Criteo S.A. v. Steel House, Inc.

NOTICE OF MOTION AND MOTION to Dismiss 1)CRITEO S.A.'s NOTICE OF MOTION AND MOTION TO DISMISS COUNTERCLAIMS AND STRIKE AFFIRMATIVE DEFENSES; 2) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

C.D. Cal.August 15, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses JACK P. DICANIO (SBN 138782) Jack.DiCanio@skadden.com JAMES P. SCHAEFER (SBN 250417) James.Schaefer@skadden.com SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 525 University Avenue, Suite 1400 Palo Alto, California 94301 Telephone: (650) 470-4500 Facsimile: (650) 470-4570 Attorneys for Plaintiff and Counter-Defendant Criteo S.A. (Additional Counsel On Following Page) UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION STEEL HOUSE, INC., Counter-Claimant, v. CRITEO S.A., Counter-Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO.: 2:16-cv-4207-SVW-MRW 1) CRITEO S.A.’S NOTICE OF MOTION AND MOTION TO DISMISS COUNTERCLAIMS AND STRIKE AFFIRMATIVE DEFENSES; 2) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; FILED/LODGED UNDER SEPARATE COVER: 3) [PROPOSED] ORDER GRANTING MOTION TO DISMISS AND TO STRIKE; and Hearing Date: September 12, 2016 Time: 1:30 p.m. Courtroom: 6 Judge: Hon. Stephen V. Wilson Complaint Filed: June 13, 2016 Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 1 of 35 Page ID #:409 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses ABRAHAM A. TABAIE (SBN 260727) Abraham.Tabaie@skadden.com WINSTON P. HSIAO (SBN 273638) Winston.Hsiao@skadden.com MATTHEW J. TAKO (SBN 307013) Matthew.Tako@skadden.com SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 300 South Grand Avenue, Suite 3400 Los Angeles, California 90071-3144 Telephone: (213) 687-5000 Facsimile: (213) 687-5600 Attorneys for Plaintiff and Counter-Defendant Criteo S.A. Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 2 of 35 Page ID #:410 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses NOTICE OF MOTION AND MOTION TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on September 12, 2016, at 1:30 p.m., or at the nearest available date at which counsel may be heard, before the Honorable Stephen V. Wilson, in Courtroom 6 of the above-referenced Court located at 312 N. Spring Street, Los Angeles, CA 90012-4701, Criteo S.A. (“Criteo”) will, and hereby does, move the Court for an order dismissing Steel House, Inc.’s (d/b/a SteelHouse (“SteelHouse”)) counterclaims and striking SteelHouse’s affirmative defenses with prejudice. This Motion is made pursuant to Federal Rules of Civil Procedure 8, 9(b), 12(b)(6) for failure to state a claim and pursuant to Rule 12(f) for pleading insufficient defenses. This Motion is based on this Notice of Motion and Motion to Dismiss Counterclaims and Motion to Strike Affirmative Defenses, the accompanying Memorandum of Points and Authorities, all pleadings and papers filed in this action, all matters of which this Court may take judicial notice, and such additional papers and arguments as may be presented to the Court at or in connection with the hearing on this Motion. This Motion is made following a conference of counsel pursuant to Local Rule 7-3, which took place on August 3, 2016, more than seven days prior to the last day for filing the Motion. (See C.D. Cal. L.R. 7-3.) DATED: August 15, 2016 Respectfully submitted, By: /s/ Jack P. DiCanio JACK P. DICANIO SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Attorneys for Plaintiff and Counter-Defendant Criteo S.A. Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 3 of 35 Page ID #:411 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses TABLE OF CONTENTS TABLE OF AUTHORITIES ....................................................................................... iii I. INTRODUCTION .............................................................................................. 1 II. BACKGROUND ................................................................................................ 4 III. ARGUMENT...................................................................................................... 6 A. All Five Of SteelHouse’s Counterclaims Should Be Dismissed ............. 6 1. SteelHouse Failed To State A Lanham Act Claim ........................ 7 a. SteelHouse Failed To Adequately Allege That Criteo Made Any False Statement Of Fact .................................... 7 b. SteelHouse Failed To Adequately Allege Facts Showing That Criteo Made False Statements In Commercial Advertisements ............................................. 10 2. SteelHouse Failed To State A § 17500 False Advertising Claim 12 a. SteelHouse Failed To Adequately Allege That Criteo Made False Or Misleading Statements .............................. 12 b. SteelHouse Failed To Adequately Allege Criteo Knew Its Statements Were False Or Misleading .............. 13 c. SteelHouse Failed To Allege That It Relied on Criteo’s Allegedly False Advertisements .......................... 13 3. SteelHouse Failed To State A UCL Claim .................................. 13 a. SteelHouse Failed To Allege Unlawful Conduct .............. 14 b. SteelHouse Failed To Adequately Allege Fraud ............... 14 c. SteelHouse Did Not Allege Its Own Reliance on Criteo 15 4. SteelHouse Failed To State A Contract Interference Claim ........ 15 a. SteelHouse Failed To Allege A Valid Contractual Relationship Existed Between Itself And A Third Party 15 b. SteelHouse Failed To Allege That Criteo Knew Of The Unspecified Contracts With Which It Allegedly Interfered ........................................................................... 16 c. SteelHouse Failed To Allege That Any Contractual Obligation Owed To SteelHouse Was Breached Or Disrupted As A Result Of Criteo’s Alleged Conduct ....... 17 Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 4 of 35 Page ID #:412 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses 5. SteelHouse Failed To Allege A Claim For Intentional Interference With Prospective Economic Advantage .................. 17 a. SteelHouse Failed To Identify Specific Economic Relationships That Were Allegedly Disrupted .................. 18 b. SteelHouse Failed To Allege Facts Showing Criteo Knew Of The Unspecified Prospective Business Relationships ..................................................................... 19 c. SteelHouse Failed To Adequately Allege That Criteo Engaged In Independently Wrongful Conduct.................. 19 B. SteelHouse’s Affirmative Defenses Should Be Stricken ....................... 22 IV. CONCLUSION ................................................................................................ 25 Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 5 of 35 Page ID #:413 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses TABLE OF AUTHORITIES CASES PAGES Ashcroft v. Iqbal, 556 U.S. 662 (2009) ........................................................................................ 2, 6, 23 Beachbody, LLC v. Universal Nutrients, LLC, CASE NO. CV 16-02015-R, 2016 WL 3912014 (C.D. Cal. July 18, 2016) ........................................................... 7 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................................ 6, 23 Brosnan v. Tradeline Solutions, Inc., No. C-08-0694 JCS, 2009 WL 1604572 (N.D. Cal. June 5, 2009) .......................................................... 11 In re Centerstone Diamonds, Inc., Bankruptcy No. 2:09-bk-23945-PC, Adversary No. 2:13-ap-02040-PC, 2014 WL 1330186 (Bankr. C.D. Cal. Apr. 2, 2014) .............................................. 16 CTF Development, Inc. v. Penta Hospitality, LLC, No. C 09-02429 WHA, 2009 WL 3517617 (N.D. Cal. Oct. 26, 2009) ....................................................... 23 Damabeh v. 7-Eleven, Inc., No. 5:12-CV-1739-LHK, 2013 WL 1915867 (N.D. Cal. May 8, 2013) .................................................... 18, 19 Davidson v. Kimberly-Clark Corp., 76 F. Supp. 3d 964 (N.D. Cal. 2014) .................................................................... 8, 9 Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal. 4th 376 (1995) ........................................................................................ 4, 20 Dodson v. CSK Auto, Inc., No. 2:13-cv-00346-GEB-AC, 2013 WL 3942002 (E.D. Cal. July 30, 2013) ......................................................... 24 Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350 (2010) ............................................................................... 15 Eckler v. Wal-Mart Stores, Inc., No. 12-CV-727-LAB-MDD, 2012 WL 5382218 (S.D. Cal. Nov. 1, 2012) .......................................................... 14 F.M. Tarbell Co. v. A&L Partners, Inc., No. CV 10-1589 PSG (Ex), 2011 WL 1153539 (C.D. Cal. Mar. 23, 2011) ........................................................ 18 Figueroa v. Stater Bros. Markets, Inc., No. CV 13-3364 FMO (JEMx), 2013 WL 4758231 (C.D. Cal. Sept. 3, 2013) ......................................................... 23 Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 6 of 35 Page ID #:414 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses First Advantage Background Services Corp. v. Private Eyes, Inc., 569 F. Supp. 2d 929 (N.D. Cal. 2008) .................................................................... 21 G & G Closed Circuit Events, LLC v. Nguyen, No. 10-CV-00168-LHK, 2010 WL 3749284 (N.D. Cal. Sept. 23, 2010) ....................................................... 25 Gatsinaris v. ART Corp. Solutions Inc., No. SA CV 15-0741-DOC (DFMx), 2015 WL 4208595 (C.D. Cal. July 10, 2015) ......................................................... 22 Gonzalez v. Preferred Freezer Services, LBF, LLC, No. CV 12-3467 ODW (FMO), 2012 WL 2602882 (C.D. Cal. July 5, 2012) ........................................................... 23 Grodzitsky v. American Honda Motor Co., No. 2:12-cv-1142-SVW-PLA, 2013 WL 2631326 (C.D. Cal. June 12, 2013) ........................................................ 14 Guttman v. La Tapatia Tortilleria, Inc., Case No. 15-cv-02042-SI, 2015 WL 7283024 (N.D. Cal. Nov. 18, 2015) ............................................. 3, 13, 15 Harrison Ventures, LLC v. Alta Mira Treatment Center, LLC, No. C 10-00188 RS, 2010 WL 1929566 (N.D. Cal. May 12, 2010) ........................................................ 17 Havensight Capital LLC v. Nike, Inc., No. CV 14-8985-R, 2015 WL 993334 (C.D. Cal. Feb. 18, 2015), appeal filed, No. 15-56607 (9th Cir. Oct. 16, 2015) ............................................................ passim Heartland Payment Systems, Inc. v. Mercury Payment Systems, No. C 14-0437 CW, 2014 WL 5812294 (N.D. Cal. Nov. 7, 2014) .................................................. passim Hiraide v. VaST Systems Technology Corp., No. C-08-04714 RMW, 2009 WL 2390352 (N.D. Cal. Aug. 3, 2009) ......................................................... 17 Homeland Housewares, LLC v. Euro-Pro Operating, LLC, No. CV 14-03954 DDP (MANx), 2015 WL 476287 (C.D. Cal. Feb. 5, 2015) .............................................................. 7 Implant Direct Sybron International v. Zest IP Holdings, LLC, No. 11-CV-2247-LAB-WVG, 2012 WL 1969292 (S.D. Cal. June 1, 2012) .................................................... 21, 22 Ingels v. Westwood One Broadcasting Services, Inc., 129 Cal. App. 4th 1050 (2005) ............................................................................... 14 J & J Sports Productions, Inc. v. Jimenez, No. 10cv0866 DMS (RBB), 2010 WL 5173717 (S.D. Cal. Dec. 15, 2010) .............................................. 4, 24, 25 Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 7 of 35 Page ID #:415 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses Joseph v. Kaye, CASE NO.: CV 16-01245 SJO (GJSx), 2016 WL 3677142 (C.D. Cal. July 7, 2016) ........................................................... 13 Korea Supply Co. v. Lockheed Martin Co., 29 Cal. 4th 1134 (2003) .................................................................................... 18, 20 Mallen v. Alphatec Holdings, Inc., 861 F. Supp. 2d 1111 (S.D. Cal. 2012), aff’d sub nom. Fresno County Employees’ Retirement Association v. Alphatec Holdings, Inc., 607 F. App’x 694 (9th Cir. 2015) ..................................................................... 8 Mangindin v. Washington Mutual Bank, 637 F. Supp. 2d 700 (N.D. Cal. 2009) .................................................................... 12 Mann v. Quality Old Time Service, Inc., 120 Cal. App. 4th 90 (2004) ................................................................................... 22 Melaleuca, Inc. v. Clark, 66 Cal. App. 4th 1344 (1998) ................................................................................. 21 Moss v. U.S. Secret Service, 572 F.3d 962 (9th Cir. 2009) .................................................................................... 6 New Show Studios LLC v. Needle, No. 2:14-cv-01250-CAS(MRWx), 2014 WL 2988271 (C.D. Cal. June 30, 2014) .................................................. 10, 13 O’Connor v. Uber Technologies, Inc., 58 F. Supp. 3d 989 (N.D. Cal. 2014) .................................................................. 3, 15 Openwave Messaging, Inc. v. Open-Xchange, Inc., Case No. 16-cv-00253-WHO, 2016 WL 2621872 (N.D. Cal. May 9, 2016) ............................................................ 6 Pacific Gas & Electric Co. v. Bear Stearns & Co., 50 Cal. 3d 1118 (1990) ..................................................................................... 15, 17 Piping Rock Partners, Inc. v. David Lerner Associates, Inc., 946 F. Supp. 2d 957 (N.D. Cal. 2013) .............................................................. 21, 22 Rael v. Dooney & Bourke, Inc., Case No.: 16cv0371 JM(DHB), 2016 WL 3952219 (S.D. Cal. July 22, 2016) ..................................................... 8, 10 Reudy v. Clear Channel Outdoors, Inc., 693 F. Supp. 2d 1091 (N.D. Cal. 2010), aff’d sub nom. Reudy v. CBS Corp., 430 F. App’x 568 (9th Cir. 2011) ........................................................................... 19 Robinson v. HSBC Bank USA, 732 F. Supp. 2d 976 (N.D. Cal. 2010) .................................................................... 21 Rombach v. Chang, 355 F.3d 164 (2d Cir. 2004), aff’d, 355 F.3d 164 (2d Cir. 2004) ............................. 3 Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 8 of 35 Page ID #:416 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vi Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses Seoul Laser Dieboard System Co. v. Serviform, S.r.l., 957 F. Supp. 2d 1189 (S.D. Cal. 2013) ................................................................... 19 Somers v. Apple, Inc., 729 F.3d 953 (9th Cir. 2013) .................................................................................... 6 Spann v. J.C. Penney Corp., Case No. SA CV 12-0215 FMO (RNBx), 2015 WL 11072165 (C.D. Cal. July 6, 2015) ......................................................... 23 State of Cal. ex rel. State Lands Commission v. United States, 512 F. Supp. 36 (N.D. Cal. 1981) ........................................................................... 22 TransFresh Corp. v. Ganzerla & Associates, Inc., 862 F. Supp. 2d 1009 (N.D. Cal. 2012) ........................................................... passim UMG Recordings, Inc. v. Global Eagle Entertainment, Inc., 117 F. Supp. 3d 1092 (C.D. Cal. 2015) ........................................................... passim United National Maintenance, Inc. v. San Diego Convention Center, Inc., 766 F.3d 1002 (9th Cir. 2014), cert. denied, 135 S. Ct. 980 (2015) ...................... 16 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) .................................................................................. 6 Vogel v. Huntington Oaks Delaware Partners, LLC, 291 F.R.D. 438 (C.D. Cal. 2013) ........................................................................ 4, 23 Vogel v. OM ABS, Inc., No. CV 13-01797 RSWL (JEMx), 2014 WL 340662 (C.D. Cal. Jan. 30, 2014) ..................................................... 23, 24 Watson v. Bank of America, N.A., CASE NO. 16cv513-GPC(MDD), 2016 WL 3552061 (S.D. Cal. June 30, 2016) ........................................................ 14 Wofford v. Apple Inc., No. 11-CV-0034 AJB NLS, 2011 WL 5445054 (S.D. Cal. Nov. 9, 2011) ............................................................ 7 Yagman v. Galipo, No. CV 12-7908-GW(SHx), 2013 WL 1287409 (C.D. Cal. Mar. 25, 2013) .................................................... 3, 17 Zef Scientific, Inc. v. Shimadzu Scientific Instruments, Inc., Civil No. 14CV1758 JAH (RBB), 2016 WL 1255787 (S.D. Cal. Mar. 31, 2016) ........................................................ 22 STATUTES 15 U.S.C. § 1125(a) ............................................................................................. passim California Business & Professions Code § 17200 ............................................... passim Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 9 of 35 Page ID #:417 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vii Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses California Business & Professions Code § 17500 ............................................... passim RULES Federal Rule of Civil Procedure 8 .......................................................................... 2, 23 Federal Rule of Civil Procedure 8(a) ............................................................................ 6 Federal Rule of Civil Procedure 9(b) ................................................................... passim Federal Rule of Civil Procedure 12(b)(6) ..................................................................... 6 Federal Rule of Civil Procedure 12(f) .................................................................. 22, 23 Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 10 of 35 Page ID #:418 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Criteo sued SteelHouse to put an end to a counterfeit click fraud scheme perpetrated by SteelHouse to steal credit for online sales attributable to Criteo and other industry participants. In response, and without any evidentiary support, SteelHouse asserts baseless counterclaims that are nothing more than a thinly veiled effort to divert attention from its own misconduct. Criteo was founded in 2005 by a small group of innovators at a start-up incubator in Paris. In just over ten years, it has become the global leader in digital performance advertising: Criteo has nearly 12,000 clients, delivers personalized ads to over 130 countries, served 710 billion ads in 2015, has 1.2 billion unique internet users per month, and in the past 12 months has generated roughly $22 billion in post- click sales for its clients. Criteo drives sales for e-commerce businesses by intelligently converting shoppers into purchasers with dynamic personalized ads. This is achieved by: (1) accurately recommending the best offer from the entire product catalog; (2) precisely predicting purchase intent; and (3) optimizing campaign performance by dynamically selecting the creative components that will drive the most user interaction with the ads. The Criteo Engine that enables this performance analyzes data from over 1.1 billion users each month, continuously sharpening its prediction, recommendation, and bidding algorithms to maximize advertising campaign results. Choosing to ignore the tech superiority, creativity and data-rich customer insights that have driven Criteo’s growth, SteelHouse alleges in conclusory fashion that Criteo’s superior performance is simply too good to be true. In doing so, SteelHouse demonstrates a fundamental misunderstanding of the online advertising industry, an intent to deceive the Court, or both. For example, SteelHouse alleges that Criteo must be engaged in fraud because, as to three of Criteo’s approximately 12,000 clients, SteelHouse cannot determine Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 11 of 35 Page ID #:419 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses from the data available to it the “attributable source” - also known as “referrer code” - for 52% of the clicks attributed to Criteo. (Dkt. 21 at 30-34 ¶¶ 18-24.) SteelHouse apparently does not know, or finds it too inconvenient to mention, that pursuant to standard internet browser security protocol all major internet browsers remove the “referrer code” in the URL header when an internet user transitions from a secure HTTP site (such as most of the publishing sites through which Criteo serves advertisements) to a non-secure HTTP site (which many e-tailer websites are still using).1 Accordingly, SteelHouse’s inability to see the “referrer code” for all clicks attributed to Criteo in the data available to SteelHouse does not mean the clicks are fake; it is simply a function of standard internet browser security measures. SteelHouse’s legal claims fare no better. SteelHouse attempts to allege five fraud-based counterclaims (i.e., (1) false advertising under the Lanham Act; (2) false advertising under California Business & Professions Code § 17500 (“§ 17500 claim”); (3) violation of California’s Unfair Competition Law (“UCL claim”); (4) intentional interference with contract; and (5) intentional interference with prospective economic advantage), and twelve affirmative defenses. For multiple reasons, SteelHouse’s counterclaims should be dismissed and its affirmative defenses stricken. First, all five of SteelHouse’s counterclaims are based, in whole or in part, on conclusory allegations that Criteo fraudulently “generates fake clicks” or is “counterfeiting clicks” to inflate its click count. SteelHouse fails, however, to allege any facts as to how Criteo supposedly effects such fraud. Instead, SteelHouse speculates that Criteo must be doing so because SteelHouse cannot determine from the data available to it the source of every click attributed to Criteo. Such speculation does not come close to satisfying the pleading requirements of either Rule 8 or 9(b) of the Federal Rules of Civil Procedure. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (pleading under Rule 8 “demands more than an unadorned, the-defendant- 1 See, e.g., https://www.ietf.org/rfc/rfc2616.txt (“Clients SHOULD NOT include a Referrer header field in a (non-secure) HTTP request if the referring page was transferred with a secure protocol.”). Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 12 of 35 Page ID #:420 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses unlawfully-harmed-me accusation” and rejects “‘naked assertion[s]’ devoid of ‘further factual enhancement’”); Rombach v. Chang, 355 F.3d 164, 174 (2d Cir. 2008) (explaining that to satisfy Rule 9(b) “plaintiffs cannot rest on their say-so that these statements are fraudulent; they must explain why”). Second, as to each allegedly false statement made by Criteo, SteelHouse fails to allege one or more of the following essential facts: who made the statement, when it was made, where it was made, to whom it was made, why it was false or misleading, and whether it was sufficiently disseminated to constitute a commercial advertisement. See, e.g., TransFresh Corp. v. Ganzerla & Assocs., Inc., 862 F. Supp. 2d 1009, 1017-20 (N.D. Cal. 2012) (dismissing false advertising claims because plaintiff did not “specifically” allege who, when, where, and to whom the statements were made, or why they were misleading); Heartland Payment Sys., Inc. v. Mercury Payment Sys., 2014 WL 5812294, at *9 (N.D. Cal. Nov. 7, 2014) (dismissing tortious interference claims because the plaintiff did not allege “‘who, what, when, where, and how’ the interference occurred”). Third, SteelHouse’s § 17500 and UCL claims fail because SteelHouse does not allege it relied on any statements made by Criteo. See O’Connor v. Uber Tech., Inc., 58 F. Supp. 3d 989, 1001-02 (N.D. Cal. 2014); Guttman v. La Tapatia Tortilleria, Inc., 2015 WL 7283024, at *3 (N.D. Cal. Nov. 18, 2015). Fourth, the claim for intentional interference with contract fails because SteelHouse does not: (i) “identify the third party or parties [with] whom [SteelHouse] contracted, and the nature and extent of [SteelHouse’s] relationship with that party or parties,” UMG Recordings, Inc. v. Global Eagle Entertainment, Inc., 117 F. Supp. 3d 1092, 1115 (C.D. Cal. 2015); (ii) allege specific facts demonstrating that Criteo knew of these unidentified contracts, Havensight Capital LLC v. Nike, Inc., 2015 WL 993334, at *1-2 (C.D. Cal. Feb. 18, 2015); and (iii) allege that Criteo’s conduct actually induced a breach of an existing contractual obligation owed to SteelHouse, Yagman v. Galipo, 2013 WL 1287409, at *5 (C.D. Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 13 of 35 Page ID #:421 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses Cal. Mar. 25, 2013). Fifth, SteelHouse’s claim for intentional interference with prospective economic advantage fails because SteelHouse does not: (i) “identify with particularity the relationships or opportunities with which [d]efendant is alleged to have interfered,” UMG Recordings, Inc., 117 F. Supp. 3d at 1118; (ii) allege any facts demonstrating that Criteo knew of these unidentified prospective relationships, Havensight, 2015 WL 993334, at *1-2; and (iii) allege that independently wrongful and actionable conduct by Criteo interfered with these unidentified relationships, Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal. 4th 376, 392-93 (1995). Sixth, SteelHouse’s affirmative defenses fail because: (1) seven of them are not even affirmative defenses; (2) SteelHouse did not allege any facts to support any of them; and (3) SteelHouse failed to identify Criteo’s claim(s) to which each defense applies. See Vogel v. Huntington Oaks Delaware Partners, LLC, 291 F.R.D. 438, 441 (C.D. Cal. 2013); J & J Sports Prods., Inc. v. Jimenez, 2010 WL 5173717, at *2 (S.D. Cal. Dec. 15, 2010). For these reasons and those discussed below, SteelHouse’s counterclaims should be dismissed and its affirmative defenses should be stricken with prejudice. II. BACKGROUND As alleged in Criteo’s Complaint and shown in the Motion for Preliminary Injunction, SteelHouse’s counterfeit click fraud scheme has harmed and continues to harm both Criteo and the online advertising industry as a whole and should be enjoined. In a transparent attempt to divert attention from its own misconduct, SteelHouse alleges five counterclaims against Criteo: (1) a Lanham Act false advertising claim; (2) a § 17500 claim; (3) a UCL claim; (4) an intentional interference with contract claim; and (5) an intentional interference with prospective economic advantage claim. (Dkt. 21 at 26-44.) All five counterclaims are based, in whole or in part, on the conclusory allegation that Criteo “counterfeit[s]” or “generates fake clicks” to fraudulently Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 14 of 35 Page ID #:422 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses inflate its click count and falsely promotes its inflated click count. (Dkt. 21 at 27 ¶ 4, 30-35 ¶¶ 18-29.) However, in sharp contrast to Criteo’s Complaint, SteelHouse does not allege any facts supporting these conclusory allegations. SteelHouse alleges no facts as to how Criteo purportedly generates fake clicks or counterfeits clicks.2 Furthermore, as to Criteo’s alleged promotion of inflated click count numbers, SteelHouse fails to allege as to all statements: (1) who made it; (2) when it was made; (3) where it was made; (4) to whom it was made; (4) what it specifically said; (5) why it was false or misleading at the time it was made; and (6) whether it was sufficiently disseminated to constitute a commercial advertisement. SteelHouse asserts in both its opposition to Criteo’s Motion for Preliminary Injunction (Dkt. 19 at 1-7) and Answer (Dkt. 21 at 3-4) that its business model is not based on clicks and that clicks are an outdated mode of online advertising. SteelHouse then does an about-face and alleges that clicks are an important part of its business and that Criteo’s alleged inflation of its click count has “diverted actual and potential customers from SteelHouse by promising inflated click rates” and “prohibited SteelHouse from being able to compete fairly.” (Dkt. 21 at 27 ¶ 4, 35 ¶ 28.) SteelHouse fails, however, to identify a single actual customer that was, or potential customer that could have been, diverted by Criteo’s alleged conduct. Nor does it allege facts regarding a single instance when it was not able to fairly compete. In support of its intentional interference claims, SteelHouse also alleges that Criteo made “false and misleading statements” accusing SteelHouse of fraudulent business practices. (Id. at 27 ¶ 5, 35-36 ¶¶ 31-34, 41 ¶ 64, 42 ¶ 71.) SteelHouse fails, however, to allege: (1) the identity of the current or prospective SteelHouse clients to whom Criteo allegedly made false and misleading statements; and (2) facts demonstrating that any statement by Criteo caused the breach of an existing contract or the disruption of a prospective business relationship. 2 Indeed, while SteelHouse submitted declarations in opposition to Criteo’s Motion for Preliminary Injunction that repeat these baseless allegations against Criteo, those declarations also provide no facts to support their naked assertions. Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 15 of 35 Page ID #:423 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses III. ARGUMENT A. All Five Of SteelHouse’s Counterclaims Should Be Dismissed A complaint cannot survive a Rule 12(b)(6) motion to dismiss if it does not contain factual allegations sufficient to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555 (quoting Fed. R. Civ. P. 8(a)). Federal Rule of Civil Procedure 8 “demands more than an unadorned, the-defendant-unlawfully-harmed- me accusation” and rejects “‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 556 U.S. at 678. Rather, “for a complaint to survive a motion to dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (citing Iqbal, 556 U.S. at 678 (“Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.”)); Somers v. Apple, Inc., 729 F.3d 953, 960 (9th Cir. 2013) (factual allegations “must rise above the mere conceivability or possibility of unlawful conduct that entitles the pleader to relief”). Furthermore, all five of SteelHouse’s counterclaims are premised on the allegation that Criteo fraudulently inflated and promoted its click count numbers in order to “deceive and defraud SteelHouse and e-tailers.” (Dkt. 21 at 36-37 ¶ 35, 40 ¶ 57, 41 ¶ 64, 42 ¶ 71.) Thus, all of the counterclaims sound in fraud and are subject to “the heightened pleading requirements of [Federal] Rule [of Civil Procedure] 9(b).” TransFresh Corp., 862 F. Supp. 2d at 1017-18; Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102-05 (9th Cir. 2003) (holding that Rule 9(b) applies to §17500 and UCL claims when a “unified course of fraudulent conduct” provides the basis for the claims); Openwave Messaging, Inc. v. Open-Xchange, Inc., 2016 WL 2621872, at *5 Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 16 of 35 Page ID #:424 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses n.7 (N.D. Cal. May 9, 2016) (applying Rule 9(b) to Lanham Act false advertising claim); UMG Recordings, Inc., 117 F. Supp. 3d at 1117 (applying Rule 9(b) to intentional interference with prospective economic advantage claim when the act of interference involves fraud and misrepresentation); Wofford v. Apple Inc., 2011 WL 5445054, at *3 (S.D. Cal. Nov. 9, 2011) (applying Rule 9(b) to intentional interference with contract claim). “To satisfy Rule 9(b), the plaintiff must include the who, what, when, where, and how of the fraud.” TransFresh, 862 F. Supp. 2d at 1017 (citation omitted). “The plaintiff must set forth what is false or misleading about a statement, and why it is false.” Id. “[O]n a motion to dismiss, if particular averments of fraud are insufficiently pled under Rule 9(b), a district court should disregard those averments, or strip them from the claim . . . [and] then examine the allegations that remain to determine whether they state a claim.” Id. 1. SteelHouse Failed To State A Lanham Act Claim To state a Lanham Act false advertising claim, SteelHouse is required to plead: (1) [Criteo made] a false statement of fact . . . in a commercial advertisement about its own or another’s product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material . . . ; (4) . . . [Criteo] caused its false statement to enter interstate commerce; and (5) [SteelHouse] has been or is likely to be injured as a result of the false statement. Beachbody, LLC v. Universal Nutrients, LLC, 2016 WL 3912014 (C.D. Cal. July 18, 2016). SteelHouse failed to do so for several reasons. a. SteelHouse Failed To Adequately Allege That Criteo Made Any False Statement Of Fact SteelHouse was required to allege that Criteo made statements that either: (1) were literally false; or (2) misled, confused, or deceived the public. See Homeland Housewares, LLC v. Euro-Pro Operating, LLC, 2015 WL 476287, at *3 (C.D. Cal. Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 17 of 35 Page ID #:425 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses Feb. 5, 2015). At the motion to dismiss stage, “[i]t is not enough . . . to simply claim that [an advertisement] is false - [the plaintiff] must allege facts showing why it is false.” Davidson v. Kimberly-Clark Corp., 76 F. Supp. 3d 964, 974 (N.D. Cal. 2014) (emphasis in original); Rael v. Dooney & Bourke, Inc., 2016 WL 3952219, at *3 (S.D. Cal. July 22, 2016) (dismissing false advertising claims based on alleged misleading prices where plaintiff relies on “say-so and conclusory allegations instead of facts”). Here, SteelHouse alleges that a click “refers to when a consumer clicks on an online ad,” Criteo “generates fake clicks” or is “counterfeiting clicks,” and, therefore, Criteo is falsely inflating its click count numbers. (Dkt. 21 at 30 ¶ 16, 34 ¶ 25, 35 ¶¶ 28-29.) SteelHouse fails, however, to allege a single fact as to how Criteo purportedly “generates fake clicks” or is “counterfeiting clicks.” Instead, SteelHouse speculates that Criteo must be doing so because SteelHouse cannot determine from the data available to it the “attributable source” for 52% of the clicks attributed to Criteo related to three of Criteo’s roughly 12,000 clients. (Dkt. 21 at 30-34 ¶¶ 18-24.) However, SteelHouse’s inability to determine the source of a click from the data available to it does not mean that the click is fake or counterfeit. Indeed, SteelHouse nowhere alleges that any click that Criteo takes credit for is not the result of an actual click by an internet user on an actual Criteo-placed advertisement. Simply put, SteelHouse improperly relies on its own “say-so and conclusory allegations instead of facts” to allege that Criteo’s click count numbers are false. Rael, 2016 WL 3952219, at *3 (rejecting allegation that reduced sales prices were misleading because the handbags were substandard, holding “Plaintiff alleges no facts or legal authority to explain why Defendant’s assertion that all items sold at the outlet store are ‘over-runs, discounted, or irregular’ conclusively establishes that these products are inherently ‘substandard’ or inferior”); Mallen v. Alphatec Holdings, Inc., 861 F. Supp. 2d 1111, 1130 (S.D. Cal. 2012) (mere allegation that there is “indication” that there “may have been” channel stuffing insufficient to plead that sales results were in fact false or misleading). Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 18 of 35 Page ID #:426 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses While SteelHouse alleges that Criteo “generates fake clicks after consumers purchase a product,” it then explains in the next two sentences why these clicks are not actually fake. (Dkt. 21 at 34 ¶ 25.) Specifically, SteelHouse alleges that, unlike other advertisers, Criteo continues to serve advertisements to an internet user after he or she has made a purchase. (Id.) That Criteo seeks to drive incremental sales by serving actual ads to actual internet users does not make actual clicks by those internet users - or the resulting incremental sales - fake. SteelHouse’s conclusory allegation that Criteo’s click count statements are falsely inflated because its click count numbers include actual clicks, on actual ads, by actual internet users makes no sense and should be disregarded. See, e.g., Davidson, 76 F. Supp. 3d at 974-75 (“vague” references to defendant’s alleged statements “lacking in detail” “do not satisfy plaintiff’s obligation to plead with specificity how the . . . representation was false and caused the damage . . . [w]ithout those details, plaintiff’s [allegation] . . . is nothing more than an unwarranted conclusion”). SteelHouse also alleges Criteo must be inflating its click count numbers since “16% of Criteo’s clicks are from users clicking the same advertisement within a 30- minute period,” which is allegedly “eight times the industry standard.” (Dkt. 21 at 34 ¶ 26.) Again, SteelHouse inexplicably takes issue with Criteo counting clicks that SteelHouse itself concedes were in fact made by actual internet users. SteelHouse alleges no facts supporting its conclusion that taking credit for multiple actual clicks by actual internet users within a 30-minute period is somehow fraudulent. Similarly, SteelHouse finds it suspicious - without explaining why - that 8% of Criteo’s clicks occur after an internet user has made a purchase on a particular e-tailer’s website. (Dkt. 21 at 34 ¶ 25.) SteelHouse either does not know, or intentionally ignores, that marketing studies and common sense indicate that displaying ads to internet shoppers who have demonstrated a propensity to buy by making a purchase is an effective means of driving incremental sales. Again, SteelHouse asks the Court to conclude based on its “say-so” that Criteo Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 19 of 35 Page ID #:427 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses has committed fraud. Such allegations are patently insufficient and SteelHouse’s claims should be dismissed. See Rael, 2016 WL 3952219, at *3. b. SteelHouse Failed To Adequately Allege Facts Showing That Criteo Made False Statements In Commercial Advertisements SteelHouse’s Lanham Act claim is based on allegedly false “advertising about the nature, quality and characteristics of Criteo’s products and services.” (Dkt. 21 at 37 ¶ 40, 38-39 ¶ 48.) SteelHouse fails, however, to allege facts showing that Criteo made any false statement that was “disseminated sufficiently to the relevant purchasing public to constitute ‘advertising’ or ‘promotion’ within that industry.” New Show Studios LLC v. Needle, 2014 WL 2988271, at *16 (C.D. Cal. June 30, 2014) (citation omitted). SteelHouse’s complaint identifies six statements that Criteo allegedly made regarding the nature, quality and characteristics of Criteo’s products and services. (Dkt. 21 at 30-31 ¶¶ 18-19, 34 ¶ 25.) As to four of these statements, SteelHouse fails to allege when it was made, where it was made, who made it, and to whom it was made. Therefore, the Court should disregard these alleged statements when assessing whether SteelHouse has adequately pled a false advertising claim. See TransFresh, 862 F. Supp. 2d at 1017-20 (dismissing false advertising claims based on various statements where plaintiff did not allege who “specifically” made the statements, when they were made, where they were made, to whom they were made, or why they were misleading). Furthermore, as to all six statements allegedly made by Criteo, SteelHouse fails to allege facts demonstrating falsity. First, SteelHouse alleges that “Criteo claims it has the highest click rate in the industry, somehow outperforming its competitors by more than 400 percent.” (Dkt. 21 at 30 ¶ 18.) Alternatively, SteelHouse phrases this allegation as Criteo “advertise[s] more than four times the click rate as everyone else in the industry.” (Dkt. 21 at 34 ¶ 25.) SteelHouse fails, however, to allege: (1) when these statements were made; (2) where they were made; (3) who made them; (4) the context in which Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 20 of 35 Page ID #:428 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses they allegedly were made; (5) to whom they were made; and most importantly (6) why these statements are false and/or misleading. Furthermore, SteelHouse fails to allege facts demonstrating that these statements were sufficiently disseminated to the relevant purchasing public to constitute commercial advertisements. Accordingly, SteelHouse has not adequately pled false advertising based on these statements. See, e.g., Brosnan v. Tradeline Sols., Inc., 2009 WL 1604572, at *5 (N.D. Cal. June 5, 2009) (dismissing unfair competition and false advertising claims because the plaintiff “does not specify who made the fraudulent or misleading statements . . . fails to allege when the allegedly misleading statements were made and to whom . . . does not provide the statements or advertising claims that were made, sufficient for [d]efendants to respond” and “fails to explain how the statements . . . are false or misleading” (emphasis in original)); Heartland, 2014 WL 5812294, at *5 (dismissing Lanham Act claim based on “alleged oral statements from [defendant] to merchants,” where plaintiff “fails to disclose the name” of any “merchant who it claims was deceived” by defendant’s statements). Second, SteelHouse alleges that “[a]s early as 2012, Criteo started proclaiming its click rates are the highest in the industry . . . [and] ten times higher . . . than the market average, having achieved around .06 percent and rising.” (Dkt. 21 at 31 ¶ 19.) Again, SteelHouse fails to allege who made this statement, where this statement was made, and to whom it was made. Furthermore, SteelHouse again fails to allege facts showing why this statement is either false or misleading, as well as any facts showing it was sufficiently disseminated to the relevant purchasing public to constitute a commercial advertisement. Accordingly, SteelHouse has not adequately pled false advertising based on this statement. See TransFresh, 862 F. Supp. 2d at 1017-20. Third, SteelHouse alleges that “[i]n 2015, Criteo also claimed that its click through rate is seven times the industry average.” (Dkt. 21 at 31 ¶ 19.) Again, SteelHouse fails to allege who made this statement, where it was made, and to whom it was made. Nor does SteelHouse allege why this statement is false or misleading, or Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 21 of 35 Page ID #:429 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses plead facts showing it was sufficiently disseminated to the relevant purchasing public to constitute a commercial advertisement. SteelHouse has not adequately pled false advertising based on this statement. See TransFresh, 862 F. Supp. 2d at 1017-20. Fourth, SteelHouse alleges that Jean-Baptiste Rudelle stated in 2014 that Criteo’s “click through rate is on average ‘3 or 4 times higher than the typical click through rate you would see in the internet.’” (Dkt. 21 at 31 ¶ 19.) SteelHouse fails, however, to allege why this statement is false or misleading or plead facts showing it was sufficiently disseminated to the relevant purchasing public to constitute a commercial advertisement. Accordingly, SteelHouse has not adequately pled false advertising based on this statement. See TransFresh, 862 F. Supp. 2d at 1017-20. Fifth, SteelHouse alleges that “Criteo’s website currently claims that ‘marketers using our platform have seen . . . average click-through rates of over 25%,” with some clients seeing “up to [a] 203% increase in click through rates.” (Dkt. 21 at 31 ¶ 19.) SteelHouse fails, however, to allege why this statement is false or misleading. Accordingly, SteelHouse has not adequately pled false advertising based on this statement. See TransFresh, 862 F. Supp. 2d at 1017-20. 2. SteelHouse Failed To State A § 17500 False Advertising Claim California Business & Professions Code section 17500 prohibits a business from disseminating “any statement ‘which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.’” Mangindin v. Wash. Mut. Bank, 637 F. Supp. 2d 700, 709 (N.D. Cal. 2009) (citation omitted). a. SteelHouse Failed To Adequately Allege That Criteo Made False Or Misleading Statements As with the Lanham Act, to adequately plead falsity under § 17500, a plaintiff must plead facts showing that either the defendant’s statements: (1) are literally false; or (2) misled, confused, or deceived the public. 637 F. Supp. 2d at 709. Here, in support of its § 17500 claim, SteelHouse relies on the same deficient allegations Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 22 of 35 Page ID #:430 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses underlying its Lanham Act claim. Thus, SteelHouse fails to allege falsity under § 17500 for the same reasons it fails to do so under the Lanham Act. b. SteelHouse Failed To Adequately Allege Criteo Knew Its Statements Were False Or Misleading “To plead a claim for false advertising under [§ 17500], a plaintiff must allege that a defendant publicly disseminated advertising that [is] false or misleading, and which the defendant knew or reasonably should have known was untrue or misleading.” New Show Studios LLC, 2014 WL 2988271, at *17. SteelHouse does not allege that Criteo knew, or even that Criteo should have known, that its click count numbers were inflated. SteelHouse’s failure to do so is not surprising because, as discussed, SteelHouse failed to adequately plead facts showing Criteo inflated its click count numbers. c. SteelHouse Failed To Allege That It Relied on Criteo’s Allegedly False Advertisements To plead a § 17500 claim, SteelHouse must allege it “relied on [Criteo]’s purported misrepresentation and suffered economic injury as a result.” Guttman, 2015 WL 7283024, at *3, *5 (granting motion to dismiss where plaintiff failed to allege actual reliance). SteelHouse does not allege it relied on any allegedly false statement made by Criteo. Instead, SteelHouse alleges that “Criteo’s statements regarding its high click count have deceived, or are intended to deceive, actual and potential customers of Criteo.” (Dkt. 21 at 35 ¶ 29.) This is not sufficient to allege standing to bring a § 17500 claim. SteelHouse was required to allege its own reliance. The § 17500 claim should be dismissed with prejudice. 3. SteelHouse Failed To State A UCL Claim The UCL prohibits unlawful, unfair or fraudulent business acts or practices. Joseph v. Kaye, 2016 WL 3677142, at *9 (C.D. Cal. July 7, 2016) (citation omitted). Here, SteelHouse attempts to allege a UCL claim under the unlawful and fraudulent act prongs. (Dkt. 21 at 40 ¶¶ 54-59.) SteelHouse’s unlawful prong UCL Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 23 of 35 Page ID #:431 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses claim fails, however, because it has not adequately pled any of its other four counterclaims, as discussed above and below. The fraud prong UCL claim also fails because SteelHouse has not adequately pled that Criteo engaged in fraudulent conduct. See Eckler v. Wal-Mart Stores, Inc., 2012 WL 5382218, at *5 (S.D. Cal. Nov. 1, 2012) (applying Rule 9(b) to UCL claim under fraudulent act prong); see also Grodzitsky v. Am. Honda Motor Co., 2013 WL 2631326, at *4 n.4 (C.D. Cal. June 12, 2013) (Wilson, J. ) (“Although not all . . . UCL claims are subject to Rule 9(b)‘s heightened pleading requirements, allegations of fraudulent omissions-like the ones here-are.”). SteelHouse’s failure to plead actual reliance on any alleged conduct by Criteo is also fatal to its UCL claim. a. SteelHouse Failed To Allege Unlawful Conduct “A defendant cannot be liable under § 17200 for committing ‘unlawful business practices’ without having violated another law. . . . If the [underlying] claim is dismissed, then there is no ‘unlawful’ act upon which to base[] the derivative [UCL] claim.” Ingels v. Westwood One Broad. Servs., Inc., 129 Cal. App. 4th 1050, 1060 (2005) (third alteration in original) (citation omitted); Heartland, 2014 WL 5812294, at *7 (dismissing UCL claim under unlawful prong where court found underlying Lanham Act and § 17500 claims insufficiently pled). Here, SteelHouse’s allegation of unlawful conduct is premised on its other four counterclaims. (Dkt. 21 at 40 ¶ 56.) However, as discussed above and below, SteelHouse has not adequately pled any of these claims. As such, its derivative unlawful prong UCL claim should be dismissed with prejudice. b. SteelHouse Failed To Adequately Allege Fraud In order to plead a fraud-based UCL claim, SteelHouse must “set forth ‘the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation.’” Watson v. Bank of Am., N.A., 2016 WL 3552061, at *17 (S.D. Cal. June 30, 2016). Failure to “allege the who, what, when, and where concerning the misrepresentations and/or fraudulent conduct” is fatal to a Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 24 of 35 Page ID #:432 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses fraud prong UCL claim. Id. Here, SteelHouse’s fraud prong UCL claim is based on its conclusory allegations that Criteo “generates fake clicks” or is “counterfeiting clicks” to inflate its click count numbers. However, as discussed above, SteelHouse failed to plead facts, as opposed to conclusions, supporting these conclusory allegations. Accordingly, its fraud-based UCL claim should be dismissed. c. SteelHouse Did Not Allege Its Own Reliance To establish standing to bring a fraud-based UCL claim, SteelHouse must plead and prove its “own reliance - not the reliance of third parties.” O’Connor, 58 F. Supp. 3d at 1001-02 (emphasis in original). This standing requirement extends to “claims under the unlawful prong . . . that are based . . . on allegations of misrepresentation and deception.” Guttman, 2015 WL 7283024, at *3; see also Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350, 1363-64 (2010) (affirming demurrer of a UCL claim under the unlawful prong when plaintiff failed to plead actual reliance). As discussed above, SteelHouse does not plead that it relied on any allegedly false or misleading statement made by Criteo. Accordingly, SteelHouse’s UCL claim should be dismissed with prejudice. 4. SteelHouse Failed To State A Contract Interference Claim To state a claim for intentional interference with contractual relations, SteelHouse is required to plead facts showing: “(1) a valid contract between [SteelHouse] and a third party; (2) [Criteo]’s knowledge of this contract; (3) [Criteo]’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” Pacific Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal. 3d 1118, 1126 (1990). SteelHouse failed to do so for several reasons. a. SteelHouse Failed To Allege A Valid Contractual Relationship Existed Between Itself And A Third Party To adequately plead an intentional interference with contractual relations Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 25 of 35 Page ID #:433 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses claim, “counterclaimants must identify the third party or parties with whom they contracted, and the nature and extent of their relationship with that party or parties.” UMG Recordings, Inc., 117 F. Supp. 3d at 1115. Failure to do so “requires dismissal of the claim, because ‘to understand whether [counterclaimants’] performance was disrupted require[s] the district court to determine what contractual rights [they] possessed.’” Id. (quoting United Nat’l Maint., Inc. v. San Diego Convention Ctr., Inc., 766 F.3d 1002, 1009 (9th Cir. 2014)). Here, SteelHouse merely alleges that Criteo’s alleged conduct caused SteelHouse to “los[e] actual customers with whom it had contractual relationships.” (Dkt. 21 at 41 ¶ 65.) SteelHouse fails to identify in any way who those customers were, let alone “the nature and extent” of SteelHouse’s supposed contractual relationships with those unidentified customers. UMG Recordings, Inc., 117 F. Supp. 3d at 1115. Accordingly, SteelHouse’s intentional interference with contractual relations claim should be dismissed with prejudice. Id. (dismissing intentional interference with contractual relations claim where counterclaimants simply alleged they had “Airline Contracts,” but “supply no facts concerning the identity of any third party with whom they had contracted”); In re Centerstone Diamonds, Inc., 2014 WL 1330186, at *6 (Bankr. C.D. Cal. Apr. 2, 2014) (dismissing intentional interference with contractual relations claim where the “Complaint states only that ‘there were valid contractual relationships that existed between the Debtors and multiple customers and consignees’” but “does not allege facts identifying a specific contract, the parties thereto, or the substance and date thereof”). b. SteelHouse Failed To Allege That Criteo Knew Of The Unspecified Contracts With Which It Allegedly Interfered To plead an intentional contract interference claim, SteelHouse was required to plead that Criteo knew of the contracts with which it allegedly interfered. See Havensight Capital LLC, 2015 WL 993334, at *1-2. SteelHouse failed to allege the requisite facts and the claim should be dismissed. Id. (plaintiff did not allege facts Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 26 of 35 Page ID #:434 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses “demonstrating the requisite knowledge” of contractual relationships, where plaintiff only “makes bare legal conclusions that [d]efendant[s] knew about [p]laintiff’s business relationships without pleading any actual facts to support that claim”). c. SteelHouse Failed To Allege That Any Contractual Obligation Owed To SteelHouse Was Breached Or Disrupted As A Result Of Criteo’s Alleged Conduct To plead a claim for intentional inference with contractual relations, SteelHouse was required to plead actual breach or disruption of an existing contractual relationship. See Pac. Gas & Elec. Co., 50 Cal. 3d at 1126. Here, SteelHouse vaguely alleges that it “lost” customers due to Criteo’s alleged conduct. SteelHouse fails, however, to allege facts showing any contractual relationship between SteelHouse and a third party was actually breached or disrupted. Thus, SteelHouse’s intentional interference with contract claim should be dismissed. See, e.g., Harrison Ventures, LLC v. Alta Mira Treatment Ctr., LLC, 2010 WL 1929566, at *5 (N.D. Cal. May 12, 2010) (“When, as here, the complaint fails to allege an underlying breach, no claim for intentional interference can be stated.”); Hiraide v. VaST Sys. Tech. Corp., 2009 WL 2390352, at *6 (N.D. Cal. Aug. 3, 2009) (same); Heartland, 2014 WL 5812294, at *8 (dismissing contract interference claim while plaintiff alleged and identified “merchants who have left [plaintiff] for [defendant]” but plaintiff “does not allege that any of its contracts with any former merchant have actually been breached, much less breached because of interference by [defendant]” (citation omitted)); Yagman, 2013 WL 1287409, at *5 (interference claim fails where the complaint “fails to set forth the terms of the agreement, explain exactly which terms were breached, or allege plausible facts indicating that [defendant’s] actions were intentionally designed to cause that breach.”). 5. SteelHouse Failed To Allege A Claim For Intentional Interference With Prospective Economic Advantage To state a claim for intentional interference with prospective economic advantage, SteelHouse was required to allege facts showing: (1) an economic Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 27 of 35 Page ID #:435 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses relationship between SteelHouse and some third party, with the probability of future economic benefit to the plaintiff; (2) Criteo’s knowledge of the relationship; (3) intentional and wrongful conduct designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to SteelHouse proximately caused by Criteo’s wrongful conduct. Korea Supply Co. v. Lockheed Martin Co., 29 Cal. 4th 1134, 1153 (Cal. 2003). SteelHouse failed to do so for several reasons. a. SteelHouse Failed To Identify Specific Economic Relationships That Were Allegedly Disrupted As with claims for contract interference, a claimant alleging “interference with prospective business advantage must identify with particularity the relationships or opportunities with which [d]efendant is alleged to have interfered.” UMG Recordings, Inc., 117 F. Supp. 3d at 1118 (citation omitted); Damabeh v. 7-Eleven, Inc., 2013 WL 1915867, at *10 (N.D. Cal. May 8, 2013) (“Requiring the plaintiff to identify a particular relationship or opportunity with which the defendant’s conduct is alleged to have interfered serves the purpose of ensuring that there is a sufficient ‘factual basis’ from which it may be inferred that there was a benefit that ‘the plaintiff was likely to have . . . received’ and that the defendant’s conduct interfered with plaintiff’s receipt of this benefit.” (citation omitted)). Indeed, courts routinely dismiss tortious interference claims when the plaintiff fails to specify particular business relationships with which the defendant interfered. See, e.g., Damabeh, 2013 WL 1915867, at *10; F.M. Tarbell Co. v. A&L Partners, Inc., 2011 WL 1153539, at *4 (C.D. Cal. Mar. 23, 2011) (allegations that plaintiff “had and have existing business relationships or prospective business relationships which had the probability of future economic benefit and/or advantage” insufficient (citation omitted)). Here, SteelHouse alleges it “maintained continuing economic relationships with numerous e-tailers that probably would have continued to result in future economic benefit to SteelHouse.” (Dkt. 21 at 41 ¶ 68.) SteelHouse fails, however, to “identify with particularity” any of these supposed business relationships or Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 28 of 35 Page ID #:436 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses opportunities. UMG Recordings, Inc., 117 F. Supp. 3d at 1118. Accordingly, SteelHouse’s interference with prospective economic advantage claim should be dismissed. See, e.g., Damabeh, 2013 WL 1915867, at *10 (allegations that defendant interfered “with Plaintiff’s employees and customers” insufficient); Reudy v. Clear Channel Outdoors, Inc., 693 F. Supp. 2d 1091, 1123 (N.D. Cal. 2010) (dismissing claim where “Plaintiffs fail[ed] to allege a specific economic relationship with any particular ad agency or advertiser with which it ha[d] an existing economic relationship and with which Defendants have interfered”); Heartland, 2014 WL 5812294, at *9 (dismissing claim where plaintiff “does not allege any particular prospective economic relationship, nor the ‘who, what, when, where, and how’ the interference occurred” (citation omitted)); Seoul Laser Dieboard Sys. Co. v. Serviform, S.r.l., 957 F. Supp. 2d 1189, 1201 (S.D. Cal. 2013) (dismissing claim where plaintiff “fails to allege that it was likely to receive an economic benefit from a specific third party, and it fails to identify a specific opportunity lost”). b. SteelHouse Failed To Allege Facts Showing Criteo Knew Of The Unspecified Prospective Business Relationships SteelHouse’s intentional interference with prospective economic advantage claims should also be dismissed because SteelHouse fails to allege facts demonstrating that Criteo knew of the unspecified business relationships with which it allegedly interfered. See, e.g., Havensight, 2015 WL 993334, at *2 (allegation that defendants “‘either knew, or had constructive notice of the fact that [plaintiff] was engaged in multiple business relationship [sic] with soccer store owners . . .” insufficient where plaintiff only “makes bare legal conclusions that [d]efendant[s] knew about [p]laintiff’s business relationships without pleading any actual facts to support that claim” (citation omitted)) c. SteelHouse Failed To Adequately Allege That Criteo Engaged In Independently Wrongful Conduct A “plaintiff seeking to recover for alleged interference with prospective Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 29 of 35 Page ID #:437 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses economic relations has the burden of pleading and proving that the defendant’s interference was wrongful ‘by some measure beyond the fact of the interference itself.’” Della Penna, 11 Cal. 4th at 392-93. The allegedly interfering conduct must be an “independently actionable” cause of action. Korea Supply Co., 29 Cal. 4th at 1158-59 (“[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.”); see also UMG Recordings, Inc., 117 F. Supp. 3d at 1117 (“Because counterclaimants have not adequately pled a separate cause of action . . . as the basis of independently wrongful conduct, they fail to allege a cause of action for interference with prospective business relations.” (alterations in original omitted) (citation omitted)). Here, SteelHouse alleges that Criteo interfered with SteelHouse’s prospective business relationships by: (1) making “false and misleading statements in commercial advertising” concerning Criteo’s own “click count numbers”; and (2) making “false and misleading statements about SteelHouse’s attribution method to SteelHouse’s e-tail clients, and wrongly accus[ing] SteelHouse of fraud.” (Dkt. 21 at 42 ¶¶ 70-71.) Neither allegation satisfies SteelHouse’s burden of pleading independently wrongful conduct. First, as shown above, SteelHouse failed to adequately plead a Lanham Act, UCL, or § 17500 claim based on conclusory allegations that Criteo made “false and misleading statements in commercial advertising” about its “click count numbers.” Second, SteelHouse does not identify, let alone adequately plead, a separate cause of action based on its allegation that Criteo “intentionally made false and misleading statements about SteelHouse’s attribution method to SteelHouse’s e-tail clients, and wrongly accused SteelHouse of fraud.” (Dkt. 21 at 42 ¶ 71.) To the extent SteelHouse was attempting to allege trade libel, it failed to do so. To state a trade libel claim, SteelHouse would have had to allege Criteo made a false statement concerning SteelHouse that played a material and substantial part in Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 30 of 35 Page ID #:438 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses inducing others not to deal with SteelHouse and caused direct pecuniary loss to SteelHouse. See Piping Rock Partners, Inc. v. David Lerner Assocs., Inc., 946 F. Supp. 2d 957, 981 (N.D. Cal. 2013); Robinson v. HSBC Bank USA, 732 F. Supp. 2d 976, 984-85 (N.D. Cal. 2010); First Advantage Background Servs. Corp. v. Private Eyes, Inc., 569 F. Supp. 2d 929, 938 (N.D. Cal. 2008) (“[A] cause of action for damages for trade libel requires pleading and proof of special damages in the form of pecuniary loss.” (citation omitted)). While SteelHouse alleges three statements purportedly made by Criteo to unidentified SteelHouse clients concerning SteelHouse’s misconduct (Dkt. 21 at 35- 36 ¶¶ 31-34), those allegations do not state a trade libel claim for several reasons. First, SteelHouse does not allege a single fact demonstrating the falsity of Criteo’s alleged statements that SteelHouse’s click count numbers were inflated - which is all SteelHouse alleges Criteo said in these three statements to unidentified clients. See Implant Direct Sybron Int’l v. Zest IP Holdings, LLC, 2012 WL 1969292, at *6 (S.D. Cal. June 1, 2012) (dismissing trade libel claim where plaintiff does not allege why statement was false). Indeed, SteelHouse does not even deny that it was taking credit for sales attributable to Criteo, thereby inflating SteelHouse’s own click count numbers; SteelHouse merely asserts its misconduct was “unintentional.” (Dkt. 21 at 36 ¶ 35.) Second, to allege a trade libel claim, SteelHouse must allege facts showing that Criteo knew its statements were false or had “some serious subjective doubt about the truth of the statement[s].” Melaleuca, Inc. v. Clark, 66 Cal. App. 4th 1344, 1350 (1998). While SteelHouse alleges in conclusory fashion that “Criteo knew that its statements were false and/or misleading,” SteelHouse does not allege a single fact showing that Criteo knew its alleged statements regarding SteelHouse’s misconduct were false or that it had some serious subjective doubt about the truth of the statements. To the extent Criteo made such statements, it did so with the belief that such statements were factually accurate. Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 31 of 35 Page ID #:439 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses Third, SteelHouse does not allege facts showing that any of the unidentified SteelHouse customers to whom Criteo purportedly made the three allegedly false statements stopped doing business with SteelHouse as a result of Criteo’s statements. Thus, SteelHouse has not pled that any statement by Criteo “played ‘a material and substantial part in inducing others not to deal with [SteelHouse].’” Piping Rock Partners, Inc., 946 F. Supp. 2d at 981 (citation omitted). Finally, to adequately allege special damages to state a trade libel claim, SteelHouse needs to “specifically identify the customers or transactions lost as a result of the disparagement; a general decline in business will not suffice.” Implant Direct, 2012 WL 1969292, at *6 (S.D. Cal. June 1, 2012); Mann v. Quality Old Time Serv., Inc., 120 Cal. App. 4th 90, 109 (2004) (same). As noted, SteelHouse did not allege the identity of a single customer or transaction lost due to any Criteo act. Thus, because SteelHouse has not adequately alleged independently wrongful conduct, its interference with prospective economic advantage claims should be dismissed. UMG Recordings, Inc., 117 F. Supp. 3d at 1116; Zef Sci., Inc. v. Shimadzu Sci. Instruments, Inc., 2016 WL 1255787, at *6 (S.D. Cal. Mar. 31, 2016) (dismissing tortious interference claim based on alleged antitrust violations where plaintiff “did not factually allege an antitrust injury as required for its claims under the Sherman Act, Cartwright Act, and UCL”); Gatsinaris v. ART Corp. Sols. Inc., 2015 WL 4208595, at *16 (C.D. Cal. July 10, 2015) (dismissing tortious interference claims premised on Cartwright Act claim where plaintiff failed to adequately allege necessary elements including injury). B. SteelHouse’s Affirmative Defenses Should Be Stricken A motion to strike under Federal Rule of Civil Procedure 12(f) is well taken when it has “the effect of making the trial of the action less complicated, or ha[s] the effect of otherwise streamlining the ultimate resolution of the action.” State of Cal. ex rel. State Lands Comm’n v. United States, 512 F. Supp. 36, 38 (N.D. Cal. 1981). Affirmative defenses should be stricken when the defendant fails to allege facts Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 32 of 35 Page ID #:440 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses satisfying the pleading requirements of Federal Rule of Civil Procedure 8 as articulated in Iqbal and Twombly. See Spann v. J.C. Penney Corp., 2015 WL 11072165, at *3 (C.D. Cal. July 6, 2015) (“‘The court can see no reason why the same principles applied to pleading claims should not apply to the pleading of affirmative defenses which are also governed by Rule 8.’” (citation omitted)); Figueroa v. Stater Bros. Mkts., Inc., 2013 WL 4758231, at *3 (C.D. Cal. Sept. 3, 2013) (applying Twombly and Iqbal to affirmative defenses). “Under the Iqbal standard, the burden is on the defendant to proffer sufficient facts and law to support an affirmative defense, and not on the plaintiff to gamble on interpreting an insufficient defense in the manner defendant intended.” CTF Dev., Inc. v. Penta Hosp., LLC, 2009 WL 3517617, at *8 (N.D. Cal. Oct. 26, 2009) (emphasis in original). Accordingly, to adequately plead its affirmative defenses, SteelHouse was required: (1) to plead facts that support its affirmative defenses, see, e.g., Vogel v. OM ABS, Inc., 2014 WL 340662, at *2 (C.D. Cal. Jan. 30, 2014); and (2) to inform Criteo as to which claim(s) each affirmative defense applies, see, e.g., Gonzalez v. Preferred Freezer Servs., LBF, LLC, 2012 WL 2602882, at *3 (C.D. Cal. July 5, 2012) (striking affirmative defenses where the defendant failed “to link its . . . defenses to the particular claims for relief to which it purportedly applies. . . .”). Here, SteelHouse failed to allege facts supporting any of its twelve affirmative defenses. Each of SteelHouse’s affirmative defenses consists of a single sentence that merely names the defense. (See Dkt. 21 at 23-25 ¶¶ 116-27.) SteelHouse also failed to link any affirmative defense with the claim or claims to which it supposedly applies. (Id.) Accordingly, all twelve of SteelHouse’s affirmative defenses are “factually insufficient defense[s]” that should be stricken. Vogel, 291 F.R.D. at 441- 42 (striking as “factually insufficient defenses” where defendant “provides no grounds for the defense” and where “every affirmative defense suffers from the same malady”); see also Fed. R. Civ. P. 12(f). Seven of SteelHouses’s affirmative defenses should also be stricken because Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 33 of 35 Page ID #:441 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses they are not actually affirmative defenses. See Vogel, 2014 WL 340662, at *3. “Affirmative defenses plead matters extraneous to the plaintiff’s prima facie case, which deny the plaintiff’s right to recover even if the allegations of the complaint are true.” J & J Sports, 2010 WL 5173717, at *2. An assertion that a plaintiff has not and cannot meet its burden of proof is not an affirmative defense. Id. SteelHouse’s First Affirmative Defense (i.e., Failure To State A Claim Upon Which Relief Can Be Granted) alleges “Criteo’s claims are barred, in whole or in part, because it has failed to state a claim for which relief can be granted.” (Dkt. 21 at 23 ¶ 116.) This “fails as a matter of law because it is not an affirmative defense, but rather a failure of Plaintiff’s prima facie case.” Vogel, 2014 WL 340662, at *2. SteelHouse’s Fourth Affirmative Defense (i.e., Justification) alleges that “Criteo’s claims are barred, in whole or in part, because SteelHouse was engaged in lawful conduct.” (Dkt. 21 at 24 ¶ 119.) This assertion is not an actual affirmative defense because it is merely an assertion that Criteo will not be able to prove that SteelHouse engaged in unlawful conduct. See J & J Sports, 2010 WL 5173717, at *2-3 (striking a defense of “reasonable, just, and proper acts” because it merely tries to “demonstrate[] that plaintiff has not met its burden of proof”). SteelHouse’s Sixth Affirmative Defense (i.e., Intervening Causes) asserts that “the damages claimed by Criteo were caused by or made worse by intervening causes.” (Dkt. 21 at 24 ¶ 121.) Again, this assertion is not an affirmative defense. It is simply an assertion that Criteo “has not or cannot prove the element of causation.” J & J Sports, 2010 WL 5173717, at *2. SteelHouse’s Seventh Affirmative Defense (i.e., Lack Of Standing) asserts that “Criteo’s claims are barred, in whole or in part, because Criteo lacks standing to bring forth its claims.” (Dkt. 21 at 24 ¶ 122.) “[S]tanding is an element of plaintiff’s prima facie case” and “is properly addressed through denial or a motion to dismiss,” not as an affirmative defense. See Dodson v. CSK Auto, Inc., 2013 WL 3942002, at *4 (E.D. Cal. July 30, 2013). Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 34 of 35 Page ID #:442 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25 Criteo S.A.’s Motion To Dismiss Counterclaims And Strike Affirmative Defenses SteelHouse’s Eighth Affirmative Defense (i.e., Lack Of Causation) asserts that “SteelHouse did not directly or proximately cause or contribute to any injury or damage alleged by Criteo.” (Dkt. 21 at 24 ¶ 123.) Again, this assertion is not an affirmative defense and is just “another way of asserting that Plaintiff has not or cannot prove the element of causation.” J & J Sports, 2010 WL 5173717, at *2. SteelHouse’s Ninth Affirmative Defense (i.e., Speculative Damages) asserts that “any damages claimed by Criteo are speculative.” (Dkt. 21 at 24 ¶ 124.) Again, this “affirmative defense” merely alleges Criteo cannot prove its case, and is not an actual affirmative defense. See G & G Closed Circuit Events, LLC v. Nguyen, 2010 WL 3749284, at *5 (N.D. Cal. Sept. 23, 2010) (striking affirmative defense labeled “lack of damages” as “not [an] affirmative defense[]”); J & J Sports, 2010 WL 5173717, at *3 (striking affirmative defense labeled “no entitlement to damages’”). SteelHouse’s Tenth Affirmative Defense (i.e., No Punitive Damages) alleges “punitive damages are not available.” (Dkt. 21 at 25 ¶ 125.) Criteo bears the burden of proving its entitlement to punitive damages. This “affirmative defense” is merely an assertion that Criteo cannot prove its case, not an actual affirmative defense. See G & G Closed Circuit Events, LLC, 2010 WL 3749284, at *5 (striking affirmative defense labeled “‘lack of allegations entitling Plaintiff to punitive damages’” as “not [an] affirmative defense[]” but “merely denials of the allegations and claims set forth in the Complaint”); J & J Sports, 2010 WL 5173717, at *3 (same). Thus, all twelve of SteelHouse’s affirmative defenses should be stricken. IV. CONCLUSION For the foregoing reasons, Criteo respectfully requests that this Court grant Criteo’s motion to dismiss SteelHouse’s counterclaims and to strike SteelHouse’s affirmative defenses. DATED: August 15, 2016 Respectfully submitted, By: /s/ Jack P. DiCanio JACK P. DICANIO SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Attorneys for Plaintiff and Counter-Defendant Criteo S.A. Case 2:16-cv-04207-SVW-MRW Document 23 Filed 08/15/16 Page 35 of 35 Page ID #:443 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [PROPOSED] ORDER GRANTING MOTION TO DISMISS AND STRIKE UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION STEEL HOUSE, INC., Counter-Claimant, v. CRITEO S.A., Counter-Defendant. ) ) ) ) ) ) ) ) ) ) ) CASE NO.: 2:16-cv-4207-SVW-MRW [PROPOSED] ORDER GRANTING CRITEO S.A.’S MOTION TO DISMISS COUNTERCLAIMS AND STRIKE AFFIRMATIVE DEFENSES Case 2:16-cv-04207-SVW-MRW Document 23-1 Filed 08/15/16 Page 1 of 2 Page ID #:444 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 [PROPOSED] ORDER GRANTING MOTION TO DISMISS AND STRIKE The Court, having considered the Motion to Dismiss Counterclaims and Strike Affirmative Defenses, filed by Plaintiff and Counter-Defendant Criteo S.A. (“Criteo”), and all papers filed in support thereof and in opposition thereto, and the argument of counsel, and good cause appearing, hereby GRANTS the Motion. Defendant and Counter-Complainant Steel House Inc.’s (“SteelHouse”) Counter Complaint is dismissed in its entirety, and SteelHouse’s Affirmative Defenses to Criteo’s Complaint are stricken from SteelHouse’s Answer. IT IS SO ORDERED. DATED: __________ By: HONORABLE STEPHEN V. WILSON UNITED STATES DISTRICT COURT JUDGE Case 2:16-cv-04207-SVW-MRW Document 23-1 Filed 08/15/16 Page 2 of 2 Page ID #:445