I spoke at a CLE a few weeks ago and discussed the recent jurisprudence on federal pleadings requirements. A couple of attendees were quick to email me when they saw Sen. Arlen Specter, D-Pa., had introduced legislation that would undermine the clarified civil pleading standards for plaintiffs set forth by the U.S. Supreme Court in the Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007) decision, and reaffirmed in Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009) decided in May.
The so-called "Notice Pleading Restoration Act of 2009’’ would turn back the clock to the ancient and unrealistic interpretation of Rule 8 of the Civil Rules announced in Conley v. Gibson more than 5 decades ago. The bill is clearly aimed at helping the plaintiffs' bar and making it more difficult for defendants to get courts to dismiss frivolous and ungrounded litigation before expensive discovery. Specter, the newly turned Democrat facing an uphill re-election battle, submitted the bill last week.
Rule 8(a)(2) requires that complaints contain a “short and plain statement of the claim” but also, that statement must show that the plaintiff is “entitled to relief.” The view that a complaint cannot be dismissed unless "no set of facts" might support the claim comes from Conley dicta, and, as applied, has seemed to dispense with the need for any showing of a reasonably founded hope that a plaintiff would be able to make out a case. This has created huge, that is, expensive problems for defendants, because courts relegate to discovery the task of sorting out whether there is really anything to litigate. A good example may be In re MTBE Products Liability Litig., 379 F. Supp.2d 348, 367-70, 432 (S.D.N.Y. 2005), where the court quoted the “no set of facts” language multiple times to support a convoluted and vague commingled market share liability theory. The standard led to approval of broad, vague allegations, particularly, but not exclusively, involving conspiracy or concerted action.
Under the new cases, it is no longer enough to say that some set of unpleaded facts consistent with the complaint might make out a claim someday. Instead, plaintiffs must allege facts that establish the legal cause of action; the facts must be plausible; more than speculative and more than a suspicion. And there must be enough facts to raise a reasonable expectation that discovery will reveal evidence of the alleged breach of duty.
While detailed factual allegations are not necessary, plaintiffs need more than labels and conclusions. Thus, a formulaic recitation of the elements of a cause of action will not do. The Supreme Court recognized this harsh reality: “The requirement of [adequate] allegations ... serves the practical purpose of preventing a plaintiff … from taking up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value.” 127 S.Ct. at 1959. “It is no answer to say that a claim just shy of plausible entitlement can be weeded out early in the discovery process, given the common lament that the success of judicial supervision in checking discovery abuse has been modest.” 127 S.Ct. at 1959. Accordingly, some "threshold of plausibility must be crossed at the outset before a … case should be permitted to go into its inevitably and protracted discovery phase.” 127 S.Ct. at 1966. “And it is self-evident that the problem of discovery abuse cannot be solved by careful scrutiny of evidence at the summary judgment stage, much less lucid instructions to juries….the threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching those proceedings.” 127 S.Ct. at 1967.
An example of the rule in operation: Bailey v. Janssen Pharmaceutica, Inc., 288 Fed. Appx. 597 (11th Cir. 2008). Plaintiff alleged, “The defective patches were not accompanied by adequate instructions and/or warnings to fully apprise the prescribing physicians . . . of the full nature or extent of the risks and side effects associated with its use.” The court dismissed the complaint because it failed to even recite the contents of the warning label or to describe the manner in which the warning was inadequate.
Ashcroft v. Iqbal made clear that the Twombly pleading rule applies to all civil cases, including products liability. It explained the principles on which Twombly rested:
- “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” 129 S.Ct. at 1949.
- “only a complaint that states a plausible claim for relief survives a motion to dismiss…. a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 1950.
- Requiring plaintiffs to furnish “more than a sheer possibility that a defendant has acted unlawfully,” id. at 1949, makes sense as a matter of public policy in light of the often immense demands of discovery.
While Specter claims the high court's decisions in those two cases were effectively an “end run” around Congress' authority to amend the FRCP, in reality the bill is just the latest of a series by Democrats to overturn decisions they don't like for political reasons, and to make it easier for their allies in the plaintiffs' bar to force defendants to settle meritless claims because of the cost of litigation. Far from denying plaintiffs with meritorious claims access to the federal courts, the new decisions require plaintiffs simply to allege suuficient information to show that their claim is not frivolous, without forcing defendants to engage in expensive and intrusive discovery.