Monday, June 28, 2010
Prof. Scott Dodson (William & Mary) has published Justice Souter and the Civil Rules in the Washington University Law Review Commentaries. From the text:
Justice Souter appears to have shied away from writing opinions that addressed the civil rules for most of his tenure on the Court. The first opinion he wrote—either for the Court or for himself—that directly addressed a federal civil rule was Ortiz v. Fibreboard Corp., issued almost a decade after he joined the Court. Over the next eight years, he authored only one other opinion on the civil rules, dissenting in Mayle v. Felix. After mid-2007, however, Justice Souter showed considerably more willingness to write on the civil rules. In the span of a little over two years, he authored the blockbuster pleadings case, Bell Atlantic Corp. v. Twombly; a passionate dissent in Bowles v. Russell; and a dissent in Twombly’s equally important progeny, Ashcroft v. Iqbal.
A survey of these five opinions by Justice Souter reveals that he is not uniformly historicist, textualist, formalist, instrumentalist, pragmaticist, or minimalist when it comes to the civil rules. It does, however, manifest a commitment to construing the civil rules in a way that would treat litigants fairly in court.
Friday, June 25, 2010
The Washington State Supreme Court decided yesterday to maintain the pleading standard that has long applied in Washington state courts, rebuffing a request to adopt the federal pleading standard that the U.S. Supreme Court embraced in Twombly and Iqbal. The decision is McCurry v. Chevy Chase Bank (No. 81896-7). Here’s an excerpt (footnote and some citations omitted):
Chevy Chase urges this court to reconsider the standard for dismissing a motion under CR 12(b)(6) in light of changes in the United States Supreme Court case law regarding Fed. R. Civ. P. 12(b)(6). Under CR 12(b)(6) a plaintiff states a claim upon which relief can be granted if it is possible that facts could be established to support the allegations in the complaint. See Halvorson v. Dahl, 89 Wn.2d 673, 674, 574 P.2d 1190 (1978) (“On a [CR] 12(b)(6) motion, a challenge to the legal sufficiency of the plaintiff’s allegations must be denied unless no state of facts which plaintiff could prove, consistent with the complaint, would entitle the plaintiff to relief on the claim.”); see also Christensen v. Swedish Hosp., 59 Wn.2d 545, 548, 368 P.2d 897 (1962) (citing Conley v. Gibson, 355 U.S. 41 (1957)).
However the United States Supreme Court has recently revised its dismissal standard under Fed. R. Civ. P. 12(b)(6), permitting dismissal unless the claim is plausibly based upon the factual allegations in the complaint – a more difficult standard to satisfy. See Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) (“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Chevy Chase encourages this court to similarly construe CR 12(b)(6). We decline.
The Supreme Court’s plausibility standard is predicated on policy determinations specific to the federal trial courts. The Twombly Court concluded: federal trial courts are incapable of adequately preventing discovery abuses, weak claims cannot be effectively weeded out early in the discovery process, and this makes discovery expensive and encourages defendants to settle “largely groundless” claims. See 550 U.S. at 557-58, 559. Neither party has shown these policy determinations hold sufficiently true in the Washington trial courts to warrant such a drastic change in court procedure.
Nor has either party here addressed countervailing policy considerations. For example, do current discovery expenses justify plaintiffs’ loss of access to that discovery and general access to the courts, particularly in cases where evidence is almost exclusively in the possession of defendants? Could runaway discovery expenses be addressed by better means – perhaps involving more court oversight of the discovery process or a change in the discovery rules?
Although three Justices dissented, they agreed with the majority about the pleading standard. From the dissenting opinion: “My discussion of CR 12(b)(6) should not be confused with the Fed. R. Civ. Pr. 12(b)(6) standard articulated by the United States Supreme Court. See Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). I do not suggest we modify our rule to align with the federal “plausible” standard in our decision today.”
(Hat Tip: Brooke Coleman)
Tuesday, June 22, 2010
We blogged earlier about Supreme Court nominee Elena Kagan’s civil procedure paper trail.
As for her views on one of today’s most controversial issues in civil procedure — federal pleading standards — a recent New York Times article starts with an interesting story about Kagan’s service in the Clinton administration. Kagan’s first Oval Office presentation involved the 1995 Private Securities Litigation Reform Act (PSLRA), and Kagan expressed particular concern about the Act’s heightened pleading standards. From the article, Bill Clinton Speaks Out on Kagan:
“Against the wishes of his economic team and top Congressional Democrats, Mr. Clinton in late 1995 was considering vetoing new legislation that was framed as a way to halt frivolous lawsuits against the securities industry. At his direction, Ms. Kagan had analyzed the bill and determined that it would raise the bar so high for such suits that shareholders could be prevented from pursuing legitimate fraud claims. . . . Mr. Clinton accepted her judgment and issued a surprise veto — one of two occasions when he was overridden by Congress.”
Perhaps a Justice Kagan will be similarly concerned about the direction of federal pleading standards after Twombly and Iqbal?
Wednesday, June 2, 2010
Prof. Kevin Clermont (Cornell) has posted on SSRN his essay Three Myths About Twombly-Iqbal. Here's the abstract:
This essay tries to convey the meaning of the recent revolutionary cases on federal pleading law. To do so, it refutes the three leading myths about the Twombly and Iqbal cases and thereby establishes these three propositions: First, the Supreme Court has not revived code-based fact pleading. This first conclusion implies that the codes’ law/fact distinction plays no role in applying the new screening of allegations for conclusoriness, and it also implies that the courts should not apply the new test for plausibility to each allegation but only to the ultimate assertion of liability. Second, we academics must beware of overstating the scope of the new cases. Their holdings apply only to claimants’ pleadings, and indeed only to allegations on the merits. Third, we must also beware of reading optimistically the opinions’ evident confusions to infer an aimless Court. Its rather steady purpose indicates that the Justices mean business as pleading revolutionaries.
Thursday, May 20, 2010
Iqbal-Twombly anniversary week continues with this decision from the Third Circuit. Mayer v. Belichick affirms the district court's dismissal of a claim by a Jets season ticket holder (New York, not Winnipeg) arising out of the Spygate videotaping scandal.
For additional coverage, see How Appealing.
Tuesday, May 18, 2010
The Supreme Court’s controversial pleading decision Ashcroft v. Iqbal celebrates(?) its first anniversary today. Coincidentally, today is also the day that my article, The Pleading Problem, 62 Stanford L. Rev. 1293 (2010), is officially in print. Here’s the abstract:
Federal pleading standards are in crisis. The Supreme Court's recent decisions in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal have the potential to upend civil litigation as we know it. What is urgently needed is a theory of pleading that can bring Twombly and Iqbal into alignment with the text of the Federal Rules of Civil Procedure and a half-century worth of Supreme Court precedent, while providing a coherent methodology that preserves access to the courts and allows pleadings to continue to play their appropriate role in the adjudicative process. This Article provides that theory. It develops a new paradigm -- plain pleading -- as an alternative to both notice pleading (which the pre-Twombly era was widely understood to endorse) and plausibility pleading (which many read Twombly and Iqbal to endorse). As a functional matter, this new paradigm is largely consistent with notice pleading, but it stands on firmer textual footing and avoids some of the conceptual problems that arise when notice is the exclusive frame of reference.
This approach is able to reconcile Twombly and Iqbal with pre-Twombly authority. Indeed, a careful reading of Twombly and Iqbal undermines the conventional wisdom that they require a stricter approach to pleading. First, Twombly and Iqbal did not overrule the most significant pre-Twombly authorities. The only aspect of prior case law that these decisions set aside was a misunderstood fifty-year-old phrase whose real meaning was never called into question. Furthermore, Iqbal's two-step analysis confirms that the problematic plausibility standard employed in Twombly and Iqbal is neither the primary inquiry at the pleadings phase nor a necessary one. The threshold issue is whether a crucial allegation in a complaint may be disregarded as "conclusory"; only then does the "plausibility" of an entitlement to relief become dispositive. While there remains some uncertainty about what conclusory means, authoritative pre-Twombly sources -- the Federal Rules, their Forms, and Supreme Court decisions that remain good law -- foreclose any definition that would give courts drastic new powers to disregard allegations at the pleadings phase.
The citation count data in the article's appendix reveals that Iqbal has had quite a prolific first year on the books. It is already among the most frequently cited Supreme Court decisions of all time.
The 11th Circuit has nixed a RICO class action brought by dentists against the insurers who reimburse them for services on the grounds that the complaint does not meet the Twiqbal plausibility requirements.
Aside from being an interesting decision, I couldn't help but be amused by bad dentist related puns in this news report from the National Law Journal:
[The plaintiff's lawyer] said that he sensed defeat during oral arguments. "It was clear from the minute I opened my mouth," he said. "The Court of Appeals was a buzzsaw."
Friday, May 14, 2010
The current issue of U.S. Law Week includes the following stories:
(1) Twombly, Iqbal Introduce More Subjectivity To Rulings on Dismissal Motions, Judge Says (78 U.S.L.W. 2667) reports on a discussion of Twombly and Iqbal that occurred at a recent meeting of the ABA Litigation Section.
(2) Federal Law Includes Permissive Claims Within Supplemental Jurisdiction Definition (78 U.S.L.W. 1699) reports on a recent First Circuit decision (Global NAPs Inc. v. Verizon New England Inc., No. 09-1308, 2010 WL 1713240, 2010 U.S. App. LEXIS 8929) that applies the supplemental jurisdiction statute (28 U.S.C. § 1367) to counterclaims.
Thursday, May 13, 2010
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:
Monday, May 10, 2010
Professor Lisa A. Eichhorn (University of South Carolina School of Law) has posted "A Sense of Disentitlement: Frame-Shifting and Metaphor in Ashcroft v. Iqbal" on SSRN. It will be published in the Florida Law Review.
The abstract states:
Tuesday, May 4, 2010
Today's U.S. Law Week features an article by David Borgen and Lin Chan entitled Clash of the Titans: Iqbal and Wage and Hour Class/Collective Actions (78 U.S.L.W. 2643). It begins:
"The U.S. Supreme Court's new pleading standards have set the stage for a new 'clash of the titans,' as emboldened employers seek to utilize their new weapon against the current heavyweight of the courts' dockets, the wage and hour class and collective actions. As expected, management counsel have rushed into the battlefield filing newly styled motions to dismiss. However, the wage-and-hour causes of action have proven to be resistant to this new attack."
Friday, April 23, 2010
As covered earlier here, an SEC civil action against defendants who were allegedly involved in the Bernie Madoff ponzi scheme was recently dismissed for failing to satisfy federal pleading standards. (See SEC v. Cohmad Securities Corp., No. 09-CV-5680, 2010 WL 363844, 2010 U.S. Dist. LEXIS 8597.)
"[W]e always thought the SEC had it easier than private plaintiffs because it could bring actions against aiders and abetters and didn't have to deal with pleading requirements of the PSLRA. I guess Iqbal somehow levels that playing field, although possibly not in the right direction.
"The Cohmad case seemed to be the easiest case to bring, and maybe it would have been for the DOJ, who operates under different and sometimes easier rules for securities cases than civil rules. Judge Stanton did dismiss without prejudice with leave to replead for 30 days, but that deadline passed over a month ago.
"So, will the Goldman complaint survive the inevitable Motion to Dismiss?"
We'll find out soon enough. No doubt the attorneys for Goldman Sachs and Fabrice Tourre are preparing their 12(b)(6) motions as we speak.
Monday, April 12, 2010
Daphna Kapeliuk and Alon Klement (Interdisciplinary Center Herzliyah - Radzyner School of Law) have posted on SSRN their forthcoming article Contracting Around Twombly, 60 DePaul L. Rev. (forthcoming Oct. 2010). Here's the abstract:
The Supreme Court's recent decisions in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal have generated a heated debate over which is the most just and efficient transsubstantive pleading standard. Unlike the vast scholarship that followed these decisions, we do not take sides in this debate. Instead, we focus on a subset of cases in which litigants have prior contractual relationships. We argue that if contracting parties are allowed to contract around the Twombly pleading standard, they will be able to overcome problems of inadequate screening and to realize both pre-dispute and post-dispute opportunities that would prove unfeasible otherwise.
Hence, we propose a novel approach for addressing the question whether the Twombly standard performs better than its predecessor in contract cases. We suggest that the answer to this question should be informed by analyzing the costs of modifying the Twombly standard and the difficulties in implementing such modification, in addition to the proportion of cases where this modification would have been chosen by contracting parties. As we show, even if aggregatively, over all contracts, the Twombly pleading standard would have been chosen less often, it may still promise improved efficiency and justice in contract cases, due to the lower costs of contracting around it.
Thursday, April 8, 2010
"DRI announces its annual Law Student Diversity Scholarship program open to incoming second and third-year African American, Hispanic, Asian, Pan Asian and Native American students. Incoming second and third-year female law students are also eligible, regardless of race or ethnicity."
The deadline is May 3, 2010, and applicants must submit an essay (no more than 1,000 words) on the following topic:
Did Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal really break new ground and sound a death knell for plaintiffs in federal civil litigation; and is the “anti-Twombly and Iqbal” Notice Pleading Restoration Act of 2009 introduced by Senator Specter to require the federal courts to follow traditional civil procedure rules for filing lawsuits really necessary?
More details available here.
(Hat Tip: Austyn Sanders)
Professor Edward A. Harnett (Seton Hall University School of Law) has posted "Responding To Twombly and Iqbal: Where Do We Go from Here?" on SSRN. It will be published in the Iowa Law Review Bulletin.
The abstract states:
Monday, April 5, 2010
Professor Scott Dodson (William & Mary School of Law) has posted "Federal Pleading and State Presuit Discovery" on SSRN. It will be published in the Lewis & Clark Law Review.
The abstract states:
Saturday, April 3, 2010
Professor Suzette M. Malveaux (Catholic University School of Law) has posted "Front Loading and Heavy Lifting: How Pre-Dismissal Discovery Can Address the Detrimental Effect of Iqbal on Civil Right Cases" on SSRN. It will be published in Lewis & Clark Law Review.
The abstract states:
Thursday, March 25, 2010
Howard Wasserman (Florida International) has posted on SSRN his recent symposium piece, Iqbal, Procedural Mismatches, and Civil Rights Litigation, 14 Lewis & Clark L. Rev. 157 (2010). Here's the abstract:
Understanding the twin pleading cases of Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal from the vantage point of only a few months (or even years) requires as much prediction as explanation. Early confusion is a product of the long-heralded link between substance and procedure. What we are seeing now may be less about Court-imposed changes to procedure as about changes to substantive law and a “mismatch” between new substance and the old procedure of the Federal Rules. Much of the current business of federal courts involves constitutional litigation under 42 U.S.C. § 1983 and Bivens, a species of civil action unheard of when the Federal Rules and the system of notice pleading and broad, wide-ranging discovery were created in 1938. That pleading system arguably does not work with such “modern” litigation and Iqbal reflects the Court’s effort to make federal pleading and discovery rules more consistent and more functional with this particularly vulnerable area of new federal substance. Unfortunately, the greater detail demanded by the new pleading rules may be impossible in many civil rights cases, where plaintiffs cannot know or plead essential information with particularity at the outset without the benefit of discovery - discovery that Iqbal stands to deny to plaintiffs who fail to plead with the necessary detail. The predictable result, illustrated by one Ninth Circuit decision just two months after Iqbal, will be a significant decrease in enforcement and vindication of federal constitutional and civil rights.
Tuesday, March 16, 2010
The Blog of the Legal Times is reporting an interesting development on the effort to legislatively overrule the Supreme Court's pleading decisions in Ashcroft v. Iqbal and Bell Atlantic Corp. v. Twombly (see earlier coverage here, here, here, here, and here). The story Christian Group Joins Campaign on Pleading Standard begins:
"The conservative Alliance Defense Fund is lining up in opposition to a pair of U.S. Supreme Court decisions that changed the standard for filing most civil lawsuits — a move that aligns the Christian litigation group with some unlikely allies."
For a copy of the Alliance Defense Fund's letter to Senate Judiciary Committee Chair Patrick Leahy, see here.
(Hat Tip: How Appealing)
Friday, March 12, 2010
The SEC's civil action against defendants allegedly involved in the Madoff ponzi scheme ran up against federal pleading standards in a recent decision from the Southern District of New York. The case is SEC v. Cohmad Securities Corp., No. 09-CV-5680, and docket information is available here. Judge Stanton's decision is at 2010 WL 363844 or 2010 U.S. Dist. LEXIS 8597. Here are some excerpts:
"[N]owhere does the complaint allege any fact that would have put defendants on notice of Madoff's fraud. Rather, the complaint supports the reasonable inference that Madoff fooled the defendants as he did individual investors, financial institutions, and regulators.
. . .
[T]he SEC has failed to allege facts giving rise to a plausible inference of the Cohns' or Jaffe's fraudulent intent, and the securities fraud claims against them are dismissed. Since the SEC has failed to plead the Cohns' or Jaffe's fraudulent intent (and it does not argue that Madoff's intent can be imputed to Cohmad), the securities fraud claims against Cohmad are dismissed as well."
The SEC was granted leave to replead.
(Hat Tip: Paul Stancil)