Monday, May 18, 2009

Beyond Twombly (by Prof. Scott Dodson)

Today, the Supreme Court decided Ashcroft v. Iqbal, a case that continues the recent evolution of pleading standards under Rule 8  mostly begun by a case from two years ago, Bell Atlantic v. Twombly.  As I have written previously here, here, here, here, and here, Twombly affirmed, for the first time, lower court attempts to impose something more than mere notice pleading to a claim governed by Rule 8.  The Supreme Court’s opinion in Twombly was not a model of clarity, however, with Courts of Appeals taking divergent views of the proper pleading standard in its wake.

We at least can applaud Iqbal for clarifying matters.  Twombly’s “plausibility” standard is clearly now a uniform Rule 8 standard, not a standard borne of antitrust law or reserved for certain claims, as some had argued.  And, it is clear that, as I argue in this article forthcoming in the University of Pennsylvania Law Review, the plausibility standard is a “factual sufficiency” standard that depends upon the factual detail and content alleged. 

But, in my view, reaffirming Rule 8’s transsubstantivity with the restrictive pleadings standard of Twombly continues to move pleadings in the wrong direction.  There may be good reasons to depart from transsubstantivity to accommodate the challenges and complexities of particular types of claims.  (For more, see Professor Burbank’s thoughts in this recent article.)  There may also be good reasons to adhere to a liberal pleading standard applied transsubstantively.  (For more, see Professor Spencer’s thoughts in this recent article.)  But applying a restrictive pleading standard transsubstantively will surely result in fewer meritorious cases filed, more meritorious cases dismissed, and less unlawful conduct redressed, particularly for cases in which a less restrictive standard could achieve a better balance between efficiency and justice.  

In addition, Iqbal reintroduces distinctions between conclusions of law, ultimate facts, and evidentiary facts that Rule 8 was designed to obliterate.  The Court casts the distinction between ultimate facts and evidentiary facts in different terminology, namely “conclusory” and “nonconclusory” (or, perhaps, “well-pleaded”), but the inadequacy remains.  As Justice Souter points out in dissent, the distinction between “conclusory” and “nonconclusory” factual allegations is difficult at best and may be fallacious.  

Iqbal may be most remarkable for what it did not say.  It did not cite to Erickson v. Pardus, a per curiam decision issued two weeks after Twombly that many (though not I ) thought might temper Twombly’s reach.  It did not cite to Swierkiewicz v. Sorema N.A, a discrimination case that may now be effectively overruled.  It did not explain how Form 11’s assertion of “negligently drove” is both nonconclusory and plausible.  And it made no mention of notice.  I think it is fair to say that we have entered a new era in pleadings.  Notice is now an aside, probably insignificant in most cases.  Instead, pleadings litigation will focus on factual sufficiency.  As I think the Court made clear, that inquiry will turn on whether each factual allegation is “conclusory” or not and whether all of the nonconclusory allegations state a claim that is “plausible.”

 -          Scott Dodson

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Comments

Twombly and Iqbal, taken together, may stand simply for the proposition behind closed doors meetings and decisions critical to a cause of action must be pleaded with factual specificity sufficient to show a pre-litigation insider source -- which is quite similar to what the legislative reform of pleading for securities causes of action sought to achieve.

In other words, while Form 11's bald allegation (accompanied by an approximate time and place) may be plausible because the plaintiff can be presumed to have direct knowledge or strong corroborating evidence of the facts alleged. In contrast, it is implausible that a plaintiff will have the kind of insider knowledge of a meeting to form an antitrust conspiracy or deprive muslim men of their civil rights, in the absence of factual allegations that show this to be likely with facts such as times, places and paraphrases of conversations or communications. The alleged failures in Erickson v. Pardus weren't of this nature, and hence weren't suspect.

Viewed this way, Rules 8 and 12 are being applied not to require notice, but to prevent fishing expenditions when lots of merely circumstantial evidence is available. If the details of a meeting haven't been leaked to the New York Times or Washington Post, you probably have no case.

Put another way, Iqbal stands for the proposition that CRCP 9(f) ("An alllegation of time or place is material when testing the sufficiency of a pleading."), trumps CRCP 9(b) ("Malice, intent, knowledge, and other conditions of a persons mind may be alleged generally.").

The difficulty here is that the information that SCOTUS is requiring under Rule 8 is routinely unavailable pre-discovery in entire classes of cases, and that putting the screen at a Rule 12 motion, rather than a motion for summary judgment, eliminates the need for defendants to even deny general conspiracy or ill intent allegations under oath in a supporting affidavit. Moreover, this difficulty is itsef a product of a paucity of civil procedure options for pre-litigation discovery, which is of the rule maing committees' and ultimately SCOTUS's own making. The ruling in Iqbal is particularly troubling in light of SCOTUS promulgated CRCP 9(b).

Posted by: ohwilleke | May 18, 2009 3:42:40 PM

Great post.

I wonder whether Iqbal will really change, say, pleading in a negligence case, or a breach of contract case with private parties. Will those cases, for which lawyers have great familiarity, really require fact pleading in practice?

But no matter where one stands on the value of fact pleading, I think we can all agree that "re-writing" rule 8 by decision, as opposed to the Rules process, is poor form.

Posted by: Lumen Mulligan | May 18, 2009 7:52:55 PM

I agree, Lou, with the poor-form point. Twombly's mandate should have contained the disclaimer that it became effective only after December 1st. See 28 U.S.C. s1704.

Posted by: RR | May 19, 2009 6:23:48 AM

A primary goal would be to expose inconsistencies in the allegations made. The strongest inconsistency would be having a strong alibi for the time in question. Is there any independent evidence to refute the allegations.

Posted by: Toronto Personal Injury | May 27, 2009 1:50:06 AM

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