BCOWW HOLDINGS, LLC et al v. Collins et al
REPORT AND RECOMMENDATIONS re 36 Motion to Strike, filed by BCOWW OUTFITTERS, LLC, BCOWW HOLDINGS, LLC, 45 Motion to Strike filed by BCOWW OUTFITTERS, LLC, BCOWW HOLDINGS, LLC. Signed by Judge Elizabeth S Chestney. (aej)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
BCOWW HOLDINGS, LLC, BCOWW
DANIEL COLLINS, JADAC LLC,
REPORT AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
To the Honorable United States District Judge Fred Biery:
This Report and Recommendation concerns the Rule 12(f) Motion to Strike Defendants’
Affirmative Defenses (“Motion to Strike”) [#36] and the Corrected Motion to Strike [#45] filed
by Plaintiffs BCOWW, LLC and BCOWW Outfitters, LLC (collectively, “Plaintiffs” or
All pretrial matters in this case have been referred to the undersigned for
disposition pursuant to Western District of Texas Local Rule CV-72 and Appendix C [#9].1 The
undersigned has authority to enter this recommendation pursuant to 28 U.S.C. § 636(b)(1)(B).
After considering the Motion to Strike [#36], the Corrected Motion to Strike [#45], and
Defendants’ Response [#56], the undersigned recommends that the District Court DENY
Plaintiffs’ Corrected Motion to Strike [#45]. It is also recommended that the District Court
DISMISS Plaintiff’s Motion to Strike [#36], which was superseded by the Corrected Motion to
Strike, as MOOT. Plaintiffs have failed to show they lack fair notice regarding any of the
This case was initially referred to U.S. Magistrate Judge John W. Primomo but was
subsequently referred to the undersigned in light of Judge Primomo’s retirement [#37, #39].
affirmative defenses pled by Defendants. Moreover, although some of the defenses pled by
Defendants may not be classified as true “affirmative defenses,” there is no evidence that
Plaintiffs would suffer unfair surprise with an unexpected defense so as to justify the relief
This is an unfair competition case brought by Plaintiffs against a former member
Defendant Daniel Collins, as well as Defendant JADAC, LLC (“JADAC”) (collectively,
“Defendants”), a company Collins formed after resigning from BCOWW. Plaintiffs filed suit
against Defendants on May 1, 2017, asserting claims for breach of contract, trademark
infringement, trade secret misappropriation, breach of fiduciary duty, tortious interference with
prospective business relationships, tortious interference with existing contracts, common law
unfair competition, and civil conspiracy [#1]. Plaintiffs allege that Defendants violated the
aforementioned federal and/or state laws when Collins set up JADAC to compete in the wafflemaker business.
Approximately one month after filing suit, this case was stayed for mediation pursuant to
a mandatory mediation provision in the Company Agreement [#19, #21].
The stay was
subsequently lifted on July 12, 2017, when the mediation ended in impasse [#26]. On August 1,
2017, Defendants filed their Answer and Affirmative Defenses to Plaintiffs’ Verified Complaint
Plaintiffs filed their Motion [#36] on August 22, 2017 without including a certificate of
conference as required by Local Rule CV-7(i). After receiving a deficiency notice from the
Clerk of the Court, Plaintiffs filed their Corrected Motion on August 28, 2017.
Federal Rule of Civil Procedure 12(f) permits a party to request the Court “strike from a
pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous
matter.” Fed. R. Civ. P. 12(f). This rule applies to affirmative defenses. Woodfield v. Bowman,
193 F.3d 354, 362 (5th Cir. 1999).
Federal Rule of Civil Procedure 8(c) requires a defendant to “affirmatively state any
avoidance or affirmative defense.” Fed. R. Civ. P. 8(c). The Fifth Circuit has held that this
requires a defendant to plead an affirmative defense with “enough specificity or factual
particularity to give the plaintiff “fair notice” of the defense that is being advanced.” Woodfield,
193 F.3d at 362. This “fair notice pleading requirement is met if the defendant sufficiently
articulated the defense so that the plaintiff was not a victim of unfair surprise.” Id. (internal
quotations omitted). In other words, “[a] defendant should not be permitted to ‘lie behind a log’
and ambush a plaintiff with an unexpected defense.” Ingraham v. United States, 808 F.2d 1075,
1079 (5th Cir.1987). However, “[w]here the [affirmative defense] is raised in the trial court in a
manner that does not result in unfair surprise . . . technical failure to comply precisely with Rule
8(c) is not fatal.” Id. (quoting Allied Chem. Corp. v. Mackay, 695 F.2d 854, 855–56 (5th
Cir.1983) (per curiam). Thus, in some cases, “merely pleading the name of the affirmative
defense . . . may be sufficient.” Woodfield, 193 F.3d at 362.
The Fifth Circuit has not yet specifically addressed whether the heightened Twombly and
Iqbal pleading standards have changed the pleading standards for affirmative defenses, resulting
in disagreement among the district courts in this Circuit on the issue. See, e.g., Dyson v. Stuart
Petroleum Testers, Inc., No. 1-15-cv-282-RP, 2015 WL 4935527 at *2 (W.D. Tex. Aug. 18,
2015) (citing conflicting authorities). However, in one case post-Twombly but pre-Iqbal, the
Fifth Circuit cited approvingly to the “fair notice” standard in pleading an affirmative defense.
See Rogers v. McDorman, 521 F.3d 381, 385 (5th Cir. 2008) (citing Woodfield, 193 F.3d at 362).
Moreover, at least two courts in this District have refused to apply the more heightened
pleading requirement to affirmative defenses on the grounds that “[d]ifferent policy and practical
considerations apply when asserting defenses as opposed to asserting claims.” Deaf Interpreter
Services, Inc. v. Webbco Enterprises, L.L.C., No. SA:13-CV-867-OLG, 2014 WL 12489609, at
*2 (W.D. Tex. June 30, 2014) (listing several policy and practical reasons for not extending the
Twombly/Iqbal pleading standard to affirmative defenses including but not limited to the textual
differences between Rule 8(a) and 8(c), the unfairness of holding the defendant to the same
pleading standards as the plaintiff, and the fact that a heightened pleading requirement would
result in more motions to strike, which are disfavored); see also Dyson, 2015 WL 4935527 at *3
(finding the “fair notice” standard the “better view” based upon a “number of reasons,” including
the textual differences between the rules, the fact that a defendant only has twenty-one days to
respond to a complaint whereas a plaintiff is only limited by the applicable statute of limitations,
and raising the standard for pleading affirmative defenses would only encourage more motions to
strike, prolonging pre-discovery motion practice).
In light of the Fifth Circuit’s continued
application of the “fair notice” standard after Twombly, and the policy and practical
considerations discussed in the cases above, the undersigned will apply the “fair notice” pleading
standard to Plaintiffs’ motion.
Motions to strike affirmative defenses are viewed with disfavor and are infrequently
granted “both because striking a portion of a pleading is a drastic remedy, and because it often is
sought by the movant simply as a dilatory tactic.” Fed. Deposit Ins. Corp. v. Niblo, 821 F. Supp.
441, 449 (N.D. Tex. 1993); see also Kaiser Aluminum & Chem. Sales, Inc. v. Avondale
Shipyards, Inc., 677 F.2d 1045, 1057 (5th Cir. 1982) (“[M]otions to strike a defense are
generally disfavored.”). Accordingly, a “motion to strike should be granted only when the
pleading to be stricken has no possible relation to the controversy.” Augustus v. Bd. of Pub.
Instruction of Escambia County, Fla., 306 F.2d 862, 868 (5th Cir. 1962). A district court has
“ample discretion” in determining whether to strike a defense pursuant to Rule 12(f). See In re
Beef Indus. Antitrust Litig., MDL Docket No. 248, 600 F.2d 1148, 1168 (5th Cir. 1979).
Plaintiffs first seek to strike all of the defenses included in Defendants’ Answer under the
caption “Affirmative Defenses,” arguing that Defendants fail to provide any supporting facts or
explanation for all of their fifteen different affirmative defenses. However, Plaintiffs fail to point
to any specific defense that they believe lacks specificity or factual particularity such that it fails
to provide them with “fair notice” of the defense advanced. Accordingly, Plaintiffs request to
strike all of Defendants’ affirmative defenses should be denied.2
Alternatively, Plaintiffs argue that the following five defenses asserted by Defendants
should be struck because they are not proper affirmative defenses:
First Defense: “The complaint fails to state a claim upon which relief may be
Seventh Defense: “The claims of the Plaintiffs are barred by spoliation of
evidence, the extent of which is to be determined during the course of discovery.”
Plaintiffs’ motion could also be denied for failure to confer in good faith as required by Local
Rule CV-7(i) (providing that a court may deny a nondispositive motion “unless the movant
advises the court within the body of the motion that counsel for the parties have first conferred in
a good-faith attempt to resolve the matter by agreement and, further, certifies the specific reason
that no agreement could be made”). Although Plaintiffs included a certificate of conference in
their Corrected Motion, the certificate reveals that Plaintiffs only attempted to confer to discover
whether Defendants would oppose their motion― not to resolve the disputed issues raised in the
motion in good faith. If Plaintiffs were concerned that Defendants’ Answer might unfairly
surprise them with an unexpected defense, Plaintiffs could have requested that Defendants replead some of their defenses with sufficient particularity.
Eighth Defense: “The claims of the Plaintiffs are barred because Plaintiffs cannot
establish the elements of a contract between the parties.”
Fourteenth Defense: “The claims of the Plaintiffs are barred because Plaintiffs
know that Defendant Collins never signed any contract with Plaintiffs and this
action is therefore not based on fact, is frivolous, unreasonable, unfounded and
groundless and accordingly, Defendants are entitled to their attorneys’ fees and
other costs associated with the defense of this action.”
Fifteenth Defense: “BCOWW’s information concerning vendors, manufacturers,
contractors, engineers, designers, suppliers, customers, pricing, shippers and
warehouses was information within the public domain.”
Notably, the inclusion of the above non-affirmative defenses in Defendants’ answer does not
prejudice the Plaintiffs in this action. In fact, Plaintiffs have arguably been given an advantage in
the form of a more robust understanding of Defendants’ defense strategy through Defendants’
decision to plead non-affirmative defenses. The District Court should reject Plaintiffs’ attempt to
prolong pre-discovery motion practice with a motion that neither advances this case nor benefits
the Plaintiffs in this action. 3
Plaintiffs are correct that defenses eight and fifteen are denials of essential elements of
Plaintiffs’ claims, rather than true “affirmative defenses.” However, Plaintiffs have not shown
that they will suffer any prejudice if these defenses, which are included under the inaccurate
section heading “affirmative defenses,” are not stricken.4 Indeed, by pleading these defenses,
Given that Plaintiffs already know they have an obligation to prove each element of their
claims, it is not obvious to the undersigned why Plaintiffs would have filed this motion. Perhaps
it is an attempt to gain leverage in the litigation by forcing their opponents to respond. In any
event, this is not a wise use of the clients’, attorneys’, or Court’s resources.
Plaintiffs argue that “[a]llowing Defendants to proceed with its improper affirmative defenses
jeopardizes Plaintiffs’ claims and will cause Plaintiffs to incur unnecessary costs and effort
assembling evidence and preparing arguments related to these purported defenses.” (See [#45] at
4.) However, there is no evidence that Plaintiffs would suffer any unnecessary expense if their
motion is not granted. Rather, Plaintiffs appear to misunderstand the term “prejudice” in the
context of a motion to strike. “[T]he prejudice inquiry considers whether the plaintiff had
sufficient notice to prepare for and contest the defense, and not simply whether the defense, and
Defendants have provided Plaintiffs with additional information regarding their defense strategy
on certain claims. Accordingly, Plaintiffs’ motion to strike defenses eight and fifteen should be
denied. See Deaf Interpreter, No. 2014 WL 12489609, at *3 (refusing to strike defenses more
properly classified as denials of essential elements because Plaintiff did not show that it would
suffer prejudice if the “affirmative defenses” were not struck).
Plaintiffs are also correct that spoliation is not an affirmative defense.
Bayliner Marine Corp., 71 F.3d 148, 155-56 (4th Cir. 1995) (“Even though application of the
[spoliation] rule could prove to be critical to a party's recovery on a claim, it is not an affirmative
defense, but a rule of evidence, to be administered at the discretion of the trial court.
Consequently, a party need not indicate its intent to invoke the spoliation rule in the pleadings.”).
So again, Defendants through their pleading have provided notice of a defense strategy that they
were under no legal obligation to reveal in their Answer. And again, Plaintiffs will not suffer
any prejudice from this inclusion. See id. (trial court did not error in allowing late pretrial
amendment alleging spoliation as plaintiff actually benefited from defendants’ advance notice of
their intent to invoke the spoliation rule). If Defendants seek a spoliation instruction to the jury,
Defendants will not be able to rest on this pleading but will have to request the instruction
through the proper procedural vehicle, and Plaintiffs, without a doubt, will respond and object at
that time. In the meantime, they are on notice of Defendants’ desire to seek this instruction and
can take steps to defend themselves.
Plaintiffs also take issue with Defendants’ inclusion of their fourteenth “affirmative
defense,” through which Defendants indicate their intention to seek attorneys’ related to
defending against the breach-of-contract claim that Defendants contend was legally frivolous due
evidence in support of it, were detrimental to the plaintiff (as every affirmative defense is).”
Rogers, 521 F.3d at 387.
to the lack of an executed contract. Here, again, Plaintiffs may be technically correct that this is
not an “affirmative defense.” This is more accurately described as a request for sanctions under
Rule 11, and if Defendants desire to collect their attorneys’ fees, they would be required to make
an appropriate motion requesting the same—and they could do so whether or not they included
this “defense” in their Answer. See, e.g., Williams v. Cordillera Commc’ns, Inc., No. 2:13-CV124, 2014 WL 6674087, at *1 (S.D. Tex. Nov. 24, 2014) (requests for attorneys’ fees and
expenses for vexatious litigation tactics need not be pleaded; rather, the requesting party must
file a motion setting out the basis for relief and the damages requested). Like the situation with
the spoliation “defense,” Defendants have at worst provided additional notice of their intentions
beyond what is required under federal pleading standards, and Plaintiffs are helped, not
prejudiced by this inclusion. See, e.g., Book v. Moulton, No. 3:05 CV 0875, 2005 WL 3307361,
at *1 (N.D.N.Y. Dec. 6, 2005) (refusing to strike defendants’ “affirmative defenses” that the
action was “legally frivolous” and filed in violation of Rule 11, entitling defendants to expenses,
because even though these may not be “traditional affirmative defenses,” defendants put plaintiff
on notice of their intent to hold plaintiff accountable for attorneys’ fees for filing a frivolous
lawsuit). Accordingly, Defendants’ fourteenth “affirmative defense” should not be struck.
Finally, courts are split as to whether Plaintiff’s first defense―failure to state a claim
upon which relief may be granted―is a proper affirmative defense. Compare SecurityProfiling,
LLC v. Trend Micro Am., Inc., No. 616CV01165RWSJDL, 2017 WL 1950810, at *2 (E.D. Tex.
May 11, 2017) (adopting recommendation to strike the defense of failure to state a claim upon
which relief can be granted as it is not a proper affirmative defense) with Two Men and a Truck
Int’l, Inc. v. Two Guys Moving Bossier, LLC, et al., No. 15-254-SDD-RLB, 2015 WL 7573216,
at *1 (M.D. La. Nov. 25, 2015) (noting that although this defense serves as nothing more than
notice that a motion to dismiss may be forthcoming, it is nonetheless a defense recognized in
Form 30 of the Appendix to the Federal Rules of Civil Procedure). Regardless, there is no
reason this “belt-and- suspenders” type pleading prejudices Plaintiffs in any manner. Defendants
have simply placed Plaintiffs on notice that they may choose to file a motion to dismiss in the
future. As with the other motions addressed above, Plaintiffs would have the right to file a
response to any motion filed by Defendants, including any motion to dismiss.
For the reasons discussed above, the undersigned recommends that the District Court
DENY Plaintiffs’ Corrected Motion to Strike [#45]. Plaintiffs Motion to Strike [#36] should be
DISMISSED as MOOT.
Instructions for Service and Notice of Right to Object/Appeal
The United States District Clerk shall serve a copy of this report and recommendation on
all parties by either (1) electronic transmittal to all parties represented by attorneys registered as
a “filing user” with the clerk of court, or (2) by mailing a copy to those not registered by certified
mail, return receipt requested. Written objections to this report and recommendation must be
filed within fourteen (14) days after being served with a copy of same, unless this time period is
modified by the district court. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). The party shall file
the objections with the clerk of the court, and serve the objections on all other parties. A party
filing objections must specifically identify those findings, conclusions or recommendations to
which objections are being made and the basis for such objections; the district court need not
consider frivolous, conclusive or general objections. A party’s failure to file written objections
to the proposed findings, conclusions and recommendations contained in this report shall bar the
party from a de novo determination by the district court. Thomas v. Arn, 474 U.S. 140, 149–52
(1985); Acuña v. Brown & Root, Inc., 200 F.3d 335, 340 (5th Cir. 2000). Additionally, failure to
file timely written objections to the proposed findings, conclusions and recommendations
contained in this report and recommendation shall bar the aggrieved party, except upon grounds
of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal
conclusions accepted by the district court. Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415,
1428–29 (5th Cir. 1996) (en banc).
SIGNED this 15th day of September, 2017.
ELIZABETH S. ("BETSY") CHESTNEY
U.S. MAGISTRATE JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?