United Tactical Systems, LLC v. Real Action Paintball, Inc. (143 F. Supp. 3d 982, 2015)

United States District Court for the Northern District of California 2015-11-10

Commerce and Trade Judiciary and Judicial Procedure

Citations

Full opinion text

ORDER RE: (1) MOTION TO DISMISS COUNTERCLAIMS; (2) MOTION TO STRIKE COUNTERCLAIMS; AND (3) MOTION TO TRANSFER BOND

MARIA-ELENA JAMES, United States Magistrate Judge

INTRODUCTION

Real Action Paintball, Inc. and its principal, K.T. Tran (collectively ‘Real Action”) filed 18 counterclaims in this matter (First Am. Counterclaim (‘FACC”), Dkt. No. 152), which United Tactical Systems, LLC (‘UTS”) and related Counter-Defendants (collectively with UTS, ‘Counter-Defendants”) now seek to dismiss or strike on a multitude of different grounds. See Mot. to Dismiss Brief (‘MTD Br.”), Dkt. No. 160; Mot. to Strike Brief (‘MTS Br.”), Dkt. No. 163. Real Action also filed a motion asking the Court to transfer the bond held by the. Northern District Court of Indiana, which previously issued a temporary restraining order (‘TRO”) against Real Action. See Mot. to Transfer Bond (‘Transfer Mot”), Dkt. No. 158. Having considered the parties’ positions, relevant legal authority, and the record in this case, the Court GRANTS IN PART and DENIES IN PART Counter-Defendants’ Motions and DENIES AS MOOT Real Action’s Transfer Motion for the following reasons.

BACKGROUND

UTS and Real Action sell irritant filled projectiles. Compl. ¶ 2, Dkt. No. 1; FACC ¶¶ 20, 29. Typically used by law enforcement or military, these projectiles are nonlethal capsules that contain a pepper substance and can be shot like paintballs. FACC ¶ 19. UTS’s predecessor in interest, Advanced Tactical Ordnance Systems, LLC (‘ATO”), an Indiana corporation, previously brought suit against Real Action, a California company, in a case styled Advanced Tactical Ordinance Systems, LLC v. Real Action Paintball, Inc., et al., Case No. 12-00296-JVB-RBC (N.D. Ind.) (the ‘Indiana Action”), alleging Real Action infringed on its ‘PepperBall” trademark by making statements implying that Real Action sold PepperBall projectiles, among other things. Compl. ¶¶ 1, 36; FACC ¶¶ 30: 31, 48. ATO alleges it acquired PepperBall Technologies, Inc. in 2012, procuring the use of the PepperBall mark, among other things. Compl. ¶ 2. ATO obtained a temporary restraining order and later a preliminary injunction in the Indiana Action to stop Real Action’s use of the PepperBall mark and related acts by Real Action. Compl. ¶ 36; FACC ¶¶ 36, 51.

ATO also sued Conrad Sun, Sun LLC, and Apon in the Indiana Action. FACC ¶¶ 86-87. Apon manufactured irritant projectiles, while Conrad Sun and his company Sun LLC had previously helped broker a deal for the sale of irritant filled projectiles from Apon to Real Action. Compl. ¶¶ 11, 12, 14-16; FACC ¶ 28. Real Action alleges ATO settled with Sun, Sun LLC, and Apon in the Indiana Action ‘on abusive terms,” which made it so that Real Action was unable to acquire the irritant projectiles it contracted for from Sun LLC and Apon, and consequently harmed Real Action’s position in the marketplace. FACC ¶ 96.

Meanwhile, Real Action challenged whether the Northern District of Indiana (the ‘Indiana Court”) properly invoked personal jurisdiction over it. Id. ¶ 44. The Court of Appeals for the Seventh Circuit confirmed the Indiana Court did not have personal jurisdiction over Real Action, and the Indiana Court consequently dismissed the suit. Id.; see also Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball, Inc., 751 F.3d 796 (7th Cir.2014).

The case has found new residence in this Court. Real Action filed the first suit, styled as Real Action Paintball, Inc. v. Advanced Tactical Ordnance Systems, LLC et al., Case No. 14-2435-MEJ (N.D. Cal.) (the ‘ATO Case”). It asserted 17 claims against ATO, including claims for wrongful injunction, declaratory relief, unfair competition, and restraint of trade. Real Action also sued attorneys Michael Blumenthal and David Piell, who represented ATO in the Indiana Action, and the persons and entities who had formed ATO. ATO Case, Dkt. No. 1. Specifically, Real Action sued Gary Gibson and Perfect Circle Projectiles LLC as well as Tyler Tiberius and Tiberius Arms LLC. Id. Gibson' owns or owned Perfect Circle, which in turn owns or owned 50% of ATO. FACC ¶¶ 23, 25. Perfect Circle also once supplied irritant projectiles to Pepperball Technologies. Id. ¶ 20. Tiberius is or was a co-owner of Tiberius Arms, which Real Action alleges owns or owned the other 50% of ATO. Id. ¶¶ 24-25. Finally, Real Action also sued Robert N. Trgovich in his capacity as clerk of the United States District Court for the Northern District of Indiana. ATO Case, Dkt. No. 1; see also FACC ¶ 11.

After Real Action filed suit in this Court, UTS was formed and purchased ATO and the PepperBall mark. Compl. ¶ 2. UTS then filed the present lawsuit against Real Action (the ‘UTS Case”), and moved for a temporary restraining order. Dkt. No. 27. The Court denied that motion but construed it as a motion for a preliminary injunction. Dkt. No. 34. The Court ultimately granted in part and denied in part UTS’s motion for a preliminary injunction, which enjoined Real Action from using the PepperBall name to refer to its irritant projectiles. Dkt. No. 85. Real Action subsequently counter-sued UTS for various claims (many of which are similar to those asserted against ATO), as well as Blumen-thal and Piell for misappropriation of trade secrets related to information published with the filing of UTS’s motion for a temporary restraining order. Dkt. No. 51.

The Court subsequently consolidated the ATO and UTS actions under the UTS Case. Dkt. No. 140. In light of this consolidation, the Court denied Real Action’s Motion to Amend its Complaint, and denied without prejudice UTS’s and ATO’s pending Motions to Dismiss and Motions to Strike, but granted the parties leave to amend their pleadings. Id.

On June 16, 2015, Real Action filed its First Amended Counterclaims against Counter-Defendants as well as Trgovich. Dkt. No. 152. Real Action brings a total of 18 claims;

1. Wrongful Injunction (under Federal law of the Seventh Circuit) — ATO and Trgovich

2. Wrongful Injunction (under Indiana law) — ATO and Trgovich

3. Wrongful Seizure (under Federal law) — ATO, Gibson, Tiberius, and Trgovich

4. Abuse of Process (under Indiana law) — ATO, Gibson, Tiberius, Blu-menthal, and Piell

5. Malicious Prosecution (under Indiana law) — ATO, Gibson, Tiberius, Blu-menthal, and Piell

6. Intentional Interference with Contractual Relations (under Indiana and California laws) — ATO, Perfect Circle, Gibson, Tiberius, Tactical Air, Tiberius Arms, Blumenthal, and Piell

7. Intentional or Negligent Interference with Prospective Economic Advantage (under Indiana and California laws) — ATO, Gibson, Tiberius, Blu-menthal, and Piell

8. Tortious Conversion (under Indiana and California laws) — ATO, Gibson, and Blumenthal

9. Criminal Conversion (under Indiana law) — ATO, Gibson, and Blumenthal

10. False Designation of Origin (under 15 U.S.C. § 1125) — ATO, Gibson, Tiberius, and UTS

11. Monopoly and Combination in Restraint of Trade (under the Sherman Act) — ATO, Perfect Circle, and Tiberius Arms

12. Combination in Restraint of Trade (under California’s Cartwright Act) — ATO, Perfect Circle, and Tiberius

13. Unfair Competition and False Advertising (under California Business and Professions Code sections 17200 and 17500) — ATO, Perfect Circle, and UTS

14. Declaratory Judgment of No Violation of the Lanham Act nor of Common Law Trademark nor Trade Dress — ATO and UTS

15. Declaratory Judgment of No Trade Secret Misappropriation — ATO and UTS

16. Unjust Enrichment (under Indiana law) — ATO and Perfect Circle

17. Conspiracy (under Indiana and California laws) — ATO, Perfect Circle, Gibson, Tactical Air, Tiberius Arms, Tiberius, Blumenthal, and Piell

18.Successor Liability — UTS, UTSIH, and UTSH

After filing the FACC, Real Action filed a Second Motion for the Court to Accept and Hold the Bond from the Indiana Action. Dkt. No. 158. The Court previously dismissed without prejudice Real Action’s First Motion to Accept and Hold the Bond, finding the motion premature as ‘the Court ha[d] not yet determined its role in assessing the Northern District of Indiana’s earlier injunction against Real Action.” Dkt. No. 148. On October 28, 2015, Counter-Defendants filed a Notice stating the Indiana Court released the bond, presumably back to ATO. Dkt. No. 184. Real Action has not responded to this notice.

This Order considers the Court’s power to hear Real Action’s Wrongful Injunction counterclaims under the circumstances and also considers Counter-Defendants’ Motions to Dismiss Real Action’s Counterclaims pursuant to Rule 12(b)(6) or alternatively to Strike those counterclaims pursuant to California Code of Civil Procedure section 425.16, California’s anti-SLAPP law. See Dkt. Nos. 159 (Mot. to Dismiss); 162 (Motion to Strike) (filed July 9, 2015).

LEGAL STANDARDS

A. Motion to Dismiss

Rule 8(a) requires that a complaint contain a ‘short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A eom-plaint must therefore provide a defendant with ‘fair notice” of the claims against it and the grounds for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotations and citation omitted).

A court may dismiss a complaint under Rule 12(b)(6) when it does not contain enough facts to state a claim to relief that is plausible on its face. Id. at 570, 127 S.Ct. 1955. ‘A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). ‘The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). ‘While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal citations and parentheticals omitted).

In considering a motion to dismiss, a court must accept all of the plaintiffs allegations as true and construe them in the light most favorable to the plaintiff. Id. at 550, 127 S.Ct. 1955; Erickson v. Pardus, 551 U.S. 89, 93-94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007); Vasquez v. Los Angeles Cty., 487 F.3d 1246, 1249 (9th Cir.2007). In addition, courts may consider documents attached to the complaint. Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir.1995) (citation omitted).

If a Rule 12(b)(6) motion is granted, the ‘court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000) (en banc) (internal quotations and citations omitted). However, the Court may deny leave to amend for a number of reasons, including ‘undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir.2003) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)).

B. Anti-SLAPP Motion to Strike

California Code of Civil Procedure section 425.16 provides a procedure for a court ‘to dismiss at an early stage nonmeritorious litigation meant to chill the valid exercise of the constitutional rights of freedom of speech and petition in connection with a public issue.” Sipple v. Found. for Nat’l Progress, 71 Cal.App.4th 226, 235, 83 Cal.Rptr.2d 677 (1999) (citation and footnote omitted). This type of nonmerito-rious litigation is referred to under the acronym ‘SLAPP,” or ‘Strategic Lawsuit Against Public Participation.” Id. The archetypal SLAPP complaint is a ‘generally meritless suit[ ] brought by large private interests to deter common citizens from exercising their political or legal rights or to punish them for doing so.” Wilcox v. Sup. Ct., 27 Cal.App.4th 809, 816, 33 Cal.Rptr.2d 446 (1994) (disapproved on other grounds) (citation omitted). The anti-SLAPP statute provides:

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 Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that there is a probability that the plaintiff will prevail on the claim.

Cal. Civ. Proc. Code § 425.16(b)(1). Section 425.16 thus ‘allows a court to strike any cause of action that arises from the defendant’s exercise of his or her constitutionally protected free speech rights or petition for redress of grievances.” Flatley v. Mauro, 39 Cal.4th 299, 311-12, 46 Cal.Rptr.3d 606, 139 P.3d 2 (2006).

California’s anti-SLAPP statute is available to litigants in federal court. In re NCAA Student-Athlete Name & Likeness Licensing Litig., 724 F.3d 1268, 1272 (9th Cir.2013), cert. dismissed sub nom. Elec. Arts Inc. v. Keller, — U.S. -, 135 S.Ct. 42, 189 L.Ed.2d 894 (2014); see also Batzel v. Smith, 333 F.3d 1018, 1025-26 (9th Cir.2003). While section 425.16 ‘does not apply to federal law causes of action,” it does apply to ‘state law claims that federal courts hear pursuant to their diversity jurisdiction^]” Hilton v. Hallmark Cards, 599 F.3d 894, 900 n. 2, 901 (9th Cir.2010).

In ruling on a motion to strike brought under Section 425.16, the trial court must engage in a two-step process that involves shifting burdens. Kearney v. Foley & Lardner LLP, 590 F.3d 638, 648 (9th Cir.2009). First, the defendant must make an initial prima facie showing that the plaintiffs challenged cause of action ‘arises from” an act in furtherance of the defendant’s rights of petition or free speech. Rusheen v. Cohen, 37 Cal.4th 1048, 1056, 39 Cal.Rptr.3d 516, 128 P.3d 713 (2006). ‘A cause of action ‘arising from’ [a party’s] litigation activity may appropriately be the subject of an [anti-SLAPP motion to strike].” Id. (citation omitted). Such activity ‘includes communicative conduct such as the filing, funding, and prosecution of a civil action.” Id. (citation omitted).

Second, ‘[i]f the court determines that the defendant has met this burden, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the merits.” Kearney, 590 F.3d at 648 (citation omitted); Jarrow Formulas, Inc. v. LaMarche, 31 Cal.4th 728, 733, 3 Cal.Rptr.3d 636, 74 P.3d 737 (2003). ‘Reasonable probability’ in the anti-SLAPP statute has a specialized meaning” and ‘requires only a ’minimum level of legal sufficiency and triability.’” Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590, 598 (9th Cir.2010) (quoting Linder v. Thrifty Oil Co., 23 Cal.4th 429, 438 n. 5, 97 Cal.Rptr.2d 179, 2 P.3d 27 (2000)). ‘Indeed, the second step of the anti-SLAPP inquiry is often called the ’minimal merit’ prong.” Id. (citations omitted). ‘ ’Put another way, the plaintiff must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.’” Id. at 599 (quoting Wilson v. Parker, Covert & Chidester, 28 Cal.4th 811, 821, 123 Cal.Rptr.2d 19, 50 P.3d 733 (2002)); see also Navellier v. Sletten, 29 Cal.4th 82, 93, 124 Cal.Rptr.2d 530, 52 P.3d 703 (2002) (the statute ‘subjects to potential dismissal only those actions in which the plaintiff cannot state and substantiate a legally sufficient claim.”). ‘[A] reviewing court ’should grant the motion if, as a matter of law, the defendant’s evidence supporting the motion defeats the plain tiffs attempt to establish evidentiary support for the claim.’” Makaeff v. Trump Univ., LLC, 736 F.3d 1180, 1183 (9th Cir.2013) (Wardlaw, J. and Callahan J. concurring in the denial of rehearing en banc) (emphasis in original) (quoting Vargas v. City of Salinas, 46 Cal.4th 1, 20, 92 Cal. Rptr.3d 286, 205 P.3d 207 (2009)). ‘Only a cause of action that satisfies both prongs of the anti-SLAPP statute — i.e., that arises from protected speech or petitioning and lacks even minimal merit — is a SLAPP, subject to being stricken under the statute.” Navellier, 29 Cal.4th at 89, 124 Cal.Rptr.2d 530, 52 P.3d 703 (emphasis in original).

PRELIMINARY ISSUES

A number of substantive legal issues have arisen in the context of assessing Counter-Defendants’ Motions, which the Court addresses as a preliminary matter before discussing the individual counterclaims.

A. Federal Conflicts

As an initial matter, the Court notes that Real Action did not address the substance of Counter-Defendants’ anti-SLAPP arguments as to its individual counterclaims. Instead, it has challenged the Counter-Defendants’ anti-SLAPP motion on threshold legal grounds, first arguing the Court should not strike any claims under California’s anti-SLAPP law until discovery is complete. MTS Opp’n at 9, Dkt. No. 172. In support, Real Action cites a case stating: ‘If a defendant makes an anti-SLAPP motion based on the plaintiffs failure to submit evidence to substantiate its claims, the motion is treated as a motion for summary judgment, and discovery must be developed sufficiently to permit summary judgment under Rule 56.” Id. at 10 (citing Lauter v. Anoufrieva, 642 F.Supp.2d 1060, 1109 (C.D.Cal.2009)).

Although there is some dispute about this issue within the Ninth Circuit and among the judges of our Court of Appeals itself, the Ninth Circuit has recently reiterated its long held assessment that section 425.16 applies in federal courts in the absence of ‘direct collusion” between the state enactment and the Federal Rules of Civil Procedure 8, 12, and 56. See Makaeff, 736 F.3d at 1181-84; U.S. ex rel. Newsham v. Lockheed Missiles & Space Co., Inc., 190 F.3d 963, 972-73 (9th Cir.1999). The Ninth Circuit has found that while California’s ‘[ajnti-SLAPP statute and the Federal Rules do, in some respects, serve similar purposes, namely the expeditious weeding out of meritless claims before trial... .there is no indication that Rules 8, 12, and 56 were intended to ‘occupy the field’ with respect to pretrial procedures aimed at weeding out meritless claims.” Newsham, 190 F.3d at 972 (citation omitted). Here, the Court finds no conflict between the Federal Rules and California’s anti-SLAPP law. As Counter-Defendants state in their Reply, their Motion to Strike ‘only attacks the pleadings and submits facts that are judicially noticeable, ... us[ing] the tools available on a motion made under Federal Rule of Civil Procedure 12(b)(6).” MTS Reply at 7, Dkt. No. 176. The Court’s analysis proceeds on the same lines, without need for more discovery. Accordingly, Real Action’s request that the Court wait to decide Counter-Defendants’ anti-SLAPP motion until after discovery is DENIED.

B. Mixed Claims Asserted Under Both California and Indiana Law

Real Action contends that California’s anti-SLAPP law applies only to California state law claims and not claims grounded in the law of another state. MTS Opp’n at 7. As such, Real Action asserts its claims brought under both California and Indiana laws may not be stricken under California’s anti-SLAPP law. Id. at 7-8. Real Action also argues ‘if the Indiana allegations in a mixed claim survive — and they do because the Anti-SLAPP statute has no authority to strike Indiana claims — then the claim survives as a whole.” Id.

Although neither the California Supreme Court nor the Ninth Circuit has addressed the exact issue posed by Real Action, the Second Circuit Court of Appeals recently considered the issue and found California’s anti-SLAPP law could apply to other states’ substantive causes of action. See Liberty Synergistics Inc. v. Microflo Ltd., 718 F.3d 138, 144-48 (2d Cir.2013). In that case, Liberty originally filed a malicious prosecution claim in California state court, which was then removed to federal court and subsequently transferred to New York. Id. at 142. The defendants brought a motion to strike under California’s anti-SLAPP law, which the New York District Court denied, finding that New York substantive law would apply to plaintiffs malicious prosecution claim, and therefore California’s anti-SLAPP law could not be used to strike the claim. Id. at 143. The Second Circuit disagreed. The Court of Appeals noted that federal courts are required to apply the choice-of-law rules of the state in which the court sits, but since the case was originally filed in California and later transferred to the Eastern District of New York pursuant to 28 U.S.C. § 1404(a), the federal court in New York was required to act as if, for the purpose of determining the applicable state rules of decision, it was sitting in California. Id. at 153. Under that lens, the Second Circuit stated it had ‘no reason to doubt that a California state court would apply California’s anti-SLAPP rule as a matter of its own procedural rules, even if it applied New York substantive law to the merits of the malicious prosecution action.” Id. at 154. It further noted that the text of California’s anti-SLAPP law was not limited to causes of action that arose under California law and consequently found the District Court erred by concluding California’s anti-SLAPP law would not apply merely because New York substantive law governed the cause of action. See also Makaeff, 736 F.3d at 1184 n. 3 (citing Liberty with approval for proposition that California’s anti-SLAPP law confers substantive rights under Erie doctrine).

This case presents a simpler question. The Court sits in California and this case was filed in California; as such, the Court applies California choice-of-law rules. The Second Circuit’s conclusion that California courts would apply the California anti-SLAPP law even where the cause of action is based on another state’s substantive law appears reasonable to this Court. While Real Action cites case law establishing that California’s anti-SLAPP law applies to California state claims (MTS Opp’n at 7) (a self-evident proposition), these cases do not conflict with the Liberty court’s analysis or show that California’s anti-SLAPP law should not apply to other state’s claims. While the Liberty court recognized that, ‘[t]o be sure, the Due Process Clause and the Full Faith and Credit Clause, among other constitutional provisions, provide some.limitations to the application of state conflict-of-law rules in ways that would frustrate causes of action defined by other states’ laws,” having carefully reviewed and considered the counterclaims and legal issues present in this case, the Court finds no reason indicating this case ‘approach[es] those constitutional boundaries.” 718 F.3d at 155.

Accordingly, the Court agrees with the Second Circuit and holds that California’s anti-SLAPP law can be applied to Real Action’s counterclaims brought pursuant to Indiana law. In considering Counter-Defendants’ challenges to Real Action’s counterclaims, the Court will apply California’s anti-SLAPP law to claims, asserting violations of Indiana law.

C. “Mixed” Causes of Action Arising from Protected and Unprotected Activities

The other issue implicitly raised by the parties’ arguments is whether California’s anti-SLAPP law applies to a cause of action that involves claims arising from both protected and unprotected activities. Counter-Defendants assert that ‘[wjhere a single cause of action alleges both acts protected under the statute and unprotected acts, the entire cause of action may be stricken under California Code of Civil Procedure section 425.16[,]” arguing that ‘RAP4 ‘cannot frustrate the purpose of the SLAPP statute through a pleading, tactic of combining allegations of protected and nonprotected activity under the label of one ‘cause of action.’” MTS Br. at 12 (quoting Fox Searchlight Pictures, Inc. v. Paladino, 89 Cal.App.4th 294, 308, 106 Cal.Rptr.2d 906 (2001)). Real Action also raises this issue, asserting ‘under California law if any portion of a claim has merit, the Court may not strike it under the Anti-SLAPP statue [sic].” MTS Opp’n at 7-8 (citing Mann v. Quality Old Time Serv., Inc., 120 Cal.App.4th 90, 106, 15 Cal.Rptr.3d 215 (2004)). Although Real Action raises this argument in the context of analyzing its mixed Indiana and California law claims rather than challenging Counter-Defendants’ assessment of whether its claims arise out of a protected activity, this issue of how the Court should consider a cause of action alleging claims arising from both protected and unprotected activities must be assessed before reviewing those individual claims.

Specifically, in several of its counterclaims, Real Action asserts wrongdoing by the Counter-Defendants both for bringing and litigating the Indiana Action against Real Action as well as for legal violations associated with the settlement agreements with Sun LLC and Apon. The Court agrees with Counter-Defendants that actions arising from their litigation of the Indiana Action are protected activities. See Soukup v. Law Offices of Herbert Hafif, 39 Cal.4th 260, 291, 46 Cal.Rptr.3d 638, 139 P.3d 30 (2006) (‘[t]he filing of lawsuits is an aspect of the First Amendment right of petition.” (quotation omitted)). However, the settlement agreements with Sun LLC and Apon are not necessarily protected activities. The California Supreme Court has warned that a cause of action may be ‘triggered” by protected activity without arising from it. City of Cotati v. Cashman, 29 Cal.4th 69, 78, 124 Cal.Rptr.2d 519, 52 P.3d 695 (2002). ‘In the anti-SLAPP context, the critical consideration is whether the cause of action is based on the defendant’s protected free speech or petitioning activity.” Navellier, 29 Cal.4th at 89, 124 Cal.Rptr.2d 530, 52 P.3d 703 (citation omitted; emphasis in original). But the ‘fact that protected activity may lurk in the background — and may explain why the rift between the parties arose in the first place — does not transform [such a] dispute into a SLAPP suit.” In re Episcopal Church Cases, 45 Cal.4th 467, 478, 87 Cal.Rptr.3d 275, 198 P.3d 66 (2009), as modified (Feb. 25, 2009); see also Optional Capital, Inc. v. Das Corp., 222 Cal.App.4th 1388, 1399, 166 Cal.Rptr.3d 705 (2014) (‘[C]onduct is not automatically protected merely because it is related to pending litigation”). The Court considers whether Real Action’s allegations concern protected or non-protected in the context of the individual claims, but the issue remains as to how the Court should view Real Action’s counterclaims that challenge both protected activities as well as non-protected activities.

California ‘[ajppellate courts have wrestled with the application of the anti-SLAPP law where... a single cause of action includes multiple claims, some protected by that law and some not.” Cho v. Chang, 219 Cal.App.4th 521, 526, 161 Cal.Rptr.3d 846 (2013). The anti-SLAPP law is silent on the matter, and California’s appellate courts are split on how to apply the law to causes of action dealing with protected and. unprotected activities. See id. (collecting cases). A case cited by Real Action states ‘once a plaintiff shows a probability of prevailing on any part of its claim, the plaintiff has established that its cause of action has some merit and the entire cause of action stands.” Mann, 120 Cal.App.4th at 106, 15 Cal.Rptr.3d 215 (emphasis in original). In light of the Mann rule, other courts have concluded that an entire cause of action may be properly stricken where any part is protected and not merely ‘incidental” to an unprotected claim, and a plaintiff fails to show the requisite probability of success on the protected claim. See Haight Ashbury Free Clinics, Inc. v. Happening House Ventures, 184 Cal.App.4th 1539, 1554, 110 Cal.Rptr.3d 129 (2010). Another court, however, found that where a plaintiff has established probability of prevailing as to allegations of nonprotected activity but not as to allegations of protected activity, the protected activity allegations ‘may be parsed from the causes of action and stricken, while the allegations related to non-protected activity may remain as part of the complaint.” City of Colton v. Singletary, 206 Cal.App.4th 751, 773, 142 Cal.Rptr.3d 74 (2012). Subsequent courts have disagreed with the Colton court, interpreting California Supreme Court precedent that did not involve mixed causes of action to conclude that if the plaintiff could show ‘a probability of prevailing on any part of [her] claim, the cause of action is not meritless and will not be stricken.” Burrill v. Nair, 217 Cal.App.4th 357, 382, 158 Cal.Rptr.3d 332 (2013), review denied (Oct. 2, 2013) (emphasis and alteration in original) (relying on Oasis W. Realty, LLC v. Goldman, 51 Cal.4th 811, 820, 124 Cal.Rptr.3d 256, 250 P.3d 1115 (2011)). The California Supreme Court’s analysis in Oasis did not directly address the issue here or in the cases above, but it nonetheless cited Mann with approval, stating ‘[i]f the plaintiff ‘can show a probability of prevailing on any part of its claim, the cause of action is not meritless’ and will not be stricken; ‘once a plaintiff shows a probability of prevailing on any part of its claim, the plaintiff has established that its cause of action has some merit and the entire cause of action stands.’” Oasis, 51 Cal.4th at 820, 124 Cal.Rptr.3d 256, 250 P.3d 1115 (emphasis in original) (quoting Mann, 120 Cal.App.4th at 106, 15 Cal.Rptr.3d 215).

One recent California Court of Appeal challenged the foregoing viewpoints, refusing to read the statement in Oasis ‘so broadly” and finding that ‘the better view.. .is that the trial court may strike the allegations in the cross-complaint attacking the protected activity while allowing the unprotected theories to remain.” Cho, 219 Cal.App.4th at 523, 527, 161 Cal.Rptr.3d 846. Thus, in the Cho court’s view, a plaintiff should not be required to make a showing of probability of prevailing on unprotected claims. Id. at 527, 161 Cal.Rptr.3d 846 n.2. In doing so, the Cho court suggested a court could extract the protected claims from the non-protected claims before analyzing whether a plaintiff had shown a probability of prevailing on those claims. Id. The court reiterated ‘the guiding principle in applying the anti-SLAPP statute to a mixed cause of action case,” which is that ‘a plaintiff cannot frustrate the purposes of the SLAPP statute through a pleading tactic of combining allegations of protected and nonprotected activity under the label of one ‘cause of action.’” Id. at 527, 161 Cal.Rptr.3d 846 (citing Fox Searchlight Pictures, 89 Cal.App.4th at 308, 106 Cal.Rptr.2d 906). But in the Cho court’s view, ‘[striking the claims that invoke protected activity but allowing those alleging nonprotected activity to remain” was consonant with that principle and the overall purposes of a motion to strike. Id.

Subsequent courts have disagreed with the approaches taken in both Colton and Cho. For instance, in Baral v. Schnitt, the Court of Appeal considered ‘whether section 425.16 (anti-SLAPP statute) authorizes excision of allegations subject to the anti-SLAPP statute (protected activity) in a cause of action that also contains meritorious allegations not within the purview of that statute (mixed cause of action).” 233 Cal.App.4th 1423, 1427, 183 Cal.Rptr.3d 615 (2015). This issue arose in the following context: after the trial court struck two defamation causes of action based solely on allegations regarding privileged communications made in a prelitigation fraud investigation, the plaintiff amended the complaint and included the same allegations in otherwise colorable causes of action for breach of fiduciary duty, constructive fraud, and declaratory relief. Id. at 1430, 183 Cal.Rptr.3d 615. The trial court held the anti-SLAPP statute could not be used to selectively strike the allegations of privileged activity, and the Court of Appeal affirmed. Id. at 1443, 183 Cal.Rptr.3d 615.

In doing so, the Baral court again relied on Mann and Oasis, siding against Colton and Cho and with Burrill and another California Court of Appeal case, Wallace v. McCubbin, 196 Cal.App.4th 1169, 128 Cal.Rptr.3d 205 (2011). Baral relied on Wallace for its finding that ‘Oasis clearly holds that, where a cause of action (count) is based on protected activity, the entire cause of action may proceed as long as the plaintiff shows a probability of prevailing on at least one of the asserted bases for liability.” Baral, 233 Cal.App.4th at 1439, 183 Cal.Rptr.3d 615 (quoting Wallace, 196 Cal.App.4th at 1211, 128 Cal.Rptr.3d 205 (‘Indeed, not only does Oasis permit the entirety of the cause of action to go forward, it precludes consideration of the merit of any other claims in the cause of action once a probability of prevailing is demonstrated as to one of them.”)). The Baral court further noted ‘the anti-SLAPP statute states that it applies to a ‘cause of action[,]’” and while the California Legislature amended the statute several times, it never saw fit to change this language to something that might permit the parsing allowed in Cho and Colton. Id. at 1442, 183 Cal.Rptr.3d 615. Consequently, ‘[i]f the better rule is to apply the statute to less than a cause of action, enacting that rule is a legislative function, not a judicial one.” Id. Given these findings, the Baral court ‘conclude[d] that the balance tips in favor of allowing mixed causes of action containing potentially meritorious claims to proceed unencumbered by the special procedures of the anti-SLAPP statute.” Id. at 1443, 183 Cal.Rptr.3d 615.

The California Supreme Court granted review of the Baral decision on May 13, 2015. Baral v. Schnitt, — Cal.4th -, 186 Cal.Rptr.3d 840, 347 P.3d 988 (2015). The Supreme Court will thus decide the following issue: ‘Does a special motion to strike under Code of Civil Procedure section 425.16 authorize a trial court to excise allegations of activity protected under the statute when the cause of action also includes meritorious allegations based on activity that is not protected under the statute?” Anti-SLAPP Litigation § 5:12, “Mixed’ cause of action?” (Updated July 2015). This leaves open considerable questions about how California’s highest court will viewed mixed causes of actions.

The Court has carefully considered whether it should wait to decide some of these claims until the California Supreme Court weighs in on Baral, but the Court ultimately decides to proceed with the analysis using the well-established formula for federal courts to determine matters of state law. Where the state high court has not decided the matter, the Court’s task is to ‘predict” how the state high court would rule. Hayes v. Cty. of San Diego, 658 F.3d 867, 871 (9th Cir.2011). ‘In other words, the federal court must determine issues of state law as it believes the highest court of the state would determine them, not necessarily (although usually this will be the case) as they have been decided by other state courts in the past.” 19 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 4705 (2d ed.). In performing this task, the Court should consider the available reliable evidence, which may include ‘intermediate appellate court decisions, decisions from other jurisdictions,- statutes, treatises, and restatements.” Vestar Dev. II, LLC v. Gen. Dynamics Corp., 249 F.3d 958, 960 (9th Cir.2001) (quotation omitted). ‘The Court’s task, in sum, is to make a conscientious prediction of what rule a state high court would adopt in the case before it, without regard to the Court’s own view of what the best rule may be.” In re Lithium Ion Batteries Antitrust Litig., 2014 WL 4955377, at *7-8 (N.D.Cal. Oct. 2, 2014).

Having conducted a careful survey of California law and related treatises, the Court agrees with the thorough analysis of the Baral court. California’s legislature has maintained specific language in the anti-SLAPP statute, despite multiple amendments, such that the statute applies to a ‘cause of action” as a whole. See Cal. Civ. Proc. Code § 425.16(b)(1). Numerous courts have relied on this as well as the California Supreme Court’s citation of Mann in Oasis to hold that where a cause of action is based on protected activity, the entire cause of action may proceed as long as the plaintiff shows a probability of prevailing on at least one of the asserted bases for liability. If the legislature or California Supreme Court believed a different result was proper, the Court believes those bodies would have said as much. As such, the Court agrees with Baral and concludes that Real Action’s mixed causes of action containing potentially meritorious claims may proceed unencumbered by the special procedures of the anti-SLAPP statute. See also Kenne v. Stennis, 230 Cal.App.4th 953, 967-68, 179 Cal.Rptr.3d 198 (2014) (‘Under established authority, when a cause of action is based on both protected and unprotected activity, it is subject to the anti-SLAPP statute, unless the protected activity is merely incidental to the unprotected conduct.” (citation omitted)).

DISCUSSION — INDIVIDUAL COUNTERCLAIMS

Counter-Defendants have challenged each of Real Action’s counterclaims under Rule 12(b)(6), California’s anti-SLAPP law, or both. This Order thus addresses each of Real Action’s counterclaims and each of Counter-Defendants’ related arguments below.

A. Wrongful Injunction and Seizure Claims

Real Action brings two Wrongful Injunction claims: (1) a claim based on federal law of the Seventh Circuit (Counterclaim 1) and (2) a claim based on Indiana law (Counterclaim 2). Counter-Defendants’ Motion to Dismiss only challenges the Federal Wrongful Injunction claim, while they challenge both Wrongful Injunction claims under California’s anti-SLAPP law. Real Action’s third claim is for Wrongful Seizure pursuant to 15 U.S.C. § 1116(d)(ll). Counter-Defendants challenge the Wrongful Seizure claim in their Motion to Dismiss as well as their Motion to Strike. The Court considers these claims together as they address issues related to actions the Indiana Court took in the Indiana Action.

1. Federal Wrongful Injunction Claim

As an initial matter, Counter-Defendants assert there is no federally recognized claim for Wrongful Injunction, and even if there were, only the court issuing the injunction should be permitted to hear it. MTD Br. at 5. Real Action disagrees, noting that Counter-Defendants have cited no case law in support of their arguments. MTS Opp’n at 3.

28 U.S.C. § 1352 ‘grants jurisdiction to hear an ‘action on a bond’ executed pursuant to Rule 65(c), Fed. R. Civ. P. (security required for issuance of preliminary injunction).” Buddy Sys., Inc. v. Exer-Genie, Inc., 545 F.2d 1164, 1166 (9th Cir.1976), cert. denied, 431 U.S. 903, 97 S.Ct. 1694, 52 L.Ed.2d 387 (1977); 28 U.S.C. § 1352 (‘The district courts shall have original jurisdiction, concurrent with State courts, of any action on a bond executed under any law of the United States,.... ”). Section 1352 thus provides district courts with jurisdiction to hear federal wrongful injunction claims, as such an injunction requires the posting of a bond. See Fed. R. Civ. P. 65(c). A court may thus determine whether an injunction or seizure was lawful by the terms of the bond and the related orders of the issuing court. Buddy Sys., 545 F.2d at 1168 (Tf a bond is posted, liability is limited by the terms of the bond or the order of the court that required the posting.”); see also Laux v. Chopin Land Assocs., Inc., 615 N.E.2d 902, 907 (Ind.App.1993) (where claim of wrongful injunction was not raised before the court that issued the injunction, ‘liability on the bond [for wrongful injunction] is properly the subject of a separate action”).

But a court’s ability to exercise jurisdiction over a wrongful injunction claim comes with one critical limitation: ‘there is no jurisdiction under section 1352 over a suit.. .independent of the security instrument.” Buddy Sys., 545 F.2d at 1167 (emphasis added). Accordingly, ‘[a] party injured by the issuance of an injunction later determined to be erroneous has no action for damages in the absence of a bond.” W.R. Grace & Co. v. Local Union 759, Int’l Union of United Rubber, Cork, Linoleum & Plastic Workers of Am., 461 U.S. 757, 770 n. 14, 103 S.Ct. 2177, 76 L.Ed.2d 298 (1983) (citations omitted); see also Language Line Servs., Inc. v. Language Servs. Assocs., LLC, 2011 WL 5024281, at *9 (N.D.Cal. Oct. 13, 2011) (‘no cause of action exists for Wrongful Injunction in the absence of a bond or a court-ordered payment between the parties” (citation omitted)).

Real Action filed a Motion requesting that this Court ‘authorize” the Clerk of Court to accept transfer of. the security deposit, i.e., the bond issued by the Indiana Court in the Indiana Action, although as it tacitly acknowledged, this Court has no power to order the Indiana Court to transfer the bond as Real Action requested. Dkt. No. 158. There is no indication the Indiana Court attempted to transfer the bond on its own. Meanwhile, this Court earlier denied without prejudice Real Action’s Motion to Accept the Security, finding it premature. Dkt. No. 148. In briefing that matter, none of the parties cited any case - law wherein one district court sat in judgment over another district court’s issuance of a TRO or preliminary injunction, and given the highly unusual circumstances present in this case, the Court deemed it prudent to await further briefing on the matter and the substantive issues raised in this case. Recently, however, the Indiana Court released the bond, presumably back to ATO. See Dkt. No. 184. Faced with these circumstances — and regardless of what this Court or the Indiana Court could have done differently — at this point, this Court does not have jurisdiction over Real Action’s Wrongful Injunction claims absent the bond. See Buddy Sys., 545 F.2d at 1168-69 (‘Once the security is returned to the plaintiff there can no longer a section 1352 action ‘on a bond.’”); Language Line Servs., 2011 WL 5024281, at *9 (no wrongful injunction claim without a bond).

Real Action is not without a remedy, however. It has presented a number of other theories for relief, including causes of action for abuse of process and related claims, under which it may recover its damages, if so warranted, regardless of the bond. See Buddy Sys., 545 F.2d at 1168; Gametech Int’l, Inc. v. Trend Gaming Sys., LLC, 2005 WL 1473982, at *2 (D.Ariz. June 21, 2005) (‘absent a different legal theory like malicious prosecution or unjust enrichment, a wrongfully enjoined party has no recourse for damages in the absence of a bond.” (emphasis added)). Accordingly, the Court DISMISSES WITH PREJUDICE Real Action’s First and Second Counterclaims for Wrongful Injunction.

2. Wrongful Seizure Claim

Counter-Defendants also move to dismiss Real Action’s Wrongful Seizure claim, first arguing only the Indiana Court may assess whether the seizure was wrongful as it was the court that permitted the seizure. Real Action brings its Wrongful Seizure claims under 15 U.S.C. § 1116(d)(11), which provides: ‘A person who suffers damage by reason of a wrongful seizure.. .has a cause of action against the applicant.. .to recover such relief as may be appropriate, including damages for lost profits, cost of materials, loss of good will and punitive damages in instances where the seizure was sought in bad faith, and, unless the court finds extenuating circumstances, to recover a reasonable attorney’s fee.” There is nothing in this statute suggesting that only the court which issued the seizure order may review its effects. Instead, the statute identifies that the injured party has an independent ‘cause of action” to recover its damages. Accordingly, the Court may hear such a claim.

Counter-Defendants additionally challenge Real Action’s seizure claim on other grounds, none of which convince the Court that this claim should be dismissed. First, they assert Real Action ‘fails to sufficiently state that its products were not counterfeit.” MTD Br. at 7. But as Real Action points out, it does in fact allege ‘the matter seized was not counterfeit[,]” MTD Opp’n at 5, Dkt. No. 169 (citing FACC ¶ 68), and supports this with the allegation that, in the Indiana Action, none of ATO’s witnesses were able to identify a single instance where Real Action had sold a projectile bearing the PepperBall mark. FACC ¶ 33. Second, while Counter-Defendants insist 15 U.S.C. § 1116(d)(11) requires bad faith as an element, the plain language of the statute indicates bad faith is merely a requirement for punitive damages to be recovered. See 15 U.S.C. § 1116(d)(11) (‘A person who suffers damage by reason of a wrongful seizure under this subsection has a cause of action against the applicant for the order under which such seizure was made, and shall be entitled to recover such relief as may be appropriate, including damages for lost profits, cost of materials, loss of good will, and punitive damages in instances where the seizure was sought in had faith, and, unless the court finds extenuating circumstances, to recover a reasonable attorney’s fee.” (emphasis added)). None of these arguments demonstrate Real Action’s Wrongful Seizure claim should be dismissed. Accordingly, the Court DENIES Counter-Defendants’ Motion to Dismiss Real Action’s Wrongful Seizure claim at this time.

B. Malicious Prosecution and Abuse of Process

Real Action brings Abuse of Process and Malicious Prosecution counterclaims pursuant to Indiana law. FACC ¶¶ 72-82. Counter-Defendants contend the Court should strike these claims because they both challenge activity Counter-Defendants assert is protected — namely, their right to petition and seek relief in the Indiana Action. MTS Br. at 9. They urge the Court to find Real Action has not shown a probability of prevailing on these claims. Id. at 9,15-16.

1. Malicious Prosecution

First, Counter-Defendants have met their burden of showing Real Action’s malicious prosecution claim challenges protected activities. Soukup, 39 Cal.4th at 291, 46 Cal.Rptr.3d 638, 139 P.3d 30 (defendants fulfilled threshold requirement as ‘[b]y definition, a malicious prosecution suit alleges that the. defendant committed a tort by filing a lawsuit... .[and t]he filing of lawsuits is an aspect of the First Amendment right of petition.” (quotations omitted)).

Second is the issue of whether Real Action has shown a probability it will prevail on this claim. Under Indiana Law, to prevail on a malicious prosecution claim, the plaintiff must establish that ‘(1) the defendant.. .instituted or caused to be instituted an action against the plaintiff...; (2) the defendant acted with malice in doing so; (3) the defendant had no probable cause to institute the action; and (4) the original action was terminated in the plaintiffs favor.” Bah v. Mac’s Convenience Stores, LLC, 37 N.E.3d 539, 547 (Ind.App.2015) (quoting City of New Haven v. Reichhart, 748 N.E.2d 374, 378 (Ind.2001)); see also FACC ¶ 78 (citing City of New Haven, 748 N.E.2d at 378 for the proposition that ‘Under Indiana law, the elements of malicious prosecution are: acting with malice and without probable cause, instituted or caused to be instituted a prosecution that terminated in the plaintiffs favor.”).

The Court agrees with Counter-Defendants that Real Action has not shown a probability of prevailing on the merits for its Malicious Prosecution claims because it has not shown that Counter-Defendants did not have probable cause to file suit against it. Two courts now — including this one — found that Counter-Defendants were likely to succeed with claims against Real Action for its alleged misuse of the Pepperball name. See Dkt. No. 85 (Order re: Preliminary Injunction); Dkt. No. 164, Exs. C & F (TRO and Preliminary Injunction Order in the Indiana Action). Given these findings, the Court cannot find now that Real Action has a probability of prevailing in showing that Counter-Defendants did not have probable cause to initiate the Indiana Action. Even if Real Action is correct that some of the Counter-Defendants’ claims prove to be fruitless, the inquiry is whether Counter-Defendants had probable cause to initiate legal action against Real Action. See City of New Haven, 748 N.E.2d at 378. The Indiana Court’s grant of a TRO and preliminary injunction against Real Action— which were largely re-instated by this Court’s preliminary injunction — confirms the presence of probable cause to institute legal action. See Ace Bail Bonds v. Gov’t Payment Serv., Inc., 892 N.E.2d 702, 705 (Ind.App.2008) (‘The rule in Indiana is that a decision by a competent tribunal in favor of the person(s) who initiated the civil action complained of is conclusive evidence of probable cause, even though that decision was subsequently reversed on appeal.” (quoting Chapman v. Grimm & Grimm, P.C., 638 N.E.2d 462, 464 (Ind.App.1994)).

In sum, the Court GRANTS Counter-Defendant’s Motion to Strike Real Action’s Malicious Prosecution WITHOUT LEAVE TO AMEND.

2. Abuse of Process

As to the first prong of the anti-SLAPP requirements, the Court finds Real Action’s Abuse of Process Claim arises from protected activities. Raining Data Corp. v. Barrenechea, 175 Cal.App.4th 1363, 1368, 97 Cal.Rptr.3d 196 (2009) (an abuse of process claim ‘by definition arise[s] from the protected activity” of the filing of a complaint).

The Court thus turns to the second prong: whether Real Action has shown a probability of prevailing on this claim. The elements for an abuse of process claim under Indiana law are (1) an ulterior purpose or motive, and (2) a willful act in the use of process not proper in the regular conduct of a proceeding. Estate of Mayer v. Lax, Inc., 998 N.E.2d 238, 250 (Ind.App.2013). For an abuse of process claim, ‘[i]f a party’s ‘acts are procedurally and substantively proper under the circumstances’ then his intent is irrelevant.” Watson v. Auto Advisors, Inc., 822 N.E.2d 1017, 1029 (Ind.App.2005) (quotation omitted). ‘A party may not be held liable for abuse of process if the ‘legal process has been used to accomplish an outcome which the proqess was designed to accomplish.”’ Id. (quotation omitted). ‘Put another way, ‘there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion.’” Reichhart v. City of New Haven, 674 N.E.2d 27, 31 (Ind.App.1997) (quotation omitted).

‘Thus, the starting point of inquiry is not motive or intent, but whether the counter-defendant used an improper process to accomplish a goal other than that which the law was designed to accomplish.” Bell v. Taylor, 2014 WL 902573, at *2 (S.D.Ind. Mar. 7, 2014) (citations omitted; emphasis added). “Process’ means the procedures incident to litigation” — in other words, the ‘use of judicial machinery” by. which a litigant undertakes action in pursuing a legal claim. Brooks v. Harding, 2001 WL 548098, at *7 (S.D.Ind. March 30, 2001) (citing Reichhart, 674 N.E.2d at 31). ‘A party is not liable if the legal process has been used to accomplish an outcome that it was designed to accomplish.” Konecranes v. Davis, 2013 WL 5701046, at *5 (S.D.Ind. Oct. 18, 2013) (citations omitted).

The Court finds Real Action has established there is a probability it will prevail on the abuse of process claim. ‘A complaint that is filed for a purpose other than resolving a dispute or seeking damages. . .is substantively improper and may give rise to an abuse of process claim.” Estate of Mayer, 998 N.E.2d at 257 (‘There must be evidence that an attorney filed a claim for a purpose other than aiding his or her client in adjudicating his or her claim.”). Real Action alleges ‘ATO, Gibson, Tiberius, Blumenthal, and Piell had an ulterior motive for seeking to oppress Real Action’s freedom to operate in the marketplace[,]” namely, to ‘wrongfully perpetuat[e] their de facto monopoly position in the irritant projectile market.” FACC ¶¶ 74-75. Elsewhere, Real Action alleges ‘ATO, Gibson, Tiberius, Tiberius Arms, Blumenthal and Piell sought to maintain ATO’s unlawful monopoly on the irritant projectile market through improper means, to seek to drive a competitor out of business by abusing the legal process, and to negotiate leveraged settlements with Apon and Sun LLC that would improperly advantage ATO in the market— and attempt to negotiate a similar agreement with Real Action to the same ends.” Id. ¶¶ 95. Real Action contends ATO ‘bragged” about its monopoly in court filings and used it ‘as a justification to government agencies... as to why purchases of irritant projectiles had to be made exclusively from ATO and from no other supplier!.]” Id. ¶ 40 (citing ATO Case, Dkt. No. 1-6 (‘Limited Source Justification for Federal Supply Schedule”)); see also Dkt. No. 131-13 (Tr. of G. Gibson’s Test, on Sept. 20, 2012 at 157:15-17 (‘Q: So who is your biggest competitor for pepper-powder projectiles? A: At this point in time, I don’t think we have a competitor.”)).

Real Action has thus provided allegations that, if credited, establish at least minimal merit and a probability of prevailing on an abuse of process claim. See West v. West, 694 F.3d 904, 906 (7th Cir.2012) (‘A suit can be wrongful even if it is not groundless, if the aim is something other than a judgment, such as bankrupting the defendant or destroying his reputation or distracting him from his other pursuits or simply immiserating him. Such a suit is an abuse of process.” (citations omitted)). Accordingly, the Court DENIES Counter-Defendants’ Motion to Strike this claim.

C. Intentional and/or Negligent Inference Claims

Real Action asserts claims against several Counter-Defendants for (1) intentional inference with contractual relations under Indiana and California law (FACC ¶¶ 83-97); and (2) intentional or negligent interference with prospective economic advantage under Indiana and California law (id. ¶¶ 98-106). Counter-Defendants challenge these claims under California’s anti-SLAPP law, asserting they arise from protected activities. Specifically, they note Real Action alleges they committed wrongdoing by (a) ‘purposefully filling] the Indiana Action and motions for a TRO and preliminary injunction with the purpose of undermining and upsetting the agreement” between Real Action and Sun LLC; and (b) ‘purposefully filling] the Indiana Action and [seeking] unlawful injunctions with the Indiana federal court with the purpose of undermining and upsetting” Real Action’s ‘relationships with customers that purchased irritant projectiles and training rounds.” MTS Br. at 10 (citing FACC ¶¶ 86, 101). Given these allegations, the Court agrees Real Action’s interference claims arise out of protected activities.

The issue then is whether Real Action has established a probability of prevailing on its interference claims.

1. Interference with Contractual Relations

Under Indiana law, ‘proof of five elements is necessary to recover for tortious interference with a contract: (i) existence of a valid and enforceable contract; (ii) defendant’s knowledge of the existence of the contract; (iii) defendant’s intentional inducement of breach of the contract; (iv) the absence of justification; and (v) damages resulting from defendant’s wrongful inducement of the breach.” DIRECTV, Inc. v. Ferguson, 328 F.Supp.2d 904, 913-14 (N.D.Ind.2004) (citing Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1235 (Ind.1994)). Lack of justification is established ‘only if the interferer acted intentionally, without a legitimate business purpose, and the breach is malicious and exclusively directed to the injury and damage of another.” Bilimoria Computer Sys., LLC v. Am. Online, Inc., 829 N.E.2d 150, 156-57 (Ind.App.2005) (citations omitted). ‘The existence of a legitimate reason for the defendant’s actions provides the necessary justification to avoid liability.” Id. at 157 (citation omitted).

Under California law, ‘to state the cause of action for intentional interference with contractual relations” a plaintiff must plead ‘(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.” Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal.3d 1118, 1126, 270 Cal.Rptr. 1, 791 P.2d 587 (1990). ‘Because interference with an existing contract receives greater solicitude than does interference with prospective economic advantage,. . .it is not necessary that the de fendant’s conduct be wrongful apart from the interference with the contract itself[,]” nor ‘does [it] require that the actor’s primary purpose be disruption of the contract.” Quelimane Co. v. Stewart Title Guar. Co., 19 Cal.4th 26, 55-56, 77 Cal.Rptr.2d 709, 960 P.2d 513 (1998), as modi fied, (Sept. 23, 1998) (citations omitted). ‘[I]ntentionally interfering with an existing contract is ‘a wrong in and of itself[.]”’ Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134, 1158, 131 Cal.Rptr.2d 29, 63 P.3d 937 (2003) (quoting Quelimane, 19 Cal.4th at 56, 77 Cal.Rptr.2d 709, 960 P.2d 513). Thus, a plaintiff need only show ‘defendant’s knowledge that the interference was certain or substantially certain to occur as a result of his or her action.” Reeves v. Hanlon, 33 Cal.4th 1140, 1148, 17 Cal.Rptr.3d 289, 95 P.3d 513 (2004) (citing Quelimane, 19 Cal.4th at 56, 77 Cal.Rptr.2d 709, 960 P.2d 513).

The Court finds Real Action has shown a probability of prevailing on its interference with contractual relations claim. Specifically, Real Action alleges it had a contract with Sun LLC to procure projectiles from Apon and includes as attachments to the FACC numerous documents that purport to show the Counter-Defendants named in this claim knew about this contract and acted to facilitate a settlement agreement between ATO and Sun LLC that forbade Sun and Sun LLC from honoring its pre-existing agreement with Real Action. See FACC ¶¶ 85-87, 89-94; see also Compl. ¶ 16 (acknowledging ‘RAP4 and Tran accepted Sun’s proposal and entered into an agreement to buy projectiles sold by Sun from APON”). Real Action alleges Sun and Sun LLC did in fact settle in the Indiana Action, and provides evidence of that agreement, which caused Sun LLC to breach its agreement with Real Action and in turn ‘caused Real Action to lose significant profits from sales of irritant projectiles and related products, and has damaged Real Action’s good name and reputation in this business.” FACC ¶¶ 94-97. The FACC also alleges Counter-Defendants named in this claim interfered with Real Action’s contract with Sun LLC ‘to maintain ATO’s unlawful monopoly on the irritant projectile market through improper means, [and],. .to drive a competitor out of business.” Id. ¶ 95.

Counter-Defendants assert a number of unpersuasive arguments to undermine these allegations and the documents submitted, including that Real Action ‘cannot prove that ATO, Gibson, Tiberius, Piell, or Blumenthal acted intentionally to induce a breach or disruption of [it]s contractual relationships[,]” noting ATO was the only plaintiff in the Indiana Action. MTS Br. at 17. Regardless of who was the plaintiff in the Indiana Action, the issue is whether the named Counter-Defendants in this claim intentionally interfered with Real Action