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Calabrese v. CSC Holdings

March 6, 2006

CIRA CALABRESE, ET AL., PLAINTIFFS,
v.
CSC HOLDINGS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: James Orenstein, Magistrate Judge.

ORDER AND MEMORANDUM

Cira Calabrese and her fellow named plaintiffs, purporting to act on behalf of themselves and other similarly situated cable television subscribers, have accused defendants CSC Holdings, Inc., employees Robert Astarita, Amy Groveman, and James F. Magee, and its collection agency Allied Account Services Inc. (collectively, "Cablevision") together with Cablevision's attorneys -- including the defendant law firm of Lefkowitz, Louis & Sullivan L.L.P. and individual defendants Shaun K. Hogan, Daniel J. Lefkowitz, Wayne R. Louis, and Patrick J. Sullivan (collectively, the "Attorneys") -- of extorting money from them by prosecuting meritless claims arising from their alleged acquisition of "pirate" devices cable television converters. See Docket Entry ("DE") 163 (Fourth Amended Complaint) ("Complaint"). The defendants deny the plaintiffs' core claims and have also asserted certain affirmative defenses, reserved the right to add still others, and made a counterclaim against named plaintiff Mel Gevanter ("Gevanter"). The plaintiffs seek to strike several of those affirmative defenses as well as the reservation of rights to add others and to dismiss the counterclaim. On September 9, 2005, the Honorable Dora L. Irizarry, United States District Judge, referred the motion to me for decision. For the reasons set forth below, I now grant the plaintiffs' motion to strike the Attorneys' reservation of the right to assert new defenses and counterclaims and deny the plaintiffs' motion in all other respects.

I. Background

The essential nature of the parties' dispute is relatively straightforward, and arises from Cablevision's efforts to combat the use of "pirate" devices. Such devices permit the user to view encrypted cable television programs that would normally be available only by means of paying a fee to a provider such as Cablevision. The use of such devices can constitute violations of the Federal Communications Act of 1934, as amended, 47 U.S.C. §§ 553(a)(1) and 605(a) ("FCA"), and Cablevision has made a regular practice of bringing lawsuits in this court and elsewhere claiming damages for such violations. The cases often result either in a settlement or a default judgment in an amount of several thousand dollars. See generally CSC Holdings, Inc., v. Bokee, CV 04-5434 (ADS) (JO), DE 12 (E.D.N.Y. Mar. 1, 2006) (providing details about Cablevision's litigation practices in seeking damages under the FCA).

The plaintiffs assert that Cablevision's litigation practices, as enabled by their Attorneys, amount to an extortion scheme. In essence, they claim that Cablevision accuses subscribers who make only innocuous use of pirate devices of violating the FCA and then demand payment from them without adequately investigating whether those subscribers have actually used the devices to gain unlawful access to cable programming. By doing so, the plaintiffs claim, Cablevision and the Attorneys force such innocent purchasers of the devices to choose among three unattractive options: paying a few thousand dollars to settle an unjust claim, spending even more to mount a successful defense, or being subjected to a default judgment that can award a still larger sum in damages and attorneys' fees. Subscribers who anticipate that the first option is the lesser evil feel compelled to pay Cablevision. See generally Complaint ¶¶ 24-34.

The defendants respond in essence that their practices are legitimate efforts to combat the theft of cable services, and indeed express considerable skepticism that anyone possesses a pirate device for any purpose other than an unlawful one. See generally DE 184 ("Cablevision Answer"); DE 189 ("Attorneys' Answer"). In addition, they raise a counterclaim against Gevanter based on his alleged violation of a previously executed settlement agreement. See DE 189 at 26. They therefore deny engaging in any extortionate scheme and raise defenses based on their constitutionally protected rights to engage in free speech and to petition the government for redress of their claims as well as on the plaintiffs' allegedly unclean hands.

While the parties thus have a clear understanding of each others' claims, and should presumably be anxious to have those claims proceed to resolution on the merits, they appear reluctant to allow the case to proceed beyond its initial stages. The instant dispute over the contents of the pleadings is only the latest skirmish in a long, drawn-out war over the normally simple question of what the various parties should be permitted to assert as their respective theories of the case, as is illustrated by the following procedural history of the litigation.

The plaintiffs filed their initial complaint on September 24, 2002, alleging that defendants conspired to extort settlements from cable subscribers in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO"). DE 1. A month later, the plaintiffs amended their complaint as of right before an answer had been. DE 3. The month after that, the defendants moved to dismiss the amended complaint pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. DE 8, DE 12. By order dated August 13, 2003 the Honorable Joanna Seybert, United States District Judge (to whom the case was initially assigned) granted the defendants some of the relief they requested and denied the remainder of their motion. See Calabrese v. CSC Holdings, Inc., 283 F.Supp. 2d 797, 815 (E.D.N.Y. 2003) ("Calabrese I"). Specifically, Judge Seybert dismissed the plaintiffs' RICO claim under 18 U.S.C. § 1962(a) (alleging that the defendants invested the proceeds of a pattern of racketeering activity in an enterprise) but denied without prejudice the motion to dismiss the claims under subsections (c) and (d) of the same statute (i.e., those alleging respectively, that the defendants conducted the affairs of an enterprise through a pattern of racketeering activity and that they conspired to do so). Id. In light of her ruling on the motion, Judge Seybert granted the plaintiffs leave to further amend their complaint.

The plaintiffs acted on that ruling and ultimately filed a Third Amended Complaint, DE 54, on October 8, 2003 (their Second Amended complaint was further amended with the defendants' consent; see DE 43; DE 47; DE 49). Once again, the defendants invoked Rule 12(b)(6) in an attempt to have the claims dismissed. See DE 68; DE 76. Once again, Judge Seybert dismissed the claims under subsection (a) of the RICO statute (as well as certain other claims under state and federal criminal laws) and denied the motion to dismiss the claims under subsections (c) and (d) (as well as other state law claims). Calabrese v. CSC Holdings, Inc., 2004 WL 3186787 (E.D.N.Y. Jul. 19, 2004) ("Calabrese II").

The latter ruling led to the filing of the instant Complaint (the fourth amended complaint in this case) on September 30, 2004. Cablevision and its Attorneys answered on November 3 and December 3, 2004, respectively. At a hearing on January 11, 2005, Judge Irizarry granted the plaintiffs permission to file a motion to strike certain portions of the defendants' answers. In accordance with that ruling, on March 30, 2005, the plaintiffs moved to strike Cablevision's First, Second, Third, Fourth, Sixth, and Seventh affirmative defenses and moved to strike the Attorneys' Third, Fourth, and Eighth affirmative defenses as well as paragraphs 177 and 193 of their Answer. See DE 205 (Plaintiffs' memorandum of law) ("Memo.") at 1, 20. The plaintiffs simultaneously filed a separate motion under Rule 12(b)(6) to dismiss the Attorneys' counterclaim against Gevanter. DE 204. Cablevision voluntarily withdrew its First and Second affirmative defenses, see DE 208 at 1, n.1, but in all other respects the defendants opposed the motions. Judge Irizarry referred the motions to me on September 9, 2005.

II. Discussion

A. The Motion to Strike

1. The Applicable Legal Standard

The plaintiffs' attack on the various affirmative defenses invokes the court's authority to strike "any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). Such motions are generally disfavored, see, e.g., Wine Markets International, Inc. v. Bass, 177 F.R.D. 128, 133 (E.D.N.Y. 1998), and should be granted only where if there is neither a question of fact nor a substantial question of law that might allow the challenged defense to succeed, and even then only if the plaintiff will be prejudiced by allowing the defense to go forward. See Specialty Minerals, Inc. v. Pluess-Staufer AG, 395 F. Supp.2d 109, 111 (S.D.N.Y. 2005); Federal Deposit Insurance Corp. v. ...


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