Motion to Dismiss Affirmative Defenses granted, Blackberry Limited v. Typo Products LLC, Case No. 3:14-cv-00023-WHO (J. Orrick).
In 2007, the Supreme Court's Bell Atlantic v. Twombly opinion altered the Rule 8 pleading standard by tightening up the "permissive" pleading standard for complaint, requiring plaintiffs to state facts showing that its claims were not merely "conceivable," but "plausible." A "plausible" claim under Twombly requires stating "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence [of the alleged wrongdoing]." At first, many courts and commentators believed that the Twombly standard would not find broad application beyond the antitrust context, until Ashcroft v. Iqbal, when the Supreme Court clarified that Twombly applied to all civil complaints.
But does the Twombly/Iqbal standard apply still more broadly, even to affirmative defenses? Neither the Supreme Court nor the Ninth Circuit has directly answered the question. Absent such guidance, is the Ninth Circuit's 1979 Wyshak v. City National Bank "fair notice"standard—"[t]he key to determining the sufficiency of pleading an affirmative defense is whether it gives plaintiff fair notice of the defense"—still alive and kicking?
Elsewhere in California, that's not a bad bet: in a dozen or more post-Iqbal decisions, district courts in the Southern, Central and Eastern Districts have held that Wyshak remains vital or else have declined to extend Twombly/Iqbal absent clear guidance from a higher court. But ask your Magic 8-Ball whether Wyshak persists in the Northern District of California and the answer you'll receive is: "Don't count on it." On May 8, in Blackberry Limited v. Typo Products LLC, Case No. 3:14-cv-00023, a patent case, Judge Orrick dismissed five of Typo Product's affirmative defenses on the grounds of Twombly/Iqbal. Typo alleged fairly typical patent affirmative defenses: prosecution history estoppel, equitable estoppel, patent misuse, abandonment, and comparative negligence—each pled in seemingly Wyshak-approved but factually unsupported fashion, e.g., "[e]ach asserted claim of the [patents-in-suit] is unenforceable due to the doctrine of equitable estoppel."
Typo had argued that the Wyshak "fair notice" standard is still widely applied in California, and backed its argument up with a pages-long chain citation to nearly a dozen post-Iqbal decisions from the Central, Southern, and Eastern Districts of California. Typo was not, however, able to marshal a favorable decision from the Northern District, and Judge Orrick ultimately agreed with his benchmates Judges Wilken, Koh, Conti, Beeler, Alsup, and Patel, who have all held that affirmative defenses must meet Twombly/Iqbal. Why? In Judge Patel's words, the heightened pleading standard under Twombly/Iqbal permits courts 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."
For now, and apparently until higher court addresses the split, Twombly/Iqbal is, if not the law of land, at least the law for many judges in the Northern District. Therefore, a defendant would be well-advised not to, err... put itself behind the 8-ball in pleading its affirmative defenses.
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