Lockheed Martin Corp. v. United States
973 F. Supp. 2d 591 (2013)
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Rule of Law:
The heightened 'plausibility' pleading standard for complaints established in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal does not apply to affirmative defenses pleaded in an answer under the Federal Rules of Civil Procedure. Affirmative defenses are governed by the less stringent requirement to 'state in short and plain terms its defenses' under FRCP 8(b).
Facts:
- Plaintiff is a Maryland-based global security and aerospace company that conducts substantial business with the United States Government.
- Plaintiff alleged that it overpaid its federal income taxes for the years 2004 through 2008.
- The alleged overpayment resulted from the IRS improperly applying various tax credits, deductions, and exclusions.
- Plaintiff sought a tax refund of at least $16,157,226 from the United States.
Procedural Posture:
- Plaintiff, a Maryland corporation, filed a Complaint against the United States in the U.S. District Court for the District of Maryland for a refund of federal income taxes.
- Plaintiff subsequently filed an Amended Complaint in May 2013.
- The United States filed an Answer, which included a 'Second Defense' asserting its right to reduce any potential refund by any other tax liabilities Plaintiff might owe for the years in question.
- Plaintiff filed a Motion to Strike the Defendant's Second Defense, arguing that it was a conclusory legal statement that failed to meet the 'plausibility' pleading standard set forth in Twombly and Iqbal.
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Issue:
Do the heightened 'plausibility' pleading standards established in Twombly and Iqbal for complaints also apply to affirmative defenses pleaded in an answer under the Federal Rules of Civil Procedure?
Opinions:
Majority - Williams, Jr., District Judge.
No. The heightened plausibility pleading standards established in Twombly and Iqbal do not apply to affirmative defenses. The court's reasoning is based on a textual analysis of the Federal Rules of Civil Procedure and policy considerations. The court notes that the Supreme Court’s analysis in Twombly and Iqbal focused on FRCP 8(a)(2)'s requirement that a plaintiff make a 'showing' of entitlement to relief. In contrast, FRCP 8(b), which governs defenses, only requires a party to 'state in short and plain terms its defenses.' Applying a plausibility standard to defenses would also be inconsistent with FRCP 8(b)(3), which permits general denials. Furthermore, policy considerations support this distinction, as defendants have significantly less time to develop defenses than plaintiffs have to develop their claims. Finally, the court reasons that the primary function of heightened pleading is to screen potentially groundless complaints that invoke the court's jurisdiction, a function that does not apply to affirmative defenses.
Analysis:
This decision contributes to a significant and ongoing split among federal district courts regarding the pleading standard for affirmative defenses post-Twombly and Iqbal. By adopting the minority view, the court reinforces the traditional distinction between the requirements for pleading claims and defenses, making it easier for defendants to assert a broad range of defenses without extensive factual development at the pleading stage. This ruling prioritizes giving defendants flexibility due to their limited response time over concerns about judicial efficiency and 'boilerplate' pleadings, leaving discovery as the primary mechanism for narrowing and challenging defenses. The lack of appellate guidance on this issue means that pleading standards for defenses will continue to vary by jurisdiction and even by judge, creating uncertainty for litigants.
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