1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 DXC TECHNOLOGY COMPANY, Case No. 23-cv-04818-EJD

8 Plaintiff, ORDER GRANTING MOTION TO

DISMISS (ECF NO. 18); GRANTING

9 v. MOTION TO SEVER (ECF NO. 21);

DENYING MOTION FOR A MORE

10 GEN DIGITAL, INC., DEFINITE STATEMENT (ECF NO. 41) 11 Defendant. Re: ECF Nos. 18, 21, 41

12 13 Before the Court are three motions: (1) Third-Party Defendant, Sycomp, a Technology 14 Company, Inc.’s (“Sycomp”) Partial Motion to Dismiss (ECF No. 18); (2) Plaintiff DXC 15 Technology Company’s (“DXC”) Motion to Sever (ECF No. 21); and (3) Third-Party Defendant 16 North American Systems International, Inc.’s (“NASI”) Motion for a More Definite Statement 17 (ECF No. 41). 18 The Court heard oral argument on all three motions on March 14, 2024. For the reasons 19 set forth below, the Court GRANTS Sycomp’s Motion to Dismiss, GRANTS DXC’s Motion to 20 Sever, and DENIES NASI’s Motion for a More Definite Statement. 21 I. BACKGROUND 22 A. DXC’s Claims Against Gen Digital 23 DXC brought this case for breach of contract based on Gen Digital’s alleged failure to 24 fulfill its contractual obligations to DXC under an Information Technology Services Agreement 25 (“ITSA”) that was entered into by both Gen Digital and DXC’s predecessor companies. 26 Complaint (“Compl.”), ECF No. 1, ¶ 1. DXC alleges that under the terms of the ITSA Agreement, 27 Gen Digital (through its predecessor company) agreed to indemnify DXC (through its predecessor 1 company) for losses DXC sustained arising out of or related to certain third-party claims that 2 Symantec Proprietary Software infringed upon the proprietary rights of any third party. Id. 3 On March 22, 2016, Oracle America, Inc. and Oracle International Corporation 4 (collectively “Oracle”) filed a lawsuit in this District against Hewlett Packard Enterprise Company 5 (“HPE”) alleging that HPE infringed Oracle’s copyrights through the installation of software 6 patches, updates, and bug fixes of, among other things, Oracle’s allegedly proprietary Solaris 7 operating system (the “Oracle Lawsuit”). Id. ¶ 2. DXC, which was formed by the merger of 8 Computer Sciences Corporation and the Enterprise Services division of HPE in 2017, inherited the 9 ITSA Agreement and incurred significant losses in connection with Oracle’s claims that certain 10 software patches, updates, and bug fixes that Symantec required to be installed—which DXC 11 alleges Gen Digital has acknowledged constituted Symantec Proprietary Software for purposes of 12 the ITSA Agreement—infringed Oracle’s proprietary software. Id. 13 DXC alleges that even though Gen Digital has never contested its indemnification 14 obligations with respect to the Oracle Lawsuit, Gen Digital “has failed to fulfill those obligations 15 under the terms of the ITSA Agreement, in breach of the ITSA Agreement, and resulting in 16 significant damage to DXC.” Id. ¶ 3. 17 B. Gen Digital’s Claims Against Sycomp and NASI 18 On October 11, 2023, Gen Digital answered DXC’s complaint and filed a third-party 19 complaint against Sycomp and NASI (collectively, “Third-Party Defendants”), asserting that both 20 Third-Party Defendants failed to fulfill their contractual and equitable indemnity obligations to 21 Gen Digital. Third-Party Complaint (“Third-Party Compl.”), ECF No. 11. Gen Digital asserts, 22 “to the extent it has any indemnity obligations to DXC, those obligations should be satisfied in full 23 by NASI and/or Sycomp, with whom Symantec [Gen Digital’s predecessor] had agreements” with 24 indemnity provisions relating to the conduct in question. Id. ¶ 2. 25 Gen Digital provides the following background context relevant to its indemnity claims 26 against Sycomp and NASI. 27 In 2007, Symantec outsourced its IT maintenance to Electronic Data Systems which was 1 acquired by Hewlett Packard (DXC’s predecessor-in-interest) in 2008. Id. ¶ 10. 2 In 2010, Symantec engaged Sycomp to perform certain IT maintenance and support 3 services. Id. ¶ 12. The terms of this relationship were set forth in the Product Purchase 4 Agreement (“PPA”). Id. In 2012, Oracle acquired Sun, and Symantec contacted several third- 5 party maintenance service providers to inquire about obtaining support options for its older Sun 6 devices running the Solaris operating systems. Id. ¶ 15. In mid-2012, Symantec and NASI 7 executed a Service Delivery Agreement (“SDA”). Id. ¶ 16. The IT maintenance services 8 provided by NASI included operating system (including Solaris) support and software. Id. ¶ 18. 9 That agreement included an indemnification provision. Id. ¶ 19. 10 In 2015, HPES notified Symantec of Oracle’s intent to sue HP in relation to the Sun 11 software provided to HPES’s customers, including Symantec. Id. ¶ 37. Oracle claimed that the 12 software updates installed by HPES on behalf of Symantec infringed Oracle’s copyrights. Id. 13 In April 2017, while the Oracle Lawsuit was pending, HPES spun off its Enterprise 14 Services business which was merged with Computer Services Corporation to form DXC. Id. ¶ 41. 15 In June 2022, a jury in the Oracle Lawsuit returned a verdict that DXC infringed Oracle’s 16 copyrights, among other findings, and awarded Oracle $30 million in damages. Id. ¶ 43. 17 In November 2022, DXC demanded that Gen Digital fulfill its indemnity obligations under 18 the ITSA. Id. ¶ 45. On December 23, 2023, Gen Digital notified Sycomp and NASI about DXC’s 19 indemnity demand, and Gen Digital demanded that Sycomp and NASI provide indemnity. 20 Id. ¶ 46. Gen Digital alleges that Sycomp and NASI refused to fulfill their indemnification 21 obligations to Gen Digital. Id. Gen Digital then sued Sycomp and NASI in the present Third- 22 Party Complaint. 23 C. Procedural History 24 On November 22, 2023, Sycomp filed a partial motion to dismiss the Third-Party 25 Complaint. ECF No. 18. Sycomp’s motion seeks to dismiss the third (equitable indemnity) and 26 fourth (declaratory relief) causes of action against it in the Third-Party Complaint as either 27 preempted or subsumed by the first cause of action. 1 On December 8, 2023, DXC filed a motion to strike or sever Gen Digital’s third-party 2 complaint from the action. ECF No. 21. DXC argues that Gen Digital’s claims against the Third- 3 Party Defendants are irrelevant to DXC’s claims against Gen Digital, and keeping those claims in 4 will prejudice DXC by overcomplicating the case, creating additional expense for DXC, and 5 delaying resolution for DXC. 6 On January 18, 2024, NASI filed a motion for a more definite statement. ECF No. 41. 7 NASI contends that the complaint fails to identify what services NASI provided Gen Digital and 8 without that information, NASI cannot meaningfully respond or prepare its defenses. 9 The Court addresses each motion in turn below. 10 II. SYCOMP’S PARTIAL MOTION TO DISMISS (ECF NO. 18) 11 Gen Digital brings claims against Sycomp for breach of contract, equitable indemnity, and 12 declaratory relief. See Third-Party Compl. Sycomp moves for an order dismissing the third cause 13 of action for equitable indemnity and fourth cause of action for declaratory relief in Gen Digital’s 14 Third-Party Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6). Sycomp’s Motion 15 to Dismiss (“MTD”), ECF No. 18. 16 A. Request for Judicial Notice 17 Sycomp requests that the Court take judicial notice of one document submitted in support 18 of its motion to dismiss. See Sycomp’s Request for Judicial Notice in Support of its Motion to 19 Dismiss (“RJN”), ECF No. 20. The document is the verdict form submitted in the matter Oracle 20 America, Inc., et al. v Hewlett Packard Enterprise Company, Case No. 16-cv-01393-JST, ECF 21 No. 1349, filed June 14, 2022. See ECF No. 19 at 21. Gen Digital has not opposed the request. 22 Courts may take notice of adjudicative facts that are “not subject to reasonable dispute” 23 because they are “generally known” or “can be accurately and readily determined from sources 24 whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). As a court record 25 publicly filed, the Court finds that the verdict form is an undisputed matter of public record. 26 Accordingly, the Court will GRANT Synopsys’s request. Harris v. Cty. of Orange, 682 F.3d 27 1126, 1131–32 (9th Cir. 2012) (internal citations omitted) (courts “may take judicial notice of … 1 undisputed matters of public record, including documents on file in federal or state courts”). 2 B. Legal Standard 3 In federal court, a complaint must contain “a short and plain statement of the claim 4 showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While a plaintiff need not 5 offer detailed factual allegations to meet this standard, she is required to offer “sufficient factual 6 matter . . . ‘to state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 7 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In other words, a 8 complaint must (1) “contain sufficient allegations of underlying facts to give fair notice and to 9 enable the opposing party to defend itself effectively[,]” and (2) “plausibly suggest an entitlement 10 to relief, such that it is not unfair to require the opposing party to be subjected to the expense of 11 discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The 12 court must generally accept as true all “well-pleaded factual allegations.” Ashcroft v. Iqbal, 556 13 U.S at 664. The court also must construe the alleged facts in the light most favorable to the 14 plaintiff. See Retail Prop. Trust v. United Bd. of Carpenters & Joiners of Am., 768 F.3d 938, 945 15 (9th Cir. 2014) (“[The court] must accept as true all factual allegations in the complaint and draw 16 all reasonable inferences in favor of the nonmoving party.”). However, “courts are not bound to 17 accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678. 18 If the court concludes that a 12(b)(6) motion should be granted, the “court should grant 19 leave to amend even if no request to amend the pleading was made, unless it determines that the 20 pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 21 1122, 1127 (9th Cir. 2000) (en banc) (quotation omitted). 22 C. Discussion 23 1. Third Cause of Action (Equitable Indemnity) 24 Sycomp argues that Gen Digital’s third cause of action for equitable indemnity is 25 preempted by its first cause of action for breach of contract. Mot. 7. 26 “Indemnity may be defined as the obligation resting on one party to make good a loss or 27 damage another party has incurred. This obligation may be expressly provided for by contract, it 1 may be implied from a contract not specifically mentioning indemnity, or it may arise from the 2 equities of particular circumstances.” Rossmoor Sanitation, Inc. v. Pylon, Inc., 13 Cal. 3d 622, 3 628 (1975). Where “the parties expressly contract with respect to the duty to indemnify, the extent 4 of that duty must be determined from the contract and not by reliance on the independent doctrine 5 of equitable indemnity.” Id.; see also Krag v. Kaiser Found. Hosps., No. C 89-3042-TEH, 1993 6 WL 226108, at *5 (N.D. Cal. June 15, 1993) (“‘an express indemnity clause is accorded a certain 7 preemptive effect, displacing any implied rights which might otherwise arise’ ... including both 8 equitable and implied indemnification”) (quoting E. L. White, Inc. v. City of Huntington Beach, 21 9 Cal. 3d 497, 507–08 (1978)). 10 In Liftech Consultants Inc. v. Samsung Shipbuilding & Heavy Indus., Ltd., the defendant 11 sought to dismiss the plaintiff’s claims for equitable indemnity, arguing that it was barred by 12 plaintiff’s claim for contractual indemnity. No. 10-cv-2976-SBA, 2010 WL 4510905 (N.D. Cal. 13 Nov. 2, 2010). The plaintiff argued that it was permitted to plead the claims in the alternative, but 14 the court explained that the question of “whether [plaintiff] is permitted to plead alternative 15 theories is inapposite.” Id. at 4. Because “an express indemnity agreement governs the parties’ 16 relationship,” the court held that plaintiff was “legally precluded from pursuing claims for 17 equitable indemnity.” Id. (citing Maryland Cas. Co. v. Bailey & Sons, Inc., 35 Cal. App. 4th 856, 18 864, 872–73 (1995) (holding that equitable indemnity claims were “barred by the express 19 indemnity provisions in the parties’ contracts”)). 20 Here, Gen Digital acknowledges it “seeks equitable indemnity from Sycomp based on their 21 contractual relationship as memorialized in the PPA.” Opposition to Sycomp’s Motion to Dismiss 22 (“MTD Opp.”), ECF No. 45 at 7. Nevertheless, it argues, its claim for equitable indemnity “is 23 properly construed as a claim for implied contractual indemnity.” Id. Gen Digital does not 24 explain why construing the claim as one for implied contractual indemnity rather than equitable 25 indemnity based on a contractual relationship is significant. But even if the claim, which is 26 pleaded as “equitable indemnity” (see Third-Party Compl. at 17) could properly be construed as 27 “implied contractual indemnity,” the Court is unpersuaded that doing so would prevent a finding 1 of preemption here, where Gen Digital has pleaded that an express indemnity agreement governs 2 the parties’ relationship. See Liftech Consultants Inc., No. C 10–2976 SBA, 2010 WL 4510905, at 3 *2 (N.D. Cal. Nov. 2, 2010) (“Implied contractual indemnity is but a form of equitable indemnity 4 which may arise where indemnity is implied from a contract not specifically mentioning 5 indemnity”) (cleaned up). 6 Gen Digital next argues that its equitable indemnity claim is not preempted because Gen 7 Digital has “set forth alternative theories of recovery in a non-verified complaint” which is 8 permitted under Rule 8(d). MTD Opp. 8–9. While Rule 8(d) does permit alternative and 9 inconsistent legal theories, “it does not alter a substantive right between the parties and 10 accordingly does not allow a plaintiff invoking state law to an unjust enrichment claim while also 11 alleging an express contract.” Gerlinger v. Amazon.com, Inc., 311 F. Supp. 2d 838, 856 (N.D. 12 Cal. 2004). “[A] plaintiff may not plead the existence of an enforceable contract and maintain a 13 quasi-contract claim at the same time, unless the plaintiff has pled facts suggesting that the 14 contract may be unenforceable or invalid.” Jacobs v. Sustainability Partners LLC, No. 20-CV- 15 01981-PJH, 2020 WL 5593200, at *17 (N.D. Cal. Sept. 18, 2020) (quoting Schulz v. Cisco Webex, 16 No. 13-cv-04987-BLF, 2014 WL 2115168, at *5 (N.D. Cal. May 20, 2014)); see also World 17 Surveillance Grp. Inc. v. La Jolla Cove Investors, Inc., Case No. 13-CV-03455-WHO, 2014 WL 18 1411249 (N.D. Cal. Apr. 11, 2014) (dismissing claim for restitution based on unjust enrichment 19 where plaintiff explicitly alleged existence of enforceable contract). 20 In Gerlinger, the court dismissed plaintiff’s unjust enrichment theory where a “valid 21 express contract covering the same subject matter exist[ed] between the parties.” Gerlinger, 311 22 F. Supp. 2d at 856. In rejecting plaintiff’s argument that he should nevertheless be permitted to 23 plead unjust enrichment in the alternative, the court explained that “[s]uch an alternative claim 24 might be stated if … plaintiff alleged that no express agreement existed between plaintiff and 25 either defendant. Instead, plaintiff has pleaded the opposite and relies on that contract as the basis 26 for standing in the case at bar.” Id.; see also Liftech Consultants, 2010 WL 4510905, at *4 27 (dismissing equitable indemnity claims and explaining that “[s]ince there is no dispute that such 1 an agreement exists, and that [plaintiff] is not entitled to indemnification from [defendant] 2 thereunder, [plaintiff] is legally precluded from pursuing claims for equitable indemnity”). 3 So too here. Gen Digital has plead that the parties “entered into a valid contract (the PPA), 4 which included an agreement from Sycomp to indemnify [Gen Digital].” Third-Party Compl. 5 ¶ 48. Because “there is no dispute that … an agreement exists,” Gen Digital “is legally precluded 6 from pursuing claims for equitable indemnity.” Liftech Consultants, 2010 WL 4510905, at *4. 7 Moreover, Gen Digital has not alleged that the PPA may be unenforceable, but rather pleads the 8 opposite: it alleges that Sycomp had an “uncontested obligation under the terms of the PPA to 9 indemnify Gen Digital.” Third-Party Compl. ¶ 53. Accordingly, the Third-Party Complaint fails 10 to state a claim for unjust enrichment, even in the alternative. Dolce Int’l/San Jose, LLC v. City of 11 San Jose, Cal., No. 20-CV-03774-EJD, 2020 WL 5910066, at *3 (N.D. Cal. Oct. 6, 2020) 12 (dismissing unjust enrichment claim where plaintiff “affirmatively alleges that the Parties are 13 bound by [an agreement] and does not allege any facts suggesting that the [agreement] may be 14 unenforceable or invalid”); see also Schulz, 2014 WL 2115168, at *5 (dismissing unjust 15 enrichment claim where “the express allegations of an enforceable contract on the face of the 16 complaint [] preclude[d] [plaintiff] from asserting a quasi-contract claim based on unjust 17 enrichment”); see also Klein v. Chevron U.S.A., Inc., 202 Cal. App. 4th 1342, 1389 (2012), as 18 modified on denial of reh’g (Feb. 24, 2012) (affirming dismissal of unjust enrichment claim where 19 “plaintiffs’ breach of contract claim pleaded the existence of an enforceable agreement and their 20 unjust enrichment claim did not deny the existence or enforceability of that agreement”). 21 Sycomp’s motion to dismiss Gen Digital’s claim for equitable indemnity is GRANTED. 22 Because Gen Digital “cannot allege in good faith, while maintaining his other claims, that no 23 contract exists between himself and [Sycomp],” the Court dismisses Gen Digital’s equitable 24 indemnity claim without leave to amend. Gerlinger, 311 F. Supp. 2d at 856 (dismissing quasi- 25 contract claim without leave to amend); see also Liftech Consultants Inc., 2010 WL 4510905, at 26 *5 (dismissing equitable indemnity claim with prejudice where complaint established that “an 27 express indemnity agreement governs the parties’ relationship”). 1 2. Fourth Cause of Action (Declaratory Relief) 2 Sycomp also moves to dismiss Gen Digital’s fourth cause of action for declaratory relief 3 on the grounds that it is subsumed by the first cause of action for breach of contract. Gen Digital’s 4 fourth cause of action “seeks a judicial determination of the parties’ respective rights and duties, 5 specifically, Third-Party Defendants’ indemnity obligations to Gen Digital under their respective 6 contracts with Gen Digital (formerly known as Symantec).” Third-Party Compl. ¶ 68. 7 Sycomp argues that because Gen Digital does not seek any interpretation of any 8 contractual term or provision and only seeks a determination that Sycomp breached its obligation 9 under the PPA to indemnify Gen Digital, the claim for declaratory relief is duplicative of the 10 breach of contract claim. MTD 11–12. 11 A claim for declaratory relief requires the plaintiff to demonstrate the existence of an 12 actual controversy regarding the legal rights of the parties. Sencion v. Saxon Mortg. Servs., Inc., 13 No. CV-10-03108-PSG, 2011 WL 672643, at *3 (N.D. Cal. Feb. 17, 2011) (citing McClain v. 14 Octagon Plaza, LLC, 159 Cal. App. 4th 784 (Ct. App. 2008)). Declaratory relief operates 15 prospectively and not merely for the redress of past wrongs. Id. (citations omitted). The purpose 16 of a declaratory judgment is to set controversies at rest before they cause harm to the plaintiff in 17 the interest of preventive justice, not to remedy harms that have already occurred. Id. 18 Gen Digital contends that its declaratory relief claim is proper given Sycomp’s position 19 with respect to the PPA. As with its equitable relief claim, Gen Digital argues that it can plead its 20 declaratory relief claim as an alternative to the breach of contract claim because Sycomp has 21 contested the applicability of the PPA and denies that it is required to indemnify Gen Digital. 22 MTD Opp. 13. Given this “very real dispute” between the parties as to the scope and application 23 of the indemnity provisions in the contract between them, Gen Digital argues it is appropriate to 24 seek declaratory judgment as to whether Sycomp is obligated to indemnify Gen Digital. Id. at 13– 25 14. 26 Travers affirmed dismissal of a declaratory relief claim where the complaint “did not 27 allege uncertainty as to the meaning of the contract or pray for its interpretation” and “merely 1 allege[d] a breach of the contract as a foundation for some unspecific claim of a right to redress.” 2 Travers v. Louden, 254 Cal. App. 2d 926 (Ct. App. 1967). In so holding, the court explained that 3 it had “found no authority for the proposition that declaratory relief is proper procedure when the 4 rights of the complaining party have crystallized into a cause of action for past wrongs.” Id. 5 Osseous similarly considered the issue. In the underlying action, the plaintiff sued for 6 declaratory relief rather than waiting for a breach of contract action to be filed against it. Osseous 7 Techs. of Am., Inc. v. DiscoveryOrtho Partners LLC, 191 Cal. App. 4th 357, 360 (2010). The 8 plaintiff sought a declaration on “multiple questions pertaining to the interpretation of the [] 9 agreement.” Id. at 362. The trial court dismissed the declaratory relief claim, reasoning that 10 declaratory relief would not be necessary or proper “because the facts as pleaded amounted to a 11 breach of contract dispute (looking to past conduct) rather than a forward-looking pronouncement 12 of the rights and duties of the parties.” Id. A few months after the trial court dismissed the 13 declaratory relief claim, the defendant sued plaintiff in a separate action for breach of contract of 14 the same agreement. Id. The decision was affirmed on appeal. The court explained that “the 15 question is really whether this case is too ripe for declaratory relief to be necessary and proper.” 16 Id. (emphasis in original). The court went on to explain that, although the case before it involved 17 a potential defendant to a breach of contract claim suing for declaratory relief, “[l]ess 18 understandable is why a potential breach of contract plaintiff would sue a defendant for 19 declaratory relief when such a plaintiff had the ability to bring a plain vanilla breach of contract 20 action.” Id. at 353. In citing Travers and the decisions succeeding it, the court concluded that 21 “authority for the proposition that a trial court abuses its discretion by refusing to dismiss a 22 declaratory relief claim because the claim amounts to a backward-looking breach of contract claim 23 is underwhelming.” Id. 24 Osseous also identified cases where courts reversed dismissals of declaratory relief claims 25 where “the pleadings alleged both continuing contractual relationships and future consequences 26 for the conduct of the relationship that depended on the court’s interpretation of the contracts at 27 issue.” See id. at 369 (citing Columbia Pictures Corp. v. De Toth (1945) 26 Cal. 2d 753 and 1 Warren v. Kaiser Found. Health Plan, Inc. (1975) 47 Cal. App. 3d 678). 2 Here, Gen Digital’s declaratory relief claim amounts to a backward-looking breach of 3 contract claim. It alleges that Sycomp “refused to satisfy [its] indemnity obligations to Gen 4 Digital.” Third-Party Compl. ¶ 68 (declaratory relief claim). Gen Digital’s breach of contract 5 claim similarly alleges that “Sycomp has failed to satisfy its obligations to indemnity Gen 6 Digital.” Id. ¶ 53 (breach of contract claim). Gen Digital has not alleged any continuing 7 contractual relationship between it and Sycomp, nor any future consequences for the conduct of it 8 and Sycomp’s relationship that depends on the Court’s interpretation of the PPA. Its declaratory 9 relief claim essentially seeks to “determine if a breach [of the PPA] occurred” and any relief 10 would not “also govern the future conduct of the parties.” Osseous Techs, 191 Cal. App. 4th at 11 372 (emphasis in original) (citing Ermolieff v. R.K.O. Radio Pictures (1942) 19 Cal. 2d 543, 545– 12 549). 13 The Court will exercise its discretion and dismiss Gen Digital’s fourth cause of action for 14 declaratory relief. See Osseous Techs., 191 Cal. App. 4th at 372 (finding trial court “well within 15 its discretion” in dismissing declaratory relief claim where plaintiff did “not allege an ongoing 16 contractual relationship between it and [defendant],” and the allegations “suggest[ed] this case 17 principally concerns the interpretation of contracts to assess alleged ‘past wrongs’”); see also 18 Watson v. Sansone (1971) 19 Cal. App. 3d 1 (affirming dismissal of declaratory relief action 19 where “the issue relates solely to a fully matured claim for money in an amount within the 20 jurisdiction of the municipal court, where nothing remains to be done but the payment of money, 21 and where no declaration of future rights and obligations is sought, or necessary, or proper”). 22 Accordingly, Sycomp’s motion to dismiss Gen Digital’s fourth cause of action for 23 declaratory relief is GRANTED. Because Gen Digital’s failure to state a claim may be cured with 24 additional allegations––for example, regarding an ongoing contractual relationship––Gen Digital’s 25 fourth cause of action is dismissed with leave to amend. 26 27 1 D. Conclusion As to Sycomp’s Motion to Dismiss 2 Sycomp’s motion to dismiss is GRANTED. Gen Digital’s third cause of action for 3 equitable indemnity is DISMISSED WITH PREJUDICE. Gen Digital’s fourth cause of action for 4 declaratory relief is DISMISSED WITHOUT PREJUDICE. Any amended complaint must be 5 filed within 30 days of this Order consistent with the Court’s ruling below on DXC’s motion to 6 sever. 7 The Court observes that Gen Digital brought its third cause of action for equitable 8 indemnity and its fourth cause of action for declaratory relief against both Sycomp and NASI. See 9 Third-Party Compl. at 17–18. In light of the Court’s Order dismissing these two causes of action 10 against Sycomp, the Court invites NASI to submit a five-page statement within 10 days of this 11 Order expressing its position regarding the impact, if any, of the Court’s ruling on Gen Digital’s 12 third and fourth causes of action against NASI. 13 III. DXC’S MOTION TO STRIKE OR SEVER (ECF NO. 21) 14 DXC has moved to strike or sever Gen Digital’s Third-Party Complaint pursuant to Rule 15 14(a)(4). DXC’s Motion to Strike or Sever (“MTS”), ECF No. 21. DXC argues that allowing 16 Gen Digital to pursue its claims against Sycomp and NASI in this action will result in prejudice to 17 DXC without promoting judicial efficiency. 18 A. Legal Standard 19 Rule 14 provides that “[a] defending party may, as third-party plaintiff, serve a summons 20 and complaint on a nonparty who is or may be liable to it for all or part of the claim against it.” 21 Fed. R. Civ. P. 14(a). “The decision to allow a third-party defendant to be impleaded under rule 22 14 is entrusted to the sound discretion of the trial court.” Universal Green Sols., LLC v. VII Pac 23 Shores Invs., LLC, No. C-12-05613-RMW, 2013 WL 5272917, at *2 (N.D. Cal. Sept. 18, 2013) 24 (quoting U.S. v. One 1977 Mercedes Benz, 708 F.2d 444, 452 (9th Cir. 1983)). In exercising this 25 discretion, the court should seek to effectuate Rule 14’s purpose of promoting “judicial efficiency 26 by eliminating the necessity for the defendant to bring a separate action against a third individual 27 who may be secondarily or derivatively liable to the defendant for all or part of the plaintiff’s 1 original claim.” SHFL Ent., Inc. v. Kardwell Int’l, Inc., No. 12-CV-8271-SVW-RZ, 2013 WL 2 12123990, at *3 (C.D. Cal. July 15, 2013) (quoting Sw. Adm’rs, Inc. v. Rozay’s Transfer, 791 F.2d 3 769, 777 (9th Cir. 1986)). Courts also consider (1) prejudice to the original plaintiff; 4 (2) complication of issues at trial; and (3) likelihood of trial delay. Id. (citing Irwin v. Mascott, 94 5 F. Supp. 2d 1052, 1056 (N.D. Cal. 2000)). 6 B. Discussion 7 DXC brings a single cause of action for breach of contract against Gen Digital. 8 Compl. ¶¶ 39–47. DXC alleges that Gen Digital must indemnify it for losses that it occurred 9 resulting from and arising out of the Oracle Lawsuit based on the agreement––the ITSA 10 Agreement––between the two parties. Id. Gen Digital sued Sycomp and NASI for breach of 11 contract, equitable indemnity, and declaratory relief. Third-Party Compl. at 15–18. Gen Digital 12 claims that Sycomp and NASI must indemnify it pursuant to agreements between it and two 13 Third-Party Defendants––the PPA and SDA, respectively––for losses resulting from the Oracle 14 Lawsuit. Id. ¶¶ 53, 60. 15 It is undisputed that Gen Digital’s claims against Sycomp and NASI are derivative of the 16 claim by DXC against Gen Digital. DXC argues that Gen Digital’s claims seeking separate 17 indemnification should nevertheless be stricken or severed because allowing the claims would 18 prejudice DXC without promoting judicial efficiency. MTS 7. Gen Digital responds that Sycomp 19 and NASI “are secondarily or derivatively liable to Gen Digital for all or part of DXC’s 20 underlying claim” and keeping all claims in the same case would promote judicial economy. 21 Opposition to Motion to Strike (“MTS Opp.”), ECF No. 26. 22 When faced with a motion to strike a third party, a court must consider “the effect the 23 additional parties and claims will have on the adjudication of the main action-in particular, 24 whether continued joinder will serve to complicate the litigation unduly or will prejudice the other 25 parties in any substantial way.” SHFL Ent., 2013 WL 12123990, at *3. 26 DXC argues that keeping the Third-Party Complaint in the case would complicate the 27 issues because it injects two additional parties with two separate indemnification disputes and 1 three additional agreements that otherwise would not impact the underlying breach of contract 2 claim. MTS 7. Gen Digital’s new claims, DXC argues, will introduce legal issues that would 3 otherwise not need to be resolved and are “irrelevant” in DXC’s case and would require a jury to 4 “disambiguate three separate indemnification obligations across four different agreements.” Id. at 5 8. 6 While DXC argues that resolution of the case without the additional third-party claims 7 would be “narrow and straightforward” (MTS 1), Gen Digital paints a different picture. It argues 8 that Gen Digital’s obligation to indemnify DXC for the losses incurred in the Oracle Lawsuit is “a 9 foregone conclusion” and “very real factual questions” surround the indemnification issues. 10 MTS Opp. 11. Given this already complicated set of facts, Gen Digital seems to argue that 11 including Sycomp and NASI would not cause further confusion. Moreover, Gen Digital argues, it 12 would promote judicial efficiency to include Sycomp and NASI because “[w]hether DXC is 13 entitled to indemnification is an issue to be established at trial,” and “the nature of Sycomp’s and 14 NASI’s conduct” is “central to the resolution of this issue.” MTS Opp. 15. 15 The Court finds that the Third-Party Complaint would complicate and lengthen any trial by 16 introducing facts and issues that would not otherwise be present. In SHFL, the plaintiff alleged 17 that defendant engaged in copyright and trademark infringement as well as other competition 18 violations. 2013 WL 12123990, at *3. The defendant brought a third-party claim, asserting that 19 the third party “failed to inform it that the layouts it purchased were infringing on [plaintiff’s] 20 intellectual property rights.” Id. at *2. The court granted plaintiff’s motion to strike the third- 21 party claims where “the sales and contracts between [defendant] and [the third-party defendant] 22 depend on facts and issues that [were] largely unrelated to the underlying action and have no 23 bearing on whether [defendant] is liable to [plaintiff] for infringement.” Id. at *3. Because 24 including the third-party would result in additional discovery, extensive expert testimony, and 25 complicated damages calculations for trial, and keeping the third-party in “would not necessarily 26 aid in determining liability in the underlying suit,” the court severed the third-party claims. Id. 27 Here, the Third-Party Complaint introduces three additional agreements and two separate 1 indemnification disputes with two additional parties. Although Gen Digital argues that “the 2 conduct of all the parties will be an issue in determining issues of indemnity in this case,” it has 3 not presented with clarity as to how the conduct of all the parties will be at issue. To the extent 4 Gen Digital contends that the Third-Party Defendants’ “interactions with HPES” are “central to 5 the lawsuit,” it has not alleged as much in the Third-Party Complaint. MTS Opp. 6. Nor did 6 counsel at the hearing identify how judicial economy will be served by keeping the case intact. 7 Counsel stated that there is a “danger of inconsistent results” and “there are going to be factual 8 issues that are common to both,” but did not identify any inconsistent results or common factual 9 issues. 10 Gen Digital also alleges that its predecessor company was “induced” to obtain the Solaris 11 Updates, which were then installed by HPES. MTS Opp. 12. But Gen Digital has not explained 12 why resolving the question of how Gen Digital’s predecessor obtained the Solaris Updates is 13 relevant to DXC’s claim against Gen Digital for breach of the indemnity provision in the ITSA 14 between DXC and Gen Digital. Moreover, counsel for Gen Digital at the hearing agreed that Gen 15 Digital’s obligation to DXC is not contingent on the outcome of the Third-Party Complaint. 16 Regarding whether the Third-Party Complaint will result in delay of the adjudication of 17 DXC’s claim, the Court finds that it likely will. Both Sycomp and NASI have challenged the 18 Third-Party Complaint and given the Court’s grant of leave to amend, the pleading stage will 19 continue for the Third-Party Complaint while the underlying pleadings are complete. 20 * * * 21 The Court recognizes that the case is in its infancy, and Gen Digital’s Third-Party 22 Complaint was timely. Nevertheless, given the apparent tangential relationship between Gen 23 Digital’s claims and the case in chief and the addition of multiple parties and indemnity 24 provisions, the Court finds that severing the Third-Party Complaint would prevent delay and 25 confusion. 26 C. Conclusion As to DXC’s Motion to Strike or Sever 27 For the foregoing reasons, DXC’s motion to sever is GRANTED. Gen Digital’s Third- 1 Party Complaint is severed from the underlying complaint. Gen Digital may refile its Third-Party 2 Complaint as a separate complaint in a new action within 30 days of this Order. The filing fee is 3 ORDERED waived, and the Clerk shall accept the new complaint for filing without a fee. See 4 Ayers v. Lee, No. 14-CV-542-LAB (WVG), 2016 WL 11783381, at *1 (S.D. Cal. Nov. 21, 2016) 5 (ordering the Clerk of the Court to waive all fees for the new cases to be filed by Plaintiff after 6 granting motion to sever claims); see also Tierravision, Inc. v. Research in Motion Ltd., 2011 WL 7 4862961, at *1 (S.D. Cal. Sept. 16, 2011) (same). 8 IV. NASI’S MOTION FOR A MORE DEFINITE STATEMENT (ECF NO. 41) 9 Third-Party Defendant NASI, an infrastructure sales company specializing in hardware, 10 moves for a more definite statement under Rule 12(e). NASI’s Motion for a More Definite 11 Statement (“Mot.”), ECF No. 41 at 1, 5. Specifically, it seeks the following: (1) a statement 12 specifically identifying and describing with particularity the services or software provided by 13 NASI that led to the alleged contractual breach; (2) a statement specifically identifying and 14 describing with particularity the contract or contracts NASI has entered into that led to the alleged 15 breach; and (3) a statement specifically identifying and describing with particularity the services 16 provided by any third party that NASI has contractually agreed to indemnify that led to the alleged 17 breach. Id. at 2. 18 A. Evidentiary Objections 19 Gen Digital filed evidentiary objections to the Declaration of Phil Bettenburg filed in 20 support of NASI’s Motion for a More Definite Statement. Evidentiary Objections, ECF No. 46-1. 21 Because the Court denies NASI’s motion for the reasons discussed below, the Court need not rule 22 on the evidentiary objections which have no bearing on the Court’s decision. 23 B. Legal Standard 24 Under Federal Rule of Civil Procedure 12(e), “[a] party may move for a more definite 25 statement of a pleading to which a responsive pleading is allowed but which is so vague or 26 ambiguous that the party cannot reasonably prepare a response.” Such motions are “viewed with 27 disfavor, and are rarely granted.” Peng Chan v. Time Warner Inc., No. 16-CV-06268-EJD, 2017 1 WL 11500157, at *1 (N.D. Cal. June 20, 2017) (citing Cellars v. Pac. Coast Packaging, Inc., 189 2 F.R.D. 575, 578 (N.D. Cal. 1999)). Rule 12(e) motions challenge the intelligibility of the 3 complaint, not the lack of detail, and should be denied if the complaint notifies the defendant of 4 the substance of the claims. Id. (citing Beery v. Hitachi Home Elecs., Inc., 157 F.R.D. 477, 480 5 (C.D. Cal. 1993)). “If the detail sought by a motion for more definite statement is obtainable 6 through discovery, the motion should be denied.” Id. Rule 12(e) motions are granted only on 7 “rare occasions.” United Specialty Ins. Co. v. Meridian Mgmt. Grp., Inc., No. 15-CV-01039- 8 HSG, 2015 WL 4718998, at *4 (N.D. Cal. Aug. 7, 2015) (citing Bautista v. Los Angeles Cnty., 9 216 F.3d 837, 843 n.1 (9th Cir.2000)); see also E.E.O.C. v. Alia Corp., 842 F.Supp.2d 1243, 1250 10 (E.D. Cal. 2012) (motions pursuant to Rule 12(e) are generally “viewed with disfavor and are 11 rarely granted[.]”). 12 C. Discussion 13 NASI argues that it “only partially” agreed to indemnify Symantec (and its successor, Gen 14 Digital), but Gen Digital’s partial description of the indemnity obligation is “misleading” because 15 the services provided to Symantec consisted entirely of hardware support and maintenance, and 16 telephone support and advice. Mot. 3–4. NASI claims it never provided software patches for 17 Solaris or any other operating system, and the Oracle Lawsuit involves claims that DXC infringed 18 Oracle’s copyrights by installing software patches of Solaris. Id. at 4. Thus, Gen Digital appears 19 to dispute its obligation to indemnify. Because the Third-Party Complaint “fails to connect the 20 dots between DXC’s alleged liability and Gen Digital’s obligation to indemnify for that liability,” 21 NASI argues it is unable to respond to the Third-Party Complaint “without Gen Digital specifying 22 which contracts or services invoke [NASI’s] indemnity liability.” Id. at 6. 23 The Court finds that the Third-Party Complaint is sufficiently clear to permit NASI to 24 prepare a response. As in United Specialty, this is not one of those “rare occasions” where the 25 defendant cannot make heads or tails of the allegations. 2015 WL 4718998, at *4. And unlike 26 Peng Chan, where the “substance of Plaintiff’s claims [was] nearly impossible to discern,” the 27 “complaint fail[ed] to allege the elements of specific causes of action,” and the complaint “fail[ed] 1 to clearly explain how Time Warner’s conduct is involved,” the Third-Party Complaint here is 2 || sufficient to notify NASI of the substance of the claims against it. The Third-Party Complaint 3 alleges the existence of the contract—the SDA—it claims was breached along with allegations 4 || pertaining to how it claims that contract was breached. See Third-Party Complaint §[] 55-61. 5 NASI appears to raise several defenses to Gen Digital’s indemnity claims. See Reply 2 6 || (“Gen Digital does not explain how a hardware provider can be liable for a software 7 infringement”). If NASI believed that the allegations were so thin that they fail to state a claim, it 8 could have moved to dismiss under Rule 12(b)(6). NASI also takes issue that Gen Digital did not 9 identify the specific services NASI provided that led to its alleged liability. Reply 1. But 10 || mformation regarding the services at issue “is obtainable through discovery.” See United 11 Specialty Ins., 2015 WL 4718998, at *4. At this stage, for any allegations for which NASI 12 || believes it lacks knowledge or information sufficient to form a belief about the truth of an 5 13 allegation, NASI should so state as permitted under Federal Rule of Civil Procedure 8(b)(5). 14 While NASI may believe the Third-Party Complaint is not “‘a perfect model of clarity,” the 3 15 || Court finds that it “is clear enough to convey its requested relief and the bases for that relief.” See a 16 United Specialty Ins. Co., 2015 WL 4718998, at *4. 2 17 D. Conclusion As to NASI’s Motion for a More Definite Statement 18 For the reasons set forth above, NASI’s motion for a more definite statement is DENIED. 19 || NASI must answer the Third-Party Complaint within 30 days of Gen Digital re-filing the Third- 20 || Party Complaint as set forth above. 21 22 IT IS SO ORDERED. 23 Dated: June 7, 2024

25

EDWARD J. DAVILA

26 United States District Judge 27 28 || Case No.: 23-cv-04818-EJD

ORDER RE ECF NOS. 18, 21, 41