# TorchStar Corp v. Hyatech Inc > District Court, E.D. Washington · January 6, 2023 URL: https://www.frixlaw.com/law-library/cases/10698089 ## Case - **Court:** District Court, E.D. Washington - **Decided:** January 6, 2023 - **Opinion:** 100trialcourt - **Cited by:** 0 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10698089 ## Opinion text 1 FILED IN THE 2 EASTERU N. S D. I SD TI RS IT CR TI C OT F C WO AU SR HT I NGTON 3 Jan 06, 2023 4 SEAN F. MCAVOY, CLERK 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF WASHINGTON 8 9 TORCHSTAR CORP., a California 10 corporation, No. 2:22-CV-00110-SAB 11 Plaintiff/Counter-Defendant, 12 v. ORDER DENYING 13 HYATECH, INC., a Washington PLAINTIFF’S SPECIAL 14 corporation, MOTION TO STRIKE 15 Defendant/Counter-Claimant. 16 17 Before the Court is Plaintiff Torchstar Corp.’s Special Motion to Strike 18 Pursuant to RCW 4.105.010, et seq., ECF No. 27. The motion was considered 19 without oral argument. Plaintiff is represented by Clifford Davidson, Dylan 20 Burstein, and Jason Yu. Defendant is represented by Todd Reuter. 21 Background Facts 22 On May 1, 2022, Plaintiff initiated this action. On July 20, 2022, it filed a 23 Second Amended Complaint, asserting four causes of action: (1) tortious 24 interference with business expectancy; (2) copyright infringement; (3) violation of 25 California’s Unfair Competition Law; and (4) Unfair Competition in violation of 26 the Lanham Act. Plaintiff sells LED products on Amazon web marketplaces. 27 Plaintiff alleges that Defendant copied essentially the entirety of its Amazon sales 28 pages in order to sell the same produce on Amazon. Plaintiff alleges that 1 Defendant copied the photographs as well as the product descriptions. Plaintiff also 2 alleges that Defendant is unlawfully passing Plaintiff’s goods off as its own. It 3 asserts that Defendant used the “Hyatech” brand name to market and sell 4 Plaintiff’s LED products, which created a false impression that Defendant, not 5 Plaintiff, was the origin of the LED products. 6 Defendant filed its Answer to the Second Amended Complaint on August 5, 7 2022, asserting a counterclaim for Tortious Interference with a Business 8 Expectancy. Defendant asserts that Plaintiff had knowledge of its business 9 expectancy in all its products being commercially available for sale on Amazon, 10 and Plaintiff intentionally interfered with its business expectancy, through bad faith 11 conducts including falsely accusing Defendant of copyright infringement on 12 Plaintiff’s marketing materials, while knowing that Plaintiff’s marketing materials 13 could not satisfy the minimum degree of creativity to qualify for copyright 14 protection. It alleges that Plaintiff’s intentional interference was through improper 15 means and for an improper purpose by developing false accusations against it with 16 an intent to destroy its business. 17 In support of its counterclaim, Defendant asserts the following: Plaintiff 18 induced Amazon to de-list Defendant by doing the following: (a) by suggesting to 19 Amazon that Plaintiff had copyright infringement claim against Defendant when 20 no copyright was registered at the time and the validity of its alleged unregistered 21 rights was dubious at best; (b) by basing its complaints on purported copyright 22 protection in product descriptions that Plaintiff had itself copied from another 23 seller who was in the market before Plaintiff; and (c) by asserting copyright 24 protection in photographs even after Defendant had shown Plaintiff that 25 Defendant’s own photographer took Defendant’s pictures. 26 Defendant asserts that Plaintiff registered its copyright with the U.S. 27 Copyright Office only after Defendant filed its Answer and Counterclaim in June 28 2022. After it did, it then added a copyright infringement claim to its Amended 1 Complaints. 2 Plaintiff now moves to dismiss Defendant’s counterclaim pursuant to the 3 Washington Uniform Public Expression Protection Act, Wash. Rev. Code §§ 4 4.105.010-.903 (the Washington anti-SLAPP statute). Plaintiff asserts Defendant’s 5 counterclaim is barred for three reasons: (1) both Plaintiff’s report of copyright 6 infringement to Amazon and its lawsuit against Defendant constitute protected 7 communications in connection with judicial proceedings; (2) Defendant cannot 8 establish a likelihood of success on its counterclaim because the Noerr-Pennington 9 doctrine bars the claim and (3) Defendant cannot make out the required elements 10 of a tortious interference claim. As Plaintiff sees it, Defendant’s counterclaims are 11 based on Plaintiff’s prelitigation communications with Amazon and the instant 12 lawsuit. Plaintiff asserts that Defendant is simply suing it for pursuing its right to 13 petition this Court, which is what the UPEPA and the First Amendment protect. 14 Applicable Law 15 1. Washington’s Uniform Public Expression Protection Act 16 Washington was the first state to adopt the Uniform Public Expression 17 Protection Act. The Uniform Public Expression Protections Act provides for early 18 adjudication of baseless claims aimed at preventing an individual from exercising 19 the constitutional right of free speech. Jha v. Khan, __ P.3d __, 2022 WL 20 16918101 (Wash. Ct. App. 2022). 21 The UPEPA applies to any claim asserted “against a person based on the 22 person’s:” (a) Communication in a legislative, executive, judicial, administrative, or 23 other governmental proceeding; 24 (b) Communication on an issue under consideration or review in a legislative, executive, judicial, administrative, or other governmental 25 proceeding; 26 (c) Exercise of the right of freedom of speech or of the press, the right to assemble or petition, or the right of association, guaranteed by the United 27 States Constitution or Washington state Constitution, on a matter of public 28 concern. 1 Wash. Rev. Code § 4.105.010(2). 2 There are certain exemptions that are enumerated in Wash. Rev. Code § 3 4.105.010(3)(a). Notably, this provision does not apply against a person primarily 4 engaged in the business of selling or leasing good or services if the cause of action 5 arises out of a communication related to the person’s sale or lease of the goods or 6 services. § 4.105.010(3)(a)(iii) 7 Section 4.105.060 provides the standards for ruling on a special motion to 8 dismiss. (1) In ruling on a motion under RCW 4.105.020, the court shall 9 dismiss with prejudice a cause of action, or part of a cause of action, 10 if: (a) The moving party establishes under RCW 4.105.010(2) 11 that this chapter applies; 12 (b) The responding party fails to establish under RCW 4.105.010(3) that this chapter does not apply; and 13 (c) Either: 14 (i) The responding party fails to establish a prima facie case as to each essential element of the cause of action; or 15 (ii) The moving party establishes that: 16 (A) The responding party failed to state a cause of action upon which relief can be granted; or 17 (B) There is no genuine issue as to any material 18 fact and the moving party is entitled to judgment as a matter of law on the cause of action or part of the cause 19 of action. 20 In ruling on a motion under § 4.105.020, the court shall consider the 21 pleadings, the motion, any reply or response to the motion, and any evidence that 22 could be considered in ruling on a motion for summary judgment under superior 23 court civil rule 56. § 4.105.050. 24 2. Noerr-Pennington doctrine 25 The Noerr-Pennington doctrine provides that “those who petition any 26 department of the government for redress are generally immune from statutory 27 liability for their petitioning conduct.” Sosa v. DIRECTV, Inc., 437 F.3d 923, 929 28 1 (9th Cir. 2006). It derives from the First Amendment’s guarantee of “the right of 2 the people . . . to petition the Government for a redress of grievances.” Id. 3 (quotation omitted). 4 On the other hand, the Ninth Circuit has instructed that neither the Petition 5 Clause nor the Noerr-Pennington doctrine protects sham petitions. Id. Under the 6 sham litigation exception, the party seeking to impose liability must establish both 7 that the lawsuit, or petition is: (1) “objectively baseless in the sense that no 8 reasonable litigant could realistically expect success on the merits” and (2) “an 9 attempt to interfere directly with the business relationship of a competitor through 10 the use of the governmental process—as opposed to the outcome of that process. 11 Rock River Commc’n, Inc. v. Universal Music Grp., Inc., 745 F.3d 343, 351 (9th 12 Cir. 2014) (quotation omitted). 13 Whether the sham exception to the Noerr-Pennington doctrine applies is a 14 question of fact and summary judgment on the defense is not appropriate where the 15 facts are disputed. Id. at 352. 16 Recently, in an unpublished opinion, the Ninth Circuit held that while 17 prelitigation settlement demands and cease-and-desist letters sent to potential 18 defendants are immune from liability under the Noerr-Pennington doctrine, the 19 doctrine does not apply to communications sent a third party and which did not 20 propose or threaten litigation. See Thimes Solutions, Inc. v. TP Link USA Corp., 21 2022 WL 1125628 (9th Cir. 2022). 22 3. Tortious Interference with a Business Expectancy 23 To succeed on a claim for tortious interference, a plaintiff must prove (1) the 24 existence of a valid contractual relationship or business expectancy; (2) the 25 defendant’s knowledge of and intentional interference with that relationship or 26 expectancy; (3) a breach or termination of that relationship or expectancy induced 27 or caused by the interference; (4) an improper purpose or the use of improper 28 means by the defendant that caused the interference; and (5) resultant damage. 1 Eugster v. City of Spokane, 121 Wash. App. 799, 811 (2004). Because a tortious 2 interference claim requires wrongful conduct, the claimant must show 3 “purposefully improper interference.” Leingang v. Pierce Cnty. Med. Bureau, Inc., 4 131 Wash. 2d 133, 157 (1997). “Exercising in good faith one’s legal interests is not 5 improper interference.” Id. 6 Analysis 7 The Court finds that the Noerr-Pennington doctrine does not apply to 8 Plaintiff’s complaints to Amazon, a third-party. There is nothing in the record to 9 suggest that these complaints, which were delivered solely to Amazon, proposed or 10 threaten litigation. See Thimes Solutions, Inc., 2022 WL 1125628 at *2. The Court 11 does not believe a party has a constitutional right to “petition” Amazon for redress 12 of grievances. That said, to the extent Defendant is seeking liability and damages 13 because Plaintiff filed its lawsuit, the Court find that questions of fact exist 14 whether certain claims that are being asserted by Plaintiff qualify as sham 15 litigation. 16 The Court finds that § 4.105.060 does not apply because Plaintiff has not 17 shown that Defendant failed to state a cause of action upon which relief can be 18 granted—the Court finds it did—nor did Plaintiff prove there are no genuine 19 issues as to any material facts.1 On the contrary, there are genuine issues of 20 material fact that prevent the Court from dismissing the counterclaim. 21 Additionally, if the facts as alleged by Plaintiff are believed, a reasonable jury 22 could find for Defendant on its counterclaim. 23 Finally, the Court does not find that any party is entitled to attorneys’ fees 24 pursuant to Wash. Rev. Code § 4.105.090. 25 26 1Based on these findings, the Court need not address the parties’ arguments about 27 whether Plaintiff met its burden under § 4.105.060(a) or whether Defendant met its 28 burden under § 4.105.060(b). 1 Accordingly, IT IS HEREBY ORDERED: l. Plaintiff Torchstar Corp.’s Special Motion to Strike Pursuant to RCW 4.105.010, et seg., ECF No. 27, is DENIED. IT IS SO ORDERED. The District Court Clerk is hereby directed to enter 5|| this Order and provide copies to counsel. DATED this 9th day of January 2023. 8 7 ‘ 10 byt Sectha— Stanley A. Bastian 3 Chief United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10698089. Public record. Not legal advice.