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Guifu Li, Meng Wang, Fang Dai, Lin Cui, and Zhong Yu, On Behalf of Themselves and All Others Similarly Situated v. A Perfect Franchise

July 21, 2011

GUIFU LI, MENG WANG, FANG DAI, LIN CUI, AND ZHONG YU, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
A PERFECT FRANCHISE, INC, A CALIFORNIA CORPORATION; A PERFECT DAY, INC., A ANSWERS AND AFFIRMATIVE CALIFORNIA CORPORATION; MINJIAN HAND HEALING INSTITUTE, INC., A CALIFORNIA CORPORATION; TOM SCHRINER, AN INDIVIDUAL; TAILING LI, AN INDIVIDUAL; JIN QUI, AN INDIVIDUAL; HUAN ZOU, AN INDIVIDUAL; CHUANYU LI, AN INDIVIDUAL; JUN MA, AN INDIVIDUAL; AND DOES 1 TO 10, INCLUSIVE,
DEFENDANTS.



The opinion of the court was delivered by: Lucy H. Koh United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO STRIKE DEFENDANTS' CERTAIN DEFENSES TO PLAINTIFFS' SECOND AMENDED COMPLAINT

have moved to strike certain answers and affirmative defenses made by Defendants A Perfect Franchise, Incorporated (Defendants), in response to Plaintiffs' Second Amended Complaint. See Dkt. No. 196 ("Motion"). After considering the parties' briefs relating to Plaintiffs' Motion, the Court finds this matter suitable for decision without oral argument. See CIV. L. R. 7-1(b). 26

Accordingly, the hearing on this Motion, set for July 28, 2011 is hereby VACATED. For the 27 reasons set forth below, the Court GRANTS-IN-PART and DENIES-IN-PART Plaintiffs' Motion. 28 Plaintiffs Guifu Li, Meng Wang, Fang Dai, Lin Cui, and Zhong Yu (together, Plaintiffs)

I. BACKGROUND 2

Plaintiffs in this putative class action are current and former workers for A Perfect Day Franchise, Inc. ("Perfect Day"). Perfect Day owns and operates spas in Fremont, Santa Clara, and 4 Millbrae, California. Plaintiffs claim that Perfect Day has mis-categorized them as independent 5 contractors rather than employees. According to Plaintiffs, Perfect Day failed to pay them and other putative class members minimum wages and overtime, wrongly subtracted materials costs from Plaintiffs' wages, wrongly took Plaintiffs' tips, and committed other violations of California wage and hour laws. Based on these allegations, Plaintiffs claim violations of both the Fair Labor Standards Act (FLSA, 29 U.S.C. §§ 201-19) and California law. Perfect Day denies any unlawful conduct. 10

March 22, 2010, and a First Amended Complaint

Plaintiffs filed their first complaint on (FAC) on May 12, 2010. Defendants were ineffectively served with Plaintiffs' first complaint on 12 March 27, 2010, but were properly served with the FAC on June 3, 2010. The Court granted 13 Plaintiffs permission to file a Second Amended Complaint ("Complaint"), and Plaintiffs did so on 14 April 12, 2011. See Dkt. No. 179. 15

Defendants filed multiple Answers to Plaintiffs' Second Amended Complaint. Defendants A Perfect Day Franchise, Inc., Minjian Hand Healing Institute, Inc., Tailiang Li, and Jin Qui filed 17 answers on April 26, 2011 ("Answers"). See Dkt. Nos. 183-86. Defendant Tom Schriner filed an 18 Answer on May 2, 2011. See Dkt. No. 190. 19

Plaintiffs moved to strike certain of Defendants' answers and affirmative defenses on May 17, 2011. See Dkt. No. 196.

II. ANALYSIS 22

A. Legal Standard

Federal Rule of Civil Procedure 12(f) permits a court to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." A defense 25 may be insufficient as a matter of pleading or as a matter of law. Sec. People, Inc. v. Classic Woodworking, LLC, No. C-04-3133, 2005 U.S. Dist. LEXIS 44641, at *5-*8 (N.D. Cal. 2005). 27

"The key to determining the sufficiency of pleading an affirmative defense is whether it gives 28 plaintiff fair notice of the defense." Wyshak v. City Nat'l Bank, 607 F.2d 824, 827 (9th Cir. 1979).

What constitutes fair notice depends on the particular defense in question. 5C Charles Alan Wright 2 & Arthur R. Miller, Federal Practice and Procedure § 1381 (3d ed. 2004). While a defense need 3 not include extensive factual allegations in order to give fair notice, bare statements reciting mere 4 legal conclusions may not be sufficient. CTF Dev., Inc. v. Penta Hospitality, LLC, No. C 09- 02429, 2009 U.S. Dist. LEXIS 99538, at *21-22 (N.D. Cal. 2009). Because motions to strike a defense as insufficient are disfavored, they "will not be granted if the insufficiency of the defense is not clearly apparent." 5C Wright & Miller § 1381; accord Salcer v. Envicon Equities Corp., 744 F.2d 935, 939 (2d Cir. 1984), vacated on other grounds, 478 U.S. 1015 (1986).

A court may also strike matter in an answer that is immaterial or impertinent. Fed. R. Civ. Pro. 12(f). Immaterial matter is "that which has no essential or important relationship to the claim 10 for relief or the defenses being pleaded." Fantasy, Inc. v. Fogerty

, 984 F.2d 1524, 1527 (9th Cir.

1993), rev'd on other grounds, 510 U.S. 517 (1994). Impertinent matter does not pertain, and is 12 not necessary, to the issues in question. Id.

impertinent, or scandalous," the Court must construe the pleadings "so as to do justice." Fed. R. 15 Civ. P. 8(e). Where a court strikes an affirmative defense, leave to amend should be freely given 16 so long as there is no prejudice to the moving party. Wyshak, 607 F.2d at 826; Qarbon.com Inc. v. 17 eHelp Corp., 315 F. Supp. 2d 1046, 1049 (N.D. Cal. 2004). 18

In deciding whether a defense is insufficient, or whether material is "redundant, immaterial,

B. Defendants' References to "Legal Conclusions"

Plaintiffs request the Court strike Defendants' statements that certain paragraphs of the Complaint "amount to legal conclusions to which no answer is required." Mot. at 2. As Plaintiffs 21 are not moving to strike a defense, this material must be "redundant, immaterial, impertinent, or 22 scandalous" before it may be stricken. Fed. R. Civ. P. 12(f). Defendants respond that these 23 answers are not "immaterial, impertinent, or scandalous," and that they provide Plaintiffs with 24 adequate notice of the matters in dispute. Opp'n at 3. 25

The Court initially notes that Defendants responded to 66 of Plaintiffs' 124 paragraphs with the assertion that the paragraph contained a legal conclusion and required no answer. However, several of these paragraphs do not appear to contain a legal conclusion. Paragraphs 61, 69, 104,

1. Paragraphs not containing legal conclusions and 110 merely quote or paraphrase a statute. Compl. ¶¶ 61, 69, 104, 110. These paragraphs do 2 not appear to contain legal conclusions or factual allegations. The Court construes these 3 paragraphs as Plaintiffs' allegation that this is the law. It is not clear what Defendants mean by 4 denying the factual allegations contained in these paragraphs. The Court believes Defendants intended to admit the accuracy of Plaintiffs' quotations, but deny either that Defendants had violated this law, or that this law applies to this case. As it is not clear what Defendants intended to deny in their answers to these paragraphs, Defendants do not appear to have responded "to the substance of the allegation." Fed. R. Civ. P. 8(b)(2). The Court therefore GRANTS Plaintiffs' Motion to Strike Defendants' answers to paragraphs 61, 69, 104, and 110, and asks Defendants to 9 replead their answers to these paragraphs to clarify the nature of their denial. 10

conclusions. See Answers ¶¶ 1, 2, 3, 15, 18, 20, 21, 22-34, 52, 53, 57-59, 61, 66, 67, 69, 75-77, 79-13 82, 84-87, 89, 92, 94, 95, 97-101, 103, 104, 108-10, 115-26. The Court must therefore decide 14 whether nonresponse to a legal conclusion is so impertinent or scandalous as to justify striking 15

There is some support for Plaintiffs' contention that Rule 8(b) requires defendants to respond even to legal conclusions with an admission, a denial, ...


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