1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 TALECE INC., Case No. 20-cv-03579-BLF
8 Plaintiff, ORDER DENYING MOTION TO 9 v. STRIKE AFFIRMATIVE DEFENSES
10 ZHENG ZHANG, [Re: ECF No. 93] 11 Defendant.
12 ZHENG ZHANG, 13 Third-party Plaintiff, 14 v.
15 LANHAI SU, 16 Third-party Defendant. 17
18 19 Before the Court is Defendant and Third-Party Plaintiff Zheng Zhang’s motion to strike 20 affirmative defenses asserted in answers to the First Amended Counter- and Third-Party 21 Complaint. ECF No. 93 (“MTS”); see also ECF No. 96 (“Reply”). Zhang seeks to strike the 22 affirmative defenses pled by Plaintiff Talece Inc. and Third-Party Defendant Lanhai Su as 23 inadequately pled under Federal Rules of Civil Procedure 8(a) and 9(b). See ECF No. 91 (Talece 24 answer); ECF No. 92 (Su answer). Talece and Su oppose the motion. See ECF No. 95 (“Opp.”). 25 The Court finds this motion suitable for disposition without oral argument and VACATES the 26 April 28, 2022 hearing. See Civ. L.R. 7-1(b). The Court DENIES the motion. 27 I. BACKGROUND 1 previous order on (1) the motion to dismiss and strike filed by Talece and (2) the motion to 2 dismiss filed by Su. See ECF No. 88. 3 II. LEGAL STANDARD 4 Federal Rule of Civil Procedure 12(f) permits a court to “strike from a pleading an 5 insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” The 6 function of a motion made under this rule is “to avoid the expenditure of time and money that 7 must arise from litigating spurious issues by dispensing with those issues prior to trial.” 8 Whittlestone, Inc. v. Handi–Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (quotation marks and 9 citation omitted). “While a Rule 12(f) motion provides the means to excise improper materials 10 from pleadings, such motions are generally disfavored because the motions may be used as 11 delaying tactics and because of the strong policy favoring resolution on the merits.” Barnes v. AT 12 & T Pension Ben. Plan-Nonbargained Program, 718 F. Supp. 2d 1167, 1170 (N.D. Cal. 2010). 13 “The key to determining the sufficiency of pleading an affirmative defense is whether it gives 14 plaintiff fair notice of the defense.” Wyshak v. City Nat. Bank, 607 F.2d 824, 827 (9th Cir. 1979). 15 III. DISCUSSION 16 A. Motion to Strike All Affirmative Defenses (Rule 8(a)) 17 Zhang first moves to strike “[a]ll 52 affirmative defenses pled by Talece and Su” because 18 they lack plausibility under Rules 8(a) and the explication of Rule 8 in Bell Atl. Corp. v. Twombly, 19 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). MTS at 2–4. Talece and Su 20 oppose, arguing that Zhang does not provide argument as to why each specific affirmative defense 21 should be stricken and, where he does, those arguments are not persuasive. Opp. at 3–5. 22 The Court declines to issue an order striking all of Talece and Su’s affirmative defenses. 23 Zhang cannot expect the Court itself to analyze the twenty-five affirmative defenses asserted by 24 Talece and the twenty-six asserted by Su without any legal argument as to why each specific 25 affirmative defense is insufficiently pled. The Court will not fill in gaps in argument for Zhang, 26 particularly in a motion that is “generally disfavored” due to its frequent misuse as a “delaying 27 tactic[].” Barnes, 718 F. Supp. 2d at 1170. 1 First Affirmative Defense (Failure to State a Claim). Zhang says that this is not an 2 affirmative defense and that the Court has already ruled that the counter- and third-party claims 3 have been sufficiently pled. MTS at 4:1–3. The Court rejected this very argument when it refused 4 to strike the same affirmative defense asserted in own Zhang’s answer—an affirmative defense 5 that Zhang himself defended. See ECF No. 88 at 5. Zhang cannot simultaneously defend the 6 affirmative defense when he asserts it in his own answer and then assert it should be stricken when 7 his opponents assert it in their answers. 8 Second and Seventh Affirmative Defenses. Zhang argues that the second and seventh 9 affirmative defenses are identical because they both “allege that [he] committed equity.” MTS at 10 4:4–7. This is both unclear and factually incorrect. In both answers, the second affirmative 11 defense is “failure to mitigate damages, if any” and the seventh is “unclean hands.” ECF No. 91 at 12 8–9; ECF No. 92 at 9, 10. The Court finds that Zhang has “fair notice” of the basis for these 13 affirmative defenses. Wyshak, 607 F.2d at 827. The primary complaint in this case asserts claims 14 against Zhang, including conversion, breach of fiduciary duty, and unjust enrichment, and 15 provides a plausible factual basis for those claims, as the Court has already found. See ECF No. 16 61. Zhang thus has fair notice of the allegations Talece and Su have asserted against him that are 17 the bases for these affirmative defenses. 18 Eleventh and Twenty-Fourth Affirmative Defenses. Zhang argues that these affirmative 19 defenses are also identical because one says that Talece’s action is privileged under the business 20 judgment rule and the other generically asserts that Talece’s acts were “privileged.” MTS at 4:8– 21 10. While these affirmative defenses are closer in similarity than are the second and seventh 22 affirmative defenses, they are not identical, and Zhang’s argument that “no other potential 23 ‘privilege’ could exist in this corporate-shareholder dispute,” id., is not supported by any 24 authority. Because Zhang has not provided a legal basis to strike the defenses, the Court declines 25 to do so. 26 Twenty-Sixth Affirmative Defense (No Duty). Zhang argues that the affirmative defense 27 for “no duty” should be stricken because it “has no possible application to this case” where 1 plaintiff [Zhang].” MTS at 4:11–13. But as Talece responds, its answer has specifically denied 2 that Zhang is a shareholder of Talece, so the affirmative defense accordingly asserts that it lacks 3 any duty to Zhang. Opp. at 3. The Court finds that this gives Zhang fair notice of the defense 4 asserted, and thus the Court will not strike this affirmative defense. 5 Thirteenth Affirmative Defense (Unjust Enrichment). Zhang argues that the affirmative 6 defense for unjust enrichment should be stricken because it “does not apply to statutory damages 7 under the False Claim[s] Act.” MTS at 4:15–21. But Zhang has asserted breach of fiduciary duty 8 and conversion claims to which the unjust enrichment affirmative defense may apply. Accord 9 Opp. at 4. The Court accordingly declines to strike the affirmative defense. 10 Additional Affirmative Defenses Challenged in Reply. Zhang calls out additional 11 allegedly deficient affirmative defenses in reply: the third, sixth, and fourteenth affirmative 12 defenses. See Reply at 6:4–14, 7:6–9. The Court declines to address arguments against those 13 affirmative defenses that are raised for the first time in reply. Zamani v. Carnes, 491 F.3d 990, 14 997 (9th Cir. 2007). 15 B. Motion to Strike Affirmative Defenses 7–10 (Rule 9(b)) 16 Zhang then moves to strike four specific equitable affirmative defenses as insufficiently 17 pled under Rule 9(b): affirmative defenses for unclean hands, waiver, estoppel, and “one who 18 seeks equity must do equity.” MTS at 5–6.
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 TALECE INC., Case No. 20-cv-03579-BLF
8 Plaintiff, ORDER DENYING MOTION TO 9 v. STRIKE AFFIRMATIVE DEFENSES
10 ZHENG ZHANG, [Re: ECF No. 93] 11 Defendant.
12 ZHENG ZHANG, 13 Third-party Plaintiff, 14 v.
15 LANHAI SU, 16 Third-party Defendant. 17
18 19 Before the Court is Defendant and Third-Party Plaintiff Zheng Zhang’s motion to strike 20 affirmative defenses asserted in answers to the First Amended Counter- and Third-Party 21 Complaint. ECF No. 93 (“MTS”); see also ECF No. 96 (“Reply”). Zhang seeks to strike the 22 affirmative defenses pled by Plaintiff Talece Inc. and Third-Party Defendant Lanhai Su as 23 inadequately pled under Federal Rules of Civil Procedure 8(a) and 9(b). See ECF No. 91 (Talece 24 answer); ECF No. 92 (Su answer). Talece and Su oppose the motion. See ECF No. 95 (“Opp.”). 25 The Court finds this motion suitable for disposition without oral argument and VACATES the 26 April 28, 2022 hearing. See Civ. L.R. 7-1(b). The Court DENIES the motion. 27 I. BACKGROUND 1 previous order on (1) the motion to dismiss and strike filed by Talece and (2) the motion to 2 dismiss filed by Su. See ECF No. 88. 3 II. LEGAL STANDARD 4 Federal Rule of Civil Procedure 12(f) permits a court to “strike from a pleading an 5 insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” The 6 function of a motion made under this rule is “to avoid the expenditure of time and money that 7 must arise from litigating spurious issues by dispensing with those issues prior to trial.” 8 Whittlestone, Inc. v. Handi–Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (quotation marks and 9 citation omitted). “While a Rule 12(f) motion provides the means to excise improper materials 10 from pleadings, such motions are generally disfavored because the motions may be used as 11 delaying tactics and because of the strong policy favoring resolution on the merits.” Barnes v. AT 12 & T Pension Ben. Plan-Nonbargained Program, 718 F. Supp. 2d 1167, 1170 (N.D. Cal. 2010). 13 “The key to determining the sufficiency of pleading an affirmative defense is whether it gives 14 plaintiff fair notice of the defense.” Wyshak v. City Nat. Bank, 607 F.2d 824, 827 (9th Cir. 1979). 15 III. DISCUSSION 16 A. Motion to Strike All Affirmative Defenses (Rule 8(a)) 17 Zhang first moves to strike “[a]ll 52 affirmative defenses pled by Talece and Su” because 18 they lack plausibility under Rules 8(a) and the explication of Rule 8 in Bell Atl. Corp. v. Twombly, 19 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). MTS at 2–4. Talece and Su 20 oppose, arguing that Zhang does not provide argument as to why each specific affirmative defense 21 should be stricken and, where he does, those arguments are not persuasive. Opp. at 3–5. 22 The Court declines to issue an order striking all of Talece and Su’s affirmative defenses. 23 Zhang cannot expect the Court itself to analyze the twenty-five affirmative defenses asserted by 24 Talece and the twenty-six asserted by Su without any legal argument as to why each specific 25 affirmative defense is insufficiently pled. The Court will not fill in gaps in argument for Zhang, 26 particularly in a motion that is “generally disfavored” due to its frequent misuse as a “delaying 27 tactic[].” Barnes, 718 F. Supp. 2d at 1170. 1 First Affirmative Defense (Failure to State a Claim). Zhang says that this is not an 2 affirmative defense and that the Court has already ruled that the counter- and third-party claims 3 have been sufficiently pled. MTS at 4:1–3. The Court rejected this very argument when it refused 4 to strike the same affirmative defense asserted in own Zhang’s answer—an affirmative defense 5 that Zhang himself defended. See ECF No. 88 at 5. Zhang cannot simultaneously defend the 6 affirmative defense when he asserts it in his own answer and then assert it should be stricken when 7 his opponents assert it in their answers. 8 Second and Seventh Affirmative Defenses. Zhang argues that the second and seventh 9 affirmative defenses are identical because they both “allege that [he] committed equity.” MTS at 10 4:4–7. This is both unclear and factually incorrect. In both answers, the second affirmative 11 defense is “failure to mitigate damages, if any” and the seventh is “unclean hands.” ECF No. 91 at 12 8–9; ECF No. 92 at 9, 10. The Court finds that Zhang has “fair notice” of the basis for these 13 affirmative defenses. Wyshak, 607 F.2d at 827. The primary complaint in this case asserts claims 14 against Zhang, including conversion, breach of fiduciary duty, and unjust enrichment, and 15 provides a plausible factual basis for those claims, as the Court has already found. See ECF No. 16 61. Zhang thus has fair notice of the allegations Talece and Su have asserted against him that are 17 the bases for these affirmative defenses. 18 Eleventh and Twenty-Fourth Affirmative Defenses. Zhang argues that these affirmative 19 defenses are also identical because one says that Talece’s action is privileged under the business 20 judgment rule and the other generically asserts that Talece’s acts were “privileged.” MTS at 4:8– 21 10. While these affirmative defenses are closer in similarity than are the second and seventh 22 affirmative defenses, they are not identical, and Zhang’s argument that “no other potential 23 ‘privilege’ could exist in this corporate-shareholder dispute,” id., is not supported by any 24 authority. Because Zhang has not provided a legal basis to strike the defenses, the Court declines 25 to do so. 26 Twenty-Sixth Affirmative Defense (No Duty). Zhang argues that the affirmative defense 27 for “no duty” should be stricken because it “has no possible application to this case” where 1 plaintiff [Zhang].” MTS at 4:11–13. But as Talece responds, its answer has specifically denied 2 that Zhang is a shareholder of Talece, so the affirmative defense accordingly asserts that it lacks 3 any duty to Zhang. Opp. at 3. The Court finds that this gives Zhang fair notice of the defense 4 asserted, and thus the Court will not strike this affirmative defense. 5 Thirteenth Affirmative Defense (Unjust Enrichment). Zhang argues that the affirmative 6 defense for unjust enrichment should be stricken because it “does not apply to statutory damages 7 under the False Claim[s] Act.” MTS at 4:15–21. But Zhang has asserted breach of fiduciary duty 8 and conversion claims to which the unjust enrichment affirmative defense may apply. Accord 9 Opp. at 4. The Court accordingly declines to strike the affirmative defense. 10 Additional Affirmative Defenses Challenged in Reply. Zhang calls out additional 11 allegedly deficient affirmative defenses in reply: the third, sixth, and fourteenth affirmative 12 defenses. See Reply at 6:4–14, 7:6–9. The Court declines to address arguments against those 13 affirmative defenses that are raised for the first time in reply. Zamani v. Carnes, 491 F.3d 990, 14 997 (9th Cir. 2007). 15 B. Motion to Strike Affirmative Defenses 7–10 (Rule 9(b)) 16 Zhang then moves to strike four specific equitable affirmative defenses as insufficiently 17 pled under Rule 9(b): affirmative defenses for unclean hands, waiver, estoppel, and “one who 18 seeks equity must do equity.” MTS at 5–6. Talece and Su respond that these affirmative defenses 19 are adequately pled. See Opp. at 4. 20 For the same reasons as in rejecting his challenge to the seventh affirmative defense under 21 Rule 8, the Court rejects the challenge to these affirmative defenses under Rule 9(b). Zhang has 22 sufficient notice of the grounds on which Talece and Su claim he acted inequitably because Talece 23 has outlined those allegations in the primary complaint in this case. The Court has already 24 rejected Zhang’s motion to dismiss the claims in that complaint, finding an adequately pleaded 25 factual basis for them under Rule 12(b)(6) and, where applicable, Rule 9(b). See ECF No. 61 at 6– 26 9. The Court will not collaterally revisit that ruling through a Rule 12(f) motion. 27 / / / 1 IV. ORDER 2 Accordingly, the motion to strike is DENIED. The case schedule, ECF Nos. 63, 75, 3 || remains in effect. 4 5 Dated: February 25, 2022 tn) 6 BETH LABSON FREEMAN 7 United States District Judge 8 9 10 11 12
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