Honey Bum, LLC v. Fashion Nova, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

HONEY BUM, LLC, a California No. 22-55150

limited liability company,

Plaintiff-Appellant, D.C. No.

2:20-cv-11233-

v. RGK-AS

FASHION NOVA, INC., a California

corporation; RICHARD D. OPINION

SAGHIAN,

Defendants-Appellees.

Appeal from the United States District Court

for the Central District of California

R. Gary Klausner, District Judge, Presiding

Argued and Submitted December 6, 2022

Pasadena, California

Filed March 22, 2023

Before: PAUL J. KELLY, JR., * MILAN D. SMITH, JR.,

and DANIEL P. COLLINS, Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.

*

The Honorable Paul J. Kelly, Jr., United States Circuit Judge for the

U.S. Court of Appeals for the Tenth Circuit, sitting by designation.

2 HONEY BUM, LLC V. FASHION NOVA, INC.

SUMMARY **

Antitrust

The panel affirmed the district court’s summary

judgment in favor of Fashion Nova, Inc., et al. in an antitrust

action brought by Honey Bum, LLC.

Honey Bum, a rival fast-fashion retailer, alleged that

Fashion Nova organized a per se unlawful group boycott by

threatening to stop purchasing from certain clothing vendors

unless they, in turn, stopped selling to Honey Bum. The

district court granted summary judgment on Honey Bum’s

Sherman Act § 1 group boycott claim, concluding that

Honey Bum failed to create a material dispute as to the

existence of a horizontal agreement, between the vendors

themselves, to boycott Honey Bum. The district court also

granted summary judgment on Honey Bum’s California

business tort claims.

The panel held that Sherman Act § 1 prohibits contracts,

combinations, and conspiracies that unreasonably restrain

trade. In determining the reasonableness of a restraint, two

different kinds of liability standards are considered. Some

restraints are unreasonable per se because they always or

almost always tend to restrict competition and decrease

output. Most restraints, however, are subject to the so-called

Rule of Reason, a multi-step, burden-shifting

framework. The panel held that a group boycott is an

agreement among multiple firms not to deal with another

**

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

HONEY BUM, LLC V. FASHION NOVA, INC. 3

firm (the target). Some group boycotts are per se unlawful,

while others are not.

Honey Bum asserted a Klor’s-style per se group boycott,

or “naked” group boycott, under which competitors enter

into a horizontal agreement to boycott a firm and the

boycott’s initiator had no purpose other than disadvantaging

the target. Honey Bum alleged that Fashion Nova (the hub)

pressured clothing vendors (the spokes) to boycott Honey

Bum and then those vendors agreed among themselves to do

so. The panel held that a horizontal agreement among the

spokes was required to prevail, and the district court

correctly concluded that Honey Bum failed to establish a

material dispute as to whether the clothing vendors agreed

among themselves to boycott Honey Bum.

The panel affirmed the district court’s grant of summary

judgment on Honey Bum’s claim for tortious interference

with prospective economic relations because that claim

required a showing of independent unlawfulness.

Accordingly, summary judgment on the Sherman Act claim

necessarily required summary judgment on that claim as

well. The panel rejected the theory that California Bus. &

Prof. Code § 16600 provided a source of independent

unlawfulness.

The panel affirmed the district court’s grant of summary

judgment on Honey Bum’s claim for tortious interference

with contract because Honey Bum did not show interference

with a preexisting valid contract.

4 HONEY BUM, LLC V. FASHION NOVA, INC.

COUNSEL

Jeffery D. McFarland (argued) and Grant Maxwell, McKool

Smith Hennigan PC, Los Angeles, California, for Plaintiff-

Appellant.

Jonathan E. Nuechterlein (argued), C. Frederick Beckner III,

and Alexandra T. Mushka, Sidley Austin LLP, Washington,

D.C.; Chad S. Hummel, David R. Carpenter, and Anna

Tutundjian, Sidley Austin LLP, Los Angeles, California; for

Defendants-Appellees.

OPINION

M. SMITH, Circuit Judge:

Fashion Nova, Inc., a major retailer in the fast-fashion

industry, threatened to stop purchasing from certain clothing

vendors unless they, in turn, stopped selling to Honey Bum,

LLC—one of Fashion Nova’s rival retailers. After over

thirty vendors acceded to Fashion Nova’s demands, Honey

Bum sued Fashion Nova alleging that it had organized a

group boycott that is per se unlawful pursuant to the

Sherman Act, 15 U.S.C. § 1 et seq. Honey Bum also alleged

two California business torts. The district court granted

summary judgment in Fashion Nova’s favor on all of Honey

Bum’s claims. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Honey Bum and Fashion Nova are retailers in the fast-

fashion industry, which quickly produces inexpensive

clothing to accommodate consumers’ desire for products in

HONEY BUM, LLC V. FASHION NOVA, INC. 5

line with ever-changing fashion trends. 1 Honey Bum is a

newcomer to the industry, while Fashion Nova is one of the

industry’s “biggest player[s].” Fashion Nova came to

believe that Honey Bum had intentionally copied its business

model: Honey Bum hired the same website designer, entered

into deals with some of the same models and social-media

influencers, hired a former Fashion Nova employee, and

purchased some of the same styles from the same clothing

vendors. To stop what it perceived to be free-riding, Fashion

Nova organized a group boycott of Honey Bum. It informed

vendors that, to retain Fashion Nova’s business, they must

stop doing business with Honey Bum. Over thirty vendors

agreed to Fashion Nova’s terms and stopped doing business

with Honey Bum entirely.

Honey Bum filed suit, alleging that Fashion Nova had

violated federal antitrust law and committed two California

business torts. Specifically, Honey Bum’s original

complaint alleged four causes of action: (1) a group boycott

in violation of Sherman Act Section 1; (2) monopoly

maintenance in violation of Sherman Act Section 2; (3)

tortious interference with prospective economic relations;

and (4) tortious interference with contract. 2

Fashion Nova moved to dismiss all alleged causes of

action and the district court granted the motion in part,

dismissing the Section 2 monopoly-maintenance claim with

1

This factual account construes the record in the light most favorable to

Honey Bum. See Soc. Techs. LLC v. Apple Inc., 4 F.4th 811, 816 (9th

Cir. 2021).

2

Honey Bum also sued Fashion Nova’s founder and CEO, Richard

Saghian. Because Honey Bum’s claims against Saghian duplicate those

against Fashion Nova, we use “Fashion Nova” to refer both to the

business and Saghian.

6 HONEY BUM, LLC V. FASHION NOVA, INC.

prejudice. The court held that Honey Bum failed to allege a

plausible market, concluding that Honey Bum’s market of

“Los Angeles-sourced fast fashion online clothing”

myopically excluded interchangeable products (e.g., New

York-sourced fast-fashion clothing).

Fashion Nova later moved for summary judgment on

Honey Bum’s Sherman Act Section 1 claim and the two

California business torts. The court granted summary

judgment on all three claims. On the Sherman Act claim, the

Court concluded that Honey Bum failed to create a material

dispute as to the existence of a horizontal agreement (i.e.,

between the vendors themselves) to boycott Honey Bum.

The court then granted summary judgment on Honey Bum’s

claim for tortious interference with prospective economic

relations. That claim requires a showing of independent

unlawfulness, so summary judgment on the Sherman Act

claim necessarily required summary judgment on that claim

as well. The court finally granted summary judgment on

Honey Bum’s claim for tortious interference with contract,

concluding that “a reasonable jury [could not] find that

Defendants knew about or intended to disrupt any

contractual relationship.” Honey Bum timely appealed,

arguing that summary judgment should be reversed on each

of its claims.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction pursuant to 28 U.S.C. § 1291. “We

review a district court’s grant of summary judgment de novo

and, viewing the evidence in the light most favorable to the

non-movant, determine whether there are any genuine issues

of material fact and whether the district court correctly

applied the relevant substantive law.” Soc. Techs., 4 F.4th

at 816 (cleaned up).

HONEY BUM, LLC V. FASHION NOVA, INC. 7

ANALYSIS

I. Sherman Act: Per Se Unlawful Group Boycott

Summary judgment was proper on Honey Bum’s

Sherman Act group-boycott claim. Section 1 of the Sherman

Act prohibits “[e]very contract, combination . . . , or

conspiracy, in restraint of trade.” 15 U.S.C. § 1. Despite the

seeming “breadth of that provision,” we have “long

interpreted it ‘to outlaw only unreasonable restraints.’”

Flaa v. Hollywood Foreign Press Ass’n, 55 F.4th 680, 688

(9th Cir. 2022) (quoting Ohio v. Am. Express Co. (“Amex”),

138 S. Ct. 2274, 2283 (2018)). We determine the

reasonableness of a restraint by considering two different

kinds of liability standards.

“A small group of restraints are unreasonable per se

because they ‘always or almost always tend to restrict

competition and decrease output.’” Id. (quoting Amex, 138

S. Ct. 2274, 2283 (2018)). When a per se prohibition

applies, we deem the restraint unlawful without any

“elaborate study of the industry” in which it occurs. Id.

(quoting Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006)). For

example, courts categorically condemn, without inquiring

into their effect or purpose, horizontal price-fixing

agreements in which competitors at the same level of a

supply chain agree to charge the same prices. See, e.g.,

Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 647

(1980); United States v. Socony-Vacuum Oil Co., 310 U.S.

150, 223 (1940).

Most restraints, however, are subject to the so-called

Rule of Reason. This multi-step, burden-shifting framework

“requires courts to conduct a fact-specific assessment” to

determine a particular restraint’s “actual effect” on

competition. Amex, 138 S. Ct. at 2284 (quoting Copperweld

8 HONEY BUM, LLC V. FASHION NOVA, INC.

Corp. v. Indep. Tube Corp., 467 U.S. 752, 768 (1984)). Rule

of Reason litigation generally, but not always, requires

parties to define a relevant market and assess whether the

defendant has market power within that market. See Amex,

138 S. Ct. at 2285 & n.7. Though the Rule of Reason is not

a “rote checklist,” it also generally requires the parties to

produce, and the court to evaluate, evidence regarding a

restraint’s anticompetitive effects, its procompetitive

benefits, and whether there are less restrictive means of

accomplishing those benefits. NCAA v. Alston, 141 S. Ct.

2141, 2160 (2021) (citing Amex, 138 S. Ct. at 2284).

A group boycott, as its name suggests, is an agreement

among multiple firms not to deal with another firm (the

target). Unlike price-fixing, where a plaintiff need only

prove it occurred to establish a violation, we employ a multi-

track analysis when considering group boycotts. Some

group boycotts “are per se unlawful, while others are not.”

Flaa, 55 F.4th at 689; cf. FTC v. Ind. Fed’n of Dentists, 476

U.S. 447, 458 (1986) (“the category of restraints classed as

group boycotts is not to be expanded indiscriminately”).

While determining “which group boycotts qualify as per se

violations . . . has been a source of confusion for decades,”

some general principles have emerged in our precedents.

Flaa, 55 F.4th at 689 (quotation omitted).

First, a per se prohibition applies where competitors

enter into a horizontal agreement to boycott a firm and the

boycott’s initiator had no purpose other than disadvantaging

the target—i.e., “naked” group boycotts. See Charley’s Taxi

Radio Dispatch Corp. v. SIDA of Hawaii, Inc., 810 F.2d 869,

877 (9th Cir. 1987) (per se prohibition applies to group

boycotts “designed to stifle competition” (quoting Assoc.

Press v. United States, 326 U.S. 1, 19 (1945))); Joseph E.

Seagram & Sons, Inc. v. Hawaiian Oke & Liquors, Ltd., 416

HONEY BUM, LLC V. FASHION NOVA, INC. 9

F.2d 71, 76 (9th Cir. 1969) (per se rule applies to group

boycotts that are “naked restraints of trade with no purpose

except stifling competition” (quoting White Motor Co v.

United States, 372 U.S. 253 (1963))); see also Herbert

Hovenkamp & Phillip E. Areeda, Antitrust Law ⁋ 2203 (4th

ed. 2022) (per se rule limited to boycotts “that on brief

inspection are unlikely to have any purpose other than the

reduction of market output and attendant price increases”);

Julian von Kalinowski, Peter Sullivan, and Maureen

McGuirl, Antitrust Laws and Trade Regulation §12.03[2][d]

(2d ed. 2022) (“boycotts between competitors are per se

illegal when they are nothing more than naked restraints of

trade”). For example, the Supreme Court condemned as per

se unlawful an agreement among several fashion designers

to pressure their retailers into boycotting rival designers to

drive them out of the market. Fashion Originators’ Guild of

Am. v. FTC, 312 U.S. 457, 460–63 (1941). Similarly, the

Court applied the per se prohibition where a dominant

retailer pressured several manufacturers—who, in turn,

agreed among themselves—to boycott the retailer’s rival.

Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207,

212–13 (1959).

Importantly, “[a]ntitrust law does not permit the

application” of this Klor’s-style per se rule “in the absence

of a horizontal agreement.” NYNEX Corp. v. Discon, Inc.,

525 U.S. 128, 138 (1998) (emphasis added). The horizontal

agreement can exist either among the initiators of the boycott

(as in Fashion Originators) or those pressured into joining

(as in Klor’s). We call this latter type—where one dominant

firm pressures other firms at a different level of the supply

chain—a hub-and-spoke group boycott. See In re Musical

Instruments & Equip. Antitrust Litig., 798 F.3d 1186, 1192

(9th Cir. 2015). In such a boycott, the initiating firm acts as

10 HONEY BUM, LLC V. FASHION NOVA, INC.

a hub to which all the pressured firms, or spokes, are

connected. Id. Given the horizontal-agreement requirement,

plaintiffs can successfully invoke the per se rule in a hub-

and-spoke conspiracy only if they prove “horizontal

agreements among the spokes.” Id. at 1192 & n.3. Without

an agreement among the spokes, there is simply a “collection

of purely vertical agreements” subject to Rule of Reason

scrutiny. Id.

Second, a modified per se prohibition applies where

“some or all,” Flaa, 55 F.4th at 689, of the following

characteristics are met: (1) the defendant’s restriction “cut[s]

off access to a supply, facility, or market necessary to enable

the boycotted firm to compete”; (2) the defendant

“possesse[s] a dominant position in the relevant market”;

and (3) the defendant’s restriction is “not justified by

plausible arguments that [it is] intended to enhance overall

efficiency and make markets more competitive.” Nw.

Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co.,

472 U.S. 284, 294 (1985). Northwest Wholesale involved a

joint buying venture’s expulsion of a member after a rule

violation. Id. at 285–86. And its modified per se prohibition

lends itself most readily to boycotts facilitated by a joint

venture, trade association, or other professional

organization. See PLS.com, LLC v. Nat’l Ass’n of Realtors,

32 F.4th 824, 835–37 (9th Cir. 2022).

Third, where a group boycott falls neither within the

Klor’s-style per se prohibition nor the Northwest Wholesale

modified per se prohibition, we apply the Rule of Reason.

Flaa, 55 F.4th at 693–95; Hahn v. Oregon Physicians’ Serv.,

868 F.2d 1022, 1031 (9th Cir. 1988). These theories are not

always exclusive and a plaintiff can assert more than one of

them. See Flaa, 55 F.4th at 680–91, 693–95 (applying both

Northwest Wholesale analysis and the Rule of Reason).

HONEY BUM, LLC V. FASHION NOVA, INC. 11

Turning to the facts of this case, Honey Bum asserts only

a Klor’s-style per se group boycott: that Fashion Nova (the

hub) pressured clothing vendors (the spokes) to boycott

Honey Bum and then those vendors agreed among

themselves to do so. Indeed, Honey Bum structured its

litigation such that it lacks the kind of evidence required to

prevail pursuant to Northwest Wholesale or the Rule of

Reason. 3 Honey Bum did not attempt to define a relevant

market in which Fashion Nova possesses market power; nor

did it do any “analysis of [the] impact” of the group boycott

on consumers. Accordingly, Honey Bum’s Sherman Act

claim rises and falls with its ability to show that Fashion

Nova organized a per se unlawful hub-and-spoke group

boycott.

Below, the district court granted summary judgment

because no reasonable jury could find that the spokes in the

alleged conspiracy (the clothing vendors) had agreed among

themselves to boycott Honey Bum. On appeal, Honey Bum

makes two arguments: (1) that an agreement among the

spokes is not required to prevail; and (2) even if it is, the

district court misconstrued the factual record. We are not

persuaded by either argument.

A. Necessity of a Horizontal Agreement

The district court correctly held that Honey Bum, to

survive summary judgment on its hub-and-spoke group-

boycott claim, must create a material dispute regarding an

agreement among the spokes. As explained, that

3

Though our caselaw refers to Northwest Wholesale as a modified per

se rule, its threshold inquiries into market power and the harms and

benefits of a restriction require “that the facts be developed as in a rule

of reason case, or at least almost as fully.” Hahn, 868 F.2d at 1030 n.9.

12 HONEY BUM, LLC V. FASHION NOVA, INC.

requirement flows directly from Supreme Court and our

precedents. NYNEX, 525 U.S. at 138 (“[a]ntitrust law does

not permit the application” of the Klor’s-style per se rule “in

the absence of a horizontal agreement”); Musical

Instruments, 798 F.3d at 1192 (plaintiff must establish

“horizontal agreements among the spokes.”). 4

B. Honey Bum’s Proof Failure

Moreover, the district court correctly held that Honey

Bum failed to prove such a material dispute. A plaintiff can

establish a conspiracy through direct evidence,

circumstantial evidence, or both. See In re Citric Acid Litig.,

191 F.3d 1090, 1093 (9th Cir. 1999). Direct evidence is

smoking-gun evidence that “establishes, without requiring

any inferences” the existence of a conspiracy. Id. When it

comes to circumstantial evidence, “parallel conduct—even

consciously parallel conduct—[is] insufficient” to establish

a conspiracy. Musical Instruments, 798 F.3d at 1193. In

addition to parallel conduct, a plaintiff relying on

circumstantial evidence must show “plus factors,” id., that

“tend[] to exclude the possibility that the alleged

conspirators acted independently.” Matsushita Elec. Indus.

Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986)

4

Against this binding precedent, Honey Bum offers the general

proposition that courts are to consider a “conspiracy as a whole.” The

cases it quotes for this purported unitary-conspiracy rule are readily

distinguishable. One quote comes from a turn-of-the-century case

addressing how to determine whether a conspiracy affects interstate

commerce and thus falls within the scope of the Sherman Act. See

United States v. Patten, 226 U.S. 525, 544 (1913). The other is from a

case involving a sports league—a unique antitrust context where “both

types of agreements [vertical and horizontal] are analyzed under the rule

of reason.” In re NFL Sunday Ticket Antitrust Litig., 933 F.3d 1136,

1152 (9th Cir. 2019).

HONEY BUM, LLC V. FASHION NOVA, INC. 13

(cleaned up). Here, Honey Bum asserts that it produced both

direct and indirect evidence, but upon examination, each

showing falls short.

1. Direct Evidence

Honey Bum relies on three batches of purported direct

evidence. None of Honey Bum’s evidence “establishes,

without requiring any inferences” the existence of a

conspiracy because it suggests nothing more than conscious

parallelism. Citric Acid Litig., 191 F.3d at 1093.

First, Honey Bum points to evidence relating to the

vendors Rehab and Honey Punch, noting that an employee

who worked at Rehab, which participated in the boycott of

Honey Bum, switched jobs and started working for Honey

Punch, which subsequently joined the boycott. This

evidence does not, “without requiring any inferences,”

establish that Rehab and Honey Punch joined the boycott

only after agreeing with each other to do so. Instead, it

simply shows employee movement from one vendor to

another.

Second, Honey Bum emphasizes a communication from

another vendor showing that vendor “understood that the

boycott in which [it was] participating was not comprised of

[sic] a simple vertical arrangement.” By Honey Bum’s own

framing, this communication establishes only “conscious

parallelism”—that the vendor “understood” Fashion Nova

imposed the same vertical restraints on other vendors.

Third, Honey Bum relies on an entry in Fashion Nova’s

“vendors to block” spreadsheet, which lists the same contact

person for two different vendors. Again, this evidence does

not, “without requiring any inferences,” establish a

conspiracy. Undisputed evidence shows that the listed

14 HONEY BUM, LLC V. FASHION NOVA, INC.

contact person worked sequentially for the two listed

vendors, and so, like the first batch, this evidence is

consistent with employee movement within an industry.

2. Circumstantial Evidence

Turning to circumstantial evidence, Honey Bum failed

to present plus-factor evidence from which a jury could

reasonably infer a horizontal agreement among the spokes

(i.e., the clothing vendors Fashion Nova pressured).

a. Acts Against Self-Interest

Where the conduct of an alleged co-conspirator is in its

own economic self-interest only if the other alleged co-

conspirators follow suit, there is strong circumstantial

evidence of a conspiracy. See Stanislaus Food Prod. Co. v.

USS-POSCO Indus., 803 F.3d 1084, 1092 (9th Cir. 2015);

Citric Acid, 191 F.3d at 1095. Here by contrast, acceding to

Fashion Nova’s demands was in the economic self-interest

of each vendor regardless of what other vendors chose to do.

Fashion Nova is a well-established, high-volume purchaser

whereas Honey Bum is an upstart, low-volume purchaser. If

a vendor believed Fashion Nova’s threats, it would rationally

choose to retain Fashion Nova’s business. Honey Bum

survived a motion to dismiss on a narrow theory that the

economic benefit of accepting Fashion Nova’s demands

depended on other vendors doing so. After discovery failed

to bear out that theory, Honey Bum abandoned it and failed

to advance any other argument that an individual vendor

acted against its self-interest by accepting Fashion Nova’s

terms.

b. Opportunities to Collude

Atypical communications between alleged coconspirators

can constitute a plus factor because such communications

HONEY BUM, LLC V. FASHION NOVA, INC. 15

provide the opportunity for parties to come to (and enforce)

an illicit agreement. But to qualify as a plus factor, such

communications must go beyond the “standard fare” of

business and trade-association practice. Citric Acid, 191

F.3d at 1098. Here, Honey Bum makes only the generalized,

commonplace contention that some fast-fashion vendors are

“close colleagues” and “friends” who often attend the same

trade shows. If that showing were enough to preclude

summary judgment, then “we would have to allow an

inference of conspiracy whenever a trade association” exists

in a given industry. Id. Such a result would run counter to

the Supreme Court’s instruction that “trade associations

often serve legitimate functions, such as providing

information to industry members, conducting research to

further the goals of the industry, and promoting demand for

products and services.” Id. (citing Maple Flooring Mfs.

Ass’n v. United States, 268 U.S. 563, 567 (1925)).

II. Tortious Interference with Prospective Economic

Relations

Summary judgment was also proper concerning Honey

Bum’s claim for tortious interference with prospective

economic relations (TIPER). This California business tort

requires a plaintiff to establish: “(1) an economic

relationship between the plaintiff and some third party, with

the probability of future economic benefit to the plaintiff; (2)

the defendant’s knowledge of the relationship; (3)

intentional acts on the part of the defendant designed to

disrupt the relationship; (4) actual disruption of the

relationship; and (5) economic harm to the plaintiff

proximately caused by the acts of the defendant.”

TransWorld Airlines, Inc. v. Am. Coupon Exch., Inc., 913

F.2d 676, 689 (9th Cir. 1990) (quoting Youst v. Longo, 43

Cal. 3d 64, 71 n.6 (1987)). The plaintiff must also show that

16 HONEY BUM, LLC V. FASHION NOVA, INC.

the defendant’s conduct was independently wrongful—i.e.,

that it is “wrongful by some legal measure other than the fact

of interference itself.” Ixchel Pharma, LLC v. Biogen, Inc.,

9 Cal. 5th 1130, 1142 (2020); see also Korea Supply Co. v.

Lockheed Martin Corp., 29 Cal. 4th 1134, 1159 (2003) (the

interference must be unlawful pursuant to “some

constitutional, statutory, regulatory, [or] common law”

prohibition).

Here, the parties dispute only whether this latter

independent-wrongfulness requirement is satisfied. Honey

Bum primarily asserted Section 1 of the Sherman Act as a

source of independent unlawfulness. Because we hold that

Honey Bum’s Section 1 claim fails, that statutory provision

cannot provide a source of independent unlawfulness for

Honey Bum’s TIPER claim.

Honey Bum alternatively asserted—for the first time in

its opposition to summary judgment—that California

Business and Professions Code § 16600 provides a source of

independent unlawfulness. That section provides that “every

contract by which anyone is restrained from engaging in a

lawful profession . . . is to that extent void.” Even assuming

this theory was properly raised before the district court, it

fails. Though the language is unconditional on its face, the

California Supreme Court has interpreted it to impose a per

se prohibition only in the context of certain employer-

employee noncompete clauses; outside of that context, the

court has “long applied a reasonableness standard to

contractual restraints on business operations and commercial

dealings” that resembles the Rule of Reason. Ixchel, 9 Cal.

5th at 1159. Honey Bum structured its litigation specifically

to avoid the Sherman Act’s Rule of Reason. As a result, the

summary-judgment record is devoid of any evidence upon

HONEY BUM, LLC V. FASHION NOVA, INC. 17

which a reasonable factfinder could conclude that Fashion

Nova’s conduct violates California’s analogous standard.

III. Tortious Interference with Contract

Finally, summary judgment was proper concerning

Honey Bum’s claim for tortious interference with contract

(TIC). This California business tort is closely related to the

one addressed in the previous section—applying, as its name

suggests, to business relationships that have already

culminated in a contract. Ixchel, 9 Cal. 5th at 1141. As such,

it requires a plaintiff to establish: “(1) a valid contract

between plaintiff and a third party; (2) defendant’s

knowledge of this contract; (3) defendant’s intentional acts

designed to induce a breach or disruption of the contractual

relationship; (4) actual breach or disruption of the

contractual relationship; and (5) resulting damage.” United

Nat. Maint., Inc. v. San Diego Convention Ctr., Inc., 766

F.3d 1002, 1006 (9th Cir. 2014) (quoting Pac. Gas & Elec.

Co. v. Bear Stearns & Co., 50 Cal. 3d 1118, 1126 (1990)).

In addition to the formality of the disrupted relationship

(contractually cemented versus only prospective), there is

another critical distinction between TIC and TIPER: the

former tort generally does not require a showing of

independent wrongfulness. Ixchel, 9 Cal. 5th at 1148.

Because Fashion Nova allegedly interfered with

contracts for the sale of goods (i.e., clothing items), we

determine whether a valid contract existed pursuant to

California’s Uniform Commercial Code – Sales (UCC). See

Cal. Com. Code §§ 2101, 2102, 2105(1). Formation of a

contract requires “an offer communicated to the offeree and

an acceptance communicated to the offeror.” Donovan v.

RRL Corp., 26 Cal. 4th 261, 271 (2001) (emphasis added).

The UCC considers a purchase order to be an offer to buy

18 HONEY BUM, LLC V. FASHION NOVA, INC.

goods. See Cal. Com. Code § 2206(1)(b) (referring to “[a]n

order or other offer to buy goods”); Foremost Pro Color, Inc.

v. Eastman Kodak Co., 703 F.2d 534, 538 (9th Cir. 1983)

(“The weight of authority is that purchase orders . . . are not

enforceable contracts until they are accepted by the seller.”).

The merchant who receives a purchase order can, as a default

rule, accept the offer either through prompt shipment or “by

any medium reasonable in the circumstances.” Cal. Com.

Code § 2206(1)(a)–(b); see also Restatement (Second)

Contracts § 35(1) (“An offer gives the offeree a continuing

power to complete the manifestation of mutual assent by

acceptance of the offer.”).

Below, the district court entered summary judgment on

Honey Bum’s TIC claim after concluding that “a reasonable

jury [could not] find that Defendants knew about or intended

to disrupt any contractual relationship.” On appeal, Honey

Bum argues that two purported contracts warrant reversal.

We are not persuaded.

First, Honey Bum relies on an email exchange to assert

a contract with the vendor Bear Dance. In the cited

exchange, Honey Bum informed Bear Dance, “We place[d]

an order today with two styles, can you tell me if this will be

fulfilled or cancelled?” To which Bear Dance responded:

“We will go ahead and cancel it from our side.” As

explained, a purchase order is simply an offer. Cal. Com.

Code § 2206(1)(b); Foremost Pro, 703 F.2d at 538. Though

inartful, Bear Dance’s email “cancel[ing]” the purchase

order was a rejection of Honey Bum’s offer to purchase its

goods. Therefore, there was no valid contract between Bear

HONEY BUM, LLC V. FASHION NOVA, INC. 19

Dance and Honey Bum with which Fashion Nova could have

intentionally interfered. 5

Second, Honey Bum points to a purported contract with

Viva USA. Even assuming that there was a valid contract

between Viva USA and Honey Bum, the existence of a

contract is just one element of a TIC claim. As relevant here,

Honey Bum also needed to create a material dispute that

Fashion Nova took “intentional acts designed to induce a

breach or disruption of the contractual relationship.” United

Nat. Maint., 766 F.3d at 1006. But Honey Bum cited no

evidence—either in its opposition to summary judgment or

in its briefs before this court—that creates a material dispute

regarding this requirement. Honey Bum cites an email

exchange in which a vendor noted that Honey Bum “pre-

ordered” some goods and a Fashion Nova employee

requested that someone “call and ask” the vendor to not

“ship.” To begin, this email exchange does not relate to

either of the two purported contracts Honey Bum put

forward. In any event, all this exchange shows is that

Fashion Nova intentionally acted to prevent a vendor from

entering into a prospective contract by shipping the

requested goods, see Cal Commercial Code § 2206(1)(b),

not that Fashion Nova intentionally induced the vendor to

breach an existing contract. Honey Bum next points to

testimony from Bear Dance that Fashion Nova “asked us to

stop taking Honey Bum’s orders.” Again, this evidence does

5

Both in its briefing and at oral argument, Honey Bum mentioned in

passing “a number of purchase orders” that could purportedly support a

TIC claim. Even assuming Honey Bum did not waive an argument based

on these purchase orders by failing to mention them in its summary-

judgment opposition, the argument fails for the same reason as the Bear

Dance email exchange. A purchase order, without more, is not a

contract.

20 HONEY BUM, LLC V. FASHION NOVA, INC.

not relate to the asserted Viva USA contract and merely

shows interference with prospective economic relations—

not, as this tort requires, interreference with a preexisting

valid contract.

CONCLUSION

For the foregoing reasons, the district court’s grant of

summary judgment on all of Honey Bum’s claims is

AFFIRMED.