Thursday, May 13, 2010

Decision of Interest on Twombly/Iqbal and Pleading Standards

The Second Circuit's recent decision in Arista Records LLC v. Doe 3, No. 09-0905, 2010 WL 1729107, 2010 U.S. App. LEXIS 8879 (2d Cir. Apr. 29, 2010), may prove to be a very significant one as federal courts continue to struggle with federal pleading standards after Twombly and Iqbal.

The opinion emphasizes that Twombly and Iqbal have not set aside fundamental aspects of the pre-Twombly regime, noting their consistency with the Supreme Court's 2002 decision in Swierkiewicz v. Sorema N.A. and Twombly's endorsement of the "fair notice" standard from Conley v. Gibson:

First, the notion that Twombly imposed a heightened standard that requires a complaint to include specific evidence, factual allegations in addition to those required by Rule 8, and declarations from the persons who collected the evidence is belied by the Twombly opinion itself. The Court noted that Rule 8(a)(2) of the Federal Rules of Civil Procedure “requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to give the defendant fair notice of what the ... claim is and the grounds upon which it rests,” Twombly, 550 U.S. at 555 (other internal quotation marks omitted); see also Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508, 512, (2002) (holding that, at the pleading stage, an employment discrimination plaintiff who alleges facts that provide fair notice of his claim need not also allege “specific facts establishing a prima facie case,” for such a “heightened pleading standard ... conflicts with Federal Rule of Civil Procedure 8(a)(2)”). The Twombly Court stated that “a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations,” but mere “labels and conclusions” or “formulaic recitation[s] of the elements of a cause of action will not do”; rather, the complaint's “[f]actual allegations must be enough to raise a right to relief above the speculative level,” Twombly, 550 U.S. at 555 (emphasis added), i.e., enough to make the claim “plausible,” id. at 570....

...

Concluding that the complaint before it failed to state a plausible claim, the Twombly Court stated that “[i]n reaching this conclusion, we do not apply any ‘heightened’ pleading standard,” id. at 569 n. 14 (emphasis added). Rather, it emphasized that its holding was consistent with its ruling in Swierkiewicz that “a heightened pleading requirement,” requiring the pleading of “‘specific facts' beyond those necessary to state [a] claim and the grounds showing entitlement to relief,” was “impermissibl[e],” Twombly, 550 U.S. at 570....

...

Nor did Iqbal heighten the pleading requirements. Rather, it reiterated much of the discussion in Twombly and rejected as insufficient a pleading that the IqbalCourt regarded as entirely conclusory.

The Second Circuit also writes: "The Twombly plausibility standard, which applies to all civil actions, see Iqbal, 129 S.Ct. at 1953, does not prevent a plaintiff from pleading facts alleged upon information and belief where the facts are peculiarly within the possession and control of the defendant, see, e.g., Boykin v. KeyCorp, 521 F.3d 202, 215 (2d Cir.2008), or where the belief is based on factual information that makes the inference of culpability plausible." (emphasis added). The use of the word "or" in this sentence suggests that "where facts are peculiarly within the possession and control of the defendant," a plaintiff may allege facts upon information and belief even if the complaint lacks "factual information that makes the inference of culpability plausible."

For additional coverage of the Arista Records decision, see the Federal Civil Practice Bulletin.

--A

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