United States District Court, S.D. New York
Jeffrey Sonnabend, Esq., SonnabendLaw, Brooklyn, NY, Attorneys for Plaintiff.
Theodore J. Minch, Esq., SovichMinch LLP, McCordsville, IN, Bonnie L. Mohr, Esq., Law Offices of Bonnie L. Mohr, PLLC, New York, NY, Attorneys for Defendants.
MEMORANDUM AND ORDER
NAOMI REICE BUCHWALD, District Judge.
Plaintiff Erickson Beamon Ltd. ("Erickson Beamon" or "plaintiff") brings this action for a declaratory judgment of trademark non-infringement, non-violation of section 43(a) of the Lanham Act, and non-infringement of certain rights of publicity with respect to its "Bette Davis Eyes" jewelry collection. Defendants CMG Worldwide, Inc. ("CMG") and the Estate of the late movie star Bette Davis (the "Estate") (collectively, "defendants") maintain that plaintiff's jewelry line does, in fact, infringe those intellectual property rights. Presently before the Court is plaintiff's motion to dismiss the affirmative defenses and counterclaims asserted in defendants' answer to the complaint. For the reasons set forth below, we grant plaintiff's motion in part and deny it in part.
Erickson Beamon is a New York corporation that designs and distributes jewelry for sale in seventy-five nations worldwide. Compl. ¶¶ 1, 16. In late 2010, plaintiff launched a jewelry line called the "Bette Davis Eyes" collection. Id . ¶ 2. The "Bette Davis Eyes" name was used in the advertisement, marketing, and distribution of various jewelry items, including necklaces, rings, earrings, and bracelets. Countercl. ¶ 15. The "Bette Davis Eyes" line of jewelry was made available both at online retailers and at physical stores throughout the United States. Id . ¶ 18.
It is undisputed that plaintiff used the name "Bette Davis" in connection with its jewelry without authorization from either the Estate or from CMG, the Estate's exclusive licensing agent for Bette Davis's intellectual property. Compl. ¶¶ 2, 21. However, plaintiff maintains that its jewelry actually references "Bette Davis Eyes, " a song originally written in 1974 and which achieved popularity when recorded by Kim Carnes in 1981. Id . ¶¶ 7-9. While plaintiff asserts that "consumers associate the phrase Bette Davis Eyes'" with the song, id. ¶ 15, defendants contend that "consumers will mistakenly believe" that plaintiff's merchandise is somehow affiliated with the actress herself, Countercl. ¶ 30. In September 2011, upon learning about the jewelry line, CMG sent a letter to Erickson Beamon which stated defendants' belief that the use of Bette Davis's name was unauthorized and, as such, constituted an infringement of the Estate's rights in and to the actress's name and likeness. Countercl. ¶ 20.
On June 29, 2012, plaintiff filed a lawsuit in this Court seeking declaratory relief and an injunction which stated that its use of the "Bette Davis Eyes" name for its jewelry line did not infringe on defendants' intellectual property rights. Compl. ¶ 50. Defendants responded on December 17, 2012 by filing a motion to dismiss or, in the alternative, to stay or transfer this action to the U.S. District Court for the Southern District of Indiana. We denied this motion on September 25, 2013. See Erickson Beamon Ltd. v. CMG Worldwide, Inc., No. 12 Civ. 5105(NRB), 2013 WL 5355010, at *9 (S.D.N.Y. Sept. 25, 2013). Defendants then filed a motion for reconsideration, which we denied on November 12, 2013.
Having lost their motion for dismissal or transfer, defendants answered plaintiff's complaint on November 25, 2013. The answer included eleven affirmative defenses and a seven-count counterclaim. On December 16, 2013, plaintiff filed a motion to dismiss defendants' affirmative defenses pursuant to Federal Rules of Civil Procedure 12(c) and 12(h)(2), and to dismiss defendants' counterclaims under Federal Rule of Civil Procedure 12(b)(6). See Pl.'s Mot. to Dismiss Countercls. & Affirmative Defenses ("Pl.'s Mot.") at 1. This motion was filed in violation of Rule 2(B) of our Individual Practices, which requires that parties submit a letter requesting a pre-motion conference in advance of filing a non-discovery motion. Despite this violation, we considered the relative merits of plaintiff's motion and defendants' opposition brief before conducting a teleconference with the parties on January 14, 2013. In discussing the case with the parties, we expressed our initial concerns about the usefulness of plaintiff's motion and voiced skepticism regarding whether it had the potential to resolve or even advance this litigation. Nevertheless, plaintiff's counsel wished to proceed, and he filed the reply brief the next day.
I. Motion to Strike Affirmative Defenses
A. Legal Standard
Although plaintiff seeks dismissal of defendants' affirmative defenses pursuant to Rule 12(h)(2) of the Federal Rules, the proper provision is actually Rule 12(f). Compare Fed.R.Civ.P. 12(h) (stating the rule for waiving and preserving defenses), with Fed.R.Civ.P. 12(f) (describing the circumstances when a court may strike defenses from a pleading). Under Rule 12(f), either party may move to strike from a pleading "any insufficient defense or any... immaterial [or] impertinent" allegations. Fed.R.Civ.P. 12(f). "An allegation is impertinent' or immaterial' when it is neither responsive nor relevant to the issues involved in the action." Anderson v. Davis Polk & Wardwell LLP , 850 F.Supp.2d 392, 416 (S.D.N.Y. 2012) (internal quotation marks omitted).
Motions to strike affirmative defenses are generally disfavored, see Salcer v. Envicon Equities Corp. , 744 F.2d 935, 939 (2d Cir. 1984), vacated on other grounds, 478 U.S. 1015 (1986), and in considering such a motion, all reasonable inferences will be drawn in favor of the non-moving party, see Diesel Props S.r.L. v. Greystone Bus. Credit II LLC, No. 07 Civ. 9580(HB) , 2008 WL 4833001, at *4 (S.D.N.Y. Nov. 5, 2008). For a plaintiff to prevail on a motion to strike an affirmative defense: "(1) there must be no question of fact that might allow the defense to succeed; (2) there must be no substantial question of law that might allow the defense to succeed; and (3) the plaintiff must be prejudiced by the inclusion of the defense." Coach, Inc. v. Kmart Corps. , 756 F.Supp.2d 421, 425 (S.D.N.Y. 2010); accord Cognex Corp. v. Microscan Sys., Inc., 990 F.Supp.2d 408, 418 (S.D.N.Y. 2013). Federal courts enjoy broad discretion in granting motions to strike, see Orientview Techs. LLC v. Seven for All Mankind, LLC, No. 13 Civ. 0538(PAE), 2013 WL 4016302, at *3 (S.D.N.Y. Aug. 7, 2013), but courts "should not tamper with the pleadings unless there is a strong reason for so doing." Lipsky v. Commonwealth United Corp. , 551 F.2d 887, 893 (2d Cir. 1976).
Despite the burden on the party moving to strike, plaintiff argues that defendants' affirmative defenses must meet the plausibility standard outlined in Bell Atlantic Corporation v. Twombly , 550 U.S. 544 (2008), and Ashcroft v. Iqbal , 556 U.S. 662 (2009). See Pl.'s Mot. at 2. "Since the Supreme Court's Twombly and Iqbal decisions, district courts have disputed whether [the] plausibility standard' applies to affirmative defenses as well." Scott v. WorldStarHipHop, Inc., No. 10 Civ. 9538(PKC)(RLE), 2012 WL 5835232, at *2 (S.D.N.Y. Nov. 14, 2012); compare E.E.O.C. v. Kelley Drye & Warren, LLP, No. 10 Civ. 655(LTS)(MHD), 2011 WL 3163443, at *2 (S.D.N.Y. July 25, 2011) ("[M]ost lower courts that have considered the question of the standard applicable to pleading of defenses have held that the Rule 12(b)(6) standard, as elucidated in Twombly and Iqbal, governs the sufficiency of the pleading of affirmative defenses."), with Hon-Hai Precision Indus. Co., Ltd. v. Wi-LAN, Inc., No. 12 Civ. 7900(SAS) , 2013 WL 2322675, at *9 (S.D.N.Y. May 28, 2013) ("The majority of district courts in [the Second] Circuit to consider the issue have held that affirmative defenses are not subject to the pleading standard of Twombly."). We disagree with plaintiff and hold defendants to a less exacting standard than the one articulated in Twombly and Iqbal.
The reasons behind our conclusion are manifold. First, the text of the Federal Rules indicates that a plaintiff's initial pleading burden is more significant than that of a defendant raising an affirmative defense. While Rule 8(a)(2), "which governs pleadings that state claims, requires that pleadings show' the pleader's entitlement to relief[, ]... Rule 8(c)(1), ... which governs pleading affirmative defenses, only requires a party to state' the defense." Scott, 2012 WL 5835232, at *3. Twombly and Iqbal clarified the pleading requirement under Rule 8(a), but do not reference the standard for affirmative defenses under Rule 8(c). See Twombly , 550 U.S. at 557; Iqbal , 556 U.S. at 678-79. In addition to the textual argument, "Form 30 of the Federal Rules of Civil Procedure indicates that notice pleading suffices to plead an affirmative defense." Hon-Hai , 2013 WL 2322675, at *9. Moreover, from an equitable perspective, it would be unfair to "hold the defendant to the same pleading standard as the plaintiff, when the defendant has only a limited time to respond after service of the complaint while plaintiff has until the expiration of the statute of limitations." Tardif v. City of New York, No. 13-CV-4056 (KMW)(FM), 2014 WL 2971004, at *3 (S.D.N.Y. July 2, 2014) (quoting Bayer CropScience AG v. Dow AgroSciences LLC, Civ. 10-1045 , 2011 WL 6934557, at *1 (D. Del. Dec. 30, 2011)). Finally, the "low likelihood that motions to strike affirmative defenses would expedite the litigation, given that leave to amend is routinely granted" also militates against holding defendants to the Twombly and Iqbal standard. Id . (quoting Bayer CropScience , 2011 WL 6934557, at *2). This final reason is particularly salient in the context of this litigation, as we previously advised plaintiff's counsel that the instant motion served little purpose in moving this case toward resolution. Therefore, to survive plaintiff's motion, defendants must only state their affirmative defenses pursuant to Rule 8(c) and need not meet the plausibility standard of Twombly and Iqbal.
B. Defendants' Affirmative Defenses
In their answer, defendants raise eleven affirmative defenses. We will address them each in turn.
1. Bad Faith
Plaintiff challenges defendants' first affirmative defense, bad faith, on the ground that "[t]here is no separable bad faith' alleged anywhere in the Answer and Counterclaims." Pl.'s Mot. at 3. This argument is misguided. When we construe the answer in the light most favorable to defendants, they sufficiently claim that plaintiff acted in bad faith through its alleged misappropriation of the "Bette Davis" name and by bringing the instant lawsuit when plaintiff itself acted wrongfully. Answer ¶¶ 50-51. Whether defendants are ultimately able to prove their allegations is another matter, but because the question of bad faith is "very fact intensive, " we cannot say that there is no question of fact that may allow the defense to succeed. Michelle Pommier Models, Inc. v. Men Women NY Model Mgmt., Inc., No. 97 Civ. 6837(SAS), 1997 WL 724575, at *4 (S.D.N.Y. Nov. 18, 1997). ...