G & G Closed Circuit Events, LLC v. Cal. Ctr. for the Arts, Escondido, Found.

G & G CLOSED CIRCUIT EVENTS, LLC, Plaintiff, v. CALIFORNIA CENTER FOR THE ARTS, ESCONDIDO, FOUNDATION,an unknown business entity d/b/a/ California Center for the Arts, Escondido, Defendant.

Case No.: 20-CV-2137-JLS (NLS)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

April 6, 2021

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO STRIKE

(ECF No. 6)

Presently before the Court is Plaintiff G & G Closed Circuit Events, LLC's Motion to Strike ("MTS," ECF No. 6). Defendant California Center for the Arts, Escondido, Foundation d/b/a California Center for the Arts, Escondido filed an Opposition to the Motion ("Opp'n," ECF No. 9), and Plaintiff filed a Reply ("Reply," ECF No. 10). The Court took the matter under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). See ECF No. 11. Having carefully considered the Parties' arguments, the evidence, and the law, the Court GRANTS IN PART AND DENIES IN PART Plaintiff's Motion, as set forth below.

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BACKGROUND

"Pursuant to contract, Plaintiff . . . was granted the exclusive nationwide commercial distribution (closed-circuit) rights to the Saul "Canelo" Alvarez v. Sergey Kovalev Championship Fight Program, telecast nationwide on Saturday, November 2, 2019" (the "Program"). ECF No. 1 ("Compl.") ¶ 16. Pursuant to its contract, "Plaintiff . . . entered into subsequent sublicensing agreements with various commercial entities throughout North America, including entities within the State of California, by which it granted these entities limited sublicensing rights, specifically the rights to publicly exhibit the Program within their respective commercial establishments." Id. ¶ 17 (emphasis omitted). "The Program could only be exhibited in a commercial establishment in California" if Plaintiff contractually authorized said establishment. Id. ¶ 18 (emphasis omitted). On Saturday, November 2, 2019, Defendant allegedly intercepted, received, and published the Program at California Center for the Arts, Escondido. See id. ¶ 21.

On October 31, 2020, Plaintiff filed the operative Complaint, alleging the following four claims against Defendant: (1) violation of 47 U.S.C. § 605; (2) violation of 47 U.S.C. § 553; (3) conversion; and (4) violation of California Business and Professions Code §§ 17200 et seq. See generally Compl. On December 29, 2020, Defendant filed an Answer raising seventeen affirmative defenses. See generally ECF No. 4 ("Answer"). Plaintiff then filed the instant Motion, which seeks to strike all Defendant's affirmative defenses. See generally MTS.

LEGAL STANDARD

Federal Rule of Civil Procedure 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)).

"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." San Diego Unified Port Dist. v. Monsanto, 309 F. Supp. 3d 854 (S.D. Cal. 2018) (quotations and citations omitted). "When ruling on a motion to strike, this Court 'must view the pleading under attack in the light most favorable to the pleader.'" Novick v. UNUM Life Ins. Co. of Am., 570 F. Supp. 2d 1207, 1208 (C.D. Cal. 2008) (quoting RDF Media Ltd. v. Fox Broad. Co., 372 F. Supp. 2d 556, 561 (C.D. Cal. 2005)).

"[T]he Ninth Circuit has not explicitly addressed whether the Twombly and Iqbal plausibility standard should replace the Wyshak [v. City National Bank, 607 F.2d 824 (9th Cir. 1979), abrogated in part by Castro v. Cnty. of Los Angeles, 833 F.3d 1060 (9th Cir. 2016) (en banc),] fair notice standard for affirmative defenses." Philpot v. Baltimore Post-Exam'r, No. 3:20-CV-00872-H-MSB, 2020 WL 6449199, at *3 (S.D. Cal. Nov. 3, 2020). Plaintiff requests that the Court apply the Twombly and Iqbal "plausibility" standard to Defendant's affirmative defenses. See MTS at 9. Defendant requests that the Court find that only a "fair notice standard" applies to the pleading of affirmative defenses. See Opp'n at 1, 9. Although this Court recognizes it previously has applied the Twombly and Iqbal "plausibility" standard in assessing the sufficiency of the pleading of affirmative defenses, in light of recent decisions in this District noting the Ninth Circuit's continuing recognition of the Wyshak fair notice standard for affirmative defenses and the lack of controlling authority to the contrary, this Court now elects to stand with the clear majority of courts within this District and apply the "fair notice" standard. See, e.g., Philpot, 2020 WL 6449199, at *3 ("[S]ince Twombly and Iqbal were decided, the Ninth Circuit has continued to recognize the Wyshak fair notice standard.") (citations omitted); Boba Inc. v. Blue Box Opco LLC, No. 19-CV-00304-H-NLS, 2019 WL 2140597, at *3 n.2 (S.D. Cal. May 15, 2019) (similar); Cota v. Aveda Corp., No. 320CV01137BENBGS, 2020 WL 6083423, at*4 (S.D. Cal. Oct. 14, 2020) ("The Southern District follows the Ninth Circuit's decision in Kohler, which requires Defendant to plead its affirmative defenses under the fair notice standard."); Hawkins v. Kroger Co., No. 15CV2320 JM(BLM), 2019 WL 6310553, at *3 (S.D. Cal. Nov. 25, 2019) ("Plaintiff has supplied the court with no binding authority for her assumption that the heightened pleading standards of Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), apply to affirmative defenses, and the court is unaware of any circuit court that has addressed this issue."); Sundby v. Marquee Funding Grp., Inc., No. 19-CV-0390-GPC-AHG, 2019 WL 5963907, at *2 (S.D. Cal. Nov. 13, 2019) ("The Court declines to apply the plausibility standard here as neither the Ninth Circuit nor the Supreme Court have instructed the courts to depart from the notice-pleading standard applied in evaluating the sufficiency of an affirmative defense.") (citations omitted); see also Kohler v. Flava Enters., Inc., 779 F.3d 1016, 1019 (9th Cir. 2015) ("Nonetheless, the 'fair notice' required by the pleading standards only requires describing the defense in 'general terms.' We will not disturb the district court's finding that [plaintiff] received sufficient notice.") (citing 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1274 (3d ed. 1998)).

Although more relaxed than the Twombly and Iqbal "plausibility standard," Federal Rule of Civil Procedure 8's fair notice standard "requires that the allegations in the [answer] give the [plaintiff] fair notice of what the [defendant]'s [defense] is and the grounds upon which it rests." Pac. Coast Fed'n of Fishermen's Assocs. v. Glaser, 937 F.3d 1191, 1200 (9th Cir. 2019) (internal quotations omitted); see also Rosen v. Masterpiece Mktg. Grp., LLC, 222 F. Supp. 3d 793, 798 (C.D. Cal. 2016) ("[E]ven the fair notice standard requires 'at least some valid factual basis' in support of its affirmative defense."). If a court strikes an affirmative defense, "[i]n the absence of prejudice to the opposing party, leave to amend should be freely given." Wyshak, 607 F.2d at 826-27 (citing Fed. R. Civ. P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962); Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973)).

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ANALYSIS

Plaintiff requests that the Court strike all Defendant's seventeen affirmative defenses of (1) failure to state a cause of action; (2) unclean hands; (3) waiver; (4) failure to mitigate; (5) no damages; (6) acts or omissions of complainant and others; (7) estoppel; (8) statute of limitations; (9) costs and attorney's fees; (10) setoff/offset; (11) laches; (12) several liability for non-economic damages; (13) lack of jurisdiction; (14) lack of standing; (15) joinder of co-defendants' affirmative defenses; (16) no scienter, knowledge, intent, or willfulness; and (17) right to assert additional affirmative defenses, claiming each is insufficient for various reasons, as addressed more fully below. See generally MTS.

I. Defenses That Are Not Affirmative Defenses

A. First, Fifth, Sixth & Sixteenth Affirmative Defenses (Denials)

Defendant admits that the following affirmative defenses are better characterized as "denials of Plaintiff's ability to meet its burden to prove either liability or damages" and requests that the Court construe them as such: the first affirmative defense for failure to state a cause of action; the fifth affirmative defense for no damages; the sixth affirmative defense for acts or omissions of complainant and others; and the sixteenth affirmative defense for no scienter, knowledge, intent, or willfulness. Opp'n at 10.

Plaintiff contends that these denials should be stricken because "[p]ermitting denials, which by definition are not 'affirmative defenses,' would effectively reduce the concept of an 'affirmative defense' to a catch-all phrase permitting all manner of responses, some of which would otherwise be impermissible." Reply at 6. Plaintiff further asserts that, although a showing of prejudice is not required, it will suffer prejudice as a result of "expend[ing] time and resources litigating irrelevant issues" should these "defenses" not be stricken. MTS at 19. In support of its position, Plaintiff cites to Rutherford v. Evans Hotels, LLC, Case No. 18-CV-435, 2019 WL 1900889, at *3 (S.D....