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Echostar Satellite L.L.C. v. Persian Broadcasting Co.

February 22, 2006

ECHOSTAR SATELLITE L.L.C., A COLORADO LIMITED LIABILITY CORPORATION, F/K/A ECHOSTAR SATELLITE CORPORATION, PLAINTIFF,
v.
PERSIAN BROADCASTING COMPANY, INC., UPON INFORMATION AND BELIEF, A CALIFORNIA CORPORATION, F/K/A ATLANTIS ENTERPRISES, LLC; A/K/A PBC; A/K/A TAPESH TV, AND TAPESH NETWORK PERSIAN BROADCASTING COMPANY, UPON INFORMATION AND BELIEF A CALIFORNIA CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Judge Phillip S. Figa

ORDER ON PENDING MOTIONS

This matter is before the Court on Plaintiff's Motion to Strike Affirmative Defenses (Dkt. # 10), filed June 21, 2005, and Plaintiff's Motion to Dismiss Defendant's Counterclaim Pursuant to F.R.Civ.P. 12(b)(6) (Dkt. # 11), also filed June 21, 2005. The motions are fully briefed and ripe for disposition.

I. BACKGROUND AND PROCEDURAL HISTORY

Plaintiff Echostar Satellite L.L.C. ("Echostar") filed this diversity action on March 14, 2005, as a result of Defendant Persian Broadcasting Company and Tapesh Network Persian Broadcasting Company's (collectively, "PBC") alleged failure to transfer its Farsi programming to Echostar's network as specified in an Affiliation Agreement entered into by Echostar and PBC. Plaintiff filed its First Amended Complaint on March 29, 2005.

Echostar is in the Direct-to-Home satellite television business, using high-powered satellites to broadcast programming to consumers under its trade name, DISH network. PBC owns and distributes Farsi language audio and video programming channels (Tapesh 1 and Tapesh 2). On September 10, 2003, Echostar and PBC entered into an Affiliation Agreement providing Echostar an exclusive license and right to broadcast PBC's Farsi programming. Am. Compl. at ¶¶ 12-13. The Agreement provided PBC with a period of time within which to migrate its programming from its current broadcast service to the DISH network. Under the Agreement, this period was to end on February 28, 2004. Agreement at ¶ 2.1.1, attached as Ex. 1 to Am. Compl. Echostar contends that it "granted PBC two extensions for a cumulative seven month extension," requiring PBC to cease distribution of the programming by September 30, 2004. Am. Compl. at ¶ 17. PBC alleges that these extensions were for Echostar's benefit and due to Echostar's inability to meet its obligations under the Affiliation Agreement. Def.'s Answer at ¶ 17.

Echostar alleges that PBC materially breached, and continues to materially breach, the Agreement by continuing to distribute the programming elsewhere. Am. Compl. at ¶ 18. Echostar claims to have sent PBC a notice of breach on October 13, 2004, and a Cease and Desist letter on December 17, 2004. Id. at ¶¶ 26-27. It eventually filed suit, seeking damages for breach of contract and breach of the covenant of good faith and fair dealing, and requesting a permanent injunction. PBC's Answer raises eleven affirmative defenses and brings a counterclaim for breach of contract.

II. MOTION TO STRIKE AFFIRMATIVE DEFENSES

On June 21, 2005, Echostar filed a motion to strike each of PBC's affirmative defenses pursuant to F.R.Civ.P. 12(f). Echostar claims that the affirmative defenses fail to meet the pleading requirements of F.R.Civ.P. 8(a)*fn1 and that several defenses are inapplicable to Echostar's causes of action.

A. Standard of Review

Affirmative defenses are subject to F.R.Civ.P. 8(b), which requires that a party "state in short and plain terms the party's defenses to each claim." Under F.R.Civ.P. 12(f), a court "may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." The rule's purpose is to conserve time and resources by avoiding litigation of issues which will not affect the outcome of the case. United States v. Smuggler-Durant Mining Corp., 823 F. Supp. 873, 875 (D. Colo. 1993). Motions to strike, however, are generally a disfavored and drastic remedy. Sierra Club v. Tri-State Generation and Transmission Ass'n, Inc., 173 F.R.D. 275, 285 (D. Colo. 1997). Allegations will not be stricken as immaterial under this rule unless it can be shown that no evidence in support of the allegation would be admissible. United States v. Shell Oil Co., 605 F. Supp. 1064, 1085 (D. Colo. 1985). Even where the challenged allegations fall within the rule's prohibited categories, a party must usually make a showing of prejudice before a court will grant a motion to strike. Sierra Club, 173 F.R.D. at 285 (citing 5 C. Wright and A. Miller, Federal Practice and Procedure § 1382 (2d ed. 1990)).

B. Discussion

Plaintiff first requests that this Court strike all eleven of PBC's affirmative defenses because "they are mere bare bones allegations lacking any factual content and fail to give notice to Echostar of the substance of any defenses raised." Pl.'s Mot. Strike at 4-5. Echostar points to Seventh Circuit case law holding that a court should strike affirmative defenses not pled with sufficient particularity. See Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989) (upholding a motion to strike all of defendant's affirmative defenses because they were bare bones, conclusory allegations); see also Fleet Business Credit Corp. v. National City Leasing Corp., 191 F.R.D. 568 (N.D. Ill. 1999) (striking three affirmative defenses for insufficient pleading, citing Heller).

Although not detailed, PBC lists eleven short, plain statements of its affirmative defenses, providing Echostar with fair notice. See Conley v. Gibson, 355 U.S. 41, 47-48 (1957) (short, plain statement is sufficient if it gives opposing party fair notice of its claims; liberal discovery under the rules will allow further definition of the disputed facts and issues). Moreover, plaintiff makes no showing of prejudice, justifying striking the defenses. Finally, each of the affirmative defenses raises factual issues for this Court to consider and are related to the controversy. For example, PBC alleges in its Answer that Echostar was "unable to meet its obligations under the Affiliation Agreement," and thus granted two extensions, supporting the possibility of the affirmative defenses of inducement, breach, unequitable conduct, unclean hands, and impossibility. Def.'s Answer at 3, ¶ 17. PBC further alleges that Echostar failed to fulfill other duties under the Agreement, justifying PBC's breach. Id. at 9, ¶ 12. In the context of such allegations, PBC's affirmative defenses meet the requirements of F.R.Civ.P. 8(b) and are sufficient to survive a motion to strike under F.R.Civ.P. 12(f). See also Resolution Trust Corp. v. Ascher, 839 F. Supp. 764, 765-66 (D. Colo. 1993) ("Motions to strike are generally disfavored, but are within the district court's sound discretion.") (internal citations omitted).

Echostar also asks this Court to strike PBC's first, sixth, tenth, and eleventh affirmative defenses because they are inapplicable to Echostar's causes of action. According to Echostar, PBC's first affirmative defense--failure to state a claim--improperly recites the standard for a motion to dismiss under F.R.Civ.P. 12(b)(6) and fails to indicate how it is connected to the present case. PBC states that "each and every claim alleged" is subject to this defense. That is likely not the case. Nevertheless, neither a motion to dismiss under Rule 12(b)(6) nor a motion for judgment on the pleadings has been filed by the defendants, and no merits determination of the sufficiency of the complaint will be undertaken without such a motion. Under Rule 12(b)(6), a defense such as a failure to state a claim "shall be asserted in the responsive pleading" or "may at the option of the pleader be made by motion." The Court reads the rule as requiring the assertion of this affirmative defense within the timeframe required for answering, either in the answer or ...


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