Opinion ID: 4375944
Heading Depth: 2
Heading Rank: 1

Heading: Striking Calmare’s Affirmative Defenses

Text: The standards for determining the proper pleading of an affirmative defense and for granting a motion to strike an affirmative defense have had a curious 2 The Court also ruled that if Calmare wished to seek leave to file a third‐party complaint, it “must submit a proposed third‐party complaint that does not contain any counterclaims against [GEOMC]” plus a supporting memorandum. Dist. Ct. Dkt. ECF No. 136. 4 evolution in this Circuit.3 Uncertainty has sometimes resulted from the fact that district courts, which have made most of the rulings on sufficiency of affirmative defenses and motions to strike them, have not always distinguished between affirmative defenses in a timely filed answer and those later filed, either with or without court permission to amend an answer, especially those filed in late stages of litigation. Rule 12(a)(1)(A)(i) requires an answer to be filed within 21 days after service of a summons and complaint. Rule 15(a)(1)(A) provides that a party is entitled to amend its answer 21 days after serving it, Rule 15(a)(2) permits an amended answer thereafter with the opposing party’s consent or leave of court, which should be “freely give[n] . . . when justice so requires,” and Rule 15(a)(3) provides: “Unless the court orders otherwise, any required response to an amended pleading must be made within the time remaining to respond to the original pleading or within 14 days after service of the amended pleading, whichever is later.” 3 The standards appear never to have been considered by the Supreme Court. In two original jurisdiction cases, the Court struck an affirmative defense, see Washington v. Oregon, 52 S. Ct. 456 (1932), and Missouri v. Chicago, Burlington, & Quincy R.R. Co., 241 U.S. 533 (1916), but did not discuss the standard for granting a motion to strike an affirmative defense. 5 The starting point for analysis is Rule 12(f), which provides that a court may strike “from a pleading” any “insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.”4 After the adoption of the Federal Rules of Civil Procedure in 1938, the first time we considered the propriety of striking an affirmative defense appears to be United States v. Oswego Falls Corp., 113 F.2d 322 (2d Cir. 1940). We there ruled that a defense, apparently timely filed, was properly stricken because no facts were pleaded to support the defense. See id. at 325. Shortly thereafter, we ruled, apparently for the first time, that an affirmative defense was properly stricken because it was legally insufficient. See De Pasquale v. Williams‐Bauer Corp., 151 F.2d 578, 580 (2d Cir. 1945); see also Schram v. Schwartz, 68 F.2d 699, 702 (2d Cir. 1934) (same; pre‐Rules decision). Not until many years later did we endeavor to expand, even briefly, on the pleading standard necessary for an affirmative defense to survive a motion to strike. In William Z. Salcer, Panfeld, Edelman v. Envicon Equities Corp., 744 F.2d 935 (2d Cir. 1984) (“Salcer”), vacated on other grounds, 478 U.S. 1015 (1986), we stated that a motion to strike an affirmative defense, apparently timely filed, will not be 4 Rule 12(f) authorizes a court to act “on its own” or “on motion made by a party either before responding to the pleading or, if a response is not allowed, within 21 days after being served with the pleading.” Fed. R. Civ. P. 12(f)(1), (2). 6 granted unless “it appears to a certainty that plaintiffs would succeed despite any state of the facts which could be proved in support of the defense.” Id. at 939 (internal quotation marks omitted). This formulation expansively phrased the pleading standard with the wording then used by the Supreme Court in Conley v. Gibson, 355 U.S. 41 (1957), for testing the sufficiency of a complaint: “[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id. at 45‐46. That wording, the Court ruled in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), “is best forgotten,” id. at 563, and was replaced with a “plausibility standard,” id. at 560; see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (same). Fifteen years after Salcer, a District Court in this Circuit purported to extract from that opinion a three‐part test for striking a timely filed affirmative defense: “In order to prevail on a motion to strike [an affirmative defense], a plaintiff must show that: (1) there is no question of fact which might allow the defense to succeed; (2) there is no question of law which might allow the defense to succeed; and (3) the plaintiff would be prejudiced by inclusion of the defense.” 7 S.E.C. v. McCaskey, 56 F. Supp. 2d 323, 326 (S.D.N.Y. 1999). This formulation divided Salcer’s reference to facts into two factors, one concerned with facts,5 and the other concerned with law. The McCaskey formulation also added a third factor, prejudice to the plaintiff, a factor not mentioned in Salcer. After McCaskey, district courts in this Circuit repeated the three McCaskey factors, initially in identical wording and later with only slight variations, in a series of decisions, set out in the margin,6 culminating in Coach, Inc. v. Kmart Corps., 756 F. Supp. 2d 421, 425‐26 (S.D.N.Y. 2010). 5 The McCaskey formulation converted the Salcer wording of no “state of the facts which could be proved” to support the defense into “no question of fact” for such purpose. The McCaskey formulation suggests a disputed fact, but perhaps a legally sufficient fact (or set of facts) was meant. 6 The three factors listed in McCaskey were repeated in identical words in S.E.C. v. KPMG LLP, No. 03 Civ. 671 (DLC), 2003 WL 21976733, at  (S.D.N.Y. Aug. 20, 2003), citing McCaskey. The three factors listed in KPMG were repeated, in almost the exact words, in De Beers LV Trademark Ltd. v. DeBeers Diamond Syndicate. Inc., No. 04 Civ. 4099 (DLC), 2005 WL 1164073, at  (S.D.N.Y. May 18, 2005), citing KPMG. De Beers, where the affirmative defenses were filed beyond 21 days after the complaint, changed the wording of the first two factors from “there is” to “there must be,” inserted “substantial” before “question of law” in the second factor, changed the wording of the third factor from “would be” to “must be,” and inserted “the” before “inclusion.” With these slight changes, the three factors were repeated in identical words in Specialty Minerals, Inc. v. Pluess‐Staufer AG, 395 F. Supp. 2d 109, 111 (S.D.N.Y. 2005), citing De Beers, and were repeated in identical words in Coach, Inc. v. Kmart Corps., 756 F. Supp. 2d 421, 425‐26 (S.D.N.Y. 2010), quoting from Specialty Minerals. The affirmative defenses in Coach were filed more than 21 days after the complaint, but apparently not pursuant to leave to file under Rule 15. 8 In the pending appeal, the District Court cited Coach for the proposition that “‘ [i]f a court determines that a defense is legally insufficient, the court must next determine whether inclusion of the defense would prejudice the plaintiff.’” Special App’x 5 (quoting Coach, 756 F. Supp. 2d at 425‐26). The District Court also stated the three relevant factors in terms somewhat different from those used in the McCaskey formulation or in Coach. The Court said that the party moving to strike a defense “ordinarily must show that ‘(1) no evidence in support of the allegations would be admissible; (2) the allegations have no bearing on the issues in the case; and (3) permitting the allegations to stand would result in prejudice to the movant.’” Special App’x 4 (quoting Tucker v. American International Group, Inc., 936 F. Supp. 2d 1, 16 (D. Conn. 2013)). The three Tucker factors can be traced back through a series of decisions, set out in the margin,7 that did not concern a motion to strike 7 Tucker quoted its wording of three factors from Impulsive Music v. Pomodoro Grill, Inc., No. 08‐CV‐6293, 2008 WL 4998474, at  (W.D.N.Y. 2008), which had quoted them from Roe v. City of New York, 151 F. Supp. 2d 495, 510 (S.D.N.Y. 2001). Roe quoted them from Koch v. Dwyer, No. 98 Civ. 5519(RPP), 2000 WL 1458803, at  (S.D.N.Y. Sept. 29, 2000), adding an “s” to “allegation” in the first factor. Koch, which concerned a motion to strike allegations of a complaint, not affirmative defenses, drew the formulation of the three Tucker factors from Wine Markets International, Inc. v. Bass, 177 F.R.D. 128, 133 (E.D.N.Y. 1998), which concerned a motion to strike immaterial and impertinent matter from a complaint. Wine Markets drew the Tucker factors from Laverpool v. New York City Transit Authority, 760 F. Supp. 1046, 1060‐61 (E.D.N.Y. 1991), which concerned a motion to strike immaterial and impertinent matter from a complaint. Laverpool had drawn the three factors from three different sources: Lipsky v. Commonwealth United Corp., 551 F.2d 9 affirmative defenses, but concerned a motion to strike either an allegation of a complaint or material in a pleading. Before adjudicating the propriety of the District Court’s striking two of Calmare’s affirmative defenses, we take this occasion to clarify the factors relevant to striking an affirmative defense. To avoid having district courts continue to repeat the three‐factor formulation as worded in McCaskey, we consider each of those factors in turn. Whether the first of the McCaskey factors should be reworded in light of Twombly, i.e., whether Twombly applies to the pleading of affirmative defenses, is an issue that has divided the many district courts8 and commentators that have considered it. Three comprehensive articles take three different approaches. One 887, 893 (2d Cir. 1976) (reference to certain evidence in pleading was immaterial because that evidence would not be admissible), Fuchs Sugars & Syrups, Inc. v. Amstar Corp., 402 F. Supp. 636, 637‐38 (S.D.N.Y. 1975) (motion to strike references in amended complaint as immaterial denied for lack of prejudice), and 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1382, at 683‐85 (2d ed. 1990) (allegations would result in prejudice to movant). 8 Compare, e.g., Perez v. Gordon & Wong Law Group, P.C., No. 11‐CV‐03323‐LHK, 2012 WL 1029425, at ‐8 (N.D. Cal. Mar. 26, 2012) (Twombly applicable to affirmative defenses), HCRI TRS Acquirer, LLC v. Iwer, 708 F. Supp. 2d 687, 691 (N.D. Ohio 2010) (same), and Tracy v. NVR, Inc., No. 04‐CV‐6541L, 2009 WL 3153150, at  (W.D.N.Y. Sept. 30, 2009) (same), with e.g., Leviton Manufacturing Co. v. Pass & Seymour, Inc., 264 F. Supp. 3d 421, 427 (E.D.N.Y. 2017) (Twombly not applicable to pleading affirmative defenses), Hon Hai Precision Industry Co. v. Wi‐LAN, Inc., No. 12 Civ. 7900(SAS), 2013 WL 2322675, at  (S.D.N.Y. May 28, 2013) (same), and Lane v. Page, 272 F.R.D. 581, 588‐97 (D.N.M. 2011) (same). 10 article favors applying Twombly to affirmative defenses. See Joseph A. Seiner, Plausibility Beyond the Complaint, 53 Wm. & Mary L. Rev. 987 (2012). One opposes applying Twombly to affirmative defenses. See Justin Rand, Tightening Twiqbal: Why Plausibility Must Be Confined to the Complaint, 9 Fed. Cts. L. Rev. 79 (2016). One proposes a “middle‐ground approach.” See Note, Nathan Pysno, Should Twombly and Iqbal Apply to Affirmative Defenses?, 64 Vand. L. Rev. 1633, 1670 (2011); see also 2 Moore’s Federal Practice § 12.37[4] (3d ed. 2018) (“If a plaintiff files a motion to strike one or more defenses, the better view is that the plausibility standard of Twombly does not apply in judging the adequacy of the defendant’s pleaded defenses, although there is some authority to the contrary.” (footnote omitted)); 5 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 1274 (3d ed. 2018) (taking no position on whether Twombly applies to pleading affirmative defenses). We conclude that the plausibility standard of Twombly applies to determining the sufficiency of all pleadings, including the pleading of an affirmative defense, but with recognition that, as the Supreme Court explained in Iqbal, applying the plausibility standard to any pleading is a “context‐specific” 11 task. 556 U.S. at 679.9 The Court described the context of Iqbal as one “where we are impelled to give real content to the concept of qualified immunity for high‐ level officials who must be neither deterred nor detracted from the vigorous performance of their duties.” 556 U.S. at 686. The key aspect of the context relevant to the standard for pleading an affirmative defense is that an affirmative defense, rather than a complaint, is at issue. This is relevant to the degree of rigor appropriate for testing the pleading of an affirmative defense. The pleader of a complaint has the entire time of the relevant statute of limitations to gather facts necessary to satisfy the plausibility standard. By contrast, the pleader of an affirmative defense has only the 21‐day interval to respond to an original complaint, see Fed. R. Civ. P. 12(a)(1)(A)(i), the 21‐day interval to amend, without court permission, an answer that requires a responsive pleading, see Fed. R. Civ. P. 15(a)(1)(B), or the 14‐day interval to file a required response to an amended pleading that makes a new claim, see Fed. R. Civ. P. 15(a)(3).10 That aspect of the context matters. In addition, the relevant context 9 The Court described the context of Iqbal as one “where we are impelled to give real content to the concept of qualified immunity for high‐level officials who must be neither deterred nor detracted from the vigorous performance of their duties.” 556 U.S. at 686. 10 If a plaintiff’s amended pleading only amends a claim previously made, the defendant, though obliged to respond, could usually have had the interval between the 12 will be shaped by the nature of the affirmative defense. For example, the facts needed to plead a statute‐of‐limitations defense will usually be readily available; the facts needed to plead an ultra vires defense, for example, may not be readily known to the defendant, a circumstance warranting a relaxed application of the plausibility standard. The second factor identified in McCaskey needs no revision. There is no dispute that an affirmative defense is improper and should be stricken if it is a legally insufficient basis for precluding a plaintiff from prevailing on its claims. Whether the third of the McCaskey factors, prejudice, should be a basis for dismissing or opposing the addition of an otherwise valid affirmative defense will normally depend on when the defense is presented. A factually sufficient and legally valid defense should always be allowed if timely filed even if it will prejudice the plaintiff by expanding the scope of the litigation. A defendant with such a defense is entitled to a full opportunity to assert it and have it adjudicated before a plaintiff may impose liability. See Lucente v. International Business Machines Corp., 310 F.3d 243, 260 (2d Cir. 2002). On the other hand, prejudice may be considered and, in some cases, may be determinative, where a defense is presented plaintiff’s first and amended complaints to amend its original answer to include affirmative defenses. 13 beyond the normal time limits of the Rules, especially at a late stage in the litigation, and challenged by a motion to dismiss or opposed by opposition to a Rule 15(a) motion. See Anderson v. National Producing Co., 253 F. 2d 834, 838 (2d Cir. 1958) (motion made on eighth day of trial to amend answer to add affirmative defense properly denied). With these considerations in mind, we consider the District Court’s ruling in this case. Granting in part a motion by GEOMC, the District Court struck Calmare’s sixth and seventh affirmative defenses asserted in its answer to GEOMC’s second amended complaint. The sixth defense alleged that GEOMC’s damages were caused by its own negligence; the seventh defense alleged that GEOMC failed to join a necessary party. Although the District Court had permitted Calmare to file this answer, the Court had cautioned that Calmare’s answer would be subject to a motion to strike by GEOMC. The Court stated that these defenses “introduce vague allegations regarding the actions of unnamed third parties, raising concerns of both legal sufficiency and prejudice to GEOMC.” GEOMC, 2016 WL 6122930, at . Striking these two affirmative defenses was within the District Court’s discretion. The sixth defense lacked any indication of what conduct by GEOMC or 14 others might have been a defense to the breach of contract claim added by the second amended complaint. The seventh defense lacked any indication of which party needed to be joined or why. Calmare needed to support these defenses with some factual allegations to make them plausible. Moreover, both affirmative defenses were presented at a late stage of the litigation. Although the defenses were presented soon after GEOMC filed its second amended complaint, they were not aimed at the one new cause of action in that complaint but sought to challenge claims made nearly a year earlier in the first amended complaint. Expanding the litigation at that stage would have been prejudicial to GEOMC.