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8 United States District Court 9 Central District of California

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11 SAMANTHA SHAFER, et al., Case № 2:20-CV-5726-ODW (PVCx)

12 Plaintiffs, ORDER GRANTING

13 v. MOTION TO STRIKE

AFFIRMATIVE DEFENSES [67]

14 RED TIE, LLC (d/b/a Red Tie Gentlemen’s Club), et al., 15 Defendants. 16 17 18 I. INTRODUCTION 19 On June 26, 2020, Plaintiff Samantha Shafer initiated this action against 20 Defendants Red Tie, LLC and Mike Mudaris for allegedly violating the Fair Labor 21 Standards Act (“FLSA”) by misclassifying workers like herself as independent 22 contractors, failing to pay minimum and overtime wages, and implementing illegal 23 practices regarding the taking and sharing of tips. (Compl. ¶¶ 10–40, ECF No. 1.) 24 Plaintiffs Ida Hurley, Aeja Hurt, and Alexis Jackson opted into the action (ECF 25 Nos. 19–21), and together Plaintiffs filed a First Amended Complaint (“FAC”) adding 26 Defendants Ingrid Goulding and Bob Simoni. (FAC, ECF No. 48). Defendants filed 27 an Answer to the operative FAC, asserting seven affirmative defenses. (Answer to 28 FAC (“Answer”), ECF No. 65.) 1 Plaintiffs now move to strike Defendants’ affirmative defenses, and the matter 2 is fully briefed. (Pls.’ Mot. to Strike Defs.’ Affirmative Defenses (“MTS”), ECF 3 No. 67; Opp’n, ECF No. 71; Reply, ECF No. 73.) For the reasons discussed below, 4 the Court GRANTS Plaintiffs’ Motion.1 5 II. BACKGROUND2 6 Plaintiffs are dancers who worked at Red Tie, a gentlemen’s club, from 7 approximately June 2017 to January 2021. (FAC ¶¶ 14, 32.) Defendants Mike 8 Mudaris, Ingrid Goulding, and Bob Simoni are the managers of Red Tie who 9 “executed the policies regarding payment to dancers/entertainers.” (Id. ¶¶ 16–21.) 10 Plaintiffs allege that Defendants did not pay Plaintiffs on an hourly basis and that 11 Plaintiffs were compensated exclusively through tips from customers. (Id. ¶¶ 36, 12 46–47.) Plaintiffs also allege that Defendants required Plaintiffs to share their earned 13 tips with Defendants and other non-service employees who do not customarily receive 14 tips. (Id. ¶ 47.) Based on the foregoing, Plaintiffs assert five claims for relief: 15 (1) failure to pay minimum wage; (2) failure to pay overtime wages; (3) unlawful 16 taking of tips; (4) illegal kickbacks; and (5) forced tip sharing. (Id. ¶¶ 102–142.) 17 Defendants alleged seven affirmative defenses in response to Plaintiffs’ 18 allegations. (Answer ¶¶ 143–149.) Following a meet and confer, Defendants 19 consented to striking five of the seven affirmative defenses at issue. (Mot. 3.) In the 20 moving papers, Plaintiff argued in favor of striking these five affirmative defenses, 21 and Defendants confirmed in their opposition that they stipulate to the striking of 22 these five defenses. (Mot. 2–5; Opp’n 1.) Accordingly, only two affirmative defenses 23 remain in dispute: waiver (first affirmative defense) and FLSA good faith and 24 reasonable belief (seventh affirmative defense). 25

26 1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 27 2 All factual references derive from Plaintiff’s FAC or attached exhibits, unless otherwise noted, and 28 well-pleaded factual allegations are accepted as true for purposes of this Motion. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 1 III. LEGAL STANDARD 2 Under Federal Rule of Civil Procedure 12(f), a court may strike an affirmative 3 defense if it is insufficient or is “redundant, immaterial, impertinent, or scandalous.” 4 Fed. R. Civ. P. 12(f). An affirmative defense must give the plaintiff fair notice of the 5 defense. Wyshak v. City Nat’l Bank, 607 F.2d 824, 827 (9th Cir. 1979). “To 6 determine that a defense is insufficient as a matter of law, the court must be convinced 7 that there are no questions of fact, that any questions of law are clear and not in 8 dispute, and that under no set of circumstances could the defense succeed.” Ganley v. 9 County of San Mateo, No. C06-3923 TEH, 2007 WL 902551, at *1 (N.D. Cal. 10 Mar. 22, 2007) (internal quotation marks omitted). 11 Where a district court grants a motion to dismiss, it should generally provide 12 leave to amend unless “it is clear . . . the complaint could not be saved by any 13 amendment.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1034 14 (9th Cir. 2008); see Fed. R. Civ. P. 15(a) (“The court should freely give leave when 15 justice so requires.”). 16 IV. DISCUSSION 17 Plaintiffs assert that the Court should strike Defendants’ first and seventh 18 affirmative defenses because they are too vague to satisfy the fair notice requirement 19 and are improper as a matter of law. (See generally Mot.) As discussed below, the 20 Court agrees that the challenged affirmative defenses fail to provide fair notice, and 21 the Court grants the motion on this basis. Zissa v. County of Los Angeles, No. 2:18- 22 cv-101745-CJC (JDEx), 2019 WL 8060086 at *2 (C.D. Cal. Mar. 7, 2019) (finding 23 that boilerplate recitations of the affirmative defense are not sufficient to put plaintiffs 24 on fair notice of the basis of each affirmative defense). 25 A. First Affirmative Defense: Waiver 26 Plaintiffs move to strike Defendants’ first affirmative defense of waiver. 27 (Mot. 6.) The defense merely states: “Plaintiff has waived any claims she may have.” 28 (Answer ¶ 143.) While a “detailed statement of facts” is not required for an 1 affirmative defense to sufficiently provide fair notice, fair notice generally requires 2 that the defendant “set forth the nature and grounds for the affirmative defense.” Loi 3 Nguyen v. Durham Sch. Servs., L.P., 358 F. Supp. 3d 1056, 1059 (C.D. Cal. 2019). 4 Here, Defendants’ one-sentence allegation is conclusory and fails to provide any facts 5 indicating which of the Plaintiffs’ words or conduct indicate waiver. It is therefore 6 insufficient to provide fair notice to Plaintiffs. 7 In their Opposition, Defendants attempt to address the deficiency of this 8 affirmative defense by claiming that the statement refers to the waivers allegedly 9 signed by Plaintiffs Shafer and Hurt. (Opp’n 3.) However, this claim constitutes 10 material outside the pleadings and may not be considered. See Winebarger v. Pa. 11 Higher Educ. Assistance Agency, 411 F. Supp. 3d 1070, 1082 (“Generally, a district 12 court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) 13 motion.”) (quoting Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 14 1555 n.19 (9th Cir. 1990)). It remains unclear from the pleadings what the Plaintiffs 15 waived (their substantive rights under FLSA, or their right to participate in a collective 16 action, or something else) and how that waiver took place. 17 Accordingly, the Court strikes Defendants’ first affirmative defense (waiver) 18 with leave to amend. See Manzarek, 519 F.3d at 1034. 19 B. Seventh Affirmative Defense: Good Faith 20 Plaintiffs move to strike Defendants’ seventh affirmative defense, which asserts 21 that any act or omission in violation of the FLSA was in good faith. (Mot. 7.) The 22 seventh affirmative defense indicates: “Any act or omission giving rise to any liability 23 hereunder . . . was in good faith and . . . defendants had reasonable grounds for 24 believing that their act or omission was not a violation of [FLSA]. Accordingly, the 25 court should award no liquidated damages.” (Answer ¶ 149.) 26 29 U.S.C. § 260 provides that in certain FLSA actions, the court may award no 27 liquidated damages if the employer shows “the act or omission giving rise to [the 28 case] was in good faith and that [the employer] had reasonable grounds for believing 1 || that [its] act or omission” was not a violation of the FLSA. This provision of the 2 || FLSA makes clear that, to avoid liquidated damages, the employer must act in good 3 || faith and must have a reasonable basis for its belief that it was not violating the law. 4|| Accordingly, a sufficient pleading would set forth the factual basis for the employer’s good faith belief. Here, Defendants’ purported good faith defense is insufficient 6 || because it sets forth no basis for Defendants’ belief. The defense is conclusory and is 7 || insufficient to provide Plaintiffs with fair notice. 8 Accordingly, the Court strikes Defendants’ seventh affirmative defense (good 9 || faith) with leave to amend. See Manzarek, 519 F.3d at 1034. 10 Vv. CONCLUSION 11 For the reasons discussed above, the Court GRANTS Plaintiffs’ Motion to 12] Strike. (ECF No. 67.) The Court STRIKES all seven of Defendants’ affirmative 13 | defenses with leave to amend. If Defendants choose to file a First Amended Answer, 14 || they must do so no later than fourteen (14) days from the date of this Order. 15 16 IT IS SO ORDERED. 17 18 August 10, 2021 os 19 he 20 Giedbae 1 OTIS D. GHT, II

UNITED STATES DISTRICT JUDGE

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