Innovation Ventures LLC et al v. Pittsburg Wholesale Grocers Inc et al

Filing 332

ORDER GRANTING PLAINTIFFS' MOTION TO STRIKE AFFIRMATIVE DEFENSES AND VACATING HEARING by Judge William Alsup [granting 275 Motion to Strike]. (whasec, COURT STAFF) (Filed on 5/13/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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INNOVATION VENTURES, LLC, et al.,

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For the Northern District of California

United States District Court

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No. C 12-05523 WHA

Plaintiffs,
v.

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ORDER GRANTING
PLAINTIFFS’ MOTION
TO STRIKE AFFIRMATIVE
DEFENSES AND
VACATING HEARING

PITTSBURG WHOLESALE GROCERS,
INC., et al.,
Defendants.
/

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In this anti-counterfeiting action regarding 5-hour Energy drinks, plaintiffs move to

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strike certain affirmative defenses from defendants’ first amended answer. For the reasons

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given below, this motion is GRANTED.

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Plaintiff International IP Holdings, LLC owns the 5-hour Energy trademark, copyright,

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and trade dress. Plaintiff Innovation Ventures, LLC exclusively licenses the 5-hour Energy

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trademark, copyright, and trade dress. Plaintiff Living Essentials, LLC, a subsidiary of

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Innovation Ventures, distributes 5-hour Energy. Plaintiffs allege that the defendants in this

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action have been involved in a scheme to manufacture and sell counterfeit 5-hour Energy drinks.

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Defendants Dan-Dee Company, Inc., and its owners Fadi Attiq and Kevin Attiq (collectively

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“Dan-Dee”), are among the many wholesale grocers and distributors allegedly involved.

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Dan-Dee and the Attiqs separately answered plaintiffs’ second amended complaint in

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January 2013 (Dkt. Nos. 159, 161). Plaintiffs moved to strike most of the 26 asserted affirmative

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defenses (Dkt. No. 191). Dan-Dee conceded that many of its defenses did not meet the pleading

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standard (Dkt. No. 234). An order allowed plaintiffs to withdraw the motion and permitted

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Dan-Dee and the Attiqs each to file an amended answer, which are identical except for

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defendants’ names (Dkt. Nos. 235, 243, 245). Now, plaintiffs bring a Rule 12(f) motion to

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strike 11 of the 27 defenses contained in Dan-Dee’s answers. None of these 11 defenses is an

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affirmative defense and all are STRICKEN.

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1.

LEGAL STANDARD.

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Our court of appeals has not addressed whether the pleading standards of Iqbal and

generally agreed that they do. See PageMelding, Inc. v. ESPN, Inc., C 11-06263-WHA, 2012

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WL 3877686 (N.D. Cal. Sept. 6, 2012) (collecting cases). “Affirmative defenses plead matters

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For the Northern District of California

Twombly apply to affirmative defenses. Judges in this district, including the undersigned, have

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United States District Court

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extraneous to the plaintiff’s prima facie case, which deny plaintiff’s right to recover, even if the

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allegations of the complaint are true. In contrast, denials of the allegations in the Complaint or

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allegations that the Plaintiff cannot prove the elements of his claims are not affirmative

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defenses.” G & G Closed Circuit Events, LLC v. Nguyen, C 10-00168, 2010 WL 3749284, at *5

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(N.D. Cal. Sept. 23, 2010) (Judge Lucy Koh) (internal citation and quotation marks omitted).

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“Affirmative defenses are governed by the same pleading standards as claims. Notice requires

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more than legal conclusions; factual allegations must establish a right to relief that is ‘beyond the

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speculative level.’” PageMelding, 2012 WL 3877686 at *5 (internal citation omitted).

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“Pursuant to a motion under [Rule] 12(f), the court may order stricken from any pleading

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any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.

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[Rule] 12(f) is a means by which to avoid the expenditure of time and money that must arise

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from litigating spurious issues by dispensing with those issues prior to trial.” Matsushita Elec.

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Indus. Co. Ltd. v. CMC Magnetics Corp., C 06-04538-WHA, 2006 WL 3290413 (N.D. Cal.

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Nov. 13, 2006) (internal citation and quotations omitted).

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2.

DEFENSES THAT DENY LIABILITY.

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The fifth, twelfth, seventeenth, nineteenth, twenty-third, and twenty-fifth affirmative

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defenses deny allegations in the complaint or elements of plaintiffs’ prima facie case and

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thus are not true affirmative defenses but denials of liability. J & J Sports Prods., Inc. v.
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Mendoza-Govan, C 10-05123-WHA, 2011 WL 1544886 (N.D. Cal. Apr. 25, 2011).

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These include: (5) lack of prior knowledge; (12) bona fide error and/or innocent mistake;

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(17) lack of duty owed; (19) lack of willful misconduct; (23) lack of bad faith; and (25) lack

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of an agency relationship. The above-listed affirmative defenses are STRICKEN.

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The fourth affirmative defense also attacks plaintiffs’ case rather than being a true
affirmative defense. It reads:

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Each of Plaintiffs’ trademarks that contains the term or phrase
“5-Hour Energy” is merely descriptive of the supposed and desired
effect of their products upon consumers who ingest them — viz.,
providing an energy boost that lasts for five hours. The term or
phrase “5-Hour Energy” is therefore descriptive and has become
associated with Plaintiffs only by secondary meaning — namely,
Plaintiffs’ ongoing sales and promotion of their own products under
the name “5-Hour Energy.” Plaintiffs’ rights and remedies must be
limited accordingly.

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For the Northern District of California

United States District Court

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(Dkt. No. 243 at 21).
This defense is also a mere denial of one aspect of plaintiffs’ case, rather than a true

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affirmative defense. The parties spill much ink arguing whether a motion to strike is the proper

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place to determine if the 5-hour Energy marks and trade dress merit strong trademark

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protections. This order need not reach that issue. Elsewhere in their answers, defendants have

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addressed plaintiffs’ assertions regarding the relative strength of the marks (Ans. at 6). Because

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the fourth affirmative defense is not an affirmative defense at all, but merely responds to an

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element of plaintiffs’ case, it is STRICKEN. All of the foregoing is without prejudice to

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defendant litigating these points to the extent relevant to any claims asserted by plaintiff.
DEFENSES THAT ATTACK THE SUFFICIENCY OF THE COMPLAINT.

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3.

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The tenth, eleventh, and twenty-seventh affirmative defenses merely allege that plaintiffs

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have failed to state a claim, and would more properly have been brought under a Rule 12(b)(6)

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motion rather than framing them as affirmative defenses. Perez v. Gordon & Wong Law Group,

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P.C., C 11-03323, 2012 WL 1029425 (N.D. Cal. Mar. 26, 2012) (Judge Lucy Koh). The tenth

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affirmative defense states “[p]laintiffs have failed to allege sufficient facts to state any claim for

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which relief can be granted and have failed to meet the pleading requirements . . .” (Ans. at 25).

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The eleventh affirmative defense alleges “[p]laintiff’s boiler-plate allegations of conspiracy have
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been stricken from their amended complaint . . . so that [p]laintiffs have failed to state an

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actionable claim for relief against them” (ibid.). The twenty-seventh affirmative defense alleges

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“[t]he complaint fails to state any basis for injunctive relief because it fails to plead continuing

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facts, the threat of irreparable harm, or the inadequacy of a legal remedy” (ibid.). The tenth,

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eleventh, and twenty-seventh affirmative defenses are not affirmative defenses and are therefore

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STRICKEN. It is noted that this does not preclude defendants from later asserting these types

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of defenses in a Rule 12(c) motion or at trial. Rule 12(h)(2); G & G, 2010 WL 3749284 at *5.

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Similarly, the twenty-fourth affirmative defense is not a true affirmative defense but
would more properly have been brought as a motion for a more definite statement under
Rule 12(e). G & G, 2010 WL 3749284 at *5. The twenty-fourth affirmative defense alleges

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For the Northern District of California

United States District Court

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“[p]laintiffs’ claims, as pled, are uncertain, ambiguous and unintelligible . . .” (Ans. at 27).

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A lack of clarity in the complaint should be addressed through a Rule 12(e) motion, which may

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only be made before serving a responsive pleading. Although plaintiffs pointed out this

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deficiency in their first motion to strike Dan-Dee’s affirmative defenses (Dkt. No. 191),

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defendants failed to meaningfully address the problem in their amended answer. Given

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defendants’ choice to reallege the deficient twenty-fourth affirmative defense, it is STRICKEN.

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Plaintiffs’ motion to strike defenses (4), (5), (10), (11), (12), (17), (19), (23), (24), (25),

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and (27) is GRANTED. The hearing scheduled for May 16, 2013, is VACATED.

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IT IS SO ORDERED.

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Dated: May 13, 2013.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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