Equal Employment Opportunity Commission v. Kelley Drye & Warren, LLP

Filing 69

MEMORANDUM AND OPINION: #100569 For the foregoing reasons, the EEOC's motion to strike certain affinnative defenses is granted as to Defendant's fourth, ninth, tenth, eleventh, and seventeenth defenses, and is denied as to Defendant's thirteenth,fifteenth, sixteenth, and eighteenth defenses. This memorandum opinion and order resolves docket entry no. 10. (Signed by Judge Laura Taylor Swain on 7/25/11) (laq) Modified on 7/26/2011 (ajc).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff,
No. 10 Civ. 655 (LTS)(MHD)

-v-

KELLY DRYE & WARREN, LLP,
Defendant.

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MEMORANDUM OPINION AND ORDER

Eugene T. D'Ablemont ("D' Ablemont"), an attorney with the defendant law finn
Kelley Drye & Warren, LLP ("Defendant" or "KD"), filed a charge with the federal Equal
Employment Opportunity Commission ("Plaintiff' or "EEOC"), alleging that KD's practice
under which finn partners' status and tenns of compensation changed after age 70 violated the
Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §621 et seq. After investigating
the charge, the EEOC commenced this action, alleging Defendant engaged in discriminatory
employment practices, including retaliation, in violation ofthe ADEA rights of D'Ablemont and
what the EEOC characterizes as a class of similarly situated employees. The Court has
jurisdiction of this action pursuant to 28 U.S.c. §§ 1331, 1337, 1343, and 1345.
Currently before the Court is the EEOC's Motion to Strike Certain Affinnative
Defenses pursuant to Federal Rule of Civil Procedure 12(f). The Court has reviewed thoroughly
and considered carefully both parties' submissions. For the following reasons, the EEOC's
motion is granted in part and denied in part.
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BACKGROUND

The EEOC alleges that, since at least 2001, Defendant has operated under a
Partnership Agreement that requires all attorneys subject to the agreement who wish to continue
their practice of law beyond 70 years of age to give up any equity interest they have in the
Defendant law firm. (Am. Compo

,r 7.a.)

The Partnership Agreement also requires such

attorneys to relinquish their authority to "manage or significantly influence" Defendant. (Id.)
The compensation system established by the Partnership Agreement requires that attorneys who
reach the age of 70 be compensated thereafter solely on the basis of a discretionary annual bonus
payment. (Id.) Under the compensation system established by the Partnership Agreement,
D'Ablemont and a class of similarly situated attorneys who continued to practice law beyond the
age of 70 were required to relinquish any equity interest they had with Defendant law firm and
have received compensation from Defendant in an amount significantly less than that paid to
similarly situated, younger attorneys. (Id.,-r 7.b.)
The EEOC further alleges that, after D' Ablemont filed his ADEA charge with the
EEOC, his 2008 annual bonus was reduced from $75,000 to $25,000 in retaliation for his
complaining about Defendant's compensation system and his filing of a charge with the EEOC.
(Id.

'1 7.c.)

D'Ablemont's annual bonus was reduced despite his "collections and other measures

of productivity" having been similar to those of previous years. (Id.) The annual bonus
D'Ablemont received in both 2009 and 2010 was again reduced to $25,000 despite his
collections and other measures of productivity being similar to years in which he received a
$75,000 bonus. (Id.) According to the EEOC, Defendant's employment practices have been,
and continue to be, intentional, and were undertaken with malice or reckless indifference to the
rights ofD'Ablemont and other similarly situated attorneys. (Id.,-r,-r 8, 9.)
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In its answer to the EEOC's Amended Complaint, Defendant asserts nineteen
affirmative defenses. The EEOC has moved pursuant to Federal Rule of Civil Procedure 12(f) to
strike nine of Defendant' s affirmative defenses in whole or in part.
DISCUSSION

Rule 12(f) provides that "[t]he court may strike from a pleading an insufficient
defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f).
The EEOC moves to strike Defendant's fourth, ninth, tenth, eleventh, thirteenth, sixteenth,
seventeenth, and eighteenth affirmative defenses as insufficient as a matter oflaw. Additional1y,
the EEOC moves to strike most of Defendant's fifteenth affirmative defense as consisting
substantially of "immaterial, impertinent, or scandalous" all egations. The EEOC contends that it
would be prejudiced by "expending its limited resources in dealing with discovery, post­
discovery motions and trial" as to the challenged affirmative defenses. (Pl.'s Mem. of Law in
Supp. of Mot. Under Fed. R. Civ. P. l2(f) to Strike Certain Affirmative Defenses 3.)
Rule 8 of the Federal Rules of Ci vii Procedure requires that a party responding to
a pleading "state in short and plain terms its defenses to each claim asserted against it." Fed. R.
Civ. P. 8(b)(l)(A). Although no Circuit Court of Appeals has yet spoken to the issue since the
Supreme Court's rulings in Twombly and Igbal concerning pleading standards for claims, most
lower courts that have considered the question of the standard applicable to pleading of defenses
have held that the Rule 12(b)(6) standard, as elucidated in Twombly and Iqbal, governs the
sufficiency of the pleading of affirmative defenses. See, e.g., Aspex Eyewear, Inc. v. Clariti
Eyewear, Inc., 531 F. Supp. 2d 620, 622-23 (S.D.N.Y. 2008) (recognizing that the equivalent
standard governs a motion to dismiss pursuant to Rule 12(b)(6) and a motion to strike an
affirmative defense pursuant to Rule 12(f)); Tracy v. NVR, Inc., No. 04 Civ. 6541L, 2009 WL
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3153150, *7 (W.D.N.Y. Sept. 30,2009) (same); Burck v. Mars, Inc., 571 F. Supp. 2d 446, 456
(S.D.N.Y. 2008) (same). It has long been held that affirmative defenses that contain only "bald
assertions" without supporting facts should be stricken. Shechter v. Comptroller of City of New
York, 79 F.3d 265, 270 (2d Cir. 1996). When reviewing a motion to strike, the court views "the
pleading under attack most favorably to the pleader." Wohl v. Blair & Co., 50 F.R.D. 89,91
(S.D.N.Y. 1970).
Motions to strike affirmative defenses for legal insufficiency are, nonetheless,
generally disfavored. Salcer v. Envicon Equities Corp., 744 F.2d 935, 939 (2d Cir. 1984),
vacated on other grounds, 471 U.S. 1098 (1986). The Second Circuit has cited approvingly
cases holding that a motion to strike should not be used as an opportunity for the determination
of disputed, substantial questions of law and has endorsed the view of a leading treatise that
"even when the defense presents a purely legal question, the courts are very reluctant to
determine disputed or substantial issues of law on a motion to strike; these questions quite
properly are viewed as determinable only after discovery and a hearing on the merits." Salcer,
744 F.2d 935,939 (2d Cir. 1984) (quoting 5 C. Wright & A. Miller, Federal Practice &
Procedure § 1381 at 800-01).
Fourth Affirmative Defense
Defendant's fourth affirmative defense states, in its entirety, that "[t]he EEOC's
claims are barred, in whole or in part, by the applicable statutes of limitations and/or filing
periods." (Def.'s Answer to Am. Compl. 4.) The EEOC moves to strike this defense, asserting
that it is not bound by the statutory limitations periods and administrative filing requirements
that apply to private litigants. Citing a single district court decision to the contrary, KD argues
that this legal issue is sufficiently unsettled that the motion to strike should be denied.
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The Civil Rights Act of 1991 removed language in the ADEA which had
incorporated by reference the time limitations applicable to claims under the Fair Labor
Standards Act ("FLSA"). In the place of the excised reference to the FLSA, Congress created a
requirement that private individuals file suit no later than 90 days after the receipt of a right-to­
sue letter from the EEOC. See 29 U.S.C.A. § 626(e) (West 2008). It is thus clear that the
amended language of ADEA § 626(e) imposes no temporal limitations on the EEOC's initiation
of a suit.
Defendant's underlying conduct at issue, and the commencement of suit, occurred
long after the 1991 revisions to the procedure and substance of the ADEA. Therefore, no statute
of limitations restricts the EEOC's prosecuting this ADEA action. See, e.g., EEOC v. Inc. ViII.
of Valley Stream, 535 F. Supp. 2d 323,325-26 (E.D.N.Y. 2008) (no statute of limitation
applicable to EEOC's ADEA suit); EEOC v. Venator Group, Specialty, Inc., No. 09 Civ. 4758
(AGS), 2002 WL 181709, *2 (S.D.N.Y. Feb. 5,2002) (same); Littel v. Aid Ass'n for Lutherans,
62 F.3d 257,258-59 (8th Cir. 1995) (same); EEOC v. Tire Kingdom, Inc., 80 F.3d 449,451 n.1
(lIth Cir. 1996) (same). The EEOC's motion to strike Defendant's fourth affirmative defense
will, accordingly, be granted.
Ninth, Tenth, and Eleventh Affirmative Defenses
Defendant's ninth affirmative defense states, in its entirety, that "[t]he claims
contained in the Complaint are barred as to any matters not contained in the administrative
charges of discrimination." (Def. 's Answer to Am. Compl. 4.) The Court reads the reference to
"administrative charges" as relating to the charge filed by D' Ablemont with the EEOC.
The content of an individual complainant's charge does not limit the scope of a
lawsuit brought by the EEOC in an enforcement capacity. EEOC v. Johnson & Higgins, Inc., 91
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F.3d 1529, 1536-37 (2d Cir. 1996) (EEOC's authority to combat age discrimination is
independent ofthe filing of a charge); EEOC v. Sidley Austin LLP, 437 F.3d 695, 696 (7th Cir.
2006) (EEOC's enforcement authority is "not derivative of the legal rights of individuals even
when it is seeking to make them whole"). The provision of pre-suit notice to the employer of the
basis of the charges in time to permit the required conciliation efforts is sufficient.

29

U.S.c.A. § 626(b) (West 2008); EEOC v. Thomas Dodge Corp. ofN.Y., 524 F. Supp. 2d 227,
235 (E.D.N.Y. 2007). Such notice was provided in the instant action through D'Ablemont's
February 29,2008, charge (Burstein Decl. Ex. A) and the EEOC's March 20, 2009, Letter of
Determination which notified Defendant of the EEOC's claims arising out of the terms and
compensation ofD'Ablemont and other Life Partners (id. Ex. B). The EEOC's motion to strike
Defendant's ninth affirmative defense due to legal insufficiency will, therefore, be granted.
Defendant's tenth affirmative defense states that Plaintiffs claims "are barred, in
whole or in part, by the failure of the EEOC and D'Ablemont to satisfy the statutory andlor
administrative prerequisite to the bringing of an action under the ADEA." (Def. 's Answer to
Am. CompI. 5.) Defendant's eleventh affirmative defense states that Plaintiffs claims
"allegedly asserted on behalf of individual(s) other than D'Ablemont are barred, in whole or in
part, because no administrative charges were filed relating thereto." (Id.) As noted above, the
EEOC may pursue claims on behalf of individuals other than D'Ablemont since "[a]ny
violations that the EEOC ascertains in the course of a reasonable investigation of the charging
party's complaint are actionable." Gen Tel. Co. v. EEOC, 446 U.S. 318,331 (1980). The
EEOC's enforcement authority is not limited to the scope of an individual's charge.
Furthermore, KD has neither plead nor proffered any facts indicating that the EEOC has failed to
comply with any of the administrative prerequisites to commencement of an enforcement suit.
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See 29 C.F.R. §§ 1626.15(b), (d) (2010). See also Thomas Dodge, 524 F. Supp. 2d at 236 (the
doctrine that any violations that the EEOC ascertains in the course of a reasonable investigation
of the charging party's complaint applies "to additional victims who are uncovered during such
investigation"); 29 C.F.R. § 1626.13 (2010) (because EEOC has "independent investigative
authority" it "may continue any investigation and may secure relief for all affected persons
notwithstanding a request by a charging party to withdraw a charge."); EEOC v. Waffle House,
Inc., 534 U.S. 279, 291 (2002); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991).
For these reasons, the EEOC's motion to strike Defendant's tenth and eleventh affirmative
defenses as lacking legal sufficiency will be granted.
Thirteenth and Fifteenth Affirmative Defenses
Defendant's thirteenth affirmative defense states that the EEOC's claims are
"barred, in whole or in part, by the doctrines of waiver, estoppel, laches, and unclean hands" due
to various actions and/or inactions by the EEOC and/or D'Ablemont. (Def. 's Answer to Am.
CompI. 5-6.) Defendant's fifteenth affirmative defense argues that "D' Ablemont's
compensation as a Life Partner has been entirely non-discriminatory, non-retaliatory and fair" in
light of numerous aspects and circumstances ofD'Ablemont's employment and Defendant's
business conditions. (Id. 6.)
As explained above, the EEOC is not in privity with D' Ablemont even though it
seeks relief on his behalf. However, this does not mean that D' Ablemont's actions have no
bearing on the EEOC's ability to recover in this action. See Waffle House, 534 U.S. at 297
(noting that an employee's conduct may affect the EEOC's recovery without rendering the
EEOC's claim merely derivative of that of the employee); Sidley Austin, 437 F.3d at 696. The
EEOC seeks injunctive relief, compensatory damages, punitive damages, and costs. The
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monetary component of the remedies sought may depend on D' Ablemont's conduct (particularly
ifD' Ablemont remains the EEOC's only Life Partner for whom the EEOC seeks victim-specific
relief). The potential relevance ofD' Ablemont's conduct derives not from privity between
D' Ablemont and the EEOC, but from traditional equitable considerations that prevent, for
instance, double recovery for any specific plaintiff, no matter whether their relief is obtained
through suit by the EEOC or through private litigation. See Waffle House, 534 U.S. at 296-97.
Affinnative defenses thirteen and fifteen contain numerous details and particular statements
about D'Ablemont's employment conduct on which these defenses are based. Rule 8's pleading
requirement is satisfied by these factual allegations. The allegations contained in the fifteenth
affinnative defense are not so "immaterial, impertinent, or scandalous" so as to justify their
being stricken from Defendant's Answer. The potential relevance ofD'Ablemont's actions to
the victim-specific relief the EEOC seeks is clear. The EEOC's motion will, therefore, be
denied to the extent that affinnative defenses thirteen and fifteen are relevant to any damages
claims asserted with respect to D'Ablemont.
Sixteenth and Eighteenth Affinnative Defenses
The EEOC moves to strike Defendant's sixteenth affinnative defense to the
extent KD asserts that punitive damages are unavailable "under the statutes that allegedly give
rise to the claims asserted by the EEOC.'" (Def.'s Answer to Am. Compi. 7.) Defendant's
eighteenth affinnative defense states that "[t]he EEOC cannot recover compensation for alleged
'non-pecuniary losses' because any such losses are not compensable under the statutes which
allegedly give rise to the claims asserted by the EEOC." (Id.)

(See PL's Mem. of Law in Supp. of Mot Under Fed. R Civ. P. 12(f) to Strike
Certain Affinnative Defenses 12 n.S.)
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Circuit Courts of Appeal have reached different conclusions as to the availability
of compensatory and punitive damages under the ADEA. Compare, Sh&, Travis v. Gary Cmty.
Mental Health Ctr., Inc., 921 F.2d 108, 112 (7th Cif. 1990) (punitive and compensatory damages
available under FLSA) with Snapp v. Unlimited Concepts, Inc., 208 F.3d 928, 934-37 (11 th Cir.
2000) (FLSA, the remedial scheme of which the ADEA incorporates by reference, does not
permit punitive and compensatory damages). Although at least one court in this district has
determined that such damages are available under the ADEA, Sines v. Service Corp. Int'), No.
03 Civ. 5465 (SC), 2006 WL 3247663, at *2-3 (S.D.N.Y. Nov. 8,2006), there is no binding
authority from the Court of Appeals for the Second Circuit on this issue of law.
In light of the unsettled state of the law on these contentions and the disfavored
status of Rule 12(f) motions as vehicles for deciding disputed issues of law, it is inappropriate
for the Court to address these issues oflaw at this stage of the proceedings. See Sa1cer, 744 F.2d
at 939 ("a motion to strike for insufficiency was never intended to furnish an opportunity for the
determination of disputed and substantial questions of law. . .. This is particularly so when []
there has been no significant discovery. Even when the defense presents a purely legal question,
the courts are very reluctant to determine disputed or substantial issues of law on a motion to
strike; these questions quite properly are viewed as determinable only after discovery and a
hearing on the merits. To do otherwise would be to run the risk of offering an advisory opinion
on an abstract and hypothetical set of facts.") (quotations and citations omitted). The EEOC's
motion to strike the sixteenth and eighteenth affirmative defenses will, accordingly, be denied.
Seventeenth Affirmative Defense
Defendant's seventeenth affirmative defense asserts that the EEOC's claim
seeking recovery of punitive damages violates Defendant's rights under various federal and state
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constitutional provisions. This defense is too conclusory to provide fair notice to the EEOC of
the grounds on which it rests. Defendant merely provides a laundry list of federal constitutional
provisions, and "the corresponding state constitutional provisions," that the pursuit of punitive
damages is asserted to violate. Defendant's list, without factual elucidation, fails to meet the fair
notice Twombly pleading standard. The EEOC's motion is therefore granted as to the
seventeenth affinnative defense.
CONCLUSION

For the foregoing reasons, the EEOC's motion to strike certain affinnative
defenses is granted as to Defendant's fourth, ninth, tenth, eleventh, and seventeenth defenses,
and is denied as to Defendant's thirteenth,fifteenth, sixteenth, and eighteenth defenses.
This memorandum opinion and order resolves docket entry no. 10.

SO ORDERED.

Dated: New York, New York
July 25, 2011

£ORSWAIN
United States District Judge

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