Bank v. Dimension Serv. Corp.

1

TODD C. BANK, individually and on behalf of all others similarly situated, Plaintiff, v. DIMENSION SERVICE CORPORATION, Defendant.

No. 23-CV-2467

United States District Court, E.D. New York

December 29, 2023

DONNELLY, J.

REPORT AND RECOMMENDATION

JOSEPH A. MARUTOLLO, UNITED STATES MAGISTRATE JUDGE

Plaintiff Todd C. Bank brings this action against Defendant Dimension Service Corporation for an alleged violation of the Telephone Consumer Protection Act, 47 U.S.C § 227 (“TCPA”). See Dkt. No. 1.

On December 18, 2023, the Court certified the close of discovery in this action. See Order, dated December 18, 2023. On December 26, 2023, Defendant filed a Second Amended Answer.^[1]See Dkt. No. 25. In the Second Amended Answer, Defendant asserts twenty-four affirmative defenses in response to Plaintiff's allegations in the Complaint. See id.; see also Dkt. No. 27. On the same date, Plaintiff filed a motion to strike portions of Defendant's Second Amended Answer-namely Defendant's Fifth, Eleventh, Thirteenth, Fourteenth, and Sixteenth Affirmative Defenses. See Dkt. No. 26 (“Plaintiff's Motion”).^[2] On December 27 2023, Defendant filed its opposition to Plaintiff's Motion. See Dkt. No. 27. Also on December 27, 2023, the Honorable Ann M. Donnelly, United States District Judge, referred Plaintiff's Motion to the undersigned. On December 28, 2023, Plaintiff filed a reply in further support of Plaintiff's Motion. See Dkt. No. 29.

For the reasons set forth below, the Court respectfully recommends that Plaintiff's Motion be GRANTED in part and DENIED in part.^[3]

I. Standard of Review

“A motion to strike an affirmative defense is governed by Federal Rule of Civil Procedure 12(f), which provides that a court may ‘strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.'” Trott v. Deutsche Bank AG, No. 20-CV-10299 (MKV), 2023 WL 6386899, at *3 (S.D.N.Y. Sept. 28, 2023) (quoting Fed.R.Civ.P. 12(f)). “Whether to strike a party's affirmative defense is within the district court's discretion.” Trott, 2023 WL 6386899, at *3 (citing GEOMC Co., Ltd. v. Calmare Therapeutics Inc., 918 F.3d 92, 98 (2d Cir. 2019).

“Motions to strike are generally disfavored and will not be granted ‘unless it appears to a certainty that plaintiffs would succeed despite any state of the facts which could be proved in support of the defense.'” Kelly v. 21 Grp. Inc., No. 22-CV-0226 (MKB), 2023 WL 5831131, at *3 (E.D.N.Y. Sept. 8, 2023) (citations omitted); see also State of New York v. United Parcel Serv., Inc., 160 F.Supp.3d 629, 637 (S.D.N.Y. 2016) (“Motions to strike are generally disfavored.”) (quoting Mayfield v. Asta Funding, Inc., 95 F.Supp.3d 685, 696 (S.D.N.Y. 2015)); Walters v. Performant Recovery, Inc., 124 F.Supp.3d 75, 78 (D. Conn. 2015) (“Motions to strike are generally disfavored, but are within the district court's sound discretion.”) (quoting Lamoureux v. AnazaoHealth Corp., 250 F.R.D. 100, 102 (D. Conn. 2008)).

The Second Circuit has made clear that “the plausibility standard of Twombly applies to determining the sufficiency of all pleadings, including the pleading of an affirmative defense, but with recognition that, as the Supreme Court explained in Iqbal, applying the plausibility standard to any pleading is a ‘context-specific' task.” GEOMC, 918 F.3d at 98 (citing Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). An affirmative defense is improper and should be stricken “if it is a legally insufficient basis for precluding a plaintiff from prevailing on its claims.” GEOMC, 918 F.3d at 98.

Additionally, the Second Circuit has generally endorsed the view that “[e]ven when the defense presents a purely legal question, the courts are very reluctant to determine disputed or substantial issues of law on a motion to strike; these questions quite properly are viewed as determinable only after discovery and a hearing on the merits.” Kelly, 2023 WL 5831131, at *4 (citations omitted); see also Perm-Star Ins. Co. v. FPM Realty LLC, No. 21-CV-975 (EK) (CLP), 2022 WL 1085320, at *2 (E.D.N.Y. Feb. 24, 2022), report and recommendation adopted as modified, 2022 WL 969727 (E.D.N.Y. Mar. 31, 2022) (same).

II. Defendant's Fifth Affirmative Defense

Defendant's Second Amended Answer alleges, as a Fifth Affirmative Defense, that “[t]o the extent that Plaintiff seeks actual damages, such claims for actual damages are barred because Plaintiff failed to mitigate, limit, or avoid his alleged damages.” Dkt. No. 25, at 7. Defendant adds that it should be “entitled to have sums to which Plaintiff may be entitled, if any, reduced by the amount Plaintiff could reasonably have been able to mitigate, minimize, or avoid those alleged actual damages.” Id.

Plaintiff seeks to have Defendant's Fifth Affirmative Defense stricken because, according to Plaintiff, the Complaint seeks “statutory damages only.” Dkt. No. 26, at 1. In its opposition to Plaintiff's Motion, Defendant argues that “there has been no definitive waiver of actual damages or clear election of statutory damages by [Plaintiff] at this early stage”-which should favor denial of Plaintiff's Motion. Dkt No. 27, at 1-2. In his reply in further support of Plaintiff's Motion, Plaintiff argues that “affirmative defenses, like an answer in general, [are] to be directed at the operating Complaint, not a potential amended complaint; and, because the operating Complaint clearly seeks statutory damages only.” Dkt. No. 29, at 1 (emphasis in original).

In the Complaint, Plaintiff lists three prayers for relief:

(a) Pursuant to 47 U.S.C. Section 227(b)(3)(A), an order enjoining Defendant from violating 47 U.S.C. Section 227(b)(1);

(b) Pursuant to 47 U.S.C. Section 227(b)(3)(B), statutory damages of $500 per violation of 47 U.S.C. Section 227(b)(1) for Plaintiff and the other Class Members; and

(c) Pursuant to 47 U.S.C. Section 227(b)(3)(C), up to $1,000 of statutory damages for Plaintiff and the other Class Members, in addition to the statutory damages prayed for in the preceding paragraph, if the Court finds that Defendant knowingly or willfully violated 47 U.S.C.

Dkt. No. 1 at 7. The plain text of Section 227(b)(3)(B) allows Plaintiff to bring “an action to recover for actual monetary loss from such violation, or to receive $500 in damages from each such violation, whichever is greater.” 47 U.S.C.A. § 227 (b)(3)(B) (emphasis added); see also Jenkins v. Nat'l Grid USA, No. 15-CV-1219 (JS) (GRB), 2017 WL 1208445, at *5 (E.D.N.Y. Mar. 31, 2017).

Plaintiff elected to solely recover statutory damages under the relevant provisions. Cf. Physicians Healthsource, Inc. v. Boehringer Ingelheim Pharms., Inc., 847 F.3d 92, 102 n.7 (2d Cir. 2017) (noting, in a concurrence, that “[o]ne can well surmise [] that because the statute generally offers plaintiffs a maximum award of $500 in statutory damages, the statute's efficacy in controlling nuisance faxes would be nullified if a plaintiff needed to spend thousands of dollars in discovery litigation to win a much smaller award.”). Therefore, Defendant's Fifth Affirmative Defense is immaterial to this action as the Complaint only seeks statutory damages and did not allege actual damages. See Godson v. Eltman, Eltman & Cooper, P.C., 285 F.R.D. 255, 260 (W.D.N.Y. 2012) (striking affirmative defense where “[plaintiff] seeks only statutory damages, and did not allege actual damages, yet affirmative defense number three denies that [plaintiff] suffered actual damages”); cf. Petroci v. Transworld Sys., Inc., No. 12-CV-0072, 2012 WL 5464597, at *4 (W.D.N.Y. Oct. 19, 2012), report and recommendation adopted, (W.D.N.Y. Nov. 8, 2012) (finding that while there can be no mitigation defense where the claim is only for statutory damages, the affirmative defense was proper as the plaintiff clearly sought both statutory and actual damages).

Moreover, as explained in his reply in further support of Plaintiff's Motion, Plaintiff has reiterated that the Complaint seeks “statutory damages only.” Dkt. No. 29, at 1 (emphasis in original). At bottom, Plaintiff cannot now attempt to argue that he is seeking actual damages, thereby rendering any affirmative defense regarding actual damages moot.

In light of the legal standard set forth above, there is no factual underpinning supporting Defendant's Fifth Affirmative Defense. See Perm-Star Ins. Co., 2022 WL 1085320, at *2. The Court respectfully recommends that Plaintiff's Motion to Strike the Fifth Affirmative Defense be GRANTED.

III. Defendant's Eleventh Affirmative Defense

Defendant, in its Eleventh Affirmative Defense, asserts that:

Plaintiff's claims are barred by the Doctrines of Unclean Hands, Waiver, and/or Estoppel because Plaintiff falsely and improperly provided his credit card for payment of the subject automotive warranty knowing he intended to cancel such transactions after eliciting the issuance of the subject automotive warranty. Plaintiff also opted in to receive the phone call that is the subject of the Complaint. Plaintiff's actions described herein were intentional and unethical.

Dkt. No. 25, at 8. Plaintiff's Motion asserts that (i) the Doctrines of Unclean Hands, Waiver, and/or Estoppel does not apply herein and that (ii) he was entitled to take the purported actions. Dkt. No. 26, at 1-2. In its opposition, Defendant asserts that this defense is based on “[Plaintiff's] express consent” and asserts that the defense of unclean hands may be asserted in a TCPA case. Dkt. No. 27, at 2. In his reply, Plaintiff again argues that this affirmative defense should be stricken. See Dkt. No. 28, at 1.

The doctrine of unclean hands allows a court to deny relief to a party which has entered litigation in bad faith. See Keystone Driller Co. v. Gen. Excavator Co., 290 U.S 240, 243 (1933). “The ...