NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAY 14 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
PROSTAR WIRELESS GROUP, LLC, No. 19-15130
Plaintiff-Appellant, D.C. No. 3:16-cv-05399-WHO
v.
MEMORANDUM*
DOMINO’S PIZZA, INC.,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of California
William Horsley Orrick, District Judge, Presiding
Submitted May 12, 2020**
San Francisco, California
Before: THOMAS, Chief Judge, and FRIEDLAND and BENNETT, Circuit
Judges.
Prostar Wireless Group, LLC (“Prostar”) brought ten claims under
California law against Domino’s Pizza, Inc. (“Domino’s”) after Domino’s declined
to provide the approval that would have been necessary to enable Prostar to sell,
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
for use in Domino’s locations, a GPS-based driver-tracking solution that Prostar
had developed in collaboration with Domino’s over the course of several years.
The district court granted summary judgment in favor of Domino’s on all claims.
Reviewing de novo, we affirm.
1. Prostar’s claims for breach of an implied-in-fact contract and breach of
the covenant of good faith and fair dealing fail. “An implied contract is one, the
existence and terms of which are manifested by conduct.” Cal. Civ. Code § 1621.
That conduct must show that there was “a mutual agreement and intent to
promise,” Retired Emps. Ass’n of Orange County, Inc. v. County of Orange, 266
P.3d 287, 290 (Cal. 2011) (quoting Silva v. Providence Hosp. of Oakland, 97 P.2d
798, 804 (Cal. 1939)), and, as with any contract, promises are enforceable only if
they are “definite enough that a court can determine the scope of the duty and the
limits of performance,” Ladas v. Cal. State Auto. Ass’n, 23 Cal. Rptr. 2d 810, 814
(Ct. App. 1993). Prostar’s claim for breach of the covenant of good faith and fair
dealing depends on the existence of an implied contract. See Avidity Partners,
LLC v. State, 165 Cal. Rptr. 3d 299, 320 (Ct. App. 2013) (“The implied covenant
of good faith and fair dealing rests upon the existence of some specific contractual
obligation.” (quoting Racine & Laramie, Ltd. v. Dep’t of Parks & Recreation, 14
Cal. Rptr. 2d 335, 338 (Ct. App. 1993))).
Prostar has failed to “make a showing sufficient to establish the existence”
2
of key elements of its implied-in-fact contract claim: a mutual agreement between
it and Domino’s, the terms of which are definite enough to be enforceable. See
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (summary judgment standard).
Prostar contends that “the parties engaged in a lengthy development project based
on the mutual understanding that if the project proved successful—meaning that if
[Prostar’s technology] were successfully integrated into the [Domino’s point-of-
sale] system—Prostar would be allowed to market and sell [its technology] . . . to
Domino’s franchisees.” But the evidence only supports the inference that
Domino’s hoped that enough progress might be made on Prostar’s solution to
enable the parties to reach a future agreement. At the points during the parties’
commercial relationship when they considered the possibility of a concrete
agreement, Domino’s expressly declined to agree. The evidence may be sufficient
to show that Prostar believed there was an implied agreement, but there is not
enough evidence that any such belief was reasonable.1
2. Prostar’s claims for deceit, negligent misrepresentation, and unfair
competition similarly fail. There is insufficient evidence to show that it was
reasonable for Prostar to conclude, based on anything Domino’s said or did, that
Domino’s had committed to ultimately approve Prostar’s solution. Prostar
1
In light of our conclusion that there was insufficient evidence of
agreement, we need not and do not decide whether the parties’ non-disclosure
agreement bears on Prostar’s contract-related claims.
3
therefore cannot establish the justifiable reliance that is required for its claims for
deceit and negligent misrepresentation. See Small v. Fritz Cos., 65 P.3d 1255,
1258-59 (Cal. 2003) (deceit and negligent misrepresentation have similar elements,
including that both require justifiable reliance). And Prostar acknowledges that its
claim for unfair competition “stands or falls” with those claims.2
3. Prostar’s claim for misappropriation of trade secrets also fails. Of the
nine alleged trade secrets that Prostar presses on appeal, eight relate to Prostar’s
algorithms. Prostar has not presented sufficient evidence that Domino’s ever had
access to those algorithms, as would be required to support its misappropriation
claim. See Cal. Civ. Code § 3426.1(b) (misappropriation requires “[a]cquisition of
a trade secret” by “improper means” or disclosure of a trade secret without
consent). Based on the record in this case, no reasonable factfinder could agree
with Prostar’s argument that, even though Prostar did not share its source code
with Domino’s, the algorithms associated with those eight alleged trade secrets
were nonetheless “discernible” from the material it did share.
The final alleged trade secret is for the “architecture” of Prostar’s solution.
Prostar has not presented sufficient evidence that it kept this architecture secret, as
would be required to support its misappropriation claim. See Cal. Civ. Code
2
In light of our conclusion that there was insufficient evidence to establish a
necessary element of these claims, we need not and do not decide whether the
claims are preempted by the California Uniform Trade Secrets Act.
4
§ 3426.1(d) (information is a trade secret only if it derives value “from not being
generally known” and “[i]s the subject of efforts that are reasonable under the
circumstances to maintain its secrecy”). For example, Prostar revealed aspects of
its architecture without making accompanying efforts to maintain secrecy.
Although it is theoretically possible that the architecture as a whole could have
nevertheless been maintained in secrecy, Prostar has not identified sufficient
evidence that any such secret architecture in fact exists and goes beyond what
Prostar did reveal.
4. Because Domino’s is entitled to judgment in its favor regarding liability,
we need not and do not resolve the parties’ dispute about whether Prostar could
have obtained damages based on a calculation of its own lost profits if it were
entitled to a remedy.
AFFIRMED.
5