District Court (Cal.) Applies Iqbal/Twombly Pleading Standard to Pleading Affirmative Defenses under the FDCPA

In Dion v. Fulton Friedman & Gullace LLP, 2012 WL 160221 (N.D.Cal. 2012), Judge Conti imposed the higher Iqbal/Twombly pleading standards to a debt collector’s pleading affirmative defenses. 

The parties dispute which standard should apply to the instant motion. Plaintiffs urge this Court to apply the heightened “plausibility” pleading standard that some district courts have derived from the Supreme Court’s watershed Twombly and Iqbal deci-sions. MTS at 2–4, Reply at 1–3; see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Defendants argue for the continued vitality of the lower “fair notice” standard articulated by the Ninth Circuit in Wyshak, decades before the Supreme Court decided Twombly and Iqbal. Opp’n at 2–6; see also Wyshak v. City Nat’l Bank, 607 F.2d 824, 827 (9th Cir.1979).  ¶  This disagreement mirrors the difference of opinion among federal district courts that has followed in the wake of the Twombly/Iqbal sea change in federal pleading standards. Judge Patel summarized the situation in Barnes v. AT & T Pension Benefit Plan–Nonbargained Program, 718 F.Supp.2d 1167, 1171–72 (N.D.Cal.2010). See also 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1278 (3d ed. 1998 & Supp.2011) (describing split). As both parties acknowledge, MTS at 4 n. 12, Opp’n at 4, neither the Supreme Court nor the Ninth Circuit has yet held whether the reasoning of Twombly and Iqbal, which specifically addressed Rule 8’s pleading standard for complaints, extends to affirmative defenses pled in an answer. Barnes, 718 F.Supp.2d. at 1171. A majority of district courts have held that it does, while a minority continue to apply the fair notice standard of Wyshak.   ¶  This Court is not bound by the decisions of other district courts, but it finds Judge Patel’s reasoning in support of the heightened “plausibility” standard to be persuasive. Therefore, in deciding the present motion, the Court applies the heightened standard derived from Twombly and Iqbal and explicated in Barnes. This standard “serve[s] to weed out the boilerplate listing of affirmative defenses which is commonplace in most defendants’ pleadings where many of the defenses alleged are irrelevant to the claims asserted.” Barnes, 718 F.Supp.2d at 1172. In doing so, it furthers the underlying purpose of Rule 12(f), which is to avoid spending time and money litigating spurious issues. See Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir.1993), rev’d on other grounds, 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). Just as a plaintiff’s complaint must allege enough supporting facts to nudge a legal claim across the line separating plausibility from mere possibility, Twombly, 550 U.S. at 570, a defendant’s pleading of affirmative defenses must put a plaintiff on notice of the underlying factual bases of the defense, Barnes, 718 F.Supp. at 1172–73. Mere labels and conclusions do not suffice. See Twombly, 550 U.S. at 555.