Combating Affirmative Defense Inflation 22

• Published date: 27 December 2021
• Subject Matter: Anti-trust/Competition Law, Litigation, Mediation & Arbitration, Antitrust, EU Competition , Class Actions
• Law Firm: WilmerHale
• Author: Mr David Gringer, Kevin Gallagher and Jason Raymond

Earlier this month, a magistrate judge in the Northern District of California dealt another blow to the "kitchen sink" approach to pleading affirmative defenses. In Wesch v. Yodlee, Inc.,¹ Magistrate Judge Sallie Kim granted in full plaintiffs' motion to strike nearly all the defendant's 28 affirmative defenses, holding that several had failed to satisfy the pleading standards set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), and still more were not even valid affirmative defenses in the first place. Judge Kim's order is an important reminder that defendants must be mindful of courts' growing impatience with defendants who plead a laundry list of factually unsupported-or patently invalid-affirmative defenses. Indeed, the Wesch decision makes clear that enterprising plaintiffs will move to strike such faulty defenses, dealing an early and avoidable loss to defendants that could have lasting implications on their credibility with the court.

Background

Wesch is a putative class action brought by consumers who allege that Yodlee, a financial data aggregator that develops programming interfaces for financial apps, collects and sells users' personal and sensitive financial data without their consent. Plaintiffs brought several state and federal claims against Yodlee, along with its parent company; after two motions to dismiss failed to dispose of the case in its entirety, Yodlee answered plaintiffs' remaining claims and alleged 28 affirmative defenses. Plaintiffs thereafter moved to strike 19 of those defenses.

This month, Judge Kim granted plaintiffs' motion in full, striking all the challenged affirmative defenses on two grounds. First, Judge Kim determined that 13 of the 19 defenses were invalid affirmative defenses in the first instance. Among the 13, Yodlee had asserted a list of what are commonly found in many defendants' answers as affirmative defenses:

• that plaintiffs' complaint failed to state any claims for which relief may be granted;
• that plaintiffs lacked Article III standing;
• that plaintiffs' claims were barred because the harm alleged was not proximately caused by Yodlee; and
• that plaintiffs' claims could not be properly certified as a class action.

When challenged, Yodlee could not deny that these challenged defenses were invalid, instead arguing that the court should deny plaintiffs' motion to strike because plaintiffs suffered no prejudice from their inclusion. Judge Kim...