Since the Iqbal decision was handed down, there have been several issues on which different circuits, and different district courts within the same circuit, have differed in their interpretations of the requirements of Iqbal’s pleading standards. One of those areas where a split of authority can already be seen is the applicability of the Iqbal pleading standards to affirmative defenses. Courts in the Seventh Circuit appear to be siding with those courts that hold that Iqbal pleading standards do apply to affirmative defenses, although their treatment of those affirmative defenses under Iqbal appears to differ. For instance, in In re Mission Bay Ski & Bike, Inc., Nos. 07 B 20870 & 08 A 55, 2009 Bankr. LEXIS 2495 (Bankr. N.D. Ill. Sept. 9, 2009), the bankruptcy trustee sued First American Bank for fraudulent transfer and other claims. Id. at *3. The bank asserted several affirmative defenses in summary fashion, i.e., “the trustee’s claims are precluded, in whole or in part, by the doctrine of estoppel.” See id. at *17. For this reason, the plaintiff moved to strike the affirmative defenses. The court held that Iqbal and its standards apply to affirmative defenses because affirmative defenses must comply with Rule 8 of the Federal Rules of Civil Procedure. Id. at *15–16. The court held that the summary affirmative defenses asserted by the defendant were mere legal conclusions without facts to demonstrate their plausibility and struck the affirmative defenses with leave to amend. Id.at *17. And in Bank of Montreal v. SK Foods, LLC, No. 09 C 3479, 2009 U.S. Dist. LEXIS 106577 (N.D. Ill. Nov. 13, 2009), the plaintiff sued the defendant to collect on debts guaranteed by the defendant after debtors defaulted. Id. at *2. As in the above case, the defendant filed an answer containing, among others, an affirmative defense of breach of the implied covenant of good faith and fair dealing, which the plaintiff moved to dismiss for lack of plausibility under Iqbal. Id.at *10. The court found that Iqbal is applicable to affirmative defenses, citing to a California federal decision. Id. at *11 (citing CTF Dev., Inc. v. Penta Hospitality, LLC, No. 09 C 02429 WHA, 2009 U.S. Dist. LEXIS 99538, AT *8 (N.D. Cal. Oct. 26, 2009). With regard to the specific affirmative defense at issue, the court recognized that the affirmative defense’s allegations, which contained many factual allegations, could mean that the plaintiff acted in a manner equally consistent with lawful behavior and stated that the allegations were “somewhat implausible.” Id. at *11. However, the court denied the motion to dismiss, stating that “striking the good-faith affirmative defense at this early stage is inappropriate.” Id.
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