I have federal pleading all figured out.

• Author: Shannon, Bradley Scott

ABSTRACT

The Supreme Court's recent decisions in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal, both of which deal with federal civil pleading standards, are important, but misunderstood. This Article hopes to alleviate some of the confusion and place these decisions in proper perspective. Viewed in terms of the two primary ways in which an action may be dismissed for failure to state a claim upon which relief can be granted--factual insufficiency and legal insufficiency-coupled with an understanding of a plaintiff's obligations under Federal Rule of Civil Procedure 11, these decisions arguably have resulted in little practical change in the overall federal pleading scheme. What these decisions have done, though, is brought renewed attention to the requirement that a plaintiff's allegations be supported by evidence, and the problems that accompany such a requirement. But this Article argues that concerns regarding a plaintiff's insufficiency of proof should be resolved not through Federal Rule of Civil Procedure 8 and the requirement that a plaintiff "show" that it is entitled to relief--as the Supreme Court appears to have done--but rather through Rule 11. This Article also argues that a federal-court action dismissed for failure to state a claim because of insufficiency of proof should not be given claim-preclusive effect in those state courts with less stringent pleading standards.

CONTENTS I. INTRODUCTION II. PLEADING FUNDAMENTALS AND GROUNDS FOR DISMISSAL A. Factual Insufficiency B. Legal Insufficiency C. Insufficiency of Proof III. TWO LOOSE ENDS A. Frivolous Complaints B. The Divergence of Federal and State Pleading Standards IV. CONCLUSION I. INTRODUCTION

The Supreme Court's recent decisions in Bell Atlantic Corp. v. Twombly (1) and Ashcroft v. Iqbal (2) are probably the most significant civil procedure rulings in decades. (3) Remarkably, though, for all of their significance, there remains widespread confusion as to what these decisions mean: The reaction to these decisions is also remarkable, for despite broad disagreement as to the meaning of Twombly and Iqbal, the consensus (at least within the legal academy) has been negative. (5) In particular, many have accused the Court of reinterpreting the Federal Rules of Civil Procedure (the "Rules") and thereby effecting a significant change in federal civil pleading practice, (6) a change that generally works to the disadvantage of plaintiffs. (7)

The primary purpose of this Article is twofold. First, the Article attempts to ease the confusion in this area by explaining the meaning of Twombly and Iqbal and identifying their place in the broader procedural context. Second, this Article attempts to show that some of the criticism directed toward these decisions might be unfounded. In its attempt to achieve this purpose, this Article will reach a number of conclusions, many of which run counter to the conventional thinking on this subject:

1. The Supreme Court's rulings in Twombly and Iqbal probably did not result in a significant change in the overall federal-court pleading scheme. Rather, these decisions have brought increased attention to a plaintiff's obligations in the pleadings stage and have invigorated the use of the motion to dismiss for "failure to state a claim upon which relief can be granted," (8) much as the Supreme Court's decisions in Celotex Corp. v. Catrett, (9) Anderson v. Liberty Lobby, Inc., (10) and Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp. (11) invigorated summary-judgment practice. (12)

2. The word "plausible" as used by the Supreme Court in connection with a plaintiff's allegations cannot be construed as meaning "believable." Rather, it must refer only to the factual sufficiency of a complaint. This means that a factually suspicious (or even frivolous), but otherwise factually and legally sufficient, complaint should not be dismissed for failure to state a claim.

3. The venerable passage from Conley v. Gibson (13) that was "retired" by the Court in Twombly (14)--"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" (15)--appears to be dicta, and in any event related not to the factual sufficiency of a plaintiff's allegations, but rather to the legal sufficiency of a plaintiff's claim.

4. Though there are currently several proposals to abrogate the Supreme Court's holdings in Twombly and Iqbal, all are probably futile unless they also alter a plaintiff's obligations under Federal Rule of Civil Procedure 11. In other words, the problem for plaintiffs brought to the fore by Twombly and Iqbal does not relate to the Court's plausibility standard per se. Rather, the problem--if there is a problem--lies in the requirement that a plaintiff's factual allegations (or "contentions") "have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery," (16) coupled with the limited ability to engage in formal discovery before the commencement of the action.

5. Despite widespread dissatisfaction with the current federal pleading scheme and the fact that it might differ from the practice in some states, the federal scheme, if properly understood and applied, does not unreasonably interfere with a plaintiff's right to a jury trial under the Seventh Amendment, (17) and raises no choice-of-law issue under Erie Railroad Co. v. Tompkins. (18) Still, an argument can be made that dismissals for failure to state a claim due to a failure to comply with more stringent federal pleading requirements should not be given claim preclusive effect in state courts with less stringent requirements.

This Article contains a brief and general discussion of the more significant rules governing federal pleading. It then attempts to explain the applicable standard in terms of the three ways in which a complaint properly may be dismissed for failure to state a claim: factual insufficiency, legal insufficiency, and insufficiency of proof. The Article then addresses two particularly troublesome and recurring problems: the proper disposition of the frivolous complaint, and the possible disparity between federal and state pleading requirements. But contrary to its title, the goal of this Article is not to show that its author indeed has federal pleading all figured out. (19) Rather, the goal is to reach a broader understanding of federal pleading practice, an understanding that hopefully will lead to a more informed normative debate as to where the line for pleading sufficiency should be drawn and how that line might be moved, if desirable.

2. PLEADING FUNDAMENTALS AND GROUNDS FOR DISMISSAL

   Federal pleading, like federal procedure generally, is governed primarily by the Federal Rules of Civil Procedure. But the rules related to pleading are sparse and, to a large extent, vague. With respect to stating a claim, the primary rule is Rule 8(a), which provides: "A pleading that states a claim for relief must contain: ... a short and plain statement of the claim showing that the pleader is entitled to relief...." (20) Rule 8 also provides: "[e]ach allegation must be simple, concise, and direct"; (21) "[n]o technical form is required"; (22) and "[p]leadings must be construed so as to do justice." (23) But though the Rules further provide that the defense of failure to state a claim upon which relief can be granted, if timely raised by a defendant, (24) results in the dismissal of that claim, (25) the Rules give no further guidance as to precisely how or why a claim may be considered insufficient.

   A review of relevant case law, though, reveals essentially three ways in which an action properly may be dismissed for failure to state a claim--i.e., three different types of problems or defects that can render a complaint insufficient as a matter of law. This Article will refer to these three problems as factual insufficiency, legal insufficiency, and insufficiency of proof. (26) By investigating what makes a complaint insufficient, perhaps one can reach some understanding as to what makes a complaint sufficient and, more importantly, where to draw the line. (27)

   1. Factual Insufficiency

      In order to understand what must be included in a complaint, one should reexamine the text of Rule 8(a). (28) Rule 8(a) provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." (29) What, exactly, does this mean? In legal parlance, to "show" generally means to prove. (30) But what does the rest of this rule require?

      At least one thing is clear: whatever Rule 8(a) might require by way of a "showing," it need not--indeed, it must not--be long and complicated. For the rule expressly provides that a plaintiff's statement of the claim, whatever else it is, must be "short and plain." Thus, whether one considers the Official Forms governing complaints (31) or the Supreme Court's repeated rebuffs to calls for heightened pleading outside of the context of Rule 9, (32) the message is always the same: very little is required in order for a complaint to survive a motion to dismiss for failure to state a claim. (33) Indeed, in Twombly, the Court went out of its way to make it clear that this was still true. (34)

      But how little? Is it possible for a complaint to be too short and plain? Yes. And the reason (again) is that Rule 8(a) also requires a showing that the plaintiff is "entitled to relief." What does this mean? The Supreme Court has long recognized that the complaint must "give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." (35) Thus, showing that one is entitled to relief is about notice, though not simply notice that an action has been commenced against the defendant, for that the summons accomplishes...