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Motion to Strike Affirmative Defenses in ERISA Disability Cases
Federal Rule of Civil Procedure 12(f) allows the Court to “strike from a pleading an insufficient defense or a redundant, immaterial, impertinent or scandalous matter.” Delta Consulting Grp., Inc. v. R. Randle Constr. Inc., 554 F.3d 1133, 1141 (7th Cir. 2009). Therefore, if an affirmative defense in a defendant-insurer's answer fails to state a sufficient defense or if the allegations in the affirmative defense are not relevant to the claims in plaintiff's complaint, then the affirmative defense constitutes an immaterial or impertinent allegation that can be stricken.
Courts have developed a three part test in examining the affirmative defenses subject to a motion to strike: (1) the matter must be properly pleaded as an affirmative defense; (2) the matter must be adequately pleaded under the requirements of Federal Rules of Civil Procedure 8 and 9; and (3) the matter must withstand a Rule 12(b)(6) challenge. Williams v. Provident Inv. Counsel Inc., 279 F. Supp. 2d 894, 906 (N.D. Ohio 2003).
While motions to strike are generally viewed with disfavor, the function of the motion is to “avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with” them early in the case. Operating Engineers Local 324 Health Care Plan v. G & W Const. Co., 783 F.3d 1045, 1050 (6th Cir. 2015) (quoting Kennedy v. City of Cleveland, 797 F.2d 297, 305 (6th Cir. 1986)).
A motion to strike should be granted if “it appears to a certainty that plaintiffs would succeed despite any state of the facts which could be proved in support of the defense and are inferable from the pleadings.” Operating Engineers, 783 F.3d at 1050 (quoting Williams v. Jader Fuel Co., 944 F.2d 1388, 1400 (7th Cir. 1991)). Furthermore, such motions “should be granted where it is clear that the affirmative defense is irrelevant and frivolous and its removal from the case would avoid wasting unnecessary time and money litigating the invalid defense.”SEC v. Gulf & Western Indust., 502 F. Supp. 343, 345 (D.D.C. 1980).
A defendant-insurer typically asserts a “laundry list” of affirmative defenses. Generally, the affirmative defenses fail to identify which defense applies to which specific claim asserted by plaintiff and fail to plead any specific facts in support of the affirmative defenses raised.
Striking insufficient affirmative defenses is proper, because courts “must not tolerate shotgun pleading of affirmative defenses and should strike vague and ambiguous defenses which do not respond to any particular count, allegation or legal basis of a complaint.” Tsavaris v. Pfizer, Inc., 310 F.R.D. 678, 682 (S.D. Fla. 2015).
The Ninth Circuit has ruled that the function of a motion to strike is “to avoid the expenditure of time and money that must arise from litigating spurious issues …,” and has defined “immaterial” as that which has no essential or important relationship to the claim for relief or the defenses being pleaded.” Fantasy, Inc. v. Fogerty, 984 F.2d 1524 (9thCir. 1993) (overruled on other grounds in Fogerty v. Fantasy, Inc. 510 U.S. 517 (1994)).
Affirmative defenses are pleadings and, therefore, subject to all pleading requirements under the Federal Rules of Civil Procedure, including that they must set forth a short and plain statement of the defense, and they must give the opposing party “fair notice of the nature” of the defense. Fed. R. Civ. P., Rule 8(a); Fleet Bus. Credit Corp. v. Nat'l City Leasing Corp., 191 F.R.D. 568, 570 (N.D. Ill. 1999).
A defendant-insurer's affirmative defenses, as pleaded in their answer, are subject to a motion to strike under Rule 12(f) when they are “nothing but bare bones conclusory allegations” that fail “to allege the necessary elements of the alleged claims.” Heller Fin. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir. 1989).
In pleading their affirmative defenses, a defendant-insurer must more than recite the words of a particular doctrine or principle as a substitute for the obligation to include a short and plain statement of the facts upon which an affirmative defense is premised.
However, the exact amount of factual material that an affirmative defense is required to include is unclear. Under the “fair notice” standard, a court may strike those affirmative defenses that are “nothing but bare bones conclusory allegations” that fail to provide plaintiff with “fair notice.” Under the Twombly/Iqbal“plausibility” standard, affirmative defenses must include enough “factual matter” to render their contentions plausible.
Fair Notice Standard
Traditionally, courts have applied Conley's“no set of facts” standard to pleadings that were challenged by a Rule 12(b)(6) or Rule 12(f) motion. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Under that standard, an affirmative defense was held valid if it provided “fair notice” to the plaintiff. Wyshak v. City Nat'l Bank,607 F. 2d 824, 827 (9th Cir. 1979).
Motions to strike affirmative defenses were generally “disfavored and infrequently granted,” and an affirmative defense was fairly immune from a motion to strike unless it appeared with certainty that plaintiff would succeed despite any state of facts which could be proved in support of the defense. SEC v. Sands, 903 F. Supp. 1149, 1165-1166 (C.D. Cal. 1995), aff'd sub nom. SEC v. First Pac. Bancorp, 142 F. 3d 1186 (9th Cir. 1998).
Heightened Plausibility Standard under Twombly/Iqbal
In Bell Atlantic Co. v. Twombly, 550 U.S. 544, 555, 559 (2007), the Supreme Court replaced Conley's “no set of facts” standard and held that in order to withstand a motion to dismiss, a plaintiff must plead sufficient facts in a complaint to allege “a plausible entitlement to relief” and to “raise a right to relief above the speculative level.” In other words, a complaint must contain enough factual allegations to state a claim that is plausible on its face.
In Ashcroft v. Iqbal, 556 U.S. 662, 1940, 1950 (2009), the Supreme Court further clarified the heightened pleading standard that bare legal conclusions in a complaint which do nothing more than recite the elements of a cause of action are not entitled to an assumption of truth, and a complaint must contain sufficient factual allegations to allow a court to infer that it states a “plausible claim for relief.”
However, because Twombly/Iqbalcentered on the pleading of complaints, there has been a split among federal district courts on whether to apply the heightened pleading standard of Twombly/Iqbalto the pleading of affirmative defenses. Cottle v. Falcon Holdings Management, LLC, 892 F. Supp.2d 1053 (N.D. Ind. 2012)(noting split among district courts on issue); HCRI TRS Acquirer, LLC v. Iwer, 708 F. Supp.2d 687, 691 (N.D. Ohio 2010)(finding that the heightened pleading standard applies to the pleading of affirmative defenses).
Argument in Favor of Applying the Heightened Plausibility Standard of Twombly/Iqbalto Affirmative Defenses
There are several arguments an ERISA plaintiff may make that the heightened Twombly/Iqbalstandard should apply to affirmative defenses.
1.) Fairness to the Parties. It is inequitable to hold Plaintiff to a higher pleading standard than a defendant. Just as a defendant faced with a factually deficient complaint is prejudiced, a plaintiff should not have to respond to defenses that lack factual support. The same pleading standards should apply to defendants and plaintiffs alike; a defendant must also plead sufficient facts to demonstrate a plausible affirmative defense.
2.) Textual consistency of pleading rules. If both Rule 8(a)(2) and Rule 8(b) of the Federal Rules of Civil Procedure require a “short and plain” statement in the pleading of claims and affirmative defenses, then it follows that defendants and plaintiffs should both be required to plead sufficient facts to put the other side on notice of the factual basis of their defenses and claims. Barnes v. AT&T Pension Ben. Plan-Nonbargained Program, 718 F. Supp. 2d 1167, 1171 (N.D. Cal. 2010) (applying the heightened standard of Twomblyto affirmative defenses and equating Rule 8(a)(1) and Rule 9(b)(1)); see also: Hayne v. Green Ford Sales, 263 F.R.D. 647, 650 (D. Kan. 2009).
There are important textual similarities between Rules 8(a) and 8(b). Form 30, which is appended to the Federal Rules in accordance with Rule 84, provides, by way of illustration, a ‘statute of limitations' affirmative defense that sets forth not only the name of the affirmative defense, but facts to support it. Aguilar v. City Lights of China Restaurant, No. 2011 U.S. Dist. LEXIS 122531(D. Md. Oct. 24, 2011).
3.) Judicial economy and litigation efficiency. Applying the heightened pleading standard to affirmative defenses promotes the policy of Twombly/Ibalby improving litigation efficiency, reducing delay, and limiting potentially expensive discovery associated with affirmative defenses that lack merit. HCRI TRS Acquirer, LLC, 708 F. Supp. 2d, at 690.
Just as a poorly drafted complaint, boilerplate affirmative defenses are wasteful of time and resources. Restricting affirmative defenses to only those with factual support would streamline the litigation process by narrowing the issues for the parties. Bradshaw v. Hilco Receivables LLC, 725 F. Supp. 2d 532, 536 (D. Md. 2010 (“The application of the Twombly and Iqbal standard to defenses will also promote litigation efficiency and will discourage defendants from asserting boilerplate affirmative defenses that are based on nothing more than ‘some conjecture that they may somehow apply.'”)
Argument Opposing the Application of the Heightened Plausibility Standard of Twombly/Iqbal to Affirmative Defenses
In Bayer CorpScience AG v. Dow Agro Sciences LLC, 851 F.3d 1302 (Fed. Cir. 2017), the court declined to apply the plausibility standard of Twombly/Iqbal to affirmative defenses and offered the following reasons in support to its conclusion. They included (1) “textual differences” between Rule 8(a) and Tule 8(c), relating to affirmative defenses; (2) limited discovery costs related to affirmative defenses; (3) the unfairness of applying the same pleading standard to a defendant with limited time to respond to a complaint; and (4) the low likelihood that motions to strike affirmative defenses would expedite the litigation.
Where Are We Now?
The United States Supreme Court has not determined whether the Twombly/Iqbalpleading standard applies to Rule 12(f) motions seeking to strike affirmative defenses under Rule 8(c)(1), and the issue among district courts is not settled. [See: James V. Bilet, Twombly, Iqbal, and Rule8(c) : Assessing the Proper Standard to Apply to Affirmative Defenses, 15 Char. L. Rev. 377, 378 (2011) (“yet while the Court may have announced the standard for complaints, it was silent as to what to do with affirmative defenses pled in an answer.”)]
Some courts have intervened sua sponteto require re-pleading of factually unsupported affirmative defenses, even imposing sanctions in such cases. Byrne v. Nezhat261 F.3d 1075, 1133, fn. 114, (11th Cir. 2001).
Accordingly, appellate and district courts continue to struggle with Twomblywith respect to affirmative defenses, without reaching a consensus. The Ninth Circuit, in Simmons v. Navajo City, 609 F.3d 1011 (9thCir. 2010), elected to apply the “fair notice “standard, even after Twombly, but provided no analysis for its decision. However, it remains an open question what other appellate courts, or the United States Supreme Court, will do.
Striking pleadings prior to discovery.
There has been a judicial reluctance to strike down pleadings, including affirmative defenses, prior to discovery and a hearing on the merits. William Z. Salcer, Panfeld, Edelman v. Envicon Equities Corp., 744. F. 2d 935, 939 (2d Cir. 1984), vacated on other grounds, 478 U.S. 1015, 106 S. Ct. 3324.
However, in virtually all ERISA cases, there is no discovery, including whether an affirmative defense is valid. Accordingly, there is no risk, and it is not premature to strike down meritless affirmative defenses.
Timeliness of Motion to Strike
Courts have held that a plaintiff in an ERISA litigation has the right to challenge the legal sufficiency of a defense at any time and have interpreted Rule 12(f) to allow a motion to strike at any point in the case; even on its own motion. Oregon Laborers-Employers Trust Funds v. Pacific Fence & Wire Co. (D OR 1989) 726 F. Supp. 786, 788; Williams v. Jader Fuel Co., Inc. (7th Cir. 1991) 944 F.2d 1388, 1399.
The Court has Broad Discretion
The decision to strike an affirmative defense is within the liberal discretion of the district court; recognizing that a defendant may be granted leave to amend. (Hayne, 263 F.R.D., at 649, 652.)
While motions to strike are generally viewed with disfavor by the court, the function of the motion is to “avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with” them early in the case. Operating Engineers Local 324 Health Care Plan v. G & W Const. Co., 783 F.3d 1045, 1050 (6th Cir. 2015) (quoting Kennedy v. City of Cleveland, 797 F.2d 297, 305 (6th Cir. 1986)).
A motion to strike should be granted if “it appears to a certainty that plaintiffs would succeed despite any state of the facts which could be proved in support of the defense and are inferable from the pleadings.” Operating Engineers, 783 F.3d at 1050 (quoting Williams v. Jader Fuel Co., 944 F.2d 1388, 1400 (7th Cir. 1991)). Furthermore, such motions “should be granted where it is clear that the affirmative defense is irrelevant and frivolous and its removal from the case would avoid wasting unnecessary time and money litigating the invalid defense.” SEC v. Gulf & Western Indust., 502 F. Supp. 343, 345 (D.D.C. 1980).
A court may strike affirmative defenses that are “insufficient on the face of the pleadings,” that fail” as a matter of law,” or that are “legally insufficient.” Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7thCir 1989). Accordingly, when an affirmative defense is without merit, conclusory, improperly pled, devoid of any factual allegations, and inadequate as a matter of law, it should be stricken.
The Decision to file a Motion to Strike
There are pros and cons as to whether to file a motion to strike affirmative defenses in an ERISA case. However, when a plaintiff's attorney is served with an answer from a defendant-insurer that sets forth a laundry list of affirmative defenses, most of which fail to state a sufficient defense or specific facts, and sets forth allegations that are irrelevant to the claims in the complaint, a motion to strike should be considered.
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