Abrahamian v. loanDepot.com: Which Affirmative Defenses Survive a Motion to Strike in a Do Not Call Class Action

Background

The plaintiff's personal number had appeared on the National Do Not Call Registry since 2007. He alleged that a national mortgage lender called him twice and texted him once within a year to promote a home equity loan, without permission or a prior relationship, and he brought a single Section 227(c) class claim. The lender responded with thirty-one defenses, and the plaintiff moved under Rule 12(f) to strike many of them as either factually or legally insufficient.

The Standard

A motion to strike is disfavored and tends to be denied absent prejudice. The court applied the Ninth Circuit's "fair notice" standard from Kohler v. Flavia Enterprises, under which a defense need only be described in general terms. It agreed with the lender, and with other judges in the district, that the Twombly and Iqbal plausibility standard does not apply to affirmative defenses. But denials of the plaintiff's allegations, or assertions that the plaintiff cannot prove an element, are not affirmative defenses, because an affirmative defense is one on which the defendant bears the burden of proof.

Defenses Struck

• Not true affirmative defenses: failure to state a claim, fault of the plaintiff or others, no TCPA violation, third party fault, compliance with the law, insufficient pleading, speculative relief and the prior express consent defense as pleaded. As the lender can still contest the merits, the court said this was a "no harm, no foul" situation.
• Reservation of future defenses: not a defense at all; new defenses require amendment under Rule 15.
• Failure to mitigate: the weight of authority holds there is no duty to mitigate statutory TCPA damages.
• Arbitration: the facts supporting arbitration are in the lender's hands, yet it gave no facts or explanation, so the defense failed even the lenient standard.
• Called party, bona fide error procedures and written Do Not Call procedures: treated as denials of liability rather than affirmative defenses.

Defenses Kept

• Laches, unclean hands, waiver and estoppel: valid defenses, and the plaintiff offered only conclusory arguments against their legal sufficiency.
• Statute of limitations: with a single claim, the plaintiff could readily identify the applicable period.
• No willful or knowing violation and good faith: these give fair notice of the lender's position on enhanced damages and remain open to factual development.
• Personal jurisdiction over out-of-state class members: the plaintiff cited no authority and claimed no prejudice.

Observations

• Striking often changes little. Several items struck remain as possible merits arguments; the order merely tidies the pleadings up.
• Consent label. The court took the consent defense as pleaded here as a merits denial. Counsel on both sides should consider how consent is framed in the answer, given its importance in TCPA cases.
• Plead arbitration with facts. A bare reservation of the right to arbitrate is vulnerable.
• Statutory damages and mitigation. Defendants should not expect a mitigation defense to reduce statutory awards.

Read the District of Arizona order.