Unreported / Non-Citable
Background
Plaintiff Charles Bathersfield filed a putative class action on February 23, 2026, alleging that Heart & Soil Supplements, LLC violated the Telephone Consumer Protection Act (TCPA) quiet-hours restriction, 47 C.F.R. § 64.1200(c)(1), by sending marketing text messages at 6:11 a.m. and 5:14 a.m. local time without his prior express authorization.
Heart & Soil answered on April 17, 2026, asserting eleven affirmative defenses and two counterclaims.
Counterclaim I sought a declaratory judgment that the FCC quiet-hours rule applies only to “telephone solicitations” as defined by statute, that texts sent with prior express invitation or permission are not telephone solicitations, and that Heart & Soil did not violate the rule by texting consenting consumers.
Counterclaim II alleged Bathersfield breached the Terms of Service by filing a class action in court rather than individual arbitration, seeking damages in the form of litigation fees, costs, and expenses.
Bathersfield moved to dismiss both counterclaims under Rule 12(b)(6) or, alternatively, to strike Counterclaim I under Rule 12(f).
The Court’s Holding
The Court granted the motion to strike Counterclaim I without leave to amend, holding it was a redundant “mirror image” of the plaintiff’s TCPA claim and the defendant’s First and Second Affirmative Defenses, presenting a complete identity of factual and legal issues and serving no useful purpose under the Declaratory Judgment Act.
The Court granted the motion to dismiss Counterclaim II with leave to amend, holding that under Texas law (assumed applicable), the defendant failed to plausibly allege damages.
The American Rule and Texas Civil Practice & Remedies Code § 38.001 bar recovery of attorney’s fees as compensatory damages absent a separate damages award, and the indemnification provision in the Terms of Service was a standard third-party indemnity clause that did not cover claims between the contracting parties.
Because all alleged breaches rested solely on the unrecoverable litigation costs, the counterclaim failed in its entirety.
Key Takeaways
- A declaratory judgment counterclaim that merely duplicates the plaintiff’s claims and the defendant’s affirmative defenses will be struck as redundant under Rule 12(f) where there is a complete identity of factual and legal issues.
- The Declaratory Judgment Act grants courts discretion to decline relief that serves no useful purpose in clarifying legal relations or terminating controversy beyond what the existing pleadings already achieve.
- Under Texas law, attorney’s fees and litigation costs incurred in defending a lawsuit are not compensatory damages for a breach of contract claim; a party must first prevail and recover independent damages to trigger fee-shifting under Tex. Civ. Prac. & Rem. Code § 38.001.
- Standard indemnification provisions using language such as “indemnify,” “defend,” and “hold harmless” protect against third-party claims, not first-party disputes between the contracting parties, absent express language to the contrary.
- A catch-all prayer for “such other damages as will be proven at trial” does not plausibly allege damages under the Iqbal/Twombly standard.
Why It Matters
This order reinforces the Ninth Circuit’s practice of striking duplicative declaratory judgment counterclaims under Rule 12(f) to prevent procedural gamesmanship and judicial inefficiency.
It clarifies that a defendant cannot manufacture a standalone declaratory claim simply to anchor a case against voluntary dismissal under Rule 41(a)(2) when the issues are already fully joined.
On the contract counterclaim, the ruling applies Texas law to reject the increasingly common defense tactic of recasting litigation expenses as breach-of-contract damages via class-action waivers and indemnification clauses, confirming that the American Rule and the third-party nature of standard indemnity provisions bar such recovery absent explicit contractual language covering first-party disputes.