Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 1 of 24 PageID 256
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF TENNESSEE
`WESTERN DIVISION
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`B.E. TECHNOLOGY, L.L.C.,
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`Plaintiff/Counter-Defendant,
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`v.
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`APPLE INC.,
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`Defendant/Counterclaimant.
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`Case No. 2:12-cv-02831 JPM tmp
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`JURY DEMAND
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`
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`PLAINTIFF’S MEMORANDUM IN SUPPORT OF ITS
`MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) AND
`MOTION TO STRIKE UNDER FED. R. CIV. P. 12(f)
`
`Richard M. Carter (TN B.P.R. #7285)
`Adam C. Simpson (TN B.P.R. #24705)
`MARTIN, TATE, MORROW & MARSTON, P.C.
`6410 Poplar Avenue, Suite 1000
`Memphis, TN 38119-4839
`Telephone: (901) 522-9000
`
`Robert E. Freitas (CA Bar No. 80948)
`Craig R. Kaufman (CA Bar No. 159458)
`Daniel J. Weinberg (CA Bar No. 227159)
`James Lin (CA Bar No. 241472)
`Qudus B. Olaniran (CA Bar No. 267838)
`FREITAS TSENG & KAUFMAN LLP
`100 Marine Parkway, Suite 200
`Redwood Shores, CA 94065
`Telephone: (650) 593-6300
`
`Attorneys for Plaintiff
`B.E. Technology, L.L.C.
`
`
`
`Dated: January 25, 2013
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`
`

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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 2 of 24 PageID 257
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`TABLE OF CONTENTS
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`
`Page
`
`I.
`
`II.
`
`INTRODUCTION ............................................................................................................. 1
`
`RELEVANT BACKGROUND ......................................................................................... 1
`
`III.
`
`APPLICABLE LAW ......................................................................................................... 3
`
`A.
`
`B.
`
`C.
`
`D.
`
`Motion to Dismiss Under Federal Rule of Civil Procedure 12(f) .......................... 3
`
`The Twombly/Iqbal Standard Applies to Counterclaims In Patent Cases ............. 3
`
`Motion to Strike Under Federal Rule of Civil Procedure 12(f) ............................. 5
`
`The Twombly/Iqbal Standard Applies To Affirmative Defenses .......................... 8
`
`IV.
`
`APPLE’S INVALIDITY ALLEGATIONS DO NOT WITHSTAND A RULE
`12(b)(6) CHALLENGE ................................................................................................... 10
`
`A.
`
`B.
`
`Counterclaim Two and Counterclaim Four Should Be Dismissed ...................... 10
`
`The Third Affirmative Defense Should Be Stricken ........................................... 13
`
`V.
`
`APPLE’S NONINFRINGEMENT ALLEGATIONS DO NOT WITHSTAND A
`RULE 12(b)(6) CHALLENGE ........................................................................................ 14
`
`A.
`
`B.
`
`Counterclaim One and Counterclaim Three Should Be Dismissed ..................... 14
`
`The Second Affirmative Defense Should Be Stricken ........................................ 15
`
`VI.
`
`APPLE’S OTHER AFFIRMATIVE DEFENSES DO NOT WITHSTAND A
`RULE 12(b)(6) CHALLENGE ........................................................................................ 15
`
`A.
`
`B.
`
`C.
`
`Fourth Affirmative Defense ................................................................................. 15
`
`Fifth Affirmative Defense .................................................................................... 16
`
`Sixth Affirmative Defense ................................................................................... 16
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`VII. B.E. WILL BE PREJUDICED IF APPLE’S AFFIRMATIVE DEFENSES ARE
`NOT STRICKEN ............................................................................................................. 17
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`VIII. CONCLUSION ................................................................................................................ 17
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`
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`-i-
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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 3 of 24 PageID 258
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`
`
`
`
`TABLE OF AUTHORITIES
`
`FEDERAL CASES
`
`Page(s)
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ......................................................................................................... passim
`
`Bayer CropScience AG v. Dow AgroSciences LLC¸
`2011 WL 6934557 (D. Del. Dec. 30, 2011) ...............................................................................7
`
`Bell Atlantic Corp. v. Twombly,
`550 U.S. 544 (2007) ......................................................................................................... passim
`
`Conley v. Gibson, 355 U.S. 41 (1957) ......................................................................................7, 14
`
`Damron v. ATM Central LLC,
`2010 WL 6512345 (W.D. Tenn. Oct. 29, 2010) ........................................................................6
`
`Dann v. Lincoln Nat’l Corp.,
`274 F.R.D. 139 (E.D. Pa. 2011) .................................................................................................8
`
`Del-Nat Tire Corp. v. A To Z Tire & Battery, Inc.,
`2009 WL 4884435 (W.D. Tenn. Dec. 8, 2009) .........................................................................6
`
`Duramed Pharmaceuticals, Inc. v. Watson Laboratories, Inc.,
`2008 WL 5232908 (D. Nev. Dec. 12, 2008) ......................................................................11, 12
`
`Elliot & Frantz, Inc. v. Ingersoll-Rand Co.,
`457 F.3d 312 (3d Cir. 2006) ......................................................................................................9
`
`Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,
`535 U.S. 722 (2002) .................................................................................................................16
`
`Groupon, Inc. v. MobGob LLC,
`2011 WL 2111986 (N.D. Ill. May 25, 2011) .................................................................4, 12, 17
`
`HCRI TRS Acquirer, LLC v. Iwer,
`708 F. Supp. 2d 687 (N.D. Ohio 2010) ..................................................................................5, 7
`
`Holley Performance Prods., Inc. v. Quick Fuel Tech., Inc.,
`2011 WL 3159177 (W.D. Ky. July 26, 2011) ...........................................................................7
`
`Iconfind, Inc. v. Google, Inc.,
`2011 WL 4505779 (E.D. Cal. Aug. 2, 2011) ................................................................... passim
`
`In re Sterten,
`546 F.3d 278 (3d Cir. 2008)...................................................................................................8, 9
`
`-ii-
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`

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`
`
`
`
`TABLE OF AUTHORITIES
`(CONT.)
`
`FEDERAL CASES
`
`Page(s)
`
`McLemore v. Regions Bank,
`2010 WL 1010092 (M.D. Tenn. Mar. 18, 2010) .....................................................................14
`
`Montgomery v. Wyeth,
`580 F.3d 455 (6th Cir. 2009) ...........................................................................................7, 8, 14
`
`PB Farradyne, Inc. v. Peterson,
`2006 WL 132182 (N.D. Cal. Jan. 17, 2006) ......................................................................12, 14
`
`Phonometrics, Inc. v. Economy Inns of Am.,
`340 F.3d 1356 (Fed. Cir. 2003)..............................................................................................4, 5
`
`Qarbon.com v. eHelp Corp.,
`315 F. Supp. 2d 1046 (N.D. Cal. 2004) .............................................................................11, 14
`
`Regions Bank v. SoFHA Real Estate, Inc.,
`2010 WL 3341869 (E.D. Tenn. Aug. 25, 2010) ........................................................................5
`
`Renalds v. S.R.G. Restaurant Group, Chicago, LLC,
`119 F. Supp. 2d 800 (N.D. Ill. 2000) ......................................................................................15
`
`Safeco Ins. Co. of Am. v. O’Hara Corp.,
`2008 WL 2558015 (E.D. Mich. June 25, 2008).........................................................................6
`
`Shinew v. Wszola,
`2009 WL 1076279 (E.D. Mich. 2009) .......................................................................................6
`
`Sloan Valve Co. v. Zurn Indus., Inc.,
`712 F. Supp. 2d 743 (N.D. Ill. 2010) .................................................................................15, 16
`
`Sprint Comms. Co., L.P. v. Theglobe.com, Inc.,
`233 F.R.D. 615 (D. Kansas 2006) ......................................................................................12, 14
`
`Sun Microsystems, Inc. v. Versata Enters., Inc.,
`630 F. Supp. 2d 395 (D. Del. 2009) .......................................................................................3, 4
`
`Surface Shields, Inc. v. Poly-Tak Protection Sys., Inc.,
`213 F.R.D. 307 (N.D. Ill. 2003) .................................................................................................5
`
`Tyco Fire Prods. LP v. Victaulic Co.,
`777 F. Supp. 2d 893 (E.D. Pa. 2011) ............................................................................... passim
`
`-iii-
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`

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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 5 of 24 PageID 260
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`
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`
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`TABLE OF AUTHORITIES
`(CONT.)
`
`FEDERAL CASES
`
`Page(s)
`
`United States v. Quadrini,
`2007 WL 4303213 (E.D. Mich. Dec. 6, 2007) ..........................................................................6
`
`Vivid Tech. Inc. v. Am. Science & Eng., Inc.,
`200 F.3d 795 (Fed. Cir. 1999)....................................................................................................5
`
`Westbrook v. Paragon Sys. Inc.,
`2007 WL 7715075 (S.D. Ala. Nov. 29, 2007) ...........................................................................7
`
`Williams v. Provident Inv. Counsel, Inc.,
`279 F. Supp. 2d 894 (N.D. Ohio 2003) .....................................................................................6
`
`Zampieri v. Zampieri,
`2009 WL 3241741 (E.D. Tenn. Sept. 30, 2009) ........................................................................6
`
`FEDERAL STATUTES
`
`
`
`35 U.S.C. § 100. .............................................................................................................................11
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`35 U.S.C. § 101. ...............................................................................................................2, 4, 11, 13
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`35 U.S.C. § 102 ................................................................................................................2, 4, 11, 13
`
`35 U.S.C. § 103 ................................................................................................................2, 4, 11, 13
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`35 U.S.C. § 112 ................................................................................................................2, 4, 11, 13
`
`35 U.S.C. § 116 ................................................................................................................................4
`
`35 U.S.C. § 286 ..............................................................................................................................16
`
`35 U.S.C. § 287 ..............................................................................................................................16
`
`RULES
`
`Fed. R. Civ. P. 1 ...............................................................................................................................3
`
`Fed. R. Civ. P. 7(a) ........................................................................................................................10
`
`Fed. R. Civ. P. 8 ...............................................................................................................................5
`
`Fed. R. Civ. P. 8(a) ............................................................................................................7, 8, 9, 17
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`-iv-
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`

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`
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`
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`TABLE OF AUTHORITIES
`(CONT.)
`
`RULES
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`Page(s)
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`Fed. R. Civ. P. 8(a)(2) ......................................................................................................................3
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`Fed. R. Civ. P. 8(b) ..................................................................................................................7, 8, 9
`
`Fed. R. Civ. P. 8(b)(1)(A) ................................................................................................................9
`
`Fed. R. Civ. P. 8(c) ............................................................................................................7, 8, 9, 10
`
`Fed. R. Civ. P. 9 ...............................................................................................................................5
`
`Fed. R. Civ. P. 11 .........................................................................................................................4, 5
`
`Fed. R. Civ. P. 12 ...........................................................................................................................10
`
`Fed. R. Civ. P. 12(b) ....................................................................................................................6, 8
`
`Fed. R. Civ. P. 12(b)(6)......................................................................................................1, 4, 5, 10
`
`Fed. R. Civ. P. 12(c) ..................................................................................................................8, 10
`
`Fed. R. Civ. P. 12(f) ............................................................................................................... passim
`
`Fed. R. Civ. P. 12(h)(2)..................................................................................................................10
`
`Fed. R. Civ. P. 19(b) ......................................................................................................................10
`
`OTHER AUTHORITIES
`
`5C Charles Alan Wright & Arthur Miller,
`Federal Practice and Procedure Civil § 1380 (3d ed. 2004) ....................................................5
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`5C Charles Alan Wright & Arthur Miller,
`Federal Practice and Procedure Civil § 1381 (3d ed. 2004) ..................................................10
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`
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`-v-
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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 7 of 24 PageID 262
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`
`I.
`
`INTRODUCTION.
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`Plaintiff B.E. Technology, L.L.C. (“B.E.”) respectfully moves to dismiss defendant
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`Apple Inc.’s (“Apple”) counterclaims for failure to state a claim upon which relief can be granted
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`pursuant to Federal Rule of Civil Procedure 12(b)(6). B.E. also moves for an order striking
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`Apple’s affirmative defenses pursuant to Federal Rule of Civil Procedure 12(f). For the reasons
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`stated below, the Court should grant B.E.’s motion.
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`II.
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`RELEVANT BACKGROUND.
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`B.E. is a Delaware limited liability company with its principal place of business in
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`Memphis, Tennessee. D.E. 1. B.E. owns all right, title, and interest in United States Patent No.
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`6,628,314 (“’314 patent”) and United States Patent No. 6,771,209 (“’290 patent”). The ’314
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`patent is entitled “Computer Interface Method and Apparatus With Targeted Advertising.” Id.
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`The ’290 patent is entitled “Computer Interface Method and Apparatus With Portable Network
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`Organization System and Targeted Advertising.” Id. The patents claim inventions related to the
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`display of targeted advertisements based on demographic information over a network. Id.
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`Apple is a California corporation. B.E. filed its Complaint in this matter on September
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`22, 2012. Id. B.E. alleged that “Apple has infringed the ’314 patent by using a method of
`
`providing demographically targeted advertising that directly infringes at least Claim 11 of the
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`’314 patent either literally or under the doctrine of equivalents.” Id. at 3. B.E. also alleges that
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`“Apple has infringed at least Claim 2 of the ’290 patent by using, selling, and offering to sell in
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`the United States tablet computer products that directly infringe at least Claim 2 of the ’290
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`patent either literally or under the doctrine of equivalents.” Id. Following a substantial
`
`extension of time designed to permit, among other things, Apple to “consider and evaluate the
`
`Complaint, and prepare a responsive pleading,” (see D.E. 15 at 1), Apple filed its Answer on
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`December 31, 2012. D.E. 26.
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`- 1 -
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`

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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 8 of 24 PageID 263
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`Apple’s Third Affirmative Defense states that:
`
`One or more claims of the ’314 and ’290 patents are invalid for
`failing to satisfy one or more of the conditions for patentability
`specified in 35 U.S.C. § 101 et seq., including §§ 101, 102, 103,
`and/or 112.
`
`D.E. 26 at 4. Apple’s Second Affirmative Defense provides that “Apple has not and does not
`
`infringe any valid and enforceable claim of the ’314 or ’290 patents.” Id. It’s Fourth
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`Affirmative Defense simply concludes that “B.E.’s claims are barred in whole or in part by
`
`prosecution history estoppel,” id., while its Sixth Affirmative Defense states “B.E.’s claims for
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`relief are barred by the equitable doctrine of laches, waiver, estoppel, patent exhaustion, implied
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`license, and/or by any other equitable doctrine.” Id. Apple’s Second, Third, Fourth, and Sixth
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`Affirmative Defenses should be stricken.
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`Apple also asserts counterclaims seeking declaratory judgments of noninfringement and
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`invalidity. The counterclaims are conclusory and devoid of factual sufficiency. The
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`counterclaim for a declaratory judgment of invalidity states, much like Apple’s invalidity
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`affirmative defense, that “[n]one of the claims of the ’314 patent is valid and enforceable for
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`failure to meet the conditions of patentability and/or otherwise company [sic] with one or more
`
`of Title 35 U.S.C. § 101 et seq., including §§ 101, 102, 103, and/or 112.” Id. at 6 & 7 (mirroring
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`the same language for the declaratory judgment of invalidity with respect to the ’290 patent).
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`The counterclaim for a declaratory judgment noninfringement also matches up with the
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`conclusory assertion of noninfringement in Apple’s affirmative defense. See id. at 6-7 (“Apple
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`has not infringed and does not infringe (literally, under the doctrine of equivalents,
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`contributorily, by inducement, or in any other manner) any valid and enforceable claim of the
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`’314 patent [or ’290 patent].”).
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`III. APPLICABLE LAW.
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`A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(f).
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`“To survive a motion to dismiss, a complaint must contain 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)). “[A]
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`formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555;
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`see also Fed. R. Civ. P. 8(a)(2) (requiring “a short and plain statement of the claim showing that
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`the pleader is entitled to relief”). As the Supreme Court explained in Iqbal, “[a] claim has facial
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`plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
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`inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. 678.
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`Although a court must accept all well-pleaded factual allegations as true when it
`
`considers a motion to dismiss, that rule does not apply to a legal conclusion that is “couched as a
`
`factual allegation.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 678-79. Additionally,
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`even where a complaint presents appropriate factual allegations, a court must determine whether
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`the allegations, accepted as true, “plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S.
`
`at 679. The allegations must “permit the court to infer more than the mere possibility of
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`misconduct.” Id.
`
`B.
`
`The Twombly/Iqbal Standard Applies to Counterclaims In Patent Cases.
`
`The Twombly and Iqbal standard is generally applicable to cases filed in federal court.
`
`See id. at 684 (“Our decision in Twombly expounded the pleading standard for ‘all civil actions,’
`
`and it applies to antitrust and discrimination suits alike.”) (citing Twombly, 550 U.S. at 555-56,
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`555 n.3, and Fed. R. Civ. P. 1). The Twombly and Iqbal standard applies to declaratory judgment
`
`counterclaims in patent cases. See Tyco Fire Prods. LP v. Victaulic Co., 777 F. Supp. 2d 893,
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`903 (E.D. Pa. 2011); Sun Microsystems, Inc. v. Versata Enters., Inc., 630 F. Supp. 2d 395, 412
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`- 3 -
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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 10 of 24 PageID 265
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`(D. Del. 2009); Iconfind, Inc. v. Google, Inc., 2011 WL 4505779, at *1 (E.D. Cal. Aug. 2, 2011);
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`Groupon, Inc. v. MobGob LLC, 2011 WL 2111986, at *2 (N.D. Ill. May 25, 2011).
`
`In Groupon, the plaintiff Groupon moved to dismiss a counterclaim seeking a declaratory
`
`judgment that the Groupon patent is invalid. 2011 WL 2111986, at *2. The counterclaim stated
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`the “[t]he . . . Patent is invalid for failing to comply with one or more provisions of Title 35 of
`
`the United States Code, including without limitation, 35 U.S.C. §§ 101-103, 112, and 116.” Id.
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`Applying the standard of Twombly and Iqbal, the court dismissed the invalidity counterclaim,
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`stating:
`
`Because MobGob has not alleged a single fact in support of its
`claim, it fails to give Groupon notice of the basis of its claim.
`Moreover, it provides the Court with no basis for making a
`reasonable inference in its favor. In other words, its claims of
`invalidity are not plausible. They are merely possible. This is not
`enough to survive a Rule 12(b)(6) motion to dismiss.
`
`Id. at *5. In Google, the court dismissed an invalidity counterclaim because “Google’s invalidity
`
`allegations are comprised solely of legal conclusions and/or conclusory factual allegations. . . .
`
`Google’s prior art invalidity allegations, alleged under 35 U.S.C. §§ 102 and 103, are []
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`insufficient since Google fails to allege facts sufficient for a reasonable inference to be drawn
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`that the claimed invention is invalid in light of prior art.” Google, 2011 WL 4505779, at *1;
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`Tyco, 777 F. Supp. 2d at 904 (concluding the invalidity counterclaim “plainly does not satisfy
`
`[the Twombly/Iqbal] standard: it contains a mere legal conclusion, no supporting facts, and cites
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`four broad provisions of Title 35 of the United States Code in support ‘without limitation’.”).
`
`There are compelling practical reasons to require declaratory judgment claimants to
`
`satisfy the Twombly and Iqbal standard. Requiring patent infringement defendants to provide a
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`factual basis for their allegations of noninfringement and invalidity insures that defendants
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`comply with Rule 11 requirements applicable in patent cases. See Phonometrics, Inc. v.
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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 11 of 24 PageID 266
`
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`Economy Inns of Am., 340 F.3d 1356, 1367-68 (Fed. Cir. 2003) (affirming Rule 11 sanctions
`
`against plaintiff in patent infringement action); Vivid Tech. Inc. v. Am. Science & Eng., Inc., 200
`
`F.3d 795, 802-03 (Fed. Cir. 1999) (applying Rule to defendant’s counterclaim). Potential
`
`counterclaimants aware that their pleadings will be tested under the Twombly/Iqbal standard will
`
`hesitate to assert frivolous or otherwise unsupportable claims. Baseless claims will not be made,
`
`and expensive discovery or other proceedings will be avoided in many cases. See Iqbal, 556
`
`U.S. 678-79 (“Rule 8 marks a notable and generous departure from the hyper-technical, code-
`
`pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed
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`with nothing more than conclusions.”).
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`C. Motion to Strike Under Federal Rule of Civil Procedure 12(f).
`
`Under Rule 12(f) of the Federal Rules of Civil Procedure, “[t]he court may strike from a
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`pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous
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`matter.” Fed. R. Civ. P. 12(f). “A motion to strike under Rule 12(f) is the primary procedure for
`
`objecting to an insufficient defense.” Regions Bank v. SoFHA Real Estate, Inc., 2010 WL
`
`3341869, at *12 (E.D. Tenn. Aug. 25, 2010) (citing 5C Charles Alan Wright & Arthur Miller,
`
`Federal Practice and Procedure Civil § 1380 (3d ed. 2004)). “[C]ourts have developed a three-
`
`part test to determine whether an affirmative defense survives a motion to strike.” HCRI TRS
`
`Acquirer, LLC v. Iwer, 708 F. Supp. 2d 687, 689 (N.D. Ohio 2010).
`
`First, the matter must be properly pleaded as an affirmative
`defense. Second, the affirmative defense must be adequately
`pleaded under the requirements on Federal Rules of Civil
`Procedure 8 and 9. Finally, the affirmative defense must be able to
`withstand a Rule 12(b)(6) challenge.”
`
`Id. (internal citations and quotations omitted); see also Surface Shields, Inc. v. Poly-Tak
`
`Protection Sys., Inc., 213 F.R.D. 307, 308 (N.D. Ill. 2003) (applying the three-part test); Regions
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`Bank, 2010 WL 3341869, at *12 (“It has been recognized . . . that if a defendant’s affirmative
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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 12 of 24 PageID 267
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`defense cannot withstand a Rule 12(b) challenge, the defense may be stricken as legally
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`insufficient.”) (citing Williams v. Provident Inv. Counsel, Inc., 279 F. Supp. 2d 894, 906 (N.D.
`
`Ohio 2003)).
`
`There is a split of authority as to whether the Twombly/Iqbal standard applies to
`
`affirmative defenses, and no Sixth Circuit or other circuit case law addresses the issue. Damron
`
`v. ATM Central LLC, 2010 WL 6512345, at *2 (W.D. Tenn. Oct. 29, 2010) (“The Sixth Circuit
`
`has yet to decide whether the new pleading standards announced in Twombly and Iqbal apply to
`
`affirmative defenses and the district courts are divided on the issue.”); Del-Nat Tire Corp. v. A
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`To Z Tire & Battery, Inc., 2009 WL 4884435, at *2 (W.D. Tenn. Dec. 8, 2009) (“Neither the
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`Sixth Circuit Court of Appeals nor any of the other Courts of Appeals have addressed this issue,
`
`and the district courts have reached different conclusions.”). See also United States v. Quadrini,
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`2007 WL 4303213, at *4 (E.D. Mich. Dec. 6, 2007) (“Like the plaintiff, a defendant must plead
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`sufficient facts to demonstrate a plausible affirmative defense, or one that has a ‘reasonably
`
`founded hope’ of success.”); Zampieri v. Zampieri, 2009 WL 3241741, at *3 (E.D. Tenn. Sept.
`
`30, 2009) (applying Twombly standard to the pleading of affirmative defenses).
`
`District courts that have applied the Twombly/Iqbal standard to affirmative defenses
`
`recognize that the underlying rationale of the Supreme Court’s decisions extend to affirmative
`
`defenses. See, e.g., Shinew v. Wszola, 2009 WL 1076279, at *4 (E.D. Mich. 2009) (“The
`
`Twombly decision also observed that discovery costs required to explore the factual basis for a
`
`pleaded claim or defense are a problem.”); Safeco Ins. Co. of Am. v. O’Hara Corp., 2008 WL
`
`2558015, at *1 (E.D. Mich. June 25, 2008) (explaining that applying the Twombly/Iqbal standard
`
`to affirmative defenses will help streamline litigation). On the other hand, courts concluding that
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`the Twombly/Iqbal standard does not apply to affirmative defenses rely on differences in the
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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 13 of 24 PageID 268
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`language of Rule 8(a), Rule (8)(b), and Rule 8(c). See, e.g., Westbrook v. Paragon Sys. Inc.,
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`2007 WL 7715075, at *1 (S.D. Ala. Nov. 29, 2007) (“Neither [Rule 8(b) nor Rule 8(c)]
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`expresses a requirement that the answer ‘show’ the defendant is entitled to prevail on its
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`affirmative defense.”); Bayer CropScience AG v. Dow AgroSciences LLC¸ 2011 WL 6934557, at
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`*1 (D. Del. Dec. 30, 2011) (stating that “textual differences between Rule 8(a), which requires
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`that a plaintiff asserting a claim show entitlement to relief, and Rule 8(c), which requires only
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`that the defendant state any defenses”) (emphasis in original); but see HCRI TRS Acquirer, 708
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`F. Supp. 2d at 690-91 (“While the language in Civil Rule 8(a) differs from the language in Civil
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`Rule 8(b) & (c), this difference is minimal and simply reflects the fact that an answer is a
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`response to a complaint.”).
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`One post-Twombly/Iqbal Sixth Circuit decision, that did not address Twombly or Iqbal,
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`held that “[t]he Federal Rules of Civil Procedure do not require a heightened pleading standard
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`for a statute of repose defense.” Montgomery v. Wyeth, 580 F.3d 455, 468 (6th Cir. 2009)
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`(addressing whether the statute of repose defense codified in the Tennessee Products Liability
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`Act had been waived). The Court relied on Supreme Court precedent that a plaintiff must “give
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`the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.”
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`Montgomery v. Wyeth, 580 F.3d 455, 468 (6th Cir. 2009) (quoting Conley v. Gibson, 355 U.S.
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`41, 47 (1957)). A few district courts in this circuit have likened the Sixth Circuit’s comments on
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`the pleading requirements of the statute of repose—not an affirmative defense—to affirmative
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`defenses. See, e.g., Holley Performance Prods., Inc. v. Quick Fuel Tech., Inc., 2011 WL
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`3159177, at *1 (W.D. Ky. July 26, 2011) (“Given the Sixth Circuit’s ‘fair notice’ standard for
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`pleading affirmative defenses, its ruling in Montgomery, and the total absence of appellate
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`precedent on this issue the Court declines to adopt the heightened pleading standard of Twombly
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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 14 of 24 PageID 269
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`and Iqbal for the pleading of defenses.”). The Montgomery case does not address the holdings of
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`Twombly or Iqbal, neither of which articulates a “heightened pleading standard,” but B.E.
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`submits that the Twombly/Iqbal standard applies equally to defenses as it does to claims for
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`relief.
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`D.
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`The Twombly/Iqbal Standard Applies To Affirmative Defenses.
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`The Twombly/Iqbal pleading standards should apply to affirmative defenses, as a
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`majority of district courts have held, Dann v. Lincoln Nat’l Corp., 274 F.R.D. 139, 145 n.6 (E.D.
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`Pa. 2011), because the rationale upon which courts rely to conclude otherwise represents a
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`misunderstanding of Rule 8(c). Federal Rule of Civil Procedure 8(a) requires a “short and plain
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`statement of the claim showing that the pleader is entitled to relief;” Rule 8(b) requires a pleader
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`to “state in short and plain terms its defenses;” and Rule 8(c) requires a pleader to “affirmatively
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`state any avoidance or affirmative defense.” Fed. R. Civ. P. 8(a), (b), & (c). In Tyco Fire
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`Products LP v. Victaulic Co., 777 F. Supp. 2d 893 (E.D. Pa. 2009), the court relied on these
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`language differences to support a holding that the Twombly/Iqbal standard does not apply to
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`affirmative defenses. 777 F. Supp. 2d at 900. In particular, the court noted that Rule 8(a)
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`requires the pleading of a “short and plaint statement of the claim showing that the pleader is
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`entitled to relief,” whereas Rule 8(c) requires a pleader to “state” affirmative defenses without
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`mentioning any required “showing.” Id. at 897. Rule 8(c), however, does not merely say that a
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`defendant must “state” its defense, it provides that “a party must affirmatively state any
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`avoidance or affirmative defense,” and lists examples of matters that must be pleaded
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`affirmatively. Fed. R. Civ. P. 8(c). The point of Rule 8(c) is that matters of avoidance or
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`affirmative defense must be affirmatively stated, on pain of waiver. The drafters of the rule did
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`not intend to specify the form of the required affirmative statement, and the essence of Rule 8(c)
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`is missed by a reading separating “affirmatively” from “state.” See In re Sterten, 546 F.3d 278,
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`Case 2:12-cv-02831-JPM-tmp Document 38-1 Filed 01/25/13 Page 15 of 24 PageID 270
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`283 (3d Cir. 2008) (“Rule 8(c) governs affirmative defenses, which are generally waived if not
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`specifically raised by responsive pleading or by appropriate motion.”) (internal quotations
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`omitted) (citing Elliot & Frantz, Inc. v. Ingersoll-Rand Co., 457 F.3d 312, 321 (3d Cir. 2006)).
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`Rule 8(c) does not concern the sufficiency of the allegations of an affirmative defense.
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`It is Rule 8(b), not Rule 8(c), which provides the pleading requirement for defenses
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`analogous to the requirement of Rule 8(a) applicable to claims for relief. Like Rule 8(a), Rule
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`8(b) requires a “short and plain” statement. The defendant must “state in short and plain terms
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`its defenses to each claim asserted against it.” Fed. R. Civ. P. 8(b)(1)(A). Given its purpose,
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`Rule 8(b) could not be expected to require that the defendant’s short and plain statement of its
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`defense show that the defendant “is entitled to relief.” That is not the point of a defense. A
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`defense is supposed to show that the plaintiff is “not entitled to relief,” and there is no reason to
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`expect the rule