Wednesday, June 26, 2013

Sauce for goose isn't (chocolate) sauce for gander: pleading affirmative defenses

Miller v. Ghirardelli Chocolate Co., 2013 WL 3153388 (N.D. Cal.)

This ruling covers an issue discussed at the FDLI conference: what is the proper pleading standard for affirmative defenses?  The court says it’s Iqbal/Twombly, but can’t really be said to apply those cases.

Previous ruling.  Miller sued over “Ghirardelli® Chocolate Premium Baking Chips-Classic White,” which don’t contain white chocolate.  Ghirardelli’s answer asserted 25 affirmative defenses, 24 of which Miller moved to strike.  The court denied the motion.

Courts may strike as redundant, immaterial, or impertinent defenses that are not actually affirmative defenses. A defense that demonstrates that a plaintiff hasn’t met its burden of proof on a required element is not an affirmative defense.  Courts differ on whether prejudice is required, but moving to strike is usually a waste of time and money without prejudice.  Expensive and potentially unnecessary and irrelevant discovery is prejudice; a motion to strike can be proper if it makes the issues less complicated and streamlines the ultimate resolution of the case. 

Also, an affirmative defense is insufficiently pleaded if it fails to give the plaintiff fair notice of the nature of the defense.  Courts in N.D. Cal. have applied Iqbal/Twombly to affirmative defenses, requiring defendants to allege enough facts to state a plausible claim. This is to “weed out the boilerplate listing of affirmative defenses which is commonplace in most defendant's pleadings.”

Miller moved to strike 13 affirmative defenses as well as Ghirardelli’s “reservation of rights” as not actually affirmative defenses (e.g., that Miller didn’t reasonably rely on the product name).  He didn’t argue that striking the affirmative defenses would prevent unnecessary discovery, but instead argued that he bore the burden of proof on these issues.  There was no reason to grant the motion to strike when it would serve no real purpose to streamline the case.

Miller also argued that certain defenses were insufficiently pleaded. The court disagreed.  For example, the statute of limitations defense put Miller on fair notice by identifying some of the applicable statutes of limitations and explaining that the class period is longer than the limitations periods that may apply to absent class members, and also that the precise limitations period depends on a choice of law analysis.  Merits analysis was for summary judgment.

So too with preemption; Ghirardelli’s answer alleged that “[t]he claims are barred to the extent that they are preempted by federal law, including specifically by FDA labeling requirements and the prohibition on private rights of action to enforce FDA rules.”  This was enough because preemption could apply regardless of how it was pleaded.  And so on, including, “[i]njunctive relief is not necessary or appropriate because voluntary changes in the label and website have rendered the requested relief moot.”  Though Miller argued that Ghirardelli should’ve described the changes, this was sufficient detail for pleading purposes.  As the court notes below but doesn’t find important, this doesn’t seem like it’s applying Iqbal/Twombly equally—can you imagine a plaintiff surviving a motion to dismiss with a claim that a “label and website” is misleading?

Even the pure boilerplate survived, such as “23. Contributory Fault: The recovery of Plaintiff and/or other class members is barred and/or should be reduced because of contributory negligence or fault and/or comparative negligence or fault. 24. The FAC, and each cause of action alleged therein, is barred by the doctrines of unclean hands, estoppel, waiver, and laches. 25. Plaintiff, and any class members, failed or refused to exercise reasonable care and diligence to avoid loss and minimize damages, and therefore, may not recover for losses that could have reasonably prevented.”  Though these defenses were unsupported by factual allegations, and were the bare statement of a legal doctrine, Ghirardelli rejoined that it was common to allege these defenses in boilerplate fashion.

The court was

not unsympathetic to Miller's point that he is entitled to notice sufficient to oppose this defense. The court also recognizes the implicit equities argument that is at play here: the court took a hard look at the fact allegations in the complaint in the context of a standing argument that Miller thought would be better illuminated at the class certification stage after discovery. Given that posture, and [Iqbal's] and Twombly 's application to the affirmative defenses, then Miller doubtless thinks the same hard look should apply here, too.

Though these were fair points, a motion to strike is a different context.  Viewed in the context of the complaint, there was fair notice of the defenses.  (Unclean hands, estoppel, waiver, and laches?  Really?  What facts provide proper notice of these?  Where is the allegation of facts demonstrating prejudice to Ghirardelli based on its reasonable belief that Miller wouldn’t sue?)  Anyway, the reality was that there was no prejudice to Miller and no discovery burden. 


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