NY MACHINERY INC. et al v. THE KOREAN CLEANERS MONTHLY et al
Filing
30
LETTER OPINION. Signed by Judge Susan D. Wigenton on 11/20/2018. (dam, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CHAMBERS OF
MARTIN LUTHER KING COURTHOUSE
50 WALNUT ST.
NEWARK, NJ 07101
973-645-5903
SUSAN D. WIGENTON
UNITED STATES DISTRICT JUDGE
November 20, 2018
Nancy A. Del Pizzo, Esq.
Gene Y. Kang, Esq.
Rivkin Radler LLP
21 Main Street, Court Plaza South
Hackensack, NJ 07601
Attorneys for Plaintiffs
Jay J. Rice, Esq.
Nagel Rice LLP
103 Eisenhower Parkway
Roseland, NJ 07068
Attorney for Defendants
LETTER OPINION FILED WITH THE CLERK OF THE COURT
Re:
NY Machinery Inc., et al., v. The Korean Cleaners Monthly, et al.
Civil Action No. 17-12269 (SDW)(LDW)
Counsel:
Before this Court is Plaintiffs NY Machinery Inc. (“NYM”) and Kleaners LLC’s
(“Kleaners”) (collectively, “Plaintiffs”) Motion to Dismiss the Counterclaim and Strike the First,
Twelfth, and Thirteenth Separate Defenses of Defendants The Korean Cleaners Monthly (“KCM”)
and John Chung (“Chung”) (collectively, “Defendants”) pursuant to Federal Rules of Civil
Procedure (“Rule”) 12(b)(6) and 12(f). Jurisdiction is proper pursuant to 28 U.S.C. § 1331. Venue
is proper pursuant to 28 U.S.C. § 1391. This opinion is issued without oral argument pursuant to
Rule 78. For the reasons stated herein, Plaintiffs’ Motion is GRANTED.
I.
BACKGROUND
This Court assumes the parties’ familiarity with the factual background and procedural
history in this matter and thus will summarize only those facts relevant to the instant motion. On
November 30, 2017, Plaintiffs commenced this civil action alleging that Defendants had published
and disseminated false and defamatory statements regarding Plaintiffs and their products. (See
generally Compl., ECF No. 1.) On January 24, 2018, Defendants moved to dismiss the Complaint.
(See ECF No. 10.) On May 31, 2018, this Court issued an Opinion and Order denying Defendants’
Motion to Dismiss Counts One through Seven, granting Defendants’ Motion to Dismiss Count
Eight, and providing Plaintiffs with the opportunity to amend the Complaint. (ECF Nos. 15-16.)
On June 29, 2018, Plaintiffs filed an Amended Complaint re-alleging Counts One through
Eight: (1) unfair competition in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)
(Count One); (2) unfair competition in violation of N.J. Stat. Ann. § 56:4-1 (Count Two); (3)
common law unfair competition (Count Three); (4) false advertising in violation of § 43(a) of the
Lanham Act, 15 U.S.C. § 1125(a) (Count Four); (5) tortious interference with prospective
economic relations (Count Five); (6) defamation per se (Count Six); (7) false light (Count Seven);
and (8) trade libel (Count Eight). (See generally Am. Compl., ECF No. 17.) On July 13, 2018,
Defendants filed an Answer to the Amended Complaint, Separate Defenses, and Counterclaim
(“Answer”). (See generally Answer, ECF No. 18.) Defendants’ Counterclaim seeks to recover
for defamation per se, alleging that Plaintiff “NYM published and disseminated false statements
concerning Chung and KCM through Kleaners.” (Answer, Counterclaim ¶ 8.) Specifically,
Defendants allege that Plaintiffs published statements in writing “that Mr. Chung and KCM
extort[] allied traders and that Mr. Chung is engaged in organized crime.” (Id. ¶ 9.)
On August 3, 2018, Plaintiffs filed the instant Motion to Dismiss the Counterclaim and
Strike the First, Twelfth, and Thirteenth Separate Defenses. (ECF No. 21.) Defendants opposed
the motion on September 4, 2018, and Plaintiffs replied on September 10, 2018. (ECF Nos. 24,
26.)
II.
DISCUSSION
A. Counterclaim: Defamation per se
Rule 8(a)(2) requires a complaint to set forth a “short and plain statement of the claim
showing that a pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This short and plain statement
must “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The pleading standard under Rule 8 requires
“more than an unadorned, the defendant-unlawfully-harmed-me-accusation.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009).
“A motion to dismiss a counterclaim is properly evaluated under the familiar 12(b)(6)
standard.” Malibu Media, LLC v. Lee, No. 12-03900, 2013 U.S. Dist. LEXIS 72218, at *8 (D.N.J.
May 22, 2013). For the purposes of a Rule 12(b)(6) motion to dismiss, “the facts alleged in the
counterclaim-complaint are accepted as true and all reasonable inferences are drawn in favor of
the plaintiff.” Fresenius Kabi USA, LLC v. Fera Pharms., LLC, No. 15-3654, 2017 U.S. Dist.
LEXIS 76582, at *5 (D.N.J. May 19, 2017) (citing N.J. Carpenters & the Trustees Thereof v.
Tishman Constr. Corp. of N.J., 760 F.3d 297, 302 (3d Cir. 2014)). A counterclaim-complaint
“must contain sufficient factual matter . . . to state a claim to relief that is plausible on its face.”
Ashcroft, 556 U.S. at 678 (internal quotation marks omitted); see also Fowler v. UPMC Shadyside,
578 F.3d 203, 210-11 (3d Cir. 2009) (discussing the standard for a 12(b)(6) motion to dismiss).
In ruling on a motion to dismiss, a court may consider a “document integral to or explicitly
relied upon in the complaint . . . without converting the motion [to dismiss] into one for summary
judgment.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)
2
(citations omitted). As such, this Court will consider the exhibit attached to Defendants’
Counterclaim that contains the article with the alleged defamatory statements, and the English
translation of that article attached to Defendants’ opposition brief. (Answer, Counterclaim, Ex. B;
Rice Cert., ECF No. 24-1.) A statute of limitations defense can be raised in a Rule 12(b)(6) motion
to dismiss “if the limitations bar is apparent on the face of the complaint.” BK Trucking Co. v.
PACCAR, Inc., No.15-2282, 2016 U.S. Dist. LEXIS 85149, at *15 (D.N.J. June 30, 2016).
Here, Plaintiffs move to dismiss Defendants’ Counterclaim as time-barred pursuant to New
Jersey’s one-year statute of limitations for claims of defamation. See N.J. Stat. Ann § 2A:14-3;
see also Petro-Lubricant Testing Labs., Inc. v. Adelman, 233 N.J. 236, 250 (N.J. 2018) (“A
defamation action must be filed within one year of the publication of an actionable writing or
utterance.”). Exhibit B to the Counterclaim shows that the allegedly defamatory statements made
by Plaintiffs about Defendants were published in the May 2017 issue of Kleaners magazine.
(Answer, Counterclaim, Ex. B.) Thus, Defendants’ Counterclaim was untimely when it was
asserted on July 13, 2018. Contrary to Defendants’ arguments, the Counterclaim was neither
compulsory nor was it saved by the doctrine of recoupment.
Defendants’ defamation counterclaim is permissive because it does not arise out of the
same transaction or occurrence that is the subject matter of Plaintiffs’ Amended Complaint. 1 The
alleged defamatory statements were distinct, occurred in a different publication six months before
Plaintiffs commenced this litigation, and Defendants could have asserted their claim at any point
prior to the expiration of the statute of limitations. 2 Further, the defense of recoupment does not
apply because the Counterclaim does not “arise out of the identical transaction that provided
[Plaintiffs] with a cause of action.” Aleynikov v. Goldman Sachs Grp., Inc., No. 12-5994, 2016
U.S. Dist. LEXIS 149666, at *38 (D.N.J. Oct. 28, 2016) (citation omitted). Because Defendants
did not assert their defamation claim until July 13, 2018, it is time-barred and Defendants’ request
for leave to amend the Counterclaim would be futile. See Monroe v. Host Marriot Servs. Corp.,
999 F. Supp. 599, 604 (D.N.J. Apr. 7, 1998) (“The statute of limitations in defamation actions is
to be strictly construed.”).
B. First, Twelfth, and Thirteenth Separate Defenses
Rule 12(f) provides that “[t]he court may strike from a pleading an insufficient defense or
any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). Generally,
motions to strike are disfavored and “should only be granted when ‘the insufficiency of the defense
is clearly apparent.’” Collura v. Ford, No. 13-4066, 2016 U.S. Dist. LEXIS 13965, at *78 (E.D.
Pa. Feb. 3, 2016) (quoting Cipollone v. Liggett Grp., Inc., 789 F.2d 181, 188 (3d Cir. 1986)).
Plaintiffs’ motion challenges the sufficiency of certain affirmative defenses raised by Defendants
in their Answer to the Amended Complaint, which this Court will address seriatim.
1
Rule 13 provides that a counterclaim is compulsory if it “arises out of the transaction or
occurrence that is the subject matter of the opposing party’s claim[.]” Fed. R. Civ. P. 13(a)(1)(A).
A counterclaim that is not compulsory is permissive. See Fed. R. Civ. P. 13(b).
2
This Court notes that Defendants do not have a viable defamation claim because the statements
referenced in the Counterclaim do not comport with the alleged defamatory statements attached to
Defendants’ pleading.
3
Defendants’ First Separate Defense asserts that “[t]he First Amended Complaint fails to
state a claim upon which relief may be granted.” (Answer at 11.) Although Rule 12(h)(2)(A)
explicitly provides that the defense of failure to state a claim may be raised in any pleading 3
allowed under Rule 7(a), here, that defense is not viable. Indeed, this Court previously considered
Defendants’ Motion to Dismiss the Complaint for failure to state a claim and found that the
Complaint was sufficiently pled as to Counts One through Seven. (ECF Nos. 15-16.) Regarding
Count Eight (Trade Libel), this Court previously held that Plaintiffs were required to plead special
damages with particularity, 4 which they have now included in the Amended Complaint. (Am.
Compl. ¶¶ 138-41.)
Defendants’ Thirteenth Separate Defense claims that the “Amended Complaint is barred
in whole or in part as Defendants did not reveal Plaintiffs’ identity in its reporting.” (Answer at
12.) Because Plaintiffs have sufficiently pled each cause of action, including their claim for
defamation per se, Defendants’ First and Thirteenth Separate Defenses are stricken. 5
Defendants’ Twelfth Separate Defense asserts that “[a]ny damages owed to Plaintiffs by
Defendants must be offset by the amount of damages owed to Defendants by Plaintiffs.” (Answer
at 12.) As explained above, Defendants’ Counterclaim is neither timely nor viable. Thus,
Defendants’ Twelfth Separate Defense is stricken.
III.
CONCLUSION
For the reasons set forth above, Plaintiffs’ Motion is GRANTED. An appropriate order
follows.
/s/ Susan D. Wigenton
SUSAN D. WIGENTON, U.S.D.J.
Orig:
cc:
Clerk
Leda D. Wettre, U.S.M.J.
Parties
3
See Fed. R. Civ. P. 12(h)(2)(A); see also Fed. R. Civ. P. 7(a)(2) (pleadings include “an answer to
a complaint”).
4
“[T]he need to prove such special damages requires that Plaintiffs allege either the loss of
particular customers by name, or a general diminution in its business, and extrinsic facts showing
that such special damages were the natural and direct result of the false publication.” Intervet, Inc.
v. Mileutis, Ltd., No. 15-1371, 2016 U.S. Dist. LEXIS 22165, at *17-18 (D.N.J. Feb. 24, 2016)
(citing Mayflower Transit, LLC v. Prince, 314 F. Supp. 2d 362, 378 (D.N.J. 2004)) (emphasis
added).
5
This Court will not reiterate its reasoning as it is fully set forth in this Court’s prior Opinion dated
May 31, 2018. (ECF No. 15.)
4
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