Unigestion Holding, S.A. v. UPM Tech., Inc.

• Citation: 305 F.Supp.3d 1134
• Decision Date: 30 March 2018
• Docket Number: Case No. 3:15–cv–185–SI
• Parties: UNIGESTION HOLDING, S.A., a foreign corporation, d/b/a Digicel Haiti, Plaintiff, v. UPM TECHNOLOGY, INC. d/b/a UPM Telecom, Inc, and UPM Marketing, Inc., an Oregon corporation; UPM Telecom, Inc., an Oregon a/b/n; UPM Marketing, Inc., an Oregon a/b/n; Benjamin Sanchez a/k/a Benjamin Sanchez Murillo, an Oregon resident; Baltazar Ruiz, an Oregon resident, and Tyler Allen, an Oregon resident; and Duy "Bruce" Tran, an Oregon resident, Defendants.
• Court: U.S. District Court — District of Oregon

305 F.Supp.3d 1134

UNIGESTION HOLDING, S.A., a foreign corporation, d/b/a Digicel Haiti, Plaintiff,

v.UPM TECHNOLOGY, INC. d/b/a UPM Telecom, Inc, and UPM Marketing, Inc., an Oregon corporation; UPM Telecom, Inc., an Oregon a/b/n; UPM Marketing, Inc., an Oregon a/b/n; Benjamin Sanchez a/k/a Benjamin Sanchez Murillo, an Oregon resident; Baltazar Ruiz, an Oregon resident, and Tyler Allen, an Oregon resident; and Duy "Bruce" Tran, an Oregon resident, Defendants.

Case No. 3:15–cv–185–SI

United States District Court, D. Oregon.

Signed March 30, 2018

Richard K. Hansen, Schwabe, Williamson & Wyatt, 1211 SW Fifth Ave, Suite 1600, Portland, OR 97204; Robert C.L. Vaughan, Cherine Smith Valbrun, and Leah B. Storie, Kim Vaughan Lerner LLP, One Financial Plaza, Suite 2001, Fort Lauderdale, FL 33394. Of Attorneys for Plaintiff.

Kathryn P. Salyer and Eleanor A. DuBay, Tomasi Salyer Baroway, 121 SW Morrison Street, Suite 1850, Portland, OR 97204; Christopher W. Savage, Davis Wright Tremaine, LLP, 1919 Pennsylvania Ave. NW, Suite 800, Washington, D.C. 20006. Of Attorneys for Defendants.

OPINION AND ORDER

Michael H. Simon, United States District Judge

Plaintiff Unigestion Holding, S.A., dba "Digicel Haiti," provides mobile telecommunication services in Haiti for profit. Defendants (collectively, "UPM") formerly provided mobile telecommunication services to Haiti for profit. Digicel Haiti alleges that UPM provided these services by using certain practices and technologies to fraudulently access Digicel Haiti's telecommunications network. Digicel Haiti asserts claims against UPM alleging common law fraud, violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") under 18 U.S.C. §§ 1962(b) - (d), common law conversion, and common law unjust enrichment. Digicel Haiti filed a complaint against UPM on February 2, 2015. Since that time, Digicel Haiti has amended its complaint several times, UPM has answered and asserted counterclaims, and each party has moved to dismiss the other's claims. On October 18, 2016, Digicel Haiti filed its second amended complaint ("the Complaint" or "SAC"). On September 11, 2017, UPM filed an amended answer to the SAC, asserting seven affirmative defenses and seven counterclaims. UPM's first and seventh counterclaims include allegations that Digicel Haiti is in violation of the Communications Act of 1934 and § 2 of the Sherman Act, respectively. Digicel Haiti now moves to strike UPM's first, second, fifth, sixth and seventh affirmative defenses and dismiss UPM's first and seventh counterclaims. For the following reasons, Digicel Haiti's motion to strike and motion to dismiss are each granted in part and denied in part.

STANDARDS

A. Motion to Strike

An answer must "affirmatively state any avoidance or affirmative defense." Fed. R. Civ. P. 8(c)(1). Such defenses must be stated "in short and plain terms." Fed. R. Civ. P. 8(b)(1)(a). A court may strike an affirmative defense under Federal Rule of Procedure 12(f) if it presents 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 (9th Cir. 2010) ; see also Fantasy, Inc. v. Fogerty , 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds , 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). The disposition of a motion to strike is within the discretion of the district court. See Fed. Sav. & Loan Ins. Corp. v. Gemini Mgmt. , 921 F.2d 241, 244 (9th Cir. 1990). "Motions to strike are disfavored and infrequently granted." Legal Aid Servs. of Oregon v. Legal Servs. Corp. , 561 F.Supp.2d 1187, 1189 (D. Or. 2008) ; see also Capella Photonics, Inc. v. Cisco Sys., Inc. , 77 F.Supp.3d 850, 858 (N.D. Cal. 2014) ("Motions to strike are regarded with disfavor because of the limited importance of pleadings in federal practice and because they are often used solely to delay proceedings." (quotation marks and alterations omitted) ).

An affirmative defense may be struck if it is insufficient. " ‘The key to determining the sufficiency of pleading an affirmative defense is whether it gives plaintiff fair notice of the defense.’ " Simmons v. Navajo Cty. , 609 F.3d 1011, 1023 (9th Cir. 2010) (quoting Wyshak v. City Nat'l Bank , 607 F.2d 824, 827 (9th Cir. 1979) ). "[T]he ‘fair notice’ required by the pleadings standards only requires describing the defense in ‘general terms.’ " Kohler v. Flava Enters., Inc. , 779 F.3d 1016, 1019 (9th Cir. 2015) (quoting 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1274 (3d ed. 1998) ).

Rule 12(f) also provides that pleadings that are "immaterial" or "impertinent" may be struck by a court. An "immaterial" matter is "that which has no essential or important relationship to the claim for relief or the defenses being pleaded." Fantasy, Inc. , 984 F.2d at 1527 (quoting C. Wright, A. Miller, et al., 5C Fed. Prac. & Proc. Civ. § 1382 (3d ed. 2013) ). "Impertinent" matters are those "that do not pertain, and are not necessary, to the issues in question." Id. Such pleadings are legally insufficient because they clearly lack merit "under any set of facts the defendant might allege." Polk v. Legal Recovery Law Offices , 291 F.R.D. 485, 489 (S.D. Cal. 2013) (citation and quotation marks omitted).

B. Motion to Dismiss

A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc. , 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party.

Wilson v. Hewlett–Packard Co. , 668 F.3d 1136, 1140 (9th Cir. 2012) ; Daniels–Hall v. Nat'l Educ. Ass'n , 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint "may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca , 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution , 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal , 556 U.S. 662, 678–79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

A complaint must contain sufficient factual allegations to "plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Starr , 652 F.3d at 1216. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

BACKGROUND

For purposes of Digicel Haiti's motion to dismiss counterclaims, the Court accepts as true the following facts alleged in UPM's counterclaims. Certain allegations from Plaintiff's amended complaint also are included as background. In deciding Digicel Haiti's motion to dismiss, the Court gives no presumption of truth to Digicel Haiti's allegations in the amended complaint, except where UPM's argument or counterclaims endorse or rely on Digicel Haiti's allegations.

A. Digicel Haiti's Operations

Digicel Haiti is a wholly owned subsidiary of Digicel Holdings, Ltd., which also owns Digicel USA, Inc. ("Digicel USA") and Digicel Jamaica, Ltd. ("Digicel Jamaica"). Digicel Haiti is the leading provider of telecommunications services in Haiti, where it solely operates and has an estimated 75% market share of local telephone services. Digicel USA operates a set of international telephone switching systems—equipment with the capacity to transmit a call from the United States to an overseas telecommunications network—located in Miami, Florida and New York City, New York.

Digicel Haiti tracks and charges its local customers in Haiti through the use of pre-paid Subscriber Identity Module ("SIM") cards. A SIM card acts as a small circuit board: when the card is placed inside a cellular telephone, the card identifies the device as associated with an individual customer's unique telephone number and account. SIM cards allow customers to access Digicel Haiti's cellular network and, in turn, allow Digicel to charge for communications made from cellular devices containing specific SIM cards. Digicel Haiti's customers can use SIM cards for voice, data, and messaging services on the Digicel Haiti network. Customers can add credits, in the form of minutes, to SIM cards by using, among other methods, vouchers and online "top-ups."

When a user of a Digicel Haiti SIM card makes a local call within Haiti, that user incurs charges of approximately $0.09 per minute of wireless service. If a Digicel Haiti customer travels to the United States and uses his or her Digicel Haiti SIM card to make calls back to Haiti, the user of that SIM card incurs charges of at least $1.99 for each minute of wireless service used. Digicel also offers a Roam–Like–You're–Home ("RLYH") plan. For an access fee of approximately $20 to $25, the RLYH plan allows registered Digicel Haiti customers to call back to Haiti while traveling in the United States at rates similar to the local rate during the authorized and pre-paid period.

When someone in the United States originates a call to one of Digicel Haiti's...