Television Education, Inc. v. Contractors Intelligence School, Inc. et al

Filing 27

MEMORANDUM AND ORDER signed by Senior Judge William B. Shubb on 12/12/2016 GRANTING in PART and DENYING in PART 18 Plaintiff's Motion to Strike Affirmative Defenses. Defendants have twenty-one days from the date this Order is signed to file an amended answer, if they can do so consistent with this Order. (Kirksey Smith, K)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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TELEVISION EDUCATION, INC.,

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Plaintiff,

CIV. NO. 2:16-1433 WBS EFB
MEMORANDUM AND ORDER RE: MOTION
TO STRIKE AFFIRMATIVE DEFENSES

v.

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CONTRACTORS INTELLGIENCE
SCHOOL, INC.; CONTRACTORS
PUBLISHER, INC.; LEONID
VORONTSOV; OKSANA VORONTSOV;
and DOES 1 through 25;
Defendants.

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Plaintiff Television Education, Inc. brought this

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action against defendants Contractors Intelligence School and

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Contractors Publisher (collectively “defendants”) for alleged

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copyright infringement.1

(First Am. Compl. (“FAC”) (Docket No.

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Two other defendants are named in this action: Leonid
and Oksana Vorontsov. (First Am. Compl. ¶¶ 6-7 (Docket No. 12).)
Plaintiff’s Motion only concerns the Answer filed by Contractors
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12).)

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the twenty-six affirmative defenses asserted in defendants’

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Answer.

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Before the court is plaintiff’s Motion to strike eleven of

(Pl.’s Mot. (Docket No. 18).)
Plaintiff leases and sells contractor’s license exam

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preparation materials to private schools and businesses in

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California.

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Plaintiff allegedly created and owns copyrights to a number of

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test preparation manuals and practice exams, and has “pending

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copyright applications in numerous other educational courses and

(Id., Mem. (“Pl.’s Mem.”) at 1 (Docket No. 19).)

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materials.”

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executed agreements to lease and sell its educational materials

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to Contractors Intelligence School “for use in [the school’s]

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license examination preparation courses.”

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to plaintiff, the agreements stated that Contractors Intelligence

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School “will not ‘copy, plagiarize, paraphrase, or duplicate’ any

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of the educational materials owned by Television Education . . .

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or allow any of its employees or any other person or firm to do

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so.”

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(FAC ¶¶ 15, 17.)

From 2011 through 2014, plaintiff

(Id. ¶ 18.)

According

(Id. ¶ 20.)
From 2010 to 2016, Contractors Intelligence School

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allegedly “cop[ied],” “plagiariz[ed],” and sold “knock-offs” of

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plaintiff’s materials in violation of the parties’ agreements and

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federal copyright law.

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allegedly marketed as original works of Contractors Publisher, an

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affiliate of Contractors Intelligence School.

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and Desist Letter at 2.)

(See id. at 9-12.)

The “knock-offs” were

(Id. Ex. A, Cease

Plaintiff alleges that defendants

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Intelligence School and Contractors Publisher.
(Docket No. 18).)
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(Pl.’s Mot. at 1

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continue to “plagiariz[e]” and create “knock-offs” of its

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materials despite receiving its cease and desist letter in June

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2016.

(Id. ¶¶ 37-38.)

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On June 23, 2016, plaintiff filed this action.

(Compl.

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(Docket No. 1).)

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2016.

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action “for copyright infringement under . . . 17 U.S.C. section

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101 et seq.”

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plaintiff’s amended Complaint in October 2016.

(FAC.)

Plaintiff amended its complaint in September

The amended Complaint alleges a single cause of

(Id. at 13.)

Defendants filed an Answer to
(Answer (Docket

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No. 17).)

The Answer asserts twenty-six affirmative defenses.

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(Id.)

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affirmative defenses under Federal Rule of Civil Procedure 12(f).

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(Pl.’s Mot.)

Plaintiff now moves to strike eleven of the twenty-six

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Under Rule 12(f), the court may strike an affirmative

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defense if it is insufficiently pled.

See Fed. R. Civ. P. 12(f);

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Saunders v. Fast Auto Loans, Inc., No. 2:15-2624 WBS CKD, 2016 WL

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1627035, at *6-7 (E.D. Cal. Apr. 25, 2016) (striking affirmative

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defenses as insufficiently pled under Rule 12(f)).

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Circuit has held that an affirmative defense is sufficiently pled

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when it provides plaintiff with “fair notice” of its grounds,

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which need only be described in “general terms.”2

The Ninth

Kohler v.

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Plaintiff cites several district court cases that
applied the “plausibility” standard of Bell Atlantic Corp. v.
Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662
(2009) to affirmative defenses. (See Pl.’s Mem. at 4-5.) Those
cases are no longer good law in light of Kohler v. Flava Enters.,
Inc., 779 F.3d 1019 (9th Cir. 2015), which applied the “fair
notice” standard to affirmative defenses. See Staggs v. Doctor's
Hosp. of Manteca, No. 211-CV-00414 MCE KJN, 2016 WL 3027742, at
*1 (E.D. Cal. May 27, 2016) (stating that Kohler resolved the
split in the Ninth Circuit as to whether “plausibility” or “fair
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Flava Enters., Inc., 779 F.3d 1016, 1019 (9th Cir. 2015); see

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also Beco Dairy Automation, Inc. v. Global Tech Sys., Inc., Civ.

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No. 1:12-1310 LJO SMS, 2015 WL 5732595, at *10 (E.D. Cal. Sept.

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28, 2015) (applying Kohler).

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the Twombly/Iqbal standard, it still requires a party to plead

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some factual basis for its allegations.”

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2015 WL 9583012, at *2; see also Gomez v. J. Jacobo Farm Labor

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Contractor, Inc., No. 1:15-CV-1489 AWI MJS, 2016 WL 6143342, at

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*3 (E.D. Cal. May 20, 2016) (holding the same).

“While this is less demanding than

Beco Dairy Automation,

Mere “reference

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to a [legal] doctrine, like a reference to statutory provisions,

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is insufficient.”3

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2d 1046, 1049 (N.D. Cal. 2004); see also Beco Dairy Automation,

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2015 WL 9583012, at *2 (citing Qarbon.com post-Kohler).

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Qarbon.com Inc. v. eHelp Corp., 315 F. Supp.

Plaintiff seeks to strike the following affirmative

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defenses from defendants’ Answer (numbers designated according to

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numbers used in defendants’ Answer): (4) plaintiff’s “waiver” of

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its copyright infringement claim; (5) the doctrines of “unjust

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notice” standard applies to affirmative defenses).
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Defendants cite cases holding that affirmative defenses
may only be stricken if they “prejudice the [plaintiff]” and
“ha[ve] no bearing on the subject matter of the litigation.”
(Def.’s Opp’n at 2-3 (Docket No. 23).) None of those cases are
binding Ninth Circuit precedent, however, and the court has noted
that no such precedent appears to exist, Houston Cas. Co. v. Crum
& Forster Ins. Co., No. 1:16-CV-535 LJO EPG, 2016 WL 4494444, at
*4 (E.D. Cal. Aug. 25, 2016). The Ninth Circuit rejected
defendants’ cases in an unpublished decision--Atlantic Richfield
Co. v. Ramirez, 176 F.3d 481, 1999 WL 273241 (9th Cir. 1999)-where it stated that “Rule 12(f) says nothing about a showing of
prejudice and allows a court to strike material sua sponte.” Id.
at *2. Accordingly, the court will not require plaintiff to show
“prejudice” or complete lack of “bearing” with respect to the
affirmative defenses at issue here.
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enrichment and in pari delicto”; (6) “the doctrine of unclean

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hands”; (10) expiration of plaintiff’s claim under the statute of

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limitations set forth in 17 U.S.C. § 507(b); (11) defendants’

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“good faith” in using plaintiff’s materials; (12) defendants’

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“fair use” of plaintiff’s materials; (13) plaintiff’s “improper

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purpose,” “abuse of process,” and “improper restraint of trade”

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in filing this action; (18) plaintiff’s failure to comply “with

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the statutory formalities of either the Copyright Act of 1909 or

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the Copyright Act of 1976”; (22) “the doctrine of independent

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creation”; (25) “the doctrine of copyright misuse”; and (26)

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defendants’ “right of offset.”

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(Pl.’s Mem. at 6-11.)

Defendants’ fourth affirmative defense asserts that

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plaintiff waived its copyright infringement claim against

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defendants.

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plaintiff might have waived its claim.

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factual basis for the assertion that plaintiff waived its claim

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or otherwise consented to defendants’ alleged plagiarism of its

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materials, defendants cannot be said to have provided plaintiff

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“fair notice” of their fourth affirmative defense.

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Dairy Automation, 2015 WL 9583012, at *2 (defendant must provide

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“some factual basis” for an affirmative defense).

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the court will strike that defense.

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(Answer at 6.)

Defendants do not state when or how
Without providing any

See Beco

Accordingly,

Defendants’ fifth and sixth affirmative defenses assert

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that plaintiff “engaged in improper conduct of the same nature

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which it alleges [defendants] to have done,” which bars its claim

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under the doctrines of unjust enrichment, in pari delicto, and

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unclean hands.

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when or how plaintiff might have “engaged in improper conduct of

(Answer at 6.)

Again, defendants do not identify

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the same nature which it alleges [defendants] to have done.”

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Because defendants fail to provide any factual basis for their

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fifth and sixth affirmative defenses, the court will strike those

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defenses as well.

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Defendants’ tenth affirmative defense asserts that

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plaintiff’s claim is barred under the statute of limitations set

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forth in 17 U.S.C. § 507(b).

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identified a specific limitations period, three years, which, in

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conjunction with the filing date of this action, results in a

(Id. at 7.)

Here, defendants have

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threshold date that plaintiff’s claim must not have accrued prior

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to--June 23, 2013.

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Defendants argue that plaintiff’s claim accrued prior to the

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threshold date because it is based on allegations of misconduct

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that took place as early as 2010.4

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Because this information is sufficient to notify plaintiff of the

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“general terms” of defendants’ statute of limitations defense,

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the court will not strike that defense.

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(See Compl. (filed on June 23, 2016).)

(See Answer at 7; FAC ¶ 33.)

Defendants’ eleventh affirmative defense asserts that

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defendants “acted at all times . . . in good faith” and thus are

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“not liable” under federal copyright law.

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The Ninth Circuit has held that “good faith” or “innocent intent”

(See Answer at 7-8.)

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Plaintiff notes that defendants do not identify which
specific act resulted in accrual. (See Pl.’s Mem. at 7.) Rule
12(f) only requires that affirmative defenses be pled in “general
terms,” however. See Kohler, 779 F.3d at 1019; see also Stevens
v. Corelogic, Inc., No. 14-CV-1158 BAS JLB, 2015 WL 7272222, at
*4 (S.D. Cal. Nov. 17, 2015) (Rule 12(f) does not require “a
detailed recitation of facts”). Thus, the court will not strike
defendants’ defense for lack of specificity.
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is not a defense to copyright infringement liability, however.

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Monge v. Maya Magazines, Inc., 688 F.3d 1164, 1170 (9th Cir.

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2012).

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case--Wild v. Benchmark Pest Control, Inc., No. 1:15-CV-01876

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JLT, 2016 WL 1046925 (E.D. Cal. Mar. 16, 2016)--for the

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proposition that “lack of intent serves as an affirmative defense

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to the amount of statutory damages” in copyright infringement

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cases.

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faith” defense, as stated in their Answer, is addressed to

In their Opposition, defendants cite a district court

(Defs.’ Opp’n at 7 (Docket No. 23).)

Defendants’ “good

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liability, however, not damages.

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provided plaintiff “fair notice” of any “good faith” defense to

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the amount of damages, the court will strike that defense.

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Because defendants have not

Defendants’ twelfth, thirteenth, eighteenth, twenty-

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second, twenty-fifth, and twenty-sixth affirmative defenses all

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fail for lack of factual basis.

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cite a statute or doctrine that purportedly defeats plaintiff’s

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claim, but provide no facts explaining how such statute or

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doctrine is implicated in this case.

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For each defense, defendants

Defendants’ twelfth affirmative defense, for example,

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asserts that defendants’ alleged misappropriation of plaintiff’s

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materials was in fact “fair use” of the materials under federal

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copyright law, but states no facts explaining how defendants used

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the materials or why their use constituted “fair use” under the

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relevant statute.

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affirmative defense, to cite another example, asserts that

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plaintiff filed this action “for an improper purpose, abuse of

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process and as an improper restraint of trade,” but states no

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facts explaining why this case is improper, abusive, or

(Answer at 8.)

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Defendants’ thirteenth

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unlawfully restrains trade.

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affirmative defenses--plaintiff’s failure to comply “with the

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statutory formalities of either the Copyright Act of 1909 or the

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Copyright Act of 1976,” “the doctrine of independent creation,”

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“the doctrine of copyright misuse,” and defendants’ “right of

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offset”--are similarly bereft of facts.

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(See id.)

Defendants’ other

Bare references to doctrine or statute are

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“insufficient notice” under Rule 12(f).

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2d at 1049.

Qarbon.com, 315 F. Supp.

Because defendants’ twelfth, thirteenth, eighteenth,

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twenty-second, twenty-fifth, and twenty-sixth affirmative

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defenses each reference a doctrine or statute without providing

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any supporting facts, the court will strike those defenses under

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Rule 12(f).

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See Beco Dairy Automation, 2015 WL 9583012, at *2.

The court is aware of defendants’ concern that

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“Plaintiff’s Motion to Strike . . . is really a thinly veiled

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attempt to obtain summary judgment on Defendants’ defenses

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without letting Defendants engage in the discovery process.”

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(Defs.’ Opp’n at 5.)

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grant of leave to amend in this Order.

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already issued an order providing for discovery in this case,

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(see Oct. 19, 2016 Order at 2-3 (Docket No. 16)), defendants will

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have the opportunity to engage in discovery before filing an

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amended answer.

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That concern is addressed by the court’s
Because the court has

IT IS THEREFORE ORDERED that the following affirmative

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defenses are hereby STRICKEN from defendants’ Answer: (4)

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plaintiff’s “waiver” of its copyright infringement claim; (5) the

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doctrines of “unjust enrichment and in pari delicto”; (6) “the

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doctrine of unclean hands”; (11) defendants’ “good faith” in
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using plaintiff’s materials; (12) defendants’ “fair use” of

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plaintiff’s materials; (13) plaintiff’s “improper purpose,”

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“abuse of process,” and “improper restraint of trade” in filing

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this action; (18) plaintiff’s failure to comply “with the

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statutory formalities of either the Copyright Act of 1909 or the

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Copyright Act of 1976”; (22) “the doctrine of independent

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creation”; (25) “the doctrine of copyright misuse”; and (26)

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defendants’ “right of offset.”

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IT IS FURTHER ORDERED that plaintiff’s Motion to Strike

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defendants’ tenth affirmative defense--expiration of plaintiff’s

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claim under the statute of limitations set forth in 17 U.S.C. §

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507(b)—- be, and the same hereby is, DENIED.

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Defendants have twenty-one days from the date this

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Order is signed to file an amended answer, if they can do so

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consistent with this Order.

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Dated:

December 12, 2016

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