Thursday, May 7, 2009

Equitable Estoppel Requires Actual Misleading Conduct and Actual Reliance, Not Just the Potential for Both

Plaintiff was entitled to summary judgment as to defendant's equitable estoppel defense. "[Defendant] repeatedly suggests that [plaintiff's] conduct is misleading based on what [defendant] 'could have' inferred from [plaintiff's] overtures. But [defendant's] argument focuses on the wrong question. The issue is not what [defendant] could have believed, but whether [plaintiff's] conduct was somehow misleading. Here, there was nothing misleading about [plaintiff's] actions. . . . "With respect to the reliance element, [defendant] repeatedly suggests that it 'could have' believed that [plaintiff] would not file suit against [defendant], but [defendant] never says it actually had this belief. [Defendant] fails to submit any declarations, cite to any deposition testimony or identify any other evidence that shows that [defendant] actually believed that [plaintiff] would not pursue [defendant]. Instead, [defendant] simply argues that it could have avoided expenditures if [plaintiff] had brought suit earlier. This shows harm, not reliance."

District Judge R. Gary Klausner
Ronald A Katz Technology Licensing LP v. American Airlines Inc., 2-07-cv-02196
(CACD May 1, 2009, Order)

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