The Lawletter Vol 37 No 6

Paul Ferrer, Senior Attorney, National Legal Research Group

We have written often in The Lawletter about what is now required for a plaintiff to plead claims in federal court that will survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) in light of the Supreme Court's decisions in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009).  But do the heightened pleading standards formulated in Twombly and Iqbal also apply to affirmative defenses asserted by the defendant against those claims?  That issue has split the federal courts that have addressed it.

Part of the Supreme Court's rationale for adopting the more exacting "plausibility" standard for reviewing the sufficiency of a plaintiff's complaint was found in the language of Rule 8(a)(2), which requires "[a] pleading that states a claim for relief" to contain, among other things, "a short and plain statement of the claim showing that the pleader is entitled to relief[.]"  Fed. R. Civ. P. 8(a)(2) (emphasis added); see Iqbal, 556 U.S. at 679 ("But where the well‑pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader is entitled to relief.'" (quoting Fed. R. Civ. P. 8(a)(2))).  By contrast, the portion of Rule 8 dealing with defenses generally requires only that a party, in responding to a pleading, "state in short and plain terms its defenses to each claim asserted against it[.]"  Fed. R. Civ. P. 8(b)(1).  Likewise, Rule 8(c), which deals specifically with affirmative defenses, requires the party to "affirmatively state any avoidance or affirmative defense[.]"  Fed. R. Civ. P. 8(c)(1).

Some of the district courts have relied, in part, on the differences in the language of these subsections in holding that the Twombly/Iqbal standard does not apply to the pleading of affirmative defenses.  See, e.g., Falley v. Friends Univ., 787 F. Supp. 2d 1255, 1258 (D. Kan. 2011) (finding these differences "significant," in that the "showing" requirement in subsection (a) does not appear in subsections (b) and (c) governing defenses).  These courts have also considered that the issue arises in the context of a motion to strike an "insufficient defense" under Rule 12(f), see id. at 1257, and such motions are "highly disfavored" because they are often used by the movant "simply as a dilatory tactic," FTC v. Hope Now Modifications, LLC, No. 09-1204, 2011 WL 883202, at *1 (D.N.J. Mar. 20, 2011) (internal quotation marks omitted).  In addition, another one of the considerations underlying the adoption of a higher pleading standard for complaints—not subjecting a defendant to discovery in favor of "a plaintiff armed with nothing more than conclusions," Iqbal, 556 U.S. at 679—does not apply to a defendant who is "already subjected to discovery."  Hope Now, 2011 WL 883202, at *3.

September 25, 2012

Jeremy Taylor, Senior Attorney, National Legal Research Group

The U.S. Court of Appeals for the Sixth Circuit recently decided that an immunity defense given to a drug manufacturer by a state statute was preempted by the Federal Food, Drug, and Cosmetic Act ("FDCA").  See Marsh v. Genentech, Inc., Nos. 11-2373, 11-2385, 11-2419, 11-2417, 2012 WL 3854780 (6th Cir. Sept. 6, 2012).  Therefore, the manufacturer's entitlement to immunity had to be analyzed under federal law, despite the existence of an applicable state immunity provision.

The plaintiffs were consumers who alleged that they suffered life-threatening side effects from their use of the defendant's psoriasis drug "Raptiva."  Raptiva worked by suppressing T cells to prevent them from migrating to the skin and causing psoriasis.  However, because T cells fight infection, their suppression has been linked to life-threatening side effects.  Following reports of such effects, including a rare brain infection in patients taking Raptiva, the defendant removed the drug from the market in 2009. 

One of the plaintiffs in the consolidated cases had begun using Raptiva in 2004 and later suffered viral meningitis and a collapsed lung.  She sued Genentech under the theory of strict liability, alleging defective design and failure to warn, and also under the theories of negligence, breach of warranty, and fraud.  She argued that both before and after approval of Raptiva by the Food and Drug Administration ("FDA"), the defendant had known of the dangerous side effects, concealed them from the public, and not included them in the drug's labeling.  The plaintiff further alleged that Genentech had failed to update statements of contraindications, warnings, precautions, and adverse reactions based upon what the defendant knew and that Genentech had negligently failed to comply with various FDA regulations. 

September 11, 2012

Steve Friedman, Senior Attorney, National Legal Research Group

The doctrine of adverse possession provides that title to real property may be acquired, without an affirmative conveyance thereof, if the claimant takes actual and uninterrupted possession of the property, intending to claim it as his own to the exclusion of the true owner, and makes an outward showing of such claim for a sufficient period of time.  See 2 C.J.S. Adverse Possession § 1 (Westlaw database updated May 2012); Weinstein v. Hurlbert, 2012 ME 84, ¶ 8, 45 A.3d 743, 745; Whetstone Baptist Church v. Schilling, No. SD 31412, 2012 WL 3094954, at *5 (Mo. Ct. App. July 31, 2012) (not yet released for publication).

Back in law school, I recall learning about adverse possession and thinking to myself that this ancient doctrine was probably just an academic exercise that would not have much practical application in today's world.  But as Bart Simpson says, "Au contraire mon frère!"  In the years since law school, I have worked on a great many adverse possession cases.  Most often, the dispute concerns whether the claimant's possession was sufficiently hostile or open and notorious.  See, e.g., Weinstein, 2012 ME 84, 45 A.3d 743 (holding that adverse possessors' use of property was not hostile and notorious).  And just when I thought there were no new issues to be raised regarding the doctrine, I once again stand corrected.

Virtually all jurisdictions hold that adverse possession does not apply against the State, which oftentimes includes the political subdivisions thereof.  See 2 C.J.S., supra, §§ 9, 16; e.g., Houck v. Huron County Park Dist. Bd. of Park Comm'rs, 116 Ohio St. 3d 148, 2007‑Ohio‑5586, 876 N.E.2d 1210.  And the State of Washington is no exception: "[N]o claim of right predicated upon the lapse of time shall ever be asserted against the state."  Wash. Rev. Code ("RCW") 4.16.160.

That rule sounds simple enough, right?  Well, the Supreme Court of Washington was recently asked whether RCW 4.16.160 bars a quiet title action against a municipality asserting title to real property by adverse possession where the claimant alleges that he adversely possessed the property while it still belonged to a private individual and before that private individual conveyed the property to the municipality.  See Gorman v. City of Woodinville, No. 85962-1, 2012 WL 3516888 (Wash. Aug. 16, 2012) (en banc).

James Gorman, the record title owner of a certain parcel of real estate, alleged that he had acquired title to an adjacent parcel of real estate by adverse possession prior to December 2005, the time when the subject property was dedicated to the City of Woodinville by the record title owner.  The City had identified the property as a necessary part of a capital improvement plan for improving a busy intersection to alleviate vehicle congestion and address safety concerns.  Some 19 months after the dedication to the City, in July 2007, Gorman decided to initiate the instant quiet title action against the City.

The City moved to dismiss the complaint for failure to state a claim upon which relief could be granted, asserting that the claim was precluded by RCW 4.16.160.  The trial court granted the City's motion and dismissed the claim, but the Court of Appeals of Washington reversed and remanded the case to the trial court for a determination of the validity of Gorman's claim.  The City appealed the intermediate court's decision to the supreme court.  In a unanimous decision, and as a matter of first impression, the supreme court allowed the adverse possession claim to proceed against the municipality.

The Lawletter Vol 37 No 5

Suzanne Bailey, Senior Attorney, National Legal Research Group

A recent decision from the Fourth Circuit Court of Appeals illustrates both the reach of our immigration laws over even long-term lawful immigrants to this country and the need for criminal defense counsel to familiarize themselves with the impact a criminal conviction may have on one's immigrant status.  The case also provides guidance on the correct standard for addressing a petition for writ of error coram nobis pursuant to 28 U.S.C. § 1651.  See United States v. Akinsade, 686 F.3d 248 (4th Cir. 2012).  The case came to the Fourth Circuit on appeal of the district court's denial of Temitope Akinsade's petition.

            Akinsade was a 30-year-old Nigerian citizen who legally came to the United States in July 1988 at the age of seven and became a lawful permanent resident in May 2000.  When he was employed as a bank teller in 1999, at the age of 19, Akinsade cashed checks for several neighborhood acquaintances, who were not listed as payees on the checks, and deposited a portion of the proceeds from those checks into his own account.  He eventually reported the transactions to his supervisor, who then contacted the FBI.  He cooperated with the FBI and was neither arrested nor taken into custody at that time.  In March 2000, Akinsade was charged by a bank employee with embezzlement in the amount of $16,400, and he subsequently agreed to plead guilty after twice asking his attorney about the immigration consequences of a guilty plea and twice being advised that he could be deported only if he had two felony convictions.  The attorney's advice was erroneous.  See 8 U.S.C. § 1101(a)(43)(M)(i) (aggravated felony includes offense involving fraud or deceit and loss to victim in excess of $10,000); id. § 1227(a)(2)(A)(iii) (any alien convicted of an aggravated felony after admission is deportable).  Finding that the charged behavior was out of character for Akinsade, the court gave him the minimum sentence under the Sentencing Guidelines.

Nine years later, after Akinsade had served his sentence, after he had earned both a bachelor's degree in computer science and a master's degree from the University of Maryland, graduating with a 3.9 GPA, after he had received a fellowship from the National Science Foundation, and after he had entered into a leadership program at General Electric Company and moved to upstate New York, he was arrested by immigration authorities and threatened with deportation based on his embezzlement conviction.  He then filed a petition for writ of coram nobis, alleging a violation of his Sixth Amendment right to counsel due to his attorney's misadvice.  The district court denied the petition, concluding that although counsel's representation was constitutionally deficient under the first prong of Strickland v. Washington, 466 U.S. 668, 687 (1984), Akinsade did not meet the second prong of establishing prejudice. 

The Lawletter Vol 37 No 5

Steve Friedman, Senior Attorney, National Legal Research Group

The Establishment Clause of the First Amendment, made applicable to the States by the Fourteenth Amendment, provides that "Congress shall make no law respecting an establishment of religion."  U.S. Const. amend. I, cl. 1.  Among other things, a Government violates the Establishment Clause if its practice could be viewed by a reasonable observer as endorsing religion, either by fostering excessive entanglement with religion, see Lemon v. Kurtzman, 403 U.S. 602, 612-13 (1971), or by applying coercive pressure to support or participate in religion, see Lee v. Weisman, 505 U.S. 577, 587 (1992); Santa Fe Indep. Sch. Dist. v. Doe, 530 U.S. 290, 312 (2000).

In Doe v. Elmbrook School District, No. 10-2922, 2012 WL 2996743 (7th Cir. July 23, 2012) (en banc), a divided en banc Seventh Circuit held that the Establishment Clause prohibits having high school graduation and related events at a church with an emphatically Christian atmosphere.  Due to the hot, cramped, and uncomfortable confines of the high school gymnasium shared for graduation-related events by two area high schools in the Elmbrook, Wisconsin, School District (the "District"), the senior class of 2000 looked for alternative locations in which to hold them.  With the backing of the District, they ultimately chose a local evangelical Christian church (the "Church").  "The atmosphere of the Church, both inside and outside the sanctuary, is indisputably and emphatically Christian.  Crosses and other religious symbols abound on the Church grounds and the exterior of the Church building, and visitors encounter these symbols as they drive to the parking lot and walk into the building."  Id. at *4.  A group of students and their parents brought suit against the District, claiming that holding graduation in the Church violated the Establishment Clause.

On cross-motions for summary judgment, the trial court granted the District summary judgment.  The plaintiffs appealed, and the District's judgment was affirmed by a panel of the Seventh Circuit.  On rehearing en banc, however, in a 4-3 decision, the Seventh Circuit reversed and remanded, holding that the District's practice violated the Establishment Clause.

In relevant part, the majority held first that the District's practice "conveyed a message of endorsement" and that "the sheer religiosity of the space created a likelihood that high school students and their younger siblings would perceive a link between church and state." Id. at *10.  In addition to the large Latin cross at the front of the sanctuary, the lobby contained numerous child-oriented proselytizing pamphlets, and church staff manned booths during some of the District's activities.  Not only was the Church adorned with its own symbols, but it was covered with high school decorations too, such that the District placed its imprimatur on the Church's religious message.

The majority also held that the District's practice constituted religious coercion.  By directing students to attend a pervasively Christian, proselytizing environment, the District created a captive audience.  "The only way for graduation attendees to avoid the dynamic is to leave the ceremony.  That is a choice . . . the Establishment Clause does not force students to make."

August 28, 2012

Fred Shackelford, Senior Attorney, National Legal Research Group

If an individual unsuccessfully attempts to monitor another's private activities, can he or she be held liable for invasion of privacy?  The Iowa Supreme Court decided this issue in the case of Koeppel v. Speirs 808 N.W.2d 177 (Iowa 2011).  In Koeppel, an employee, Koeppel, discovered a video camera in a bathroom at her workplace.  An investigation revealed that her employer, Speirs, had hidden the camera there in an effort to monitor another employee's activity, allegedly because he suspected that she was abusing drugs or engaging in other conduct detrimental to his business.

The camera, which was pointed toward a toilet, was designed to transmit a signal to a receiver located in Speirs's office, where it could be monitored.  The camera's battery had a useful life of only a few hours, and at the time it was discovered, its battery was dead.  However, when police replaced the battery, the camera operated, and the monitor briefly displayed a "snowy, grainy, foggy" image before its screen displayed a "no signal" message.  Speirs claimed that he had not been able to detect an identifiable picture on the monitor and had planned to remove the camera from the bathroom.

Koeppel sued in tort for invasion of privacy—specifically, for the branch of this tort known as "unreasonable intrusion upon the seclusion of another."  The trial court granted summary judgment for Speirs, holding that the tort required an actual, rather than an attempted, intrusion.

On appeal, the Iowa Supreme Court first analyzed the general nature of the tort at issue.  The court observed that the cause of action is based upon the particular method that is used to obtain information, not the content of whatever information is obtained or how the information may be used or disseminated.  The court recited the two elements of the tort:  (1) that there be an intentional intrusion into a matter in which a plaintiff has a right to expect privacy, and (2) that the intrusion be highly offensive to a reasonable person.  The court noted that although Restatement (Second) of Torts § 652B does not specifically define "intrusion," that section's illustrations include examples such as taking photographs of a sick patient in a hospital or of activities in a neighbor's bedroom, or installing a recording device on another's telephone.

Speirs conceded that placing a camera in a bathroom would be highly objectionable to a reasonable person, but the parties disagreed about what proof is required to establish that an intrusion occurred.  The Koeppel court reviewed case law from various other jurisdictions, noting that other courts are divided on the question of whether a person can intrude without actually viewing or recording the victim.  The court agreed with the approach taken by the  New Hampshire Supreme Court in Hamberger v. Eastman, 206 A.2d 239 (N.H. 1964), in which the court held that plaintiffs whose bedroom was bugged were not required to prove that the defendant landlord actually overheard or viewed activities in a secluded place.  Instead, the Hamberger court found that an intrusion occurs when the defendant performs an act that has the potential to impair a person's peace of mind and comfort associated with an expectation of privacy.  The Koeppel court reasoned as follows:

[W]e find the approach taken in Hamberger and its progeny is more consistent with the spirit and purpose of the protection of privacy. The secret use of an electronic listening or recording device is abhorrent to the interests sought to be protected by the tort. Amati, 829 F.Supp. at 1010. The approach is also consistent with the path we have started to follow. See Tigges, 758 N.W.2d at 829 (finding the installation of equipment, recording activities with the equipment, and attempting to view the activities recorded established an intentional intrusion). Additionally, the comments and illustrations contained in the Restatement (Second) of Torts make no suggestion that the intrusion into solitude or seclusion requires someone to actually see or hear the private information. See Restatement (Second) of Torts § 652B illus. 3, at 379. Finally, the minority rule fails to provide full protection to a victim, while giving too much protection to people who secretly place recording devices in private places. Direct evidence that an actual viewing occurred can be difficult to establish, and a person who is inclined to secretly place a camera in a private area can easily incapacitate the camera when it is not in use so as to minimize any responsibility upon discovery. A plaintiff who learns a camera was placed in a private place should not be forced to live with the uncertainty of whether an actual viewing occurred. Such an approach would leave those victims with a reasonable belief that someone could have listened to or seen a private moment without a remedy simply because the device was unable to actually operate to invade privacy at the time it was discovered.

August 21, 2012

John Stone, Senior Attorney, National Legal Research Group

Among the less frequently litigated federal civil rights statutes is 42 U.S.C. § 1981, which prohibits race discrimination related to making and enforcing contracts. The term "make and enforce contracts" in the statute means "the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship."  42 U.S.C. § 1981(b).  Within the category of cases deciding claims under this provision, there are fewer still that involve actions brought by customers against retail businesses.  In a recent case, the Eleventh Circuit had to decide whether a customer could succeed on his § 1981 cause of action, where he had been subjected to racially motivated treatment that delayed and obstructed his shopping but that did not, in the end, prevent him from completing the transaction.  The court answered this question in favor of the defendant store, affirming dismissal of the § 1981 claim.  Lopez v. Target Corp., 676 F.3d 1230 (11th Cir. 2012).

The Hispanic plaintiff in Lopez had selected some items to purchase at a big-box store and stood in a checkout line.  When he reached the register, the white female cashier "rudely" told him that her register was closed, then proceeded to help the next customer, who was white, after Lopez had walked away.  As she did this, the cashier laughed at, and gestured toward, Lopez.  When Lopez headed toward a different line, a supervisor, who had apparently witnessed Lopez's first attempt to check out, told Lopez to go back to the same line, where the same cashier would accept his payment.  Given a second chance to get it right, the cashier squandered the opportunity and instead revealed her bias more plainly.  The cashier did not use any racial terms, but when Lopez reached her, she very loudly said, "Don't you listen? I'm closed!"  Id. at 1232.  When Lopez explained that a supervisor had sent him back to her, she said, even more loudly, "Don't you understand? I'm closed to YOU!"  Id.  Again Lopez left the line, and again the cashier gestured at him and laughed as he went.  At that point, Lopez was finally able to buy his items from a different cashier, who heard his story and summoned a supervisor, who apologized profusely.  The opinion does not indicate the fate of the rude cashier, but Lopez, "in a state of shock" and still distraught, finally left the store with his purchased items and $9 worth of coupons from the apologetic supervisor.

Lopez brought suit in state court against the store and the cashier, and the presence of the federal claim under § 1981 allowed the case to be removed to federal court.  When Lopez's claims were dismissed by the district court, the Eleventh Circuit had before it the ' 1981 claim and the state law tort claim for intentional infliction of emotional distress ("IIED").  It affirmed the lower court's rulings.

The Lawletter Vol 37 No 4

Brett Turner, Senior Attorney, National Legal Research Group

Can state courts order divorcing parties to file joint federal income tax returns?  Joint returns can be filed for any tax year, so long as the taxpayers were married, and not divorced or legally separated, on the last day of that year.  See generally 13 William H. Byrnes et al., Mertens Law of Federal Income Taxation § 47:19 (Westlaw database updated July 2012).  Ordinarily, a joint tax return will result in a significantly smaller amount of tax due than will two separate tax returns.  But some divorcing spouses, often for selfish reasons, will refuse to sign such a return.

State court case law is split on whether the divorce court can actually order a party, under penalty of contempt, to sign a joint tax return.  A typical case permitting such an order is the New Jersey decision in Bursztyn v. Bursztyn, 879 A.2d 129 (N.J. Super. Ct. App. Div. 2005):

We do not find persuasive the argument that individuals have a federal statutory right to choose whether to file joint or separate income tax returns which may not be abridged by state courts.  In matrimonial actions, courts routinely issue orders which have significant effects on individuals' rights.  For example, courts may infringe upon a parent's right to relocate from one state to another.  Baures v. Lewis, 167 N.J. 91, 770 A.2d 214 (2001).  By contrast, limiting an individual's statutory right to choose between filing a joint or individual federal income tax return seems a minor intrusion.

Id. at 136.

Typical of those cases reaching a contrary result is the very recent Nebraska decision in Bock v. Dalbey, 815 N.W.2d 530 (Neb. 2012).  Bock identified four separate reasons for its holding.

"First, the U.S. Tax Court is not bound by orders compelling the parties to sign a joint return. It will look to the husband and wife's intent, and if one of them signed only because a state court ordered him or her to do so, the return may or may not be treated as a joint return."  Id. at 535.

"Second, an order compelling the parties to file joint tax returns is a mandatory injunction. A mandatory injunction . . . is considered an extreme or harsh remedy that should be exercised sparingly and cautiously."  Id. at 536.

"Third, a resisting spouse's exposure to liability under the federal tax code is too difficult to predict if compelled to file a joint return."  Id. at 537.

"Fourth, the rules related to filing deadlines under the federal tax code create practical hurdles to allowing a trial court to compel the parties to file joint returns."  Id.  A decision to file a joint tax return cannot be revoked after the yearly tax filing deadline has passed, so that a spouse has no effective remedy if an order to file a joint tax return is reversed on appeal.