North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

Tentative Ruling

Defendants Odin Real Estate group LLC and Odin Construction Solution, Inc.’s (collectively, “Odin”) demurrer to plaintiff North Bay Steel Mill Supply & Recycling, Inc.’s (“Plaintiff”) Fifth Amended Complaint (“5AC”) is ruled upon as follows.

Requests for Judicial Notice

Odin’s request for judicial notice of the judgment dismissing the California Department of Resources Recycling and Recovery and California Office of Emergency Services (the “State”) dated February 22, 2023, is GRANTED.

Odin’s request for judicial notice of the Amended Order dated November 9, 2023, granting Odin’s motion for judgment on the pleadings with leave to amend is GRANTED.

Odin’s request for judicial notice of the Department of Resources Recycling and Recovery’s Revised Invitation for Bid (“IFB”) is GRANTED. (Evid. Code, § 452(c); see Requa v. Regents of University of California (2012) 213 Cal.App.4th 213, 223, fn. 7.) The Court's notice is limited to the existence of the documents, not the truth of the matters stated therein or that might be deduced therefrom.

Factual and Procedural Background

This action arises from the State of California’s fire cleanup activities following the 2018 Camp Fire, including contracts entered into with private companies to assist with the cleanup. The 5AC alleges the State awarded fire clean-up contracts to three prime contractors. One of the three primes, ECC Contractors LLC (“ECC”), allegedly entered into a subcontract with Plaintiff to handle disposal and recycling of Camp Fire metal debris, but the State and Odin allegedly interfered with this subcontract by selecting Odin to process the debris.

Plaintiff alleges the State circulated an IFB on December 19, 2018. (5AC ¶¶ 24-25.) On January 16, 2019, in IFB Addendum 4, the State announced it would select the debris receiving facilities and would direct prime contractors to use them. (5AC ¶ 36; (“Question 84: a potential bidder asked whether CalRecycle would direct each of the three primes to their own separate facility to disperse the trucks between all available disposal sites. CalRecycle said: “This is yet to be determined. CalRecycle will direct Contractors to use facilities based on overall Project operation efficiency and costs and will work with the Contractors in making those determinations.’” (emphasis original).)

Plaintiff alleges it furnished debris/recycling work for ECC on past projects (including the earlier

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

Carr Fire) and that ECC “assured [it] that [it] would be its exclusive metal debris recycling subcontractor if ECC won the work.” (5AC ¶¶ 27, 28, 41.) Plaintiff alleges ECC timely submitted its bid to the State as a prime contractor on January 22, 2019, and that Odin untimely submitted its bid to be the debris processing facility on January 31, 2019. (5AC ¶¶ 41, 51, 56.)

On January 28, 2019, the State issued a Notice to Proceed to ECC. (5AC ¶ 44.) The next day, on January 29, 2019, the State issued a press release announcing that the “Odin Metal Processing Facility in Oroville” was “tapped to handle Camp Fire metal debris.” (5AC ¶ 47.) The State “instructed ECC and the other two primes to deliver all metal to Odin’s processing site in Oroville.” (5AC ¶ 78.) On January 31, 2019, ECC allegedly entered into a contract with Odin for debris disposal/recycling work. (5AC ¶¶ 58-59.)

Plaintiff alleges it should have been selected to process the debris instead of Odin because Plaintiff’s work location in Paradise was closer to the fire epicenter and it was more qualified and efficient. (5AC ¶¶ 51-54, 82.) Plaintiff also alleges Odin lacked required business licenses and/or permits and did not comply with various California requirements (5AC ¶¶ 66-68), that Odin conspired and colluded with the State to violate competitive bidding requirements (5AC ¶¶ 15, 82, 84, 89, 215), and Odin received unjustified favorable treatment. (5AC ¶¶ 89, 114, 128)

The following is a brief timeline of alleged and relevant events surrounding Plaintiff’s claim:

(1) January 16, 2019 – the State announced it would select the debris receiving facilities and would direct prime contractors to use them. (5AC ¶ 36.)

(2) January 22, 2019 – ECC submitted its bid to the State. (5AC ¶ 41.)

(3) January 28, 2019 – ECC received notice to proceed from the State. (5AC ¶ 44.)

(4) January 29, 2019 – The State selected Odin’s debris processing facility. (5AC ¶ 47.)

(5) January 30, 2019 – ECC sent Plaintiff a purchase order for metal recycling. (5AC ¶ 48.)

(6) January 31, 2019 – ECC and Plaintiff exchanged the final purchase order with clarified terms. (5AC ¶ 49.)

(7) January 31, 2019 – Prime contractors and Odin entered into a subcontract. (5AC ¶ 58- 59.)

(8) January 31, 2019 – Odin submitted a bid to the State. (5AC ¶ 55.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

(9) February 1, 2019 – The State approved Odin’s proposal. (5AC ¶ 63.)

(10) February 8, 2019 – ECC signed a contract with the State. (5AC ¶ 73.)

Odin demurs to the fifth cause of action for tortious interference with contractual relations, sixth cause of action for tortious interference with prospective economic relations, and seventh cause of action of negligent tortious interference with prospective economic relations. Odin demurs on the ground that each fails to state facts sufficient to constitute a cause of action.

Legal Standard

The function of a demurrer is to test the sufficiency of the pleading it challenges by raising questions of law. (Salimi v. State Comp. Ins. Fund (1997) 54 Cal.App.4th 216, 219; Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 1271.) A demurrer “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Extrinsic evidence may not properly be considered on demurrer or on a motion to strike. (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881; Hibernia Savings & Loan Soc. v. Thornton (1897) 117 Cal. 481, 482.)

For the purpose of determining the effect of a complaint, its allegations are liberally construed, with a view toward substantial justice. (Code Civ. Proc. § 452; Amarel v. Connell (1988) 202 Cal.App.3d 137, 140-141; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 43, fn. 7.) In this respect, the Court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and considers matters which may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-1112.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . ., we are not concerned with plaintiff's possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 696-697.) The sole issue raised by a general demurrer is whether the facts pled state a valid cause of action, not whether they are true. (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

Discussion

Standing

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

Odin first demurs to all three of the causes of action on the ground that Plaintiff lacks standing. To that end, Odin contends the allegations “make it clear that Odin’s alleged interference was with the selection of the debris recycling facility[,]” but Plaintiff was not competing to provide the debris recycling facility. (Demurrer at 11:4-5.) Rather, ECC was allegedly going to be allowed to use its debris recycling facility in Paradise and would thereafter subcontract with Plaintiff to perform the labor and other services involved in recycling the debris. (5AC ¶¶ 27-28, 32-41.)

The State, however, selected Odin rather than ECC as the debris recycling facility. (5AC ¶ 47.) In turn, this meant ECC could not use Plaintiff to provide the related labor. Based thereon, Odin concludes that if any claim exists related to the State’s selection of Odin as the debris recycling facility rather than ECC’s facility that claim belongs to ECC, not Plaintiff. Odin further elaborates that Plaintiff lacks standing because, at most, Plaintiff is an incidental beneficiary of a contingent expectancy and there are no allegations that Plaintiff was an intended third party beneficiary of the contract between ECC and the State. (Thayer v.

Katbateck Brown Kellner, LLP (2012) 207 Cal.App.4th 141, 160 (“The rule is that for one to succeed as a third party beneficiary, the contract must be ‘expressly for the benefit of a third party. Hence, a person only remotely benefited, or a mere incidental beneficiary, cannot enforce it.’”)

Plaintiff opposes on the ground that its claims do not allege interference with the State’s selection of a debris processing facility. The alleged interference was with Plaintiff’s contract with ECC to provide the labor and services related to the metal debris recovery work, which Plaintiff contends could have been performed at Odin’s facility. Plaintiff also argues it was a direct, rather than an incidental, beneficiary of its contract with ECC.

“[E]very action must be prosecuted in the name of the real party in interest.” (Code Civ. Proc. § 367; see Dino v. Pelayo (2006) 145 Cal.App.4th 347, 353 n.2.) The real party in interest is the person who has the right to sue under the substantive law. It is the person who owns or holds title to the claim as opposed to others who may be interested or benefitted by the litigation. (See Jasmine Networks, Inc. v. Superior Court (Marvel Semiconductor, Inc.) (2009) 180 Cal.App.4th 980, 991.)

The Court is not persuaded that the allegations clearly demonstrate Plaintiff lacks standing. Even assuming the alleged interference was only with the selection of the recycling facility, Plaintiff has alleged such interference caused it harm. Plaintiff alleges Odin interfered by colluding with the State for the State to select Odin’s facility, such that Plaintiff’s subcontract with ECC could not be performed and which caused harm to Plaintiff. Although the 5AC makes clear that Plaintiff does not have a recycling facility and that it was contemplating utilizing ECC’s facility to provide the services Plaintiff offers, this does not mean that Plaintiff lacks standing. Ultimately, Odin’s facility was selected to receive and process the metal rather than ECC and Plaintiff. Accordingly, Odin’s argument that Plaintiff lacks standing is rejected and the demurrer

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

on this ground is OVERRULED.

Plaintiff’s Claims Predicated on the State Having a Duty to Select ECC’s Recycling Facility

Next, Odin argues Plaintiff’s interference claims fail because they are predicated on the State having a mandatory duty to select ECC’s debris recycling facility, and this Court has already ruled that the State had no such duty. Odin claims that on February 2, 2023, this Court sustained the State’s demurrer to Plaintiff's Fourth Amended Complaint without leave to amend, holding that the State had no mandatory duty to select ECC’s debris recycling facility, and went on to dismiss Plaintiff's interference claims against the State “since no cause of action is stated for mandatory breach of duty.” (RJN, Ex. 1, Order on State’s Demurrer, p. 5.) Odin, therefore, concludes that it cannot be liable for tortuously inducing the State to breach a non-existent duty.

Odin’s argument is not persuasive for a number of reasons. First, Odin misstates the Court’s ruling. Nowhere in the ruling did the Court expressly find the State had no mandatory duty to select ECC’s debris recycling facility. On the State’s demurrer the Court was evaluating Plaintiff’s claim for breach of mandatory duty under the specific requirements set forth in Government Code section 815.6. The Court sustained the demurrer to Plaintiff’s claim for breach of mandatory duty on the basis that, “Plaintiff has not alleged standing as a frustrated bidder nor has it satisfied the requirement that the damages incurred in preparing to perform the subcontract with ECC is ‘one of the consequences which the [enacting body] sought to prevent through imposing the alleged mandatory duty.’” (February 2, 2023, Minute Order.)

Second, and perhaps more significantly, Plaintiff’s claims against Odin are independent of Plaintiff’s claim for breach of mandatory duty against the State. Plaintiff’s claims against Odin allege interference with Plaintiff’s subcontract with ECC to perform debris processing services and ECC’s alleged allowance to select its own metal subcontractor. Accordingly, the demurrer on this ground is OVERRULED.

Plaintiff’s Claims are Contingent on a Condition Precedent that Did not Occur

Odin also argues the State’s selection of ECC’s debris recycling facility is a condition precedent to Plaintiff’s claims, which did not occur because the State selected Odin’s facility. Odin contends Plaintiff’s claims are based on Odin’s alleged interference with Plaintiff’s contract, or prospective contract, with ECC and the other two primes. Yet, those contracts cannot form the basis for Plaintiff’s interference claims because the State expressly stated it would select the debris recycling facility (5AC ¶ 36) and, unless the State selected ECC’s facility, ECC could not enter into a subcontract with Plaintiff to recycle the debris.

Further, Odin contends Plaintiff does not allege that the State would have selected ECC’s debris recycling facility but for Odin’s alleged tortious activity. Instead, Plaintiff alleges the primes were generally permitted to select the subcontractors to recycle debris from fires and that it had received assurances from ECC that

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

it would be selected to provide labor and serves at ECC’s debris recycling facility. (5AC ¶¶ 31- 41, 56, 62.) Odin concludes that whether ECC wanted Plaintiff to recycle the metal waste and/or whether Plaintiff and ECC had a pre-existing relationship has no relevance because any contract with ECC could not be performed.

Plaintiff opposes on the ground that the only “condition” relevant to its subcontract with ECC was that the State choose ECC as a prime, which occurred.

Even assuming the State’s selection of ECC’s facility was a condition precedent to Plaintiff’s subcontract with ECC, the Court is not persuaded that precludes Plaintiff from stating claims for interference with contractual relations or intentional or negligent interference with prospective economic relations. “It is well-established that contracts subject to conditions precedent can be the basis for tortious interference claims.” (SCEcorp v. Superior Court (1992) 3 Cal.App.4th 673, 681.) Further, Odin’s argument also concerns whether or not Plaintiff has sufficiently alleged the existence of a valid or contract. In reviewing the allegations, the Court is not persuaded that the 5AC fails to alleges the existence of a valid contract, which is further discussed below regarding the fifth cause of action.

Plaintiff alleges its contract with ECC was to provide metal recycling services, not a facility, and this contract was interfered with by Odin and the State when they diverted that work to Odin rather than permitting ECC the customary allowance to choose its subcontractors. The demurrer on this ground is OVERRULED.

Fifth Cause of Action for Interference with Contractual Relations

The elements of a cause of action for intentional interference with contractual relations are “(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. (1990) 50 Cal.3d 1118, 1126.) “[W]hile the tort of inducing breach of contract requires proof of a breach, the cause of action for interference with contractual relations is distinct and requires only proof of interference.” (Pacific Gas & Electric Co., supra, 50 Cal.3d at1129.)

Odin demurs to this cause of action on the basis that no contract existed between Plaintiff and ECC when Odin was selected, ECC ignored Odin’s alleged interference, Odin lacked knowledge of the contract, and Odin did not disrupt the relationship.

As to the first point, Odin raises the same argument it raised in its prior motion for judgment on the pleadings – that Odin’s facility was selected by the State on January 29, 2019, two days

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

before Plaintiff entered into its purported subcontract with ECC on January 31, 2019. In opposition, Plaintiff argues it has sufficiently alleged its subcontract existed prior to Odin’s selection based on the following allegations. Prior to ECC submitting its bid on January 22, 2019, ECC assured Plaintiff it would get the metal work if ECC won the bid, which “made good sense” because “ECC successfully subcontracted with North Bay earlier in 2018 as its metal processor on the Carr Fire.” (5AC ¶ 41.)

After ECC received notice to proceed from the State, ECC asked Plaintiff’s managers to meet with ECC at ECC’s facility in Paradise. (5AC ¶ 44.) On January 30, 2019, “as the culmination of its teaming work with North Bay over the prior two months, ECC sent its purchase order to [Plaintiff,]” and a “final revised purchase order the next day, January 31, 2019.” (5AC ¶¶ 48-49.) Plaintiff alleges the subcontract “went into effect January 28, 2019 (the same day ECC received CalRecycle’s Notice to Proceed) for a one-year term.” (5AC ¶ 49.)

Further, the State did not formally approve Odin’s proposal until February 1, 2019. (5AC ¶63.) The Court finds the foregoing allegations are sufficient to allege the existence of a contract.

On Odin’s prior motion for judgment on the pleadings, the Court granted the motion with leave to amend finding that Plaintiff had not sufficiently alleged Odin had knowledge of the contract. Odin maintains while “Plaintiff has added a lot of words to the Complaint, Plaintiff has still failed to allege facts indicating that ODIN knew about Plaintiff’s subcontract with ECC.” (Demurrer at 16:20-22.) Odin contends Plaintiff’s allegations regarding knowledge are conclusory and speculative.

Plaintiff opposes and argues it has sufficiently alleged knowledge based upon the following allegations. Odin aggressively pursued a relationship with ECC knowing the State always allowed primes to select their own metal recycling subcontractor and Odin either knew or learned of ECC’s past teaming with Plaintiff, thereafter considering Plaintiff a competitor. (5AC ¶ 32.) As early as December 2018, Odin learned that ECC had a Camp Fire cleanup facility planned in Paradise, California, and learned or concluded that ECC intended to use as its metal subcontractor, the same one it successfully used just weeks before in completing the Carr Fire work for the State, i.e., Plaintiff and not Odin. (5AC ¶ 38.) “Having been spurned by ECC through silence or inaction, and considering North Bay as its competitor ” Odin then used its contacts with the State to bypass the primes and capture all of the metal work for itself. (5AC ¶ 39.)

Odin sent a revised proposal to the State on January 15, 2019, knowing: (a) the customary and historical practice was for the primes to select their own metal recycler, (b) ECC’s bid was coming and ECC would use North Bay for the metal work as it had in the Carr Fire, and (c) that ECC and North Bay had a deal to work together on the Camp Fire cleanup. (5AC ¶ 40.) Odin submitted its proposal late and knew ECC and North Bay “had a deal to handle the metal work.” (5AC ¶ 56.) Plaintiff alleges the events that took place at the end of January of 2019 “happened at a time when the State and ODIN knew that ECC had chosen North Bay as its Camp Fire metal processor and had a contract with North Bay to perform such work.” (5AC ¶ 60.) “At the time

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

the State and ODIN pursued ECC to sign a contract with ODIN effective January 31, 2019 to process Camp Fire metal, the State and ODIN knew the ECC metal was already contractually committed to North Bay.” (5AC ¶ 61.) Plaintiff argues the foregoing allegations are not contentions or deductions, but factual averments that must be accepted as true on demurrer. Plaintiff also contends it has set forth sufficient essential facts to acquaint Odin with the nature and extent of the cause of action and that the specific circumstances surrounding Odin’s knowledge of the contract lie more within Odin’s knowledge and can be flushed out during discovery.

California law does not require a pleading to set forth all details or evidentiary facts. Under applicable California law, a plaintiff need only allege “a statement of the facts constituting the cause[s] of action, in ordinary and concise language.” (Code Civ. Proc. § 425.10.) The complaint need only allege ultimate facts, and “each evidentiary fact that might eventually form part of plaintiff s proof need not be alleged.” (CA. v. William S. Hart Union High School District (2012) 53 Cal.4th 861, 872.)

Further, “[e]ven under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party.” (Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199 (internal citations omitted.) While the Complaint could have included more details regarding Odin’s alleged discovery of the contract, the Court finds the Complaint is sufficiently pleaded to withstand the present demurrer.

Odin then contends the 5AC fails to allege contractual disruption because “Plaintiff could not perform the debris recycling work unless the State first selected ECC’s facility” and “the State reserved the exclusive right to select the debris recycling facility.” (Demurrer at 18:1-24.) This argument has already been rejected for the reasons discussed above. Plaintiff also alleges Odin and the State interfered with its contract by engaging in a “covert, secret plan born of illegal favoritism and corruption” (5AC ¶ 10) to “divert work rightfully and knowingly belonging to [Plaintiff] and give it to ODIN, despite the fact that ODIN had never done such work for the State, was charging roughly 16 times what [Plaintiff] was, and ODIN’s location resulted in wasteful transportation cost and completely unnecessary environmental and infrastructure damage.” (5AC ¶ 84.)

The Court finds the foregoing allegations are sufficient.

Odin’s additional argument that the claim fails because ECC rejected Odin’s efforts to interfere is not relevant. Even if ECC chose not to respond to Odin’s efforts, Plaintiff has sufficiently alleged Odin conspired with the State to interfere with the contract and divert the work to Odin.

Odin’s demurrer to the fifth cause of action is OVERRULED.

Sixth Cause of Action for Intentional Tortious Interference with Prospective Economic Relations And Seventh Cause of Action for Negligent Tortious Interference with Prospective Economic

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

Relations

The elements of intentional interference with prospective economic relations have been stated as follows: “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Youst v. Longo (1987) 43 Cal. 3d 64, 71, fn. 6.)

The elements for the cause of action of negligent interference with prospective economic relations are: “(1) an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship.” (Vehhaus v. Schultz (2007) 155 Cal.App.4th 1072, 1078.)

Odin first demurs on the ground Plaintiff has failed to sufficiently allege an economic relationship with the other two prime contracts with a probability of future economic benefit. (Demurrer at pp. 19-20.) The demurrer on this ground is OVERRULED because Plaintiff has also alleged an economic relationship with ECC, which is sufficient to maintain the cause of action.

Odin then argues Plaintiff has failed to sufficiently allege a relationship with ECC with a probability of future economic benefit because the existence of such a relationship required the State to award ECC the prime contract (which occurred) and select ECC’s debris recycling facility (which did not occur). The Court has rejected the argument that Plaintiff’s claims required the selection of ECC’s facility as discussed above. Accordingly, this argument is also rejected for the same reasons.

The Court finds Plaintiff has sufficiently stated a claim by alleging that it “had an economic relationship with ECC from prior fire projects with the probability that it would have resulted in future economic benefit to [it] such that it would process all the Camp Fire metal delivered to it by ECC.” (5AC ¶ 223.) This allegation is supported throughout the 5AC, i.e., at the time the Camp Fire started, Plaintiff was finishing its successful work with ECC on the Carr Fire (5AC ¶ 28); as a result of that work, ECC invited Plaintiff to meet and discuss working on the Camp Fire (5AC ¶ 30); ECC met with Plaintiff at its proposed facility in Paradise (5AC ¶ 44); and Plaintiff

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

made preparations to work for ECC on the Camp Fire at considerable expense (5AC ¶ 46). The foregoing is sufficient to establish an economic relationship with a probability of future economic benefit at this stage of the proceedings.

The demurrer to the sixth and seventh causes of action is OVERRULED.

Conclusion

Odin’s demurrer is OVERRULED. Odin shall file an Answer no later June 3, 2024.

The minute order is effective immediately. No formal order pursuant to California Rules of Court, Rule 3.1312, or further notice is required.

NOTICE:

Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure:

To request limited oral argument, on any matter on this calendar, you must call the Law and Motion Oral Argument Request Line at (916) 874-2615 by 4:00 p.m. the Court day before the hearing and advise opposing counsel. At the time of requesting oral argument, the requesting party shall leave a voice mail message: a) identifying themselves as the party requesting oral argument; b) indicating the specific matter/motion for which they are requesting oral argument; and c) confirming that it has notified the opposing party of its intention to appear and that opposing party may appear via Zoom using the Zoom link and Meeting ID indicated below. If no request for oral argument is made, the tentative ruling becomes the final order of the Court.

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A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00292686-CU-BT-GDS: North Bay Steel Mill Supply & Recycling Inc. vs. California Department of Resouces Recycling and Recovery 05/21/2024 Hearing on Demurrer to Plaintiff's Fifth Amended Complaint in Department 54

Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.