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Mircromed Technology, Inc. v. Birdsall

United States District Court, Ninth Circuit

January 2, 2014

MIRCROMED TECHNOLOGY, INC., Plaintiff,
v.
WILLIAM BIRDSALL and STEPHANIE BIRDSALL, Defendants.

ORDER

CINDY K. JORGENSON, District Judge.

Pending before the Court are the Motion to Dismiss/Strike and Expunge Answer (Doc. 9) and the Motion for Summary Disposition (Doc. 10) filed by Plaintiff/Counterdefendant MicroMed Technology, Inc. ("Micromed"). Defendants/Counterclaimants William Birdsall ("Birdsall") and Stephanie Birdsall ("the Birdsalls") have filed a Response to the Motion to Strike/Expunge Answer and Motion to Dismiss (Doc. 11) and MicroMed has filed a Reply (Doc. 12).

Procedural History

On July 3, 2013, MicroMed filed a complaint with the Court alleging claims of a violation of the automatic bankruptcy stay, corporate defamation, commercial disparagement, and trade libel against the Birdsalls. Micromed alleges Birdsall (a former director and office of MircroMed and non-party MicroMed Cardiovascular, Inc.) acted on behalf of, and in furtherance of, his marital community.

MircoMed alleges it has petitioned for bankruptcy and remains a debtor in possession, Birdsall has transmitted hostile emails to shareholders, officers and directors of MicroMed Technology and other individuals who have business relationships with MicroMed Technology, and Birdsall has spread false and misleading information about MicroMed Technology and its medical device with the purpose of harming MicroMed Technology, and obstructing the plan of reorganization.

On July 19, 2013, the Birdsall filed an Answer (Doc. 8). The document is titled as an Answer, but states that it includes an Answer, Affirmative Defenses, and Counterclaims. The documents specifically addresses (with either admissions or denials) the allegations set forth in the Complaint and includes a list of fourteen affirmative defenses. The documents does not specify any counterclaims. The Birdsalls allege Birdsall's emails were true or expressed a reasonable and supportable opinion based on facts, and constitute whistleblowing of securities fraud. The Answer appear to allege a claim of employment of manipulative and deceptive practices in violation of SEC Rule 10b-5 as a counterclaim.

On August 9, 2013, MicroMed filed a Motion to Dismiss/Strike and Expunge Answer (Doc. 9). On September 13, 2013, MicroMed filed a Motion for Summary Disposition of Motion to Strike/Expunge Answer and Motion to Dismiss Counterclaims (Doc. 10). The Birdsalls filed a Response to the Motion to Strike/Expunge Answer and Motion to Dismiss (Doc. 11) on September 20, 2013, and MicroMed filed a Reply on September 30, 2013 (Doc. 12).

Motion for Summary Disposition

MicroMed requests its Motion to Dismiss/Strike and Expunge Answer be granted by summary disposition because the Birdsalls did not timely file an opposition. On September 20, 2013, forty-two days after the filing of the Motion to Dismiss/Strike and Expunge Answer and seven days after the filing of the Motion for Summary Disposition, the Birdsalls filed a Response to the Motion to Strike/Expunge Answer and Motion to Dismiss. The Birdsalls do not address MicroMed's request for summary disposition.

The failure to file a response to a motion may be deemed a consent to the granting of that motion and it may be disposed of summarily. LRCiv. 7.2(i). Nonetheless, as the Birdsalls have filed a response to the Motion to Strike/Expunge Answer and Motion to Dismiss, the Court finds it appropriate to consider the merits of the parties' arguments. However, the Court advises the Birdsalls that future non-compliance or untimely compliance with applicable rules or orders of the Court will not be looked upon with favor.

Motion to Strike/Expunge

MircroMed requests the Birdsalls' Answer be stricken as procedurally inappropriate and a noncompliant intermixing of pleadings and motions. MicroMed asserts the Answer does not concisely and directly answer each allegation in the Complaint as required by Fed.R.Civ.P. 8. The Court disagrees with this assertion. The Answer concisely and directly addresses each allegation. The Answer then goes on to explain the admissions and denials, but the Answer has nonetheless addressed each allegation. Although MicroMed points out that the Birdsalls seem to contradict themselves (e.g., denying the allegations in paragraph 43 of the Complaint, then setting forth the text of the document referred to by MicroMed), the Court finds such contradictions to be permissible alternate theories, see e.g., 71 C.J.S. Pleading ยง 176, or to represent a theory of the Birdsalls (e.g., what constitutes a "next generation" device; basis of knowledge or lack of knowledge of patent rights).

MicroMed asserts the explanations are superfluous, redundant, prejudicial, scandalous, and contain false and defamatory statements. Micromed asserts striking the document pursuant to Fed.R.Civ.P. 12(f)(2) is appropriate. Indeed, a court "may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed.R.Civ.P. 12(f). The purpose of a Rule 12(f) motion is to avoid spending time and money litigating spurious issues. Whittlestone, Inc. v. Handi - Craft Co., 618 F.3d 970, 973-74 (9th Cir. 2010). Nonetheless, motions to strike "are generally disfavored because the motions may be used as delay[] tactics and because of the strong policy favoring resolution of the merits." Barnes v. AT & T Pension Benefit Plan, 718 F.Supp.2d 1167, 1170 (N.D.Cal.2010). Despite its general disfavor, however, a district court's ruling on a motion to strike is reviewed only for an abuse of discretion. See Hambleton Bros. Lumber Co. v. Balkin Enters., Inc., 397 F.3d 1217, 1224 n. 4 (9th Cir.2005).

It appears the parties dispute the veracity of the Birdsalls' allegations regarding fraud, retaliation for whistleblowing, and the safety and effectiveness of a MicroMed device - it is some of these statements that are the subject of MircroMed's Complaint. The Birdsalls ...


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