sFox, Inc. v. Michael M. Kessler

• Court: District Court, E.D. California
• Decided: May 13, 2026
• Docket: 2:25-cv-03227
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 EASTERN DISTRICT OF CALIFORNIA 11 12 sFOX, INC., a Texas No. 2:25-cv-03227-JAM-JDP corporation, 13 Plaintiff, 14 ORDER DENYING PLAINTIFF’S v. MOTION TO STRIKE 15 MICHAEL M. KESSLER, an 16 individual, 17 Defendant. 18 19 This matter is before the Court on Plaintiff sFox, Inc.’s 20 motion to strike the majority of Defendant Kessler’s affirmative 21 defenses. ECF No. 18, sFox’s Motion to Strike Affirmative 22 Defenses 3-6, 8-10, 17-18, 22, 23-25, 28, 30 (“Mot.”). The 23 matter is fully briefed.1 ECF No. 19, Defendant’s Opposition to 24 Plaintiff’s Motion to Strike (“Opp’n”); ECF No. 20, Plaintiff’s 25 Reply in Support of its Motion to Strike (“Reply”). For the 26 reasons detailed below, Plaintiff’s motion is denied. 27 1 This motion was determined to be suitable for decision without 28 oral argument. See ECF No. 22; E.D. Cal. L.R. 230(g). 1 I. OPINION 2 In November 2025, Plaintiff initiated a lawsuit against 3 Defendant Kessler “to recover digital assets he stole from 4 [Plaintiff]’s trading platform.” Mot. at 3. Attached to 5 Plaintiff’s complaint are over a hundred pages of documents, 6 including an executed Terms of Service agreement and a “Post- 7 Trade Settlement Agreement.” See ECF No. 1, Compl. Following 8 Defendant’s answer to the complaint (ECF No. 15), Plaintiff filed 9 the pending motion to strike most of Defendant’s affirmative 10 defenses. See Mot. 11 A. Legal Standard 12 Federal Rule of Civil Procedure 12(f) authorizes motions to 13 strike “an[y] insufficient defense or any redundant, immaterial, 14 impertinent, or scandalous matter” from a pleading. “[T]he 15 function of a 12(f) motion to strike is to avoid the expenditure 16 of time and money that must arise from litigating spurious 17 issues by dispensing with those issues prior to trial . . . .” 18 Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 19 1983). However, “broad motions to strike rarely avoid the 20 expenditure of time and money and are generally disfavored.” 21 United States v. Gibson Wine Co., No. 1:15-cv-1900, 2016 WL 22 1626988, at *4 (E.D. Cal. Apr. 25, 2016) (citations omitted) 23 (also noting motions to strike affirmative defenses “often 24 needlessly extend litigation.”). 25 B. Analysis 26 Plaintiff moves to strike the majority of the affirmative 27 defenses from Defendant’s answer, asserting they fall into two 28 categories, negligence-based and contract-based affirmative 1 defenses, and both are legally insufficient. See Mot. 2 Although Plaintiff claims “Courts in this district 3 routinely strike affirmative defenses,” the opposite is true. 4 It is well establish that “Rule 12(f) motions to strike[] are 5 ‘generally regarded with disfavor because of the limited 6 importance of pleading in federal practice, and because they are 7 often used as a delaying tactic.’” Lund v. Datzman, No. 2:19- 8 cv-2287, 2025 WL 2779354, at *2 (E.D. Cal. Sep. 30, 2025) 9 (quoting Neilson v. Union Bank of Cal., N.A., 290 F.Supp.2d 10 1101, 1152 (C.D. Cal. 2003); accord Opp’n at 3-4. 11 Plaintiff contends that affirmative defenses 3-6, 8, 17-18, 12 22, 24, and 30 are negligence-based affirmative defenses, and 13 therefore inapplicable to the claims in the complaint. See Mot. 14 at 5-6. Plaintiff also argues affirmative defenses 9-10, 23, 15 25, and 28 are contract-based affirmative defenses, and since 16 there is no breach of contract claim, these defenses are 17 “untethered to the [c]omplaint.” Id. at 6-7. Plaintiff does 18 not cite any cases supporting its theory that the cited defenses 19 are legally inapplicable to the specific causes of action pled 20 in the complaint. Id. at 5-8 (citing, e.g., cases pled under 42 21 U.S.C. § 1983 and Gomez v. J. Jacobo Farm Labor Contractor, 22 Inc., 188 F.Supp.3d 986, 990-91 (E.D. Cal. May 20, 2016), 23 involving unfair competition and labor law, which are 24 inapposite). Instead, Plaintiff simply argues none of the 25 causes of action “sound in negligence, nor would any of these 26 claims be subject to a comparative fault among tortfeasors,” and 27 do not arise from a breach of contract, despite acknowledging 28 the “contracts [that are] annexed to the [c]omplaint,” and 1 therefore, the asserted affirmative defenses are legally 2 insufficient. Id. 3 A recent case from this district, Lund v. Datzman, is 4 instructive here. No. 2:19-cv-2287, 2025 WL 2779354 (E.D. Cal. 5 Sep. 30, 2025). In Lund, the district court denied the 6 plaintiff’s motion to strike nearly all of the defendants’ 7 affirmative defenses. Id. The court in Lund highlighted other 8 district court and Ninth Circuit cases reiterating, “[i]f a 9 court is in doubt as to whether the challenged matter may raise 10 an issue of fact or law, the motion to strike should be denied, 11 leaving the assessment of the sufficiency of the allegations for 12 adjudication on the merits after proper development of the 13 factual nature of the claims through discovery,” and “[e]ven 14 when the defense under attack presents a purely legal question, 15 courts are reluctant to determine disputed or substantial 16 questions of law on a motion to strike.” Id. at *2 (quoting 17 Springer v. Fair Isaac Corp., No. 2:14-cv-02238, 2015 WL 18 7188234, at *2 (E.D. Cal. Nov. 16, 2015) and S.E.C. v. Sands, 19 902 F.Supp. 1149, 1166 (C.D. Cal. 1995), and citing 20 Whittlestone, Inc. v. Handi-Craft, Co., 618 F.3d 970 (9th Cir. 21 2010)). As part of its denial of the plaintiff’s motion to 22 strike, the Lund court “agree[d] with [d]efendants that their 23 affirmative defenses are proper and related to the facts at 24 issue in this case. The Court notes that for several 25 affirmative defenses, Plaintiff's arguments about their legal 26 sufficiency are based on conjecture about what the evidence will 27 uncover and what theories will be advanced.” Id. at *3. Like 28 the defendants in Lund, Defendant here argues its affirmative eee eee I EI OE EI OED I, OD OE

1 defenses are related to allegations in the complaint. See Opp’n 2 at 3-7. The Court agrees. Plaintiff has failed to meet its 3 burden here demonstrating the asserted defenses are 4 insufficient, redundant, immaterial, or impertinent. Accord 5 Lund, 2025 WL 2779354, at *2-5. Accordingly, Plaintiff’s motion 6 is denied in its entirety. 7 Il. ORDER 8 For the reasons set forth above, the Court DENIES 9 | Plaintiff’s Motion to Strike. 10 IT IS SO ORDERED. 11 Dated: May 12, 2026 12 HN A. MENDEZ, 13 Fee UNITED pe Act JUDGE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28