Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-02471/USCOURTS-azd-2_06-cv-02471-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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28 1 This court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)

in that plaintiff is an Arizona corporation with its principal place of business

in Arizona, and defendant is a Delaware corporation with its principal place of

business in Illinois; and the amount in controversy allegedly exceeds $75,000.00.

Co. (doc. 1) at 1-2, ¶¶ 1-3. 

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Harris Technical Sales, Inc., )

an Arizona corporation, )

)

Plaintiff, ) No. CIV 06-2471-PHX-RCB

)

vs. ) O R D E R

)

Eagle Test Systems, Inc., )

a Delaware corporation, )

)

Defendant. ) )

In this diversity action,1 plaintiff, Harris Technical Sales,

Inc., alleges three state law claims against defendant, Eagle Test

Systems, Inc.: (1) breach of contract; (2) unjust enrichment; and

(3) a demand for an accounting. Currently pending before the court

are two motions by plaintiff, both of which are directed at

defendant's answer. In the first motion, brought pursuant to Fed.

Case 2:06-cv-02471-RCB Document 60 Filed 06/29/07 Page 1 of 8
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2 Plaintiff's reliance upon Rule 7(b) is questionable because that Rule

simply sets forth the form which motions must take generally. It does not provide

an independent basis for making a motion. 

3 Although Illinois law does not require verification of all pleadings,

section 2-605(a) of the Illinois Code of Civil Procedure does provide that "[i]f

any pleading is so verified, every subsequent pleading must also be verified,

unless verification is excused by the court." 735 ILL. COMP. STAT. 5/2-605 (West

2007). Here, plaintiff's complaint was verified. Thus, as will be seen, plaintiff

is insisting that defendant's answer be verified in accordance with this statute.

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R. Civ. P. 7(b),2 plaintiff is seeking to compel defendant to

verify its answer. In its second motion, brought pursuant to Fed.

R. Civ. P. 12(f), plaintiff is moving to strike defendant's

affirmative defenses "as being insufficiently pled[.]" Mot. (doc.

10) at 1. For the reasons set forth below, the court finds no

merit to either of these motions.

Background

The contract which is the subject of this action includes a

paragraph designated "[c]onflicts[,]" which reads as follows:

"Should any conflicts arise concerning this agreement which cannot

be resolved by mutual agreement, action may be brought to resolve

the conflict according to the laws of the State of Illinois,

U.S.A." Co. (doc. 1), exh. A thereto (doc. 4) at 7, ¶ 11. Invoking

this provision, plaintiff contends that Illinois procedural and

substantive law apply here. Thus, relying upon the Illinois Code

of Civil Procedure plaintiff reasons that because it filed a

verified complaint, defendant likewise is required to file a

verified answer.3 Because defendant did not verify its answer,

plaintiff is moving to compel verification. Also in reliance upon

the Illinois Code of Civil Procedure, plaintiff is further moving

to strike defendant's affirmative defenses "as being insufficiently

pled" under section 2-613 of that Code. Mot. (doc. 10) at 1. The

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court will address each of these motions in turn. 

Discussion

I. Verification

Defendant's response is terse and, as will be more fully

discussed herein, accurate. "Under the doctrine of Erie R.R. v.

Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), a

federal court sitting in diversity must apply the Federal Rules of

Civil Procedure." Knievel v. ESPN, 393 F.3d 1068, 1073 (9th Cir.

2005). This is so, as the Ninth Circuit has explained, and

defendant is quick to point out, "irrespective of the source of

subject matter jurisdiction, and irrespective of whether the

substantive law at issue is state or federal." Champion Produce,

Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1027 (9th Cir.

2003) (internal quotation marks and citation omitted). Defendant

asserts that because its answer complies with Fed. R. Civ. P. 8,

which sets forth "general rules of pleading," and because that

Rules does not require verification, the court should deny

plaintiff's motion to verify. 

Asserting that "[d]efendant's analysis is flawed[,]"

plaintiff's response is two-fold. Reply (doc. 16) at 1. First,

based upon the contract's "conflicts" provision quoted above,

plaintiff contends that defendant is "estop[ped]" from arguing that

the Federal Rules of Civil Procedure apply rather than the Illinois

Code of Civil Procedure. See id. at 2. Second, plaintiff is

taking the position that "[t]he Erie Doctrine . . . does not

preclude local procedural law [i.e., Illinois] from being applied

in federal court, as with statutes of limitations." Id. (emphasis

in original). Plaintiff adds that "[b]ecause Illinois civil

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procedure adds to and does not detract from federal pleading

requirements, the instant case is one in which state and Federal

Rules can exist side by side . . . each controlling its own

intended sphere of coverage without conflict." Id. at 2-3 (quoting

Walker v. Armco Steel Corp., 446 U.S. 740, 752, 100 S.Ct. 1978,

1986, 64 L.Ed.2d 659 (1980)) (internal quotation marks omitted). 

Plaintiff’s argument, not defendant's, is the one which is flawed.

First of all, plaintiff's contract based estoppel argument

flies in the face of the well-settled principle that "[a] federal

court follows federal procedural law and, where it applies, state

substantive law." Kohlrautz v. Oilmen Participation Corp., 441

F.3d 827, 830 (9th Cir. 2006) (citing, inter alia, Erie, 304 U.S.

64, 58 S.Ct. 817). Second, although plaintiff is correct that the

Erie doctrine would not prevent this court from applying a state

statute of limitations, that is because for Erie "purposes . . . ,

statutes of limitations in diversity cases are considered

substantive[.]" PAI Corporation v. Integrated Science Solutions,

Inc., 2007 WL 1229329, at *4 (N.D.Cal. April 25, 2007) (citations

omitted) (emphasis added). This court is not being asked to apply

a state statute of limitations, however. While the distinction

between substantive and procedural can sometimes become blurred,

verification of a pleading easily falls into the latter category. 

And, according to Fed. R. Civ. P. 11(a), "[e]xcept when otherwise

specifically provided by rule or statute, pleadings need not be

verified[.]" Fed. R. Civ. P. 11(a). Plaintiff has not pointed to,

nor is the court aware of any, federal rule or federal statute

mandating verification of answers. Therefore, the court declines

to impose that Illinois state law procedural requirement on this

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5 For accuracy, the court notes that a close reading of section 2-613

reveals that it is not quite as broad as plaintiff suggests by this partial quote.

What must be "plainly set forth in the answer or reply[]" is "any ground or

defense, whether affirmative or not, which if not expressly stated in the pleading,

would be likely to take the opposite party by surprise[.]" 735 ILL. COMP. STAT.5/2-

613 (West 2007) (emphasis added). 

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federal diversity action. Indeed to do so would run afoul of Erie

and its progeny. Consequently, the court DENIES plaintiff's motion

to compel defendant to verify its answer. 

II. Affirmative Defenses

Plaintiff is again relying upon the mistaken belief that

because the "conflicts" provision of the subject contract provides

that Illinois law governs, that means that Illinois procedural law

governs, even though this is a federal court diversity action. In

particular, plaintiff is relying upon part of the Illinois Code of

Civil Procedure which requires that "[t]he facts constituting any

affirmative defense, . . . must be plainly set forth in the

answer[.]"5 735 ILL. COMP. STAT. 5/2-613(d) (West 2007) (emphasis

added). Noting that "[d]efendant has not provided one fact in

support of any of its nine affirmative defenses[,]" plaintiff

asserts that those "boilerplate . . . defenses are meaningless and

insufficient . . . under Illinois Law." Mot. (doc. 10) at 1. Thus,

plaintiff is seeking to have the court strike all nine of those

defenses. 

As with plaintiff's motion to compel verification, defendant's

position is that the Illinois Code of Civil Procedure, and its

arguably heightened pleading standards for affirmative defenses,

does not apply to this federal court action. This argument finds

support in Andresen v. Diorio, 349 F.3d 8 (1st Cir. 2003). There,

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relying upon the landmark Supreme Court decision of Hanna v.

Plumer, 380 U.S. 460, 466-74, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965)),

the Court explained that "under standard Erie doctrine, state

pleading requirements, so far as they are concerned with the degree

of detail to be alleged, are irrelevant in federal court even as to

claims arising under state law." Id. at 17 (other citations

omitted) (emphasis added). Thus, the Andresen Court agreed with

plaintiff that he was not subject to Massachusetts' heightened

pleading standard for defamation in his federal court action. See

id. In so holding, the First Circuit found that Leatherman v.

Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S.

163, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993)), "len[t] general

support to [plaintiff's] position by emphasizing the general

primacy in federal court of Rules 8 (notice pleading) and 9

(heightened pleading only for fraud and mistake)[.]'" Id.

(citations omitted). Based upon Andresen, coupled with its belief

that its affirmative defenses comply with Rule 8, defendant asserts

that the court should deny this motion to strike as well. 

In its Reply, plaintiff reiterates its view that the Illinois

Code of Civil Procedure "'can exist side by side'" with the Federal

Rules of Civil Procedure with "'each controlling its own intended

sphere of coverage without conflict.'" Reply (doc. 17) at 3

(quoting Walker v. Armco Steel Corp., 446 U.S. 740, 752, 100 S.Ct.

1978, 1986, 64 L.Ed.2d 659 (1980)). This argument incorrectly

assumes that the Federal Rules of Civil Procedure and the Illinois

Code do not conflict in terms of pleading requirements. There is a

direct conflict though. "Illinois is a fact pleading

jurisdiction[,]" Richco Plastic v. IMS Co., 288 Ill. App.3d 782,

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681 N.E.2d 57 (1997); whereas the Federal Rules of Civil Procedure

require only notice pleading, even for affirmative defenses. 

Hernandez v. Balakian, 2007 WL 1649911, at *1 (E.D. Cal. June 1,

2007) (quoting Wyshak v. City National Bank, 607 F.2d 824, 827 (9th

Cir. 1979)) (other citation omitted)("'The key to determining the

sufficiency of pleading an affirmative defense is whether it gives

plaintiff fair notice of the defense.'"); see also Walsh v. Nevada

Dept. of Human Resources, 471 F.3d 1033, 1036 (9th Cir. 2006)

(internal quotation marks and citation omitted) ("The Federal Rules

of Civil Procedure describe a liberal system of notice pleading.")

Accordingly, this is not a situation where two different rules are

co-extensive so they can exist in harmony, such as in Walker,

supra. 

Moreover,"[f]or the purposes of Erie, pleading standards are

considered procedural." PAI Corporation, 2007 WL 1229329, at *4 

(citations omitted). And "'[w]here state law directly conflicts

with applicable rules of the Federal Rules of Civil Procedure,

federal courts must apply the Federal Rules-not state law." Id.

(quoting Clark v. Allstate Ins. Co., 106 F.Supp.2d 1016, 1018

(S.D.Cal. 2000) (citing in turn Hanna v. Plumer, 380 U.S. 460, 85

S.Ct. 1136, 14 L.Ed.2d 8 (1965)). Based upon the well-settled law

in this area, including the Erie doctrine, in Ciampi v. CCC

Information Services Inc., 2006 WL 681049, at *1 (N.D.Ill. March

10, 2006) (footnote omitted), the court chastised counsel for

"seek[ing] to engraft on the federal regime of notice pleading a

requirement of fact pleading [under Illinois law], much as though

th[at] action was pending down the street in the Circuit Court of

Cook County rather than in this District Court." Similarly, the

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court in Ursua v. Alameda County Medical Center, 2004 WL 2496135

(N.D.Cal. Nov. 4, 2004) (citations omitted), noted that the

defendant's "contention that plaintiffs ha[d] not met the pleading

requirements under state law, d[id] not help [the defendant] in

federal court." Id. at *3 n.3. 

The same is true here. Plaintiff is in federal district

court, where it elected to commence this action. "From beginning

to end, [this] diversity litigation [will be] conducted under

federal rules of procedure." Mayer v. Gary Partners & Co., Ltd.,

29 F.3d 330, 334 (7th Cir. 1994). Thus, because plaintiff has

improperly relied upon the Illinois Code of Civil Procedure as the

basis for its motion to strike, the court DENIES this motion. 

Conclusion

For the reasons set forth above, IT IS ORDERED that the motion

by plaintiff Harris Technical Sales, Inc. to compel defendant Eagle

Test Systems, Inc. to verify its answer (doc. 11) is DENIED; 

IT IS FURTHER ORDERED that the motion by plaintiff Harris

Technical Sales, Inc. to strike defendant Eagle Test Systems,

Inc.'s affirmative defense (doc. 10) is DENIED.

DATED this 29th day of June, 2007.

Copies to counsel of record

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