Report and Recommendation

Defendant’s Motion to Strike

1 Universal Health Group v. Allstate; Case No. 09-12524

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

UNIVERSAL HEALTH GROUP, Case No. 09-12524

Plaintiff, Victoria A. Roberts

vs. United States District Judge

ALLSTATE INSURANCE COMPANY, Michael Hluchaniuk

United States Magistrate Judge

Defendant.

________________________________/

REPORT AND RECOMMENDATION

DEFENDANT’S MOTION TO STRIKE OR

FOR MORE DEFINITE STATEMENT (Dkt. 31)

I. PROCEDURAL HISTORY AND PARTIES’ ARGUMENTS

District Judge Victoria A. Roberts issued an order dismissing plaintiff’s

defamation claim without prejudice and allowing plaintiff to re-file its defamation

claim under the following circumstances:

If Plaintiff intends to re-file its defamation claim with a

request for exemplary and punitive damages, on or before

November 2, 2009, it must send Allstate another notice to

publish a retraction; allow Allstate 30 days to publish a

retraction; and re-file its defamation claim by December

3, 2009, if Allstate does not publish a retraction.

(Dkt. 22, Order dated 10/30/09). Plaintiff filed a second amended complaint on

December 2, 2009. (Dkt. 24). This matter was referred to the undersigned for all

pretrial purposes on December 22, 2009. (Dkt. 30). 
1

 Rule 12(f) of the Federal Rules of Civil Procedure provides that, on motion

of a party, the Court may “order stricken from any pleading any insufficient

defense or any redundant, immaterial, impertinent, or scandalous matter.” 

Fed.R.Civ.P. 12(f). Courts disfavor motions to strike because they “propose[ ] a

drastic remedy.” Wrench LLC v. Taco Bell Corp., 36 F.Supp.2d 787, 789 (W.D.

Mich. 1998), quoting, Resolution Trust Corp. v. Vanderweele, 833 F.Supp. 1383,

1387 (N.D. Ind. 1993). However, a court has “liberal discretion” to strike such

filings as it deems appropriate under Rule 12(f). Stanbury Law Firm v. IRS, 221

F.3d 1059, 1063 (8th Cir. 2000); 2 Moore’s Federal Practice § 12.37 (3d ed. 2002). 

Report and Recommendation

Defendant’s Motion to Strike

2 Universal Health Group v. Allstate; Case No. 09-12524

On January 7, 2010, defendant moved to strike plaintiff’s second amended

complaint or for a more definite statement. (Dkt. 31). Plaintiff filed a response on

February 11, 2010 and defendant filed a reply on February 26, 2010. (Dkt. 41,

45). The Court held a hearing on March 11, 2010. This matter is now ready for

report and recommendation

As set forth in detail below, the undersigned RECOMMENDS that

defendant’s motion to strike be GRANTED in part and DENIED in part.

II. ANALYSIS AND CONCLUSIONS

A. Fraud and New Factual Allegations

Defendant argues that plaintiff’s second amended complaint exceeds the

scope of the October 30, 2009 Order because it includes a newly-pleaded fraud

claim along with voluminous factual allegations not contained in the first amended

complaint. (Dkt. 31). Defendant contends that the second amended complaint

violates Rule 8(a)’s requirement that a complaint contain a short, plain statement of

the claim and Rule 12(f)’s bar on impertinent and scandalous materials.1
In this case, however, the undersigned’s recommendations as to the portions of

plaintiff’s second amended complaint that should be stricken are based on Judge

Roberts’ October 30, 2009 Order and Rule 8(a), rather than Rule 12(f).

Report and Recommendation

Defendant’s Motion to Strike

3 Universal Health Group v. Allstate; Case No. 09-12524

According to defendant, the second amended complaint contains numerous factual

allegations that have nothing to do with plaintiff’s claims. Plaintiff has agreed to

dismiss its fraud claim, but the parties are unable to agree on whether that

dismissal should be with or without prejudice. Plaintiff asserts that second

amended complaint contains more specific allegations regarding Allstate’s bad

faith national strategy to target, defame and destroy heath care clinics like plaintiff.

With respect to the fraud claim, plaintiff argued in its opening brief that this

claims should be stricken because plaintiff did not have leave of Court and because

plaintiff failed to comply with Rule 9(b), which requires a fraud claim to be

pleaded with particularity. (Dkt. 31). Under these circumstances, where plaintiff

has not had any opportunity to amend the fraud claim to comply with Rule 9(b),

the undersigned suggests that plaintiff’s fraud claim should be dismissed without

prejudice. Yaldu v. Bank of America Corp., — F. Supp.2d —, 2010 WL 123871,

*10 (E.D. Mich. 2010) (“[D]ismissal with prejudice on the basis of failure to plead

with particularity ordinarily should be done only after the plaintiff has a chance to

seek leave to amend the complaint.”); see also Boroff v. Alza Corp., — F.Supp.2d

—, 2010 WL 395211, *7 (N.D. Ohio 2010) (“The failure to properly plead fraud is

not grounds for dismissal with prejudice,” citing, United States ex rel. Bledsoe v.
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Defendant’s Motion to Strike

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Cmty. Health Sys., 342 F.3d 634, 644 (6th Cir. 2003)).

As to the host of new factual allegations contained in plaintiff’s second

amended complaint, the undersigned concludes that plaintiff’s inclusion of these

additional factual allegations, unrelated to notice and retraction, is improper for

two reasons. The first reason is that Judge Robert’s October 30, 2009 Order was

quite specific in allowing plaintiff to re-file its defamation claim after giving

defendant the requisite opportunity to retract the allegedly defamatory statements. 

Nothing in Judge Roberts’ order allowed plaintiff to rewrite its entire complaint or

change any aspect of it other than those allegations in the defamation claim relating

to notice and whether defendant issued any retraction.

The second reason plaintiff’s new allegations are improper is because they

violate Rule 8(a), which requires a short, plain statement of the claim. “What

constitutes a short and plain statement must be determined in each case on the basis

of the nature of the action, the relief sought, and the respective positions of the

parties in terms of the availability of information and a number of other pragmatic

matters.” 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure

§ 1217 at 240-41 (3d ed. 2004). A plaintiff properly pleads a claim for relief by

“briefly describing the events” supporting the claim. Peabody v. Griggs, 2009 WL

3200686, *3 (D. R.I. 2009), quoting, Sanjuan v. American Bd. Of Psychiatry &

Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994). The statement of the claim
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Defendant’s Motion to Strike

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should be short because “unnecessary length places an unjustified burden on the

court and on the party who must respond to it.” Id., quoting, Laurence v. Wall,

2007 WL 1875794, *1 (D. R.I. 2007); see also Wright & Miller § 1281 at 709

(“[u]nnecessary prolixity in a pleading places an unjustified burden on the district

judge and the party who must respond to it because they are forced to ferret out the

relevant material from a mass of verbiage”). “The statement should be plain

because the principal function of pleadings under the Federal Rules is to give the

adverse party fair notice of the claim asserted to enable him to answer and prepare

for trial.” Id., quoting, Laurence, 2007 WL 1875794 at *1. As noted by several

courts, this principle is particularly significant because a defendant is required,

pursuant to Rule 8(b), to “plead one of three alternatives in response to all of the

allegations in a complaint...” Id., quoting, Indiana Regional Council of Carpenters

Pension Trust Fund, 2006 WL 3302642, *2 (N.D. Ind. 2006); see also

Calderon-Garnier v. Sanchez-Ramos, 439 F.Supp.2d 229 (D. P.R. 2006), aff’d,

506 F.3d 22 (1st Cir. 2007).

The requirement of a short, plain statement of the claim and entitlement to

relief was not supplanted by the pleading standards set forth in Twombly/Iqbal. 

See e.g. Tamayo v. Blagojevich, 526 F.3d 1074, 1082-83 (7th Cir. 2008)

(“Although Twombly retooled federal pleading standards ... and retired the

oft-quoted Conley motion to dismiss no set of facts standard, Twombly did not
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Defendant’s Motion to Strike

6 Universal Health Group v. Allstate; Case No. 09-12524

supplant the basic notice-pleading standard.”) (internal quotation marks omitted);

see also Hensley Manufacturing v. Propride, Inc., 579 F.3d 603, 609 (6th Cir.

2009). Indeed, a “plaintiff still must provide only enough detail to give the

defendant fair notice of what the claim is and the grounds upon which it rests....” 

Tamayo, 526 F.3d at 1083 (internal quotation marks and citation omitted). 

Twombly specifically provided that “a complaint attacked by a Rule 12(b)(6)

motion to dismiss does not need detailed factual allegations ... .” Bell Atlantic

Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, a complaint only survives

a motion to dismiss if it “contain[s] sufficient factual matter, accepted as true, to

state a claim to relief that is plausible on its face.” Courie v. Alcoa Wheel &

Forged Products, 577 F.3d 625 (6th Cir. 2009), quoting, Ashcroft v. Iqbal, — U.S.

—, 129 S.Ct. 1937, 1949 (2009). 

Thus, in the wake of Twombly/Iqbal, a complaint must still comply with

Rule 8(a), which prohibits excessively detailed, unnecessarily complicated,

argumentative, and extraneous facts. See e.g., Lease v. Fishel, 2009 WL 922486,

*2 (M.D. Pa. 2009) (The “mash of allegations [in this complaint] read more like a

novel than a legal pleading and frequently digress into improper argumentative

detail.”); Fritz v. County of Kern, 2009 WL 382741, *2 (E.D. Cal. 2009) (a

“complaint is not a novel - background allegations and evidentiary detail are

simply unnecessary and violate Rule 8(a)(2).”). The undersigned suggests that
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Defendant’s Motion to Strike

7 Universal Health Group v. Allstate; Case No. 09-12524

plaintiff’s second amended complaint contains far too much detail, extraneous

information, and plaintiff’s attempt to prove its case through the complaint is not

well-taken. By way of example, here is a typical single paragraph contained in

plaintiff’s second amended complaint:

McKinsey’s name for its new strategy

recommended to Allstate was “Claims Core Process

Redesign” (“CCPR”). McKinsey taught Allstate the

principles of CCPR over the course of many months,

through the presentation of approximately 12,500

PowerPoint slides.

As a result of litigation against Allstate and/or

McKinsey, the substance of at least some of McKinsey

slides have become public information very recently.

Other related McKinsey documents/materials requested,

which Allstate has either denied the existence of or

desperately fought disclosure of in other litigated cases,

expand on this vile and predatory claims handling

plan/strategy in greater detail. Upon Court order they

have been produced in other cases across the country and

consequently there no longer exists, if there ever did, a

proprietary or confidential nature concerning these

documents. Similarly, since Allstate has previously 

produced these same documents in it’s production as

required by the courts in other litigation, it cannot now

claim to this court that the requests would be overly 

burdensome or require unreasonable time to produce. 

While this Second Amended Complaint will refer to the

contents of certain slides, these descriptions of the

McKinsey slides are based on what limited information is

currently publicly available, which, to some extent, may

be paraphrasing or approximating the actual slides and by

no means is all inclusive. Nonetheless, what is presented

below regarding the contents of the McKinsey slides is

intended to be representative thereof on a substantive
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Defendant’s Motion to Strike

8 Universal Health Group v. Allstate; Case No. 09-12524

basis.

(Dkt. 24, pp. 4-5, ¶ 10). It would be unduly burdensome for defendant to have to

parse each sentence – and possibly each clause – of this paragraph in order to

determine what to admit, what to deny, and what it can neither admit nor deny.

Plaintiff’s second amended complaint reads more like a brief than a complaint and

the undersigned suggests that it violates the letter and spirit of Rule 8(a)’s

requirement of a short, plain statement. Thus, the undersigned recommends that

plaintiff’s new factual allegations should also be stricken for this reason in addition

to the reason that they violate the October 30, 2009 Order.

B. Defamation

Defendant also argues that the defamation claim, as set forth in the second

amended complaint, should be stricken because it fails as a matter of law, based on

the lack of specificity and because the communications at issue were privileged. 

Plaintiff asserts that the second amended complaint contains more specific

allegations regarding Allstate’s bad faith national strategy to target, defame and

destroy heath care clinics like plaintiff and thus, its defamation claim should not be

dismissed.

Defendant cites Michigan cases in support of its argument that plaintiff’s

defamation claim must be stated with specificity. (Dkt. 31, p. 15, n. 5; Dkt. 45, p

10). Defendant does not, however, offer any explanation or support for the implied
2

 A handful of cases in this district appear to rely on the “specificity” or

“particularity” requirement found in Michigan case law on defamation. For

example, in Williams v. Detroit Bd. of Educ., 523 F.Supp.2d 602, 606 (E.D. Mich.

2007), the court noted, relying on Royal Palace Homes, Inc. v. Channel 7 of

Detroit, 197 Mich.App. 48, 52, 495 N.W.2d 392 (1992), that a plaintiff must plead

a defamation claim with specificity and cannot rely on general, conclusory

allegations to support a defamation claim, but must specifically identify the

statements alleged to be defamatory. However, the court was actually analyzing a

motion for summary judgment, not a motion to dismiss. Similarly, in DirecTV v.

Cavanaugh, 321 F.Supp.2d 825, 836 (E.D. Mich. 2003), the court concluded that

the counterclaim for defamation failed for “want of particularity.” Again, the court

was analyzing a motion for summary judgment, not a motion to dismiss or a

motion to strike. Finally, in Stencel v. Augat Wiring Systems, 173 F.Supp.2d 669

(E.D. Mich. 2001), the court noted that a “defamation claim must be pleaded with

particularity.” While this observation was seemingly made in the context of a

motion to dismiss, the court relied on the plaintiff’s discovery response to reach the

conclusion that her defamation claim was not viable.

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Defendant’s Motion to Strike

9 Universal Health Group v. Allstate; Case No. 09-12524

proposition that the Court should follow state law on what appears to be a purely

procedural issue of pleading form.2

 The undersigned concludes that nothing in the

Federal Rules suggests that pleading a defamation claim is subject to higher

pleading standard than any other claim. Scheser v. Island Property Management,

Inc., 2010 WL 1742532, *1 (W.D. Ky. 2010) (“We see no reason to impose a

heightened pleading standard. Rule 9(b) demands particularity of complaints

alleging fraud or mistake, but neither is alleged here. Consequently, ordinary

notice-pleading rules apply.”). The Scheser court also observed that in light of

Iqbal, a claim for defamation, like any other claim for relief, must merely “‘state a

claim to relief that is plausible on its face,’ but no more than that is required simply

because the plaintiff has asserted a defamation claim.” Id. Defendant does not
3

 Defendant raised this issue in the context of its futility argument in its reply

brief, but this was not addressed or argued in the initial motion. Thus, the

undersigned declines to address the issue, first raised in the reply, and which was

not fully brief by the parties. See Lexicon, Inc. v. Safeco Ins. Co. of America, Inc.,

436 F.3d 662, 676 (6th Cir. 2006) (A district court properly declines to consider an

issue raised for the first time in a reply brief.), citing, Sundberg v. Keller Ladder,

189 F.Supp.2d 671, 682-83 (E.D. Mich. 2002) (Noting, in the context of summary

judgment, “it is not the office of a reply brief to raise issues for the first time.”)

(citation omitted).

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Defendant’s Motion to Strike

10 Universal Health Group v. Allstate; Case No. 09-12524

claim that plaintiff’s defamation claim fails to satisfy the Iqbal3 standard. Based

on the foregoing, the undersigned suggests that defendant’s motion to strike the

defamation claim should be denied.

Defendant also insists that the Court can, and should, decide, as a matter of

law whether the statements alleged in plaintiff’s second amended complaint are

defamatory and whether it has a conditional privilege to make the alleged

statements to its insured. Defendant relies primarily on Another Step Forward v

State Farm Auto. Ins. Co., 2009 WL 879690 (E.D. Mich. 2009), which, according

to defendant, “held the defamation claim failed as a matter of law -- not based on

any factual analysis -- on the ground that the defendant no-fault insurer’s alleged

defamatory statement to its insureds regarding why it was not paying the plaintiff’s

medical charges was privileged.” A closer review of this case suggests that the

court relied on deposition testimony to reach this conclusion and a finding that the

plaintiff had failed to rebut the evidence presented by the defendant. Another Step
4

 Specifically, the court in Another Step Forward observed: “As shown by

Ms. Higginbottom’s deposition testimony, the statements appear limited to this

purpose, provided on a proper occasion, and made in a proper manner

(non-threatening) and to proper parties (to the insureds and/or their guardians).

Plaintiffs have not provided this Court with genuine issues of material fact to rebut

such a finding.” 

Report and Recommendation

Defendant’s Motion to Strike

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Forward, at *13.4 The undersigned suggests that the issues raised by defendant

regarding whether the statements at issue are defamatory and defendant’s claimed

conditional privilege, even if ultimately decided by the court, should be decided

based on a factual development of the record and not on the pleadings alone. This

is especially important here, where defendant bears the burden of proving qualified

privilege. See Savage v. Lincoln Benefit Life, 49 F.Supp.2d 536, 542 (E.D. Mich.

1999).

C. Tortious Interference

Finally, defendant asserts that plaintiff’s tortious interference claim must

also fail because plaintiff fails to allege facts showing the existence of any

particular valid business relationship or expectancy and because defendant had a

legitimate business reason to engage in the conduct about which plaintiff

complains. (Dkt. 31). Plaintiff asserts that the second amended complaint contains

more specific allegations regarding Allstate’s bad faith national strategy to target,

defame and destroy heath care clinics like plaintiff and thus, the tortious

interference claim should not be dismissed.
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Defendant’s Motion to Strike

12 Universal Health Group v. Allstate; Case No. 09-12524

As with the defamation claim, the undersigned suggests that defendant

attempts to hold plaintiff to a pleading standard that is not warranted under the

Federal Rules of Civil Procedure. Defendant relies on Badiee v. Brighton Area

Schools, 265 Mich.App. 343, 366, 695 N.W.2d 521 (2005) for the proposition that

tortious interference claim will not lie where a defendant has a legitimate business

reason for its actions. In Badiee, the court found that the plaintiff had presented

insufficient evidence at trial to counter the defendant’s evidence of a valid

business purpose for its actions. Id. at 368. Even if the Court were inclined to

follow Badiee for what appears to be a purely procedural pleading issue, nothing in

Badiee suggests that the decision reached would be appropriate at the pleading

stage. In addition, as with the defamation claim, defendant has not properly

asserted that this claim fails to meet the Twombly/Iqbal standard for pleading.

Based on the foregoing, the undersigned suggests that defendant’s motion to strike

the tortious interference claims should be denied.

D. Motion for More Definite Statement

In light of the conclusions reached above, which, if adopted by the Court

would drastically alter plaintiff’s complaint, the undersigned suggests that the

Court need not decide the motion for more definite statement.

III. RECOMMENDATION

Based on the foregoing, the undersigned RECOMMENDS that defendant’s
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Defendant’s Motion to Strike

13 Universal Health Group v. Allstate; Case No. 09-12524

motion to strike be GRANTED in part and DENIED in part and that plaintiff’s

fraud claim be DISMISSED without prejudice. More specifically, the undersigned

RECOMMENDS that, if this report and recommendation is adopted, plaintiff be

permitted 14 days from the date of adoption to file a third amended complaint that

contains no additional or different allegations or claims beyond those alleged in the

first amended complaint except for the new allegations regarding the notice and

retraction issues for its defamation claim.

The parties to this action may object to and seek review of this Report and

Recommendation, but are required to file any objections within 14 days of service,

as provided for in Federal Rule of Civil Procedure 72(b)(2) and Local Rule

72.1(d). Failure to file specific objections constitutes a waiver of any further right

of appeal. Thomas v. Arn, 474 U.S. 140 (1985); Howard v. Sec’y of Health and

Human Servs., 932 F.2d 505 (6th Cir. 1981). Filing objections that raise some

issues but fail to raise others with specificity will not preserve all the objections a

party might have to this Report and Recommendation. Willis v. Sec’y of Health

and Human Servs., 931 F.2d 390, 401 (6th Cir. 1991); Smith v. Detroit Fed’n of

Teachers Local 231, 829 F.2d 1370, 1373 (6th Cir. 1987). Pursuant to Local Rule

72.1(d)(2), any objections must be served on this Magistrate Judge.

Any objections must be labeled as “Objection No. 1,” “Objection No. 2,”

etc. Any objection must recite precisely the provision of this Report and
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14 Universal Health Group v. Allstate; Case No. 09-12524

Recommendation to which it pertains. Not later than 14 days after service of an

objection, the opposing party may file a concise response proportionate to the

objections in length and complexity. Fed.R.Civ.P. 72(b)(2), Local Rule 72.1(d). 

The response must specifically address each issue raised in the objections, in the

same order, and labeled as “Response to Objection No. 1,” “Response to Objection

No. 2,” etc. If the Court determines that any objections are without merit, it may

rule without awaiting the response.

Date: May 12, 2010 s/Michael Hluchaniuk

Michael Hluchaniuk

United States Magistrate Judge

CERTIFICATE OF SERVICE

I certify that on May 12, 2010, I electronically filed the foregoing paper with

the Clerk of the Court using the ECF system, which will send electronic

notification to the following: Craig S. Romanzi and Karen W. Magdich.

s/Tammy Hallwood 

Case Manager

U.S. District Court

600 Church Street

Flint, MI 48502

(810) 341-7887

tammy_hallwood@mied.uscourts.gov