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Iraheta v. Equifax Information Services LLC

United States District Court, W.D. Louisiana, Shreveport Division

July 16, 2018





         Before the Court is Plaintiffs motion to strike defenses raised by Defendants Equifax Information Services, LLC ("Equifax") and Trans Union, LLC ("Trans Union"). [Record Document 124]. For the reasons discussed below, the motion is GRANTED IN PART, DENIED IN PART, and STAYED IN PART. The motion is STAYED with respect to Count V of Plaintiffs third amended complaint, GRANTED with respect to Equifax's fifth defense, and DENIED in all other respects. Equifax is granted until August 6, 2018 to amend its answer so as to more specifically articulate its fifth defense.

         I. Background

         Plaintiff Jose Iraheta ("Iraheta") raises claims under the Fair Credit Reporting Act ("FCRA") and state tort law against the three credit reporting agencies: Trans Union, Equifax, and Experian Information Solutions, Inc. [Record Document 109]. The already complex procedural history of this matter was discussed in this Court's ruling on Iraheta's motion for default judgment, [Record Document 138 at 1-4], and so the Court will summarize only the relevant portions here. After Iraheta filed his third amended complaint, Trans Union and Equifax answered, denying most of Iraheta's allegations and asserting a number of defenses. [Record Documents 114 and 115]. Iraheta moved to strike those defenses. [Record Document 124]. Equifax and Trans Union oppose his motion. [Record Document 131].

         Count V of Iraheta's complaint involves various data breaches at the credit unions, including the May 2017 Equifax data breach that is now the subject of multidistrict litigation in the Northern District of Georgia. [Record Documents 109 at 20 and 131-1]. The Judicial Panel on Multidistrict Litigation conditionally transferred this matter to the MDL and then remanded Iraheta's remaining claims: Count III (FCRA), Count IV (Defamation), and Count VI (Negligence). [Record Document 131-1]. In light of this conditional transfer, this ruling applies only to the claims in Counts III, IV, and VI of Iraheta's third amended complaint.

         II. Law and Analysis

         A. Legal Standard

         A court may "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed R. Civ. P. 12(f). Because motions to strike are "somewhat dilatory and often harassing," 5C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1381 (3d ed. 2002), motions to strike are disfavored, Augustus v. Bd. of Pub. Instruction, 306 F.2d 862, 868 (5th Cir. 1962) (quoting Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819, 822 (6th Cir. 1953)). A motion to strike is appropriate only if a part of a pleading has "no possible relation to the controversy." Id. (quoting Brown & Williamson Tobacco Corp., 201 F.2d at 822). To have a defense successfully stricken, a plaintiff must show (1) that the defense is legally insufficient, impertinent, or redundant; and (2) prejudice resulting from its continued presence. See FDIC v. Niblo, 821 F.Supp. 441, 449 (N.D. Tex. 1993) (citing Augustus, 306 F.2d at 868); Wright & Miller, supra § 1380.

         In the aftermath of the Supreme Court's reinterpretation of pleading standards in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), lower courts have split over the level of factual detail required of affirmative defenses, see Wright & Miller, supra § 1274. In support of his motion, Iraheta cites cases from district courts in the Ninth Circuit that apply the heightened Twombly-Iqbal standard of facial plausibility to affirmative defenses. See Hernandez v. Dutch Goose, Inc., 2013 WL 5781476, at *4 (N.D. Cal. Oct. 25, 2013); Miller v. Ghirardelli Chocolate Co., No. C 12-04936 LB, 2013 WL 3153388, at *3 (N.D. Cal. June 19, 2013). The question is thus whether this Court should do likewise.

         Prior to Twombly and Iqbal, the Fifth Circuit only required that a defense "give the plaintiff 'fair notice' of the defense that is being advanced ... so that the plaintiff [i]s not a victim of unfair surprise." Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999) (quoting Home Ins. Co. v. Matthews, 998 F.2d 305, 309 (5th Cir. 1993)). There is thus a "tension between the Woodfield court's reference to the more relaxed pleading standards that existed at the time that decision came down and the heightened pleading standards now in effect." Vargas v. HWC Gen. Maint., LLC, No. CIV.A. H-11-875, 2012 WL 948892, at *2 (S.D. Tex. Mar. 20, 2012). The Fifth Circuit has not addressed this issue, and courts within the circuit are divided. Compare Id. at *2 (holding that the Twombly-Iqbal standard applies to affirmative defenses) with Bledsoe v. City of Shreveport, No. CV 15-2484, 2016 WL 8710974, at *2 (W.D. La. June 24, 2016) (applying the Woodfield standard) and Floridia v. DLT3 Girls, Inc., No. 4:11-CV-3624, 2012 WL 1565533, at *2 (S.D. Tex. May 2, 2012) (same).

         Even if the Twombly-Iqbal standard has displaced the"fair notice" requirement in Woodfield, the new standard has not altered the underlying purpose of any pleading requirement-avoiding "unfair surprise." Woodfield, 193 F.3d at 362 (quoting Home Ins. Co., 998 F.2d at 309). For this reason, courts in the Fifth Circuit have emphasized that a defense should be stricken only when a plaintiff shows prejudice. Bledsoe, 2016 WL 8710974, at *3; Niblo, 821 F.Supp. at 449 (citing Augustus, 306 F.2d at 868); see also Tayne Christensen Co. v. Bro-Tech Corp., No. 09-CV-2381-JWL-GLR, 2011 WL 3847076, at *6 (D. Kan. Aug. 29, 2011) ("[A]bsent prejudice to an opposing party, courts should not strike a defense."). In light of the stress the Fifth Circuit has placed on fair notice and avoiding surprise, the Court holds that even if the Twombly-Iqbal standard applies to affirmative defenses, a motion to strike is still properly denied unless the plaintiff shows prejudice from the factually bare pleading.

         B. Equifax' ...

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