Peacock v. Pabst Brewing Co., LLC

[7] 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA [10] 11 BRENDAN PEACOCK, 12 Plaintiff, No. 2:18-cv-00568-TLN-CKD [13] 14 v. ORDER PABST BREWING COMPANY, LLC, [15] Defendant, [21] 22 This matter is before the Court on two motions: (1) Plaintiff Brendan Peacock’s 23 (“Plaintiff”) Motion to Strike Affirmative Defenses (ECF No. 38); and (2) Defendant Pabst 24 Brewing Company, LLC’s (“Defendant”) Motion to Strike Nationwide Class Allegations (ECF 25 No. 43). Both parties filed oppositions. (ECF Nos. 41, 44.) Only Defendant replied. (ECF No. 26 45.) For the reasons set forth below, the Court hereby GRANTS in part and DENIES in part 27 Plaintiff’s motion and DENIES Defendant’s motion. [28] 1 I. FACTUAL AND PROCEDURAL BACKGROUND 2 This case arises out of a dispute over Defendant’s marketing of its “Olympia” brand beer. 3 (ECF No. 30.) Plaintiff alleges Defendant deceives consumers by marketing Olympia Beer in a 4 way that “falsely suggests to consumers that the water in the beer is from the Olympia area of 5 Washington State.” (Id. at 5.) Plaintiff filed a putative class action on March 15, 2018, claiming 6 he was injured when induced by Defendant’s misleading marketing to pay a “premium” price for 7 the beer in violation of California Business and Professions Code § 17200. (Id. at 9, 11.) 8 Plaintiff filed the operative Second Amended Complaint (“SAC”) on September 19, 2019. (Id.) 9 Defendant answered on October 21, 2020. (ECF No. 37.) Plaintiff filed his instant motion 10 pursuant to Federal Rule of Civil Procedure (“Rule”) 12(f) on November 12, 2020. (ECF No. 11 38.) On January 29, 2021, Defendant filed its instant motion pursuant to Rules 12(f), 23(c)(1)(A), 12 and 23(d)(1)(D). (ECF No. 43.) Also pending before the Court is a Motion for Class 13 Certification. (ECF No. 52.) 14 II. STANDARD OF LAW 15 A. Motion to Strike 16 Rule 12(f) provides that a court “may strike from a pleading an insufficient defense or any 17 redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). A court will 18 only consider striking a defense or allegation if it fits within one of these five categories. Yursik 19 v. Inland Crop Dusters Inc., No. CV-F-11-01602-LJO-JLT, 2011 WL 5592888 , at *3 (E.D. Cal. 20 Nov. 16, 2011) (citing Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970 , 973–74 (9th Cir. 21 2010)). “Immaterial” matter is that which has “no essential or important relationship to the claim 22 for relief or the defenses being pleaded.” Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 23 1993) (citation omitted), rev’d on other grounds, 510 U.S. 517 (1994). “Impertinent” matter 24 includes “statements that do not pertain, and are not necessary, to the issues in question.” Id. 25 “[T]he function of a 12(f) motion to strike is to avoid the expenditure of time and money 26 that must arise from litigating spurious issues by dispensing with those issues prior to trial.” 27 Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). However, Rule 12(f) 28 motions are “generally regarded with disfavor because of the limited importance of pleading in 1 federal practice, and because they are often used as a delaying tactic.” Neilson v. Union Bank of 2 Cal., N.A., 290 F. Supp. 2d 1101, 1152 (C.D. Cal. 2003). “Ultimately, whether to grant a motion 3 to strike lies with the sound discretion of the district court.” Id. Unless it would prejudice the 4 opposing party, courts freely grant leave to amend stricken pleadings. See Foman v. Davis, 371 5 U.S. 178, 182 (1962); Howey v. U.S., 481 F.2d 1187, 1190 (9th Cir. 1973); see also Fed. R. Civ. 6 P. 15 (a)(2). If the court is in doubt as to whether the challenged matter may raise an issue of fact 7 or law, the motion to strike should be denied, leaving the assessment of the sufficiency of the 8 allegation for adjudication on the merits after proper development of the factual nature of the 9 claims through discovery. See Whittlestone, 618 F.3d at 974–75. 10 B. Pleading Standard for Responsive Pleadings 11 Rule 8(c) provides, in pertinent part, “a party must affirmatively state any avoidance or 12 affirmative defense.” Fed. R. Civ. P. 8(c). “The key to determining the sufficiency of pleading 13 an affirmative defense is whether it gives plaintiff fair notice of the defense.” Wyshak v. City 14 Nat’l Bank, 607 F.2d 824, 827 (9th Cir. 1979) (citing Conley v. Gibson, 355 U.S. 41 , 47–48 15 (1957)); accord Simmons v. Navajo, 609 F.3d 1011, 1023 (9th Cir. 2010), overruled on other 16 grounds by Castro v. Cnty. of L.A., 833 F. 3d 1060 (9th Cir. 2016) (en banc) (setting forth the 17 elements of an ADA Title II claim); Schutte & Koerting, Inc. v. Swett & Crawford, 298 Fed. 18 Appx. 613, 615 (9th Cir. 2008).1 19 Under the fair notice standard, a defendant is only required to “state the nature and 20 grounds for the affirmative defense,” rather than plead a detailed statement of the facts upon 21 which the defense is based. Kohler v. Islands Rests., LP, 280 F.R.D. 560, 564 (S.D. Cal. 2012) 22 (citing Conley, 355 U.S. at 47 ). “On the other hand, an affirmative defense is legally insufficient 23 only if it clearly lacks merit ‘under any set of facts the defendant might allege.’” Id. (quoting [24] 1 Following the Supreme Court’s decisions in Iqbal and Twombly, district courts within the [25] Ninth Circuit split as to whether the heightened pleading standard established in those cases applied to affirmative defenses in Rule 12(f) motions. Aubin Indus., Inc. v. Caster Concepts, Inc., [26] No. 2:14-CV-02082-MCE, 2015 WL 3914000 , at *6 (E.D. Cal. June 25, 2015) (England, J.). 27 This Court applies the Wyshak fair notice standard in this instance, consistent with other courts within this district. Id. (finding that the Ninth Circuit resolved the split in favor of applying the 28 fair notice standard in Kohler v. Flava Enters., Inc., 779 F.3d 1016 (9th Cir. 2015)). 1 McArdle v. AT&T Mobility, LLC, 657 F. Supp. 2d 1140 , 1149–50 (N.D. Cal. 2009)). The 2 pleadings are only required to describe each defense in “general terms,” as long as it gives the 3 plaintiff fair notice of the nature of the defense. Kohler v. Flava Enters., Inc., 779 F.3d 1016 , 4 1019 (9th Cir. 2015). For well-established defenses, merely naming them may be sufficient. See 5 Ganley v. Cnty. of San Mateo, No. C06-3923 TEH, 2007 WL 902551 , at *2 (N.D. Cal. Mar. 22, 6 2007). 7 C. Class Certification 8 Class certification is governed by Rule 23. Under Rule 23(a), the party seeking 9 certification must establish: 10 (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the 11 class; (3) the claims or defenses of representative parties are typical of the claims or defenses of the class; and (4) the representative 12 parties will fairly and adequately protect the interests of the class. 13 Fed. R. Civ. P. 23(a). “These requirements effectively ‘limit the class claims to those fairly 14 encompassed by the named plaintiff’s claims.’” Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147 , 15 156 (1982). In addition, while the Rule 23(a) requirements apply to all class actions, a class 16 action must comply with only one of the categories described in Rule 23(b). See Fed. R. Civ. P. 17 23(a)–(b). 18 The Supreme Court has observed that “[s]ometimes the issues are plain enough from the 19 pleadings to determine whether the interests of the absent parties are fairly encompassed within 20 the named plaintiff’s claim.” Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982). Further, 21 “[w]here the complaint demonstrates that a class action cannot be maintained on the facts alleged, 22 courts have granted motions to strike class allegations” under Rules 12(f) and 23(d)(1)(D). Olney 23 v. Job.com, Inc., No. 1:12-CV-01724-LJO-SKO, 2013 WL 5476813 , at *3 (E.D. Cal. Sept. 30, 24 2013) (citing Sanders v. Apple, Inc., 672 F. Supp. 2d 978 , 990 –91 (N.D. Cal. 2009); Hovsepain 25 v. Apple, Inc., No. 08-5788 JF (PVT), 2009 WL 5069144 , at *6 (N.D. Cal. Dec. 17, 2009)); see 26 also Simpson v. Ramada Worldwide, Inc., No. 12-CV-5029-PSG, 2012 WL 5988644 , at *2 (N.D. 27 Cal. Nov. 29, 2012). 28 / / / 1 However, Ninth Circuit precedent stands “for the unremarkable proposition that often the 2 pleadings alone will not resolve the question of class certification and that some discovery will be 3 warranted.” Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 942 (9th Cir. 2009). 4 Accordingly, motions to strike class allegations are generally disfavored because such issues are 5 more appropriately resolved on a motion for class certification. See Thorpe v. Abbott Labs., Inc., [6] 534 F. Supp. 2d 1120, 1125 (N.D. Cal. 2008); Kazemi v. Payless Shoesource Inc., No. C 09-5142 7 MHP, 2010 WL 963225 , at *5 (N.D. Cal. Mar. 16, 2010). 8 III. ANALYSIS 9 A. Motion to Strike Affirmative Defenses 10 As a preliminary matter, Defendant seeks to voluntarily strike six of the affirmative 11 defenses and its prayer for attorneys’ fees challenged by the instant motion. (ECF No. 41 at 2–3; 12 ECF Nos. 41-1, 41-2.)2 Therefore, the Court GRANTS Plaintiff’s motion as to affirmative 13 defenses one, six, eight, twenty-two, twenty-five, and thirty-five with leave to amend. (ECF No. 14 38.) 15 Plaintiff requests the Court strike nine additional affirmative defenses because they are 16 either inappropriate or Defendant failed to plead sufficient facts to support them. (ECF No. 38 at 17 8–14.) In opposition, Defendant argues its Answer survives the lenient “fair notice standard” and 18 Plaintiff fails to identify how the presence of any of the affirmative defenses prejudice him. (ECF 19 No. 51 at 5–6.) The Court will address the remaining defenses in turn. 20 i. Affirmative Defenses Four, Twelve, and Fifteen 21 Plaintiff argues the Court should strike Defendant’s statute of limitations, waiver, and 22 latches affirmative defenses for insufficient factual support. (ECF No. 38-1 at 9, 11.) All three 23 are well-established defenses whose application is typically self-explanatory. Indeed, all three are 24 listed in Rule 8(c) as examples of affirmative defenses. See Fed. R. Civ. P. 8(c)(1). Plaintiff 25 pleads only a single claim for relief, so the applicable statute of limitations is obvious without [26] 27 2 The six defenses are as follows: (1) failure to state a claim; (6) non-joinder of party; (8) no false or misleading representations; (22) no misrepresentations of fact; (25) failure to plead with 28 particularity; and (35) reservation of defenses. (ECF No. 38 at 8–15; ECF No. 41 at 3.) 1 Defendant having to specifically plead it. See Cal. Bus. & Prof. Code § 17208 . Further, as 2 Defendant notes in its opposition to the instant motion, Plaintiff’s SAC only vaguely describes 3 the period on which his action is premised. (See ECF No. 41 at 8 (citing portions of Plaintiff’s 4 SAC that reference 2003 and “the years leading up to the lawsuit”).) To the extent Plaintiff seeks 5 to recover for injuries “[s]ince 2003” or otherwise outside the limitations period, he is on notice 6 Defendant intends to bar recovery with these defenses. See Rahman v. San Diego Accounts Serv., 7 No. 16cv2061-JLS (KSC), 2017 WL 1387206 , at *2 (S.D. Cal. Apr. 18, 2017); Villagordoa 8 Bernal v. Rodriguez, No. 5:16-cv-00152-CAS(DTBx), 2016 WL 6407406 , at *4 (C.D. Cal. Oct. 9 28, 2016) (denying motion to strike “boilerplate” affirmative defenses, including waiver and 10 laches). Finally, Plaintiff fails to demonstrate Defendant will be unable to prove any of the three 11 defenses as a matter of law. See Ganley, 2007 WL 902551 , at *6–7. Therefore, the Court 12 DENIES Plaintiff’s motion as to affirmative defenses four, twelve, and fifteen. 13 ii. Affirmative Defenses Thirty, Thirty-One, and Thirty-Four 14 Plaintiff argues the Court should strike Defendant’s class- and injunction-related defenses 15 as inappropriate. (ECF No. 38-1 at 13–14.) Defendant argues striking the defenses would serve 16 no purpose other than formalism and Plaintiff fails to demonstrate how their inclusion is 17 prejudicial. (ECF No. 41 at 11, 12–13.) All three purported defenses are merely ways of stating 18 Plaintiff is unable to prove the merits of its claim. See Savage v. Citibank N.A., No. 14-cv-0361119 BLF, 2015 WL 4880858 , at *4 (N.D. Cal. Aug. 14, 2015); Miller v. Fuhu, Inc., No. 2:14-cv20 06119, 2014 WL 4748299 , at *2 (C.D. Cal. Sept. 22, 2014); Hernandez v. Balakian, No. CV-F21 06-1383 OWW/DLB, 2007 WL 1649911 , at *9 (E.D. Cal. June 1, 2007); see also FDIC v. Main 22 Hurdman, 655 F. Supp. 259, 262 (E.D. Cal. 1987) (citing Gomez v. Toledo, 446 U.S. 635 , 640–41 23 (1980)) (“Affirmative defenses plead matters extraneous to the plaintiff’s prima facie case, which 24 deny plaintiff’s right to recover, even if the allegations of the complaint are true.”). Although 25 motions to strike affirmative defenses are sometimes not granted absent prejudice to the plaintiff, 26 Defendant has not shown, and the text of Rule 12(f) does not suggest, prejudice is required. See 27 Wright & Miller, Fed. Prac. and Proc. Civ. § 1381 (3d ed.). Accordingly, the Court GRANTS 28 Plaintiff’s motion as to affirmative defenses thirty, thirty-one, and thirty-four with leave to 1 amend. 2 iii. Affirmative Defenses Two and Three 3 Plaintiff argues the Court should strike Defendant’s standing affirmative defenses for 4 insufficient factual support and because the Court settled the issue of standing for injunctive relief 5 in its October 1, 2020 Order. (ECF No. 38-1 at 8–9.) Defendant argues its standings defenses 6 were adequately pleaded because they provide Plaintiff fair notice of the defenses being asserted. 7 (ECF No. 41 at 9–11.) Although the Court previously held Plaintiff adequately alleged a threat of 8 future harm sufficient to confer standing to pursue injunctive relief (ECF No. 36 at 11), 9 Defendant may again challenge Plaintiff’s standing at summary judgment or trial where Plaintiff 10 will be unable to sustain his action on mere allegations. See, e.g., Lanovaz v. Twinings N. Am., 11 Inc., 726 Fed. Appx. 590 , 591 (9th Cir. 2018) (affirming grant of summary judgment on 12 plaintiff’s California Unfair Competition Law injunctive relief claim). Elsewhere, this Court has 13 declined to strike conclusory standing affirmative defenses merely because they are vague and 14 lack material factual support. See Springer v. Fair Isaac Corp., No. 14-CV-02238-TLN-AC, [15] 2015 WL 7188234 , at *4 (E.D. Cal. Nov. 16, 2015) (Nunley, J.); Dodson v. Gold Cnty. Foods, 16 Inc., No. 2:13-cv-0336-TLN-DAD, 2013 WL 5970410 , at *3 (Nov. 4, 2013) (Nunley, J.). J & J 17 Sports Prods., Inc. v. Mendoza Govan, holding the opposite and on which Plaintiff relies, applied 18 a different standard from the one at issue here. See No. C 10-05123 WHA, 2011 WL 1544886 , at 19 *1 (N.D. Cal. Apr. 25, 2011) (“Twombly’s heightened pleading standard applies to affirmative 20 defenses . . . .”). Therefore, the Court DENIES Plaintiff’s motion as to affirmative defenses two 21 and three. 22 iv. Affirmative Defense Eighteen 23 Lastly, Plaintiff argues the Court should strike Defendant’s third party conduct affirmative 24 defense for insufficient factual support. (ECF No. 38-1 at 11–12.) Defendant argues it is not 25 required to plead additional facts to support this defense and may rely on the discovery process to 26 flesh out its defense. (ECF No. 41 at 11–12.) To support its assertion that Defendant’s pleading 27 is inadequate, Plaintiff solely cites to the portion of a Northern District of Illinois opinion striking 28 an affirmative defense alleging failure to join an indispensable party. (ECF No. 38-1 at 12 (citing 1 Franklin Capital Corp. v. Baker & Taylor Entm’t, Inc., No. 99 C 8237, 2000 WL 1222043 , at *3 2 (N.D. Ill. Aug. 22, 2000).) Plaintiff has further failed to rebut any of Defendant’s arguments in its 3 opposition. The discretion of whether to grant a motion to strike is soundly with the Court. 4 Plaintiff has failed to provide any persuasive authority or argument for why this request should be 5 granted. Accordingly, Plaintiff fails to carry his burden and the Court DENIES his motion as to 6 affirmative defense eighteen. 7 B. Motion to Strike Nationwide Class Allegations 8 In its motion, Defendant argues the Court should strike the nationwide class allegations 9 from Plaintiff’s SAC because they are barred by the choice of law analysis articulated in Mazza v. 10 Am. Honda Motor Co., Inc., 666 F.3d 581 (9th Cir. 2012). (ECF No. 43 at 2.) In opposition, 11 Plaintiff argues Defendant’s motion is: (1) untimely; (2) unauthorized by the Court’s scheduling 12 order; and (3) fails to carry its heavy burden to demonstrate why a nationwide class is 13 inappropriate. (ECF No. 44.) Defendant replies by asserting the Court has the authority to strike 14 the requested portions of Plaintiff’s SAC before the class certification stage and Plaintiff wholly 15 fails to respond to Defendant’s analysis under Mazza. (ECF No. 45.) Because Defendant has not 16 shown Plaintiff can achieve class certification as either a Rule 12(b)(1) or (2) class, the Court 17 does not reach Plaintiff’s procedural arguments. 18 Defendant’s reliance on Mazza is premature. In Mazza, the Ninth Circuit overturned the 19 certification of a nationwide class of Collision Mitigation Braking System-equipped Acura RL 20 consumers, who alleged Honda misrepresented and concealed material information in connection 21 with the marketing and sale of such vehicles in violation of California law. 666 F.3d at 586–87. 22 Honda appealed, arguing first that there were no common questions of fact or law as required for 23 class certification under Rule 23(a)(2) and Wal-Mart Stores, Inc. v. Dukes because of the 24 individualized impact of advertising on consumers. Id. at 589 (citing Wal-Mart Stores, Inc. v. 25 Dukes, 564 U.S. 338, 359 (2011)). The Ninth Circuit rejected Honda’s argument. 26 “[C]ommonality only requires a single significant question of law or fact. Even assuming 27 arguendo that we were to agree with Honda’s ‘crucial question’ contention, the individualized 28 issues raised go to preponderance under Rule 23(b)(3), not to whether there are common issues 1 under Rule 23(a)(2).” Id. (citation omitted). The Mazza court then held “the Plaintiffs satisfied 2 their limited burden under Rule 23(a)(2).” Id. 3 The analysis on which Defendant relies — California’s consumer protection statutes may 4 not be applied to a nationwide class with members in multiple jurisdictions — affects whether a 5 class may be certified under 23(b)(3) because questions of law or fact common to class members 6 predominate over any questions affecting only individual members. See id. (“Honda contends 7 that common issues of law do not predominate because California’s consumer protection statutes 8 may not be applied to a nationwide class with members in 44 jurisdictions.”) Although 9 Defendant attempts to shoehorn the Mazza analysis into the commonality requirement of Rule 10 23(a)(2), applicable to all types of class actions, it provides no supporting authority other than 11 Mazza itself, which directly contradicts Defendant’s assertion as quoted above. (ECF No. 43 at 12 14); Mazza, 666 F.3d at 589 . 13 Even assuming Defendant’s extensive choice of law analysis is correct and therefore 14 Plaintiff cannot seek certification as a nationwide class under Rule 23(b)(3), Defendant has not 15 shown why Plaintiff cannot achieve class certification as a nationwide Rule 23(b)(1) or (2) class, 16 neither of which require questions of law to predominate. See Fed. R. Civ. P. 23(b)(1), (2). The 17 district court opinions on which Defendant relies for the proposition the Court may strike 18 Plaintiff’s nationwide class allegations at the pleading stage similarly do not address the 19 possibility the plaintiffs could seek certification as a Rule 23(b)(1) or (2) class. See, e.g., Zeiger 20 v. WellPet LLC, 304 F. Supp. 3d 837, 847 (N.D. Cal. 2018) (no discussion why Mazza’s Rule 21 12(b)(3) analysis should apply to Rule 12(b)(1) or (2) classes); (see also ECF No. 43 at 14–15 22 (citing cases).) Accordingly, the Court finds these cases unpersuasive. Finally, the only portion 23 of Plaintiff’s SAC solely applicable for certification as a Rule 23(b)(3) class is a clause in 24 paragraph 33. “There are questions of law and fact . . . which predominate over questions 25 affecting any individual Class member.” (ECF No. 30 ¶ 33.) The Court sees no point in striking 26 a fraction of a sentence on which Plaintiff does not rely,3 permitting further amendments to the [27] 3 Plaintiff seeks certification as a Rule 23(b)(2) class in its pending motion. (See ECF No. 28 52 at 2.) 1 | pleadings, inviting additional Rule 12 motions, and further delaying this action. Therefore, 2 | without any explanation as to why the Court should apply Mazza outside of the Rule 23(b)(3) 3 | preponderance analysis in which it was decided, Defendant fails to carry its heavy burden on a 4 | motion to strike. See Vinole, 571 F.3d at 942 ; Whittlestone, 618 F.3d at 974-75 . 5 IV. CONCLUSION 6 For the foregoing reasons, the Court GRANTS in part and DENIES in part Plaintiff's 7 | Motion to Strike Affirmative Defenses (ECF No. 38) and DENIES Defendant’s Motion to Strike 8 | Nationwide Class Allegations (ECF No. 43). Defendant shall file an amended answer within 9 | twenty-one (21) days of the electronic filing date of this Order. 10 IT IS SO ORDERED. 11 DATED: February 11, 2022 12 /) 13 “ Wh / Vhokay 14 Troy L. Nunley ] 15 United States District Judge