Court Holds That Twombly/Iqbal Pleading Standard Does Not Apply to Affirmative Defenses in TCPA Case

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In a TCPA action concerning allegedly unsolicited fax advertisements, the Eastern District of Michigan recently rejected the argument that the plausibility standard articulated in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009) applies to affirmative defenses. See Exclusively Cats Veterinary Hospital, P.C. v. Pharmaceutical Credit Corp., No. 13-14376, 2014 U.S. Dist. LEXIS 132440 (E.D. Mich. Sept. 22, 2014).

Although there is a split of authority in the district courts and no authority from the circuit courts, most courts and commentators have concluded that affirmative defenses need not satisfy the plausibility standard articulated in Twombly and Iqbal. They have reasoned that the standard should be different because the rules are different; whereas those pleading a claim for relief must make a “showing that the pleader is entitled to relief,” those pleading a defense or affirmative defense must only “state in short and plain terms its defenses” and “affirmatively state any avoidance or affirmative defense.” Fed. R. Civ. P. 8(a)(2) (claims), 8(b)(1)(A) (defenses), 8(c)(1) (affirmative defenses). Because the Supreme Court’s discussion of the plausibility standard hinged on the requirement that claims be “shown,” and because affirmative defenses can be “stated” without being “shown,” most courts have found that affirmative defenses should not be held to that higher standard. Some have also explained that the Supreme Court’s concerns about “unlock[ing] the doors of discovery for a plaintiff armed with nothing more than conclusions” do not apply to affirmative defenses because the plaintiff has already unlocked those doors himself. Iqbal, 556 U.S. at 678-79. Others have noted that it would be unfair to hold defendants to a plausibility standard because whereas plaintiffs may file their complaints after months or even years of investigation, defendants must file their answers within 21 days. See Fed. R. Civ. P. 12(a)(1)(A).

The Exclusively Cats court began by acknowledging that district courts within the Sixth Circuit have split on this issue. See Exclusively Cats, 2014 U.S. Dist. LEXIS 132440 at *4 (citing Safeco Ins. Co. of Am. v. O’Hara Corp., No. 08-10545, 2008 WL 2558015, at *1 (E.D. Mich. June 25, 2008) (applying plausibility standard to affirmative defenses); Int’l Outdoor, Inc. v. City of Southgate, No. 11-14719, 2012 WL 2367160, at *7-9 (E.D. Mich. Apr. 6, 2012) (declining to do so)). It then sided with the majority view and explained that Rules 8(b) and 8(c) contain “no language similar to that of Rule 8(a).” Id. at *5. It also reasoned that the policy of containing discovery costs was not enough to tip the scales in the opposite direction. Id. Finally, it noted that its holding was consistent with a number of Sixth Circuit decisions—both before and after Twombly and Iqbal—that suggested that affirmative defenses can be stated in general terms. Id. at *3-4 (citing Lawrence v. Chabot, 182 F. App’x 442, 456-57 (6th Cir. 2006) (“An affirmative defense may be pleaded in general terms and will be held to be sufficient … as long as it gives plaintiff fair notice of the nature of the defense”); Davis v. Sun Oil Co., 148 F.3d 606, 612 (6th Cir. 1998) (holding that an affirmative defense that “claims are barred by the doctrine of res judicata” was sufficient under Rule 8(c)); Montgomery v. Wyeth , 580 F.3d 455, 468 (6th Cir. 2009) (holding that “[t]he Federal Rules of Civil Procedure do not require a heightened pleading standard for a statute of repose defense” and citing Rule 8(b)(2)’s requirement that a party “state in short and plain terms its defenses to each claim”).

However, the court did grant the plaintiff’s requested relief with respect to two affirmative defenses. First, it held that simply stating that claims “are barred, in whole, or in part by 47 U.S.C. § 227(b)(1)(C) et seq.” was insufficient because it did not specify which statutory provision allegedly barred the plaintiff’s claim. Exclusively Cats, 2014 U.S. Dist. LEXIS 132440, at *5-6. Second, it struck a mitigation of damages defense because the plaintiff did not “seek actual damages exceeding the statutory amount.” Id. at *13-14. But it held that affirmative defenses such as consent, established business relationship, and unclean hands were appropriately raised and properly pleaded. Id. at *7-15.