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United States District Court for District of Maryland holds Twombly-Iqbal pleading standard inapplicable to affirmative defenses

LBCMT 2007-C3 Urbana Pike, LLC v. Eric D. Sheppard
No. 12-3056, _ F.Supp.3d _ (D. Md. Oct. 1, 2014)

by Wayne C. Heavener, Associate
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.mdd.uscourts.gov/Opinions/Opinions/12-3056%20LBCMT%202007-C3%20Urbana%20Pike%20v%20Sheppard%20m&o%20deny%2012f%20strike%20aff%20dfns,
%20grant%20mots%20compel%200914.pdf

In LBCMT 2007-C3 Urbana Pike, LLC v. Eric D. Sheppard, the United States District Court for the District of Maryland held that the Twombly-Iqbal standard of pleading did not apply when plaintiffs sought to strike defendants’ affirmative defenses under FED. R. CIV. P. 12 (f). LBCMT 2007-C3 Urbana Pike was one (1) of several lenders (collectively, “Plaintiffs”), that held certain promissory notes guaranteed by Eric Sheppard and Philip Wolman (collectively, “Defendants”). Plaintiffs sought to enforce repayment obligations under these notes against Defendants when the original borrowers defaulted on their obligations. Defendants raised certain affirmative defenses, and Plaintiff filed three (3) motions: (a) to strike Defendants’ affirmative defenses; (b) to compel Mr. Sheppard’s Responses to Interrogatories; and (c) to compel Mr. Wolman’s Responses to Interrogatories. District Judge James K. Bredar denied Plaintiff’s Motion to Strike, awarded Plaintiffs costs in connection with filing their Motion to Compel against Mr. Sheppard, and granted Plaintiffs’ Motion to Compel Mr. Wolman’s Responses to Interrogatories. Importantly, the Court acknowledged that its decision to refrain from applying the Twombly-Iqbal standard of pleading to Defendants’ affirmative defenses diverged from other opinions by federal judges in the District of Maryland.

The Court’s opinion, which is to be published in the Federal Supplement, Third Series, did not recite the facts surrounding this case, nor did it provide what affirmative defenses were raised by Defendants. Rather, the Court’s opinion almost exclusively discussed the law. Most importantly, the Court stated that Plaintiffs sought to strike those affirmative defense raised by Defendants because Defendants failed to meet the Twombly-Iqbal standard, under which a party must state “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court denied Plaintiffs’ Motion to Strike because the Court reasoned that the Twombly-Iqbal standard, which the Supreme Court has held to apply to pleadings seeking dismissal for failure to state a claim under FED. R. CIV. P. 12 (b) (6) and (c), did not likewise apply to motions filed under FED. R. CIV. P. 12 (f) to strike affirmative defenses. In reaching its decision, the Court acknowledged that other decisions by the United States District Court for the District of Maryland have held that the Twombly-Iqbal standard applied to the pleading of affirmative defenses. In rejecting those decisions, the Court reasoned:

A plaintiff's complaint invokes the jurisdiction of the court and seeks affirmative relief. An affirmative defense does neither; consequently, it is reasonable to interpret the wording of Rule 8(b) and (c), which govern defenses and affirmative defenses, differently from the interpretation given by the Supreme Court to the distinctive wording of Rule 8(a) applicable to claims for relief. Rule 8(a)'s more demanding principle is better applied to claimants who have had significant time to craft their claims. Applying the same principle to defendants unfairly places on them too substantial a burden too early in the litigation process.

LBCMT 2007-C3 Urbana Pike, LLC, slip. op. at 3–4. As to Plaintiffs’ Motion to Compel against Mr. Sheppard, the Court acknowledged that Mr. Sheppard eventually responded to Plaintiffs’ interrogatories; therefore, the issue was moot. The Court held, however, that Plaintiffs were entitled to fees in connection with filing their motion, as Mr. Sheppard made no argument that his lack of response was substantially justified. As to Mr. Wolman, the Court granted Plaintiffs’ Motion to Compel, as Mr. Wolman had yet to respond to Plaintiffs’ interrogatories.


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