Grouse River Outfitters Ltd v. NetSuite, Inc.

Filing 172

ORDER by Judge Laurel Beeler granting in part and denying in part 119 Motion for Partial Summary Judgment. For the reasons stated in on the record on November 1, 2018 and in the attached order, the court grants in part and denies in part the defendant's motion for summary judgment. (lblc3S, COURT STAFF) (Filed on 11/21/2018)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

NORTHERN DISTRICT OF CALIFORNIA

10

San Francisco Division

United States District Court
Northern District of California

11

GROUSE RIVER OUTFITTERS LTD,

12

Plaintiff,

13
14
15

v.
ORACLE CORPORATION,
Defendant.

Case No. 16-cv-02954-LB
ORDER GRANTING IN PART AND
DENYING DEFENDANT’S MOTION
FOR PARTIAL SUMMARY
JUDGMENT
Re: ECF No. 119

16
17
18
19
20
21

For the reasons stated on the record on November 1, 2018 and below, the court grants in part
and denies in part the defendant’s motion for summary judgment.
First, on the fraud claims, the disputes of fact (including justifiable reliance) preclude the
court’s summary judgment as a matter of law.
Second, the court grants the defendant’s motion for partial summary judgment on the non-

22

fraud claims based on the limitation of liability in the parties’ contract, the Subscription Service

23

Agreement (“SSA”). The following provisions exclude punitive damages and cap damages at the

24

price of one year of subscription fees:

25

10. Limitations of Liability.

26

10.1. Exclusion of Consequential Damages. In no event shall either party be
liable to anyone for lost profits or revenue, or for incidental, consequential,
punitive, cover, special, reliance or exemplary damages, or indirect damages of any
type of kind no matter how caused, whether from breach of warranty, breach or

27
28

ORDER – No. 16-cv-02954-LB

repudiation of contract, negligence, or any other legal cause of action from or in
connection with this agreement.

1
2

10.2. Limitations on Liability. [T]he maximum liability of either party to any
person, firm or corporation whatsoever arising out of or in connection with any
license, use or other employment of the Service, whether such liability arises from
any claim based on breach or repudiation of contract, breach of warranty,
negligence, tort, statutory duty, or otherwise shall in no case exceed the equivalent
of 12 months in subscription fees applicable at the time of the event[.]1

3
4
5
6

See Embotelladora Electroputa S.A. de C.V. v. Accutek Packaging Quip. Co., Inc., No. 3:16-cv-

7

00724-GPC-DHB, 2017 WL 3288492 at *3 (S.D. Cal. 2017) (granting summary judgment and

8

limiting liability based on the contract’s limitation of liability to the purchase price of the defective

9

water-bottling machine). In its decision enforcing the contract’s limitation-of-liability provision,
the Embotelladora court considered the plain meaning of the provision and applied Cal. Com.

11

United States District Court
Northern District of California

10

Code § 2719, which provides that “limitation of consequential damages where the loss is

12

commercial is valid unless it is proved that the limitation is unconscionable.” Id. (noting too that

13

the plaintiff did not respond to the defendant’s interpretation of the clause in its opposition). The

14

court follows that analysis as persuasive here. The contract provisions limit liability. See id. The

15

plaintiff does not argue unconscionability, which is its burden to establish. Id. at *4 (“The burden

16

of proving unconscionability under § 2719(1)(b)(3) lies with the plaintiff opposing a defendant’s

17

summary adjudication motion.”) (citing Westyle v. Look Sports, Inc., 17 Cal. App. 4th 1715, 1739

18

(1993)).

19

Instead, the plaintiff characterizes the provision as a liquidated-damages provision.2 It is not.

20

The weight of authority establishes that a provision like this one is a limitation on liability, not a

21

liquidated-damages provision. See, e.g., Digital Envoy, Inc. v. Google, Inc., No. 5:04-CV-1497

22

RS, 2005 WL 2999364 at *2 (N.D. Cal. Nov. 8, 2005) (“in no event shall either party’s damages

23

in any lawsuit or other action brought under this agreement exceed the amounts paid by licensee

24

hereunder” was a limitation on liability); Travelers Indem. Co. v. Vessel Sam Houston, 26 F.3d

25
26
27
28

SSA, Ex. B to Gattey Decl. – ECF No. 119-1 at 54 (¶¶ 10.1–10.2). The defendant points out that the
Professional Services Addendum to the SSA has a similar exclusion for services provided by NetSuite
to Grouse River under the Scope of Work. Mot. – ECF No. 8 at 20 (citing SSA, Ex. B to Gattey Decl.
– ECF No. 119-1 at 60 (¶ 5).
1

2

Opp. – ECF No. 137 at 9–10.

ORDER – No. 16-cv-02954-LB

2

1

895, 899 (9th Cir. 1994) (“[i]n case of any loss or damage to or in connection with goods

2

exceeding in actual value $500 the value of the goods shall be deemed to be $500 per package”

3

was a limitation on liability); WeBoost Media S.R.L. v. LookSmart Ltd., No. C 13–5304 SC, 2014

4

WL 824297 at *3 (N.D. Cal. Feb. 28, 2014) (“[n]either party will be liable to the other party for

5

more than the total amount paid or payable (plus applicable fees and costs) to [Defendant] under

6

this Agreement” was a limitation of liability).
To support its argument, Grouse River cites Bayol v. Zipcar, 78 F.Supp.3d 1252, 1256 (N.D.

7
8

Cal. 2015). 3 Bayol does not change the outcome here. Bayol was a putative class action

9

challenging Zipcar’s late fees under various California consumer-protection statutes. Bayol, 78 F.
Supp. 3d at 1254. Zipcar moved to dismiss in part on the ground that the late fees were not

11

United States District Court
Northern District of California

10

liquidated damages because the amount varied depending on how late the car was returned. Id. at

12

1255–56. The district court denied the motion, holding that the fees were liquidated damages

13

because they were fixed and certain. Id. at 1256. That decision — addressing whether a damages

14

provision based on a formula fell within the liquidated-damages statute — is not relevant to the

15

analysis of the contract provisions here, which plainly limit liability and do not provide for

16

liquidated damages.
In sum, the court grants in part and denies in part the defendant’s motion for summary

17
18

judgment.

19

This disposes of ECF No. 119.

20

IT IS SO ORDERED.

21

Dated: November 21, 2018
______________________________________
LAUREL BEELER
United States Magistrate Judge

22
23
24
25
26
27
28

3

Id. at 9–10 (citing Bayol v. Zipcar, 78 F.Supp.3d 1252, 1256 (N.D. Cal. 2015)).

ORDER – No. 16-cv-02954-LB

3