Court Opinion

ID: 9381296
Source: CourtListenerOpinion
Date Created: 2023-03-22 17:01:46.450367+00
Date Added: 2024-06-11T17:17:31.551792
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

HONEY BUM, LLC, a California                       No. 22-55150
limited liability company,
                 Plaintiff-Appellant,                D.C. No.
                                                  2:20-cv-11233-
  v.                                                 RGK-AS

FASHION NOVA, INC., a California
corporation; RICHARD D.                              OPINION
SAGHIAN,
               Defendants-Appellees.

        Appeal from the United States District Court
           for the Central District of California
        R. Gary Klausner, District Judge, Presiding

          Argued and Submitted December 6, 2022
                   Pasadena, California

                      Filed March 22, 2023

 Before: PAUL J. KELLY, JR., * MILAN D. SMITH, JR.,
       and DANIEL P. COLLINS, Circuit Judges.

             Opinion by Judge Milan D. Smith, Jr.

*
  The Honorable Paul J. Kelly, Jr., United States Circuit Judge for the
U.S. Court of Appeals for the Tenth Circuit, sitting by designation.
2             HONEY BUM, LLC V. FASHION NOVA, INC.

                          SUMMARY **

                             Antitrust

    The panel affirmed the district court’s summary
judgment in favor of Fashion Nova, Inc., et al. in an antitrust
action brought by Honey Bum, LLC.
    Honey Bum, a rival fast-fashion retailer, alleged that
Fashion Nova organized a per se unlawful group boycott by
threatening to stop purchasing from certain clothing vendors
unless they, in turn, stopped selling to Honey Bum. The
district court granted summary judgment on Honey Bum’s
Sherman Act § 1 group boycott claim, concluding that
Honey Bum failed to create a material dispute as to the
existence of a horizontal agreement, between the vendors
themselves, to boycott Honey Bum. The district court also
granted summary judgment on Honey Bum’s California
business tort claims.
    The panel held that Sherman Act § 1 prohibits contracts,
combinations, and conspiracies that unreasonably restrain
trade. In determining the reasonableness of a restraint, two
different kinds of liability standards are considered. Some
restraints are unreasonable per se because they always or
almost always tend to restrict competition and decrease
output. Most restraints, however, are subject to the so-called
Rule of Reason, a multi-step, burden-shifting
framework. The panel held that a group boycott is an
agreement among multiple firms not to deal with another

**
  This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
            HONEY BUM, LLC V. FASHION NOVA, INC.          3

firm (the target). Some group boycotts are per se unlawful,
while others are not.
    Honey Bum asserted a Klor’s-style per se group boycott,
or “naked” group boycott, under which competitors enter
into a horizontal agreement to boycott a firm and the
boycott’s initiator had no purpose other than disadvantaging
the target. Honey Bum alleged that Fashion Nova (the hub)
pressured clothing vendors (the spokes) to boycott Honey
Bum and then those vendors agreed among themselves to do
so. The panel held that a horizontal agreement among the
spokes was required to prevail, and the district court
correctly concluded that Honey Bum failed to establish a
material dispute as to whether the clothing vendors agreed
among themselves to boycott Honey Bum.
   The panel affirmed the district court’s grant of summary
judgment on Honey Bum’s claim for tortious interference
with prospective economic relations because that claim
required a showing of independent unlawfulness.
Accordingly, summary judgment on the Sherman Act claim
necessarily required summary judgment on that claim as
well. The panel rejected the theory that California Bus. &
Prof. Code § 16600 provided a source of independent
unlawfulness.
   The panel affirmed the district court’s grant of summary
judgment on Honey Bum’s claim for tortious interference
with contract because Honey Bum did not show interference
with a preexisting valid contract.
4           HONEY BUM, LLC V. FASHION NOVA, INC.

                        COUNSEL

Jeffery D. McFarland (argued) and Grant Maxwell, McKool
Smith Hennigan PC, Los Angeles, California, for Plaintiff-
Appellant.
Jonathan E. Nuechterlein (argued), C. Frederick Beckner III,
and Alexandra T. Mushka, Sidley Austin LLP, Washington,
D.C.; Chad S. Hummel, David R. Carpenter, and Anna
Tutundjian, Sidley Austin LLP, Los Angeles, California; for
Defendants-Appellees.

                        OPINION

M. SMITH, Circuit Judge:

    Fashion Nova, Inc., a major retailer in the fast-fashion
industry, threatened to stop purchasing from certain clothing
vendors unless they, in turn, stopped selling to Honey Bum,
LLC—one of Fashion Nova’s rival retailers. After over
thirty vendors acceded to Fashion Nova’s demands, Honey
Bum sued Fashion Nova alleging that it had organized a
group boycott that is per se unlawful pursuant to the
Sherman Act, 15 U.S.C. § 1 et seq. Honey Bum also alleged
two California business torts. The district court granted
summary judgment in Fashion Nova’s favor on all of Honey
Bum’s claims. We affirm.
    FACTUAL AND PROCEDURAL BACKGROUND
    Honey Bum and Fashion Nova are retailers in the fast-
fashion industry, which quickly produces inexpensive
clothing to accommodate consumers’ desire for products in
              HONEY BUM, LLC V. FASHION NOVA, INC.                     5

line with ever-changing fashion trends. 1 Honey Bum is a
newcomer to the industry, while Fashion Nova is one of the
industry’s “biggest player[s].” Fashion Nova came to
believe that Honey Bum had intentionally copied its business
model: Honey Bum hired the same website designer, entered
into deals with some of the same models and social-media
influencers, hired a former Fashion Nova employee, and
purchased some of the same styles from the same clothing
vendors. To stop what it perceived to be free-riding, Fashion
Nova organized a group boycott of Honey Bum. It informed
vendors that, to retain Fashion Nova’s business, they must
stop doing business with Honey Bum. Over thirty vendors
agreed to Fashion Nova’s terms and stopped doing business
with Honey Bum entirely.
    Honey Bum filed suit, alleging that Fashion Nova had
violated federal antitrust law and committed two California
business torts.      Specifically, Honey Bum’s original
complaint alleged four causes of action: (1) a group boycott
in violation of Sherman Act Section 1; (2) monopoly
maintenance in violation of Sherman Act Section 2; (3)
tortious interference with prospective economic relations;
and (4) tortious interference with contract. 2
    Fashion Nova moved to dismiss all alleged causes of
action and the district court granted the motion in part,
dismissing the Section 2 monopoly-maintenance claim with

1
 This factual account construes the record in the light most favorable to
Honey Bum. See Soc. Techs. LLC v. Apple Inc., 4 F.4th 811, 816 (9th
Cir. 2021).
2
  Honey Bum also sued Fashion Nova’s founder and CEO, Richard
Saghian. Because Honey Bum’s claims against Saghian duplicate those
against Fashion Nova, we use “Fashion Nova” to refer both to the
business and Saghian.
6           HONEY BUM, LLC V. FASHION NOVA, INC.

prejudice. The court held that Honey Bum failed to allege a
plausible market, concluding that Honey Bum’s market of
“Los Angeles-sourced fast fashion online clothing”
myopically excluded interchangeable products (e.g., New
York-sourced fast-fashion clothing).
     Fashion Nova later moved for summary judgment on
Honey Bum’s Sherman Act Section 1 claim and the two
California business torts. The court granted summary
judgment on all three claims. On the Sherman Act claim, the
Court concluded that Honey Bum failed to create a material
dispute as to the existence of a horizontal agreement (i.e.,
between the vendors themselves) to boycott Honey Bum.
The court then granted summary judgment on Honey Bum’s
claim for tortious interference with prospective economic
relations. That claim requires a showing of independent
unlawfulness, so summary judgment on the Sherman Act
claim necessarily required summary judgment on that claim
as well. The court finally granted summary judgment on
Honey Bum’s claim for tortious interference with contract,
concluding that “a reasonable jury [could not] find that
Defendants knew about or intended to disrupt any
contractual relationship.” Honey Bum timely appealed,
arguing that summary judgment should be reversed on each
of its claims.
    JURISDICTION AND STANDARD OF REVIEW
    We have jurisdiction pursuant to 28 U.S.C. § 1291. “We
review a district court’s grant of summary judgment de novo
and, viewing the evidence in the light most favorable to the
non-movant, determine whether there are any genuine issues
of material fact and whether the district court correctly
applied the relevant substantive law.” Soc. Techs., 4 F.4th
at 816 (cleaned up).
            HONEY BUM, LLC V. FASHION NOVA, INC.            7

                        ANALYSIS
I. Sherman Act: Per Se Unlawful Group Boycott
    Summary judgment was proper on Honey Bum’s
Sherman Act group-boycott claim. Section 1 of the Sherman
Act prohibits “[e]very contract, combination . . . , or
conspiracy, in restraint of trade.” 15 U.S.C. § 1. Despite the
seeming “breadth of that provision,” we have “long
interpreted it ‘to outlaw only unreasonable restraints.’”
Flaa v. Hollywood Foreign Press Ass’n, 55 F.4th 680, 688
(9th Cir. 2022) (quoting Ohio v. Am. Express Co. (“Amex”),
138 S. Ct. 2274, 2283 (2018)). We determine the
reasonableness of a restraint by considering two different
kinds of liability standards.
    “A small group of restraints are unreasonable per se
because they ‘always or almost always tend to restrict
competition and decrease output.’” Id. (quoting Amex, 138
S. Ct. 2274, 2283 (2018)). When a per se prohibition
applies, we deem the restraint unlawful without any
“elaborate study of the industry” in which it occurs. Id.
(quoting Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006)). For
example, courts categorically condemn, without inquiring
into their effect or purpose, horizontal price-fixing
agreements in which competitors at the same level of a
supply chain agree to charge the same prices. See, e.g.,
Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 647
(1980); United States v. Socony-Vacuum Oil Co., 310 U.S.
150, 223 (1940).
    Most restraints, however, are subject to the so-called
Rule of Reason. This multi-step, burden-shifting framework
“requires courts to conduct a fact-specific assessment” to
determine a particular restraint’s “actual effect” on
competition. Amex, 138 S. Ct. at 2284 (quoting Copperweld
8           HONEY BUM, LLC V. FASHION NOVA, INC.

Corp. v. Indep. Tube Corp., 467 U.S. 752, 768 (1984)). Rule
of Reason litigation generally, but not always, requires
parties to define a relevant market and assess whether the
defendant has market power within that market. See Amex,
138 S. Ct. at 2285 & n.7. Though the Rule of Reason is not
a “rote checklist,” it also generally requires the parties to
produce, and the court to evaluate, evidence regarding a
restraint’s anticompetitive effects, its procompetitive
benefits, and whether there are less restrictive means of
accomplishing those benefits. NCAA v. Alston, 141 S. Ct.
2141, 2160 (2021) (citing Amex, 138 S. Ct. at 2284).
    A group boycott, as its name suggests, is an agreement
among multiple firms not to deal with another firm (the
target). Unlike price-fixing, where a plaintiff need only
prove it occurred to establish a violation, we employ a multi-
track analysis when considering group boycotts. Some
group boycotts “are per se unlawful, while others are not.”
Flaa, 55 F.4th at 689; cf. FTC v. Ind. Fed’n of Dentists, 476
U.S. 447, 458 (1986) (“the category of restraints classed as
group boycotts is not to be expanded indiscriminately”).
While determining “which group boycotts qualify as per se
violations . . . has been a source of confusion for decades,”
some general principles have emerged in our precedents.
Flaa, 55 F.4th at 689 (quotation omitted).
    First, a per se prohibition applies where competitors
enter into a horizontal agreement to boycott a firm and the
boycott’s initiator had no purpose other than disadvantaging
the target—i.e., “naked” group boycotts. See Charley’s Taxi
Radio Dispatch Corp. v. SIDA of Hawaii, Inc., 810 F.2d 869,
877 (9th Cir. 1987) (per se prohibition applies to group
boycotts “designed to stifle competition” (quoting Assoc.
Press v. United States, 326 U.S. 1, 19 (1945))); Joseph E.
Seagram & Sons, Inc. v. Hawaiian Oke & Liquors, Ltd., 416
            HONEY BUM, LLC V. FASHION NOVA, INC.             9

F.2d 71, 76 (9th Cir. 1969) (per se rule applies to group
boycotts that are “naked restraints of trade with no purpose
except stifling competition” (quoting White Motor Co v.
United States, 372 U.S. 253 (1963))); see also Herbert
Hovenkamp & Phillip E. Areeda, Antitrust Law ⁋ 2203 (4th
ed. 2022) (per se rule limited to boycotts “that on brief
inspection are unlikely to have any purpose other than the
reduction of market output and attendant price increases”);
Julian von Kalinowski, Peter Sullivan, and Maureen
McGuirl, Antitrust Laws and Trade Regulation §12.03[2][d]
(2d ed. 2022) (“boycotts between competitors are per se
illegal when they are nothing more than naked restraints of
trade”). For example, the Supreme Court condemned as per
se unlawful an agreement among several fashion designers
to pressure their retailers into boycotting rival designers to
drive them out of the market. Fashion Originators’ Guild of
Am. v. FTC, 312 U.S. 457, 460–63 (1941). Similarly, the
Court applied the per se prohibition where a dominant
retailer pressured several manufacturers—who, in turn,
agreed among themselves—to boycott the retailer’s rival.
Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207,
212–13 (1959).
    Importantly, “[a]ntitrust law does not permit the
application” of this Klor’s-style per se rule “in the absence
of a horizontal agreement.” NYNEX Corp. v. Discon, Inc.,
525 U.S. 128, 138 (1998) (emphasis added). The horizontal
agreement can exist either among the initiators of the boycott
(as in Fashion Originators) or those pressured into joining
(as in Klor’s). We call this latter type—where one dominant
firm pressures other firms at a different level of the supply
chain—a hub-and-spoke group boycott. See In re Musical
Instruments & Equip. Antitrust Litig., 798 F.3d 1186, 1192
(9th Cir. 2015). In such a boycott, the initiating firm acts as
10           HONEY BUM, LLC V. FASHION NOVA, INC.

a hub to which all the pressured firms, or spokes, are
connected. Id. Given the horizontal-agreement requirement,
plaintiffs can successfully invoke the per se rule in a hub-
and-spoke conspiracy only if they prove “horizontal
agreements among the spokes.” Id. at 1192 & n.3. Without
an agreement among the spokes, there is simply a “collection
of purely vertical agreements” subject to Rule of Reason
scrutiny. Id.
    Second, a modified per se prohibition applies where
“some or all,” Flaa, 55 F.4th at 689, of the following
characteristics are met: (1) the defendant’s restriction “cut[s]
off access to a supply, facility, or market necessary to enable
the boycotted firm to compete”; (2) the defendant
“possesse[s] a dominant position in the relevant market”;
and (3) the defendant’s restriction is “not justified by
plausible arguments that [it is] intended to enhance overall
efficiency and make markets more competitive.” Nw.
Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co.,
472 U.S. 284, 294 (1985). Northwest Wholesale involved a
joint buying venture’s expulsion of a member after a rule
violation. Id. at 285–86. And its modified per se prohibition
lends itself most readily to boycotts facilitated by a joint
venture, trade association, or other professional
organization. See PLS.com, LLC v. Nat’l Ass’n of Realtors,
32 F.4th 824, 835–37 (9th Cir. 2022).
   Third, where a group boycott falls neither within the
Klor’s-style per se prohibition nor the Northwest Wholesale
modified per se prohibition, we apply the Rule of Reason.
Flaa, 55 F.4th at 693–95; Hahn v. Oregon Physicians’ Serv.,
868 F.2d 1022, 1031 (9th Cir. 1988). These theories are not
always exclusive and a plaintiff can assert more than one of
them. See Flaa, 55 F.4th at 680–91, 693–95 (applying both
Northwest Wholesale analysis and the Rule of Reason).
               HONEY BUM, LLC V. FASHION NOVA, INC.                     11

     Turning to the facts of this case, Honey Bum asserts only
a Klor’s-style per se group boycott: that Fashion Nova (the
hub) pressured clothing vendors (the spokes) to boycott
Honey Bum and then those vendors agreed among
themselves to do so. Indeed, Honey Bum structured its
litigation such that it lacks the kind of evidence required to
prevail pursuant to Northwest Wholesale or the Rule of
Reason. 3 Honey Bum did not attempt to define a relevant
market in which Fashion Nova possesses market power; nor
did it do any “analysis of [the] impact” of the group boycott
on consumers. Accordingly, Honey Bum’s Sherman Act
claim rises and falls with its ability to show that Fashion
Nova organized a per se unlawful hub-and-spoke group
boycott.
    Below, the district court granted summary judgment
because no reasonable jury could find that the spokes in the
alleged conspiracy (the clothing vendors) had agreed among
themselves to boycott Honey Bum. On appeal, Honey Bum
makes two arguments: (1) that an agreement among the
spokes is not required to prevail; and (2) even if it is, the
district court misconstrued the factual record. We are not
persuaded by either argument.
    A. Necessity of a Horizontal Agreement
    The district court correctly held that Honey Bum, to
survive summary judgment on its hub-and-spoke group-
boycott claim, must create a material dispute regarding an
agreement among the spokes.           As explained, that

3
  Though our caselaw refers to Northwest Wholesale as a modified per
se rule, its threshold inquiries into market power and the harms and
benefits of a restriction require “that the facts be developed as in a rule
of reason case, or at least almost as fully.” Hahn, 868 F.2d at 1030 n.9.
12            HONEY BUM, LLC V. FASHION NOVA, INC.

requirement flows directly from Supreme Court and our
precedents. NYNEX, 525 U.S. at 138 (“[a]ntitrust law does
not permit the application” of the Klor’s-style per se rule “in
the absence of a horizontal agreement”); Musical
Instruments, 798 F.3d at 1192 (plaintiff must establish
“horizontal agreements among the spokes.”). 4
     B. Honey Bum’s Proof Failure
    Moreover, the district court correctly held that Honey
Bum failed to prove such a material dispute. A plaintiff can
establish a conspiracy through direct evidence,
circumstantial evidence, or both. See In re Citric Acid Litig.,
191 F.3d 1090, 1093 (9th Cir. 1999). Direct evidence is
smoking-gun evidence that “establishes, without requiring
any inferences” the existence of a conspiracy. Id. When it
comes to circumstantial evidence, “parallel conduct—even
consciously parallel conduct—[is] insufficient” to establish
a conspiracy. Musical Instruments, 798 F.3d at 1193. In
addition to parallel conduct, a plaintiff relying on
circumstantial evidence must show “plus factors,” id., that
“tend[] to exclude the possibility that the alleged
conspirators acted independently.” Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986)

4
  Against this binding precedent, Honey Bum offers the general
proposition that courts are to consider a “conspiracy as a whole.” The
cases it quotes for this purported unitary-conspiracy rule are readily
distinguishable. One quote comes from a turn-of-the-century case
addressing how to determine whether a conspiracy affects interstate
commerce and thus falls within the scope of the Sherman Act. See
United States v. Patten, 226 U.S. 525, 544 (1913). The other is from a
case involving a sports league—a unique antitrust context where “both
types of agreements [vertical and horizontal] are analyzed under the rule
of reason.” In re NFL Sunday Ticket Antitrust Litig., 933 F.3d 1136,
1152 (9th Cir. 2019).
            HONEY BUM, LLC V. FASHION NOVA, INC.         13

(cleaned up). Here, Honey Bum asserts that it produced both
direct and indirect evidence, but upon examination, each
showing falls short.
       1. Direct Evidence
    Honey Bum relies on three batches of purported direct
evidence. None of Honey Bum’s evidence “establishes,
without requiring any inferences” the existence of a
conspiracy because it suggests nothing more than conscious
parallelism. Citric Acid Litig., 191 F.3d at 1093.
    First, Honey Bum points to evidence relating to the
vendors Rehab and Honey Punch, noting that an employee
who worked at Rehab, which participated in the boycott of
Honey Bum, switched jobs and started working for Honey
Punch, which subsequently joined the boycott. This
evidence does not, “without requiring any inferences,”
establish that Rehab and Honey Punch joined the boycott
only after agreeing with each other to do so. Instead, it
simply shows employee movement from one vendor to
another.
    Second, Honey Bum emphasizes a communication from
another vendor showing that vendor “understood that the
boycott in which [it was] participating was not comprised of
[sic] a simple vertical arrangement.” By Honey Bum’s own
framing, this communication establishes only “conscious
parallelism”—that the vendor “understood” Fashion Nova
imposed the same vertical restraints on other vendors.
    Third, Honey Bum relies on an entry in Fashion Nova’s
“vendors to block” spreadsheet, which lists the same contact
person for two different vendors. Again, this evidence does
not, “without requiring any inferences,” establish a
conspiracy. Undisputed evidence shows that the listed
14          HONEY BUM, LLC V. FASHION NOVA, INC.

contact person worked sequentially for the two listed
vendors, and so, like the first batch, this evidence is
consistent with employee movement within an industry.
       2. Circumstantial Evidence
     Turning to circumstantial evidence, Honey Bum failed
to present plus-factor evidence from which a jury could
reasonably infer a horizontal agreement among the spokes
(i.e., the clothing vendors Fashion Nova pressured).
           a. Acts Against Self-Interest
    Where the conduct of an alleged co-conspirator is in its
own economic self-interest only if the other alleged co-
conspirators follow suit, there is strong circumstantial
evidence of a conspiracy. See Stanislaus Food Prod. Co. v.
USS-POSCO Indus., 803 F.3d 1084, 1092 (9th Cir. 2015);
Citric Acid, 191 F.3d at 1095. Here by contrast, acceding to
Fashion Nova’s demands was in the economic self-interest
of each vendor regardless of what other vendors chose to do.
Fashion Nova is a well-established, high-volume purchaser
whereas Honey Bum is an upstart, low-volume purchaser. If
a vendor believed Fashion Nova’s threats, it would rationally
choose to retain Fashion Nova’s business. Honey Bum
survived a motion to dismiss on a narrow theory that the
economic benefit of accepting Fashion Nova’s demands
depended on other vendors doing so. After discovery failed
to bear out that theory, Honey Bum abandoned it and failed
to advance any other argument that an individual vendor
acted against its self-interest by accepting Fashion Nova’s
terms.
           b. Opportunities to Collude
   Atypical communications between alleged coconspirators
can constitute a plus factor because such communications
             HONEY BUM, LLC V. FASHION NOVA, INC.            15

provide the opportunity for parties to come to (and enforce)
an illicit agreement. But to qualify as a plus factor, such
communications must go beyond the “standard fare” of
business and trade-association practice. Citric Acid, 191
F.3d at 1098. Here, Honey Bum makes only the generalized,
commonplace contention that some fast-fashion vendors are
“close colleagues” and “friends” who often attend the same
trade shows. If that showing were enough to preclude
summary judgment, then “we would have to allow an
inference of conspiracy whenever a trade association” exists
in a given industry. Id. Such a result would run counter to
the Supreme Court’s instruction that “trade associations
often serve legitimate functions, such as providing
information to industry members, conducting research to
further the goals of the industry, and promoting demand for
products and services.” Id. (citing Maple Flooring Mfs.
Ass’n v. United States, 268 U.S. 563, 567 (1925)).
II. Tortious Interference with Prospective Economic
    Relations
    Summary judgment was also proper concerning Honey
Bum’s claim for tortious interference with prospective
economic relations (TIPER). This California business tort
requires a plaintiff to establish: “(1) an economic
relationship between the plaintiff and some third party, with
the probability of future economic benefit to the plaintiff; (2)
the defendant’s knowledge of the relationship; (3)
intentional acts on the part of the defendant designed to
disrupt the relationship; (4) actual disruption of the
relationship; and (5) economic harm to the plaintiff
proximately caused by the acts of the defendant.”
TransWorld Airlines, Inc. v. Am. Coupon Exch., Inc., 913
F.2d 676, 689 (9th Cir. 1990) (quoting Youst v. Longo, 43
Cal. 3d 64, 71 n.6 (1987)). The plaintiff must also show that
16          HONEY BUM, LLC V. FASHION NOVA, INC.

the defendant’s conduct was independently wrongful—i.e.,
that it is “wrongful by some legal measure other than the fact
of interference itself.” Ixchel Pharma, LLC v. Biogen, Inc.,
9 Cal. 5th 1130, 1142 (2020); see also Korea Supply Co. v.
Lockheed Martin Corp., 29 Cal. 4th 1134, 1159 (2003) (the
interference must be unlawful pursuant to “some
constitutional, statutory, regulatory, [or] common law”
prohibition).
    Here, the parties dispute only whether this latter
independent-wrongfulness requirement is satisfied. Honey
Bum primarily asserted Section 1 of the Sherman Act as a
source of independent unlawfulness. Because we hold that
Honey Bum’s Section 1 claim fails, that statutory provision
cannot provide a source of independent unlawfulness for
Honey Bum’s TIPER claim.
    Honey Bum alternatively asserted—for the first time in
its opposition to summary judgment—that California
Business and Professions Code § 16600 provides a source of
independent unlawfulness. That section provides that “every
contract by which anyone is restrained from engaging in a
lawful profession . . . is to that extent void.” Even assuming
this theory was properly raised before the district court, it
fails. Though the language is unconditional on its face, the
California Supreme Court has interpreted it to impose a per
se prohibition only in the context of certain employer-
employee noncompete clauses; outside of that context, the
court has “long applied a reasonableness standard to
contractual restraints on business operations and commercial
dealings” that resembles the Rule of Reason. Ixchel, 9 Cal.
5th at 1159. Honey Bum structured its litigation specifically
to avoid the Sherman Act’s Rule of Reason. As a result, the
summary-judgment record is devoid of any evidence upon
            HONEY BUM, LLC V. FASHION NOVA, INC.           17

which a reasonable factfinder could conclude that Fashion
Nova’s conduct violates California’s analogous standard.
III. Tortious Interference with Contract
    Finally, summary judgment was proper concerning
Honey Bum’s claim for tortious interference with contract
(TIC). This California business tort is closely related to the
one addressed in the previous section—applying, as its name
suggests, to business relationships that have already
culminated in a contract. Ixchel, 9 Cal. 5th at 1141. As such,
it requires a plaintiff to establish: “(1) a valid contract
between plaintiff and a third party; (2) defendant’s
knowledge of this contract; (3) defendant’s intentional acts
designed to induce a breach or disruption of the contractual
relationship; (4) actual breach or disruption of the
contractual relationship; and (5) resulting damage.” United
Nat. Maint., Inc. v. San Diego Convention Ctr., Inc., 766
F.3d 1002, 1006 (9th Cir. 2014) (quoting Pac. Gas & Elec.
Co. v. Bear Stearns & Co., 50 Cal. 3d 1118, 1126 (1990)).
In addition to the formality of the disrupted relationship
(contractually cemented versus only prospective), there is
another critical distinction between TIC and TIPER: the
former tort generally does not require a showing of
independent wrongfulness. Ixchel, 9 Cal. 5th at 1148.
    Because Fashion Nova allegedly interfered with
contracts for the sale of goods (i.e., clothing items), we
determine whether a valid contract existed pursuant to
California’s Uniform Commercial Code – Sales (UCC). See
Cal. Com. Code §§ 2101, 2102, 2105(1). Formation of a
contract requires “an offer communicated to the offeree and
an acceptance communicated to the offeror.” Donovan v.
RRL Corp., 26 Cal. 4th 261, 271 (2001) (emphasis added).
The UCC considers a purchase order to be an offer to buy
18          HONEY BUM, LLC V. FASHION NOVA, INC.

goods. See Cal. Com. Code § 2206(1)(b) (referring to “[a]n
order or other offer to buy goods”); Foremost Pro Color, Inc.
v. Eastman Kodak Co., 703 F.2d 534, 538 (9th Cir. 1983)
(“The weight of authority is that purchase orders . . . are not
enforceable contracts until they are accepted by the seller.”).
The merchant who receives a purchase order can, as a default
rule, accept the offer either through prompt shipment or “by
any medium reasonable in the circumstances.” Cal. Com.
Code § 2206(1)(a)–(b); see also Restatement (Second)
Contracts § 35(1) (“An offer gives the offeree a continuing
power to complete the manifestation of mutual assent by
acceptance of the offer.”).
    Below, the district court entered summary judgment on
Honey Bum’s TIC claim after concluding that “a reasonable
jury [could not] find that Defendants knew about or intended
to disrupt any contractual relationship.” On appeal, Honey
Bum argues that two purported contracts warrant reversal.
We are not persuaded.
    First, Honey Bum relies on an email exchange to assert
a contract with the vendor Bear Dance. In the cited
exchange, Honey Bum informed Bear Dance, “We place[d]
an order today with two styles, can you tell me if this will be
fulfilled or cancelled?” To which Bear Dance responded:
“We will go ahead and cancel it from our side.” As
explained, a purchase order is simply an offer. Cal. Com.
Code § 2206(1)(b); Foremost Pro, 703 F.2d at 538. Though
inartful, Bear Dance’s email “cancel[ing]” the purchase
order was a rejection of Honey Bum’s offer to purchase its
goods. Therefore, there was no valid contract between Bear
              HONEY BUM, LLC V. FASHION NOVA, INC.                  19

Dance and Honey Bum with which Fashion Nova could have
intentionally interfered. 5
     Second, Honey Bum points to a purported contract with
Viva USA. Even assuming that there was a valid contract
between Viva USA and Honey Bum, the existence of a
contract is just one element of a TIC claim. As relevant here,
Honey Bum also needed to create a material dispute that
Fashion Nova took “intentional acts designed to induce a
breach or disruption of the contractual relationship.” United
Nat. Maint., 766 F.3d at 1006. But Honey Bum cited no
evidence—either in its opposition to summary judgment or
in its briefs before this court—that creates a material dispute
regarding this requirement. Honey Bum cites an email
exchange in which a vendor noted that Honey Bum “pre-
ordered” some goods and a Fashion Nova employee
requested that someone “call and ask” the vendor to not
“ship.” To begin, this email exchange does not relate to
either of the two purported contracts Honey Bum put
forward. In any event, all this exchange shows is that
Fashion Nova intentionally acted to prevent a vendor from
entering into a prospective contract by shipping the
requested goods, see Cal Commercial Code § 2206(1)(b),
not that Fashion Nova intentionally induced the vendor to
breach an existing contract. Honey Bum next points to
testimony from Bear Dance that Fashion Nova “asked us to
stop taking Honey Bum’s orders.” Again, this evidence does

5
  Both in its briefing and at oral argument, Honey Bum mentioned in
passing “a number of purchase orders” that could purportedly support a
TIC claim. Even assuming Honey Bum did not waive an argument based
on these purchase orders by failing to mention them in its summary-
judgment opposition, the argument fails for the same reason as the Bear
Dance email exchange. A purchase order, without more, is not a
contract.
20          HONEY BUM, LLC V. FASHION NOVA, INC.

not relate to the asserted Viva USA contract and merely
shows interference with prospective economic relations—
not, as this tort requires, interreference with a preexisting
valid contract.
                     CONCLUSION
   For the foregoing reasons, the district court’s grant of
summary judgment on all of Honey Bum’s claims is
AFFIRMED.