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Enough For Everyone, Inc. v. Provo Craft & Novelty

January 20, 2012

ENOUGH FOR EVERYONE, INC. PLAINTIFF(S),
v.
PROVO CRAFT & NOVELTY, INC. DEFENDANT(S).



The opinion of the court was delivered by: David O. Carter United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO STRIKE AFFIRMATIVE DEFENSES [14]

Before the Court is a Motion to Strike Defendant's Affirmative Defenses. (Doc. No. 14.) After considering the moving, opposing and replying papers thereon, and for the reasons stated below, the Court hereby GRANTS IN PART AND DENIES IN PART the Motion. The Court GRANTS Plaintiff's request for judicial notice.

I. BACKGROUND

Plaintiff and Defendant are parties to a "Consulting Services and Royalty Agreement." Under the agreement, Defendant has been making payments to Plaintiff in connection with products sold by Defendant. Plaintiff's complaint alleges that in July 2011 Defendant stopped making the payments due under the agreement. Plaintiff also alleges it has not been paid the full amount due over the course of the agreement. In conjunction with these allegations, Plaintiff seeks an accounting. Plaintiff asserts claims for: 1) breach of contract, 2) breach of the covenant of good faith and fair dealing, and 3) an accounting. Defendant filed its answer and asserted fourteen affirmative defenses. By its motion, Plaintiff seeks to strike all of Defendants' affirmative defenses.

II. LEGAL STANDARD

Under Rule 12(f), a party may move to strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. Fed. R. Civ. P. 12(f). The grounds for a motion to strike must appear on the face of the pleading under attack, or from matters which the Court may take judicial notice. SEC v. Sands, 902 F. Supp. 1149, 1165 (C.D. Cal. 1995). The essential function of a Rule 12(f) motion is to "avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial." Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993); Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). Where a party moves to strike a prayer for damages on the basis that the damages sought are precluded as a matter of law, the request is more appropriately examined as a motion to dismiss. See Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 974-75 (9th Cir. 2010) ("We therefore hold that Rule 12(f) does not authorize district courts to strike claims for damages on the ground that such claims are precluded as a matter of law.").

III. DISCUSSION

A. Pleadings Standard for Affirmative Defenses

Plaintiff moves to strike a number of the affirmative defenses based on Defendant's failure to allege sufficient factual allegations to support those defenses. The Court turns to these affirmative defenses first.

Plaintiff argues that Defendant's fifth, sixth, and eighth through thirteenth affirmative defenses must be stricken because they do not meet the "heightened Twombly 'fair notice' standard to affirmative defenses." (Mot. at 4, 11.) Plaintiff contends that the "vast majority of courts have extended this heightened Twombly 'fair notice' standard to affirmative defenses." (Id. at 4.)

Defendant opposes on the ground that the question of whether to apply the heightened pleading standard to affirmative defenses "is being hotly-litigated all around the country." (Opp'n at 2.) Defendant maintains that Rules 8(b)(1)(A) and 8 (c) suggest that the "short and plain statement" requirement of rule 8(a)(2) does not apply to affirmative defenses. (Id. at 4.)

Recently the Supreme Court clarified what it means to provide a sufficient short and plain statement under Federal Rule of Civil Procedure 8(a)(2). Specifically, the Court held that a plaintiff must state "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has "facial plausibility" if the plaintiff pleads facts that "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, --- U.S. ----, 129 S. Ct. 1937, 1949 (2009). Neither Twombly nor Iqbal discussed whether their respective holdings apply to affirmative defenses.

While no circuit court of appeals appears to have addressed whether the Twombly/Iqbal pleading standards apply to affirmative defenses, and district courts are coming down on either side of the equation, the Court thinks the question is best resolved by reference to the text of the Federal Rules. Federal Rule of Civil Procedure 8 governs general pleading standards. Rule 8(a) pertains to claims for relief. Rule 8(b) pertains to defenses, admissions, and denials. Rule 8(c) pertains to affirmative defenses. Because the motion to strike is directed at Defendant's defenses, the Court considers what is required under Rule 8.

Rule 8(b)(1) mandates that "[i]n responding to a pleading, a party must: (A) state in short and plain terms its defenses to each claim asserted against it; and (B) admit or deny the allegations asserted against it by an opposing party." Fed. R. Civ. P. 8(b)(1)(a)-(b) (emphasis added). Under Rule 8(c), "[i]n responding to a pleading, a party must affirmatively state any avoidance or ...


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