached documents, such documents are deemed part of the complaint

and may be considered in evaluating the merits of a Rule 12(b)(6)

motion. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th

Cir. 1987).

When granting a motion to dismiss, a court is generally

required to grant a plaintiff leave to amend, even if no request to

amend the pleading was made, unless amendment would be futile. 

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911

F.2d 242, 246-47 (9th Cir. 1990). In determining whether amendment

would be futile, a court examines whether the complaint could be

amended to cure the defect requiring dismissal “without

contradicting any of the allegations of [the] original complaint.” 

Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990). 

Leave to amend should be liberally granted, but an amended

complaint cannot allege facts inconsistent with the challenged

pleading. Id. at 296-97. 

DISCUSSION

I. Fifth Cause of Action: Unjust Enrichment

In the FAC’s fifth cause of action, which is against both

Comcast Corp. and Comcast LLC, the City alleges that it approved

the transfer of control over AT&T Broadband to Comcast Corp. based

upon “promises, commitments, and warranties” that Defendants made

in the CCA and 2002 Settlement Agreement. The City argues that

Comcast Corp. has been unjustly enriched by the City’s performance

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because Comcast Corp. gained control over the franchisee but has

not caused Comcast LLC to honor its contractual obligations. 

Defendants argue that Comcast Corp. was not a party to the MOU or

to the 2002 Agreement and thus Comcast Corp. could be liable for

the promises made in those agreements only if it were an alter ego

of Comcast LLC. In their reply, Defendants also assert that the

integration clause in the CCA bars the unjust enrichment claim. 

“There is no cause of action for unjust enrichment. Rather,

unjust enrichment is a basis for obtaining restitution based on

quasi-contract or imposition of a constructive trust.” McKell v.

Washington Mut., Inc., 142 Cal. App. 4th 1457, 1490 (2006). “One

of the ‘underlying principles' of the Restatement [of Restitution

(First) § 1] is that ‘a person who has been unjustly enriched at

the expense of another is required to make restitution to the

other.’” CTC Real Estate Services v. Lepe, 140 Cal. App. 4th 856,

860-861 (2006) (quoting 1 Witkin, Summary of Cal. Law (10th ed.

2005) Contracts, §§ 1015, 1016, pp. 1104-1105). The doctrine of

unjust enrichment can “in some instances, have validity without

privity of relationship.” Id. at 861 (quoting Kossian v. American

Nat. Ins. Co., 254 Cal. App. 2d 647, 650 (1967)). However, “it is

well settled that an action based on an implied-in-fact or

quasi-contract cannot lie where there exists between the parties a

valid express contract covering the same subject matter.” Lance

Camper Manufacturing Corp. v. Republic Indemnity Co., 44 Cal. App.

4th 194, 203 (1996).

The City’s claim that Comcast Corp. has been unjustly

enriched, by receiving control of the franchisee, fails because

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unjust enrichment cannot be claimed where a written contract covers

the same issue. The CCA outlines the conditions of the City’s

approval of transfer of control over franchisee AT&T Broadband from

AT&T to Comcast Corp. In it, the City and Comcast Corp. specify

Comcast Corp.’s responsibilities in order to receive control of the

franchisee. Any argument the City makes that Comcast Corp. has

been unjustly enriched by the transfer of control is precluded by

the existence of the CCA. If Comcast Corp. breached a promise that

it made in the CCA, it is liable for breach of contract, not unjust

enrichment. If Comcast Corp. breached some other alleged promise

that induced the City to enter into the CCA, but that was not

included in the CCA, it would be protected by the integration

clause in the CCA. “The parol evidence rule generally prohibits

the introduction of any extrinsic evidence to vary or contradict

the terms of an integrated written instrument.” Bionghi v.

Metropolitan Water Dist. of So. California, 70 Cal. App. 4th 1358,

1364 (1999); Cal. Code Civ. Proc. § 1856.

Although the City does not provide a copy of the CCA, as it

does of other documents relied upon in the FAC, “[a] district court

ruling on a motion to dismiss may consider documents ‘whose

contents are alleged in a complaint and whose authenticity no party

questions, but which are not physically attached to the

[plaintiff's] pleading.’” Parrino v. FHP, Inc., 146 F.3d 699, 706

(9th Cir. 1998) (superseded by statute on other grounds)). The

CCA, the contract authorizing the transfer of control over the

franchisee to Comcast Corp. and the only written document to which

Comcast Corp. was a party, is integral to the City’s claims and

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repeatedly referred to throughout the FAC. Defendants have

attached a copy of the CCA to the declaration of Jeffrey Smith and

there has been no challenge to its authenticity. Therefore, the

Court will consider the CCA in its entirety. 

Paragraph 9.2 of the CCA contains the following integration

clause:

Entire Agreement: This agreement constitutes the entire

agreement of the parties with respect to the settlement

of the matters addressed herein. No statements,

promises, or inducements inconsistent with this Agreement

made by any party shall be valid or binding, unless in

writing and executed by all parties. This agreement may

only be modified by written amendments hereto signed by

all parties.

Decl. of Jeffrey Smith Ex. A. Paragraphs 2.1 and 2.2 of the CCA

make clear that Comcast LLC would be bound by and responsible for

all prior and concurrent commitments, duties and obligations,

including the 2002 Agreements. The CCA does not indicate that

Comcast Corp. will also be responsible for these obligations, or

that it will guarantee Comcast LLC’s performance. This rather

substantial condition would presumably have been included in the

CCA if Comcast Corp. were willing to agree to it, and would be

inconsistent with the allocation of responsibility in ¶¶ 2.1 and

2.2 of the CCA. Thus, the City cannot state a claim that Comcast

Corp. was unjustly enriched by the transfer due to promises made in

the CCA, during negotiations, or after it was signed, without

pleading that Comcast Corp.’s representations were fraudulent. 

Therefore, Defendants’ motion to dismiss as to the fifth cause of

action against Comcast Corp. is GRANTED. The Court grants the City

leave to amend if it can truthfully allege that Comcast Corp. made

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fraudulent misrepresentations during negotiations of the 2002

Agreements and can specify what exactly those were. 

II. Sixth Cause of Action: Breach of Oral Contract

In the FAC’s sixth cause of action for breach of oral

contract, brought solely against Comcast Corp., the City alleges

that at the meeting on March 21, 2005, Comcast Corp. orally agreed

to cause Comcast LLC to accept the franchise renewal agreement if

the franchise renewal and regulatory ordinances were adopted by the

City Council in the form and substance agreed upon, and that

Comcast Corp. later refused to do so. In their reply, Defendants

argue that the integration clause in the CCA bars consideration of

the alleged oral agreement.

As discussed above, the integration clause in the CCA

precludes any contemporaneous or subsequent oral agreements that

would materially change a matter within its scope. Any

representations and assurances made during the negotiations

relating to what Comcast Corp. would have to do to acquire control

of AT&T Broadband were intended to be included in the written CCA,

and any subsequent agreements changing the conditions of the

transfer, such as Comcast Corp. agreeing to cause Comcast LLC to

perform its obligations under the 2002 Agreements, were intended to

be made writing. The alleged oral contract entered into three

years after the CCA was signed, which would burden Comcast Corp.

with the additional responsibility of causing Comcast LLC to honor

the promises it made in the 2002 Agreements and subsequent

negotiations, would significantly change the conditions of

transfer. Because the oral agreement falls within the subject

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matter of the CCA and would materially alter its terms, it is void

and the City cannot state a claim that Comcast Corp. breached it. 

Therefore, the Court GRANTS Comcast’s motion to dismiss the City’s

sixth cause of action against Comcast Corp. for breach of oral

contract. The Court grants the City leave to amend, if it can

truthfully do so, to plead facts indicating that Comcast Corp.

entered into a separate oral contract with the City, not

inconsistent with the terms of the CCA. 

III. Seventh Cause of Action: Negligent Misrepresentation

In the FAC’s seventh cause of action, brought solely against

Comcast Corp., the City alleges that Comcast Corp. engaged in

negligent misrepresentation by not fulfilling certain unspecified

“representations and assurances” it made about Comcast LLC’s future

performance of its obligations under the MOU after control was

transferred. In their motion, Defendants argue that the seventh

cause of action does not state a claim because the alleged

representations constitute opinions about the future, not

statements of material fact.

California Civil Code § 1709 provides, “One who willfully

deceives another with intent to induce him to alter his position to

his injury or risk, is liable for any damage which he thereby

suffers,” and § 1710 defines deceit as an “assertion, as a fact, of

that which is not true, by one who has no reasonable ground for

believing it to be true.” Cal. Civ. Code §§ 1709, 1710; Fox v.

Pollack, 181 Cal. App. 3d 954, 962 (1986). Thus, under California

law:

Negligent misrepresentation is a form of deceit, the

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elements of which consist of (1) a misrepresentation of a

past or existing material fact, (2) without reasonable

grounds for believing it to be true, (3) with intent to

induce another's reliance on the fact misrepresented, 

(4) ignorance of the truth and justifiable reliance

thereon by the party to whom the misrepresentation was

directed, and (5) damages. 

Fox, 181 Cal. App. 3d at 962 (internal citations omitted). 

In the instant case, the City alleges that Comcast Corp.’s

“representations and assurances” that it would direct Comcast LLC

to abide by the terms of the MOU, were material facts. The City

relies on Eade v. Reich, 120 Cal. App. 32, 34 (1932), in which the

court held that a prediction can constitute a “statement of fact”

as opposed to a “promissory representation” when it involves

“matters peculiarly within the speaker’s knowledge.” The City also

cites cases from 1898 and 1926 in support of the same proposition. 

The key distinction those cases discuss between a fact within the

promisor’s sole purview, such as when a manufacturing plant will

relocate or when corporate dividends will be announced, and a

promise, is not present here. 

As noted, the FAC does not specify exactly what

misrepresentations Comcast Corp. made. If the representations were

predictions that Comcast LLC would perform its obligations under

the 2002 Agreements, then they would be opinions as opposed to

facts, and thus not the basis for a colorable negligent

misrepresentation claim. If, on the other hand, the

representations were promises that Comcast Corp. would cause

Comcast LLC to perform its obligations, then the City would have to

allege that these promises were made by Comcast Corp. without a

reasonable intent to perform. If Comcast Corp.’s representations

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were something else, then they must be specified. Therefore,

Defendants’ motion to dismiss the City’s seventh cause of action

for failure to state a negligent misrepresentation claim is GRANTED

with leave to amend, for the City to plead, if it can truthfully do

so, what material facts Comcast Corp. represented that it did not

reasonably believe were true at the time. 

IV. Eighth and Ninth Causes of Action: Interference Claims

The City alleges in the FAC’s eighth and ninth causes of

action that Comcast Corp. intentionally interfered with the

contractual relationship between Comcast LLC and the City by

inducing Comcast LLC to breach its agreement under the MOU, and

that it deprived the City of its prospective economic advantage. 

In their motion, Defendants argue that Comcast Corp. cannot be

liable for interfering in the contractual relations of its whollyowned subsidiary because of the financial interest privilege,

unless it utilized improper means, and that the City has not plead

an independently wrongful act constituting intentional interference

with prospective economic advantage.

A. Intentional Interference with Contract

Defendants argue that Comcast Corp. was privileged to

interfere in Comcast LLC’s contractual obligations because Comcast

LLC is its wholly-owned subsidiary. Defendants argue that this

privilege, which is normally an affirmative defense, can be decided

on the pleadings where the facts demonstrating the privilege appear

on the face of the complaint. However, none of the cases

Defendants cite supports the proposition that such a privilege

should be decided on the pleadings in the instant case. 

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Defendants rely primarily on the language in Chicago Title

Ins. Co. v. Great Western Fin. Corp., 69 Cal. 2d 305, 319 (1968),

that “[o]ne with a financial interest in the business of another is

privileged however, so long as he does not employ improper means

but acts merely to protect his financial interest or promote the

other's welfare, to induce the other not to enter a business

relationship with a third party.” This part of the opinion is

discussing the distinct tort of interference with prospective

business advantage which, as discussed below, has a separate

independent wrongful act requirement that interference with

contract does not have. The Chicago Title court dismissed the

interference with contract claims because there was no “allegation

alleged that appellants had a contract with anyone which was

breached as a result of the activities of defendants or any of

them.” Id. Defendants cite Alpha Distributing Co. of California,

Inc. v. Jack Daniels Distillery, 454 F.2d 442, 450 (9th Cir. 1972),

for the proposition that the language from Chicago Title quoted

above was extended to apply to interference with contract claims. 

This case was appealed from a bench trial and has no relevance to

whether financial interest privilege can be decided on the

pleadings. 

Defendants also cite Culcal Stylco, Inc. v. Vornando, 26 Cal.

App. 3d 879, 881 (1972). In that case, the court stated that,

although the defendants met some factors applicable to the

financial interest privilege by virtue of their parent-subsidiary

relationship, “being the principal owners of a business, without

more, did not make their intentional interference with a contract

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4 Section 769 of the Restatement of Torts reads: “In determining

whether there is a privilege to [interfere with the economic relations

(including contractual relations) of another] . . . the following are

important factors: (a) the nature of the actor's conduct; (b) the

nature of the expectancy with which his conduct interferes; (c) the

relations between the parties; (d) the interest sought to be advanced

by the actor; and (e) the social interests in protecting the

expectancy on the one hand and the actor's freedom of action on the

other hand.”

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of the business privileged as a matter of law – that is, privileged

‘under all conceivable circumstances.’” Id. at 882-883. The court

went to explain that: 

The privilege that arises by reason of section 7694

 is at

most a qualified one dependent for its existence upon the

circumstances of the case. It is essentially a

state-of-mind privilege and therefore its existence

cannot normally be satisfactorily determined on the basis

of pleadings alone. The resolution of the issue turns on

the defendants' predominant purpose in inducing the

breach of the contract. This is preferably a matter to

be determined on the basis of proof rather than of

pleading.

Id. The other authorities cited by the parties reiterate this

standard. Therefore, Defendants’ argument that the facts

supporting Comcast Corp.’s “financial interest privilege

justification are apparent on the face of the FAC” because the City

acknowledges that Comcast Corp. “is the direct parent company of

Comcast LLC,” is not supported by the law. Accordingly, the Court

DENIES Defendants’ motion to dismiss the eighth cause of action for

intentional interference with contract.

B. Intentional Interference with Prospective Economic

Advantage 

Although a plaintiff may bring both interference causes of

action if the pleadings support it, “the distinction between these

two torts is found in the independent wrongfulness requirement of

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the tort of interference with prospective economic advantage.” 

Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1157-

1158 (2003). 

[W]hile intentionally interfering with an existing

contract is "a wrong in and of itself,” intentionally

interfering with a plaintiff's prospective economic

advantage is not. To establish a claim for interference

with prospective economic advantage, therefore, a

plaintiff must plead that the defendant engaged in an

independently wrongful act. An act is not independently

wrongful merely because defendant acted with an improper

motive.

 Id. at 1158 (internal citation omitted). 

The City fails to plead that Comcast Corp. engaged in an

independently wrongful act to deprive the City of its prospective

economic advantage. The only action that the City alleges is that

Comcast Corp. directed Comcast LLC to reject the franchise renewal

ordinance, which is also the act of interference itself. Although

that act may be sufficiently wrongful to state a claim for

interference of contract, the act of interference alone does not

state a claim for interference with prospective economic advantage

in the absence of a contract. 

The City’s only mention of the independent wrongful act

requirement appears in footnote six of its opposition, where it

asserts that it has met its burden “by showing that Comcast

Corporation engaged in ‘negligent misrepresentation.’” As stated

above, the “negligent misrepresentation” that the City plead was

that Comcast Corp. failed to fulfill its promise that it would cause

Comcast LLC to abide by the terms of the MOU. That allegation is

irrelevant to the act of subsequently encouraging the repudiation of

those contracts, which is what is at issue here. Therefore,

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Defendants’ motion to dismiss for failure to state a claim is

GRANTED with leave to amend as to the ninth cause of action against

Comcast Corp. for intentional interference with prospective economic

advantage. If the City can truthfully do so, it may amend to plead

any independently wrongful act that Comcast Corp. committed in order

to interfere with the relationship between the City and Comcast LLC.

CONCLUSION

The Court GRANTS Defendants’ motion to dismiss, for failure to

state a claim against Comcast Corp, the fifth cause of action for

unjust enrichment, the sixth cause of action for breach of oral

contract, the seventh cause of action for negligent

misrepresentation, and the ninth cause of action for intentional

interference with prospective economic advantage, all with leave to

amend if the City can truthfully do so. The Court DENIES

Defendants’ motion to dismiss the eighth cause of action for

intentional interference with contract. The City has fourteen days

from the date of this Order to file a second amended complaint. 

Defendants’ response is due twenty days thereafter. If Defendants

file a motion to dismiss the City’s second amended complaint, it

should be noticed for April 13, 2007, at 1:30 p.m. A case

management conference will be held at that date and time, even if no

motion to dismiss is filed.

IT IS SO ORDERED.

Dated: 2/14/07 

CLAUDIA WILKEN

United States District Judge

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