Friday, July 25, 2014
In a 4-3 decision, the Wisconsin Supreme Court has adopted the plausibility pleading standard of the U.S. Supreme Court's opinion in Bell Atlantic Corp. v. Twombly. Data Key Partners v. Permira Advisers LLC, No. 2012AP1967 (Wis. July 23, 2014).
The court reversed the Wisconsin Court of Appeals' ruling that plaintiffs had alleged sufficient facts to show breach of fiduciary duty against the defendants. Wisconsin's pleading rule requires a complaint to contain "[a] short and plain statement of the claim, identifying the transaction or occurrence or series of transactions or occurrences out of which the claim arises and showing that the pleader is entitled to relief." Wis. Stat. § 802.02(1)(a).
The court held that "[p]laintiffs must allege facts that, if true, plausibly suggest a violation of applicable law," stating that "Twombly is consistent with our precedent." The court also asserted that Twombly had overruled Conley v. Gibson. (In my view, however, Twombly only overruled Conley's "no set of facts" standard, not the entire opinion.)
Justice Shirley Abramson, for two other justices, dissented.
I would follow Wisconsin law and conclude that as a general rule, parties need not plead specific facts at the motion-to-dismiss phase. In the instant case, although the plaintiffs raised the business judgment rule in their complaint, the plaintiffs also set forth sufficient facts to plead around the rule and provide notice to the defendants of the claim being alleged.
. . . Under Twombly/Iqbal, federal district courts have increased the rate at which they grant motions to dismiss.
No Wisconsin case has adopted the rule as stated in Twombly and Iqbal. Twombly was not argued or briefed in the instant case. The majority opinion relies on the Twombly heightened pleading standard without any briefing or argument. I have written before that this court should give counsel the opportunity to develop arguments before the court in the adversarial system. . . .