Federal court litigation can be a regular occurrence for many
organizations. Often, litigants invest the bulk of their time and
resources in managing discovery, developing experts and setting up
cases for summary judgment. While these are critical aspects of the
case, in light of recent U.S. Supreme Court case law, litigants may
be well served to invest additional time and resources into
developing what many consider to be more basic documents in
litigation: complaints, answers, and motions to dismiss.
Indeed, the standards for drafting and challenging civil complaints
in federal court have changed a great deal in light of the recent
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and
Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009) decisions issued
by the United States Supreme Court. Case law interpreting these two
decisions is rapidly developing in each circuit, and litigants may
be able to survive or achieve an early exit based on how well they
understand this body of law in the jurisdictions where they may
engage or be engaged in litigation.
In understanding how to draft and challenge civil complaints in
light of Twombly and Iqbal, it is helpful, if not
essential, to understand the policy behind Rule 8 of the Federal
Rules of Civil Procedure. The starting point for analyzing and
responding to complaints always must be Rule 8(a)(2), which
requires that a pleading contain "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." See
Amer. Dental Assoc. v. Cigna Corp., 2010 U.S. App. LEXIS 9928,
*10 (11th Cir. May 14, 2010) (citing Conley v. Gibson, 355
U.S. 41, 47 (1957)). According to one federal judge in the Western
District of Pennsylvania, the policy driving the application of
Rule 8 has always been finding the right balance between allowing
plaintiffs access to federal courts while still conserving
defendants' and the court resources.
After Conley, which set out a fairly liberal pleading
standard, federal court dockets across the country experienced
mounting pressure due to increasing case volume. This pressure led
to a judicial backlash resulting in heightened pleading standards
being implemented through case law in piecemeal fashion. The United
States Supreme Court effectively slammed the door on these
heightened standards over the years in various cases, by noting the
difference between Rules 8 and 9 (dealing with heightened pleading
requirements for fraud).
The Court explained that - had the authors of the Rules intended
for there to be heightened pleading requirements in cases other
than fraud - the authors would have specifically included them in
the Rules as they did with Rule 9. Thus, for years, the Court has
taken the position that any changes to the pleading standards
should come not via case law but instead via the rule-making
process. Without much explanation, the Supreme Court totally
reversed its position in its recent opinions in Twombly
and Iqbal.
The United States Court of Appeals for the Eleventh Circuit's
recent decision in Amer. Dental Assoc. v. Cigna Corp.,
2010 U.S. App. LEXIS 9928 (11th Cir. May 14, 2010) provides a
helpful discussion of Twombly and Iqbal.
In Twombly, the Supreme Court expressly
"retired" Conley. See Amer. Dental
Assoc., 2010 U.S. App. LEXIS 9928 at *10 (citing
Twombly, 550 U.S. at 563). Justice Black wrote for the
Court in Conley of "the accepted rule 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." See Id. (quoting Conley, 355 U.S.
at 45-46). "In rejecting that language, the Court in
Twombly noted that courts had read the rule so narrowly
and literally that "a wholly conclusory statement of claim
would survive a motion to dismiss whenever the pleadings left open
the possibility that a plaintiff might later establish some set of
undisclosed facts to support recovery."" Id.
(quoting Twombly, 550 U.S. at 561 (internal quotation
marks and alterations omitted).
"In Twombly, the plaintiffs alleged an antitrust
conspiracy among certain regional telecommunications providers in
violation of the Sherman Act, 15 U.S.C. § 1 (2006)."
Id. at *11 (citing Twombly, 550 U.S. at 550).
"Their complaint relied on allegations of the defendants'
parallel behavior to allege the conspiracy." Id.
"The Supreme Court granted certiorari to address the proper
standard for pleading an antitrust conspiracy through allegations
of parallel conduct." Id. (citing Twombly,
550 U.S. at 553). Justice Souter, writing for a substantial
majority, first noted:
While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.
Id. (citing Twombly, 550 U.S. at 555). The
Court explained that "[f]actual allegations must be enough to
raise a right to relief above the speculative level...on the
assumption that all the allegations in the complaint are true (even
if doubtful in fact)." Id. at *12 (quoting
Twombly, 550 U.S. at 555).
The Twombly Court ultimately held that to survive a motion
to dismiss, a complaint must now contain sufficient factual matter,
accepted as true, to "state a claim to relief that is
plausible on its face." Id. (citing Twombly,
550 U.S. at 570). "Cautioning that its new plausibility
standard is not akin to a "probability requirement" at
the pleading stage, the Court nonetheless held that the standard
"calls for enough fact to raise a reasonable expectation that
discovery will reveal evidence" of the claim."
Id. (citing Twombly, 550 U.S. at 556). "The
Court was careful to note that "we do not require heightened
fact pleading of specifics," but concluded that when
plaintiffs "have not nudged their claims across the line from
conceivable to plausible, their complaint must be
dismissed."" Id. (citing Twombly, 550
U.S. at 570). "Finding that the plaintiffs' complaint did
not plausibly suggest an illegal conspiracy by merely alleging
parallel conduct--because such parallel conduct was more likely
explained by lawful, independent market behavior--the Court held
that the district court properly dismissed the complaint."
Id. (citing Twombly, 550 U.S. at 567-70).
"The Supreme Court has since applied the Twombly
plausibility standard to another type of civil action in
Ashcroft v. Iqbal,129 S. Ct. 1937 (2009)."
Id. at *13. "Iqbal involved a Bivens action
brought by a Muslim Pakistani who had been arrested and detained
following the September 11, 2001 terrorist attacks."
Id. (citing Iqbal,129 S. Ct. at 1943). He sued
current and former federal officials, including John Ashcroft,
former Attorney General of the United States, and Robert Mueller,
the Director of the FBI. Id. (citing Iqbal,129 S.
Ct.at 1942). Iqbal alleged that Ashcroft and Mueller adopted and
implemented a detention policy for persons of high interest after
September 11, and that they designated him a person of high
interest on account of his race, religion, or national origin, in
violation of the First and Fifth Amendments to the Constitution.
Id. at *13-14 (citing Iqbal,129 S. Ct. at 1944).
Iqbal's complaint alleged that Ashcroft was the "principal
architect" of the policy and identified Mueller as
"instrumental in [its] adoption, promulgation, and
implementation," but also stated that both men "knew of,
condoned, and willfully and maliciously agreed to subject"
Iqbal to harsh conditions of confinement "as a matter of
policy...for no legitimate penological interest." Id.
at *14 (citing Iqbal,129 S. Ct. at 1944) (alteration in
original).
In evaluating the sufficiency of Iqbal's complaint in light of
Twombly's construction of Rule 8, the Court explained
the "working principles" underlying its decision in that
case. Id. (citing Iqbal,129 S. Ct. at 1949).
First, the Court held that "the tenet that a court must accept
as true all of the allegations contained in a complaint is
inapplicable to legal conclusions." Id. Second,
restating the plausibility standard, the Court held that
"where the well-pleaded facts do not permit the court to infer
more than the mere possibility of misconduct, the complaint has
alleged--but it has not 'show[n]'--'that the pleader is
entitled to relief.'" Id. (citing
Iqbal,129 S. Ct. at 1950) (quoting Fed. R. Civ. P.
8(a)(2)). "The Court suggested that courts considering motions
to dismiss adopt a "two-pronged approach" in applying
these principles: 1) eliminate any allegations in the complaint
that are merely legal conclusions; and 2) where there are
well-pleaded factual allegations, "assume their veracity and
then determine whether they plausibly give rise to an entitlement
to relief."" Id. at *14-15. "Importantly,
the Court held in Iqbal, as it had in Twombly,
that courts may infer from the factual allegations in the complaint
"obvious alternative explanation[s]," which suggest
lawful conduct rather than the unlawful conduct the plaintiff would
ask the court to infer." Id. at *15 (citing
Iqbal,129 S. Ct. at 1951-52) (quoting Twombly,
550 U.S. at 567)). Finally, the Iqbal Court explicitly
held that the Twombly plausibility standard applies to all
civil actions, not merely antitrust actions, because it is an
interpretation of Rule 8. Id. (citing Iqbal,129
S. Ct. at 1953).
"Applying these principles to Iqbal's complaint, the Court
began by disregarding as wholly conclusory Iqbal's allegations
that Mueller was "instrumental" in adopting the detention
policy and Ashcroft was the "principal architect" of the
policy, and that they willfully agreed to subject Iqbal to harsh
treatment for a discriminatory purpose." Id. (citing
Iqbal,129 S. Ct. at 1951). "The Court then determined
that the remaining factual allegations--that Mueller and Ashcroft
approved the FBI's policy of arresting and detaining thousands
of Arab Muslim men as part of its investigation into the events of
September 11--did not plausibly establish the purposeful, invidious
discrimination that Iqbal asked the Court to infer."
Id. at *15-16 (citing Iqbal,129 S. Ct. at
1951-52). "The alternative inferences that could be drawn from
the facts--namely, that the arrests were likely lawful and
justified by a nondiscriminatory intent to detain aliens who were
illegally present in the United States and who had potential
connections to those who committed terrorist acts--were at least
equally compelling." Id. at *16. "Accordingly,
the Court ruled that Iqbal's complaint must be dismissed."
Id. at *16 (citing Iqbal,129 S. Ct. at
1954).
In short, Twombly and Iqbal provide defendants
with a real opportunity to be dismissed from cases much earlier
than under Conley; however, these opinions are seemingly
interpreted differently depending on context, jurisdiction, and
judge. For example, according to one judge of the U.S. Court of
Appeals for the Third Circuit, the facts averred in a complaint
must be viewed in the context of the type of case, i.e., certain
levels of specificity might work for some cases (e.g., negligence),
while more detail may be required for others (e.g.,
antitrust).
Twombly and Iqbal have been interpreted in the
Third Circuit in two key cases: Phillips v. County of
Allegheny, 515 F.3d 224 (3d Cir. 2008) and Fowler v. UPMC
Shadyside, 578 F.3d 303 (3d Cir. 2009). These cases should
likely be addressed in all motions to dismiss based on failure to
state a claim brought in the Third Circuit.
Phillips basically adopts Iqbal, but makes it
even more explicitly clear that context matters, i.e., what might
be ripe for 12(b)(6) in one case may not be in another case.
Fowler developed a two-part analysis for determining
whether a Complaint should be dismissed under 12(b)(6). First, the
Court must accept all facts in the Complaint as true, but may
disregard legal conclusions. Second, the Court must determine
whether the facts alleged are sufficient to show a plausible claim
for relief. Basically, not a great deal has changed since
Conley, except that context matters. Plaintiffs must show
the "how, when, and where" of their claim such that
relief is plausible. If defendants are left asking these questions
after reading the complaint, the complaint may be susceptible to a
12(b)(6) motion to dismiss.
In short, there is a move away from notice pleading toward fact
pleading in the federal courts (much like the standard that exists
in various state courts), but how many and what sort of facts are
required will differ from case to case based on context. It is
absolutely essential to note that Twombly and
Iqbal not only vary in application from jurisdiction to
jurisdiction, but also likely vary in application from judge to
judge within a jurisdiction. Thus, it might be beneficial to
research cases actually decided by one's particular judge,
e.g., in the Western District of Pennsylvania, doing research for
Fischer opinions, McVerry opinions, Conti opinions, and
others.
Recently, one judge in the Western District of Pennsylvania
stressed that plaintiffs and defendants should spend a great deal
of time drafting complaints and answers and preparing for the Rule
16 Conference. This judge explained that she is much more apt to
grant a motion for judgment on the pleadings following a very
detailed voir dire during the Rule 16 conference about the
complaint, the answer, and the defenses. This judge hinted that -
given the heightened pleading standards following Twombly
and Iqbal coupled with the notice pleading tradition under
Rule 8 - detailed questions about the merits during Rule 16 may be
asked and parties can use this as an opportunity to set up a motion
for judgment on the pleadings. In other words, according to at
least one federal judge, if litigants take time to follow
Twombly and Iqbal. even though Rule 8 may still
preclude an outright dismissal under (12)(b)(6), a motion for
judgment on the pleading may be used to achieve an early exit from
litigation. This judge also explained that she - and presumably
other judges - will also use common sense and experience in
determining whether discovery may bear out a claim that appears to
be deficient in the Complaint.
Twombly and Iqbal set up a whole host of other
issues, including (1) whether Twombly and Iqbal
should apply to affirmative defenses (i.e., should defendants be
required to fact plead defenses) and (2) how many chances should
plaintiffs get to amend before dismissal is with prejudice under
12(b)(6). In some jurisdictions, including the Western District of
Pennsylvania, it has already been held that these standards do not
apply to affirmative defenses. However, one Western District of
Pennsylvania judge has explained that more detailed pleading by
defendants -- like more detailed pleading by plaintiffs -- can lead
to a successful motion for judgment on the pleadings where 12(b)(6)
dismissal may not be appropriate. Also, according to the same
judge, trial court judges have wide latitude to allow amendments.
Different judges may allow a pro se plaintiff to amend a complaint
multiple times, while corporate defendants may only get one chance
to amend.
In sum, civil complaints must state the elements and facts
supporting the claim. Basically federal pleading, particularly in
the Third Circuit, is essentially now "notice pleading
plus," that shifts closer to notice pleading or closer to
factual pleading depending upon the subject matter and context of
the case. The best practice is likely to fully understand the
context of the case, how one's jurisdiction applies
Twombly and Iqbal, and how one's judge tends
to interpret these decisions. In any event, if litigants spend the
time and resources at the pleading stage, they may have more
success than they had prior to Twombly and Iqbal
when filing 12(b)(6) motions to dismiss or on motions for judgment
on the pleadings.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.