Thursday, June 20, 2024

Federal Court Strikes Affirmative Defenses Having No Basis in Fact

In the case of DeSandies v. Encore Group (YSA), LLC, No. 2:24-CV-01044-JDW (E.D. Pa. April 19, 2024 Wolson, J.), the court addressed affirmative defenses filed by a Defendant in a federal court matter and determined that a Rule 11 sanction was appropriate given that certain defenses asserted by a defense counsel were not supported by the facts of the case.

According to the Opinion, the Defendant filed an Answer that included an affirmative defense relative to an allegation regarding the statute of limitations which the court deemed to be invalid on its face on the basis of the pleadings of the parties. 

After the Defendant chose not to amend but instead defend its Answer and Affirmative Defenses, the court rejected the defense position and imposed a Rule 11 sanction, striking all of the Defendant’s affirmative defenses from its Answer but otherwise allowing the defense the ability to seek leave of court to amend its affirmative defenses for which the defense had a good faith basis.

This case arose out of allegations under the American for Disability Act. The Defendant’s Answer included ten (10) affirmative defenses, one of which was a statute of limitations defense.

The court reviewed the pleadings and concluded that the assertion of a statute of limitations defense was merely a prophylactic allegation rather than being validly based upon some claim by Plaintiff that was barred by the statute of limitations.

The court ordered the Defendant to either file an Amended Answer in which it would only assert those defenses for which it had a good faith basis or to otherwise file a Memorandum explaining why its Answer should be not stricken as in violation of F.R.C.P. 11(b).  As noted, the Defendant elected to defend its Answer rather than amend.

Thereafter, the court concluded that the Defendant’s affirmative defense on the statute of limitations was patently unmeritorious or frivolous and thereby warranted the imposition of sanctions.

The Defendant claimed that discovery could later support the defense of the statute of limitations that the Defendant therefore desired to preserve its defense in its pleadings.

The court rejected that reasoning, observing that Rule 11 does not countenance the assertion of affirmative defense based on what another party might assert in the future, either as to claims or testimony.

The court stated that, if the Defendant concluded that the Plaintiff eventually took some action that changed the scope of the claim presented, then the Defendant’s remedy would be to seek leave of court to amend its Answer to assert a new affirmative defense at that later date. The court otherwise reaffirmed its decision that it was not an option to assert affirmative defenses initially in a prophylactic fashion with no factual basis for doing so.

In the end, the court determined that the improper assertion of the affirmative defenses warranted the imposition of sanctions because such practice unnecessarily expand discovery and made it more difficult to resolve cases. Judge Wolson also noted that, just as a Plaintiff was not entitled to assert claims that lacked any basis, a Defendant may not assert affirmative defenses that lacked any basis.

The court deemed that the appropriate sanction would be to strike all of the Defendant’s asserted affirmative defenses, without prejudice to the Defendant’s ability to seek leave court to amend its Answer to include affirmative defenses for which the defense had a good faith basis.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.

Source: “The Legal Intelligencer Federal Case Alert” (May 16, 2024).

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