American GNC Corporation v. LG Electronics Inc. et al

Filing 52

ORDER granting in part and denying in part Plaintiff's 25 Motion to Strike Affirmative Defenses. Court denies Plaintiff's request to strike Defendants' second and third affirmative defenses and grants the request to strike Defendants' seventh affirmative defenses. Court strikes Defendants' seventh affirmative defense without prejudice. Signed by Judge Cynthia Bashant on 10/24/2017. (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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AMERICAN GNC CORPORATION,

Case No. 17-cv-01090-BAS-BLM

Plaintiff,

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

v.

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LG ELECTRONICS INC., et al.,
Defendants.

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[ECF No. 25]

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Plaintiff American GNC Corporation filed a First Amended Complaint (“FAC”)

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against Defendants LG Electronics Inc.; LG Electronics MobileComm U.S.A., Inc.; and

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LG Electronics Mobile Research U.S.A., LLC alleging sixteen counts of patent

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infringement. (ECF No. 6.) Defendants’ Answer raises seven affirmative defenses. (ECF

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No. 12.) Plaintiff now moves to strike three of Defendants’ affirmative defenses. (ECF No.

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25.) In response, Defendants maintain their second and third defenses and withdraw the

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seventh. (ECF No. 28.) Plaintiff replies. (ECF No. 30.)

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The Court finds this motion suitable for determination on the papers submitted and

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without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For the following

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reasons, the Court GRANTS IN PART and DENIES IN PART Plaintiff’s motion to

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strike.
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I.

BACKGROUND

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Plaintiff “specializes in inventing and applying advanced and innovative

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technologies to contemporary problems within the fields of Guidance, Navigation, Control

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and Communications (GNCC), Inertial Sensors, Health Monitoring, Intelligent Processing,

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and Autonomous Robotics.” (FAC ¶ 19.) Plaintiff owns U.S. Patent Numbers 6,311,555;

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6,415,227; 6,508,122; 6,516,283; 6,671,648; 6,697,758; and 6,792,353 (the “Patents-in-

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Suit”). (Id. ¶ 28.)

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In its FAC, Plaintiff alleges Defendants infringe the Patents-in-Suit by “making,

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using, offering for sale, selling and/or importing” an assortment of “accused smartphones,

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tablets, and other mobile wireless devices.” (FAC ¶¶ 38-39.) Defendants assert seven

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affirmative defenses in their Answer (ECF No. 12), and Plaintiff now moves to strike three

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of these defenses (ECF No. 25).

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II.

LEGAL STANDARD

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Rule 12(f) of the Federal Rules of Civil Procedure provides that a court may strike

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from a pleading “an insufficient defense or any redundant, immaterial, impertinent, or

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scandalous matter.” “[T]he function of a 12(f) motion to strike is to avoid the expenditure

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of time and money that must arise from litigating spurious issues by dispensing with those

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issues prior to trial.” Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983).

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“Motions to strike are generally regarded with disfavor because of the limited

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importance of pleading in federal practice, and because they are often used as a delaying

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tactic.” Neilson v. Union Bank of Cal., 290 F. Supp. 2d 1101, 1152 (C.D. Cal. 2003). “[The]

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motion . . . should not be granted unless the matter to be stricken clearly could have no

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possible bearing on the subject of the litigation. If there is any doubt . . . the court should

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deny the motion.” Platte Anchor Bolt, Inc. v. IHI, Inc., 352 F. Supp. 2d 1048, 1057 (N.D.

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Cal. 2004) (citations omitted). Before a motion to strike affirmative defenses may be

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granted, “the Court must be convinced that there are no questions of fact, that any questions

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of law are clear and not in dispute, and that under no set of circumstances could the defenses
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succeed.” Levin–Richmond Terminal Corp. v. Int’l Longshoremen’s & Warehousemen’s

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Union, Local 10, 751 F. Supp. 1373, 1375 (N.D. Cal. 1990) (quoting Sys. Corp. v. Am. Tel.

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& Tel. Co., 60 F.R.D. 692, 694 (S.D.N.Y. 1973)). The court “must view the pleadings in a

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light most favorable to the pleading party.” In re 2TheMart.com, Inc. Sec. Litig., 114 F.

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Supp. 2d 955, 965 (C.D. Cal. 2000).

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An affirmative defense is sufficient under Rule 12(f) if “it gives plaintiff fair notice

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of the defense.” Wyshak v. City Nat’l Bank, 607 F.2d 824, 827 (9th Cir. 1979); see also

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Vogel v. Linden Optometry APC, No. CV 13-00295 GAF (SHx), 2013 WL 1831686, at *3

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(C.D. Cal. Apr. 30, 2013) (stating that the Ninth Circuit has continued to apply Wyshak

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post Iqbal/Twombly and citing Simmons v. Navajo Cty., 609 F.3d 1011, 1023 (9th Cir.

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2010)). Under Wyshak, “[f]air notice generally requires that the defendant state the nature

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and grounds for the affirmative defense.” Kohler v. Island Rests., LP, 280 F.R.D. 560, 564

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(S.D. Cal. 2012). “It does not, however, require a detailed statement of facts.” Id.

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III.

ANALYSIS

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A.

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Initially, the parties disagree on the pleading standard applicable to affirmative

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defenses. Plaintiff argues for the Twombly/Iqbal plausibility pleading standard. (Mot. 1:4-

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12, ECF No. 25; Reply 5:28-7:10, ECF No. 30.) See also Bell Atl. Corp. v. Twombly, 550

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U.S. 544, 554-57 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 677-79 (2009). Defendants argue

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for the Wyshak fair notice pleading standard. (Opp’n 3:16-26, ECF No. 28.)

Challenge to Legal Standard

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Recent decisions acknowledge that the Ninth Circuit district courts are split on this

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issue. See, e.g., Rahman v. San Diego Account Serv., No. 16-cv-2061-JLS (KSC), 2017

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WL 1387206, at *2 (S.D. Cal. Apr. 18, 2017); MyGo, LLC v. Mission Beach Indus., LLC,

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No. 3:16-cv-2350-GPC-RBB, 2017 WL 107346, at *7 (S.D. Cal. Jan. 11, 2017); Rosen v.

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Masterpiece Mktg. Grp., LLC, 222 F. Supp. 3d 793, 802 (C.D. Cal. 2016).

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This Court sides with the courts continuing to apply the Wyshak fair notice pleading

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standard to affirmative defenses for four reasons. First, the Twombly/Iqbal plausibility
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standard is “grounded in Federal Rule of Civil Procedure 8(a)(2), which governs claims,

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rather than Federal Rule of Civil Procedure 8(c), which governs affirmative defenses.” DK

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Holdings v. Miva, Inc., No. 16-cv-0580 W (RBB), 2016 WL 4943048, at *4 (S.D. Cal.

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Sept. 16, 2016). While a pleader must “show” entitlement to relief in a claim, a pleader

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must only “affirmatively state” an affirmative defense. See Vogel, 2013 WL 1831686, at

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*3 (continuing to apply the fair notice standard and noting “important linguistic

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differences” between Rule 8(a)(2) and Rule 8(c)).

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Second, fairness considerations weigh in favor of a lower pleading standard for

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affirmative defenses because an answer must be crafted under stricter time constraints than

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a complaint. See Vogel, 2013 WL 1831686, at *3; see also Tyco Fire Prods. v. Victaulic

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Co., 777 F. Supp. 2d 893, 901 (E.D. Pa. 2011) (“[A]pplying the concept of notice to require

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more than awareness of the issue’s existence imposes an unreasonable burden on

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defendants who risk the prospect of waiving a defense at trial by failing to plead it . . . and

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have a short amount of time to develop the facts necessary to do so . . . .”); Fed. R. Civ. P.

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12(b) (“Every defense to a claim for relief in any pleading must be asserted in the

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responsive pleading if one is required.”).

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Third, “a heightened pleading requirement would produce more motions to strike,

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which are disfavored.” Bayer CropScience AG v. Dow AgroSciences LLC, No. 10-1045,

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2011 WL 6934557, at *2 (D. Del. Dec. 30, 2011) (citation omitted).

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Finally, the Ninth Circuit has not instructed district courts to apply the

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Twombly/Iqbal standard to affirmative defenses. For these four reasons, the Court confirms

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its previous decisions on this issue and continues to apply the Wyshak pleading standard to

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affirmative defenses.

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B.

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Plaintiff requests the Court strike the second, third, and seventh affirmative defenses

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Application

from Defendants’ Answer.

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1.

Second Affirmative Defense

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Defendants contend that they have not and do not infringe “any valid and enforceable

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claim of the Patents-in-Suit, either directly or indirectly, in particular because not every

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accused instrumentality practices every claimed limitation.” (Answer ¶ 611, ECF No. 12.)

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Plaintiff seeks to strike this defense because Defendants have not “pled any facts or

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arguments in support of [their] non-infringement defense, and [Plaintiff] remains unaware

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of any basis for non-infringement.” (Reply 1:9-10 (emphasis in original).) Defendants

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argue that their denial of the infringement assertions constitutes fair notice of their non-

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infringement defense and that factual plausibility is not required. (Opp’n 6:27-7:1.) For the

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reasons outlined above, the Court rejects Plaintiff’s arguments challenging this defense on

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the basis of Twombly/Iqbal plausibility and turns to whether the defense suffices under the

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fair notice pleading standard.

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At this point, the non-infringement contentions provide sufficient notice to Plaintiff

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that Defendants will pursue this affirmative defense. Plaintiff’s motion to strike this

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defense is premature. Plaintiff will have the opportunity to obtain facts about this defense

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during the discovery process. See Vistan Corp. v. Fadei USA, Inc., No. C-10-4862 JCS,

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2011 WL 1544796, at *7 (N.D. Cal. Apr. 25, 2011) (“These affirmative defenses, while

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boilerplate, are standard affirmative defenses, appropriate at the outset of the case before

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discovery has commenced.”). Further, the non-infringement contentions bear directly on

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Plaintiff’s infringement claims, and a motion to strike “should not be granted unless the

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matter to be stricken clearly could have no possible bearing on the subject of the litigation.”

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See Platte Anchor Bolt, Inc., 352 F. Supp. 2d at 1057.

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Accordingly, the Court denies Plaintiff’s motion to strike Defendants’ second
affirmative defense.

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2.

Third Affirmative Defense

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Plaintiff launches a similar attack on Defendants’ third affirmative defense. In this

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defense, Defendants assert invalidity of one or more claims of the Patents-in-Suit,
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specifically referencing: (i) several federal statutes and regulations, and (ii) navigational

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practices appearing in a military textbook that Defendants argue predated the claims in

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U.S. Patent Numbers 6,415,227 (the “227 patent”) and 6,792,353 (the “353 patent”).

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(Answer ¶ 612.) Plaintiff first argues that the specific references to the 227 and 353 patents

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lack sufficient detail to be plausible and that Defendants provide no factual basis for the

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invalidity defense for the other five Patents-in-Suit. (Mot. Ex. A, Mem. of P. & A. 5:2-10,

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ECF No. 25-1.) Plaintiff later contends that this defense also fails under the Wyshak

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pleading standard. (Reply 2:2-12.) Defendants respond that their references to specific

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statutes provide fair notice that the patentability and “validity of claims will be challenged

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as anticipated, obvious, indefinite, or unsupported.” (Opp’n 8:14-19.)

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Applying the Wyshak standard for the reasons discussed above, the Court finds that

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Defendants’ invalidity defense provides sufficient notice to Plaintiff at this time. As with

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Defendants’ non-infringement defense, Plaintiff will have the opportunity to obtain facts

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about the invalidity contentions during the discovery process. See Vistan Corp., 2011 WL

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1544796, at *7. Further, Defendants’ references to specific statutes “state the nature and

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grounds” for their defense, and Defendants are not required to include “a detailed statement

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of facts.” See Kohler, 280 F.R.D. at 564. Additionally, Defendants’ invalidity contentions

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bear directly on Plaintiff’s infringement claims, and a motion to strike “should not be

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granted unless the matter to be stricken clearly could have no possible bearing on the

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subject of the litigation.” See Platte Anchor Bolt, Inc., 352 F. Supp. 2d at 1057.

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Accordingly, the Court denies Plaintiff’s motion to strike Defendants’ third
affirmative defense.

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3.

Seventh Affirmative Defense

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Defendants assert that Plaintiff’s claims “are barred, in whole or in part, by 35 U.S.C.

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§ 288.” (Answer ¶ 616.) Plaintiff argues that this affirmative defense fails to provide fair

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notice and lacks a factual or legal basis. (Mot. 1:6-7.) In response, Defendants withdraw

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this defense. (Opp’n 1:25.) Therefore, the Court grants Plaintiff’s motion to strike the

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seventh affirmative defense.

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IV.

CONCLUSION

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In light of the foregoing, the Court GRANTS IN PART and DENIES IN PART

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Plaintiff’s motion to strike (ECF No. 25). Specifically, the Court DENIES Plaintiff’s

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request to strike Defendants’ second and third affirmative defenses and GRANTS

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Plaintiff’s request to strike Defendants’ seventh affirmative defense. The Court strikes

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Defendants’ seventh affirmative defense without prejudice.

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IT IS SO ORDERED.

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DATED: October 24, 2017

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