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Areas Usa Sjc, LLC v. Mission San Jose Airport

May 18, 2012

AREAS USA SJC, LLC, PLAINTIFF,
v.
MISSION SAN JOSE AIRPORT, LLC; ET AL., DEFENDANTS.



The opinion of the court was delivered by: Howard R. Lloyd United States Magistrate Judge

** E-filed May 18, 2012 **

NOT FOR CITATION

ORDER (1) GRANTING PLAINTIFF'S MOTION TO STRIKE THE SECOND AMENDED ANSWER; (2) GRANTING PLAINTIFF'S MOTION TO DISMISS COUNTERCLAIMS IN THE FIRST AMENDED ANSWER; AND (3) GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO STRIKE AFFIRMATIVE DEFENSES IN THE FIRST AMENDED ANSWER [Re: Docket No. 29, 30, 33, 34]

Plaintiff Areas USA SJC, LLC ("Areas") filed this action against Mission San Jose Airport, LLC and Mission Yogurt, Inc. (collectively "Mission") alleging breach of contract. Dkt. No. 1 21 ("Complaint"). Areas has contracted with the City of San Jose ("City") to provide concessions 22 throughout the San Jose Airport ("Airport"). Complaint ¶ 8. Areas executes subcontracts with 23 various entities to build out and operate portions of the concession space it controls. Complaint ¶ 9. 24

Areas and Mission executed one such subcontract for a portion of the Airport's concession space 25 known as TA-21 ("TA-21" or "the space"). Complaint ¶¶ 10, 12. Areas alleges that Mission 26 breached the subcontract by failing to build out and operate a restaurant in the space, and by 27 violating numerous other provisions.

2 and breach of contract, contending that Areas made material misrepresentations about TA-21 in 3 order to induce Mission to enter into the subcontract. Dkt. No. 11. Mission alleges that Areas knew 4

TA-21 was located over airport security equipment and subject to special building restrictions that 5 would make the build-out significantly more costly than Areas let on, and which would make the 6 operation of concession in TA-21 unprofitable. Areas moved to dismiss Mission's counterclaims 7 and to strike Mission's affirmation defenses. Dkt. No. 22. Mission then filed a First Amended 8

Mission timely answered Areas's complaint and counterclaimed for fraud in the inducement Answer ("FAA") as a matter of course pursuant to Fed. R. Civ. P. 15(a). Dkt. No. 27. Areas moved 9 to dismiss the counterclaims in the FAA and to strike the affirmative defenses therein, to which 10 moved to strike the SAA. Dkt. No. 34. Mission opposed the motion. Dkt. No. 37. The court deemed the motion suitable for determination without oral argument, pursuant to Civil L. R. 7-1(b) and 13 vacated the hearing set for March 13, 2012. All parties have expressly consented to magistrate 14 jurisdiction pursuant to 28 U.S.C. § 636(c). Based on the moving papers and all applicable 15 authority, the court rules as follows. 16

"A party may amend its pleading once as a matter of course. . . . In all other cases, a party 18 may amend its pleading only with the opposing party's written consent or the court's leave." Fed. R. 19 Litig., 792 F. Supp. 197, 203-204 (E.D.N.Y. 1992); see also Rodgers v. Lincoln Towing Service, 21 Inc., 771 F.2d 194, 203 (7th Cir. 1985) (holding that both technical and substantive amendments 22 require leave or consent after pleading has been amended once). 23 24 motions to dismiss and to strike portions of the FAA. Dkt. No. 34 ("Motion to Strike SAA"). 25

Rule 12 motion. Mission's position is an incorrect statement of the law, which clearly holds that 27 parties may amend a pleading only once without leave of court. Mission also argues that it and 28 Mission responded by filing a Second Amended Answer ("SAA"). Dkt. Nos. 29, 30, 32. Areas then

I. Areas's Motion to Strike the SAA 17

Civ. P. 15(a)-(b). Any subsequent amendment requires leave or consent. In re Crazy Eddie Sec. 20 Areas argues that Mission improperly filed its SAA without leave of court in response to the Mission argues in response that Fed. R. Civ. P. 15(a) permits one amendment as of right to every Areas discussed a potential stipulation permitting Mission to amend the FAA, but since no 2 stipulation has been filed, this argument is equally unavailing. Dkt. No. 37, pp. 10-11. 3

II. Areas's Motion to Dismiss the Counterclaims in the FAA 5

On motion, a court may dismiss a complaint for failure to state a claim. FED. R. CIV. P. 12(b)(6). The federal rules require that a complaint include a "short and plain statement" showing 8 the plaintiff is entitled to relief. FED. R. CIV. P. 8(a)(2). The statement must "raise a right to relief 9 above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 55 (2007). However, only 10 plausible claims for relief will survive a motion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009). A claim is plausible if its factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 13

Accordingly, Areas's motion to strike is GRANTED. The SAA is hereby stricken.

LEGAL STANDARD

1949. A plaintiff does not have to provide detailed facts, but the pleading must include "more than 14 an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. at 1950. 15

Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002). The factual 17 allegations pled in the complaint must be taken as true and reasonable inferences drawn from them 18 must be construed in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 19 Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987)). However, the court cannot assume that "the 21 California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). "Nor is the 23 court required to accept as true allegations that are merely conclusory, unwarranted deductions of 24 fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d ...


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