Recent First Circuit Decisions – Part III


3.  Trans-pec Truck Service, Inc. v. Caterillar, Inc.

The third decision of interest relates to procedural issues relating to affirmative defenses.

This was a case brought under the Massachusetts unfair trade practice law, Ch. 93A, as well as some other counts, relating to allegedly defective engines.  The district court (Lindsay, J.) granted a motion to dismiss on the grounds that the action was time-barred.  The Court of Appeals affirmed.  The decision, by Judge Lipez, provides a tidy primer on a series of procedural issues and the consequences of failing to grasp them fully.

Basically, there was a breach of warrantly claim.  The defendant raised a statute of limitations defense.  The plaintiff responded with an equitable estoppel argument — but did not, the Court of Appeals said, do the right things procedurally to avoid dismissal. 

The Court starts by first noting the standard of review for motions to dismiss, citing Bell At. Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007).  There have been a number of First Circuit decisions noting the new world under Twombly.  Remember, Twombly nudges in the direction of having to put more concrete factual allegation into a complaint to avoid dismissal.

Next, the Court notes that affirmative defenses, like the statute of limitations, can be addressed under F.R.Civ.P. 12(b)(6) if the facts establishing the defense are clear on the face of the complaint.

Next, the Court discusses what can be cited in support of a motion to dismiss (versus a summary judgment motion) besides the complaint itself.  Consistent with First Circuit precedent, Judge Lipez notes that one can cite documents "expressly linked" to the complaint whose authenticity are not challenged.  Conversely, one does not look at documents, such as affidavits, like the plaintiff wanted, to raise an equitable estoppel defense to the statute of limitations point.  The Court goes into the discretion of the district court to convert motions to dismiss, what forms the record on review, and notes that arguments not raised in the opening brief are waived.  There was an initial magistrate recommendation, and the Court of Appeals discusses when additional evidence can be presented after the recommendation to the district court.  Apparently, the plaintiff didn’t argue that the error in not converting the dismissal motion into one for summary judgment to support its position that its materials precluded dismissal.

Perhaps you can see where this is going — the Court ended up looking only at certain appended contractual materials, not the materials allegedly supporting the estoppel defense — because of an insufficient articulation of relevant factual allegations (the plaintiff, the Court said, should have pleaded in its complaint the estoppel facts) — which didn’t get fixed later, through, inter alia, waiver.  (There was also a motion to amend — that came too late.) 

Finally, there was a summary judgment ruling on one of the counts, so we get all the rules about those summarized here, too.   

In sum, the decision is a nice blueprint on many issues, and, in particular, provides a clear warning about pitfalls for a plaintiff if it knows a statute of limiations or other affirmative defense is lurking on the horizon.