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The Necessity of Factual Support When Pleading Affirmative Defenses in Maryland Federal District Court
January 2011
The Maryland Litigator
The June 2010 edition of The Litigator summarized the Supreme Court decision Ashcroft v. Iqbal, 566 U.S. , 129 S. Ct. 1937 (2009), which imposed on federal plaintiffs a higher standard of pleading in civil complaints. Since that edition, the U.S. District Court for the District of Maryland has issued two orders applying the heightened standards of Iqbal, and its predecessor Twombly, to civil affirmative defenses plead by defendants.
To review, in Iqbal, the Supreme Court extended its prior decision in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007), which held a complaint must “state a claim to relief that is plausible on its face,” not just conceivable and must avoid conclusory statements, otherwise, it will not survive a motion to dismiss. Iqbal extended Twombly, which applied only to bankruptcy complaints, to all federal civil complaints. The Court held that to determine if a complaint meets the heighten standard, a court must follow the below test, which first examines the factual sufficiency of the complaint, followed by an analysis of its legal sufficiency:
- If the claim is entitled to an assumption of truth because it states a plausible claim; and, if so;
- Whether the allegations plausibly entitle the plaintiff to relief.
The recent orders of the U.S. District Court for the District of Maryland, described below, extend the Iqbal and Twombly standards from civil complaints to civil answers, specifically affirmative defenses.
In a July 27, 2010, order, Chief Judge Benson E. Legg, in Topline Solutions, Inc. v. Sandler Sys., Inc., No. L-09-3102 (D. Md. July 27, 2010), struck the affirmative defenses of defendant Sandler Systems, Inc., because all “contain[ed] no facts and [were] too conclusory.” The first affirmative defense stated, for example, “[t]he Complaint fails to state a claim upon which relief can be granted.” Judge Legg, quoting a fellow Fourth Circuit district court in Palmer v. Oakland, Farms, Inc., No. 5:10cv00029, 2010 WL 2605179, *5 (W.D. Va. June 24, 2010), stated that “[a]fter Twombly and Iqbal, an affirmative defense must be pled in a way that is ‘intelligible, gives fair notice and is plausibly suggested by the facts.” In Topline, the defendant presented no facts to support its affirmative defenses. Judge Legg opined that factual support includes, for example, stating the operative dates or statute when claiming a statute of limitations defense, or specifying the exact failure when claiming failure to mitigate damages or perform as plaintiff represented.
Similarly, in an August 12, 2010, memorandum opinion, and accompanying order, Judge Richard D. Bennett, in Bradshaw v. Hilco Receivables, LLC, No. RDB-10-113 (D. Md. Aug. 12, 2010), struck five challenged affirmative defenses of the seventeen in the defendant’s answer. The motion challenging the defenses filed by the plaintiff was treated by the court as a Federal Rule of Civil Procedure Rule 12(f) Motion to Strike, rather than a Motion for Judgment on the Pleadings under Rule 12(c), since not all the defenses were questioned. Judge Legg allowed a 12(f) Motion by plaintiff in Topline though all the defendants affirmative defenses were challenged.
In his memorandum, Judge Bennett stated that the standards of Iqbal and Twombly reasonably apply to answers as well as complaints because of the similarity in the respective requirements for pleadings in Rule 8(b)(1)(A) and (a)(2). Further, requiring factual support assists in court efficiency as plaintiffs will not need to spend time conducting unnecessary discovery, a point Judge Legg also mentioned in his order. Further, any omitted defense that cannot be supported by facts early in litigation can be added by the defendant in an amendment under Rule 15(a) once discovered. Judge Bennett opined that the Court has broad discretion to strike affirmative defenses that do not meet the pleading standards of Rules 8 and 9, and also have the ability to liberally grant leave to amend answers under Rule 15(a). In Bradshaw, the Judge Bennett granted Hilco Receivables, LLC, thirty days to amend its answer from the date of entry of his order striking the defenses.
The Maryland Court of Appeals has yet to adopt the Iqbal and Twombly standards for Maryland civil pleadings. However, given the recent orders above, federal defendants should be wary when pasting boilerplate defenses in an answer and should now conduct at least minimal internal fact discovery with clients when preparing an initial response.
