Opinion
Civil Action 2:22-cv-01631
04-04-2024
MICHAEL MORGAN; LIBERTY RISK CONSULTING, LLC; and INFLUENCED EDGE, LLC, Plaintiffs, v. AMY NOSS, KEITH HICKEY, JOYCE MORGAN, BRITTANY PADUGANAN, and ETBP ENTERPRISES, LLC d/b/a THRIVE TALENT MANAGEMENT, Defendants.
Cathy Bissoon, Judge
ECF No. 49
REPORT AND RECOMMENDATION ON PLAINTIFFS' MOTION TO DISMISS COUNTERCLAIMS AND STRIKE ALLEGATIONS
Kezia O. L. Taylor, United States Magistrate Judge
For the reasons stated herein, it is respectfully recommended that Plaintiffs' Motion to Dismiss Defendants' Counterclaims and to Strike Allegations Stated therein, ECF No. 49, be GRANTED in part and DENIED in part, as follows: (1) Plaintiffs' motion to dismiss claims for abuse of process - filed as Count I of the Counterclaims brought by both the Paduganan Defendants and the Former Employee Defendants in their Answers to the Amended Complaint, ECF No. 45 and 46, respectively - GRANTED; (2) Plaintiffs' motion to dismiss claims for default judgment filed as Count II of the Former Employee Defendants' Counterclaims - GRANTED; and (3) Plaintiffs' motion to strike certain allegations made in support of the Defendants' respective counterclaims - GRANTED in part and DENIED in part as more fully set forth herein.
I. PROCEDURAL AND FACTUAL HISTORY
The procedural and factual histories were provided at length in this Court's August 28, 2023 Memorandum Opinion and Order on Defendants' Motions to Dismiss. ECF No. 43. Abbreviatedly, Morgan is the owner and CEO of the limited liability corporation Plaintiffs - LRC and IE - which provide consulting services for adult film stars and models, including former client and Defendant Paduganan. Plaintiffs' consulting services include online sales and marketing, and business proposals and strategy designs. The Amended Complaint, ECF No. 31, avers that: Defendants Noss and Morgan were executive employees of LRC, subject to Non-Disclosure and Non-Solicitation Agreements, who left when solicited by former client Paduganan for employment with her newly-formed competing enterprise, Thrive Talent Management. Defendant Hickey was then an independent contractor for IE, subject to an agreement containing non-disclosure, noncompete and non-solicitation provisions, who also left Plaintiffs' employ at Paduganan's behest. Paduganan was disgruntled at Plaintiff Morgan following a break in their consultant-client relationship and avowed intentions to attack and injure his business and personal reputation. Together, Defendants misappropriated Plaintiffs' trade secrets, accessed and misused Plaintiffs' confidential and proprietary client and other business information, and used that information to “poach” additional employees and customers, and further injure Plaintiffs' business, all as detailed in the Amended Complaint. In addition, Paduganan defamed Plaintiff Morgan on social media, including by false accusations of sex trafficking, rape, and insurance scams, with a purpose of leveraging that defamation's fallout. See generally ECF No. 31. All Defendants' Motions to Dismiss the Amended Complaint, ECF Nos. 32 and 34, were denied for reasons set forth at length in the aforesaid August 28, 2023 Memorandum Opinion. ECF No. 43.
The filings have now clarified that Defendant Morgan is Plaintiff's estranged sister-in-law. See e.g., ECF No. 46 at 2.
Defendants' September 25, 2023 Answers, Affirmative Defenses, and Counterclaims each contain as Count I a claim for “Abuse of Process.” Defendants assert that “Plaintiff's claims were brought for improper purposes” and that - by the filing and continued prosecution of this action -e.g., an amended complaint and declarations in response to Defendants' motions for dismissal on grounds of lack of personal jurisdiction and failures to state claims - Plaintiffs are “us[ing] the legal process . . . primarily to accomplish a purpose for which it was not designed”, i.e., to cause various forms of harm to the Defendants, exact revenge, intimidate, coerce, punish and extort monies from them, to “make an example of Defendants to other employees,” suppress business competition, and for “other improper purposes including personal animosity.” ECF No. 45 at 20 (“Paduganan's Answer”); ECF No. 46 at 12, 17, 25 (“Former Employees' Answer”). The Former Employees' Answer contains a single additional claim, for Declaratory Judgment, which seeks the Court's declaration that their employment and independent contractual agreements are, for various reasons, unenforceable. ECF No. 46 at 27. Both Answers include, in the allegations introducing and in support of their Counterclaims, unnecessarily (particularly at this stage of the litigation) detailed and profanity-laced assertions. See, e.g., ECF No. 45 at ¶¶ 41-43, 53 and 57. The Former Employees' Answer includes allegations of this nature extensively and repetitiously, together with accusations of offensive, wanton, and immoral conduct by Morgan. Morgan moves to dismiss the Abuse of Process and Declaratory Injunction claims and to strike numerous of the allegations. See generally ECF No. 49. Responsive briefing has been completed and the issues raised in the pending motion are ripe for disposition.
Paduganan's Answer includes additional counterclaims for Tortious Interference with Contractual Relations [with clients], Unfair Competition, Misappropriation of Confidential Business Information, violation of the Computer Fraud and Abuse Act, and Civil Conspiracy, which Plaintiffs have not challenged. These claims significantly mirror those brought against Defendants by Plaintiffs.
II. STANDARDS OF REVIEW
Rule 12(b)(6)
Under the “notice pleading” standard embodied in Rule 8 of the Federal Rules of Civil Procedure, a plaintiff must come forward with “a short and plain statement of the claim showing that the pleader is entitled to relief.” As further explicated in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), a claimant must state a “plausible” claim for relief, and “[a] claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Although “[f]actual allegations must be enough to raise a right to relief above the speculative level,” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), a plaintiff “need only put forth allegations that raise a reasonable expectation that discovery will reveal evidence of the necessary element.” Fowler v. UPMC Shadyside, 578 F.3d 203, 213 (3d Cir. 2009) (quotation marks and citations omitted); see also Covington v. Int'l Ass'n of Approved Basketball Officials, 710 F.3d 114, 117-18 (3d Cir. 2013); Thompson v. Real Estate Mortg. Network, 748 F.3d 142, 147 (3d Cir. 2014).
“For purposes of deciding a motion to dismiss under Rule 12(b)(6), claims and counterclaims are treated the same, and therefore, subject to the same standard of review.” Red Bend Hunting & Fishing Club v. Range Resources-Appalachia, LLC, Case No. 4:16-CV-00864, 2016 WL 7034686, *3 n. 35 (M.D. Pa. Dec. 2, 2016) (citing Universal Underwriters Co. v. J. Murray Motor Co., Inc., Civ. A. No. 4:11-CV-1851, 2012 WL 12870228, at *1 n. 2 (M.D. Pa. Sept. 12, 2012)).
In addition to the complaint, courts may consider matters of public record and other matters of which they may take judicial notice, court orders, and exhibits attached to the complaint when adjudicating a motion to dismiss under Rule 12(b)(6) without converting said motion into one for summary judgment. Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 n.2 (3d Cir. 1994) (citing 5A Wright and Miller, Federal Practice and Procedure: Civil 2d, § 1357; Chester County Intermediate Unit v. Pennsylvania Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990)).
III. ANALYSIS
A. Defendants Fail to State a Claim for Abuse of Process
Plaintiffs move for dismissal of Counterclaim Counts I, Abuse of Process, in each of the Paduganan and Former Employee Defendants' Answers, ECF Nos. 45 and 46, as improperly based. Defendants' initial assertion of this groundless claim may be excused by their apparent misunderstanding of the law and its distinctions between an action for abuse of process and one for malicious prosecution.
The Court substantially concurs with Plaintiffs' explication of both areas of law, as well as the case distinctions provided in Plaintiffs' Brief in Support and Reply Brief. ECF No. 50 at 5-11; ECF No. 57 at 2-7. More particularly and as informed by the Court's further legal inquiry and analysis:
Defendants allege in their Counterclaims at Count I that Plaintiffs brought and prosecute this litigation knowing that their allegations and claims are false, “primarily to accomplish a purpose for which it was not designed” - e.g., revenge, coercion, extortion, unfair competition, and otherwise to cause personal harm to Defendants - and from personal animus and other improper ulterior motives, all of which they assert constitutes actionable abuse of process. Defendants have failed to state a claim.
The common defense that a plaintiff's allegations and claims are wrong, or even false, does not give rise to a claim for abuse of process. Were it so, it would be equally common that such counterclaims would also be routine. ECF. No. 50 at 2 (noting that the “typical practice” is “to simply deny purportedly false allegations”). The gist of this tort is not commencing an action or causing process to issue without justification; nor is it litigation born of animus, revenge, or similar ill-will motives or purposes. Rather, it is the perversion of the process itself, i.e., misusing or misapplying process justified in itself “primarily to accomplish a purpose for which it is not designed.” Restatement (Second) of Torts § 682 (1977). Thus, neither Defendants' assertions of (a) the insufficiency or falsity of Plaintiffs' allegations and their knowing lack of probable cause nor (b) various ulterior ill-will motivations and/or purposes can ground this claim. The Court notes, moreover, that Defendants' challenges to the existence of probable cause were uniformly denied in its prior Memorandum Opinion at ECF No. 43 (finding Plaintiffs' claims factually and legally sufficient under the applicable standard and denying motions for dismissal).
In Pennsylvania, the elements of the tort call upon a claimant to maintain that (a) the defendant used a legal process against the claimant; (b) primarily to accomplish a purpose for which the process was not designed; and (c) that resultant harm was caused to the claimant. Greiser v. Drinkard, 516 F.Supp.3d 430, 440 (E.D. Pa. 2021); Lerner v. Lerner, 954 A.2d 1229, 1238 (Pa. Super. Ct. 2008).
See ECF No. 57 at 2-3 (providing case citations, including Zappala v. Hub Foods, Inc., 683 F.Supp. 127 (W.D. Pa. 1988)).
In assessing whether Defendants have stated a claim for abuse of process under the applicable law, the Court considers whether they have plausibly alleged that Plaintiffs caused harm by deploying a perversion of the judicial process itself - that is, misusing a legal process (procedure) of this litigation by primarily seeking to accomplish an immediate and legally unintended end, e.g., to compel or coerce them to do some collateral thing that they could not otherwise be required to do. See e.g., Jenn-Ching Luo v. Owen J. Roberts Sch. Dist., 737 Fed.Appx. 111, 116 (3d Cir. 2018); Ciolli v. Iravani, 625 F.Supp.2d 276, 296 (E.D. Pa. 2009); Werner v. Plater-Zyberk, 799 A.2d 776, 785 (Pa. Super. Ct. 2002). As the Third Circuit has explained, a “point of liability is reached when ‘the utilization of the procedure for the purpose for which it was designed becomes so lacking in justification as to lose its legitimate function as a reasonably justifiable litigation procedure.' Only at that point could the legal process be considered to have been perverted.” Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 308 (3d Cir. 2003) (quoting Nienstedt v. Wetzel, 133 Ariz. 348, 651 P.2d 876, 882 (1982)).
Restatement (Second) of Torts § 682 (comment (b)). Id. (further noting that a justified litigation with an “incidental motive of spite or ulterior purpose of benefit” (such as injuring a business competitor) does not give rise to an action for abuse of process).
Although Defendants allege coercion and extortion, neither their allegations of Plaintiffs' expressions of malevolent intent nor any of Plaintiffs' conduct in the litigation sub judice support a plausible claim that Plaintiffs have used any process in this action primarily to dissuade or coerce other collateral conduct by Defendants, e.g., with regard to other legal matters. Cases cited by Defendants in support of this proposition are patently distinguishable. See generally ECF Nos. 50 and 57 (canvassing and distinguishing cases). Compare e.g., General Refractories, 337 F.3d at 306 (manufacturer could maintain abuse of process action against insurer given evidence of a concerted and vicious effort by it to use various legal processes, e.g. discovery, as a tactical weapon in underlying action); Board of Education v. Farmingdale Classroom Teachers Assoc., 343 N.E.2d 278 (N.Y. 1975) (defendant's subpoena of 87 teachers and refusal to excuse any or stagger hearings supported inference that process was being perverted to inflict economic harm).
The word process “encompasses the entire range of procedures incident to the litigation process.” Access Fin. Lending Corp. v. Keystone State Mortg. Corp., No. 96-191, 1996 U.S. Dist. LEXIS 14073, at *9 (W.D. Pa. Sept.4, 1996). Defendants have identified no plausible abuse of a particular procedure (i.e., process) incident to the litigation. Cf. ECF No. 50 at 8, 11 (discussing filing of Amended Complaint and of Declarations in response to Paduganan Defendants' assertions that the Court lacks personal jurisdiction); ECF No. 57 at 4-7 (addressing related assertions raised in Defendants' Brief in Opposition, ECF No. 55 at 12).
Cf. Bracey v. Huntingdon Cty., Civ. No. 1:14-CV-2271, 2018 WL 4518341, at *6-7 (M.D. Pa. July 17, 2018), report and recommendation adopted sub nom. Bracey v. Park, Civ. No. 1:14-CV-2271, 2018 WL 4507598 (M.D. Pa. Sept. 19, 2018) (claim requires showing that defendant has “committed a willful act in the use of process which perverts the regular conduct of the proceeding to accomplish the improper purpose”) (quoting Dunne v. Twp. of Springfield, Civ. No. 08-5605, 2011 WL 2269963, at *8 (D.N.J. Jan. 31, 2011) (quoting Voytko, 445 F.Supp. at 32), aff'd, 500 F. App'x. 136 (3d Cir. 2012) (emphasis added); Meyers v. Kruger, 759 F.Supp. 770, 771 (E.D. Okla. 1990), aff'd, 930 F.2d 34 (10th Cir. 1991) (dismissing claim for abuse of process, finding union and workers allegation that employers' action was brought to coerce abandonment of lawful workers compensation claims was legally insufficient); id. (noting that plaintiffs failed to allege defendants “committed some willful act in the use of the process outside the confines of the complaint” vs. that they “instituted or instigated [said action] for an improper purpose”); Hart v. O'Malley, 436 Pa. Super. 151, 170 (Pa. Super. Ct. 1994) (“It is not enough that the process employed was used with a collateral purpose in mind.”); ECF No. 50 at 6 (citing additional cases).
In addition, to the extent Defendants allege that Plaintiffs' entire action sub judice constitutes abuse of process: “‘The assertion, by way of a counterclaim, that the underlying litigation as a whole constitutes an abuse of process fails to state a claim which is ripe for adjudication. By definition, a lawsuit in its entirety cannot constitute an abuse of process when it has not yet been concluded.'” U.S. ex rel. Magid v. Wilderman, 96-CV-4346, 2005 WL 469590, at *3 (E.D. Pa. Feb. 28, 2005) (quoting Access Fin. Lending Corp., 1996 U.S. Dist. LEXIS 14073, at *13-14).
Defendants allege that “[b]y serving the Complaint, filing an Amended Complaint, submitting Declarations, and presumably by continuing this action into the future, [Plaintiffs] have, and continue to, use the legal process against [Defendants] primarily to accomplish a purpose for which it was not designed ....” ECF No. 45 at 20; see also, e.g., ECF No. 55 at 10.
Cf. Ciolli v. Iravani, 625 F.Supp.2d 276, 297 (E.D. Pa. 2009) (dismissing abuse of process claim where plaintiff argued “the existence of the suit itself was designed to coerce” a third party into making certain concessions in separate litigation).
Finally, to the extent Defendants may intend to raise a claim for malicious prosecution or malicious use of civil process (codified in Pennsylvania as a Dragonetti action, 42 Pa. C.S. § 83555), the averments are insufficient and any amendment of their Counterclaims in this regard would be futile at present. More specifically, malicious use of civil process can be considered under the umbrella of due process and “‘arises when a party institutes a lawsuit with a malicious motive and lacking probable cause.'” Hart v. O'Malley, 781 A.2d 1211, 1219 (Pa. Super. Ct. 2001) (quoting Rosen v. Am. Bank of Rolla, 426 Pa. Super. 376, 627 A.2d 190, 191 (Pa. Super. Ct. 1993)). In order to prevail in an action for wrongful use of civil proceedings in Pennsylvania, a claimant must prove that the underlying proceedings terminated in his/her favor and that the defendant caused those proceedings to be instituted both without probable cause and for an improper purpose. U.S. ex rel. Magid v. Wilderman, CIV.A.96-CV-4346, 2005 WL 469590, at *2 (E.D. Pa. Feb. 28, 2005) (citing Bannar v. Miller, 701 A.2d 242, 247 (Pa. Super. Ct.1997)). Because this claim requires that the proceeding have terminated in their favor, Defendants cannot make the required allegation while the action remains pending. 42 Pa. C.S.A. § 8351(a)(2); Zappala v. Hub Foods, Inc., 683 F.Supp. 127, 131 (W.D. Pa. 1988). In other words, no counterclaim for malicious prosecution has matured.
Cf. ECF No. 57 at 4 (noting that while “Defendants' allegations and arguments that Plaintiffs brought this action and served the Complaint with an improper purpose or ulterior motive designed to harass them are irrelevant [to “abuse of process”, t]hey are, however, the true focus of Defendants' claims”).
The Court accordingly recommends that Counterclaim Count I, Abuse of Process, in both the Paduganan and the Former Employee Defendants' Answers be dismissed with prejudice for failure to state a claim.
B. Former Employee Defendants Fail to State a Claim for Declaratory Judgment
Plaintiffs move for dismissal of Former Employee Defendants' Counterclaim Count II, Declaratory Judgment, as redundant of Plaintiffs' breach of contract claims and the affirmative defenses raised in those Defendants' own responsive pleading. ECF No. 46. Plaintiffs are correct - the Court's resolution of Plaintiffs' breach of contract claims will “necessarily determine whether the agreements are enforceable.” ECF No. 50 at 2.
District courts may dismiss a counterclaim for declaratory judgment as redundant where “complete identity of factual and legal issues [exists] between the complaint and the counterclaim.” Barnett v. Platinum Equity Cap. Partners II, L.P., No. 2:16-CV-1668, 2017 WL 3190654, at *4 (W.D. Pa. July 27, 2017) (quoting Aldens, Inc. v. Packel, 524 F.2d 38, 51-52 (3d Cir. 1975) (citation omitted)).
Former Employee Defendants allege that their respective Agreements are unenforceable for a number of separate reasons, including objections to their geographic, temporal and nonsolicitation restrictions, and mootness. Plaintiffs alleged in their Amended Complaint that the Agreements at issue are valid and enforceable. ECF No. 50 at 13 (citing provisions of Amended Complaint at ¶ 137, 149, 159). For reasons set forth in Plaintiffs' Brief in Support, “the issues sought to be resolved by Former Employee Defendants' declaratory judgment claim are already accounted for within the context of the claims and defenses in the Amended Complaint, Answer, and Affirmative Defenses [and o]btaining a ruling on Plaintiffs' breach of contract claims will necessarily require a determination” as to the enforceability of said Agreements. Id. Thus, the Court recommends that said Counterclaim Count II, Declaratory Judgment, of the Former Employee Defendants' Answer be dismissed with prejudice for failure to state a claim.
See Plaintiffs' Reply Brief observation, with which the Court concurs:
In response to Plaintiffs' motion to dismiss their counterclaim for declaratory judgment, Former Employee Defendants argue their claim should survive because they ‘seek to be discharged under the various contracts . . . or at the very least to have their rights determined by the Court.' (ECF No. 55 at 23.) However, while their Counterclaim states the legal conclusion that they are ‘entitled to a declaration of their rights' (ECF No. 46 ¶ 89), the only ‘right' that they ask this Court to declare is ‘that the Agreements are unenforceable.' (ECF No. 46 at 27 ¶ f.) As previously explained, this request is subsumed by Plaintiffs' breach of contract claims, the analysis of which necessarily begins with whether an enforceable contract exists.ECF No. 57 at 7. See also id. at 8 (noting that Defendants have asserted affirmative defenses and “do not identify a single request for relief that differs from what is stated in the Amended Complaint and their Answer”); id. at 8-9 (distinguishing cases).
C. Plaintiffs are Entitled to Have Immaterial, Irrelevant and Scandalous Allegations Stricken
Plaintiffs move to have numerous of Defendants' Counterclaim allegations stricken on grounds that they are scandalous, immaterial, impertinent and/or alleged in support of nonviable counterclaims. ECF No. 50 at 13-16.
The Court may, pursuant to Federal Rule of Civil Procedure 12(f), strike from a pleading “redundant, immaterial, impertinent, or scandalous matter.” See, e.g., Sampath v. Concurrent Technologies Corp., Civ. No. 03-264J, 2006 WL 1207961, at *3 (W.D. Pa. May 3, 2006); Krisa v. Equitable Life Assur. Soc., 109 F.Supp.2d 316, 319 (M.D. Pa. 2000). And while such motions are not favored, courts possess considerable discretion in their weighing, particularly where the challenged allegations have no possible relation to the controversy and may cause prejudice to one of the parties (with the latter being an important consideration). See Miller v. Grp. Voyagers, Inc., 912 F.Supp. 164, 168 (E.D. Pa.1996); Hanselman v. Olsen, No. 4:05-CV-1834, 2006 WL 47655, *1 (M.D. Pa. Jan.9, 2006)); Thomas v. Keystone Real Estate Grp. LP, 4:14-CV-00543, 2015 WL 1471273, at *6 (M.D. Pa. Mar. 31, 2015). A court may also properly strike allegations which may “confuse the issues in the case.” Fiorentino v. Cabot Oil & Gas Corp., 750 F.Supp.2d 506, 509 (M.D. Pa. 2010).
As Plaintiffs note: “‘Immaterial' matter is that which has no essential or important relationship to the claim for relief. ‘Impertinent' matter consists of statements that do not pertain, and are not necessary, to the issues in question.” ECF No. 50 at 15 (quoting Conklin v. Anthou, No. 10-02501, 2011 WL 1303299, at *1 (M.D. Pa. Apr. 5, 2011)). And “[s]candalous pleading for the purposes of Rule 12(f) must reflect cruelly upon the defendant's moral character, use repulsive language or detract from the dignity of the court.” Carone v. Whalen, 121 F.R.D 231, 233 (M.D. Pa. 1988); Donnelly v. Commonwealth Fin. Sys., No. 07-CV-1881, 2008 WL 762085, at *4 (M.D. Pa. Mar. 2008) (internal citations omitted). Scandalous allegations may also include those which “improperly casts a derogatory light” on a party or “serve only to disparage and embarrass”. ECF No. 50 at 14 (quoting Bloom v. Congregation Beth Shalom, No. CIV. 13- 1442, 2014 WL 356624 at *4 (W.D. Pa. Jan. 31, 2014)).
As it is recommended that the Counterclaim included in the Former Employee Defendants' Answer, ECF No. 46 at 12-27, be dismissed, the Court need not further parse the allegations advanced in support therein. It is therefore recommended that Plaintiffs' request to strike certain of them be denied as moot. See, e.g., Voltage Pictures, LLC v. Blake, 3:14-CV-1875-AC, 2015 WL 9272880, at *6 (D.Or. Dec. 17, 2015) (denying as moot motion to strike phrases appearing only in counterclaims where Court was dismissing both counterclaims); GIA-GMI, LLC v. Michener, 06-7949, 2007 WL 1655614, at *5 (N.D. Cal. June 7, 2007) (dismissing counterclaim and therefore denying motion to strike allegations therein as moot).
As Counts II through VI of the Paduganan Defendants' Counterclaim were unchallenged, the Court addresses Plaintiffs' request to strike certain of those allegations as follows:
Plaintiffs assert that the Paduganan Defendants' Counterclaim at paragraphs 1, 2, 9, 41, 42, 43, and 57 contain immaterial and scandalous allegations (i.e., they are not related to the controversies in this action, speak to persons having no connection to the counterclaims, are inflammatory or prejudicial, and simply serve as an attempt to disparage and embarrass Plaintiff Morgan). They further assert that the allegations in Paragraphs 1-26, 32 and 33 are immaterial and impertinent. On review, the Court finds as follows:
Paragraphs 1 through 32 set forth statements of (a) allegedly threatening and retaliatory personal harassment by Plaintiff Morgan (at ¶¶ 1-3 with some inclusion of unnecessary and inflammatory detail); (b) Plaintiff's alleged misconduct and falsehoods related to a later-filed action by Paduganan in California, and the derivative retaliatory animus which Defendants assert was a reason for Plaintiffs' filing an Amended Complaint and Declaration in this litigation (at ¶¶ 4-23); and (c) other objections and disagreements regarding things heretofore contended, claimed or alleged by Plaintiff (at ¶¶ 24-32). These allegations culminate in the overcharging allegation which they are plainly made to support, i.e., that Plaintiffs have made their claims falsely and maliciously with wrongful intent - for the “improper purposes” of seeking to harm Defendants, exact revenge, suppress a competitor, punish Defendants for “speaking out” about Plaintiff's alleged “sexual misconduct and crimes,” and to extort and coerce them. ECF No. 45 at ¶ 33. Plaintiffs have exempted ¶¶ 27-31 from their request to strike, and the Court concurs that at least two of these paragraphs - ¶¶ 27-28, which speak to, e.g., unfair competition and misappropriation - include allegations relevant to a pending claim. As it has been recommended that Defendants' counterclaim for abuse of process be dismissed, and the pre-history of the California litigation is irrelevant to any claim before the Court (and the substance of its filings are a matter of public record), the allegations which Plaintiffs have moved to strike - ¶¶ 1-26 and ¶33 - are impertinent and immaterial. It is therefore recommended that - in the interest of clarity regarding the scope of the Paduganan Defendants' pursuit of remaining counterclaims - they be stricken.
As canvassed in the parties' pleadings, subsequent to the filing of this action, Defendant Paduganan filed suit against Plaintiffs in State Court in Los Angeles, California. See Paduganan's Counterclaim, ECF No. 46 at ¶ 14. That action has been removed and is pending before the U.S. District Court for the Central District of California. This Court has before it no claim or motion regarding the California action brought by any party to this case.
The Court notes that the Paduganan Defendants' Answer incorporates eighteen Affirmative Defenses clearly and appropriately. ECF No. 45 at 8-10.
As Plaintiffs observe, Rule 12(f) is intended “to reinforce the requirement in Rule 8 . . . that pleadings be simple, concise, and direct.” Roamingwood Sewer & Water Assoc. v. National Diversified Sales, Inc., No. 20-00640, 2020 WL 7488876, *3 (M.D. Pa. Dec. 21, 2020) (citing 5A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1380 (3d ed. 2020 update)). “To that end, the purpose of any motion to strike is to ‘clean up the pleadings, streamline litigation, and avoid the unnecessary forays into immaterial matters.'” Claude Worthington Benedum Found. v. Harley, Civ. No. 12-1386, 2013 WL 2458457, at *16 (W.D. Pa. June 6, 2013) (quoting United States v. Educ. Mgmt. Corp., 871 F.Supp.2d 433, 460 (W.D. Pa. 2012)).
In comparison, the majority of the remaining Counterclaim allegations, at ¶¶ 34-68, have reasonable potential relevance to pending claims. Plaintiffs have, however, also moved to strike Paragraphs 41-43 and 57 as immaterial and scandalous. These paragraphs contain no factual allegations in support of the Paduganan Defendants' remaining counterclaims for Tortious Interference with Contractual Relations, Unfair Competition, Misappropriation of Confidential Business Information, violation of the Computer Fraud and Abuse Act, and Civil Conspiracy. And as it has been recommended that Defendants' counterclaim for abuse of process be dismissed, these allegations present irrelevant or immaterial accusations of the personal animus assertedly underlying that claim. Moreover, they do so in sometimes disturbing and repeatedly profane language. It is therefore recommended that - in the interest of clarity regarding the scope of the Paduganan Defendants' pursuit of remaining counterclaims and the parameters of conduct before this Court - they also be stricken.
As previously noted, Count II claims tortious interference with client relationships. To the extent ¶ 57 might be read as intended to support a claim for tortious interference with employment relationships, no such claim has been made and nothing in these pending counterclaims suggests any relevance to this allegation.
Cf. ECF No. 55 at 21 (“Should the Court deny the Motion to Dismiss [the abuse of process] claims, [Defendants' Counterclaim] allegations are necessarily material. Each one of those allegations relates in some way to [Plaintiff Morgan's] motive in proceeding with this lawsuit.”).
See Thomas v. Keystone Real Estate Grp. LP, 4:14-CV-00543, 2015 WL 1471273, at *7 (M.D. Pa. Mar. 31, 2015) (striking from plaintiff's complaint paragraphs alleging criminal drug use as immaterial and prejudicial); id. at *8 (striking as scandalous plaintiff's motion and accompanying submissions where “[t]he prose in the documents [wa]s riddled with hyperbolic characterizations and profane language that ha[d] no relation whatsoever” to matters before the court); id. (noting that “submission of irrelevant scandalous material on the public record . . . is an affront” to the Court's dignity). Compare Wermann v. Excel Dentistry, P.C., 13-7028, 2014 WL 846723, at *6 (S.D.N.Y. Feb. 25, 2014) (declining to strike profane and sexually explicit language attributed to defendant where they were material to plaintiff's gender discrimination claims). In response to Defendants' assertions that all counterclaim allegations are relevant to Defendants' affirmative defenses of unclean hands and claim for attorneys' fees because the lawsuit was brought in bad faith, the Court observes that factual allegations appropriately made for these purposes may be introduced at later stages of this litigation. ECF No. 55 at 22.
IV. CONCLUSION
For the reasons specifically set forth above, it is respectfully recommended that Plaintiff's pending motion, ECF No. 49, be (1) granted as to Counterclaim Counts I of the Padagunan Defendants' and Former Employee Defendants' Answers, Affirmative Defenses and Counterclaims, ECF Nos. 45 and 46 respectively, and (2) granted as to the sole remaining count of the Former Employee Defendants' Counterclaim, Count II, and (3) that the aforesaid Counts be dismissed with prejudice.
It is further recommended that Plaintiffs' request to strike certain paragraphs of Former Employee Defendants' Counterclaim be denied as mooted by the Court's dismissal of said Counterclaims. And it is recommended that Plaintiffs' request to strike certain paragraphs of the Paduganan Defendants' Counterclaim be granted as to Paragraphs ¶¶ 1-26, 32-33, 41-43 and 57 and otherwise denied.
In accordance with the Federal Magistrate Judge's Act, 28 U.S.C. §636(b)(1)(B) and (C), and Rule 72.D.2 of the Local Rules of Court, the parties are allowed fourteen (14) days from the date of service of this Report and Recommendation to file written objections thereto. Any party opposing such objections shall have fourteen (14) days from the date of service of objections to respond thereto. Failure to file timely objections will constitute a waiver of any appellate rights.