Saturday, July 7, 2012
Posted by D. Daniel Sokol
Well, Chris Sagers (Cleveland State) responds to Max Huffman. I'll take comfort in the fact that Max considers both me and Diane Wood wrong. Max and I differ in our judgment of the significance of the opinion for the ongoing saga of Twiqbal's effect on conspiracy pleading. As I said, I believe the significance of the Potash en banc ruling for conspiracy pleading is in the following three facts:
the en banc opinion does explicitly state a holding on the merits, as a matter of law, with respect to conspiracy pleading. On p. 29 of the slip opinion, Judge Wood said that "We are . . . satisfied that the allegations suffice, at this stage, to support a plausible story of concerted action." That's pretty unequivocal. And recall that defendants did in fact move for dismissal under Rule 12(b)(6) for failure adequately to plead conspiracy, and denial of that motion was before the panel and the en banc court. I think it is also telling that in support of that holding, the en banc Seventh Circuit cites the Text Messaging opinion. Why does Text Messaging support this one sentence in this separate lawsuit? Well, I take the message to be that the allegations of conspiracy in this case are just as good as the allegations of conspiracy in that other case. The original panel opinion contained an explicit Twiqbal holding that plaintiffs failed adequately to plead a conspiracy. See 657 F.3d 650, 661-64 (7th Cir. 2011). That holding, necessarily, was reversed by the en banc ruling. But really, I think the major significance of this opinion is atmospheric. As I said, it may be true that half of the opinion is devoted to technical details of FTAIA doctrine. But the other half is not. The first half of the opinion is an elaborate rehearsal of plaintiffs' pleadings that is openly, explicitly offered to show how substantial the evidence of U.S. price fixing conspiracy is in this case, even at this early stage.
As one parting thought, is it not interesting that the two circuit judges who joined the original panel opinion (the third panel member was a district judge sitting by designation) changed their minds and joined the en banc opinion? Including that one-line, explicit holding that the complaint adequately pleads a conspiracy? Just what exactly was said during en banc deliberation? Listen to Chris Sagers' interview here.