Lane v. Page
272 F.R.D. 581
D.N.M.2011Background
- Lane files shareholder class action on §14(a) and §20(a) claims challenging Westland-SunCal merger; TAC alleges Proxy Statement misled Westland shareholders.
- DESCO and Individual Defendants filed numerous affirmative defenses and some factual allegations were deemed not to be answered; motions to strike under Rule 12(f) were filed.
- Court held October 12, 2010 and addressed whether Rule 8 and Twombly/Iqbal apply to affirmative defenses and whether defenses should be struck or amended.
- Court declines to apply Twombly/Iqbal to affirmative defenses but finds some Rule 8(b) deficiencies and orders amendments.
- Court discusses whether certain defenses are truly “negative defenses” and whether reservation of unpled defenses should be stricken.
- Outcome: partial grant and partial denial of Lane’s motions; defendants ordered to amend their answers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Twombly/Iqbal applies to affirmative defenses | Lane argues for heightened pleading for defenses | Defendants urge Rule 8(c) governs defenses without factual pleading | Twombly/Iqbal not extended to Rule 8(b) defenses |
| Whether DESCO defenses lack factual basis and should be struck | Affirmative defenses lack factual specificity | Form 30 suffices; not required to plead facts | Parts not struck; defenses adequately pled or to be amended later |
| Whether negative defenses should be struck as improper | Negative defenses improperly restate refusals to meet elements | Redundant but material; not prejudicial | DESCO negative defenses stricken; not all balanced; some to be amended |
| Whether Defendants must amend their Rule 8(b) responses to TAC allegations | Responses may be vague or improper (legal conclusions/speaks for itself) | General denial acceptable for DESCO; Individual Defendants argued to amend | Individual Defendants must amend to respond; DESCO generally denied; order to amend accordingly |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (notice pleading standard for claims; not extended to defenses)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for claims; not extended to defenses)
- Burrell v. Armijo, 603 F.3d 825 (10th Cir. 2010) (motion to strike can be granted without showing prejudice)