G&G Closed Circuit Events, LLC v. Nguyen et al

Filing 33

ORDER granting in part and denying in part 27 Motion to Strike. Signed by Judge Edward J. Davila on 6/10/2013. (ejdlc1, COURT STAFF) (Filed on 6/10/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION
CASE NO. 5:12-cv-03068 EJD

G & G CLOSED CIRCUIT EVENTS, LLC,

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

Plaintiff(s),
For the Northern District of California

United States District Court

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v.
TINA L. NGUYEN, et. al.,

[Docket Item No(s). 27]
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Defendant(s).
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I.

INTRODUCTION

On June 15, 2012, Plaintiff G & G Closed Circuit Events, LLC (“Plaintiff”) filed a

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Complaint against Defendants Tina L. Nguyen, Guruprasad Suryanarayana and Satom, LLC

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(collectively, “Defendants”) for violations of the Communications Act of 1934, 47 U.S.C. § 605, the

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Cable and Television Protection and Competition Act of 1992, 47 U.S.C. § 553, California’s Unfair

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Competition Law (“UCL”), Business and Professions Code § 17200 et. seq., as well as for

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conversion. See Compl., Docket Item No. 1. According to the Complaint, Plaintiff was granted the

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exclusive nationwide commercial distribution rights to Strikeforce: “World Grand Prix”: Alistair

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Overeem v. Fabricio Werdum. Id. at ¶ 21. Plaintiff alleges that Defendants unlawfully intercepted

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the program and broadcast it in certain establishments in violation of Plaintiff’s exclusive license.

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Defendants filed an Answer to the Complaint on September 14, 2012, which included

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eighteen affirmative defenses. See Answer, Docket Item No. 10. The court granted Plaintiff’s

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motion to strike these defenses on January 9, 2013, but allowed Defendants leave to amend a
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CASE NO. 5:12-cv-03068 EJD
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO STRIKE

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number of them. See Docket Item No. 22. Defendants thereafter filed an Amended Answer on

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January 25, 2013, this time asserting eight affirmative defenses. See Docket Item No. 25.

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Presently before the court is Plaintiff’s second Motion to Strike Defendants’ affirmative

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defenses pursuant to Federal Rule of Civil Procedure 12(f). See Docket Item No. 27. Federal

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jurisdiction arises pursuant to 28 U.S.C. §§ 1331 and 1367. Having carefully reviewed the relevant

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documents, the court has determined that Plaintiff’s motion should be granted in part and denied in

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part for the reasons explained below.

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II.

LEGAL STANDARD

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

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For the Northern District of California

Federal Rule of Civil Procedure 12(f) permits a court to “strike from a pleading an

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United States District Court

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may be insufficient as a matter of pleading or a matter of law. Sec. People, Inc. v. Classic

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Woodworking, LLC, No. C-04-3133 MMC, 2005 U.S. Dist. LEXIS 44641, at *5, 2005 WL 645592

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(N.D. Cal. Mar. 4, 2005). “The key to determining the sufficiency of pleading an affirmative

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defense is whether it gives plaintiff fair notice of the defense.” Wyshak v. City Nat’l Bank, 607 F.2d

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824, 827 (9th Cir. 1979). While a defense need not include extensive factual allegations in order to

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give fair notice (Sec. People, Inc., 2005 U.S. Dist. LEXIS 44641, at *6), bare statements reciting

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mere legal conclusions may not be sufficient. CTF Dev., Inc. v. Penta Hospitality, LLC, No. C

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09-02429, 2009 U.S. Dist. LEXIS 99538, at *21, 2009 WL 3517617 (N.D. Cal. Oct. 26, 2009).

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A court may also strike matter in an answer that is immaterial or impertinent. Fed. R. Civ. P.

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12(f). Immaterial matter is “that which has no essential or important relationship to the claim for

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relief or the defenses being pleaded.” Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993),

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rev’d on other grounds, 510 U.S. 517 (1994) (quoting 5 Charles A. Wright & Arthur R. Miller,

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Federal Practice and Procedure § 1382, at 706-07 (1990)). Impertinent matter does not pertain, and

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is not necessary, to the issues in question. Id.

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Where a court strikes an affirmative defense, leave to amend should be freely given so long
as there is no prejudice to the moving party. Wyshak, 607 F.2d at 826.

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CASE NO. 5:12-cv-03068 EJD
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III.

DISCUSSION

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A.

Laches

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Defendants have re-plead a laches defense after the court struck the prior iteration for failure

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to provide Plaintiff with fair notice of the basis for the defense. They now allege that “Plaintiff

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refrained from filing this action until June 15, 2012, nearly a year after the alleged telecast” and,

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during this time period, “Defendants’ business has substantially changed” such that Plaintiff’s delay

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in filing is prejudicial. See Docket Item No. 25, at 5:5-11. Plaintiff argues the laches defense is still

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insufficiently plead.

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“‘The defense of laches requires unreasonable delay plus either acquiescence in the act about
which plaintiff complains or prejudice to the defendant resulting from the delay.’” Johnson v. City

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For the Northern District of California

United States District Court

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of Loma Linda, 24 Cal. 4th 61, 68 (2000) (quoting Conti v. Bd. of Civil Service Comm’rs, 1 Cal. 3d

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351, 359 (1969)). Here, Defendants have amended their laches defense to plead exactly what is

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required: they have identified an unreasonable delay and stated how this delay caused them

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prejudice. Thus, to the extent Plaintiff finds the allegations incapable of providing “fair notice” due

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to a lack of further specificity, the court disagrees. See Rapp v. Lawrence Welk Resort, No.

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12-CV-01247 BEN (Wmc), 2013 U.S. Dist. LEXIS 11966, at *21, 2013 WL 358268 (S.D. Cal. Jan.

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28, 2013) (finding with regard to a laches defense that “[t]he fair notice standard only requires the

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pleading to provide a plaintiff with fair notice of the nature and grounds of the affirmative defense,

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not to prove that the defendant will ultimately prevail.”).

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It is true, however, that a laches defense may have limited application to this case. “The

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equitable defense of laches does not apply in an action at law.” Pratali v. Gates, 4 Cal. App. 4th

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632, 645 (1992). This is because “[t]he equitable doctrine of laches has a legal equivalent in the

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statutes of limitations.” Wells Fargo Bank, N.A. v. Bank of America NT&SA, 32 Cal. App. 4th 424,

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439 (1995). An action subject to trial by jury is generally considered to be one “at law.” See Tull v.

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United States, 481 U.S. 412, 417 (1987). In this case, Plaintiff is entitled to a jury trial on alleged

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violations of 47 U.S.C. §§ 553 and (or) 605 as well as on the cause of action for conversion. See J

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& J Sports Prods. v. Jimenez, No. 10cv0866 DMS (RBB), 2010 U.S. Dist. LEXIS 118222, at *8,

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2010 WL 4639314 (S.D. Cal. Nov. 8, 2010) (concluding that “the Seventh Amendment preserves
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the right to jury trial for statutory damage claims under Sections 553 and 605.”); see also Bufano v.

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San Francisco, 233 Cal. App. 2d 61, 68 (1965) (“Conversion is an action at law subject to jury

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determination.”). For this reason, they are actions “at law” to which laches can not be applied.

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But laches may apply to the UCL cause of action, particularly since Plaintiff requests

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injunctive relief.1 Cortez v. Purolator Air Filtration Products Co., 23 Cal. 4th 163, 179-80 (2000)

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(“[W]hat would otherwise be equitable defenses may be considered by the court when the court

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exercises its discretion over which, if any, remedies authorized by [California Business and

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Professions Code] section 17203 should be awarded.”). This is true regardless of Plaintiff’s

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argument that this action was filed within the UCL’s statute of limitations.

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For the Northern District of California

United States District Court

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Since Plaintiff has adequately plead an affirmative defense with potential application to one
cause of action, Plaintiff’s Motion to Strike is denied as to first affirmative defense for laches.

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B.

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The mitigation of damages defense was stricken in response to Plaintiff’s first motion

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because the court found it “unrelated to the causes of action actually asserted in the Complaint. See

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Docket Item No. 22. The court allowed leave to amend, however, so that Defendants could explain

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the doctrine’s application to this case. Id.

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Mitigation of Damages

Defendants have not done so. They now allege that “Plaintiff failed to use reasonable care

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required to protect its allegedly exclusive distribution rights” and “failed to ensure that the Program

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would not be intercepted or broadcasted without Plaintiff’s consent.” See Docket Item No. 25, at

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6:1-2. They also allege that Plaintiff failed to send “a cease and desist letter to demand that

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Defendants stop the actions alleged in Plaintiff’s Complaint.” Id. at 6:3-4.

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These activities do not constitute mitigation in the context of this case. “Typically, the rule

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of mitigation of damages comes into play when the event producing injury or damage has already

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occurred and it then has become the obligation of the injured or damaged party to avoid continuing

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or enhanced damages through reasonable efforts.” J & J Sports Prods. v. Sanchez,

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“By reason of Defendants’ violation of California Business and Professions Code Section
17200, et. seq., Plaintiff . . . is entitled to . . . injunctive and declaratory relief.” See
Compl., at ¶ 47.
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CASE NO. 5:12-cv-03068 EJD
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2:11-cv-02440-GEB-CKD, 2012 U.S. Dist. LEXIS 74070, at *6 (E.D. Cal. May 29, 2012) (quoting

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Valle de Oro Bank v. Gamboa, 26 Cal. App. 4th 1686, 1691 (1994)). Any failure by Plaintiff to

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prevent an interception - prior to its occurrence - does not fall within this definition. Nor would a

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cease and desist letter constitute mitigation of damages for an already-completed unlawful

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interception. The damage has been done at that point. Mitigation of damages is therefore

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inapplicable to this litigation.

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The fourth affirmative defense will stricken, this time without leave to amend, as Plaintiff

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would be compelled to expend additional time and resources litigating irrelevant issues if the

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defense was to remain. See Barnes v. AT&T Pension Benefit - Nonbargained Program, 718 F.
Supp. 2d 1167, 1173 (N.D. Cal. 2010).

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For the Northern District of California

United States District Court

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C.

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The court previously struck Defendants’ punitive damages defense because it was “nothing

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more than a statement of opinion.” See Docket Item No. 22. In a revised version, Defendants now

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state that allowing Plaintiff to recover punitive damages “would violate Defendants’ due process

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rights under the Fifth Amendment and Fourteenth Amendment.” See Docket Item No. 25, at 6:19.

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Defendants also claim that the “vagueness and uncertainty” of Plaintiff’s allegations do not “provide

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fair notice of the prohibited conduct.” Id. at 6:20-21.

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Punitive Damages

While Defendants have developed their position on punitive damages, the revised affirmative

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defense is still nothing more than a legal argument better suited for a motion to dismiss under Rule

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12(b)(6) or a motion for more definite statement under Rule 12(e). Indeed, “denials of the

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allegations in the Complaint or allegations that the Plaintiff cannot prove the elements of his claim

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are not affirmative defenses.” G & G Closed Circuit Events, LLC v. Nguyen, No. 10-CV-00168-

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LHK, 2010 U.S. Dist. LEXIS 104980, at *13, 2010 WL 3749284 (N.D. Cal. Sept. 23, 2010).

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Moreover, “‘uncertainty’ is not an affirmative defense.” Sec. People, Inc., 2005 U.S. Dist. LEXIS,

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at *14. “Any lack of clarity in the complaint could have been addressed, prior to filing an answer,

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by a motion for a more definite statement pursuant to Rule 12(e) of the Federal Rules of Civil

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Procedure, and may now be addressed through discovery.” Id. at *14-15.

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Accordingly, Plaintiff’s Motion to Strike will be granted as to the seventh affirmative
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CASE NO. 5:12-cv-03068 EJD
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO STRIKE

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defense addressing punitive damages without leave to amend. See Barnes, 718 F. Supp. 2d at 1173.

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D.

Defenses Still Insufficient as a Matter of Pleading

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Defendants’ affirmative defenses alleging unclean hands, justification, waiver and estoppel

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were dismissed previously because they were not plead with sufficient particularity to provide

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Plaintiff with fair notice of the basis for the asserted defense. See Docket Item No. 22. With regard

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to the first two listed defenses, the court observed that Defendants “did not state any facts which

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would amount to ‘unclean hands,’ and did not describe how their conduct was justified.” Id. The

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court found the final two defenses insufficient because they were “just bare references to legal

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doctrines without any discussion of how they may apply to this case.” Id.
Little has changed in the Amended Answer. The new versions of the unclean hands and

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For the Northern District of California

United States District Court

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justification defenses cannot be sustained since they still offer little more than legal definitions. See

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Qarbon.com Inc. v. eHelp Corp., 315 F. Supp. 2d 1046, 1049 (N.D. Cal. 2004); CTF Dev., Inc.,

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2009 U.S. Dist. LEXIS 99538, at *22 (“simply stating that a claim fails due to plaintiff’s ‘unclean

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hands’ is not sufficient to notify the plaintiff what behavior has allegedly given them ‘unclean

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hands.’”). The same is true of the waiver and estoppel defenses. Thus, the second, third, fifth, sixth

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and eighth defenses2 will be stricken without leave to amend as Plaintiff would prejudiced if they

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were to remain. See Barnes, 718 F. Supp. 2d at 1173.

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IV.

ORDER

Based on the foregoing, Plaintiff’s Motion to Strike is GRANTED IN PART and DENIED

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IN PART. The motion is DENIED as the first affirmative defense for laches. The motion is

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GRANTED as to the second through eighth affirmative defenses, which are each STRICKEN

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WITHOUT LEAVE TO AMEND.

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IT IS SO ORDERED.

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Dated: June 10, 2013
EDWARD J. DAVILA
United States District Judge

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The court notes that the fifth and eighth affirmative defenses are identical save for a
difference in the lead-in sentence.
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CASE NO. 5:12-cv-03068 EJD
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO STRIKE