United States District Court, D. Nevada
ORDER MOTION TO STRIKE (ECF NO. 14
FERENBACH UNITED STATES MAGISTRATE JUDGE.
matter concerns the allegedly fraudulent transfer of funds
from Mojave Aluminum Company, Inc. to Defendant Dean Kajioka.
Before the Court are Kajioka's Motion to Strike (ECF No.
14), Plaintiff Novva Ausrustung Group. Inc.'s
(“Novva's”) Opposition to Defendant's
Motion to Strike (ECF No. 16), and Defendant's Reply (ECF
No. 18). For the reasons stated below, the motion to strike
instant dispute involves the planned development and
construction of a 500, 000 square-foot aluminum foundry plant
in Barstow, California. See ECF No. 1 at 2, 4. In
2015, the complaint states that Eric Po-Chi Shen, an
individual and nonparty to the instant action, created Mojave
Aluminum Company, Inc. (“Mojave”), a California
company, to build the aluminum foundry. Id. To fund
this project, Mojave entered into a loan agreement with Novva
on May 4, 2015. Id. at 4. Under the agreement, Novva
allegedly loaned Mojave $1.8 million to be used
“exclusively on the Barstow project.”
Id. After Mojave failed to make the scheduled
principal and interest payments on May 3, 2016, Novva alleges
that it investigated and discovered that “Mojave's
funds and assets were gone.” Id. A couple
months later, Novva sued Mojave and Shen for breach of
contract and fraud in California state court. Id. As
part of the California litigation, Novva discovered various
transfers of monies from Mojave to various persons and
entities, including Defendant Kajioka, a Nevada licensed
attorney associated personally and professionally with Shen.
See ECF No. 1 at 4.
to the complaint, in 2015 and 2016, in a series of transfers,
Shen caused $1.2 million of Mojave's funds to be
transferred to an entity formed by Kajioka, International
Constructor Group, LLC. Id. at 5, 6. It also alleges
that Shen caused $514, 834.68 of Mojave's funds to be
transferred directly to Kajioka despite Kajioka never
performing any legitimate legal work for Mojave. Id.
at 6. The complaint alleges that these funds were transferred
to Kajioka with actual intent to defraud, hinder or delay
Novva and other Mojave creditors. Id. Kajioka
allegedly operated as a close confidant and insider to Shen
in misappropriating Mojave's assets. Id. at 2.
In May 2017, Novva filed the instant action against Kajioka
for fraudulent transfer under Cal. Civ. Code § 3439.04
and Nev. Rev. Stat. § 112.180. Id. at 6-7.
Rule of Civil Procedure 12(f) states that “[t]he court
may strike from a pleading an insufficient defense or any
redundant, immaterial, impertinent, or scandalous
matter.” The purpose of a Rule 12(f) motion to strike
is “to avoid the expenditure of time and money that
must arise from litigating spurious issues by dispensing with
those issues prior to trial ….” See
Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973
(9th Cir. 2010) (quoting Fantasy, Inc. v. Fogerty,
984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other
grounds, Fogerty v. Fantasy, Inc., 510 U.S. 517
(1994)); see also 2 James Wm. Moore, Moore's
Federal Practice, § 12.37, 128-29 (3d ed. 2017)
(“To prevail on this motion to strike, the movant must
clearly show that the challenged matter ‘has no bearing
on the subject matter of the litigation and that its
inclusion will prejudice the defendants.'”).
12(f) is not, however, “an appropriate avenue to
challenge the truth of an allegation.” See F.D.I.C.
v. Johnson, No. 2:12-cv-00209-KJD, 2012 WL 5818259, at
*6 (D. Nev. Nov. 15, 2012); see also Boyd v. United
States, 861 F.2d 106, 109 (5th Cir. 1988) (holding that
falsity of a pleading does not provide a sufficient basis for
granting a motion to strike under Rule 12(f)); Manuel v.
Lucenti, 2004 WL 2608355, *3 (N.D.Ill. 2004)
(“Defendants therefore are moving to strike the
disputed paragraphs from plaintiffs' complaint on the
basis that it is highly improbable that the allegations are
true, but Rule 12(f) is not the appropriate mechanism to
request such relief”); 2 Moore, supra, §
12.37, 132 (noting that Rule 12(f) does not provide
“any authority to strike a pleading or any allegations
within it as … false … [a]s the Ninth Circuit
has pointed out, striking pleadings or allegations on this
basis is effectively a resolution of the merits, which is not
appropriate at the pleading stage.”).
deciding a motion to strike, courts may not resolve disputed
and substantial factual or legal issues. See
Whittlestone, Inc., 618 F.3d at 973. If courts are
“in doubt as to whether challenged matter may raise an
issue of fact or law, the motion to strike should be denied,
leaving an assessment of the sufficiency of the allegations
for adjudication on the merits.” See Sliger v.
Prospect Mortg., LLC, 789 F.Supp.2d 1212, 1216 (E.D.
Cal. 2011) (citing Whittlestone, Inc., 618 F.3d at
973). Rule 12(f) motions should not, at bottom, be used as a
means to have certain portions of a complaint dismissed or to
obtain summary judgment as to those portions of the
suit-these actions are better suited for a Rule 12(b)(6)
motion or a Rule 56 motion, not a Rule 12(f) motion. See
Whittlestone, Inc., 618 F.3d at 974; see also
Yamamoto v. Omiya, 564 F.2d 1319, 1327 (9th Cir. 1977)
(“Rule 12(f) is neither an authorized nor a proper
way to procure the dismissal of all or a part of a
complaint.” (citing 5A Charles Alan Wright, Arthur R.
Miller & Richard L. Marcus, Federal Practice and
Procedure, § 1380, at 782 (3d ed. 2010))).
matter stricken under Rule 12(f) must be either: (1) an
insufficient defense; (2) redundant; (3) immaterial; (4)
impertinent; or (5) scandalous. See Whittlestone,
Inc., 618 F.3d at 973-74. An allegation is
“immaterial” it if “has no essential or
important relationship to the claim for relief or the
defenses being pleaded.” See Fogerty, 984 F.2d
at 1527. “Impertinent” matters consist of
statements that do not pertain, and are not necessary, to the
issues in question. Id. The concepts of
“impertinent” and “immaterial”
matters have considerable overlap. See 5C Wright et
al., supra, § 1382, 463-64.
12(f) motion to strike is an extreme and drastic remedy-it is
heavily disfavored. See Armed Forces Bank, N.A. v. FSG-4,
LLC, No. 2:11-cv-654-JCM-CWH, 2011 WL 5513186, at *4 (D.
Nev. Nov. 10, 2011) (citing Colaprico v. Sun
Microsystems, Inc., 758 F.Supp. 1335, 1339 (N.D.Cal.
1991) (“[M]otions to strike should not be granted
unless it is clear that the matter to be stricken could have
no possible bearing on the subject matter of the
litigation.”).“Given their disfavored status,
courts often require a showing of prejudice by the moving
party before granting the requested relief.” See
Roadhouse v. Las Vegas Metro. Police Dep't, 290
F.R.D. 535, 543 (D. Nev. 2013) (quotation omitted). Whether
to grant a motion to strike lies within the discretion of the
district court. See Whittlestone, Inc., 618 F.3d at
973; see also 5C Wright et al., supra,
§ 1382 at 433 (“The district court possesses
considerable discretion in disposing of a Rule 12(f) motion
to strike ….”).
parties present one issue: In the context of a fraudulent
transfer action under Nevada and California law, whether
certain factual allegations in the complaint are
“immaterial” or “impertinent” and
should be stricken under Fed.R.Civ.P. 12(f). A couple general
points must be noted. First, the purpose of a complaint is to
show that “the pleader is entitled to relief.”
See Fed. R. Civ. P. 8(a)(2). Second, this case is in
its infancy at the pleadings stage. The motion to strike
concerns the following allegations in the complaint:
i. Part of Paragraph 3 Evidence obtained
from Mojave and other sources revealed that Kajioka operated
as a close confidant and insider in depleting Mojave's