Correlation Plausibility: a Framework for Fairness and Predictability in Pleading Practice After Twombly and Iqbal

• Publication year: 2022

44 Creighton L. Rev. 141. CORRELATION PLAUSIBILITY: A FRAMEWORK FOR FAIRNESS AND PREDICTABILITY IN PLEADING PRACTICE AFTER TWOMBLY AND IQBAL

CORRELATION PLAUSIBILITY: A FRAMEWORK FOR FAIRNESS AND PREDICTABILITY IN PLEADING PRACTICE AFTER TWOMBLY AND IQBAL

Stephen R. Brown

TABLE OF contents

introduction..........................................142

I. TWOMBLY AND IQBAL ON PLAUSIBILITY.......147

A. Bell Atlantic Corp. v. Twombly...............147

1.No-Market-Entry-for-CLECs Conspiracy......150

2.No-Competition-Among-ILECs Conspiracy----150

B.Ashcroft v. Iqbal..............................151

C.Summary of Twombly and Iqbal................155

II. approaches to plausibility.................158

A. Baselines-of-Conduct Plausibility.............159

B. Presumption Plausibility......................163

III. correlation plausibility....................165

A. a Fire Behind a Closed Door..................165

B. Explaining the Metaphor......................167

C. Correlation Plausibility in Practice..........170

D. Correlation Plausibility and Rule 12(d).......172

IV. evaluating correlation plausibility.....178

A. Reflecting Twombly and Iqbal................178

B. Reducing Subjectivity.........................180

V. broader insights about twombly and

IQBAL..............................................183

A. The Costs of Ensuring a Correct Decision ...........184

B. Ameliorating the Costs of Ensuring a Correct Decision ..............................186

Conclusion.............................................188

INTRODUCTION

Imagine that you are a federal district-court judge. Twenty days ago,(fn1) Jane Jones sued General Corporation and her boss John Boss alleging that John fired her because she was a woman.

Today, twenty days after the filing of the complaint, General Corporation and employer John Boss move you to dismiss Jane's claim arguing that, under Bell Atlantic Corp. v. Twombly(fn2) and Ashcroft v. Iqbal,(fn3) Jane has "fail[ed] to state a claim upon which relief can be granted."(fn4) General Corporation and employer John argue that Jane's complaint does not plausibly suggest that John acted with discriminatory intent when he terminated Jane's employment. In alleging that employer John acted with the requisite discriminatory intent, Jane has pleaded(fn5):

1. Defendant fired Plaintiff because she was a woman.

2. During a performance review, Defendant stated that clients have complained about doing business with a woman.

3. On several occasions, Plaintiff heard Defendant make jokes and laugh when she exited a meeting.

4. Defendant failed to use gender-neutral language in his intra-office memoranda.

5. Defendant fired Plaintiff because of his hostility to women which he demonstrated by frequently telling sexist jokes in the office.

6. Def endant replaced Plaintiff with a man.

As a federal judge, you have studied the Twombly and Iqbal cases and want to assiduously follow the precedent of the Supreme Court of the United States. You have also kept up-to-date on the current academic commentary on plausibility.(fn6) From these sources, you understand that, to state a plausible claim, a plaintiffs complaint must cross two lines: (1) the line between the conclusory and the factual; and (2) the line between the possible and the plausible.(fn7) You want to address each of these two lines in turn.(fn8)

You start by excising from the complaint the allegations that fail to cross the line of the factual-those allegations that are "conclusory."(fn9) Just as the Supreme Court excised the allegation of discriminatory intent from the complaint in Iqbal,(fn10) you must also excise any allegation that directly alleges employer John's discriminatory motivation for the firing.(fn11) You then examine the remaining allegations to determine if you can "draw the reasonable inference that the defendant is liable for the alleged misconduct."(fn12)

Remaining in the complaint are Jane's reasons for believing that her employer fired her because of her sex (Defendant stated that clients have complained about doing business with a woman; Defendant made jokes and laughed when Plaintiff exited a meeting; Defendant failed to use gender-neutral language in his intra-office memoranda; Defendant frequently told sexist jokes at the office; Defendant replaced Plaintiff with a man). You take all these allegations as true, and now must decide if you can draw the reasonable inference that employer John acted with the requisite discriminatory intent. Put another way, you must determine whether Jane has shown that it is plausible that employer John acted with the requisite intent. This Article will refer to this determination as the "plausibility inquiry" or the "plausibility determination."

The Supreme Court has tried to guide the plausibility determination by explaining that plausibility lies somewhere between possibility and probability.(fn13) The Supreme Court has also instructed that, in determining if the pleaded allegations cross the line between the possible and the plausible, a judge should use "judicial experience and common sense."(fn14)

Is this really enough guidance though?(fn15) Where exactly is the line between the possible and the probable? What exactly is judicial experience and common sense? Should a judge rely on past cases involving similar factual situations? How similar do these cases have to be? Would this small sample even be a useful source of information from which to draw a conclusion? What if a judge was new to the bench? Should a judge rely on common sense-"sound and prudent judgment based on a simple perception of the situation or facts"(fn16)? Will "common sense" differ from judge to judge?(fn17) Is "common sense" a good basis on which rights and responsibilities should turn?(fn18) Will a plausibility determination be anything more than a subjective decision?(fn19)

These questions, provoked by looking at plausibility from the judicial perspective, suggest two main problems that Twombly and Iqbal created: (1) plausibility is too nebulous of an inquiry; and (2) the inquiry invites judges to use subjective judgment to unfairly screen out cases. What is needed, then, is a conception of plausibility that addresses these problems.

Previous approaches to plausibility have conceived the inquiry as one of comparison. These approaches compare the conduct alleged in the complaint against some standard of neutral, lawful conduct.(fn20) If the alleged conduct varied sufficiently from the standard, then the complaint was plausible. As will be explained below, however, these comparison approaches cannot adequately explain the Supreme Court's holding in Iqbal and actually exacerbate (rather than ameliorate) the problem of judicial subjectivity at the pleading stage. These comparison approaches do not address the problems of ambiguity or subjectivity.

This Article confronts these problems with a new way of thinking about plausibility that focuses on correlation-an approach I refer to as correlation plausibility. This approach will explain both Twombly and Iqbal and can provide guidance to courts and litigants. Further, this approach will allow a plaintiff to move the inquiry away from subjectivity and toward objectivity.(fn21) This Article is devoted to proposing and examining plausibility as a system of correlation.

To provide background, Part I of this Article will briefly describe the Supreme Court's adjudicatory process and reasoning in both Twombly and Iqbal.(fn22) In Part II, this Article will provide a summary of the most persuasive approaches to plausibility proffered by commentators, and address why each is inadequate. In Part III, this Article will propose correlation plausibility as an alternative approach. To clarify this approach, Part III will begin with a short, narrative metaphor for the inquiry, follow by a description of how the system of correlation plausibility will work in practice. In Part IV, this Article will evaluate the benefits and costs of correlation plausibility.

Part V will examine what this new way of thinking reveals about Twombly and Iqbal in general. This discussion will note the troubling burden of near expertise (on non-legal subjects) that the plausibility inquiry places on both courts and litigants. This Part will also suggest that these burdens may have been overlooked by the Supreme Court because of the differences between Supreme Court and district court practice. Following this broader examination of Twombly and Iqbal, this Article will provide a brief summary and conclusion.

I. twombly and iqbal on plausibility

To begin this Article, this Part will discuss Twombly(fn23) and Iqbal(fn24) in turn, focusing on the Supreme Court's reasoning on the plausibility inquiry.

A. Bell Atlaantic Corp. v. Twombly

In 1984, ATandT's local telephone business was divided up into regional service monopolies called Incumbent Local Exchange Carriers ("ILECs").(fn25) The United States Congress, however, became displeased with the operation of the regional monopolies, and eventually enacted the Telecommunications Act of 1996,(fn26) ("1996 Act") which imposed on the ILECs "a host of duties intended to facilitate market en-try"(fn27) for competitors. As the Supreme Court explained, "'[c]entral to the [new] scheme [was each ILEC's] obligation ... to share its network with competitors.'"(fn28) The...