The Federal Courts have long adhered to a broad interpretation of the pleading rules under Federal Civil Rule 8(a)(2). A pleading required only “a short and plain statement of the claim showing that the pleader is entitled to relief.” In 1957, the Court in Conley v. Gibson 355 U.S. 41, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957), issued an oft-quoted phrase concerning the pleadings standard as challenged by a Motion to Dismiss: “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 entitle him to relief.” As a result, plaintiffs have often filed complaints setting forth nothing more than the basic elements for a specific claim.
Recently, in Bell Atlantic Corp. v. Twombley, 127 S. Ct. 1955 (2007), the United States Supreme Court retired the above-quoted statement from Conley, and held that a pleading must assert a plausible cause of action. Bell Atlantic was an anti-trust case that involved allegations of conspiracy with no facts plead sufficient to establish the formation of a contract or action among the defendants sufficient to establish illegal actions. Plaintiffs’ allegations were limited to parallel business conduct and a bare allegation of conspiracy, neither of which were found to be sufficient to state a claim under the Sherman Act. The Court held:
{W}e hold that . . . a claim requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made. Asking for plausible grounds to infer an agreement does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement.
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{W}hen the allegations in the complaint, however true, could not raise a claim of entitlement to relief, “this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.”
Id. at 1965, 1966.
As with many U.S. Supreme Court cases, the breadth of the ruling is in question. The Second Circuit Court of Appeals has weighed in on Bell Atlantic, and has held that the court did not intend to expand the pleading requirements in all cases, but rather in cases that involve “sprawling, costly and hugely time-consuming” discovery, such as anti-trust and discrimination cases. Iqbal v. Hasty, 490 F. 3d 143 (2007).
In Iqbal, plaintiff asserted causes of action related to his detention. The defendant asserted qualified immunity, and appealed the denial of a motion to dismiss. The court declined to impose a higher pleading standard. The court reviewed Bell Atlantic and found it confusing, and attempted to balance the Supreme Court’s intentions with the prior case law and common law and ultimately concluded that a heightened standard of pleading would be limited to more complex, costly cases.
It is likely that Bell Atlantic will be quoted extensively in upcoming motions to dismiss. It would appear that the holding will be most effective in complex cases where plaintiffs attempt to prove their cases by filing a bare bones complaint with the intent of flushing out the allegations through discovery. Mass tort, discrimination, anti-trust and security fraud defendants seem the most likely beneficiaries from this ruling.
If you have any questions, please contact any member of our Environmental /Mass Tort/Class Action Practice Group.