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Courts split on affirmative defenses

Boston – Should defendants be held to the heightened pleading standard articulated in the Twombly-Iqbal line of U.S. Supreme Court cases for plaintiffs’ complaints?

U.S. District Courts across the country are split on this question.

In 2007, the Supreme Court decided Bell Atlantic Corp. v. Twombly, an antitrust case which did away with “notice pleading” and held that plaintiffs must put forth enough facts to state a “plausible” cause of action.

Two years later, the justices extended Twombly outside of the antitrust realm by applying the same standard in Ashcroft v. Iqbal, a discrimination claim brought by a Sept. 11 detainee.

The fallout from the decisions has been significant: multiple bills have been proposed to reverse the holdings, which have been cited thousands of times by federal courts as defendants successfully move to have suits dismissed based on the heightened pleading requirements.

But now some defendants are feeling the sting, because a growing number of federal courts are applying the reasoning of Twombly-Iqbal to affirmative defenses.

“What’s good for the goose is good for the gander,” said Tim Schulte, a partner at Shelley & Schulte in Richmond, Va. who recently won a motion applying Twombly-Iqbal to the defendant’s affirmative defenses.

John Vail, senior litigation counsel and vice president of the Center for Constitutional Litigation in Washington, D.C., said the “general trend” is that courts are finding Twombly-Iqbal applies to affirmative defenses. Vail, who has testified before Congress about overturning the decisions, said that “in discussions about legislation, representatives on both sides of the aisle seemed to accept pro forma that it would apply to affirmative defenses, too.”

There is textual support for the argument. Alex Reinert, a professor at Cardozo School of Law in N.Y. who argued the Iqbal case before the Supreme Court, noted that while the Federal Rules of Civil Procedure are different for complaints and affirmative defenses, they are “not significantly different.”

Rule 8(a), which is applicable to complaints, requires a “short and plaint statement of the claim,” while 8(b) requires defendants to “state in short and plain terms its defenses.”

“It’s not obvious that there is a ‘plausibility’ standard” in Rule 8(a), he said. “If we can get a ‘plausibility’ standard out of [Rule 8(a)], we can get a similar standard out of Rule 8(b).”

An ‘even-handed standard’

In the most recent case to look at this issue, a U.S. District Court Judge in Virginia ruled that Twombly-Iqbal applies to affirmative defenses, striking 10 of the defendant’s 15 defenses.

In that case, Francisco v. Verizon South, Inc., the plaintiff filed a complaint alleging retaliation in violation of Title VII and §1983 by her employer after she complained about incidents of racial discrimination and intimidation at work. When her employer filed a response, the plaintiff moved to strike certain defenses, arguing they failed to meet the Twombly-Iqbal pleading standard.

U.S. Magistrate Judge M. Hannah Lauck agreed.

“‘An even-handed standard as related to pleadings ensures that the affirmative defenses supply enough information to explain the parameters of and basis for an affirmative defense such that the adverse party can reasonably tailor discovery.’ Accordingly, ‘the considerations of fairness, common sense and litigation efficiency’ dictate that litigants articulate complaints and affirmative defenses according to the same pleading standards. …

“Twombly and Iqbal require only minimal facts establishing plausibility, a standard this court presumes most litigants would apply when conducting the abbreviated factual investigation necessary before raising affirmative defenses in any event,” the court said.

The federal rules’ limits on interrogatories and the fast docket in Virginia federal court spurred Schulte, who represented the plaintiff in Francisco, to file the Twombly-Iqbal motion.

“We have a trial date set within 90 to 120 days, and we don’t have that much time for discovery,” he said. Coupled with the 25-interrogatory limit, “we don’t have a month or two to discover the basis for a defendant’s claim.”

Courts split

While no federal appellate court has yet to rule on the issue, the district courts are split.

The Francisco opinion is in line with the majority rule, with similar opinions from Florida, Illinois, Kansas, Massachusetts, Michigan, New York, Oklahoma, Texas, Wisconsin and the Western District of Virginia. The Wisconsin case is Greenheck Fan Corp. v. Loren Cook Co., 2008 U.S.Dist. LEXIS 75147 (W.D.Wis.2008).

But federal courts in Arizona, Colorado, Michigan, Pennsylvania and Tennessee have declined to extend the Twombly-Iqbal standard to affirmative defenses.

Despite the split, it is unlikely the issue will make it to a federal appellate court soon. Because interlocutory appeal is generally unavailable, a U.S. District Court would have to certify the issue to a federal appellate court, which would have to accept.

However, Vail said the issue is ultimately more important for plaintiffs than defendants.

“Every case has a complaint and every case is going to turn on the complaint, while relatively few cases turn on the pleadings of an affirmative defense,” he noted.

Reinert, who recently published a paper that evaluated the empirical effects of the new pleading standard on meritorious claims, “The Costs of Heightened Pleading,” agreed.

“The significance of Twombly/Iqbal remains much greater for plaintiffs even if it is fully applied to affirmative defenses,” he said. “Unless a defendant isn’t able to amend later, there isn’t a huge cost … in having most of [your] affirmative defenses kicked. Whereas for the plaintiff, there is a pretty huge cost.”

Correy Stephenson can be reached at [email protected].

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