Avago Technologies U.S., Inc et al v. Venture Corporation Limited, No. 5:2008cv03248 - Document 31 (N.D. Cal. 2008)
Court Description: ORDER Denying 7 Motion to Dismiss; Granting 16 Motion to Dismiss. Amended Complaint due 1/22/2009. Signed by Judge James Ware on 12/22/2008 (jwlc2, COURT STAFF) (Filed on 12/22/2008) Modified docket text on 12/23/2008 (ecg, COURT STAFF).
Avago Technologies U.S., Inc et al v. Venture Corporation Limited Doc. 31 1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE NORTHERN DISTRICT OF CALIFORNIA 9 SAN JOSE DIVISION Avago Technologies U.S., Inc., et al., 11 For the Northern District of California United States District Court 10 NO. C 08-03248 JW Plaintiffs, ORDER GRANTING DEFENDANT VENTURE’S MOTION TO DISMISS; DENYING DEFENDANT EMCORE’S MOTION TO DISMISS v. 12 Venture Corp. Limited, et al., 13 Defendants. 14 / 15 16 I. INTRODUCTION Plaintiffs1 bring this diversity action against Venture Corp. Limited (“Venture”) and Emcore 17 Corp. (“Emcore”) (collectively, “Defendants”) alleging breach of contract, breach of express 18 warranty and negligent interference with prospective economic advantage. Plaintiffs allege that 19 Defendants manufactured and delivered faulty fiberoptic transceivers, a key product in Plaintiffs’ 20 optoelectronics line of products. 21 Presently before the Court are Defendant Venture’s Motion to Dismiss (hereafter, “Venture 22 Motion,” Docket Item No. 16) and Defendant Emcore’s Motion to Dismiss (hereafter, “Emcore 23 Motion,” Docket Item No. 7). The Court conducted a hearing on December 1, 2008. Based on the 24 papers submitted to date and oral argument, the Court GRANTS Venture’s Motion to Dismiss and 25 DENIES Emcore’s Motion to Dismiss. 26 27 28 1 Plaintiffs are Avago Technologies U.S., Inc. (“Avago U.S.”), Avago Technologies International Sales Pte. Limited (“Avago International”), Avago Technologies Japan, Ltd. (“Avago Japan”), and Avago Technologies Canada Corp. (“Avago Canada”). Dockets.Justia.com 1 2 Plaintiff Avago U.S. is a Delaware corporation with its principal place of business in San 3 Jose, California.2 Plaintiff Avago International is a Singaporean company with its principal place of 4 business outside of the United States. (Complaint ¶ 2.) Plaintiff Avago Japan is a Japanese 5 company with its principal place of business outside of the United States. (Id. ¶ 3.) Plaintiff Avago 6 Canada is a Canadian company with its principal place of business outside the United States. (Id. ¶ 7 4.) Defendant Venture is a Singaporean company with its principal place of business in Singapore. 8 (Id. ¶ 5.) Defendant Emcore is a New Jersey corporation with its principal place of business in 9 Albuquerque, New Mexico. (Id. ¶ 6.) 10 In a Complaint filed on July 3, 2008, Plaintiffs allege as follows: 11 For the Northern District of California United States District Court II. BACKGROUND Plaintiffs supply analog interface components for communications, industrial and 12 consumer applications. (Complaint ¶ 11.) One of the key products in Plaintiffs’ 13 optoelectronics category is its line of fiber optic transceivers. An essential component of 14 Avago’s fiber optic transceivers is a Vertical Cavity Surface Emitting Laser (“VCSEL” 15 [pronounced “vixel”]). (Id. ¶ 12.) A VCSEL is a type of laser diode that emits light from its 16 surface rather than its edge, producing a circular beam that is easy to couple with fiber. (Id.) 17 In May 2002, Agilent Technologies Inc. entered into a Global Manufacturing 18 Services Agreement (“GMSA” or “Agreement”) with Venture whereby Venture agreed to 19 manufacture, test, pack, ship, and sell, among other things, fiber optic transceivers for 20 Agilent. (Complaint ¶ 13-14.) Venture subcontracted with Emcore for the VCSEL die used 21 in the transceivers. (Id.) In November 2005, the GMSA was assigned to Plaintiffs. (Id. ¶ 22 13.) Avago International began purchasing the transceivers under the GMSA and 23 subcontracted with Avago U.S., Avago Japan and Avago Canada to sell the transceivers to 24 their customers. (Id.) Venture and Emcore knew, or should have known, that Emcore’s 25 2 27 (Complaint for Breach of Contract; Non-Conforming Goods; Breach of Express Warranty; and Negligent Interference with Prospective Economic Advantage ¶ 1, hereafter, “Complaint,” Docket Item No. 1.) 28 2 26 For the Northern District of California United States District Court 1 VCSEL die would be incorporated into finished transceivers, and that negligent 2 manufacturing of the VCSEL die would result in the disruption of Plaintiffs’ commercial 3 relationships. (Id.) 4 Beginning in November 2006, Plaintiffs’ customers reported failures of certain 5 transceivers provided to Plaintiffs by Venture. Plaintiffs accepted the return of the defective 6 products, made repairs or provided replacements and expended numerous resources dealing 7 with unsatisfied customers. (Complaint ¶ 15.) As a result of selling millions of the defective 8 transceivers to its customers, Plaintiffs suffered significant monetary loss and harm to their 9 reputations. (Id. ¶¶ 16-17.) Through a process of reverse engineering and independent 10 laboratory analysis, Plaintiffs, Venture and Emcore determined that the failures in the 11 transceivers were a result of a delamination between the mirror layers of the Emcore VCSEL 12 die sold to Venture. (Id. ¶ 15.) 13 On the basis of the allegations outlined above, Plaintiffs allege the three causes of action: (1) 14 Breach of Contract against Venture; (2) Breach of Express Warranty against Venture; and (3) 15 Negligent Interference with Prospective Economic Advantage against Emcore. 16 Presently before the Court are Defendants Venture and Emcore’s Motions to Dismiss. 17 III. STANDARDS 18 Pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint may be dismissed against a 19 defendant for failure to state a claim upon which relief may be granted against that defendant. 20 Dismissal may be based on either the lack of a cognizable legal theory or the absence of sufficient 21 facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 22 (9th Cir. 1990); Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-534 (9th Cir. 1984). 23 For purposes of evaluating a motion to dismiss, the court “must presume all factual allegations of the 24 complaint to be true and draw all reasonable inferences in favor of the nonmoving party.” Usher v. 25 City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). Any existing ambiguities must be resolved 26 in favor of the pleading. Walling v. Beverly Enters., 476 F.2d 393, 396 (9th Cir. 1973). 27 28 3 1 However, mere conclusions couched in factual allegations are not sufficient to state a cause 2 of action. Papasan v. Allain, 478 U.S. 265, 286 (1986); see also McGlinchy v. Shell Chem. Co., 845 3 F.2d 802, 810 (9th Cir. 1988). The complaint must plead “enough facts to state a claim for relief 4 that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007). 5 Courts may dismiss a case without leave to amend if the plaintiff is unable to cure the defect by 6 amendment. Lopez v. Smith, 203 F.3d 1122, 1129 (9th Cir. 2000). 7 8 For the Northern District of California United States District Court 9 IV. DISCUSSION A. Venture’s Motion to Dismiss Venture moves to dismiss Plaintiffs’ First and Second Causes of Action on the ground that 10 Plaintiffs’ allegations fail to establish that Venture did not meet its contractual obligations under the 11 GMSA. (Motion at 2.) 12 1. 13 Venture contends that the Complaint does not establish that it provided “non-conforming 14 products” in breach of the GMSA on the ground that Venture was required to provide fiberoptic 15 transceivers containing Emcore’s VCSELs. (Venture Motion at 5.) According to Venture, although 16 the transceivers may not work the way Plaintiffs would want, they are nonetheless conforming goods 17 under the terms of the GMSA. (Venture Corporation Limited’s Reply in Support of its Motion to 18 Dismiss at 3, Docket Item No. 23.) 19 Plaintiffs’ First Cause of Action for Breach of the GMSA To state a cause of action for breach of contract, a plaintiff must sufficiently allege the 20 following elements: (1) the existence of a contract; (2) the plaintiff’s performance or excuse for 21 failing to perform; (3) the defendant’s breach; and (4) damage to the plaintiff resulting from the 22 defendant’s breach. McKell v. Washington Mut., Inc., 142 Cal. App. 4th 1457, 1489 (2006). 23 In this case, the only dispute concerning Plaintiffs’ First Cause of Action is whether 24 Plaintiffs have sufficiently alleged the third element of a breach of contract–Venture’s breach. 25 (Venture Motion at 5.) With respect to Venture’s breach, Plaintiffs allege as follows: 26 Venture breached the [GMSA] by, among other things, providing [Plaintiffs] with nonconforming products. (Complaint ¶ 25.) 27 28 4 1 The GMSA defines “Non-Conforming Products” as “any Product received by [Plaintiffs] or [their] 2 customers that does not conform to the Product Information and/or General Technical Specifications 3 stated in this Agreement.”3 (Complaint, Ex. A § 2.41.) The GMSA does not define “Product 4 Information” or “General Technical Specifications.” However, it does impose the following 5 obligations on Venture: 6 Venture will . . . source Components and materials as needed to fulfill Venture’s obligations to manufacture the Products in accordance with the Specifications set forth in Exhibit B and the other Product Requirements provided by [Plaintiffs]. (Complaint, Ex. A § 1.1.1.) 7 8 Venture will . . . [m]anufacture, test, pack, ship and sell all Products in accordance with the terms of this Agreement. (Complaint, Ex. A § 1.1.2.) 9 Venture will . . . [m]eet the Supplier Performance Expectations described in Section 15 below, and develop and maintain quality control standards consistent with those standards described in that Section. (Complaint, Ex. A § 1.1.4.) 11 For the Northern District of California United States District Court 10 Venture agrees to meet the quality standards and performance metrics set forth in Exhibits B and J to this Agreement. (Complaint, Ex. A § 15.2.) 12 13 A “Product Requirement” is defined as 14 any requirement for the development or manufacture of Products provided by [Plaintiffs] to Venture, including all manufacturing information, technical data and manuals, design information, drawings, documentation, packaging requirements, testing requirements, Specifications, or any other criteria written and provided to Venture by [Plaintiffs]. 15 16 17 (Complaint, Ex. A § 2.53.) “Specifications” are defined as “the General Technical Specifications 18 listed in Exhibit B, along with any other specifications as may be mutually agreed.” (Id., Ex. A § 19 2.61.) 20 In other words, the GMSA requires Venture to provide Plaintiffs with products that (1) are in 21 accordance with the Specifications set forth in Exhibit B to the GMSA and any other written 22 requirement provided by Plaintiffs to Venture, including all manufacturing information, technical 23 data and manuals, design information, drawings, documentation, packaging requirements and testing 24 requirements; (2) have been tested, packed, shipped and sold in accordance with the terms of the 25 3 27 A court may consider documents attached to a complaint when ruling on a Rule 12(b)(6) motion without converting it into a Rule 56 of Fed. R. Civ. P. motion. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). 28 5 26 1 GMSA; and (3) meet specified quality standards and performance metrics set forth in Exhibits B and 2 J. Any product provided to Plaintiffs that does not meet these criteria is non-conforming. (See 3 Complaint, Ex. A § 2.41.) For the Northern District of California United States District Court 4 Plaintiffs contend that they have sufficiently pleaded a breach of the GMSA because “one of 5 the specifications was that the product actually work.” (Plaintiffs’ Opposition to Venture 6 Corporation’s Motion to Dismiss Complaint at 6, hereafter, “Venture Opposition,” Docket Item No. 7 18.) However, there is no allegation or GMSA provision that says non-working products are 8 nonconforming. According to the Complaint and the GMSA, Venture is only obligated to comply 9 with the requirements, quality standards and performance metrics allegedly set forth in Exhibits B 10 and J of the GMSA, as well as any other written requirements provided to Venture. None of these 11 requirements are attached to the Complaint. Thus, Plaintiffs’ allegation that “Venture breached the 12 [GMSA] by, among other things, providing [Plaintiffs] with non-conforming products” is a mere 13 conclusion that fails to provide “fair notice of what [Plaintiffs’] claim is and the grounds upon which 14 it rests.” Dura Pharmaceuticals, Inc. v. Broundo, 544 U.S. 336, 346 (2005). Plaintiffs’ “obligation 15 to provide the ‘grounds’ of [their] ‘entitlement to relief’ requires more than labels and conclusions, 16 and a formulaic recitation of a cause of action’s elements.” Twombly, 550 U.S. 544, 127 S. Ct. at 17 1963-64. 18 Accordingly, the Court GRANTS Venture’s Motion to Dismiss Plaintiffs’ First Cause of 19 Action for Breach of Contract. However, the Court finds that the defects identified with Plaintiffs’ 20 First Cause of Action may be cured by amendment. Thus, Plaintiffs are granted leave to amend their 21 allegations consistent with the terms of this Order. 22 2. 23 Venture contends that the Complaint does not state a claim for breach of the express Plaintiffs’ Second Cause of Action for Breach of Express Warranty 24 warranty because the VCSEL component does not fall within the express warranty provided by 25 Venture in the GMSA. (Venture Motion at 6.) 26 27 28 6 1 2 allege the following elements: (1) the exact terms of the warranty; (2) reasonable reliance on the 3 warranty; and (3) a breach of warranty that proximately causes the plaintiff's injury. Williams v. 4 Beechnut Nutrition Corp., 185 Cal. App. 3d 135, 142 (1986). 5 Here, Plaintiff alleges as follows: 6 Venture expressly warranted that all Products provided to [Plaintiffs] . . . would “conform strictly to the Product Requirements (Including those Specifications listed in Exhibit B)” and would conform to all other criteria referenced in the Agreement. (Complaint ¶ 30.) Venture also expressly warranted that all Products provided to [Plaintiffs] . . . would “[b]e free from defects in workmanship as specified in the Agilent Acceptability Specification 930.610, as listed in Exhibit B.” (Id. ¶ 31.) These promises became part of the basis of the bargain between Venture and [Plaintiffs]. (Id. ¶ 32.) 7 8 9 10 11 For the Northern District of California United States District Court To state a cause of action for breach of an express warranty, a plaintiff must sufficiently Venture materially breached its express warranties by failing to produce fiber optic transceivers that confirmed [sic] to the specifications and met all quality requirements. (Complaint ¶ 33.) As a direct and proximate result of the breach . . . [Plaintiffs have] been damaged in an amount exceeding the jurisdictional minimum limit of [the Court]. (Id. ¶ 34.) 12 Under the GMSA’s Product Warranty, 13 Venture warrants that all Products will: 14 15 16 17 18 Conform strictly to the Product Requirements (including those Specifications listed in Exhibit B), and other criteria referred to in this Agreement [and] be free from defects in workmanship as specified in the Agilent Acceptability Specification 930.610, as listed in Exhibit B . . . . (Id., Ex. A § 10.1.) As with Plaintiffs’ First Cause of Action, Plaintiffs’ Second Cause of Action makes the 19 conclusory allegation that Venture breached the express warranty because the transceivers provided 20 to Plaintiffs did not meet specifications and quality requirements incorporated under the GMSA. 21 Neither Exhibit B, Agilent Acceptability Specification 930.610, nor any other specifications or 22 quality requirements are included in Plaintiffs’ Complaint. Further, Plaintiffs do not to allege which 23 of the unstated, and potentially numerous, specifications or requirements were not met. Thus, 24 Plaintiffs’ allegations fail to provide notice of what their claim is and the grounds for that claim. 25 26 Accordingly, the Court GRANTS Venture’s Motion to Dismiss Plaintiffs’ Second Cause of Action for Breach of Express Warranty. As with their First Cause of Action, the Court finds that the 27 28 7 1 defects identified with Plaintiffs’ Second Cause of Action may be cured by amendment. Thus, 2 Plaintiffs are granted leave to amend their allegations consistent with the terms this Order. 3 B. 4 Emcore moves to dismiss Plaintiffs’ Third Cause of Action for Negligent Interference with 5 Prospective Economic Advantage on the ground California’s “economic loss rule” bars Plaintiffs 6 from bringing a negligent interference claim against an upstream component manufacturer for losses 7 that are purely economic. (See Emcore Motion at 2; Plaintiffs’ Opposition to Emcore Corporation’s 8 Motion to Dismiss at 4, Docket Item No. 19.) For the Northern District of California 9 United States District Court Emcore’s Motion to Dismiss 1. Application of the Economic Loss Rule 10 Emcore contends that, regardless of whether Plaintiffs adequately plead each element 11 negligent interference, their claim is defective because they seek recovery for purely economic loss, 12 which is barred under California’s “economic loss rule.” (Emcore Motion at 4.) Plaintiffs contend 13 that their claim falls within the “special relationship” exception to the economic loss rule. 14 California generally bars tort claims for economic loss based on negligence. See, e.g. 15 Anthony v. Kelsey-Hayes Co., 25 Cal. App. 3d 442, 446-47 (1972); Sacramento Regional Transit 16 Dist. v. Grumman Flxible, 158 Cal. App. 3d 289, 298 (1984). There is, however, an exception to the 17 economic loss rule in that, “[w]here a special relationship exists between the parties, a plaintiff may 18 recover for loss of expected economic advantage through the negligent performance of a contract 19 although the parties [are] not in contractual privity.” J’Aire Corp. v. Gregory, 24 Cal. 3d 799, 804 20 (1979). 21 Under the J’aire exception, a court must consider six factors to determine if the parties have 22 the requisite special relationship: (1) the extent to which the transaction was intended to affect the 23 plaintiff; (2) the foreseeability of harm to the plaintiff; (3) the degree of certainty that the plaintiff 24 suffered injury; (4) the closeness of the connection between the defendant’s conduct and the injury 25 suffered; (5) the moral blame attached to the defendant’s conduct; and (6) the policy of preventing 26 future harm. Id. 27 28 8 1 2 determine whether Plaintiffs have alleged the requisite special relationship with Emcore, sufficient 3 to permit them to proceed on a claim for negligent interference with prospective economic 4 advantage. See J’Aire, 24 Cal. 3d at 804 (applying the six special relationship factors to the 5 pleadings). For the Northern District of California 6 United States District Court Since Plaintiffs and Emcore are not alleged to be in contractual privity, the Court must First, the Court must consider the extent to which the transaction was intended to affect 7 Plaintiffs. California courts have held that the defendant’s transactions must have been “specifically 8 intended to affect the particular needs” of the plaintiff. Greystone Homes, Inc. v. Midtec, Inc., 168 9 Cal. App. 4th 1194, 2008 Cal. App. LEXIS 2376, *68 (Dec. 2, 2008). Here, Plaintiffs allege that 10 Emcore’s VCSEL was an “essential component” of its fiberoptic transceivers and that “Emcore 11 knew of the relationship between Venture and [Plaintiffs and] was also aware that the VCSEL die 12 would be incorporated into finished fiber optic transceivers and sold to [Plaintiffs’] customers.” 13 (Complaint ¶ 37.) Although Plaintiffs’ allegations do not specifically state that Emcore 14 manufactured VCSELs solely for Plaintiffs or that they were designed for Plaintiffs’ particularized 15 needs, this allegation does suggest that Emcore was aware that its product was an “essential 16 component” of Plaintiffs’ products. The Court finds that this allegation sufficiently states that 17 Emcore’s conduct was specifically intended to affect Plaintiffs’ particular needs for VCSEL dies. 18 Second, the Court must consider the foreseeability of harm to Plaintiffs. Plaintiffs allege that 19 Emcore knew or should have known that “if it did not act with due care . . . its action would interfere 20 with the relationship between Venture and [Plaintiffs] and [Plaintiffs] and [their] customers.” 21 (Complaint ¶ 37.) Thus, Plaintiffs adequately allege that it was foreseeable that Emcore’s 22 negligence would interfere with Plaintiffs’ prospective economic advantage. 23 Third, the Court must consider the degree of certainty that Plaintiffs suffered injury. 24 Plaintiffs allege that they “suffered harm as a result of the defective VCSEL die in that . . . [Plaintiffs 25 were] forced to compensate [their] customers for the defective products and/or cover with 26 replacement products” and that Plaintiffs’ “relationship with Venture and [Plaintiffs’] customers 27 28 9 1 were actually interfered with or disrupted.” (Complaint ¶ 39.) Thus, Plaintiffs have alleged 2 sufficient certainty with respect to Plaintiffs’ harm. 3 4 conduct and the injury suffered. Plaintiffs allege that, through reverse engineering, the parties 5 ascertained that “the failures in the fiber optic transceivers were a result of a delamination between 6 the mirror layers of the Emcore VCSEL die sold to Venture.” (Complaint ¶ 15.) Thus, Plaintiffs 7 have sufficiently alleged that Emcore’s conduct directly caused their injuries. 8 For the Northern District of California 9 United States District Court Fourth, the Court must consider the closeness of the connection between Defendant’s Fifth, the Court must consider the moral blame attached to Defendant’s conduct. A defendant’s lack of diligence is particularly blameworthy where its conduct continues after the 10 probability of damage is drawn to its attention. J’Aire, 24 Cal. 3d at 805. Here, Plaintiffs allege that 11 Emcore’s negligence “continued even after the cause of the field failures was brought to Emcore’s 12 attention.” (Complaint ¶ 41.) Thus, Plaintiffs have sufficiently alleged blameworthiness with 13 respect to Emcore’s conduct. 14 Finally, the Court must consider the policy of preventing future harm. Public policy 15 ordinarily requires that one should be held responsible when his lack of due care results in harm to 16 another. See Cal. Civ. Code § 1714. Based on the allegations, Plaintiffs’ injury was highly 17 foreseeable given that Emcore’s VCSEL component was essential to Plaintiffs’ ultimate product. 18 Considering the nature of Plaintiffs’ allegations, the Court finds that public policy favors imposing a 19 duty of care on Emcore. 20 In sum, the Court finds that Plaintiffs have sufficiently alleged a special relationship with 21 Emcore under the J’Aire standard, such that the economic loss rule does not prevent Plaintiffs from 22 proceeding with their claim for negligent interference with prospective economic advantage. The 23 Court considers whether Plaintiffs have sufficiently alleged facts to state this claim. 24 2. 25 To state a claim for negligent interference with prospective economic advantage, a plaintiff 26 Negligent Interference with Prospective Economic Advantage must allege the following elements: 27 28 10 1 2 3 4 5 6 In this case, Plaintiffs allege in relevant parts: 8 13 Plaintiffs and Venture, a third party to this claim, entered into an Agreement that contained reasonably probable future economic benefit or advantage for Plaintiffs. (Complaint ¶ 36.) Emcore knew of the existence of the relationship between Venture and Plaintiffs. Emcore was aware, or should have been aware, that if it did not act with due care in design and manufacture its action would interfere with the relationship between Venture and Plaintiffs and Plaintiffs and their customers. (Id. ¶ 37.) The failures in the fiberoptic transceivers were a result of Emcore’s negligent manufacture of the VCSEL wafers . (Id. ¶ 38.) Emcore’s negligence caused damage to Plaintiffs in that their relationship with Venture and their relationship with their customers were actually interfered with or disrupted and Plaintiffs lost in whole or in part economic benefits or advantage reasonably expected from those relationships. (Id. ¶ 39.) 14 Plaintiffs have therefore alleged Defendant’s knowledge of its contractual relationship with a 10 11 For the Northern District of California North American Chemical Co. v. Superior Court, 59 Cal. App. 4th 764, 787 (1997). 7 9 United States District Court (1) an economic relationship between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship. 12 15 third party, and that Defendant was aware that its lack of due care could cause Plaintiffs to lose the 16 economic benefits associated with that third-party relationship. Plaintiffs have also alleged that 17 Defendant was negligent, causing disruption to Plaintiffs’ third-party relationship and corresponding 18 injury to Plaintiffs’ expected economic benefit from that relationship. Plaintiffs have thus stated a 19 claim for negligent interference with prospective economic advantage. 20 Accordingly, the Court DENIES Emcore’s Motion to Dismiss Plaintiffs’ Third Cause of 21 Action for negligent interference with prospective economic advantage. 22 23 V. CONCLUSION The Court GRANTS Defendants Venture’s Motion to Dismiss Plaintiffs’ First and Second 24 Causes of Action with leave to amend. Any amendment shall be filed on or before January 22, 25 2009 and shall be consistent with the terms of this Order. 26 27 28 11 1 The Court DENIES Emcore’s Motion to Dismiss Plaintiffs’ Third Cause of Action. 2 3 Dated: December 22, 2008 JAMES WARE United States District Judge 4 5 6 7 8 9 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 1 THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO: 2 Caroline Ann Haugsten Sayers email@example.com Dori Lynn Yob firstname.lastname@example.org 3 Erik Paul Khoobyarian email@example.com John Calvin Brown firstname.lastname@example.org 4 John V. Picone email@example.com Matthew Paul Lewis firstname.lastname@example.org 5 6 Dated: December 22, 2008 Richard W. Wieking, Clerk 7 By: 8 9 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 /s/ JW Chambers Elizabeth Garcia Courtroom Deputy