United States of America v. Ogden

Background

Relator and counter-defendant Thomas Grinner brought a False Claims Act lawsuit under 31 U.S.C. § 3729(a)(1) against defendant and counter-claimant Dana Ogden. Ogden answered the amended complaint and asserted a counterclaim for breach of contract. Grinner moved under Federal Rule of Civil Procedure 12(f) to strike Ogden’s affirmative defenses. Ogden opposed the motion, and the court held a hearing on February 11, 2021.

Legal standard

Rule 12(f) allows a court to strike an insufficient defense or redundant, immaterial, impertinent, or scandalous matter from a pleading. The court explained that an affirmative defense must provide fair notice of the factual basis for the defense. It also distinguished an affirmative defense from an argument that the plaintiff cannot prove an element of the claim. A true affirmative defense asserts new facts or arguments that would defeat liability even if the plaintiff proved all the claim’s elements.

Analysis

The court held that all of Ogden’s defenses were inadequately pleaded because they referred to legal doctrines without alleging supporting facts. Ogden conceded that the heightened pleading standard associated with Twombly and Iqbal applied to affirmative defenses, but she alleged no supporting facts.

The court separately held that several defenses were not proper affirmative defenses:

- The first defense, failure to state a claim, challenged the adequacy of the complaint rather than asserting a defense to liability. - The third defense, asserting that Ogden’s conduct was authorized by law, merely challenged whether Grinner could establish his claim. - The fourth and fifth defenses, lack of scienter and lack of materiality, challenged elements Grinner had to prove under the False Claims Act. - The ninth defense, good faith, likewise challenged whether Grinner could show that Ogden knowingly made a false statement or engaged in fraudulent conduct. - The tenth defense, reserving the right to assert additional defenses later, was not itself a defense.

The court also considered the sixth and seventh defenses, which asserted unclean hands and Grinner’s bad acts. It rejected Ogden’s argument that Grinner’s conduct could serve as an affirmative defense based on its possible effect on Ogden’s intent. The court said that use of Grinner’s conduct for that purpose would only undermine an element of Grinner’s claim. It further held that Grinner’s conduct would not preclude liability under the False Claims Act, although it could affect the amount of any recovery or Ogden’s ability to recover attorney’s fees and costs. Those defenses therefore were not properly pleaded as affirmative defenses.

For the eighth defense, laches, the court explained that the defense generally involves unreasonable delay in bringing suit and prejudice caused by that delay. Laches would not clearly apply if Grinner sought only monetary damages within the statutory limitations period. But Grinner’s amended complaint also requested a declaration that Ogden violated the False Claims Act, and declaratory relief is equitable. The court therefore did not find laches clearly inapplicable. Because Ogden alleged no facts showing unreasonable delay or prejudice, however, the defense was inadequately pleaded.

Disposition

The court granted Grinner’s motion. Ogden’s first, third, fourth, fifth, sixth, seventh, ninth, and tenth affirmative defenses were stricken without leave to amend. The eighth affirmative defense was stricken as inadequately pleaded, but Ogden was granted leave to amend it if she could plausibly allege facts supporting its applicability. The court ordered Ogden to file an amended answer by March 22, 2021.