United States District Court, E.D. California
UNITED STATES OF AMERICA, and the STATE OF CALIFORNIA, et al., ex rel LOYD F. SCHMUCKLEY, JR., Plaintiffs,
RITE AID CORPORATION, Defendant.
qui tam action, Relator Lloyd F. Schmuckley, Jr. and
the State of California (“plaintiffs”) move to
strike defendant's affirmative defenses under Federal
Rule of Civil Procedure 12(f). Defendant opposes. For the
below reasons, plaintiffs' motion is GRANTED in part and
DENIED in part.
the False Claims Act (FCA), a private individual can bring an
action known as a qui tam action on behalf of the
United States government against any individual or company
who has knowingly presented a false or fraudulent claim to
the government. United States ex rel. Anderson v.
Northern Telecom, 52 F.3d 810, 812-13 (9th Cir. 1995).
Here, relator Loyd F. Schmuckley alleges Rite Aid has
submitted false claims for reimbursement in prescribing
“Code 1” drugs, which may not be reimbursed
unless certain requirements are met. First Am. Compl. (FAC)
¶¶ 3, 21, ECF No. 79. Specifically, these Code 1
drugs have restrictions based on patient age or diagnosis
that must be met before the appropriate government entity,
here Medi-Cal, will reimburse for prescriptions for that
medication. Id. ¶ 23. According to Schmuckley,
“California regulations explicitly state that the
pharmacist must have documentation of the patient's
diagnosis, in order for Medi-Cal to reimburse the
prescription.” Id. ¶ 24.
intervened in this case on claims under the California FCA
(CFCA) and filed its Complaint-In-Intervention, alleging Rite
Aid failed to comply with “Code 1 restrictions.”
Complaint-In-Intervention (CII) ¶ 4, ECF No. 75. More
specifically, California alleges that “[f]rom 2007 to
2014, [Rite Aid] knowingly submitted false pharmacy claims to
Medi-Cal and expressly and impliedly made false
certifications through the Medi-Cal electronic claims
submission and reimbursement process.” Id.
filed a First Amended Answer to Relator's First Amended
Complaint (“Relator Answer”), ECF No. 146, and a
First Amended Answer to California's
Complaint-In-Intervention (“State Answer”), ECF
No. 147. Plaintiffs jointly moved to strike all affirmative
defenses under Rule 12(f). Mot., ECF No. 158. Defendant
opposed, ECF No. 173, and plaintiffs replied, ECF No. 186.
The court heard oral argument on the motion on January 25,
2019, and issued a bench order granting plaintiffs'
motion to strike the following affirmative defenses (numbered
according to defendant's Answer to Relator's
Complaint): 5th (good faith), 7th (no treble damages), 8th
(no attorney's fees), 10th (denial of actual injury),
13th (compliance with industry standards), and 14th (not
willful or knowledgeable). See ECF No. 187. In a
joint statement submitted after hearing, the parties asked
the court to allow them until July 15, 2019 to meet and
confer and prepare a stipulation regarding the 11th
affirmative defense in defendant's Answer to
Relator's Complaint. ECF No. 188. The court later
extended this deadline to February 28, 2020. ECF No. 260.
Because the parties are still attempting to agree on this
issue, the court declines to resolve it in this order, but
instead resolves the remainder of the issues raised in
plaintiffs' motion and not addressed at hearing, below.
court may strike “from a pleading an insufficient
defense or any redundant, immaterial, impertinent or
scandalous matter.” Fed.R.Civ.P. 12(f). “A
defense may be insufficient as a matter of pleading or as a
matter of law.” Cal. Brewing Co. v. 3 Daughters
Brewing LLC, No. 2:15-cv-02278-KJM-CMK, 2016 WL 4001133,
at *1 (E.D. Cal. Jul. 26, 2016) (citation omitted).
Affirmative Defenses Generally
“[A]n affirmative defense, under the meaning of Federal
Rule of Civil Procedure 8(c), is a defense that does not
negate the elements of the plaintiff's claim, but instead
precludes liability even if all of the elements of the
plaintiff's claim are proven.” Barnes v. AT
& T Pension Ben. Plan-Nonbargained Program, 718
F.Supp.2d 1167, 1173 (N.D. Cal. 2010) (citation omitted).
“It is a defense on which the defendant has the burden
of proof.” Id. at 1174. On the other hand,
“[a] defense which demonstrates that plaintiff has not
met its burden of proof is not an affirmative defense,
” but a negative defense. Zivkovic v. S. California
Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002)
(citation omitted). While courts rarely grant Rule 12(f)
motions to strike affirmative defenses, if an affirmative
defense is, in actuality, a negative defense and should
instead be included as a denial in the answer, the motion to
strike will be granted. See Barnes, 718 F.Supp.2d at
Insufficiency as a Matter of Pleading
with the nomenclature, a party must affirmatively state its
affirmative defenses. Fed.R.Civ.P. 8(c)(1). Generally, the
pleading standard is met if the affirmative defense provides
“fair notice.” Wyshak v. City Nat'l
Bank, 607 F.2d 824, 827 (9th Cir. 1979) (“The key
to determining the sufficiency of pleading an affirmative
defense is whether it gives plaintiff fair notice of the
defense.”), overruled on other grounds by Castro v.
County of Los Angeles, 833 F.3d 1060 (9th Cir. 2016) (en
banc). To provide fair notice, the defendant must
“identify the nature and grounds for the affirmative
defense, rather than plead a detailed statement of facts upon
which the defense is based.” Dodson v. Munirs
Co., No. CIV. S-13-0399 LKK/DAD, 2013 WL 3146818, at *2
(E.D. Cal. June 18, 2013) (citation omitted). The fair notice
standard is a “low bar” that does not require
great detail, but requires “some factual basis”
for the affirmative defense. Gomez v. J. Jacobo Farm
Labor Contractor, Inc., 188 F.Supp.3d 986, 992 (E.D.
Cal. 2016) (citations omitted). Merely referring to the
doctrine or statute generally does not provide “fair
notice” to the other party, though some courts will
accept such references where the defense is well-established.
Id. at 992-93 (collecting cases).
courts have applied a heightened pleading standard to
affirmative defenses since the Supreme Court's
articulation of heightened pleading standards for claims in
complaints in Bell Atl. Corp. v. Twombly, 550 U.S.
544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662
(2009), while others apply the more lenient fair notice
standard reviewed above. Compare Gencarelli v. Twentieth
Century Fox Film Corp., No. 2:17-02818-ODW (AJW), 2018
WL 376664, at *2 (C.D. Cal. Jan. 11, 2018)
(Twombly/Iqbal apply to affirmative
defenses), and Wang v. Golf Tailor, LLC, No.
17-cv-00898-LB, 2017 WL 5068569, at *4 (N.D. Cal. Nov. 3,
2017) (Twombly and Iqbal apply to
affirmative defenses), with Am. GNC Corp. v. LG
Electronics Inc., No. 17-cv-01090-BAS-BLM, 2017 WL
4792373, at *2 (S.D. Cal. Oct. 24, 2017) (“fair
notice” applies to affirmative defenses), and
Neylon v. Cty. of Inyo, No. 1:16-cv-0712 AWI JLT, 2017
WL 3670925, at *2 (E.D. Cal. Aug. 25, 2017) (“fair
notice” applies to affirmative defenses). Plaintiffs
urge this court to apply the former. See Mot. at
with its previous determinations, the court declines to apply
the heightened standard. See, e.g., L.F. by
& through Brown v. City of Stockton, No.
2:17-CV-01648-KJM-DB, 2018 WL 3817558, at *2 (E.D. Cal. Aug.
10, 2018) (clarifying court's reasoning regarding
decision not to apply heightened standard). The “fair
notice” standard therefore guides the court's
Insufficiency as a Matter of Law
noted, a motion to strike an affirmative defense is
appropriate as a matter of law if the affirmative defense is
redundant, immaterial, impertinent or scandalous.
Fed.R.Civ.P. 12(f). An allegation is “redundant”
if it is needlessly repetitive or wholly foreign to the
issues involved in the action. Cal. Dep't. of Toxic
Substances Control v. Alco Pac., Inc., 217 F.Supp.2d
1028, 1033 (C.D. Cal. 2002) (citation omitted). An allegation
is “immaterial” if there is no essential or
important relationship to the pleaded claims or defenses.
Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1528 (9th
Cir. 1993) (quoting 5 Charles A. Wright & Arthur R.
Miller, Federal Practice and Procedure § 1382,
at 706-07 (1990)), overruled on other grounds, Fantasy v.
Fogerty, 510 U.S. 517 (1994). An allegation is
“impertinent” if it consists of statements
“that do not pertain, and are not necessary, to the
issues in question.” Id. An allegation is
“scandalous” if it casts a “cruelly
derogatory light on a party or other person.” In re
2TheMart.com, Inc. Sec. Litig., 114 F.Supp.2d 955, 965
(C.D. Cal. 2000). The court applies these standards in
evaluating each affirmative defense.
First Affirmative Defense: Failure to State a Claim
first affirmative defense states that plaintiffs'
complaints “fail to state a claim upon which relief
may be granted under Federal Rules of Civil Procedure 8 and
9(b).” Relator Answer at 9; State Answer at 25.
However, affirmative defenses are meant to “plead
matters extraneous to the plaintiff's prima facie case,
which deny plaintiff's right to recover, even if the
allegations of the complaint are true.” Federal
Deposit Ins. Co. v. Main Hurdman,655 F.Supp. 259, 262
(E.D. Cal. 1987) (citing Gomez v. Toledo, 446 U.S.
635, 640-41 (1980)). As plaintiffs correctly asserts,
defendant's first affirmative defense challenges
plaintiffs' prima facie case and therefore is not
properly raised as an affirmative defense. See J & J
Sports Prods., Inc. v. Angulo, 2015 WL 5020725, at *2
(“Failure to state a claim is not an affirmative
defense, rather it is an assertion of a defect in a
plaintiff's prima facie case.”) (citation omitted).