The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
MEMORANDUM DECISION AND ORDER STRIKE (Docs. 75, 76) RE: DEFENDANT'S MOTIONS TO
Plaintiff the Citrilite Company, Inc. ("Plaintiff") proceeds with an action for damages against Defendant Cott Beverages, Inc. ("Defendant").
Defendant filed motions to strike certain opinions of Plaintiff's experts on December 6, 2010. (Docs. 75, 76). Plaintiff filed opposition to Defendant's motions on December 27, 2010. (Docs. 78, 80). Defendant filed replies on January 3, 2011. (Docs. 82, 83).
II. FACTUAL BACKGROUND.*fn1
From 1996 to 2003, Plaintiff produced and marketed Slim-Lite, a zero calorie fruit-flavored drink. On December 28, 2003,
Plaintiff entered into a written agreement entitled "Intellectual Property License and Purchase Option Agreement" ("the Agreement") with Defendant, a producer and distributer of various non-alcoholic beverages.
Under the terms of the Agreement, Plaintiff granted Defendant the exclusive right to use the Slim-Lite brand identity and all associated intellectual property rights for purposes of the manufacture, production, distribution, sale and marketing of Slim-Lite. In exchange, Defendant agreed to make royalty payments to Plaintiff based on a rate of fifty cents ($0.50) per case of product sold (i.e., fifty cents per 240 ounces of the product sold by Cott), with a guaranteed minimum royalty of $350,000 per year.
The Agreement required Defendant to spend a certain amount to market Slim-Lite and to "otherwise use commercially reasonable efforts to promote and sell" Slim-Lite "so as to maintain and enhance the value of the goodwill" inhering in Slim-Lite and "produce the maximum amount of" royalty under the Agreement. Plaintiff contends that Defendant breached its obligation to use commercially reasonable efforts to promote and sell Slim-lite. Inter alia, Plaintiff contends that Defendant's reduction and eventual elimination of in-store demos of Slim-Lite at Sam's Club was commercially unreasonable and resulted in lost royalties and damage to the value of Slim-Lite's goodwill.
The proper methodology for assessing the impact of Defendant's reduction and elimination of in-store demos at Sam's Club is the subject of a dispute between the parties' experts and is the issue underlying Defendant's first "motion to strike" certain opinions related to the effectiveness of in-store demos. (Doc. 75).
Defendant's second motion to strike assails the methodology used by Plaintiff's damages expert to calculate future lost profits and damage to Slim-Lite's goodwill. (Doc. 76).
Federal Rule of Civil Procedure 12(f) provides that a court may strike from any pleading "an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). For the purposes of a motion to strike, immaterial matter is "that which has no essential or important relationship to the claim for relief or the defenses being pleaded." Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1528 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517, 114 S. Ct. 1023, 127 L. Ed. 2d 455 (1994). Scandalous matters are allegations that unnecessarily reflect on "the moral character of an individual or states anything in repulsive language that detracts from the dignity of the court." Consumer Solutions Reo, LLC v. Hillery, 658 F. Supp. 2d 1002, 1021 (N.D. Cal 2009). Rule 12(f) is deigned to eliminate from consideration issues that "can have no possible bearing on the subject matter of the litigation." Naton v. Bank of California, 72 F.R.D. 550, 552 n.4 (N.D. Cal. 1976). In addition to Rule 12, a district court's inherent authority to manage its docket authorizes the court strike matters from the docket.
Defendant's motions are procedurally unorthodox. A Rule 12 motion is necessary directed to a pleading, which is defined by Federal Rule of Civil Procedure 7. The pleadings have long been settled, as the summary judgment phase of this case is complete. It appears that Defendant's motions to strike are motions in limine, evidentiary in nature, to exclude certain expert opinions from admission at trial. Pursuant to Local Rule 281(b)(5), the proper procedure for advancing motions in limine is to identify disputed evidentiary issues in the pre-trial statement, E.D. Cal. R. 281(b)(5)), whereafter a motion in limine schedule is set. The pre-trial conference for this matter is set for February 28, 2011. (Scheduling Conference Order, Doc. 71). Motions in limine will be scheduled at that time.
A. Opinions Related to the Effectiveness of ...