New pleading, new discovery.

• Author: Dodson, Scott

Pleading in federal court has a new narrative. The old narrative was one of notice, with the goal of broad access to the civil justice system. New Pleading, after the landmark Supreme Court cases of Twombly and Iqbal, is focused on factual sufficiency, with the purpose of screening out meritless cases that otherwise might impose discovery costs on defendants. The problem with New Pleading is that factual insufficiency often is a poor proxy for meritlessness. Some plaintiffs lack sufficient factual knowledge of the elements of their claims not because the claims lack merit but because the information they need is in the hands of defendants. New Pleading thus screens out these claims even though they may have merit. This Article offers a solution to New Pleading's problems of information asymmetry: New Discovery. New Discovery recognizes the need for a carefully limited presuit or predismissal discovery paradigm to provide plaintiffs the opportunity to gather the facts necessary to comply with New Pleading's strictures. Drawing heavily on the experience of state procedural systems, the Article presents a normative defense of New Discovery, offers some guiding principles and tools for controlling its scope and cost, and explores how New Discovery might work both under the current discovery scheme and in the context of needed discovery reforms.

TABLE OF CONTENTS INTRODUCTION I. OLD PLEADING II. NEW PLEADING, OLD DISCOVERY A. Features B. Problems C. Modest Solutions III. NEW DISCOVERY A. Theoretical Basis B. Guiding Principles and Tools for Implementation 1. Sparingly Used 2. Narrow Focus and Controlled Costs 3. Tolling C. In Practice 1. Predismissal Discovery 2. Presuit Discovery CONCLUSION INTRODUCTION

In 1957, the Supreme Court instilled the famous liberal "notice" pleading standard in federal civil proceedings. (1) And, for the next fifty years, that understanding generally prevailed (or at least was paid lip service to). (2) But the last three years have seen a sea change at the Supreme Court. Bell Atlantic Corp. v. Twombly (3) and Ashcroft v. Iqbal (4) together have changed the old notice pleading standard to a new "plausibility" regime based primarily on pleading nonconclusory facts. (5)

That change means that plaintiffs proceeding with claims that depend upon facts exclusively in the hands (or minds) of defendants and third parties may find themselves in a Catch-22: plaintiff needs those facts to plead her claim properly and survive a "Twiqbal" motion to dismiss, but she may not be able to discover those facts without first surviving the motion to dismiss.

One of the most obvious solutions to this problem is to abrogate or limit Twombly and Iqbal, by rule amendment or statute. By my count, at least nine written proposals to do so have been offered. (6) I generally support such proposals to change the new pleading standard, but I do not hold out much hope for them. Congress rarely intercedes in federal procedure (7) and has done so in the pleadings area only for specific causes of action--and then only to impose greater restrictions, rather than fewer. (8) The rulemaking process has promise, but there does not appear to be much motivation from its leadership to abrogate the Supreme Court's pleadings decisions] and, in any case, rule amendments that purport to do so face the hostile prospect of needing the approval of the Supreme Court itself--a Court that is highly skeptical of the value of the prior pleading regime. (10)

Another possibility is that the Supreme Court itself, perhaps due to a change of heart (or a change in membership) will reverse course and restore some version of Old Pleading. That also seems improbable, at least in the short term, because Twombly itself, the originator of the new plausibility standard, was a 7-2 decision, and because Iqbal followed closely on its heels with such an emphatic endorsement of the new pleading regime and rejection of the old. (11)

I thus assume, for the time being, that we are stuck with the "New Pleading" of Rule 8 that imposes significant burdens on some plaintiffs faced with information asymmetry. The question becomes how to rectify those burdens in a way that would meet the approval of the current sentiment of the Court and other judicial actors.

I am cautiously and preliminarily optimistic that a realistic answer lies in what I call "New Discovery," namely, presuit or predismissal discovery with--unlike in the current discovery paradigm--significant limitations in scope and cost bearing. Elsewhere, I have explored ways in which state presuit discovery mechanisms could provide potential federal plaintiffs with the information they need, (12) but for reasons that I discuss below, the better option would be to make such discovery available in federal court.

Unfortunately, the current availability of presuit or predismissal investigative discovery in federal court is doubtful. The Federal Rules do not permit presuit investigative discovery at all. (13) And, although recent scholarship has touted ways around Twiqbal through existing predismissal discovery avenues, (14) the likelihood that a district judge will allow such relatively unconstrained predismissal investigative discovery in the Twiqbal era is extremely slim, given the rhetoric behind the Court's opinions. (15)

That rhetoric needs a counterweight, and this Article aims to provide it. It draws upon state experiences with presuit discovery mechanisms and offers a new paradigm for federal presuit or predismissal discovery--what I term "New Discovery." New Discovery, modeled on the state mechanisms, provides opportunities for federal court plaintiffs to obtain the discovery they need before facing a decision on a motion to dismiss, but it also contains new constraints to protect defendants. In other words, New Discovery could play a crucial role in rectifying information asymmetry and alleviating the injustice of overscreening meritorious claims, while still protecting defendants from unwarranted discovery burdens. I explore what that role could be and propose how judges and, particularly, rulemakers might make that role a reality.

Part I begins that task by providing a brief historical account of the development of federal pleading standards from the time of the Codes to Twombly--Old Pleading--paying special attention to the goals of the drafters of the rules and their insistence on the relative unimportance of pleadings.

Part II continues the pleadings narrative through the changes of Twombly and Iqbal--New Pleading--and contrasts the dramatic changes of New Pleading with the relative liberality of Old Pleading. It also explains why, when combined with the current discovery paradigm, New Pleading can have particularly harsh results for plaintiffs facing information asymmetry. It does credit the defensible policy arguments underlying New Pleading, which include the need to screen out meritless cases at an early stage in the litigation to avoid unfair and costly discovery burdens imposed on a blameless defendant, but it argues that New Pleading is the wrong way to achieve those policy goals because it overscreens by disallowing some meritorious cases. This Part also discusses why the existing options for ameliorating these harsh results under the current discovery paradigm are limited.

Part III then proposes the principal solution for New Pleading: New Discovery. A carefully limited and structured framework of "pre-discovery discovery," either before suit or before a motion to dismiss is decided, has several normative benefits. It will enable plaintiffs with meritorious claims who otherwise would have been screened out by New Pleading to obtain the justice they are due. It will allow all parties, for a relatively cheap price tag, to determine whether a weak case is truly meritless and thereby avoid the more expensive price tag of full-fledged litigation. And, if coupled with appropriate controls on scope and cost, it could do so while simultaneously respecting the underlying concerns of Twombly and Iqbal. In other words, New Discovery has the potential to rectify the imprecision and injustice of New Pleading in a way that ought to appease everyone.

After providing a normative defense of New Discovery, this Part then offers some guiding principles and tools for its use as well as proposals for how New Discovery might work in federal practice. Similar state presuit investigative discovery devices provide working models from which to create a meaningful federal mechanism. Lessons from state experiments suggest that such discovery in federal court is neither costly nor unworkable. To the contrary, New Discovery fits with New Pleading to better align its goals and fundamental policies. In other words, New Pleading needs New Discovery.

I conclude with a call to judges and rulemakers to recognize a more robust use of the New Discovery principles and proposals I offer in this Article.

1. OLD PLEADING

   Prior to 1938, the dominant Code pleading regime required "[a] statement of the facts constituting the cause of action." (16) The Codes also sharply limited discovery. (17) One of the primary shortcomings of Code pleading was the distinction between "ultimate" facts, which were required to be pleaded, and "evidentiary" facts and "conclusions of law," which were not to be pleaded. (18) Those distinctions proved unworkable in practice and resulted in a level of technicality and factual detail in the pleadings that became counterproductive. (19)

   Dissatisfaction with those pleading requirements led to Rule 8, which is conspicuously silent on fact pleading and instead requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." (20) Rule 8 was revolutionary in its goals of reducing the importance of pleadings, eliminating the problems of fact pleading that existed under Code pleading, and retaining only the notice function of pleading. (21) In line with the...