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Rahman v. San Diego Accounts Service

United States District Court, S.D. California

April 18, 2017

ADNAN RAHMAN, Plaintiff,
v.
SAN DIEGO ACCOUNTS SERVICE, a California corporation, d/b/a CALIFORNIA ACCOUNTS SERVICE, et al., Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO STRIKE (ECF NO. 13)

          Hon. Janis L. Sammartino United States District Judge

         Presently before the Court is Plaintiff Adnan Rahman's Motion to Strike Affirmative Defenses in Defendant's First Amended Answer (“MTS”), (ECF No. 13), Defendant's Response in Opposition to Plaintiff's Motion to Strike (“Opp'n”), (ECF No. 15), and Plaintiff's Reply in Support of Motion to Strike (“Reply”), (ECF No. 16). The Court took the matter under submission without oral argument pursuant to Civil Local Rule 7.1(d). (ECF No. 18.) Having considered the Parties' arguments and the law, the Court GRANTS IN PART and DENIES IN PART Plaintiff's Motion to Strike.

         BACKGROUND

         In 2011, Plaintiff received emergency medical services at Palomar Medical Center (“Palomar”) in Escondido, California. (Compl ¶ 11, ECF No. 1.) At least one of those services was provided by Dr. Tantuwaya. (Id. ¶ 12-15.) Subsequently, although Plaintiff's Medi-Cal coverage allegedly paid some of these emergency-medical claims, “[t]he services provided by Dr. Tantuwaya were not included in these claims . . . despite Dr. Tantuwaya's knowledge of [Plaintiff's] Medi-Cal eligibility.” (Id. ¶¶ 14, 15.) Defendant California Account Services has since taken action on this alleged debt, including by making alleged false representations to credit reporting agencies regarding “the amount, nature, and legal status of the purported debt alleged to be owed by Plaintiff . . . .” (Id. ¶¶ 22-30.)

         Plaintiff marshaled these allegedly false representations into a Complaint alleging claims against Defendant under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., (id. ¶¶ 32-37); the Rosenthal Fair Debt Collection Practices Act (“Rosenthal Act”), Cal. Civ. Code § 1788 et seq., (id. ¶¶ 38-43); and the Consumer Credit Reporting Agencies Act (“CCRAA”), Cal. Civ. Code § 1785.1 et seq., (id. ¶¶ 44-55). Defendant filed an Answer to the Complaint, (ECF No. 11), including several affirmative defenses which underlie the substance of this Motion to Strike.

         LEGAL STANDARD

         Rule 12(f) provides that the court “may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). “The function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial . . . .” Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (quoting Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517 (1994)). Accordingly, “[a] defense may be struck if it fails to provide ‘fair notice' of the basis of the defense.” Qarbon.com Inc. v. eHelp Corp., 315 F.Supp.2d 1046, 1048 (N.D. Cal. 2004); see also Wyshak v. City Nat'l Bank, 607 F.2d 824, 826 (9th Cir. 1979).

         “Motions to strike are ‘generally disfavored because they are often used as delaying tactics and because of the limited importance of pleadings in federal practice.' ” Cortina v. Goya Foods, Inc., 94 F.Supp.3d 1174, 1182 (S.D. Cal. 2015) (quoting Rosales v. Citibank, 133 F.Supp.2d 1177, 1180 (N.D. Cal. 2001)). “[M]otions to strike should not be granted unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the litigation.” Colaprico v. Sun Microsystems, Inc., 758 F.Supp. 1335, 1339 (N.D. Cal. 1991). “When ruling on a motion to strike, this Court ‘must view the pleading under attack in the light most favorable to the pleader.' ” Id. (citing RDF Media Ltd. v. Fox Broad. Co., 372 F.Supp.2d 556, 561 (C.D. Cal. 2005)).

         ANALYSIS

         As an initial matter, the Court addresses the threshold issue of whether the Twombly and Iqbal “plausibility” standard governs Defendant's pleading of its affirmative defenses. Plaintiff contends that it does, (e.g., MTS 2-6); Defendant contends that the original enunciation of the “fair notice” standard in Wyshak v. City National Bank, 607 F.2d 824 (9th Cir. 1979), governs instead, (Opp'n 3). The Court agrees with Plaintiff.

         Prior to the Supreme Court's articulation of the “plausibility” standard for pleading under Federal Rule of Civil Procedure 8, there was no question that in our Circuit the Wyshak “fair notice” standard governed pleading an affirmative defense under Rule 8. Pursuant to Wyshak, “[t]he key to determining the sufficiency of pleading an affirmative defense is whether it gives plaintiff fair notice of the defense.” 607 F.2d at 827 (citing Conley v. Gibson, 355 U.S. 41, 47-48 (1957); 5 Wright & Miller Federal Practice and Procedure, § 1274 at 323). However, in 2007 and 2009, the Supreme Court issued seminal decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), holding that Rule 8 requires a plaintiff to plead facts supporting a “plausible” rather than merely “possible” claim to relief. E.g., Iqbal, 556 U.S. at 678-79.

         Since Twombly and Iqbal, district courts in the Ninth Circuit have come to differing conclusions regarding whether those cases necessitate a different interpretation of Wyshak's “fair notice” standard. See, e.g., J & J Sports Prods., Inc. v. Scace, No. 10CV2496-WQH-CAB, 2011 WL 2132723, at *1 (S.D. Cal. May 27, 2011) (discussing split). Ultimately, this Court agrees with the numerous district courts that have concluded the Twombly and Iqbal “plausibility” standard applies with equal force to the pleading of affirmative defenses. Although there is a valid question as to whether the logic of Twombly and Iqbal-rendered in the context of Rule 8(a)-applies with equal force to Rule 8(c) governing affirmative defenses, this Court concludes that Wyshak compels application of the plausibility standard to pleading affirmative defenses. Specifically, the only case Wyshak cited to support its “fair notice” standard is Conley v. Gibson, 355 U.S. 41, 47-48 (1957), Wyshak, 607 F.2d at 827, and Conley has since been abrogated insofar as it permitted pleading at a standard lower than Twombly's plausibility standard, see Twombly, 550 U.S. at 555, 560-61 (citing Conley for “fair notice” rule statement immediately prior to articulating “plausibility” standard and expressly abrogating Conley's “no set of facts” language). Accordingly, “fair notice” necessarily now encompasses the “plausibility” standard; whatever standard “fair notice” previously encompassed no longer exists. E.g., Madison v. Goldsmith & Hull, No. 5:13-CV-01655 EJD, 2013 WL 5769979, at *1 (N.D. Cal. Oct. 24, 2013); Gonzalez v. Heritage Pac. Fin., LLC, No. 2:12-CV-01816-ODW, 2012 WL 3263749, at *2 (C.D. Cal. Aug. 8, 2012); Perez v. Gordon & Wong Law Grp., P.C., No. 11-CV-03323-LHK, 2012 WL 1029425, at *6-8 (N.D. Cal. Mar. 26, 2012).

         Accordingly, the Court reviews for plausibility Defendant's pleaded affirmative defenses of (1) Statutes of Limitations; (2) Bona Fide Error; (3) Good Faith; and (4) Offset. The Court addresses each in turn.

         I. Statutes ...


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