Late last year we published the post “Twiqbal for Defendants? Not If We Can Help It.” on the issue of whether the “plausibility” standard of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S 662 (2009), applied to “affirmative defenses (which we prefer to just call “defenses) pleaded under Fed. R. Civ. P. 8(c). Basically, our two responses to the proposition that Rule 8(c) defenses could be TwIqballed were “no” and “hell, no.”
In addition to amassing District Court precedent from every circuit, we relied on several opinions from federal courts of appeals, citing cases from the Third, Sixth, Seventh, and Ninth Circuits.
Well, the circuits are no longer unanimous. To make sure nobody on our side is misled, we feel we ought to mention the new decision, GEOMC Co. v. Calmare Therapeutics Inc., 918 F.3d 92, 94 (2d Cir. 2019), which largely, but not entirely, holds that the absolute anti-TwIqbal position we took in that post is all wet. GEOMC is not by any means a drug/device, or even a personal injury, decision (it’s a dispute over a commercial contract), so we didn’t find out about it until recently.
We don’t care about the facts, or the law, or even the procedure, except for the TwIqbal ruling in GEOMC. So getting right to that, the question before the Second Circuit was “whether Twombly applies to the pleading of affirmative defenses.” 918 F.3d at 97. GEOMC answered that question in the affirmative – at least “in context.” Specifically:
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” task. . . . 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.
Id. at 98 (citations and quotation marks omitted).
The contextual issue recognized in GEOMC was the same one that we pointed out in our prior post had led most courts to opt for a more relaxed pleading standard for Rule 8(c) – what we described as “unfairness”:
the unfairness of holding the defendant to the same pleading standard as the plaintiff, when the defendant has only a limited time to respond after service of the complaint while plaintiff has until the expiration of the statute of limitations.
The Second Circuit in GEOMC viewed this concern as “context,” holding:
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. . . . That aspect of the context matters.
Id. at 98. So difficulties in marshalling facts to support Rule 8(c) defenses are “a circumstance warranting a relaxed application of the plausibility standard.” Id. at 98.
A second contextual matter also comes into play – whether the “facts” are accessible to the pleader within the limited time frame available:
In addition, the relevant context 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.
GEOMC affirmed striking two defenses: contributory fault and failure to join a “necessary party.” As to the first, it “lacked any indication of what conduct by [plaintiff] or others might have been a defense to the breach of contract claim.” Id. at 99. As to the second, it “lacked any indication of which party needed to be joined or why.” Id. In both instances, the pleading defendant “needed to support these defenses with some factual allegations to make them plausible.” Id. There was, however, something else in play − timing. “[B]oth affirmative defenses were presented at a late stage of the litigation” and, what’s worse “sought to challenge claims made nearly a year earlier in the first amended complaint.” Id. Basically, the Second Circuit detected sharp practice, using an answer to an amended complaint to raise additional defenses to the original claim, as opposed to anything in the amendment.
So, what’s the upshot of GEOMC? In practice we’re not sure there is much. It seems like the difference is mostly in emphasis. Our post (and most courts and commentators) took the position “no TwIqbal because of X.” The Second Circuit has taken the position “yes, except X warrants “relaxing” the usual TwIqbal standard.” While that doesn’t sound like much, we do have to admit, however, that the Second Circuit does apply TwIqbal, in some fashion, to Rule 8(c) defenses. So particularly in the Second Circuit defendants would be well-advised not to go overboard with boilerplate defenses.