Hooked Media Grp., Inc. v. Apple Inc. - 55 Cal. App. 5th 323, 269 Cal. Rptr. 3d 406 (2020)

Rule:

Broken promises regarding future conduct may be actionable as promissory fraud, but only if the promisor did not actually intend to perform at the time the promise was made. Breaking a promise is not itself actionable.

Facts:

Hooked Media Group, Inc., is a startup company that Apple Inc. expressed interest in acquiring. Representatives from each company met to explore a possible acquisition but Apple ultimately passed. Then three of Hooked's most important employees left—to work for Apple. Hooked sued for fraud; misappropriation of trade secrets; interference with contract and prospective economic advantage; aiding and abetting breach of fiduciary duty; unfair business practices; and unjust enrichment. The trial court granted summary judgment for Apple.

Issue:

Can alleged false promises regarding protection of confidential information give rise to a cause of action for fraud absent any evidence of intent not to perform?

Answer:

No.

Conclusion:

The Court of Appeal affirmed the judgment and affirmed a costs order. The court held that alleged false promises regarding protection of confidential information did not give rise to a cause of action for fraud because there was no evidence of intent not to perform; moreover, a negligent misrepresentation claim could not prevail because a false promise could not support it. A misappropriation claim under the Uniform Trade Secrets Act (Civ. Code, § 3426 et seq.) failed because evidence that departing employees had information did not show their new employer improperly acquired or used it, nor was its secrecy maintained. Because no independently wrongful act was shown, interference claims failed, as did an unfair business practices claim (Bus. & Prof. Code, § 17200 et seq.). Because documents could be authenticated (Evid. Code, § 1400) by circumstantial evidence, an attorney's sworn statement sufficed as to documents bearing clear indicia of origin.