MLW Request In Antitrust Lawsuit Against WWE Rejected

:mlw:

A request from Major League Wrestling in their lawsuit against WWE has been denied by a U.S. District Court Judge.

MLW has accused WWE of monopolizing the professional wrestling media rights market. The lawsuit argues that MLW was working on a deal with the Tubi streaming service, which is owned by WWE SmackDown's broadcast partner FOX. The plan was to announce the deal publicly in August 2020, but WWE allegedly learned about it before the contract was signed, and used their connections in FOX to force Tubi to back out of the deal.

MLW had requested to have WWE's potential defenses in the lawsuit struck, PW Insider reports. United States District Court, Northern Division of California, San Jose Division issued a ruling earlier this week denying the motion. The motion reads:

ORDER TERMINATING MOTION TO STRIKE AND GRANTING LEAVE TO FILE AMENDED ANSWER
Plaintiff, MLW Media LLC (“MLW”), brings a motion to strike Defendant, World Wrestling Entertainment, Inc.’s (“WWE”), affirmative defenses filed in response to MLW’s suit for violations of the Sherman Antitrust Act; intentional interference with prospective economic advantage; intentional interference with contractual relations; and violation of California’s Unfair Competition Law. Mot. to Strike Answer to Am. Compl. (“Mot. Strike”), ECF No. 101; Answer to Am. Compl. (“Answer”), ECF No. 98.

WWE filed an opposition, and MLW filed a reply. In the alternative to granting MLW’s motion to strike, WWE asked the Court to terminate MLW’s motion as moot and grant leave to file its amended answer attached as Exhibit A. Ex. A, ECF No. 102-1. The Court finds the motion appropriate for decision without oral argument pursuant to Civil Local Rule 7-1(b). For the reasons stated below, the Court will terminate MLW’s motion to strike and grant leave for WWE to file its amended answer on the condition that it remove the improper sixth amended affirmative defense for unjust enrichment.

BACKGROUND

MLW filed this action in January 2022, asserting claims against WWE for monopolization and attempted monopolization in violation of the Sherman Antitrust Act. MLW filed a First Amended Complaint on March 6, 2023.

WWE filed its answer to MLW’s FAC on August 14, 2023, and on August 25, 2023, MLW filed its present motion to strike the fourteen affirmative defenses contained in WWE’s answer.

While WWE argues that its affirmative defenses were properly asserted, in the alternative to granting MLW’s motion, WWE asks the Court to terminate MLW’s motion to strike as moot and grant leave to file its amended answer.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(f) permits a court to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” “The function of a Rule 12(f) motion to strike is to avoid the expenditure of time and money that will arise from litigating spurious issues by dispensing with those issues prior to trial.” Solis v. Zenith Capital, LLC, No. 08–cv–4854–PJH, 2009 WL 1324051, at *3 (N.D. Cal. May 8, 2009) (citing Sidney–Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983)).

Courts in this district, including this Court, have generally applied the Twombly/Iqbal pleading standard to striking affirmative defenses. See Goobich v. Excelligence Learning Corp., No. 5:19-CV-06771-EJD, 2020 WL 1503685, at *3 (N.D. Cal. Mar. 30, 2020) (collecting cases). When a court strikes an affirmative defense, leave to amend should be freely given so long as there is no prejudice to the moving party. Wyshak v. City Nat’l Bank, 607 F.2d 824, 826 (9th Cir. 1979); see also Fed. R. Civ. P. 15(a)(2) (“The court should freely give leave [to amend] when justice so requires.”); Lopez v. Smith.

DISCUSSION

The Court grants WWE’s request for leave to file its amended answer and terminates MLW’s motion to strike as moot. While MLW identified numerous deficiencies in WWE’s affirmative defenses, the Court finds that WWE’s proposed amended answer cures nearly all deficiencies.

First, several of WWE’s original “affirmative defenses” were improper as a matter of law, as they merely sought to demonstrate that MLW has not met its burden of proof. WWE’s amended answer cures these deficiencies by removing “affirmative defenses” 1, 2, 5, 8, and 12.

Second, WWE’s remaining original affirmative defenses were improperly asserted, as they contained no facts to provide MLW with notice of the basis for the defenses.

WWE’s amended answer cures these deficiencies by adding facts sufficient to plausibly claim affirmative defenses 3, 4, 6, 7, and 9.

However, the Court finds the sixth affirmative defense for unjust enrichment in the amended answer improper. This issue concerns damages and is reserved for the remedies stage of proceedings. The Court also finds the “Reservation of Rights” section improper, as it is not in itself a defense and “serves no real purpose in litigation.” Solis, 2009 WL 2022343, at *3; see also, e.g., Goobich, 2020 WL 1503685, at * 4 (“This type of statement serves no real purpose in the litigation and should be stricken.”) (internal quotations omitted); J&J Sports Prods v. Mendoza –Govan

IV. CONCLUSION

For the foregoing reasons, the Court TERMINATES MLW’s motion to strike as moot and GRANTS WWE’s request to file its amended answer so long as it removes the improper sixth affirmative defense for unjust enrichment and “Reservation of Rights” section.

IT IS SO ORDERED. Dated: October 31, 2023

WWE has previously tried to have this lawsuit dismissed but this was rejected by the court. In July, it was reported that the antitrust lawsuit had left WWE hesitant to bring in new talent from other companies. The belief is that pursuing talent would give a bad public image amid the lawsuit and appear as if WWE was poaching talent.