Wednesday, March 18, 2015
Has Conley v. Gibson really been overruled? (And did the Fourth Circuit just tee up the next big SCOTUS case on pleading?)
Over at PrawfsBlawg, Dave Hoffman has a post up on the empirical impact of Twombly and Iqbal. That issue has been hotly debated, but there’s no question that federal courts are continuing to struggle with what those decisions mean for how judges should decide Rule 12(b)(6) motions. A particularly difficult question has been the vitality of pre-Twombly Supreme Court precedents like Conley v. Gibson and Swierkiewicz v. Sorema.
These issues were on display last Friday (the 13th, by the way) as a divided Fourth Circuit panel affirmed the dismissal of an employment discrimination claim in McCleary-Evans v. Maryland Department of Transportation (No. 13-2488). The majority opinion by Judge Niemeyer rejected the plaintiff’s reliance on Swierkiewicz, emphasizing that the Supreme Court in Swierkiewicz had “applied a pleading standard more relaxed than the plausible-claim standard required by Iqbal and Twombly.” In dissent, Judge Wynn argued that the majority had improperly “ignore[d] the factual underpinnings of the Swierkiewicz holding, looking solely to the Supreme Court’s 2009 decision in Iqbal to guide its decision,” and noted that lower federal courts “have no authority to overrule a Supreme Court decision no matter how out of touch with the Supreme Court’s current thinking the decision seems.”
Twombly and Iqbal are problematic decisions in many respects, and diagnosing their flaws is important. Even more important, though, is the question of how courts should be applying Twombly and Iqbal, especially in relation to pre-Twombly Supreme Court case law. Properly understood, Twombly and Iqbal can and should be read to preserve the notice-pleading approach that the Supreme Court repeatedly employed during the half-century before Twombly. I’ve laid out this argument here and here, and explained how the basic framework Iqbal articulated can be applied in a way that is consistent with notice pleading and pre-Twombly precedent. This understanding of Twombly and Iqbal is confirmed by more recent Supreme Court pleading decisions—especially the 2014 decision in Johnson v. City of Shelby—which cast doubt on the presumption that the Court’s pre-Twombly case law even is “out of touch with the Supreme Court’s current thinking.”
I may have more posts on pleading as March marches on, but for now I wanted to address the one—and only—instance where the Twombly and Iqbal opinions directly call into question any aspect of pre-Twombly case law. That, of course, was Twombly’s “retirement” of Conley’s statement that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”
“Twombly overruled Conley” is a great sound bite if you prefer the maximalist reading of Twombly and Iqbal that one sees in Judge Niemeyer’s McCleary-Evans opinion. But it’s a huge oversimplification, especially when Twombly explicitly quoted and embraced the language from Conley that enshrined notice pleading into federal practice: “All the Rules require is a short and plain statement of the claim that will give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.”
As for the decision to “retire” the “no set of facts” language itself, it’s important to pay attention to Twombly’s actual reasoning on this point. Justice Souter’s concern was that a “focused and literal reading” of that phrase would preclude dismissal “whenever the pleadings left open the possibility that a plaintiff might later establish some set of undisclosed facts to support recovery.” OK, let’s pretend that courts actually applied this “focused and literal reading” of Conley. And suppose I file a complaint that alleges:
1. [Jurisdictional statement]
2. The Earth is round.
Therefore, I demand judgment against one or both defendants for $ <_____>, plus costs.
One can imagine any number of facts that are consistent with both (1) the Earth being round, and (2) me having a claim for relief against the defendants. Thus, this complaint would “le[ave] open the possibility” that I “might later establish some set of undisclosed facts to support recovery.” Under the reading of Conley that Twombly retired, my complaint should pass muster.
Obviously this is not at all what Justice Black meant when he penned the “no set of facts” sentence in Conley. Nor was that nonsensical reading of Conley ever the foundation for classic notice-pleading precedents like Scheuer, Leatherman, or Swierkiewicz. But it was only this straw-man reading of Conley that Twombly “retired.”
Once Twombly’s handling of Conley is clarified, this reality remains: there is not a single meaningful aspect of pre-Twombly case law that is explicitly rejected by Twombly or Iqbal. From the standpoint of the lower federal courts, at least, any approach to pleading that would defy pre-Twombly Supreme Court precedent is highly suspect.
[Cross-posted at PrawfsBlawg]
Thanks for your comment, Glenn. You're right that there's a potential tension with the ultimate result in Twombly and allowing your hypothetical complaint to proceed. But a lot more is required before lower courts can decide for themselves that a half-century worth of pre-Twombly precedent has been implicitly overturned. Indeed, Souter never suggested that any allegation that a conspiracy occurred is per se a "legal conclusion" whose truth can be disregarded. He reasoned that, in the particular paragraph at issue in Twombly, the plaintiffs had "rested their § 1 claim on descriptions of parallel conduct and not on any independent allegation of actual agreement among the ILECs." My own view is that Souter was wrong to read the Twombly complaint that way. But in any event, he indicated that "an independent allegation of actual agreement" would be sufficient. That view is consistent with notice pleading, and would also be consistent with accepting as true the straightforward allegation in your hypo. [I talk more about Souter's reasoning on this in my article (available at http://ssrn.com/abstract=1442786), especially at pp.1337-39.]
Posted by: Adam | Mar 18, 2015 8:38:15 AM
So, say I had a complaint that said:
1. [j/d statement]
2. Defendants A and B conspired to restrain trade, and I was injured thereby.
3. Therefore, I demand judgment against A and B for $____.
Is it your view that this would have been dismissed under Conley?
Posted by: Glenn | Mar 18, 2015 7:58:09 AM