Hadley v. Kellogg Sales Company

Filing 123

Order by Judge Lucy H. Koh Denying 111 Motion to Strike Answer and Enter Default ; Granting in Part and Denying in Part 111 Motion to Strike Affirmative Defenses.(lhklc1, COURT STAFF) (Filed on 3/7/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

United States District Court
Northern District of California

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STEPHEN HADLEY,
Plaintiff,

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Case No. 16-CV-04955-LHK
ORDER DENYING MOTION TO
STRIKE ANSWER AND ENTER
DEFAULT; GRANTING IN PART AND
DENYING IN PART MOTION TO
STRIKE AFFIRMATIVE DEFENSES

v.
KELLOGG SALES COMPANY,
Defendant.

Re: Dkt. No. 111

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Plaintiff filed a second amended complaint on April 5, 2017. ECF No. 62. On August 10,

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2017, the Court granted in part and denied in part Defendant’s motion to dismiss. ECF No. 76.

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Defendant did not file its answer to the second amended complaint until January 19, 2018, 149

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days or five months past the deadline for doing so. ECF No. 110. On January 30, 2018, Plaintiff

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filed a motion to strike the answer and enter default or, in the alternative, to strike Kellogg’s

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affirmative defenses. ECF No. 111. Defendant opposed the motion to strike on February 13,

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2018. ECF No. 115. Plaintiff replied on February 20, 2018. ECF No. 116.

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Having reviewed the parties’ briefing on the motion to strike and the relevant law, the
Court denies the motion to strike the answer, denies the motion for entry of default, and grants the
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Case No. 16-CV-04955-LHK
ORDER DENYING MOTION TO STRIKE ANSWER AND ENTER DEFAULT; GRANTING IN PART AND
DENYING IN PART MOTION TO STRIKE AFFIRMATIVE DEFENSES

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motion to strike only the Fourth, Fifth, Sixth, Seventh, Eighth, and Ninth Affirmative Defenses.

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The Court denies Plaintiff’s motion to strike the First through Third Affirmative Defenses.
First, the parties disagree on the relevant standard for evaluating the motion to strike. The

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Ninth Circuit in Gibson v. Household International, Inc., 151 F. App’x 529, 530-31 (9th Cir.

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2005) (unpublished), applied Rule 12(f) to a motion to strike an untimely answer and

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distinguished cases that applied the standard for setting aside a default that had already been

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entered. Similarly, other courts in the Northern District of California have applied Rule 12(f),

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rather than Rule 55(c). See, e.g., AT&T Corp. v. Dataway Inc., 577 F. Supp. 2d 1099, 1102 (N.D.

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Cal. 2008). As a result, the Court finds that the motion to strike is properly evaluated under Rule

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United States District Court
Northern District of California

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12(f).
“Motions to strike are disfavored, and the remedy of striking a pleading should generally

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be granted only to avoid prejudice to the moving party or when it is clear that the matter sought to

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be stricken could have no possible bearing on the subject matter of the litigation.” Wolk v. Green,

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516 F. Supp. 2d 1121, 1134 (N.D. Cal. 2007). In a case with similar facts, AT&T v. Dataway, 577

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F. Supp. 2d at 1103, another court in this district denied a motion to strike an answer that was 170

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days late, where the defendant admitted the late filing was the result of oversight and had

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otherwise vigorously defended the case, including by filing a motion to dismiss. Additionally, the

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court in AT&T found that the plaintiff had not suffered prejudice because the plaintiff could not

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identify any defenses that caught it by surprise.

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In the instant case, Defendant filed three motions to dismiss and has vigorously defended

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the case. On November 15, 2016, the Court denied Defendant’s first motion to dismiss as moot in

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light of Plaintiff’s filing of an amended complaint on November 8, 2016. ECF No. 31. On March

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21, 2017, the Court granted Defendant’s second motion to dismiss. ECF No. 56. On August 10,

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2017, the Court granted in part and denied in part Defendant’s third motion to dismiss. ECF No.

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76. The parties have litigated 15 discovery motions before the special master. ECF Nos. 113-14.

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Moreover, Defendant concedes that the late filing of its answer was the result of an oversight. In

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Case No. 16-CV-04955-LHK
ORDER DENYING MOTION TO STRIKE ANSWER AND ENTER DEFAULT; GRANTING IN PART AND
DENYING IN PART MOTION TO STRIKE AFFIRMATIVE DEFENSES

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fact, neither party was aware of Defendant’s failure to file an answer until the special master

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raised the issue on December 31, 2017. The Court finds that any prejudice that Plaintiff may have

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suffered is not significant enough to warrant the drastic remedy of striking the answer. The Court

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is persuaded neither that Plaintiff abandoned any of his claims in reliance on Defendant’s silence,

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nor that Defendant waived any defenses.

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To remedy any alleged prejudice and because Defendant only began producing emails in

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mid-February 2018, the Court extends the filing deadline for Plaintiff’s class certification motion

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from April 12 to April 30, 2018. Defendant’s deadline will remain June 7, 2018 for the

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opposition.

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Second, concerning the motion to enter default, the Court finds that entry of default is

United States District Court
Northern District of California

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improper because Defendant filed its answer before Plaintiff sought entry of default. The Ninth

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Circuit has stated that “the general rule [is] that default judgments are ordinarily disfavored. Cases

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should be decided upon their merits whenever reasonably possible.” Eitel v. McCool, 782 F.2d

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1470, 1472 (9th Cir. 1986). In addition, in analogous circumstances, the Ninth Circuit held that a

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district court did not abuse its discretion in denying a motion for default where a motion to dismiss

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was filed before the clerk acted on a request for entry of default. See Nathan v. Fry’s Elecs. Inc.,

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607 F. App’x 623, 624 (9th Cir. 2015). Other district courts in the Ninth Circuit have held that

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even an untimely answer prevents entry of default. See, e.g., Wofford v. Bracks, No. 15-1052,

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2015 WL 10793981, at *1 (C.D. Cal. Aug. 13, 2015). Accordingly, the motion for entry of default

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is denied.

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Third, with respect to striking Defendant’s affirmative defenses, the Court declines to

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strike Defendant’s First through Third Affirmative Defenses of failure to state a claim, puffery,

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and lack of justifiable reliance. These issues were previously raised in Defendant’s motions to

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dismiss and thus the Court finds that Plaintiff has had adequate notice of these defenses.

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The Court strikes the Fourth and Fifth Affirmative Defenses of safe harbor and preemption
because the Court already ruled against these defenses as a matter of law. See ECF No. 76.
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Case No. 16-CV-04955-LHK
ORDER DENYING MOTION TO STRIKE ANSWER AND ENTER DEFAULT; GRANTING IN PART AND
DENYING IN PART MOTION TO STRIKE AFFIRMATIVE DEFENSES

With respect to the Sixth, Seventh, and Eighth Affirmative Defenses, the Court has

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previously held that “the heightened pleading standard for complaints articulated in Twombly and

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extended to all civil complaints in Iqbal applies to affirmative defenses. AirWair Int’l Ltd. v.

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Schultz, 84 F. Supp. 3d 943, 950 (N.D. Cal. 2015). The Sixth, Seventh, and Eighth Affirmative

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Defenses of unclean hands, waiver, and estoppel are nothing more than one-sentence recitations

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that “Plaintiff’s claims are barred in whole or in part by the doctrine[s] of” unclean hands, waiver,

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or estoppel, without specifying any factual basis for the claims. Accordingly, the Court strikes the

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Sixth, Seventh, and Eighth Affirmative Defenses for failure to sufficiently plead the affirmative

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defenses. The Court strikes these defenses with prejudice because the Court finds that it would be

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unduly prejudicial to the Plaintiff to allow Defendant to amend the answer at this late stage of the

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United States District Court
Northern District of California

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case, particularly after the answer was already untimely by five months.

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The Court also exercises its discretion to strike with prejudice the Ninth Affirmative

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Defense, the reservation of additional defenses, because the assertion of new defenses in the

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future, after this already untimely answer, would be unduly prejudicial to the Plaintiff.

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IT IS SO ORDERED.

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Dated: March 7, 2018
______________________________________
LUCY H. KOH
United States District Judge

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Case No. 16-CV-04955-LHK
ORDER DENYING MOTION TO STRIKE ANSWER AND ENTER DEFAULT; GRANTING IN PART AND
DENYING IN PART MOTION TO STRIKE AFFIRMATIVE DEFENSES