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Products and Ventures International v. Axus Stationary (Shanghai) Ltd.

United States District Court, N.D. California

April 11, 2017

Products and Ventures International, Plaintiff,
Axus Stationary Shanghai Ltd., et al., Defendants.



         Plaintiff Products and Ventures International brings this action against defendants for alleged breaches of contract and tort claims relating to a wooden pencil distribution agreement. The Court previously granted in part defendants' motion to dismiss certain claims and parties from the litigation. (Dkt. No. 144.) Pursuant to such order, the following claims and parties remain at issue: (i) breach of contract and breach of the implied covenant of good faith and fair dealing against Roberta Trading Corporation; and (ii) intentional interference with contract and intentional interference with prospective economic advantage against Andre Viegas. (Id. at 2.)[1] As such, on February 1, 2017, the remaining defendants filed their answer to the amended complaint. (Dkt. No. 148.)

         Now before the Court is plaintiff's motion to strike certain affirmative defenses contained in defendants' answer, pursuant to Federal Rule of Civil Procedure 12(f). Having carefully reviewed the pleadings and the papers submitted on this motion, and for the reasons set forth more fully below, the Court Grants in Part plaintiff's motion and strikes the ninth, tenth, eleventh, thirteenth, and fourteenth affirmative defenses without prejudice and the first, fifth, sixth, ninth, twelfth, and fifteenth affirmative defenses with prejudice.

         I. Background

         The Court adopts the “Background” section in its order at Docket Number 144 on defendants' motion to dismiss, and adds the following facts and allegations relevant to the instant motion:

         Defendants Roberta Trading and Andre Viegas filed their answer to the amended complaint on February 1, 2017. (Dkt. No. 59.) As part of such answer, defendants raised the following fifteen affirmative defenses: (i) failure to state a claim; (ii) dismissal of claims barred by court order; (iii) claims outside limitations period; (iv) lack of personal jurisdiction; (v) breach of contract by plaintiff; (vi) defendants' substantial compliance and/or compliance with contractual obligations; (vii) excuse, impossibility, or impracticability of performance as justification for non-performance; (viii) prevention of performance; (ix) termination of contract; (x) lack of consideration; (xi) failure to mitigate damages; (xii) no recovery of relief requested; (xiii) unclean hands, laches, estoppel, release, accord and satisfaction, setoff, and waiver; (xiv) fraud, fraud in the inducement, deceit and/or misrepresentation; and (xv) reservation of rights to assert additional defenses. (Id. at 59-61.)

         Plaintiff seeks to strike all but the second and fourth of these affirmative defenses arguing that (i) the first, fifth, sixth, ninth, twelfth, and fifteenth “affirmative defenses” are not, in fact, affirmative defenses and (ii) the third, seventh, eighth, ninth, tenth, eleventh, thirteenth, and fourteenth fail to meet the pleading standards of Rule 8 and Rule 9(b) for defenses alleging fraud.

         II. Legal Framework

         Federal Rule of Civil Procedure 12(f) provides that a court may “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” A defense may be insufficient as a matter of pleading or a matter of law. Security People, Inc. v. Classic Woodworking, LLC, No. 04-CV-3133, 2005 WL 645592, at *2 (N.D. Cal. Mar. 4, 2005). “The key to determining the sufficiency of pleading an affirmative defense is whether it gives plaintiff fair notice of the defense.” Wyshak v. City Nat. Bank, 607 F.2d 824, 827 (9th Cir. 1979) (citation omitted). What constitutes fair notice depends on the particular defense in question. See Haskins v. Cherokee Grand Ave., LLC, No. 11-CV-5142-YGR, 2012 WL 1110014, at *2 (N.D. Cal. Apr. 2, 2012). While a defense need not include extensive factual allegations in order to give fair notice, see Security People, Inc., 2005 WL 645592, at *2, bare statements reciting mere legal conclusions may not be sufficient, see CTF Development, Inc. v. Penta Hospitality, LLC, No. 09-CV-2429, 2009 WL 3517617, at *7 (N.D. Cal. Oct. 26, 2009).

         To strike an affirmative defense, the moving party must demonstrate “that there are no questions of fact, that any questions of law are clear and not in dispute, and that under no set of circumstances could the defense succeed.” Cal. Dep't of Toxic Subst. Control v. Alco Pac., Inc., 217 F.Supp.2d 1028, 1032 (C.D. Cal. 2002) (quoting SEC v. Sands, 902 F.Supp. 1149, 1165 (C.D. Cal. 1995)). “The grounds for the motion must appear on the face of the pleading under attack or from matter which the court may judicially notice.” Sands, 902 F.Supp. at 1165. When considering a motion to strike, the Court “must view the pleadings in a light most favorable to the pleading party.” In re, Inc., Sec. Litig., 114 F.Supp.2d 955, 965 (C.D. Cal. 2000).

         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. Sands, 902 F.Supp. at 1165 (“Even when the defense under attack presents a purely legal question, courts are reluctant to determine disputed or substantial questions of law on a motion to strike.”). “Where a court strikes an affirmative defense, leave to amend should be freely given so long as there is no prejudice to the moving party.” Haskins, 2012 WL 1110014 at *3 (citing Wyshak, 607 F.2d at 826).

         III. Discussion

         A. Improper Affirmative Defenses

         Plaintiff first argues that defendants' first, fifth, sixth, ninth, twelfth, and fifteenth affirmative defenses should be stricken because they are not actually affirmative defenses. “A defense which demonstrates that plaintiff has not met its burden of proof is not an affirmative defense.” Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002) (holding that defendants did not waive certain defenses because the plaintiff bore the burden of proof on such elements and therefore defendant had no need to plead plaintiff's failure to meet such burden as an affirmative defense); see Barnes v. AT&T Pension Ben. Plan-Nonbargained Program, 718 F.Supp.2d 1167, 1173-74 (N.D. Cal. 2010) (striking certain “affirmative” defenses as redundant where defendant did not have the burden to prove such defenses, explaining that an “affirmative defense, under the meaning of Federal Rule of Civil Procedure 8(c), is a defense that does not ...

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