# Ewing v. Freedom Forever, LLC

> District Court, S.D. California · August 21, 2024

URL: https://www.frixlaw.com/law-library/cases/10640466

## Case

- **Court:** District Court, S.D. California
- **Decided:** August 21, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10640466

## How later opinions describe it (automated extraction)

- applying Vivian’s “clearly prohibits” rule to 22 protect the strong public interest in incentivizing doctors to report public health concerns
- holding that, given the 19 important public interest favoring reports to law enforcement, statements not “clearly 20 prohibit[ed]” by a contract remained privileged
- holding that 16 a single case or controversy exists for purposes of § 1367 if the state and federal claims 17 “derive from a common nucleus of operative fact” such that the plaintiff “would ordinarily 18 be expected to try them all in one judicial proceeding”

## Opinion text

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8 UNITED STATES DISTRICT COURT
9 SOUTHERN DISTRICT OF CALIFORNIA
10
11 ANTON A. EWING, Case No.: 23-CV-1240 JLS (AHG)

12 Plaintiff,
ORDER (1) GRANTING IN PART
13 v. AND DENYING IN PART
PLAINTIFF’S MOTION TO
14 FREEDOM FOREVER, LLC; and
DISMISS DEFENDANT’S
BRETT BOUCHY, an individual,
15 COUNTERCLAIMS; (2) DENYING
Defendant. PLAINTIFF’S MOTION FOR FRCP
16
11 SANCTIONS; AND (3) DENYING
17 DEFENDANT’S MOTION TO
STRIKE
18

19 (ECF Nos. 38, 39, 59)
20
21 Presently before the Court is a series of motions. First, Plaintiff Anton A. Ewing
22 filed a Motion to Dismiss Defendant’s Counterclaims (“CC Mot.,” ECF No. 38).1 Two
23 weeks later, he filed a Motion for Rule 11 Sanctions (“Sanctions Mot.,” ECF No. 39).2 Not
24 to be outdone, Defendant Freedom Forever, LLC then filed a Motion to Strike (“MTS,”
25
26 1 Defendant filed an Opposition to the Counterclaim Motion (“CC Opp’n,” ECF No. 41), and Plaintiff
then filed a Reply (“CC Reply,” ECF No. 43).
27

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2 Defendant again filed an Opposition to the Sanctions Motion (“Sanctions Opp’n,” ECF No. 52), to which
1 ECF No. 59) targeting Plaintiff’s Sanctions Reply and associated Declaration (“Decl.,”
2 ECF No. 54).3 Having carefully considered the Answer (“Answer,” ECF No. 35), the
3 Parties’ arguments, and the law, the Court GRANTS IN PART AND DENIES IN PART
4 Plaintiff’s Motion to Dismiss Defendant’s Counterclaims, DENIES Defendant’s Motion
5 to Strike, and DENIES Plaintiff’s Motion for Rule 11 Sanctions.4
6 BACKGROUND
7 The Court incorporates by reference the factual and procedural background stated in
8 its April 29, 2024 and January 19, 2024 Orders and states here only the additional facts
9 relevant to the instant Motions.
10 On April 29, the Court granted in part and denied in part Defendant’s Partial Motion
11 to Dismiss (ECF No. 30). In so doing, the Court dismissed Plaintiff’s request for injunctive
12 relief with prejudice and dismissed Plaintiff’s Telephone Consumer Protection Act
13 (“TCPA”) and California Invasion of Privacy Act (“CIPA”) claims to the extent they
14 sought to recover for calls alleged in a previous lawsuit. ECF No. 34 at 9. Plaintiff declined
15 to amend his operative pleading,5 so Defendant filed an Answer on May 20, 2024. In the
16 Answer, Defendant alleged that it and Plaintiff previously entered into a settlement
17 agreement to resolve a separate TCPA lawsuit. Answer at 15. That agreement, per
18 Defendant, (1) contains non-disparagement and confidentiality provisions and (2) entitles
19 the prevailing party in a suit for breach of the agreement to attorney’s fees. Id. at 15–19.
20 Defendant now accuses Plaintiff of breaching both provisions and brings four
21 counterclaims. Id. These counterclaims include breach of the non-disparagement
22 provision (Claim I), breach of the confidentiality provision (Claim II), attorney’s fees
23

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3 Plaintiff filed an Opposition to the MTS (“MTS Opp’n,” ECF No. 61) on August 6, 2024. Defendant’s
25 deadline to reply has not yet expired.

26 4 Despite the filing chronology, the Court will naturally resolve the Motion to Strike before the Motion
for Rule 11 Sanctions because resolution of the latter depends upon the resolution of the former.
27

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5 Plaintiff has since asked the Court for leave to file a third amended complaint. See ECF No. 55. This
1 (Claim III), and breach of the implied duty of good faith and fair dealing (Claim IV). Id.
2 The instant Motions followed.
3 MOTION TO DISMISS COUNTERCLAIMS
4 I. Legal Standard
5 A. Rule 12(b)(1)
6 “Federal district courts are courts of limited jurisdiction that ‘may not grant relief
7 absent a constitutional or valid statutory grant of jurisdiction’ and are ‘presumed to lack
8 jurisdiction in a particular case unless the contrary affirmatively appears.’” Cooper v.
9 Tokyo Elec. Power Co., 990 F. Supp. 2d 1035, 1038 (S.D. Cal. 2013) (quoting A-Z Int’l v.
10 Phillips, 323 F.3d 1141, 1145 (9th Cir. 2003)). Accordingly, “federal courts have an
11 independent obligation to ensure that they do not exceed the scope of their jurisdiction, and
12 therefore they must raise and decide jurisdictional questions that the parties either overlook
13 or elect not to press.” Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2011).
14 The party asserting jurisdiction—here, Defendant—bears the burden of establishing
15 that subject matter jurisdiction exists. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
16 375, 377 (1994). “This burden, at the pleading stage, must be met by pleading sufficient
17 allegations to show a proper basis for the court to assert subject matter jurisdiction over an
18 action.” Wilkerson v. Butler, 229 F.R.D. 166, 169 (E.D. Cal. 2005).
19 B. Rule 12(b)(6)
20 Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the
21 defense that the complaint “fail[s] to state a claim upon which relief can be granted.” A
22 court evaluates whether a complaint states a cognizable legal theory and sufficient facts in
23 light of Federal Rule of Civil Procedure 8(a), which requires a “short and plain statement
24 of the claim showing that the pleader is entitled to relief.” Although Rule 8 “does not
25 require ‘detailed factual allegations,’ . . . it demands more than an unadorned, the-
26 defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
27 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “a
28 plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more
1 than labels and conclusions, and a formulaic recitation of the elements of a cause of action
2 will not do.” Twombly, 550 U.S. at 555 (alteration in original) (citation omitted).
3 To survive a motion to dismiss, “a complaint must contain sufficient factual matter,
4 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S.
5 at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible when the facts
6 pleaded “allow[] the court to draw the reasonable inference that the defendant is liable for
7 the misconduct alleged.” Id. That is not to say that the claim must be probable, but there
8 must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. Facts
9 “‘merely consistent with’ a defendant’s liability” do not demonstrate a plausible
10 entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557).
11 Review under Rule 8(a) requires a context-specific analysis involving a court’s
12 “judicial experience and common sense.” Id. at 679. A court must “accept[] all factual
13 allegations in the complaint as true and constru[e] them in the light most favorable to the
14 nonmoving party.” Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014 (9th Cir.
15 2012). That said, the Court need not accept as true “legal conclusions” contained in the
16 complaint. Iqbal, 556 U.S. at 678.
17 If a complaint does not state a plausible claim for relief, a court should grant leave
18 to amend unless it determines that no modified contention “consistent with the challenged
19 pleading could . . . cure the deficiency.” DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655,
20 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co.,
21 806 F.2d 1393, 1401 (9th Cir. 1986)). “The Ninth Circuit has instructed that the policy
22 favoring amendments ‘is to be applied with extreme liberality.’” Abels v. JBC Legal Grp.,
23 P.C., 229 F.R.D. 152, 155 (N.D. Cal. 2005) (quoting Morongo Band of Mission Indians v.
24 Rose, 893 F.2d 1074, 1079 (9th Cir. 1990)).
25 Finally, though litigants proceeding pro se are ordinarily entitled to liberal
26 construction of their pleadings and arguments, said liberal construction does not extend to
27 practicing attorneys. Huffman v. Lindgren, 81 F.4th 1016, 1021 (9th Cir. 2023). And, to
28 the extent such solicitude extends to plaintiffs who have attended law school and have past
1 litigation experience, said solicitude is reduced. See id. at 1020–21; Tracy v. Freshwater,
2 623 F.3d 90, 102 (2d Cir. 2010) (“[T]he degree of solicitude may be lessened where the
3 [litigant proceeding pro se] is experienced in litigation and familiar with the procedural
4 setting presented.”). As the Court has previously held, Plaintiff is entitled to only reduced
5 deference at the motion-to-dismiss stage. ECF No. 34 at 6.
6 II. Discussion
7 A. Supplemental Jurisdiction
8 Plaintiff first encourages the Court to decline to exercise supplemental jurisdiction
9 over Defendant’s counterclaims, which are grounded in state law. Plaintiff argues “the
10 breach of contract claim has nothing to do with [his] TCPA causes of action and will only
11 confuse the jury.”6 Mot. at 11.
12 In any action in which the Court has original jurisdiction, it may also exercise
13 supplemental jurisdiction “over all claims that are so related to claims in the action within
14 such original jurisdiction that they form part of the same case or controversy.” 28 U.S.C.
15 § 1367(a); see also United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966) (holding that
16 a single case or controversy exists for purposes of § 1367 if the state and federal claims
17 “derive from a common nucleus of operative fact” such that the plaintiff “would ordinarily
18 be expected to try them all in one judicial proceeding”). Supplemental jurisdiction extends
19 to compulsory counterclaims—i.e., counterclaims that arise from the same aggregate set of
20 operative facts as the initial claim. VBS Distribution, Inc. v. Nutrivita Lab’ys, Inc.,
21 No. SACV 16-01553-CJC-DFMx, 2017 WL 2404920, at *3 (C.D. Cal. Mar. 1, 2017).
22

23 6 Plaintiff also encourages the Court to decline supplemental jurisdiction because he has filed his own
24 breach-of-contract action in state court, where he thinks Defendant’s counterclaim belongs. CC Mot.
at 11. Risk of conflict with parallel state court proceedings, however, are not listed among the statutory
25 circumstances in which the Court may decline to exercise supplemental jurisdiction. See 28 U.S.C.
§ 1367(c)(1)–(4). So, the Court will not consider this parallel action when resolving Plaintiff’s
26 supplemental jurisdiction argument. Nor will the Court assess whether some other doctrine might support
dismissal in such circumstances—it is not the Court’s role to litigate this case for Plaintiff. Finally, the
27
Court did not dismiss Plaintiff’s potential breach of contract claim; Plaintiff chose not to amend his
28 pleading to assert it. See Order at 5–6. Any inconvenience associated with attempting to reverse his prior
1 And, though the Ninth Circuit has yet to decide the issue, the Second and Seventh Circuits
2 have affirmed the exercise of supplemental jurisdiction over permissive counterclaims as
3 well. Elements Spirits, Inc. v. Iconic Brands, Inc., No. CV 15-02692 DDP AGRx,
4 2015 WL 5470297, at *4 (C.D. Cal. Sept. 17, 2015) (first citing Jones v. Ford Motor Credit
5 Co., 358 F.3d 205, 212–13 (2d Cir. 2004); and then citing Channell v. Citicorp Nat’l Servs.,
6 Inc., 89 F.3d 379, 384 (7th Cir. 1996)); see also Campos v. W. Dental Servs.,
7 Inc., 404 F. Supp. 2d 1164, 1169 (N.D. Cal. 2005) (“[T]he standard for supplemental
8 jurisdiction is broader than the standard for a counterclaim to be compulsory.”).
9 There is some logical appeal to Plaintiff’s argument. At least one court has declined
10 to adjudicate a breach-of-contract counterclaim arising out of litigation conduct, reasoning
11 that delving into such conduct risked prejudicing the jury against the Plaintiff. Yardley v.
12 ADP TotalSource, Inc., No. CV-13-04639-MWF-JCGX, 2014 WL 1496333, at *4
13 (C.D. Cal. Apr. 4, 2014). Moreover, the occurrences upon which Defendant’s
14 counterclaims are based (pleadings filed and communications sent during this litigation)
15 are separate from the occurrences upon which Plaintiff’s TCPA and CIPA claims are based
16 (alleged calls made not in furtherance of this litigation but instead to sell solar panels).
17 Plaintiff, however, conveniently ignores an obvious factual connection between his
18 TCPA/CIPA claims and Defendant’s counterclaims—one that renders them sufficiently
19 related to support the exercise of supplemental jurisdiction. Plaintiff, attempting to defeat
20 Defendant’s breach of contract claim, accuses Defendant of breaching first. Mot. at 9–10.
21 Defendant’s alleged breach? Making the very calls for which Plaintiff seeks to recover
22 under the TCPA and CIPA. So, Plaintiff’s claims—and Defendant’s counterclaims—share
23 an issue of common proof—i.e., “a partial, but material, common nucleus of operative
24 facts.” See Coleman v. Dish Network LLC, No. LA CV17-02460 JAK AFMX,
25 2017 WL 6888289, at *5 (C.D. Cal. Nov. 22, 2017) (exercising supplemental jurisdiction
26 over a breach-of-contract claim where the defendant sought to raise the contract as an
27 affirmative defense to the plaintiff’s TCPA claim). This common issue renders it
28 reasonable and expected to try the two claims together.
1 Finally, the Court is unpersuaded that any of the four statutory circumstances that
2 justify declining supplemental jurisdiction exist in this case. See id. (noting a breach of
3 contract claim neither “raise[d] any novel or complex issues of state law” nor did it
4 “substantially predominate over the TCPA claim” and concluding any prejudice concerns
5 could be resolved through bifurcation); Wilson v. Discover Bank, No. 3:12-CV-05209-
6 RBL, 2012 WL 1899539, at *3 (W.D. Wash. May 24, 2012) (similar). So, the Court will
7 exercise supplemental jurisdiction over Defendant’s counterclaim.
8 B. Litigation Privilege
9 Plaintiff next contends that California’s litigation privilege—codified at Cal. Civ.
10 Code § 47—bars Defendant’s counterclaims. This absolute privilege “applies to any
11 communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other
12 participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have
13 some connection or logical relation to the action.” Silberg v. Anderson, 786 P.2d 365, 369
14 (Cal. 1990) (en banc). The privilege applies “to any communication, whether or not it
15 amounts to a publication, and all torts except malicious prosecution.” Id. at 368 (citations
16 omitted). Moreover, it is “absolute in nature”; where it applies, it cannot be overcome. Id
17 at 370–71.
18 Defendant does not contend that Plaintiff’s statements fail to satisfy the Silberg
19 elements. Instead, Defendant points out that the litigation privilege generally “precludes
20 liability in tort, not liability for breach of contract.” CC Opp’n at 6 (quoting Crossroads
21 Invs., L.P. v. Fed. Nat’l Mortg. Assn., 222 Cal. Rptr. 3d 1, 27–28 (Ct. App. 2017)). Per
22 Defendant, “the narrow circumstances in which the privilege might apply to contract claims
23 are [not] present here.” Id.
24 Defendant accurately describes the governing law. In California, the litigation
25 privilege does not categorically bar breach-of contract claims. Instead, “whether the
26 litigation privilege applies to an action for breach of contract turns on whether its
27 application furthers the policies underlying the privilege.” Wentland v. Wass,
28 25 Cal. Rptr. 3d 109, 114 (Ct. App. 2005). These policies include “ensur[ing] free access
1 to the courts, promot[ing] complete and truthful testimony, encourag[ing] zealous
2 advocacy, giv[ing] finality to judgments, and avoid[ing] unending litigation.” Id. at 115.
3 In Wentland, the defendants claimed, when opposing a motion for summary
4 judgment filed by the plaintiff, that an audit they launched was reasonable because they
5 had evidence of self-dealing by the plaintiff. Id. at 111. In response, the plaintiff filed a
6 cross-complaint accusing the defendants of violating a settlement agreement relating to the
7 alleged self-dealing. Id. This agreement “provided that [the defendants] would make no
8 accusation or comment that alleged wrongdoing by [the plaintiff] concerning [the alleged
9 self-dealing]” and that “the terms of the agreement would be kept confidential.” Id. The
10 defendants sought refuge in the litigation privilege, but the appellate court disagreed. It
11 reasoned that the “cause of action [was] not based on allegedly wrongful conduct during
12 litigation,” but instead “on breach of a separate promise independent of the litigation.” Id.
13 at 116. Put differently, the “breach was not simply a communication, but also wrongful
14 conduct or performance under the contract.” Id. By knowingly entering the contract, said
15 the court, the defendants “waived the protection of the litigation privilege.” Id. To hold
16 otherwise “would frustrate the purpose of the [agreement]” and “undermine[] the
17 settlement,” thereby “invit[ing] further litigation.” Id. at 116–17.
18 Because this case is indistinguishable from Wentland, Defendant’s breach-of-
19 contract counterclaims are not barred by the litigation privilege. Here, as in Wentland,
20 Plaintiff signed a contract requiring him to keep the terms of the agreement confidential
21 and to refrain from disparaging Defendant. See Answer at 15–17. Similarly, Plaintiff
22 allegedly breached that contract through statements made during—and filings submitted
23 in—this litigation. So, though Plaintiff’s statements may be shielded from tort liability by
24 the litigation privilege, Plaintiff, by signing the settlement agreement, waived the
25 privilege’s protection respecting liability in contract.7
26

27 7 Indeed, numerous courts have declined to apply the litigation privilege in similar situations. See, e.g.,
28 Bakst v. Cmty. Mem’l Health Sys., Inc., No. CV 09-08241 MMM (FFMX), 2011 WL 13214303, at *10
1 Plaintiff’s counterargument is unavailing. Plaintiff fixates on Defendant’s
2 counterclaim for breach of the implied duty of good faith and fair dealing, contending it
3 sounds in tort—not contract. CC Reply at 4. Plaintiff, however, misunderstands the law.
4 With the limited exception of insurance-related, bad-faith claims, a plaintiff’s recourse for
5 breach of the implied covenant “has almost always been limited to contract rather than tort
6 remedies.” Foley v. Interactive Data Corp., 765 P.2d 373, 389 (Cal. 1988) (en banc).
7 Indeed, “[a]n allegation of breach of the implied covenant of good faith and fair dealing is
8 an allegation of breach of an ‘ex contractu’ obligation, namely one arising out of the
9 contract itself.” Id. at 394. And “ex conctractu” causes of action, per Wentland and
10 Crossroads, generally escape the litigation privilege. 25 Cal. Rptr. 3d at 117;
11 222 Cal. Rptr. 3d at 27–28.
12 True, one California case has applied the litigation privilege to bar a bad-faith claim.
13 Alexsam, Inc. v. Green Dot Corp., No. 2:15-CV-05742-CAS-PLAX, 2016 WL 7261538,
14 at *3–4 (C.D. Cal. Dec. 13, 2016). But that court, contrary to Foley’s teachings, concluded
15 that a bad-faith claim is “ex delicto” rather than “ex contractu”—i.e., that it sounded in tort.
16 Id. at *4. Moreover, the Alexsam court derived a rule against applying the litigation
17 privilege to implied contractual duties from cases that state no such rule. See Vivian v.
18 Labrucherie, 153 Cal. Rptr. 3d 707, 715–16 (Ct. App. 2013) (holding that, given the
19 important public interest favoring reports to law enforcement, statements not “clearly
20 prohibit[ed]” by a contract remained privileged); McNair v. City & Cnty. of San Francisco,
21 5 Cal. App. 5th 1154, 1170 (Ct. App. 2016) (applying Vivian’s “clearly prohibits” rule to
22 protect the strong public interest in incentivizing doctors to report public health concerns).
23 And even if Vivian’s “clearly prohibits” rule ensures that statements made in violation of
24 implied contractual duties retain privilege protection, no comparably strong public interest
25 exists in the instant case.
26

27
No. CV 12-09201 DDP (AJWX), 2013 WL 6002167, at *6 (C.D. Cal. Nov. 12, 2013) (same); Yardley v.
28 ADP TotalSource, Inc., No. CV-13-04639-MWF JCGX, 2014 WL 1496333, at *2 (C.D. Cal. Apr. 4, 2014)
1 Attempting to raise such a policy concern, Plaintiff contends that he had to make the
2 alleged statements to bring his lawsuit. But, as Plaintiff has previously emphasized, he has
3 not brought a claim for breach of the settlement agreement. See ECF No. 34 at 5–6.
4 Moreover, neither Plaintiff’s TCPA nor his CIPA claims require Plaintiff to reference a
5 past settlement agreement. And even if they did, Plaintiff could have alleged that he
6 previously settled claims without including a near-full copy of the agreement as an exhibit
7 to his Complaint. Plaintiff, therefore, has fallen into a trap of his own making. His attempt
8 to rely on the litigation privilege fails.
9 C. Failure to State a Claim
10 Plaintiff’s failure-to-state-a-claim arguments target Defendant’s first two
11 counterclaims for breach of contract only (Claims I & II). In California, the elements of a
12 breach-of-contract claim are “the existence of the contract, performance by [the accusing
13 party] or excuse for nonperformance, breach by the [opposing party,] and damages.”
14 Terlato Wine Grp., Ltd. v. Fed. Ins. Co., 642 F. Supp. 3d 1139, 1145 (N.D. Cal. 2022)
15 (quoting First Com. Mortg. Co. v. Reece, 108 Cal. Rptr. 2d 23, 33 (Ct. App. 2001)).
16 Plaintiff contends Defendant has failed to plausibly allege the second and third elements.
17 1. Performance by Defendant
18 Plaintiff argues that because, in his view, Defendant has already breached their
19 settlement contract, Defendant cannot raise a claim for breach of contract. This argument
20 essentially targets the second element of Defendant’s breach-of-contract claim:
21 Defendant’s performance.
22 To the extent Plaintiff asks the Court to adjudicate whether Defendant in fact
23 breached the settlement agreement, the Court must decline Plaintiff’s request. Resolving
24 Plaintiff’s contention would require the Court to consider evidence external to Defendant’s
25 counterclaims, which the Court may not do at this stage. See id. at 1145.
26 Instead, the Court will assess only whether Defendant has plausibly alleged
27 performance of its obligations under the contract. Defendant pleads only that it “complied
28 with its obligations under the Settlement Contract.” Answer at 17–18. As this allegation
1 merely restates an element of the claim, the Court may not credit it for its truth. See Iqbal,
2 556 U.S. at 680. And the Answer contains no other factual allegations supporting the
3 conclusion that Defendant performed its end of the bargain. So, the Court must dismiss
4 Defendant’s breach-of-contract counterclaims (Claims I & II). Compare Causer v. Apria
5 Healthcare Inc., No. SACV 13-00035-JVS-RNBX, 2013 WL 12473621, at *5 (C.D. Cal.
6 July 22, 2013) (finding performance satisfactorily alleged when the claimant pleaded that
7 it “provided the equipment and services it agreed to provide pursuant to [the contract]”),
8 and Reinhardt v. Gemini Motor Transp., 879 F. Supp. 2d 1138, 1143 (E.D. Cal. 2012)
9 (crediting allegation of performance where the relevant pleading both described the
10 specific job duties the plaintiffs were required to perform under the contract and alleged
11 that the plaintiffs completed those duties), with Dongguan Beibei Toys Indus. Co. v.
12 Underground Toys USA, LLC, No. CV 19-04993 DSF JPRX, 2020 WL 2065034, at *3
13 (C.D. Cal. Mar. 2, 2020) (dismissing breach-of-contract claim supported by only
14 conclusory allegations). As Defendant can rectify this issue, however, the Court will grant
15 Defendant leave to amend.
16 2. Failure to Identify Disparaging Statements/Disclosure of Confidential
17 Information
18 Plaintiff also complains that Defendant must—and fails to—identify (1) the specific
19 statements they consider to be disparaging and (2) the specific instance(s) in which Plaintiff
20 disclosed confidential information. Defendant claims in response that they need only
21 allege that Plaintiff breached the relevant provisions.
22 The Court sides with Plaintiff. In Sieler v. Atieva Inc., a Northern District of
23 California court considered a nearly identical argument when evaluating the alleged breach
24 of a non-disparagement clause. No. 22-CV-00063-NC, 2022 WL 18402494, at *5
25 (N.D. Cal. Dec. 16, 2022). There, the court dismissed the breach of contract claim, noting
26 that the claimant “fail[ed] to identify any specific . . . remarks.” Id. This Court agrees with
27 Atieva. Without knowing which specific remarks Defendant deems disparaging, the Court
28 cannot assess whether Defendant has stated a plausible claim for relief. The Court will
1 thus dismiss Defendant’s claim for breach of the settlement agreement’s non-
2 disparagement clause (Claim I), again granting Defendant leave to amend.
3 The Court is not persuaded, however, that Defendant must provide more information
4 regarding Plaintiff’s alleged breach of the confidentiality provision. Defendant alleges
5 Plaintiff “publicly disclos[ed] certain terms and provisions of the [settlement agreement]
6 that are not subject to the exceptions of the [settlement’s confidentiality provision].”
7 Answer at 12. This allegation is sufficient to put Plaintiff on notice of the alleged breach.
8 See, e.g., Physics, Materials, & Applied Mathematics Rsch. LLC v. Yeak, No. CV-20-
9 00379-TUC-JCH, 2021 WL 2557398, at *7 (D. Ariz. May 3, 2021). Defendant is not
10 obligated to outline the “who, what, when, where, why, and how” of Plaintiff’s alleged
11 disclosure.
12 D. Necessary Parties
13 Plaintiff contends that, to bring a breach-of-contract claim, all parties to the contract
14 must be named as either plaintiffs or defendants. Mot. at 6. Notably, he cites no authority
15 to support this contention.
16 Putting it mildly, the Court is unpersuaded. A party is necessary if (1) “in that
17 person’s absence, the court cannot accord complete relief among existing parties,” or
18 (2) “the person claims an interest relating to the subject of the action” and not joining that
19 person would either impair that interest or create a risk of inconsistent obligations.
20 Fed. R. Civ. P. 19(a)(1). It does not appear to the Court that any other parties to the
21 contract fall within these categories, and Plaintiff offers no argument that might persuade
22 the Court otherwise. The Court need say no more.
23 E. Arguments Raised for the First Time in Reply
24 Plaintiff raises a series of arguments for the first time in reply, including an argument
25 grounded in the agreement’s language, a contention that Defendant cannot sue for
26 attorney’s fees as a separate cause of action, and a claim that Defendant lacks provable
27 damages. See Reply at 2–4. Unfortunately for Plaintiff, “arguments raised for the first
28 time in a reply brief are waived” for purposes of resolving the relevant motion. See
1 Newpoint Fin. Corp. v. Bermuda Monetary Auth., 680 F. Supp. 3d 1151, 1163 n.3
2 (C.D. Cal. 2023) (quoting Autotel v. Nev. Bell Tel. Co., 697 F.3d 846, 852 (9th Cir. 2012)).
3 Accordingly, the Court will not address these arguments.
4 MOTION TO STRIKE
5 I. Legal Standard
6 Federal Rule of Civil Procedure 12(f) provides that the court “may strike from a
7 pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous
8 matter.” “‘Immaterial’ matter is that which has no essential or important relationship to
9 the claim for relief or the defenses being pleaded.” Fantasy, Inc. v. Fogerty, 984 F.2d 1524,
10 1527 (9th Cir. 1993) (internal quotation marks omitted) (quoting 5 Charles A. Wright &
11 Arthur R. Miller, Federal Practice and Procedure § 1382, at 706–07 (1990)), rev’d on
12 other grounds, 510 U.S. 517 (1994). “‘Impertinent’ matter consists of statements that do
13 not pertain, and are not necessary, to the issues in question.” Id. (internal quotation marks
14 omitted) (quoting 5 Wright & Miller, supra, § 1382, at 711). Finally, an allegation is
15 scandalous if it “improperly casts a derogatory light on someone, most typically on a party
16 to the action.” Cortina v. Goya Foods, Inc., 94 F. Supp. 3d 1174, 1182 (S.D. Cal. 2015)
17 (quoting Aoki v. Benihana, Inc., 839 F. Supp. 2d 759, 764 (D. Del. 2012)).
18 “Motions to strike are ‘generally disfavored because they are often used as delaying
19 tactics and because of the limited importance of pleadings in federal practice.’” Id.
20 (quoting Rosales v. Citibank, 133 F. Supp. 2d 1177, 1180 (N.D. Cal. 2001)). So, unless
21 irrelevant, matters generally should only be stricken under Rule 12(f) if “their presence in
22 the pleading will prejudice the party seeking to strike matters.” See Ollier v. Sweetwater
23 Union High Sch. Dist., 735 F. Supp. 2d 1222, 1224 (S.D. Cal. 2010). “Where the moving
24 party cannot adequately demonstrate such prejudice, courts frequently deny motions to
25 strike ‘even though the offending matter literally [was] within one or more of the categories
26 set forth in Rule 12(f).’” N.Y.C. Emps.’ Ret. Sys. v. Berry, 667 F. Supp. 2d 1121, 1128
27 (N.D. Cal. 2009) (alteration in original) (quoting Rivers v. Cnty. of Marin, No. C 05-4251,
28 2006 WL 581096, at *2 (N.D. Cal. Mar. 7, 2006)).
1 II. Discussion
2 Defendant seeks to strike Plaintiff’s Sanctions Reply and Declaration as immaterial.
3 The Court need not dwell long on this request, as “only pleadings are subject to motions to
4 strike.” Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). Neither
5 the Sanctions Reply nor the Declaration qualify as a “pleading,” so Defendant’s MTS is
6 DENIED.
7 Defendant alternatively asks the Court to strike the Declaration alone because
8 Plaintiff is not permitted to submit new evidence in reply. Defendant is correct that,
9 generally speaking, the Court should not—and will not—consider evidence submitted for
10 the first time in reply. See Talavera v. Glob. Payments, Inc., 670 F. Supp. 3d 1074, 1093
11 (S.D. Cal. 2023). That said, the Court also recognizes that some courts have struck such
12 evidence from the record. See, e.g., Davison Design & Dev. Inc. v. Riley, No. C 11-2970
13 PJH, 2013 WL 1222691, at *2 (N.D. Cal. Mar. 25, 2013).
14 The Court agrees that the Declaration constitutes impermissible new evidence. That
15 the Court could strike Plaintiff’s Declaration, however, does not indicate that it should.
16 And given the voluminous number of motions currently pending in this case, the Court is
17 disinclined to incentivize the filing of future motions to strike. Therefore, the Court will
18 not strike Plaintiff’s declaration and will instead simply decline to consider it when
19 resolving the Sanctions Motion. Before filing future motions to strike, Defendant should
20 consider whether the battle is worth the gunpowder.
21 The Court stresses, however, that Plaintiff should not consider this decision a win.
22 The Court also agrees with Defendant that the Declaration is entirely unrelated to the
23 substance of the Sanctions Motion—whether Defendant’s counterclaims are frivolous. So,
24 the Court will give absolutely no weight to the Declaration when resolving the Sanctions
25 Motion. The Declaration—and future such declarations, should Plaintiff continue with this
26 futile form of argument—will thus amount to nothing more than a shout into the void.
27 / / /
28 / / /
1 MOTION FOR RULE 11 SANCTIONS
2 I. Legal Standard
3 Under Federal Rule of Civil Procedure 11, when a “pleading, written motion, or
4 other paper,” Fed. R. Civ. P. 11(b), “is frivolous, legally unreasonable, or without factual
5 foundation, or is brought for an improper purpose,” the court may impose sanctions,
6 Warren v. Guelker, 29 F.3d 1386, 1388 (9th Cir. 1994). A request for sanctions must be
7 made by separate motion, and the moving party must provide the other party twenty-one
8 days in which to correct or withdraw the writing at issue prior to filing the sanctions
9 motion. Fed. R. Civ. P. 11(c)(2).
10 The standard governing whether a pleading or motion is “frivolous” or brought for
11 an “improper purpose” is one of reasonableness and objectivity. Townsend v. Holman
12 Consulting Corp., 929 F.2d 1358, 1362 (9th Cir. 1990) (en banc). Where reasonable
13 inquiry would reveal errors, a party may not avoid sanctions by claiming an innocent, good-
14 faith mistake or carelessness. Lloyd v. Schlag, 884 F.2d 409, 412 (9th Cir. 1989).
15 However, “sanctions should be reserved for the ‘rare and exceptional case where the action
16 is clearly frivolous, legally unreasonable or without legal foundation, or brought for an
17 improper purpose.’” Primus Auto. Fin. Servs., Inc. v. Batarse, 115 F.3d 644, 649 (9th Cir.
18 1997) (quoting Operating Eng’rs Pension Tr. v. A-C Co., 859 F.2d 1336, 1344 (9th Cir.
19 1988)). Even if a court finds that a violation has occurred, the imposition of sanctions is
20 discretionary. See Warren, 29 F.3d at 1390.
21 In addition, “the court may award to the prevailing party the reasonable expenses,
22 including attorney’s fees, incurred for the [Rule 11] motion.” Fed. R. Civ. P. 11(c)(2). “A
23 party defending a Rule 11 motion need not comply with the separate document and safe
24 harbor provisions when counter-requesting sanctions.” Patelco Credit Union v. Sahni,
25 262 F.3d 897, 913 (9th Cir. 2001).
26 II. Discussion
27 Recycling the same arguments made in the CC Motion, Plaintiff moves for sanctions
28 on the grounds that Defendant’s counterclaims are frivolous. See Sanctions Motion at 4.
1 In opposition, Defendant counter-requests an award of attorney’s fees, arguing the
2 Sanctions Motion itself is frivolous. Sanctions Opp’n at 7. Both Parties’ arguments are a
3 dead end.
4 The Parties may test the Court’s patience, but their respective actions have not risen
5 to such a level as to justify sanctions. Plaintiff’s Sanctions Motion fails because it
6 essentially relitigates a debate Plaintiff already partially lost regarding the merits of
7 Defendant’s counterclaims. Though Plaintiff may have secured the dismissal of two of
8 Defendant’s counterclaims, the Court concluded that said counterclaims might be saved by
9 amendment. And a claim that has “some plausible basis, [even] a weak one,” is sufficient
10 to avoid sanctions under Rule 11. United Nat. Ins. Co. v. R & D Latex Corp.,
11 242 F.3d 1102, 1117 (9th Cir. 2001).8 Meanwhile, the Court will decline Defendant’s
12 request for attorney’s fees because only in the “rare and exceptional case” are sanctions
13 appropriate, and to offer a carrot here would only serve to encourage similar requests in
14 the future. Operating Eng’rs Pension Tr., 859 F.2d at 1344.
15 Rather than reward either side’s behavior, the Court urges the Parties once again,
16 and in the strongest possible terms, to avoid seeking judicial intervention for conduct that
17 does not reach the high standard meriting the imposition of sanctions. See ECF No. 24
18 at 10 (denying Defendant’s earlier request for terminating sanctions and reminding the
19 Parties to “seek sanctions sparingly, and not to obtain a tactical advantage or for any other
20 improper purpose” in accordance with Civil Local Rule 2.1).
21 Both Plaintiff’s Sanctions Motion and Defendant’s attorney’s fee request are
22 DENIED.
23 / / /
24

25
8 Plaintiff additionally asks the Court to refer Defense Counsel to the State Bar of California due to “his
26 voluminous volume of cases that he is representing on in this state far exceed[ing] the threshold for those
admitted pro hac.” Sanctions Mot. at 8. It goes without saying that to accuse Defense Counsel of ethical
27
misconduct without any substantiation whatsoever is a serious charge. The Court admonishes Plaintiff to
28 be wary of these choppy waters.
1 CONCLUSION
2 For the foregoing reasons, the Court GRANTS IN PART AND DENIES IN PART
3 || Plaintiff's Motion to Dismiss Defendant’s Counterclaims (ECF No. 38). Specifically, the
4 ||Court DISMISSES Defendant’s counterclaims for breach of contract (Claims One &
5 Two)? based on Defendant’s failure to plausibly allege (1) its own performance and (2) that
6 Plaintiff made derogatory statements. This dismissal, however, is WITH LEAVE TO
7 || AMEND, and Defendant MAY FILE amended counterclaims within fourteen (14) days
8 the date of this Order. Plaintiff's Motion to Dismiss is otherwise DENIED. The Court
9 DENIES Defendant’s Motion to Strike (ECF No. 59) and Plaintiff's Motion for Rule
10 11 Sanctions (ECF No. 39).
11 IT IS SO ORDERED.
12 ||Dated: August 21, 2024 jae L. Lo memeaite-
13 on. Janis L. Sammartino
United States District Judge
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2T YO
3g ||° Save his complaints regarding supplemental jurisdiction, Plaintiff makes no arguments in his opening
brief regarding the remaining counterclaims, and the Court thus does not address them.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10640466. Public record. Not legal advice.