UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT HONEY BUM, LLC, a California No. 22-55150 limited liability company, Plaintiff-Appellant, D.C. No. 2:20-cv-11233- v. RGK-AS FASHION NOVA, INC., a California corporation; RICHARD D. OPINION SAGHIAN, Defendants-Appellees.

Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding

Argued and Submitted December 6, 2022 Pasadena, California

Filed March 22, 2023

Before: PAUL J. KELLY, JR., * MILAN D. SMITH, JR., and DANIEL P. COLLINS, Circuit Judges.

Opinion by Judge Milan D. Smith, Jr. * The Honorable Paul J. Kelly, Jr., United States Circuit Judge for the U.S. Court of Appeals for the Tenth Circuit, sitting by designation. 2 HONEY BUM, LLC V. FASHION NOVA, INC.

SUMMARY **

Antitrust

The panel affirmed the district court’s summary judgment in favor of Fashion Nova, Inc., et al. in an antitrust action brought by Honey Bum, LLC. Honey Bum, a rival fast-fashion retailer, alleged that Fashion Nova organized a per se unlawful group boycott by threatening to stop purchasing from certain clothing vendors unless they, in turn, stopped selling to Honey Bum. The district court granted summary judgment on Honey Bum’s Sherman Act § 1 group boycott claim, concluding that Honey Bum failed to create a material dispute as to the existence of a horizontal agreement, between the vendors themselves, to boycott Honey Bum. The district court also granted summary judgment on Honey Bum’s California business tort claims. The panel held that Sherman Act § 1 prohibits contracts, combinations, and conspiracies that unreasonably restrain trade. In determining the reasonableness of a restraint, two different kinds of liability standards are considered. Some restraints are unreasonable per se because they always or almost always tend to restrict competition and decrease output. Most restraints, however, are subject to the so-called Rule of Reason, a multi-step, burden-shifting framework. The panel held that a group boycott is an agreement among multiple firms not to deal with another

** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. HONEY BUM, LLC V. FASHION NOVA, INC. 3

firm (the target). Some group boycotts are per se unlawful, while others are not. Honey Bum asserted a Klor’s-style per se group boycott, or “naked” group boycott, under which competitors enter into a horizontal agreement to boycott a firm and the boycott’s initiator had no purpose other than disadvantaging the target. Honey Bum alleged that Fashion Nova (the hub) pressured clothing vendors (the spokes) to boycott Honey Bum and then those vendors agreed among themselves to do so. The panel held that a horizontal agreement among the spokes was required to prevail, and the district court correctly concluded that Honey Bum failed to establish a material dispute as to whether the clothing vendors agreed among themselves to boycott Honey Bum. The panel affirmed the district court’s grant of summary judgment on Honey Bum’s claim for tortious interference with prospective economic relations because that claim required a showing of independent unlawfulness. Accordingly, summary judgment on the Sherman Act claim necessarily required summary judgment on that claim as well. The panel rejected the theory that California Bus. & Prof. Code § 16600 provided a source of independent unlawfulness. The panel affirmed the district court’s grant of summary judgment on Honey Bum’s claim for tort