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Inc. v. United Parcel Service, Inc.

United States District Court, Ninth Circuit

January 14, 2014

USA WHEEL AND TIRE OUTLET #2, INC.,
v.
UNITED PARCEL SERVICE INC

CIVIL MINUTES - GENERAL

DAVID O. CARTER, District Judge.

PROCEEDINGS (IN CHAMBERS): ORDER DENYING SPECIAL MOTION TO STRIKE [13]

Before the Court is Plaintiff USA Wheel and Tire Outlet No. 2 Inc.'s ("USA Wheel's") Special Motion to Strike Defendant United Parcel Service Inc.'s ("UPS's") Counter Claim (Dkt. 13). After considering the moving and opposing papers, and all declarations and exhibits attached thereto, the Court DENIES the Special Motion.

I. BACKGROUND

A. The Underlying Action

In 2009, USA Wheel and UPS entered into an Agreement whereby UPS agreed to provide shipping services to USA Wheel. Notice of Removal, Ex. A ("Compl.") ¶ 7 (Dkt. 1). Under the Agreement, USA Wheel would enter information regarding the size and type of the package online, and would then receive a shipping charge. Id. ¶¶ 10-11. UPS reserved the right to audit shipments to verify the charge and to make "appropriate adjustments, " if necessary. Id. ¶ 12.

USA Wheel brought one claim for breach of contract, alleging that "Defendant UPS manipulated these audit procedures so that it could improperly invoice [USA Wheel] increased shipping charges based on false dimensions." Id. ¶¶ 13-20.

B. The Counterclaim

The Agreement set forth discounted pricing "incentives" that apply to the shipping services that UPS provided to USA Wheel. Def.'s Ans. ¶ 6 (Dkt. 5). In order to protect the confidentiality of those discounted rates, the Agreement provided that, "[the Parties] agree to maintain the confidentiality of this Agreement including its rates, terms and incentives (Confidentiality Information') unless disclosure is required by law." Id. ¶ 7. Furthermore, USA Wheel agreed "not to post or publicly display this Confidential Information." Id.

On December 31, 2012, USA Wheel filed the Complaint in state court and attached an unredacted version of the Agreement, including the "rates, terms, and incentives" that were subject to the confidentiality provision. Id. ¶¶ 9-12.

After learning of the public filing, UPS's counsel contacted USA Wheel's counsel demanding that USA Wheel "take any and all steps necessary to cure the violation of the Carrier Agreement, whether by removing the Carrier Agreement from the public record or by having it sealed." Decl. of Gregory Koltun, Ex. B ("January 7, 2013 Letter") (Dkt. 19). USA Wheel's counsel agreed to file an ex parte application for an order sealing the exhibit that contained the pricing information, but the court declined to rule on the application because it should have been filed as a noticed motion. Decl. of Gregory Koltun, Ex. D ("January 18, 2013 Order"). USA Wheel did not file a noticed motion to seal. Decl. of Gregory Koltun ¶ 6. So, UPS's counsel reached out to USA Wheel again via email, inquiring whether USA Wheel intended on filing such a motion. Decl. of Gregory Koltun, Ex. E ("February 20 and 21 Emails"). USA Wheel's counsel never responded, so UPS filed its own motion to seal. Decl. of Gregory Koltun, Ex. F ("Motion to Seal"). USA Wheel then filed an opposition to that motion. Decl. of Gregory Koltun ¶ 8.

In its answer to USA Wheel's Complaint, UPS counterclaimed for breach of contract, alleging that USA Wheel's unredacted filing of the rates, terms, and incentives violated the confidentiality provision in the agreement. Def.'s Ans. ¶¶ 8-13. USA Wheel now moves to strike the counterclaim under California Code of Civil Procedure Section 425.16, California's anti-SLAPP statute. Mot. to Strike ("Mot.") (Dkt. 13).

II. LEGAL STANDARD

California's anti-SLAPP (strategic lawsuit against public participation) statute, provides that "[a] cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." Cal. Code Civ. Pro. § 425.16. This special motion to strike is available in federal courts concerning California state law claims. See United States ex rel. Newsham v. Lockheed Missiles & Space Co., Inc., 190 F.3d 963, 972-73 (9th Cir. 1999); ...


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