September 2010
Twombly/Iqbal Heightened Pleading Standards Required For Affirmative Defenses
In 2007, the Supreme Court first clarified that under Rule 8(a)(2) of the Federal Rules of Civil Procedure "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formal recitation of the elements will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Although application of this standard was unclear outside of the antitrust context at issue in Twombly, in 2009, the Supreme Court explained that "Twombly expounded the pleading standard for 'all civil actions.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1953 (2009).
In recent weeks, both the E.D. and W.D. of Virginia have joined a handful of other federal district courts from around the country and weighed in on the application of the Twombly/Iqbal pleading standard to a defendant's affirmative defenses under Rule 8. Prior to Twombly/Iqbal, at least two decisions from the Fourth Circuit held that general statements of affirmative defenses were sufficient provided they gave plaintiffs fair notice of the defenses asserted. Clem v. Corbeau, 98 Fed. Appx. 197, 203 (4th Cir. 2004); Ferguson v. Guyan Mach. Co., 1995 U.S. App. LEXIS 1201 (4th Cir. 1995). Departing from this precedent in light of Twombly/Iqbal, both Palmer v. Oakland Farms, 2010 U.S. Dist. LEXIS 63265 (W.D. Va. 2010) and Francisco v. Verizon South, Inc., 2010 U.S. Dist LEXIS 77083 (E.D. Va. 2010), followed the majority of other district courts and held that "the considerations of fairness, common sense and litigation efficiency underlying Twombly and Iqbal strongly suggest that the same heightened pleading standard should also apply to affirmative defenses."
This requires, as stated by Magistrate Judge James G. Welsh in Palmer, "an affirmative defense ... be pleaded in a way that is intelligible, gives fair notice, and is plausibly suggested by the facts." Although the court stated that an assertion of underlying evidentiary facts was not necessarily required, it made clear that "[a]t a minimum...some statement of the ultimate facts underlying the defense must be set forth." In Francisco, Magistrate Judge M. Hannah Lauck followed suit by stating that "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." Thus, it is clear that some statement of facts be included in support of a defendant's affirmative defenses.
Although any defendant raising affirmative defenses in either state or federal court in Virginia is concerned with possibly waiving a defense, both Judge Lauck and Judge Welsh emphasized that Rule 15 of the Federal Rules of Civil Procedure contemplates motions to amend pleadings on the basis of relevant facts learned during discovery, and such motions should be liberally granted. However, to date, neither the Fourth Circuit nor any other court of appeals has ruled on this issue.
These rulings, on the heels of Twombly/Iqbal, will change the way defendants plead affirmative defenses. Thorough fact investigation immediately upon receipt of a new complaint must be conducted. Then, at a minimum, a short description of the facts known at the outset must be pleaded along with affirmative defenses. This new standard imposes a duty on clients to work closely with their counsel as soon as they are served and on counsel to make detailed factual inquiries in the first days of a new engagement.
Please feel free to contact Matt Hundley, or any of our attorneys at Moran Reeves & Conn about this article or any of the cases cited.