Avoiding the Urkel Defense (Did I Do That?): How Safeco Has (and Has Not) Begun to Provide an Affirmative Defense against Statutory Willfulness

By Owens, S. L. | Defense Counsel Journal, January 2015 | Go to article overview

Avoiding the Urkel Defense (Did I Do That?): How Safeco Has (and Has Not) Begun to Provide an Affirmative Defense against Statutory Willfulness


Owens, S. L., Defense Counsel Journal


"DID I do that?" is a popular catchphrase used by American sitcom character, Steve Urkel.1 Urkel was a clumsy but wellintentioned character on the sit-com Family Matters. At the center of the show's playful gags were Urkel's genius inventions and klutz performances.2 These gags usually caused Urkel to break furniture, injure bystanders, and try the patience of his neighbors, the Winslow family. Translated into litigious American legal culture, Urkel's highly risky conduct was undoubtedly reckless.3 Federal common law recklessness holds defendants civilly liable for creating "an unjustifiably high risk of harm that is either known or so obvious that it should be known."4 Unlike Urkel, defendants must compensate plaintiffs who are injured by their reckless conduct.5

In Safeco Insurance Company of Am. v. Burr6 the United States Supreme Court held that when a statute left undefined the standard of willfulness, the objective common law recklessness standard should be applied. In Safeco, the Court applied this objective standard to determine whether insurance companies had engaged in conduct that was reckless under the Fair Credit Reporting Act ("FCRA").7 A class of auto insurance applicants argued that defendant insurers violated FCRA by willfully failing to provide them with notice of an adverse action as required by the FCRA. The Court disagreed, holding that notice provisions under the FCRA were ambiguous about timelines. Legislative history revealed that Congress had not proposed to require insurance companies to notify applicants of unforeseen adverse actions at the time of their initial application.8 Because the defendant insurance companies interpreted the FCRA's ambiguous statute reasonably, they did not willfully violate the law.

At first blush, Safeco appears to be a win for defendants eager to prevail against statutory recklessness, as the Supreme Court has created an affirmative defense that would shift the burden back onto plaintiffs who allege willfulness once defendants have met an objective standard. This article cautions defendants, however, against prematurely crafting a defense around an aggressive reading of Safeco in an attempt to quickly dispose of claims for civil statutory recklessness. Although Plaintiffs must show evidence of a defendant's objectively risky conduct, lurking beneath these cases is the concern that Safeco may have permitted what this article calls the "Urkel Defense." Under the Urkel Defense, regardless whether a defendant knowingly engaged in wrongful conduct, a defendant may attempt to escape liability by showing objectively reasonable conduct.

In circumstances beyond the FCRA, circuit courts have hesitated or even refused to apply Safeco if this would give rise to the Urkel Defense. For example, most other courts have declined to follow the Eighth Circuit, which dismissed claims against defendants under Safeco as early as the pleadings when they were accused of willfully violating the False Claims Act ("FCA"),9 waiting to rule on a defendant's recklessness under the FCA until the parties have established an evidentiary record.

This article provides an overview of Safeco and the ways in which appellate courts have extended (or declined to extend) the Supreme Court's holding in Safeco to other federal statutes lacking a statutorily defined standard of willfiulness, including the FCA, the Patent Act, the Clean Water Act, the Gun Control Act, the Fair And Accurate Credit Transactions Act, and the Uniformed Services Employment And Reemployment Act. This article argues that defendants can best leverage Safeco as an affirmative defense against undefined statutory willfulness after credible evidence is established in the record. Successful Safeco defenses entail a four-step analysis of the claim by which defendants prove that they: (1) reasonably interpreted the law; (2) objectively aligned with Congress's intent; (3) fairly allocated burdens; and (4) efficiently disposed of the claim as a matter of law. …

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