What's good for the goose is good for the gander...at least that's what plaintiff's attorneys are squawking about with respect to the new stricter "plausibility standard" that has been ushered in by the Supreme Court in fellow blogger Martha Doty's new favorite cases, Bell Atlantic v. Twombly and Ashcroft v. Iqbal. After all, if the Supreme Court is going to have the temerity to require plaintiffs to actually assert "plausible" claims for relief in order to survive a motion to dismiss, shouldn't defendants be required to meet that same standard for their affirmative defenses? This is the question our employment law colleague in Atlanta, Jon Roth, ponders in the following short blog article.
In 2007, the Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) retired the pleading standard courts had long-used to determine whether a complaint for relief should survive a 12(b)(6) Motion to Dismiss. According to the old standard (found in Conley v. Gibson, 355 U.S. 41 (1957)), a complaint should not be dismissed unless it appeared beyond doubt that the plaintiff could prove no set of facts in support of his claim which would entitle him to relief. [How any complaint could be found lacking under this standard is a legal wonder. Ed.] This 50 year-old standard which was very generous to plaintiffs was replaced with a moderately stricter standard designed to help dispose of frivolous and meritless claims quickly.
In Twombly, a complex anti-trust case, the Court held that under Federal Rule of Civil Procedure (“FRCP”) 8(a), a complaint should plead enough facts to state a claim for relief that is plausible on its face. [Not asking for too much, are we? Ed.] Two years later in Ashcroft v. Iqbal, -- U.S. --, 129 S.Ct. 1937 (2009), this new standard, known as the plausibility standard, was held to apply to complaints in all civil actions.
Because the plausibility standard has made it marginally more difficult for plaintiffs’ claims to survive a challenge on the pleadings, plaintiffs’ attorneys have sought to have the same standard applied to the defendants' affirmative defenses, arguing [of course] what’s good for the goose is good for the gander.
Though no circuit courts have weighed in on this debate yet, district courts in at least 18 cases have directly addressed the issue.
And while there is some disagreement between the district courts, the majority have applied Twombly to affirmative defenses.
The courts that have found that Twombly applies have based their holding on various reasons including (a) reducing frivolous affirmative defenses which waste the court's time, and (b) the similarity of the Federal Rule of Civil Procedure for complaints, 8(a), and defenses, 8(b).
Courts finding that Twombly does not apply have relied on two main arguments: (a) FRCP 8(c), which specifically refers to affirmative defenses (as opposed to Rule 8(b) applying to defenses), should apply and 8(c) is not similar to the language of 8(a); and (b) even if 8(b) does apply, the language is not identical to the language in 8(a).
The following cases have held that the Twombly plausibility standard does apply to affirmative defenses:
- Home Mgmt. Solutions, Inc. v. Prescient, Inc., No. 07-20608-CIV, 2007 WL 2412843 (S.D. Fla. Aug. 21, 2007);
- United States v. Quadrini, No. 2:07-CV-13227, 2007 WL 4303213 (E.D. Mich. Dec. 6, 2007);
- Holtzman v. B/E Aerospace, Inc., No. 07-80551- CIV, 2008 WL 2225668 (S.D. Fla. May 29, 2008);
- Safeco Ins. Co. of America v. O’Hara Corp., No. 08-CV-10545, 2008 WL 2558015 (E.D. Mich. June 25, 2008);
- Stoffels v. SBC Communications, Inc., No. 05-CV-0233-WWJ, 2008 WL 4391396 (W.D. Tex. Sept. 22, 2008);
- Greenheck Fan Corp. v. Loren Cook Co., No. 08-cv-355-jps, 2008 WL 4443805 (W.D. Wis. Sept. 25, 2008);
- Teirstein v. AGA Medical Corp., Civil Action No. 6:08cv14, 2009 WL 704138 (E.D. Tex. Mar. 16, 2009);
- Shinew v. Wszola, Civil Action No. 08-14256, 2009 WL 1076279 (E.D. Mich. Apr. 21, 2009);
- FDIC v. Bristol Home Mortgage Lending, LLC, No. 08-81536-CIV, 2009 WL 2488302 (S.D. Fla. Aug. 13, 2009);
- In re Mission Bay Ski & Bike, Inc., Nos. 07 B 20870, 08 A 55, 2009 WL 2913438 (Bkrtcy. N.D. Ill. Sept. 9, 2009);
- Tracy v. NVR, Inc., No. C 09-02429 WHA, 2009 WL 3153150 (W.D.N.Y. Sept. 30, 2009);
- CTF Development, Inc. v. Penta Hospitality, LLC, No. C 09-02429 WHA, 2009 WL 3517617 (N.D. Cal. Oct. 26, 2009);
- Bank of Montreal v. SK Foods, LLC, No. 09 C 3479, 2009 WL 3824668 (N.D. Ill. Nov. 13, 2009);
- Hayne v. Green Ford Sales, Inc., --- F.Supp.2d ----, 2009 WL 5171779 (D. Kan. Dec. 22, 2009).
The following cases have held that the Twombly plausibility standard does not apply to affirmative defenses:
- Westbrook v. Paragon Systems, Inc., Civil Action 07-0714-WS-C, 2007 U.S.Dist. LEXIS 88490 (S.D. Ala. Nov. 29, 2007);
- First Nat’l Ins. Co. of America v. Camps Services, Ltd., No. 08-cv-12805, 2009 WL 22861 (E.D. Mich. Jan. 5, 2009);
- Romantine v. CH2M Hill Engineers, Inc., Civil Action No. 09-973, 2009 WL 3417469 (W.D. Pa. Oct. 23, 2009);
- Charleswell v. Chase Manhattan Bank, N.A., Civil Action No. 01-119, 2009 WL 4981730 (D.V.I. Dec. 8, 2009).
Currently, there are two pieces of legislation pending in the U.S. House of Representatives and the U.S. Senate which seek to restore the Conley standard for evaluating complaints. Interestingly, neither bill mentions affirmative defenses. The two bills, the Notice Pleading Restoration Act and the Open Access to Courts Act of 2009, are still in committee, and there is no indication of their chance of passage. It thus appears that if the plaintiff's bar has its way, the Twombly standard may have a much shorter run than its predecessor.