Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 1 of 20
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`v.
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`THE UPPER DECK COMPANY,
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`Plaintiff,
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`RYAN MILLER et al.,
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`Defendants.
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`CASE NO. C23-1936-KKE
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`ORDER GRANTING IN PART AND
`DENYING IN PART MOTION TO
`DISMISS
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`This is a copyright infringement and breach of contract case. Plaintiff Upper Deck
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`Company (“Upper Deck”) claims that Defendant Ryan Miller, a former contractor working on the
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`trading card game “Rush of Ikorr,” took a job with competitor, Defendant Ravensburger North
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`America Inc. (“Ravensburger”), and used Upper Deck’s confidential and copyrighted material in
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`Ravensburger’s “Disney Lorcana” trading card game. Defendants move to dismiss every claim
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`except for the breach of contract claim against Miller, arguing the economic loss rule bars tort
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`claims against Miller, the claims against Ravensburger omit required elements, the state law claims
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`are preempted by the Copyright Act, and Upper Deck fails to identify any copyrighted material.
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`Except for the conversion, copyright, and parts of the fraud claim, the Court agrees with
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`Defendants but finds many of these failures can be cured by amendment.
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 1
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 2 of 20
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`I. BACKGROUND1
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`In 2018, Miller entered into an agreement (“2018 Agreement”) with Upper Deck wherein
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`Miller would attend a gaming summit to brainstorm and provide feedback on new games and game
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`mechanics. Dkt. No. 12 ¶ 26, Dkt. No. 48 at 7–11. Rush of Ikorr2 was created at this gaming
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`summit. Dkt. No. 12 ¶ 28. In 2019, Miller entered into another agreement with Upper Deck
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`(“2019 Agreement”) wherein Miller would be the lead game designer for Rush of Ikorr and would
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`be paid upon completion of specific milestones, with a timeline running through March 2021.
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`Id. ¶ 30. In October 2020, Miller terminated the 2019 Agreement and, around that time, began
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`working with Ravensburger. Id. ¶¶ 35, 37. In September 2022, Ravensburger announced the
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`Disney Lorcana game and identified Miller as the “product manager and co-designer” of the game.
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`Id. ¶ 41.
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`In June 2023, Upper Deck filed this case against Defendants in San Diego Superior Court
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`and Defendants removed the case to the Southern District of California. Dkt. No. 1. In July 2023,
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`Upper Deck filed its amended complaint, which is the operative complaint. Dkt. No. 12. The
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`complaint brings three causes of action against Miller (breach of contract, breach of fiduciary duty,
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`and fraudulent misrepresentation and/or fraudulent concealment under Cal. Civ. Code §§ 1709–
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`10), two causes of action against Ravensburger (inducing breach of a written contract, and
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`intentional interference with prospective economic relations), and three causes of action against
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`both Defendants (copyright infringement, conversion, and unfair competition under Bus. & Profs.
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`Code § 17200). Id. Defendants moved to dismiss the complaint for lack of personal jurisdiction
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`and failure to state a claim. Dkt. No. 20. After full briefing on Defendants’ motion to dismiss for
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`1 This section assumes, for purposes of resolving the motion to dismiss, that the factual allegations in the first amended
`complaint (Dkt. No. 12) are true.
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` 2
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` The game was previously called Shell Beach. Dkt. No. 12 ¶ 29.
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 2
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 3 of 20
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`lack of personal jurisdiction, and limited jurisdictional discovery, Judge M. James Lorenz
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`transferred the case to this Court under 28 U.S.C. § 1404(a) and denied the remainder of the motion
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`to dismiss as moot. Dkt. No. 29-1. After the transfer, Defendants filed this motion to dismiss for
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`failure to state a claim on all causes of action except the breach of contract claim against Miller.
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`Dkt. No. 46. The Court has considered the parties’ briefing and for the reasons explained below,
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`the Court grants in part and denies in part the motion to dismiss.
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`A.
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`This Court Has Subject Matter Jurisdiction.
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`II. ANALYSIS
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`This Court has subject matter jurisdiction under 28 U.S.C. § 1332(a) because complete
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`diversity exists between the parties and the amount in controversy exceeds $75,000. Dkt. No. 1.
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`Upper Deck is a citizen of Nevada and California. Dkt. No. 12 ¶ 18. And Ravensburger and Miller
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`are citizens of Washington. Id. ¶¶ 19, 20. Based on the harms alleged in the complaint, the amount
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`in controversy exceeds $75,000. Id. ¶¶ 73, 103; Dkt. No. 1 ¶¶ 11–22.
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`The Court also has federal question subject matter jurisdiction over the copyright claim
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`under 28 U.S.C. § 1331.
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`B.
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`The Court Will Apply California Law to the State Law Claims.
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`The parties dispute whether Washington or California law applies to the state law claims
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`after the transfer under 28 U.S.C. § 1404(a). Upper Deck argues California law applies because,
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`following a transfer under 28 U.S.C. § 1404(a), the Court “must ‘apply the state law, including the
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`choice-of-law rules, of the original transferor court.’” Dkt. No. 54 at 9 (quoting Enigma Software
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`Grp. USA, LLC v. Malwarebytes, Inc., 69 F.4th 665, 674 (9th Cir. 2023)). Defendants posit that
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`this general rule does not apply because the transferor court, the Southern District of California,
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`did not have personal jurisdiction over Defendants. Dkt. No. 46 at 13–14.
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 3
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 4 of 20
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`While the transfer order did not explicitly say it had personal jurisdiction over Defendants,
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`it implicitly so found when it stated, “[i]f transferred, the transferee Court would have to apply
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`California choice-of-law rules to determine the governing law for the non-statutory claims and
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`apply California law for the statutory claims.” Dkt. No. 29-1 at 8. Indeed, this Court would only
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`apply California choice-of-law rules if the Southern District of California had personal jurisdiction,
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`otherwise, the Court would apply Washington choice-of-law rules. See 15 Charles Alan Wright
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`et al., Federal Practice and Procedure § 3846 (4th ed. 2018) (“[W]hen transfer of a diversity of
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`citizenship case is ordered under Section 1404(a) from a court with personal jurisdiction, Van
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`Dusen3 requires the transferee district to apply the choice-of-law rules of the state in which the
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`transferor court sat.”). Defendants do not explain why this statement in the transfer order, that
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`could only be true if the transferring court had personal jurisdiction, should be ignored. Because
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`the Southern District of California implicitly found it had personal jurisdiction over Defendants,
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`this Court must use California choice-of-law rules to determine what law applies to each claim.
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`Defendants do not argue that if California’s choice-of-law rules govern, Washington law
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`should apply.4 Accordingly, the Court will assume that since California is the forum where the
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`claim was filed, California substantive law applies to each state law claim. See In re Hyundai &
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`Kia Fuel Econ. Litig., 926 F.3d 539, 561 (9th Cir. 2019) (“By default, California courts apply
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`California law unless a party litigant timely invokes the law of a foreign state, in which case it is
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`the foreign law proponent who must shoulder the burden of demonstrating that foreign law, rather
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`than California law, should apply.”). This Court will therefore apply California substantive law to
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`the state law claims and Ninth Circuit law to the copyright claim.
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`3 Van Dusen v. Barrack, 376 U.S. 612, 639 (1964).
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` 4
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` Instead, in reply, Defendants state “there does not appear to be any meaningful difference between California and
`Washington law with respect to the claims in this case[.]” Dkt. No. 55 at 7.
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 4
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 5 of 20
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`C.
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`The Court Will Consider Limited Extrinsic Evidence.
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`On a motion to dismiss, district courts can typically only consider the pleadings “when
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`assessing the sufficiency of a complaint.” Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988,
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`998 (9th Cir. 2018). However, the district court has discretion to consider extrinsic evidence under
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`the incorporation-by-reference doctrine and by judicial notice under Federal Rule of Evidence 201.
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`Id.
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`Defendants ask the Court to consider the following extrinsic evidence: the declaration of
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`Ravensburger’s International Category Director (Dkt. No. 47 at 1–2), an online article announcing
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`the Disney Lorcana game (id. at 6–8), the Disney Lorcana game rules (Dkt. No. 46 at 12), the
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`declaration of Miller (Dkt. No. 48 at 1–3), the 2018 Agreement (id. at 7–11), the 2019 Agreement
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`(id. at 13–21), and two copyright registrations (Dkt. No. 49 at 4–7).
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`The only relevant and necessary extrinsic evidence that the Court will consider is the two
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`copyright registrations and the two agreements. The copyright registrations are proper subjects of
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`judicial notice. See Idema v. Dreamworks, Inc., 90 F. App’x 496, 498 (9th Cir. 2003), as amended
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`on denial of reh’g (Mar. 9, 2004) (describing a copyright registration as “the sort of [document]
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`as to which judicial notice is appropriate”); Laatz v. Zazzle, Inc., No. 22-cv-04844-BLF, 2024 WL
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`1023849, at *3 (N.D. Cal. Mar. 7, 2024) (“It is common practice for courts to take judicial notice
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`of copyright registrations and applications.”). And, as both parties agree (Dkt. No. 46 at 11 n.2,
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`Dkt. No. 54 at 14), the 2018 and 2019 Agreements are incorporated by reference in the complaint.
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`See Vesta Corp. v. Amdocs Mgmt. Ltd., 80 F. Supp. 3d 1152, 1157 (D. Or. 2015) (incorporating
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`nondisclosure agreement contracts by reference when they are “referred to extensively in the
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`Complaint and are the basis of [a] breach of contract claim.”).
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`D.
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`Legal Standard for Motions to Dismiss
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`Dismissal under Federal Rule of Civil Procedure 12(b)(6) may be based on either the lack
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 5
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 6 of 20
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`of a cognizable legal theory or the “absence of sufficient facts alleged to support a cognizable legal
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`theory.” Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010)
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`(cleaned up). At this stage, the Court accepts as true all factual allegations in the complaint and
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`construes them in the light most favorable to the nonmoving party. Gonzalez v. Google LLC, 2
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`F.4th 871, 885 (9th Cir. 2021), rev’d on other grounds by Gonzalez v. Google LLC, 143 S. Ct.
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`1191 (2023) (per curiam). “To survive a motion to dismiss, a complaint must contain sufficient
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`factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft
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`v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007));
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`see Fed. R. Civ. P. 8(a)(2) (a plaintiff must make a “short and plain statement of the claim showing
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`that the pleader is entitled to relief”). A claim is facially plausible “when the plaintiff pleads
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`factual content that allows the court to draw the reasonable inference that the defendant is liable
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`for the misconduct alleged.” Iqbal, 556 U.S. at 678. “If a motion to dismiss is granted, a court
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`should normally grant leave to amend unless it determines that the pleading could not possibly be
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`cured by allegations of other facts.” Chinatown Neighborhood Ass’n v. Harris, 33 F. Supp. 3d
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`1085, 1093 (N.D. Cal. 2014).
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`Defendants move to dismiss each of Upper Deck’s claims, except for the breach of contract
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`claim against Miller. Defendants posit multiple, and sometimes overlapping, reasons to dismiss
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`each cause of action. For clarity, this order is organized as follows. First, the Court will address
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`the parties’ recurring argument about whether the economic loss rule applies to Miller’s contract
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`here. Then the Court will address each cause of action.
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`E.
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`The Economic Loss Rule is Generally Applicable to Claims Against Miller Arising
`from the Contract.
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`Defendants argue the economic loss rule bars Upper Deck’s claims against Miller for
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`breach of fiduciary duty, fraudulent concealment, and conversion. Dkt. No. 46 at 16–17, 20, 28.
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 6
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 7 of 20
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`Upper Deck argues the economic loss rule cannot apply here because the contract was not for the
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`sale of goods or products. Dkt. No. 54. at 12–13. Upper Deck is incorrect.
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`The contractual economic loss rule bars tort claims for monetary damages when the parties
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`have entered a contract and the claims arise from that contract. Sheen v. Wells Fargo Bank, N.A.,
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`505 P.3d 625, 633 (Cal. 2022), reh’g denied (June 1, 2022). As the California Supreme Court
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`explained in Sheen, the assumption is that the economic loss rule can apply to tort claims that arise
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`from all contract-types and that there are limited circumstances, like contracts for professional
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`services or insurance, that are exceptions to the rule. Id. at 632–634, 637–640 (explaining why the
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`economic loss rule applies in the mortgage context and why the limited exceptions to the rule are
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`“inapposite”). Thus, contrary to Upper Deck’s claim, the economic loss rule does not apply only
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`to contracts for goods or services.
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`Upper Deck also argues this case should fall into the professional services exception to the
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`economic loss rule. Dkt. No. 54 at 13. This exception allows for tort claims arising from contracts
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`when the contract involves a special relationship such that “individuals contracting for the
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`provision of services have an independent tort law duty to perform their services in a competent
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`and reasonable manner.” Land O’Lakes, Inc. v. Dairyamerica, Inc., No. 1:15-cv-01937-DAD-
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`MJS, 2017 WL 495644, at *3 (E.D. Cal. Feb. 6, 2017) (finding the professional services exception
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`to the economic loss rule applied, allowing a claim for negligence against a testing lab to survive
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`a motion to dismiss). However, Upper Deck does not provide any authority showing California
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`courts have applied this limited exception in similar circumstances. The Court agrees with
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`Defendants that the agreements should be treated like employment contracts, to which California
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`applies the economic loss rule. Sheen, 505 P.3d at 637 (“[W]e have rejected arguments that
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`employment contracts…are sufficiently analogous to the core insurance cases to warrant extension
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`of tort remedies into those areas.”)..
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 7
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 8 of 20
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`Upper Deck has not identified an applicable exception to the economic loss rule, thus the
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`Court will consider whether the economic loss rule bars any of Upper Deck’s claims.
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`F.
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`The Economic Loss Rule Bars the Breach of Fiduciary Duty Claim Against Miller.
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`Upper Deck’s breach of fiduciary duty claim is based upon allegations that Miller
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`“possessed expert knowledge in a unique field” such that he had “professional duties of care and
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`loyalty” wherein he would only provide his expertise “on strict terms of confidentiality and non-
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`disclosure.” Dkt. No. 12 ¶¶ 76–77. Upper Deck further alleges that Miller breached those duties
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`“by stealing core concepts and proprietary, novel elements of Upper Deck’s game and using it to
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`develop Lorcana.” Id. ¶ 78. Miller argues the breach of fiduciary duty claim must be dismissed
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`because (1) there was not a fiduciary relationship between Miller and Upper Deck; and (2) the
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`claim is barred by the economic loss rule. Dkt. No. 46 at 14–17, Dkt. No. 55 at 9–11. Upper Deck
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`responds with the inconsistent arguments that Miller’s fiduciary duty is created by the agreements
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`(Dkt. No. 54 at 13–15) and that the economic loss rule does not apply because “the fiduciary duty
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`claim is not based in contract” (id. at 15). The Court agrees with Miller.
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`The economic loss rule does not bar a tort claim that arises from a “duty independent of
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`the contract,” or where the plaintiff “can demonstrate harm above and beyond a broken contractual
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`promise.” Wright v. Charles Schwab & Co., No. 20-cv-05281-LB, 2020 WL 6822887, at *3 (N.D.
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`Cal. Nov. 20, 2020). Upper Deck’s fiduciary duty claim falls in neither of these categories. Rather,
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`the fiduciary duty claim is the same as the breach of contract claim and seeks the same relief.
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`Compare Dkt. No. 12 ¶ 72 (alleging breach of contract “by disclosing the central, proprietary
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`components and expressions within the game”), with Dkt. No. 12 ¶ 78 (alleging breach of fiduciary
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`duty “by stealing core concepts and proprietary, novel elements of Upper Deck’s game”).
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`Moreover, Upper Deck admits that the alleged fiduciary duty between Miller and Upper Deck does
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`not arise as matter of law, but was “undertaken by agreement” (Dkt. No. 54 at 13) because the
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 8
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 9 of 20
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`“[t]he parties agreed Miller would keep his design work confidential and not disclose it” (id. at
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`14). Because the only duties between Upper Deck and Miller arose from contract, the economic
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`loss rule bars the breach of fiduciary duty claim. See Erlich v. Menezes, 981 P.2d 978, 983 (Cal.
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`1999) (“[C]onduct amounting to a breach of contract becomes tortious only when it also violates
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`a duty independent of the contract arising from principles of tort law.”).
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`Accordingly, the Court grants Defendants’ motion to dismiss the fiduciary duty claim,
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`without leave to amend. See CleanFuture, Inc. v. Motive Energy, Inc., No. SACV 19-00084-AG
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`(KESx), 2019 WL 2896132, at *5 (C.D. Cal. Apr. 15, 2019) (dismissing breach of fiduciary duty
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`claim with prejudice where “incurably barred” by economic loss rule).
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`G.
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`Upper Deck’s Fraud Claims Are Partially Dismissed with Leave to Amend.
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`Upper Deck’s third cause of action against Miller is for “Fraud (Concealment and
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`Misrepresentation)—[CAL. CIV. CODE] § 1709–1710.” Dkt. No. 12 at 17. Under California Civil
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`Code Section 1709, “[o]ne who willfully deceives another with intent to induce harm to alter his
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`position to his injury or risk, is liable for any damage which he thereby suffers.” California Civil
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`Code Section 1710 describes the various actions that can be considered “deceit.” Relevant here,
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`“deceit” includes fraudulent misrepresentation (id. § 1710(1) (“The suggestion, as a fact, of that
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`which is not true, by one who does not believe it to be true[.]”); and fraudulent concealment (id. §
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`1710(3) (“The suppression of a fact, by one who is bound to disclose it, or who gives information
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`of other facts which are likely to mislead for want of communication of that fact[.]”). Dkt. No. 12
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`at 17; see also 5 B. E. Witkin, Summary 11th Torts, § 883 (2023).
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`As an initial matter, Miller argues the fraud claim, both for misrepresentation and
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`concealment, must be dismissed because the statute does not apply to conduct that occurred
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`primarily outside of California. Dkt. No. 46 at 17. Miller does not provide any authority to support
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 9
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 10 of 20
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`this proposition. Moreover, Miller does not identify sufficient allegations to show the relevant
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`acts took place outside of California. The Court will assume California statutes apply here.
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`1. The fraudulent misrepresentation claim is dismissed with leave to amend.
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`In California, a claim for fraudulent misrepresentation requires:
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`(1) the defendant represented to the plaintiff that an important fact was true;
`(2) that representation was false; (3) the defendant knew that the
`representation was false when the defendant made it, or the defendant made
`the representation recklessly and without regard for its truth; (4) the
`defendant intended that the plaintiff rely on the representation; (5) the
`plaintiff reasonably relied on the representation; (6) the plaintiff was
`harmed; and (7) the plaintiff’s reliance on the defendant’s representation
`was a substantial factor in causing that harm to the plaintiff.
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`Thomas v. Regents of Univ. of California, 97 Cal. App. 5th 587, 637 (Cal. Ct. App. 2023), reh’g
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`denied (Dec. 29, 2023), review denied (Feb. 28, 2024) (cleaned up).
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`Upper Deck alleges Miller made one misrepresentation, specifically “that he was ending
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`his contract to obtain or find more traditional full-time employment with benefits[.]” Dkt. No.12
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`¶ 85. Miller argues this is insufficient because a fraudulent misrepresentation claim requires a
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`statement to be false. Dkt. No. 46 at 18. The Court agrees. Upper Deck does not allege this
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`statement was false and so fails to state a claim. The fraudulent misrepresentation claim is
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`dismissed with leave to amend.
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`2. The fraudulent concealment claim is sufficiently pleaded.
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`To state a claim for fraudulent concealment, Upper Deck must sufficiently allege each of
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`the following elements:
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`(1) concealment or suppression of a material fact; (2) by a defendant with a
`duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud
`the plaintiff by intentionally concealing or suppressing the fact; (4) the
`plaintiff was unaware of the fact and would not have acted as he or she did
`if he or she had known of the concealed or suppressed fact; and (5) plaintiff
`sustained damage as a result of the concealment or suppression of the fact.
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 10
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 11 of 20
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`Graham v. Bank of Am., N.A., 226 Cal. App. 4th 594, 605–06 (Cal. Ct. App. 2014). Upper Deck
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`alleges Miller concealed the following facts from Upper Deck: that during his work with Upper
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`Deck, Miller had discussions with Ravensburger about working on a trading card game (Dkt. No.
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`12 ¶ 83); that upon his departure, Miller would be going to work on a “near-identical [game] based
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`on and using Upper Deck’s Rush of Ikorr property” with a competitor (id. ¶¶ 84, 85); and that
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`Miller intended “to seize [Upper Deck’s] confidential and proprietary game and transfer them to
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`Ravensburger without Upper Deck’s knowledge” (id. ¶ 88). Miller argues the fraudulent
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`concealment allegations fail on the first, second, and fourth elements of the claim.
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`As to the first element of the claim, requiring concealment or suppression of a material
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`fact, under California law,
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`[a] misrepresentation is judged to be ‘material if a reasonable man would
`attach importance to its existence or nonexistence in determining his choice
`of action in the transaction in question ... and as such materiality is generally
`a question of fact unless the fact misrepresented is so obviously unimportant
`that the jury could not reasonably find that a reasonable man would have
`been influenced by it.’
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`Sanders v. Apple Inc., 672 F. Supp. 2d 978, 985 (N.D. Cal. 2009) (citing Engalla v. Permanente
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`Medical Group, Inc., 938 P.2d 903, 919 (Cal. 1997) (cleaned up)). Miller conclusively states that
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`his “reasons for terminating an independent-contractor agreement are not material” because Upper
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`Deck was not entitled to that information. Dkt. No. 55 at 12. Miller’s analysis is incomplete and
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`confuses the duty and materiality elements of the claim. Miller has not shown that his statements
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`and omissions about his future employment plans are so “obviously unimportant” that they should
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`be considered immaterial as a matter of law. At this stage, Upper Deck has alleged the concealed
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`facts were material. Dkt. No. 12 ¶ 91. Dispositively, Miller’s materiality argument also ignores
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`the other non-departure related facts Upper Deck alleges were concealed, leaving it undisputed
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`that, at this stage, Miller’s representations about his discussions with Ravensburger (Dkt. No. 12
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 11
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 12 of 20
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`¶¶ 83–85) were material. Upper Deck sufficiently alleges concealment or suppression of a material
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`fact.
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`Turning to the second element of fraudulent concealment, a duty to disclose, Miller argues
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`that he did not, as a matter of law, owe a duty to disclose the alleged concealments to Upper Deck,
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`and if he did owe such a duty, it arose from his contract, thus barring the claim under the economic
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`loss rule. Upper Deck responds that Miller had a legal duty to disclose his future employment
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`plans because of his “confidentiality obligations” and, separately, because he chose to share
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`information about his future employment plans, he “must make a full and fair disclosure.” Dkt.
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`No. 54 at 17. As with the breach of fiduciary duty claim, to the extent Miller’s legal duty to
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`disclose facts about his future employment arose from contract, they are barred by the economic
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`loss rule. See supra Section II(F). However, Upper Deck’s second alleged basis for Miller’s legal
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`duty arises independently from the contract and is not barred by the economic loss rule. See
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`Wright, 2020 WL 6822887, at *3 (“[C]onduct amounting to a breach of contract becomes tortious
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`only when it also violates a duty independent of the contract arising from principles of tort law.”
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`(cleaned up)). Upper Deck’s theory that Miller had a duty to make a full and fair disclosure
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`because he chose to share some information about his future employment plans is recognized by
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`California law. Specifically, California courts have found
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`that although one may be under no duty to speak as to a matter, if he
`undertakes to do so, either voluntarily or in response to inquiries, he is
`bound not only to state truly what he tells but also not to suppress or conceal
`any facts within his knowledge which materially qualify those stated. If he
`speaks at all he must make a full and fair disclosure.
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`Mktg. W., Inc. v. Sanyo Fisher (USA) Corp., 6 Cal. App. 4th 603, 613 (Cal. Ct. App. 1992) (quoting
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`Rogers v. Warden, 125 P.2d 7, 9 (Cal. 1942)). Thus, a fraudulent concealment claim may arise if
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`“the defendant makes representations but does not disclose facts which materially qualify the facts
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`disclosed.” Id. Upper Deck has alleged Miller’s statements omitted facts that could have
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 12
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 13 of 20
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`“materially qualif[ied] the facts disclosed,” which is sufficient, at this stage, to allege a duty to
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`disclose.
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`Lastly, Miller argues Upper Deck fails to sufficiently allege that it would have acted
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`differently had it known the concealed facts, the fourth element of a fraudulent concealment claim.
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`Dkt. No. 46 at 19–20. The Court disagrees. Upper Deck has identified with sufficient particularity
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`how it allegedly would have acted differently had it known any of the concealed facts. See Dkt.
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`No. 12 at ¶ 90 (describing actions Upper Deck would have taken as “seeking to ensure Miller
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`returned and destroyed any copies of any documents Miller had relating to Rush of Ikorr, seeking
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`to enjoin the competing, knock-off [game], and/or preventing its current employees and
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`contractors from communicating with Miller about Rush of Ikorr”). The fact that Upper Deck
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`became aware of Miller’s employment with Ravensburger in September 2022 and that Miller
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`claims “Upper Deck did nothing” does not change that Upper Deck has adequately pled this
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`element when, at this stage, we must accept Upper Deck’s allegations as true. Dkt. No. 46 at 20.
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`The motion to dismiss the fraudulent concealment claim is denied.
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`H.
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`The Tortious Interference Claims Against Ravensburger Fail to Allege an
`Independently Wrongful Act and Are Dismissed with Leave to Amend.
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`1. Upper Deck’s claim for inducing breach of a written contract is dismissed with leave
`to amend.
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`In California, the elements of a claim for interference with a contract are: “(1) a valid
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`contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3)
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`defendant’s intentional acts designed to induce a breach or disruption of the contractual
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`relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting
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`damage.” Pac. Gas & Elec. Co. v. Bear Stearns & Co., 791 P.2d 587, 589–90 (Cal. 1990).
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`Ravensburger argues that Upper Deck fails to plead the second and third elements. Dkt. No. 46 at
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`21–22.
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`ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS - 13
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`Case 2:23-cv-01936-KKE Document 58 Filed 08/16/24 Page 14 of 20
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`For the second element, Ravensburger argues a plaintiff must allege the defendant had
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`actual knowledge of the contract in question and that allegations defendant “should have known”
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`are not enough. Dkt. No. 46 at 21–22. Even assuming that is the standard, Upper Deck alleges
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`that, “on information and belief, Ravensburger was aware of Miller’s contracts with Upper
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`Deck[.]” Dkt. No. 12 ¶ 98. Upper Deck also explains the likely hiring process that would have
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`led Ravensburger to learn about the contracts. Id. ¶¶ 97–99. Accordingly, Upper Deck has
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`sufficiently alleged Ravensburger’s knowledge of the agreements.
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`For the third element, requiring a defendant to have taken intentional acts designed to
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`induce a contract breach, Ravensburger argues the act Upper Deck complains of, hiring Miller
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`away from them to help develop a competing game,5 is not sufficient because such an act is not
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`wrongful. Dkt. No. 46 at 22. Generally, claims for intentional inducement of a breach of contract
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`do not require the intentional act be wrongful. See Korea Supply Co. v. Lockheed Martin Corp.,
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`63 P.3d 937, 953 (Cal. 2003) (“Thus, while intentionally interfering with an existing contract is a
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`wrong in and of itself…intentionally interfering with a plaintiff’s prospective economic advantage
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`is not.” (cleaned up)). However, when a third-party induces breach of an at-will contract,
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`California law requires a wrongful act. Ixchel Pharma, LLC v. Biogen, Inc., 470 P.3d 571, 580
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`(Cal. 2020) (“[T]o state a claim for interference with an at-will contract by a third party, the
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`plaintiff must allege that the defendant engaged in an independently wrongful act.”). This makes
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`sense because, without the wrongfulness element, “a competitor’s good faith offer that causes a
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`business to withdraw from an at-will contract could trigger liability or at least subject the
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`competitor to costly litigation.” Id. Upper