Thursday, August 18, 2011

Revised updated study of Iqbal’s quantitative effect

I have finally finished my revisions made after the March 2011 Federal Judicial Center study, and, with some trepidation, just posted the revised manuscript on SSRN.

Any and all comments and criticisms gratefully accepted. 

--Patricia Hatamyar Moore

August 18, 2011 in Federal Rules of Civil Procedure, Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0)

Monday, August 15, 2011

Distinguishing Iqbal, Seventh Circuit holds allegations against Donald Rumsfeld adequately state a Bivens claim

            In Vance v. Rumsfeld, 2011 WL 3437511 (7th Cir. Aug. 8, 2011), plaintiffs, who are American citizens and civilians, alleged that they were detained and tortured by U.S. military personnel in Iraq for several months in 2006, then were released without ever being charged with a crime.  Plaintiffs had worked for a privately-owned Iraqi security services company and began whistle-blowing when they became suspicious that the company was involved in corruption and other illegal activities.  Their detention by the U.S. military followed. 

            Plaintiffs filed a Bivens claim alleging Fifth Amendment substantive due process violations (Count I) against Donald Rumsfeld, the former Secretary of Defense, and others, for torture and cruel, inhuman treatment, among other claims.  Defendant Rumsfeld filed a 12(b)(6) motion based in part on the asserted failure of plaintiffs’ complaint to allege his personal responsibility for their treatment and on qualified immunity. 

            The district court denied the motion to dismiss Count I, and the Seventh Circuit (hearing the appeal under Sections 1291 and 1292(b)) affirmed:

To proceed with their Bivens claims, plaintiffs must allege facts indicating that Secretary Rumsfeld was personally involved in and responsible for the alleged constitutional violations. See Iqbal, 129 S.Ct. at 1948–49 . . .  “Because vicarious liability is inapplicable to Bivens and § 1983 suits, a plaintiff must plead that each Government-official defendant, through the official's own individual actions, has violated the Constitution.” Iqbal, 129 S.Ct. at 1948. As the Supreme Court said in Iqbal, “[t]he factors necessary to establish a Bivens violation will vary with the constitutional provision at issue.” Id. Unlike in Iqbal, which was a discrimination case, where the plaintiff was required to plead that the defendant acted with discriminatory purpose, the minimum knowledge and intent required here would be deliberate indifference, as in analogous cases involving prison and school officials in domestic settings.  . . . .

The Federal Rules of Civil Procedure impose no special pleading requirements for Bivens claims, including those against former high-ranking government officials. See Swierkiewicz v. Sorema N.A ., 534 U.S. 506, 513–14, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). The notice pleading standard under Rule 8 of the Federal Rules of Civil Procedure applies, and a plaintiff is required to provide a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a). The complaint will survive a motion to dismiss if it meets the “plausibility” standard applied in Iqbal and Twombly. . . . .

We agree with the district court's observation in this case: “Iqbal undoubtedly requires vigilance on our part to ensure that claims which do not state a plausible claim for relief are not allowed to occupy the time of high-ranking government officials. It is not, however, a categorical bar on claims against these officials.” 

The court then summarized the complaint’s extensive and detailed allegations of Rumsfeld’s involvement, concluding: 

We agree with the district court that the plaintiffs have alleged sufficient facts to show that Secretary Rumsfeld personally established the relevant policies that caused the alleged violations of their constitutional rights during detention. . . .

We agree with the district court that plaintiffs have articulated facts that, if true, would show the violation of a clearly established constitutional right. In fact, the defendants' argument to the contrary evaporates upon review. The plaintiffs have pled that they were subjected to treatment that constituted torture by U.S. officials while in U.S. custody. On what conceivable basis could a U.S. public official possibly conclude that it was constitutional to torture U.S. citizens?

--Patricia Hatamyar Moore

August 15, 2011 in Recent Decisions, Twombly/Iqbal | Permalink | Comments (0)

Thursday, August 4, 2011

Hoffman on Twombly/Iqbal and the FJC Study on Motions to Dismiss

Professor Lonny Hoffman (Houston) has posted on SSRN a draft of his article, Twombly and Iqbal's Measure: An Assessment of the Federal Judicial Center's Study of Motions to Dismiss. Here’s the abstract:

This paper provides the first comprehensive assessment of the Federal Judicial Center’s long-anticipated study of motions to dismiss for failure to state a claim after Iqbal v. Ashcroft. Three primary assessments are made of the FJC’s study. First, there are reasons to be concerned that the study may be providing an incomplete picture of actual Rule 12(b)(6) activity. Even if the failure to capture all relevant motion activity was a non-biased error, the inclusiveness problem is consequential. Because the study was designed to compare over time the filing and grant rate of Rule 12(b)(6) motions, the size of the effect of the Court’s cases turns on the amount of activity found. Second, even if concerns are set aside that the collected data may be incomplete, it misreads of the FJC’s findings to conclude that the Court’s decisions are having no effect on dismissal practice. The FJC found that after Iqbal, a plaintiff is twice as likely to face a motion to dismiss. This sizeable increase in rate of Rule 12(b)(6) motion activity represents a marked departure from the steady filing rate observed over the last several decades and means, among other consequences, added costs for plaintiffs who have to defend more frequently against these motions. The data regarding orders resolving dismissal motions even more dramatically shows the consequential impacts of the Court’s cases. There were more orders granting dismissal with and without leave to amend, and for every case category examined. Moreover, the data show that after Iqbal it was much more likely that a motion to dismiss would be granted with leave to amend (as compared to being denied) both overall and in the three largest case categories examined (Civil Rights, Financial Instruments and Other). Employment Discrimination, Contract and Torts all show a trend of increasing grant rates. In sum, in every case type studied there was a higher likelihood after Iqbal that a motion to dismiss would be granted. Third, because of inherent limitations in doing empirical work of this nature, the cases may be having effects that the FJC researchers were unable to detect. Comparing how many motions were filed and granted pre-Twombly to post-Iqbal cannot tell us whether the Court’s cases are deterring some claims from being brought, whether they have increased dismissals of complaints on factual sufficiency grounds, or how many meritorious cases have been dismissed as a result of the Court’s stricter pleading filter. Ultimately, perhaps the most important lesson to take away from this last assessment of the FJC’s report is that empirical study cannot resolve all of the policy questions that Twombly and Iqbal raise.

For links to the FJC study, see our earlier coverage here.

--A

August 4, 2011 in Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0)

Thursday, July 28, 2011

Ninth Circuit Minces No Words on Supreme Court’s Pleading Jurisprudence

Judge Fletcher of the Ninth Circuit recently upheld a pro se prisoner’s complaint for supervisory liability for deliberate indifference to the dangers of violent attack in county jail.  Starr v. Baca, 2011 WL 2988827 (9th Cir. July 25, 2011).  

The court traced the history of notice pleading from 1938, and then continued:

In several recent cases, without benefit of statute, the Supreme Court has applied what appears to be higher pleading standard under Rule 8(a) [citing Dura Pharmaceuticals, Twombly, and Iqbal].  . . . In two cases decided during roughly the same period, the Court appears to have applied the original, more lenient version of Rule 8(a) [citing Swiekiewicz and Erickson]. . . .

The juxtaposition of Swierkiewicz and Erickson, on the one hand, and Dura, Twombly, and Iqbal, on the other, is perplexing. Even though the Court stated in all five cases that it was applying Rule 8(a), it is hard to avoid the conclusion that, in fact, the Court applied a higher pleading standard in Dura, Twombly and Iqbal.

But whatever the difference between these cases, we can at least state the following two principles common to all of them. First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation. . . .

Viewed in the light of all of the Supreme Court's recent cases, we hold that the allegations of Starr's complaint satisfy the standard of Rule 8(a). We do not so hold merely because Starr's complaint, like the complaint in Erickson, alleges deliberate indifference in violation of the Eighth and Fourteenth Amendments. Rather, we so hold because his complaint complies with the two principles just stated.

Judge Trott, relying primarily on Iqbal, dissented.

July 28, 2011 in Federal Rules of Civil Procedure, Recent Decisions, Twombly/Iqbal | Permalink | Comments (0)

Friday, July 22, 2011

Tennessee Supreme Court Declines to Adopt “Plausibility” Pleading Standard

            Yesterday, the Supreme Court of Tennessee refused to adopt Twombly and Iqbal for Tennessee state court pleading, and upheld an amended complaint for retaliatory discharge against a motion to dismiss for failure to state a claim.  Webb v. Nashville Area Habitat for Humanity, Inc., 2011 WL 2905584 (Tenn. No. M2009-01552, July 21, 2011).    

            After reviewing much of the law review literature on Twombly and Iqbal, the court concluded:

In summary, it must be remembered that we are addressing the standard in assessing the sufficiency of a single document filed at the very beginning of a case—the complaint. Our motion-to-dismiss jurisprudence reflects the principle that this stage of the proceedings is particularly ill-suited for an evaluation of the likelihood of success on the merits or of the weight of the facts pleaded, or as a docket-clearing mechanism. Rule 8.01 has not been amended and still only requires “(1) a short and plain statement of the claim showing that the pleader is entitled to relief, and (2) a demand for judgment for the relief the pleader seeks.” We decline to reinterpret Rule 8 to require a pleader to demonstrate “plausibility” and continue to adhere to the well established standards set forth in section 1 of this opinion [which cited Tennessee’s policy of “liberal notice pleading” and its adherence to the “no set of facts” standard].

 --PHM

July 22, 2011 in Recent Decisions, Twombly/Iqbal | Permalink | Comments (2)

Monday, July 11, 2011

Thoughts on the Federal Judiciary Committee’s study of 12(b)(6) motions after Iqbal

            As most of you know, the FJC released its study comparing 12(b)(6) motions in 2006 and 2010 in March 2011.  Overall, the study takes the view that the empirical effect of Iqbal has been modest.  As I mentioned in a previous post, some are emphasizing the finding that the FJC found no increase in the rate of grants of motions without leave to amend

            I have an updated quantitative study coming out in the University of Richmond Law Review in the fall.  My study concludes that Iqbal has had a significant effect not only on the rate of granting 12(b)(6) motions with leave to amend (a finding shared by the FJC), but also without leave to amend.  Another finding of my updated study is that a case is 1.74 times more likely to be entirely dismissed upon the granting of a 12(b)(6) motion under Iqbal than under Conley.  The FJC reached a different result on a similar question.     

            Richmond accepted this article before the FJC results came out, and I am reworking it over the summer to incorporate a review of the FJC results and a comparison with my own.  The draft of the Richmond article on my SSRN page does not contain these revisions yet.  I welcome all comments!

            I wanted to limit the length of this post.  Please contact me for a fuller version of these preliminary remarks.             

            1.  Database inclusions and exclusions.  Here are the major differences between the FJC's database and the database for my updated study:

Table 1

FJC Study and Hatamyar Study Database Parameters

Database parameter

FJC

Hatamyar

Time period

Two separate six-month periods (January to June 2006 and January to June 2010)

A five-year continuous period (May 22, 2005 to May 18, 2010)

Number of cases

1,922

1,333

Number of U.S. district courts

23

86

Method of retrieval

CM/ECF codes in 23 district courts; translation of PDF documents to text; electronic search.

Electronic searches of Westlaw DCT database.

Pro se plaintiffs, including prisoner and non-prisoner

Not included

Included

12(c) motions

Not included

Included

12(b)(6) motions directed to counterclaims

Not included

Included

Motions decided under Rule 9(b) (fraud) or the PSLRA

Included

Not included

District court reviews of motions decided by magistrates

Not included

Included

MDL cases

Not included

Included

             

            II.  Results.  Table 2 compares the overall results of the two studies, removing all pro se plaintiffs from the calculations for my database so as to approximate the FJC's.

Table 2

Comparison of FJC and Hatamyar Overall Results, Represented Plaintiffs Only

Denied

Granted at least in part

FJC

Hatamyar

FJC

Hatamyar

2006

2010

2006

2010

2006

2010

2006

2010

34%

25%

34%

27%

66%

75%

66%

73%

(239)

(305)

(51)

(46)

(461)

(916)

(98)

(123)

Notes:  The FJC figures include only orders entered in 23 districts from January through June 2006 and January through June 2010.  The Hatamyar figures include orders entered in 86 districts in all of calendar year 2006 and from January through June 2010.   

            Overall, as shown in Table 2, the two studies are close in their overall percentages, when looking at represented plaintiffs only.  First, even when the plaintiff was represented, both studies found a significant increase, from 2006 to 2010, in the percentage of 12(b)(6) motions granted at least in part – from 66% to 75% in the FJC study, and from 66% to 73% in my study.  Second, both studies found that 12(b)(6) motions were denied in 34% of cases in 2006 in which the plaintiff was represented by counsel. 

            A comparison of these results may shed some light on the debate as to whether cases reported in Westlaw fairly represent the “universe” of cases.  My database included only cases reported in Westlaw, and the FJC’s database included cases gleaned as thoroughly as possible from the courts’ electronic filing records.  Yet both my study and the FJC’s found the same percentage – 34% -- of motions denied in 2006.  I think that these results may tend to disprove the hypothesis advanced by the FJC that published cases are more likely to report the grant of a 12(b)(6) motion to dismiss than unpublished cases.  Further, in 2010, the percentage of motions granted at least in part (in cases with represented plaintiffs) was actually higher in the FJC study (75%) than in my study (73%), which was based solely on cases reported in Westlaw.  This is the opposite of what one would predict if grants of 12(b)(6) motions were more likely to be published than denials.    

            The real divergence in the results of the two studies is seen when considering pro se plaintiffs, which the FJC omitted from its study.  This is shown in Table 3.

Table 3

Comparison of FJC and Hatamyar Results:

Both Represented and Pro Se Plaintiffs Included in Hatamyar Results

Denied

Granted at least in part

FJC

Hatamyar

FJC

Hatamyar

2006

2010

2006

2010

2006

2010

2006

2010

34%

25%

27%

20%

66%

75%

73%

80%

(239)

(305)

(58)

(48)

(461)

(916)

(157)

(189)

Notes:  The FJC figures include only orders entered in 23 districts from January through June 2006 and January through June 2010 and include only cases in which the plaintiff was represented by counsel.  The Hatamyar figures include orders entered in 86 districts in all of calendar year 2006 and from January through June 2010, and include both represented and pro se plaintiffs.  

            Finally, I ran some logistic regressions in an attempt to limit my database so as to more closely approximate that of the FJC.  The FJC reports the rulings as an initially binary choice (deny vs. grant at least in part), so I recoded the rulings in my database to either “denied” or “granted at least in part.”  In addition, I limited the database, as did the FJC, to cases in which the plaintiff was represented by counsel and that were decided by a district court judge. 

            First, I used all the cases in my database from 2005 to 2010, except as otherwise limited above.  The results indicate that even taking out the pro se cases, the odds of a court granting a 12(b)(6) motion, at least in part, as compared to denying the motion, were expected to be 1.79 times greater under Iqbal than under Conley (p = 0.002), all other variables held constant.

            Second, I used only the cases in my database from 2006 (Jan to Dec) and from 2010 (Jan to May 18), and otherwise limited as described above (no pro se, no magistrate judges).  Here, the results indicate that even leaving out the pro se cases, the odds of a court granting a 12(b)(6) motion, at least in part, as compared to denying the motion, were expected to be 1.92 times greater in 2010 than in 2006 (p = 0.013), all other variables held constant. 

 

July 11, 2011 in Federal Rules of Civil Procedure, Recent Scholarship, Twombly/Iqbal | Permalink | Comments (2)

Tuesday, July 5, 2011

Kochan On Iqbal And The Word "Conclusory"

Professor Donald Kochan (Chapman University) has posted on SSRN a draft of his article, While Effusive, 'Conclusory' is Still Quite Elusive: The Story of a Word, Iqbal, and a Perplexing Lexical Inquiry of Supreme Importance, which is forthcoming in the University of Pittsburgh Law Review.  Here’s the abstract:

Continue reading

July 5, 2011 in Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0)

Monday, June 20, 2011

Noyes on Twombly/Iqbal and Judicial Experience

Professor Henry Noyes (Chapman University) has posted on SSRN a draft of his article, The Rise of the Common Law of Federal Pleading: Iqbal, Twombly and the Application of Judicial Experience, which is forthcoming in the Villanova Law Review.  Here’s the abstract:

With its decisions in Twombly and Iqbal, the Supreme Court established a new federal pleading standard: a complaint must state a plausible claim for relief. Many commentators have written about the meaning of plausibility. None has focused on the Court’s statement that “[d]etermining whether a complaint states a plausible claim for relief...will be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” In this article, I make and support several claims about the meaning and application of judicial experience. First, in order to understand and define the plausibility standard, one must understand the meaning and application of judicial experience. The requirement that district courts apply judicial experience to resolve a motion to dismiss is a new part of the federal pleading regime, just like the new plausibility standard. Second, the application of judicial experience – as intended by the Supreme Court – requires district courts to consider information and evidence beyond that alleged in the complaint when resolving a motion to dismiss. Third, and contrary to conventional wisdom, the Supreme Court does not intend the application of judicial experience to involve a subjective analysis of the plausibility of a claim. Instead, the Supreme Court intends district courts to consider a larger, objective body of experience – beyond the subjective experience of any particular district court – with similar factual scenarios. Fourth, the Supreme Court anticipates that the application of judicial experience will require district courts to develop a common law of pleading standards that will vary with the type of claim, the type of claimant, the type of defendant and the alleged factual scenario. The Court has expressly denied that plausibility “require[s] heightened fact pleading of specifics,” but what plausibility means is informed by judicial experience. Sometimes plausibility requires more convincing facts (not more specific facts). Finally, I argue that this new pleading regime that requires the application of judicial experience at the pleading stage – even where it is based on objective information – is inappropriate and inconsistent with the adversarial nature of litigation.

--A

June 20, 2011 in Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0)

Thursday, June 16, 2011

Gidi on Twombly and Iqbal

Proficient in Italian? Now on SSRN is an article by Professor Antonio Gidi (University of Houston), Twombly e Iqbal: Il Ruolo Della Civil Procedure Nello Scontro Politico-Ideologico Della Società Statunitense (Twombly and Iqbal: The Role of Civil Procedure in the Political and Ideological Battle in American Society). It was recently published in Int’l Lis (Int’l Lis 104 (2010) (Italy)). Here’s the abstract:

L’autore indaga le sentenze “Twombly” (2007) e “Iqbal” (2009) della Suprema Corte federale degli Stati Uniti sotto un angolo visuale socio-politico, mettendo in evidenza il pericolo di una loro lettura strettamente tecnico-processuale e storico-comparata.

Con il conoscimento della struttura processual-giudiziaria e anche della sua complessità sociale e politica dell’ordinamento statunitense, si puó mettere in risalto da un lato, la prevedibilità delle due sentenze “Twombly” e “Iqbal” nel quadro politico attuale degli Stati Uniti e dall’altro, le significative e preoccupanti conseguenze del nuovo orientamento della suprema giurisprudenza federale statunitense sulla tutela, nel processo, delle parti meno abbienti e socialmente più deboli.

The author analyses the “Twombly” (2007) and “Iqbal” (2009) decisions from a socio-political perspective, highlighting the danger of a merely technical-procedural and historical-comparative analysis.

Only an in-depth knowledge of U. S. procedural and judiciary system as well as of its social and political complexity, highlights on the one hand, the foreseeability of the “Twombly” and “Iqbal” decisions in the present U. S. political situation and on the other hand, the meaningful and worrisome consequences of the U. S. Supreme Court’s new trend on the judicial protection of the poor and the weak.

--A 

June 16, 2011 in International/Comparative Law, Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0)

Thursday, May 12, 2011

Benham on Twombly/Iqbal and Rule 60(b)

Professor Dustin Benham (Texas Tech) has posted on SSRN a draft of his article, Twombly and Iqbal Should (Finally!) Put the Distinction Between Intrinsic and Extrinsic Fraud Out of Its Misery, which is forthcoming in the SMU Law Review. Here’s the abstract:

The proliferation of digital evidence and discovery has raised serious questions about litigation fraud in recent years. Legal tabloids are often headlined with the latest example of discovery abuse that resulted in multi-million dollar sanctions. But what about the cases of serious discovery abuse or perjury that neither the opposing party nor the court ever catch? These abuses may very well lead to judgments that do not reflect a result based on the true merits of the case. If a party seeks relief based on fraud within one year from the entry of judgment, Federal Rule of Civil Procedure 60(b) gives the trial court plenary power to vacate the judgment. For fraud discovered outside of one year, however, the district court’s powers are more limited, and relief is often contingent upon whether the fraud is deemed intrinsic or extrinsic. Indeed, a majority of the circuits hold that after one year a party cannot obtain post-judgment relief based on perjury or discovery abuse because these frauds are intrinsic. This article contends that the distinction between intrinsic and extrinsic fraud should be abolished because Twombly and Iqbal have created an effective pleading-stage screening mechanism to prevent the meritless re-litigation of cases.

Continue reading

May 12, 2011 in Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0)

Monday, April 25, 2011

Sullivan on Iqbal and Employment Discrimination

Professor Charles Sullivan (Seton Hall) has published Plausibly Pleading Employment Discrimination, 52 William & Mary L. Rev. 1613 (2011). Here’s the abstract:

The Supreme Court’s unanimous 2002 decision in Swierkiewicz v. Sorema N.A., which took a very permissive approach to pleading discrimination claims, may or may not remain good law after Ashcroft v. Iqbal. As is well known, Iqbal took a restrictive approach to pleading generally under the Federal Rules of Civil Procedure, and its application to employment discrimination cases could pose serious problems for plaintiffs attempting to get into federal court. In addition, there is certainly a tension between Swierkiewicz and Iqbal. This is in part because the former is a strong reaffirmation of notice pleading as it has traditionally been understood whereas the latter makes clear that “plausible pleading” is something very different. But it is also because Iqbal was, after all, a discrimination case, albeit brought under the Constitution rather than a federal statute, and its finding that the discrimination alleged there was not plausibly pled could easily be applied to statutes such as Title VII, the Age Discrimination in Employment Act, and the Americans with Disabilities Act.

Numerous scholars have analyzed Iqbalgenerally and several have addressed the application of plausible pleading to claims under the antidiscrimination laws. A respectable view is that Swierkiewicz remains good law, although the commentators recognize legitimate questions about its continued vitality. This Article, while agreeing that readings of both Swierkiewicz and Iqbal would permit this result, nevertheless explores the contrary possibility: supposing Iqbal sub silentio overruled Swierkiewicz and applies plausible pleading to discrimination claims, what must a plaintiff plead to avoid dismissal for failure to state a claim?

The most obvious response is that the plaintiff should plead a prima facie case of discrimination under the traditional McDonnell Douglas Corp. v. Green standard. Although Swierkiewicz held that pleading a prima facie case was not necessary, in part because there are other ways of proving discrimination, it did not suggest that such pleading would be insufficient. There are, however, complications with pleading a traditional prima facie case that should be explored. Further, there are at least three alternatives for attorneys who cannot, consistent with Rule 11, allege such a prima facie case. First, the Article proposes that the plaintiff might survive a Rule 12(b)(6) motion by pleading “direct evidence” of discrimination. Although the term has a checkered history in discrimination jurisprudence, the pleading context suggests a new look at an old concept. Second, the Article addresses the possibility of pleading the existence of a “comparator” whose more favorable treatment than the plaintiff may make the claim of discrimination plausible.

Third, and perhaps most radically, the Article argues that plaintiffs should be able to take the Supreme Court at its word in Iqbal that, in deciding a motion to dismiss for failure to state a claim, a district court must take as true all facts, as opposed to legal conclusions, alleged in the complaint. The Article proposes that plaintiffs plead the existence of social science research showing the pervasiveness of discrimination. Taken as true, this body of literature may well nudge a particular claim across the border drawn by the Supreme Court between a “possible” claim and a “plausible” one.

--A 

April 25, 2011 in Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0)

Tuesday, April 5, 2011

Commentary on Pleading and the Duke Lacrosse Litigation

Over at Prawfsblawg, Howard Wasserman has been examining the recent decisions by U.S. District Judge James Beaty in civil lawsuits brought by former members of the Duke lacrosse team against the City of Durham, District Attorney Michael Nifong, and numerous other defendants.

His most recent post (Pleading in the Duke lacrosse opinions) looks at what Judge Beaty's decisions have to say about pleading, including his application of Iqbal.

--A

April 5, 2011 in Current Affairs, Recent Decisions, Twombly/Iqbal, Weblogs | Permalink | Comments (0)

Monday, March 28, 2011

Federal Judicial Center Report on the Impact of Twombly/Iqbal

The Federal Judicial Center has released a Report to the Advisory Committee on Civil Rules entitled Motions to Dismiss for Failure to State a Claim After Iqbal, authored by Joe S. Cecil, George W. Cort, Margaret S. Williams & Jared J. Bataillon. Here’s the executive summary:

This report presents the findings of a Federal Judicial Center study on the filing and resolution of motions to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The study was requested by the Judicial Conference Advisory Committee on Civil Rules. The study compared motion activity in 23 federal district courts in 2006 and 2010 and included an assessment of the outcome of motions in orders that do not appear in the computerized legal reference systems such as Westlaw. Statistical models were used to control for such factors as differences in levels of motion activity in individual federal district courts and types of cases.

After excluding cases filed by prisoners and pro se parties, and after controlling for differences in motion activity across federal district courts and across types of cases and for the presence of an amended complaint, we found the following:

• There was a general increase from 2006 to 2010 in the rate of filing of motions to dismiss for failure to state a claim (see infra section III.A).

• In general, there was no increase in the rate of grants of motions to dismiss without leave to amend. There was, in particular, no increase in the rate of grants of motions to dismiss without leave to amend in civil rights cases and employment discrimination cases (see infra section III.B.1).

• Only in cases challenging mortgage loans on both federal and state law grounds did we find an increase in the rate of grants of motions to dismiss without leave to amend. Many of these cases were removed from state to federal court. This category of cases tripled in number during the relevant period in response to events in the housing market (see infra section III.B.1). There is no reason to believe that the rate of dismissals without leave to amend would have been lower in 2006 had such cases existed then.

• There was no increase from 2006 to 2010 in the rate at which a grant of a motion to dismiss terminated the case (see infra section III.B.1).

--A

(Hat Tip: Lonny Hoffman)

March 28, 2011 in Federal Rules of Civil Procedure, Recent Scholarship, Twombly/Iqbal | Permalink | Comments (1)

Tuesday, March 22, 2011

Today's SCOTUS Decision in Matrixx Initiatives v. Siracusano: More on Pleading

Today the Supreme Court issued a unanimous opinion (per Justice Sotomayor) in Matrixx Initiatives, Inc. v. Siracusano (No. 09-1156), affirming the Ninth Circuit’s conclusion that the plaintiffs’ complaint adequately stated a claim for securities fraud. The Court rejects the arguments by the defendant Matrixx (manufacturer of the cold remedy Zicam) that “[plaintiffs’] complaint does not adequately allege that Matrixx made a material representation or omission or that it acted with scienter because the complaint does not allege that Matrixx knew of a statistically significant number of adverse events requiring disclosure.” [Slip Op. at 1.] Although the case involves securities-fraud claims in particular, the opinion contains several references to Twombly and Iqbal and may have a bearing on pleading standards more generally. Here's a quick summary:

The Court begins its discussion [Slip Op. at 3] by stating that the plaintiffs’ complaint “alleges the following facts, which the courts below properly assumed to be true. See Ashcroft v. Iqbal, 556 U. S. ___, ___ (2009).” It recounts over the next four pages events relevant to plaintiffs’ securities fraud claims.

Analyzing the issue of materiality, the Court states [Slip Op. at 17]: “Assuming the complaint’s allegations to be true, as we must, Matrixx received information that plausibly indicated a reliable causal link between Zicam and anosmia.” In footnote 12, the Court rejects Matrixx’s argument that certain studies relied on by the plaintiffs were unreliable with the following discussion:

Matrixx contends that Dr. Jafek and Linschoten’s study was not reliable because they did not sufficiently rule out the common cold as a cause for their patients’ anosmia. We note that the complaint alleges that, in one instance, a consumer who did not have a cold lost his sense of smell after using Zicam. More importantly, to survive a motion to dismiss, respondents need only allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U. S. 544, 570 (2007).

Here’s the Court’s conclusion on whether the complaint adequately pleaded the materiality requirement [Slip Op. at 18]:

We believe that these allegations suffice to “raise a reasonable expectation that discovery will reveal evidence” satisfying the materiality requirement, Bell Atlantic Corp. v. Twombly, 550 U. S. 544, 556 (2007), and to “allo[w] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” Iqbal, 556 U. S., at ___. The information provided to Matrixx by medical experts revealed a plausible causal relationship between Zicam Cold Remedy and anosmia. Consumers likely would have viewed the risk associated with Zicam (possible loss of smell) as substantially outweighing the benefit of using the product (alleviating cold symptoms), particularly in light of the existence of many alternative products on the market. Importantly, Zicam Cold Remedy allegedly accounted for 70 percent of Matrixx’s sales. Viewing the allegations of the complaint as a whole, the complaint alleges facts suggesting a significant risk to the commercial viability of Matrixx’s leading product.

As to whether the complaint adequately pleaded scienter, the Court uses the PSLRA’s heightened pleading standard, which requires a plaintiff to “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U. S. C. § 78u–4(b)(2)(A). Citing Tellabs, the Court explains [Slip Op. at 20]:

This standard requires courts to take into account “plausible opposing inferences.” Tellabs, 551 U.S., at 323. A complaint adequately pleads scienter under the PSLRA “only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing inference one could draw from the facts alleged.” Id. at 324.

The Court holds [Slip Op. at 21] that “[t]he inference that Matrixx acted recklessly (or intentionally, for that matter) is at least as compelling, if not more compelling, than the inference that it simply thought the reports did not indicate anything meaningful about adverse reactions.” After summarizing the key allegations in the complaint, the Court concludes [Slip Op. at 22]:

These allegations, “taken collectively,” give rise to a “cogent and compelling” inference that Matrixx elected not to disclose the reports of adverse events not because it believed they were meaningless but because it understood their likely effect on the market. Tellabs, 551 U. S., at 323, 324. “[A] reasonable person” would deem the inference that Matrixx acted with deliberate recklessness (or even intent) “at least as compelling as any opposing inference one could draw from the facts alleged.” Id. at 324.

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March 22, 2011 in Recent Decisions, Supreme Court Cases, Twombly/Iqbal | Permalink | Comments (3)

Wednesday, March 16, 2011

Decision of Interest: Twombly/Iqbal and Affirmative Defenses

Last week Judge Jerome B. Simandle (U.S. District Court for the District of New Jersey) issued an opinion addressing whether the approach to pleading articulated by the Supreme Court in Twombly and Iqbal applies to the pleading of affirmative defenses. He concludes:

“This Court joins the two other Districts in this Circuit that have addressed this issue by holding that the heightened pleading standard of Twombly and Iqbal does not apply to affirmative defenses.”

The case is FTC v. Hope Now Modifications (No. 09-cv-1204), and the full opinion can be found on Justia and Pacer.

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March 16, 2011 in Recent Decisions, Twombly/Iqbal | Permalink | Comments (0)

Monday, March 14, 2011

More on SCOTUS Discussion of Pleading Standards in Last Week's Skinner Decision

We covered earlier the Supreme Court's discussion of federal pleading standards in its Skinner v. Switzer opinion, issued last week. Howard Wasserman has some additional commentary over at PrawfsBlawg in a post entitled "Some hints (or further confusion) about the state of pleading?"

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March 14, 2011 in Recent Decisions, Twombly/Iqbal, Weblogs | Permalink | Comments (0)

Monday, March 7, 2011

Discussion of Pleading Standards in Today's SCOTUS Decision (Skinner v. Switzer)

Readers following federal pleading standards after Twombly and Iqbal may be interested in a snippet from today's Supreme Court opinion in Skinner v. Switzer. The opinion cites neither Twombly nor Iqbal but does cite the Court’s pre-Twombly pleading decisions Scheuer and Swierkiewicz. Here’s the relevant paragraph:

Because this case was resolved on a motion to dismiss for failure to state a claim, the question below was “not whether [Skinner] will ultimately prevail” on his procedural due process claim, see Scheuer v. Rhodes, 416 U. S. 232, 236 (1974), but whether his complaint was sufficient to cross the federal court’s threshold, see Swierkiewicz v. Sorema N. A., 534 U. S. 506, 514 (2002). Skinner’s complaint is not a model of the careful drafter’s art, but under the Federal Rules of Civil Procedure, a complaint need not pin plaintiff’s claim for relief to a precise legal theory. Rule 8(a)(2) of the Federal Rules of Civil Procedure generally requires only a plausible “short and plain” statement of the plaintiff’s claim, not an exposition of his legal argument. See 5 C. Wright & A. Miller, Federal Practice & Procedure §1219, pp. 277–278 (3d ed. 2004 and Supp. 2010).

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March 7, 2011 in Recent Decisions, Supreme Court Cases, Twombly/Iqbal | Permalink | Comments (2)

Tuesday, January 25, 2011

Decision of Interest: Seventh Circuit on Twombly/Iqbal & 1292(b) Appeals

Last month, the Seventh Circuit decided an appeal of a district court’s refusal to grant a defendant’s motion to dismiss an antitrust complaint. The case is In re Text Messaging Antitrust Litigation (No. 10-8037), ___ F.3d ___, 2010 WL 5367383, 2010 U.S. App. LEXIS 26299 (Dec. 29, 2010), and Judge Posner’s opinion addresses both pleading standards under Twombly/Iqbal, and whether 28 U.S.C. § 1292(b) allows an immediate appeal of a district court’s denial of a Twombly/Iqbal-based motion to dismiss. The court concludes that 1292(b) is a proper means for appellate review, and then affirms the district court’s conclusion that the complaint passed muster. Detailed excerpts from the opinion (which include a reference to Paradise Lost, a discussion of child-run lemonade stands, and a recognition that "pleading standards in federal litigation are in ferment after Twombly and Iqbal") follow after the jump.

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January 25, 2011 in Recent Decisions, Twombly/Iqbal | Permalink | Comments (1)

Thursday, January 13, 2011

Seiner on Twombly/Iqbal and Affirmative Defenses

Prof. Joseph Seiner (South Carolina) has posted on SSRN a draft of his article, Twombly, Iqbal, and the Affirmative Defense. Here’s the abstract:

In Twombly v. Bell Atlantic Corp., 550 U.S. 644 (2007), and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), the Supreme Court announced a new plausibility standard for a plaintiff’s allegations. The decisions may have even broader implications, however, as many federal district courts have already applied this pleading standard to a defendant’s affirmative defenses. This Article attempts – for the first time in the legal literature – to make sense of Twombly and Iqbal in the context of the affirmative defense.

This Article addresses the two possible readings of Twombly and Iqbal for a defendant’s responsive pleadings. The first reading is a narrow case-specific approach, and concludes that the decisions are inapplicable to defendants and must be limited to a plaintiff’s civil complaint. The second approach is much broader, and concludes that a defendant must comply with the Supreme Court’s plausibility standard by pleading enough facts to sufficiently state an affirmative defense. This Article explains why a close textual review of the Federal Rules of Civil Procedure, combined with numerous policy and practical considerations, support the broader second reading of Twombly and Iqbal for affirmative defenses.

What it actually means to plausibly plead a defense is a much more complicated question. This paper closely examines this issue through the lens of one of the most complex and important defenses in all civil case law – the affirmative defense to a claim of sexual harassment. By way of this example, this Article explains how the plausibility standard would apply more broadly to defendants in all civil cases. This Article does not attempt to answer the normative question of whether the plausibility standard was properly established by the Supreme Court. Instead, this Article assumes the validity of the Court’s approach, and describes what this standard would look like if applied to the affirmative defense. The question of whether the plausibility standard should apply to defendants – and if so how it should apply – is likely to create significant controversy in the coming years. This paper establishes a foundation for that debate, and fills the current void in the academic scholarship on this issue.

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January 13, 2011 in Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0)

Friday, November 19, 2010

NY Times Story on Lack of Clarity in SCOTUS Opinions (See, e.g., Iqbal; Twombly)

This week’s New York Times contains an article by Adam Liptak titled Justices Are Long on Words but Short on Guidance. From the article:

The Supreme Court under the leadership of Chief Justice John G. Roberts Jr. is often criticized for issuing sweeping and politically polarized decisions. But there is an emerging parallel critique as well, this one concerned with the quality of the court’s judicial craftsmanship. In decisions on questions great and small, the court often provides only limited or ambiguous guidance to lower courts. And it increasingly does so at enormous length.

Among the examples provided are Twombly and Iqbal:

In a pair of civil procedure decisions in 2007 and 2009 that have been cited many thousands of times, the court gave trial judges more authority to throw out cases early based on, in the words of the later decision, their “experience and common sense.” That standard, Arthur R. Miller wrote last month in The Duke Law Journal, is “shadowy at best” and has caused “confusion and disarray among judges and lawyers.”

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November 19, 2010 in In the News, Supreme Court Cases, Twombly/Iqbal | Permalink | Comments (0)