GEOMC Co., Ltd. v. Calmare Therapeutics Inc.
918 F.3d 92
| 2d Cir. | 2019Background
- GEOMC (plaintiff, South Korean corp.) sued Calmare (defendant, Delaware corp.) over sales of medical pain-management devices; litigation progressed to a bench trial after multiple pleadings and amendments.
- GEOMC filed a second amended complaint adding a breach-of-contract claim; the district court allowed Calmare to file an amended answer but warned GEOMC could move to strike any material exceeding permissible amendment.
- Calmare’s amended answer added six affirmative defenses and six counterclaims; GEOMC moved under Fed. R. Civ. P. 12(f) to strike six new defenses and five new counterclaims.
- The district court struck Calmare’s sixth and seventh affirmative defenses (negligence and failure to join a necessary party) and five counterclaims, finding some defenses legally and factually deficient and the Radiant-related counterclaims unduly prejudicial and beyond the scope of the amended complaint.
- On appeal, the Second Circuit affirmed the striking of the two affirmative defenses and five counterclaims, and used the case to clarify standards for pleading affirmative defenses and for presenting/challenging new counterclaims in amended answers.
Issues
| Issue | GEOMC's Argument | Calmare's Argument | Held |
|---|---|---|---|
| Standard for pleading affirmative defenses (apply Twombly/Iqbal?) | Twombly plausibility should govern; defenses must be factually plausible | Affirmative defenses have different context; pleading standard should be relaxed | Twombly/Iqbal plausibility applies to affirmative defenses, but context (timing, nature of defense) affects rigor |
| Use of prejudice as factor when striking late-filed defenses | Prejudice to plaintiff supports striking defenses filed late and broadening litigation | Prejudice alone shouldn’t bar legally sufficient defenses | Prejudice is relevant and may be decisive for defenses presented beyond normal time limits; timely, valid defenses should be allowed despite prejudice |
| Proper procedure to challenge new counterclaims in amended answer | Motion to strike under Rule 12(f) was permissible per district court order | Rule 12(f) is improper to strike new counterclaims; should be tested under Rule 12(b)(6), Rule 56, or Rule 15 standards | 12(f) was procedurally improper for dismissing counterclaims; court may treat the motion functionally as Rule 15 denial and assess under Rule 15/12(b)(6)/56 standards |
| Permissible scope of new counterclaims in response to an amended complaint | New counterclaims must be limited to responding to the new allegations in the amended complaint (especially late in case) | New counterclaims may respond broadly as in an original answer | If filed late, new counterclaims that exceed scope of the amended complaint may be denied due to undue prejudice and expansion of litigation; early-stage broader counterclaims are more permissible |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (established plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (applied Twombly; emphasized context-specific application of plausibility)
- William Z. Salcer, Panfeld, Edelman v. Envicon Equities Corp., 744 F.2d 935 (2d Cir. 1984) (articulated early standard for striking affirmative defenses)
- Lucente v. Int’l Bus. Machines Corp., 310 F.3d 243 (2d Cir. 2002) (timely-filed, factually sufficient defenses entitled to adjudication despite prejudice)
- Day v. Moscow, 955 F.2d 807 (2d Cir. 1992) (Rule 12(f) should not be used to dismiss counterclaims)
- Foman v. Davis, 371 U.S. 178 (1962) (leave to amend should be freely given absent undue prejudice, delay, or bad faith)
- Telecom Int’l Am., Ltd. v. AT&T Corp., 280 F.3d 175 (2d Cir. 2001) (addressed treatment of counterclaims and prejudice in amendment context)