Roadrunner Intermodal Servs., LLC v. T.G.S. Transporation, Inc., 1:17-cv-01207-DAD-BAM

ROADRUNNER INTERMODAL SERVICES, LLC,a Delaware limited liability company, Plaintiff, v. T.G.S. TRANSPORATION, INC., a California corporation, and DOES 1-10, Defendants.

JEFFREY COX, Plaintiff, v. ROADRUNNER INTERMODAL SERVICES, LLC, a Delaware limited liability company,

CENTRAL CAL TRANSPORTATION, LLC, a Delaware limited liability company,

and DOES 1 through 50, Defendants.

ROADRUNNER INTERMODAL SERVICES, LLC,a Delaware limited liability company, Counter-Plaintiff and Defendant, v. JEFFREY COX, Counter-Defendant and Plaintiff.

No. 1:17-cv-01207-DAD-BAM

No. 1:17-cv-01056-DAD-BAM (consolidated)

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

May 28, 2021

ORDER GRANTING IN PART AND DENYING IN PART T.G.S. TRANSPORTATION'S MOTION FOR SUMMARY JUDGMENT

(Doc. No. 218)

Before the court is defendant T.G.S. Transportation, Inc's ("TGS") motion for summary judgment as to plaintiff Roadrunner Intermodal Services, LLC's ("Roadrunner") claims. (Doc. No. 218.)¹ A hearing on this motion was held on July 16, 2019. (Doc. No. 236.) Attorneys Kurt Kappes and Todd Pickles appeared on behalf of Roadrunner and attorneys Scott Ivy and Shane Smith appeared on behalf of TGS. Having reviewed the parties' briefing and heard oral argument, and for the reasons that follow, TGS' motion for summary judgment will be granted in part and denied in part.

BACKGROUND

The factual background of this case has been discussed in the court's prior orders denying Roadrunner's motion for a preliminary injunction, denying plaintiff Jeffrey Cox's partial motion for summary judgment, and granting in part and denying in part Roadrunner's motion for summary judgment as to plaintiff Cox's claims. (See Doc. Nos. 90 at 2-4; 199 at 2-4; 244 at 2-4.) That background will not be repeated here in its entirety. Only those facts relevant to the

/////disposition of the pending motion for summary judgment will be set forth below.²

Roadrunner is an industry leader in providing regional and national drayage services throughout the United States. (Doc. No. 22 at 3.) Central Cal is a smaller regional trucking company that operates trucking routes within California, Nevada, and Oregon for clients throughout the country. (See Doc. No. 98 at ¶¶ 5-6.) Plaintiff Cox was previously a co-owner of Central Cal, along with David Chidester. (See Doc. No. 175 at 7.) On November 2, 2012, Roadrunner, Central Cal, plaintiff Cox, and Mr. Chidester entered into a stock purchase agreement ("SPA") in which Roadrunner purchased all of the stock and assets of Central Cal and Double C Transportation, another trucking company, for approximately $3.8 million. (See Doc. No. 90 at 2-4.) The SPA included non-competition, non-solicitation, and non-disclosure provisions that limited plaintiff Cox's conduct in the future, at least through 2017. (See Doc. No. 199 at 3.) Section 7.4(a)(i)(B) of the SPA states that through December 31, 2017 plaintiff Cox "may not work for or with . . . any entity. . . that competes with or is planning to compete with Roadrunner in any way . . . ." (Doc. No. 22 at 34.)

After the sale of Central Cal and Double C to Roadrunner, plaintiff Cox went to work for Central Cal, where he has asserted he observed "financial irregularities in the accountings performed by Central Cal and other Roadrunner subsidiaries that, he believed, were consistent with the perpetration of fraud." (Doc. No. 30-1 at 10.) On or about February 16, 2017, plaintiff Cox filed a lawsuit against Roadrunner in Los Angeles County Superior Court, alleging that it had engaged in fraud and deceit, securities fraud, and had unfairly retaliated against him. (Doc. No. 48 at 11.) After an unsuccessful mediation session in connection with that action, plaintiff Cox was terminated from his employment with Central Cal and Roadrunner. (Id.)

///// Following his termination, plaintiff Cox accepted employment with TGS, a competitor of Central Cal and Roadrunner, on or around July 1, 2017. (Doc. No. 238 at 7.) What occurred following plaintiff Cox's termination from Central Cal is disputed by the parties. TGS asserts that several customers proactively contacted plaintiff Cox after word spread of his termination, asking him for recommendations for transportation companies they could then do business with now that he was gone. (Doc. No. 48 at 11.) TGS also claims that some Roadrunner employees contacted plaintiff Cox proactively to request TGS' contact information so that they could also make the move from Roadrunner to TGS. (Id.) Meanwhile, Roadrunner asserts that immediately after his termination from Central Cal, plaintiff Cox met with the owners and operators of TGS to discuss how to raid the Central Cal business within Roadrunner by capturing its customers, employees, and drivers for TGS. (Doc. No. 87 at 7.) Roadrunner alleges that even prior to the start of his employment with TGS, plaintiff Cox provided information to TGS including customer contact information, monthly revenue, and daily truck loads associated with Roadrunner customers, employee contact information, and salary ranges of employees. (Id.)

On July 25, 2017, plaintiff Cox filed a complaint against Roadrunner in Fresno County Superior Court asserting causes of action related to his allegedly wrongful termination. (See Doc. No. 244 at 5.)³ Roadrunner filed its own action against TGS in this court on August 7, 2017. (Doc. No. 1.) On September 1, 2017, Roadrunner filed a FAC pursuant to the parties' stipulation. (Doc. Nos. 21, FAC.) Roadrunner's FAC asserts causes of action for (1) tortious interference

/////with contract, (2) tortious interference with prospective economic relationship, (3) unjust enrichment/restitution, (4) unfair competition, and (5) conversion. Id.

On June 7, 2019, TGS filed the pending motion for summary judgment as to Roadrunner's claims against it. (Doc. Nos. 218, 238.) Roadrunner filed an opposition on July 2, 2019. (Doc. Nos. 222, 240.) TGS filed a reply on July 9, 2019. (Doc. Nos. 228, 239.)⁴

LEGAL STANDARD

Summary judgment is appropriate when the moving party "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).

In summary judgment practice, the moving party "initially bears the burden of proving the absence of a genuine issue of material fact." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The moving party may accomplish this by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials," or by showing that such materials "do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(A), (B). When the non-moving party bears the burden of proof at trial, as plaintiff does here, "the moving party need only prove that there is an absence of evidence to support the non-moving party's case." Oracle Corp., 627 F.3d at 387 (citing Celotex, 477 U.S. at 325); see also Fed. R. Civ. P. 56(c)(1)(B). Indeed, summary judgment should be entered, afteradequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. See Celotex, 477 U.S. at 322. "[A] complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Id. at 322-23. In such a circumstance, summary judgment should be granted, "so long as whatever is before the district court demonstrates that the standard for the entry of summary judgment . . . is satisfied." Id. at 323.

If the moving party meets its initial responsibility, the burden then shifts to the opposing party to establish that a genuine issue as to any material fact actually does exist. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In attempting to establish the existence of a factual dispute, the opposing party may not rely upon the allegations or denials of its pleadings but is required to tender evidence of specific facts in the form of affidavits or admissible discovery material in support of its contention that the dispute exists. See Fed. R. Civ. P. 56(c)(1); Matsushita, 475 U.S. at 586 n.11; Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002) ("A trial court can only consider admissible evidence in ruling on a motion for summary judgment."). The opposing party must demonstrate that the fact in contention is material, i.e., a fact that might affect the outcome of the suit under the governing law, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987), and that the dispute is genuine, i.e., the evidence is such that a reasonable jury could return a verdict for the non-moving party, see Anderson, 477 U.S. at 250; Wool v. Tandem Computs. Inc., 818 F.2d 1433, 1436 (9th Cir. 1987).

In the endeavor to establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that "the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." T.W. Elec. Serv., 809 F.2d at 631. Thus, the "purpose of summary judgment is to 'pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.'" Matsushita, 475 U.S. at 587 (citations omitted).

///// "In evaluating the evidence to determine whether there is a genuine issue of fact," the court draws "all inferences supported...