Plausibility pleading revisited and revised: a comment on Ashcroft v. Iqbal.

Author:Bone, Robert G.
 
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This Article critically examines the Supreme Court's most recent decision on Rule 8(a)(2) pleading standards, Ashcroft v. Iqbal, decided in May 2009. The Article supplements and extends the analysis in my recent article, Twombly, Pleading Rules, and the Regulation of Court Access, which examined the Supreme Court's seminal Bell Atlantic Corp. v. Twombly decision and evaluated the costs and benefits of screening meritless suits at the pleading stage. In this Article, I argue that Iqbal does much more than clarify and reinforce key points in Twombly; it takes Twombly's plausibility standard in a new and ultimately ill-advised direction. My criticism has two parts. First, Iqbal adopts a "two-pronged approach" that filters legal conclusions in the first prong before applying the plausibility standard to factual allegations in the second. I argue that this two-pronged approach is incoherent. There is only one prong: the judge must determine whether the complaint, interpreted as a coherent whole, plausibly supports each element of the legal claim. The second problem with Iqbal runs deeper. Iqbal screens lawsuits more aggressively than Twombly, and does so without adequate consideration of the policy stakes. In particular, Iqbal applies a thick screening model that aims to screen weak as well as meritless suits, whereas Twombly applies a thin screening model that aims to screen only truly meritless suits. The thick screening model is highly problematic on policy grounds, even in cases like Iqbal that involve qualified immunity. Moreover, the Supreme Court is not institutionally well equipped to decide whether strict pleading is desirable, especially when it implements a thick screening model. Those decisions should be made through the formal Rules Enabling Act process or by Congress.

INTRODUCTION

Court access has become a matter of intense concern today in the wake of two major pleading decisions of the United States Supreme Court. The first, Bell Atlantic Corp. v. Twombly, (1) held that a plaintiff must allege sufficient facts to state a "plausible" claim for relief. (2) Twombly's critics--and there are many--complain that the plausibility standard unfairly impedes court access for meritorious suits. (3) The second decision, Ashcroft v. Iqbal, (4) issued on May 18, 2009, applies the plausibility standard to allegations that are less obviously deficient than those in Twombly and, in so doing, signals an even stricter approach to pleading requirements. Provoked by the Iqbal decision, many critics now believe that it is imperative to undo the effects of plausibility pleading. On July 22, 2009, Senator Arlen Specter introduced the Notice Pleading Restoration Act (5) aimed at reinstating the liberal notice pleading standards existing prior to Twombly, and on November 19, 2009, Representative Jerrold Nadler introduced the Open Access to Courts Act (6) for the same purpose.

I discussed Twombly, plausibility pleading, and court access in a previous article. (7) This Article extends that earlier work by examining what Iqbal adds to Twombly. Although the Court purports to be applying Twombly's plausibility standard, a fair reading of the majority opinion shows that Iqbal's version of plausibility is significantly stricter than Twombly's. Moreover, the Iqbal Court enlists plausibility for a broader purpose. Twombly uses plausibility to screen only for truly meritless suits, but Iqbal uses it to screen for weak lawsuits too. The difference is crucial. Screening weak lawsuits raises much more complex and controversial policy questions than screening meritless suits, and the Supreme Court is not well equipped institutionally to address those policy questions. They are better left to the committees involved in the formal rulemaking process or to Congress.

Moreover, although a response to Iqbal is needed, neither of the proposed bills is the right response. It is not at all clear that the best approach is to restore pre-Twombly law. There is much to commend Twombly's thin plausibility standard and those benefits should be considered seriously in designing an optimal pleading approach. (8) A clear understanding of the differences between Iqbal and Twombly makes it possible to consider Twombly's virtues without the taint of Iqbal's vices.

The body of this Article is divided into four parts. Part I describes the Twombly and Iqbal decisions. Part II focuses on what Iqbal adds doctrinally to Twombly. Iqbal's most important doctrinal contribution is to frame the analysis formally as a "two-pronged approach." (9) The judge must first exclude "legal conclusions" before applying the plausibility standard to the "factual allegations" that remain. (10) Although Twombly also excluded legal conclusions, it did so in a very different way than Iqbal.

Part III sets the stage for the critical discussion in Part IV by briefly recounting the history of the law-fact distinction in pleading. Part IV then makes two criticisms of Iqbal. First, it argues that the two-pronged approach is incoherent. The first prong makes no sense because there is no clear division between legal conclusions and factual allegations. Classifying allegations as legal conclusions is no different than saying that those allegations are too general to support a plausible case, and that determination must be made by applying the plausibility standard to the complaint interpreted as a whole.

The second criticism strikes deeper. Iqbal's two-pronged approach obscures the fact that its pleading standard is stricter than Twombly's. By eliminating the key allegations in the complaint as "legal conclusions" in the first prong, the Court makes the second prong's plausibility analysis seem like a straightforward and relatively easy application of Twombly. But it is not. Adding the key allegations back into the complaint shows just how much more demanding Iqbal is than Twombly.

In particular, Iqbal applies a thick screening model that aims to screen weak as well as meritless suits, whereas Twombly applies a thin screening model that aims to screen only truly meritless suits. The thick screening model is highly problematic on policy grounds, even in cases like Iqbal that involve qualified immunity. Moreover, the Supreme Court is not institutionally well-equipped to decide whether strict pleading is desirable on a case-specific basis, especially when the strict pleading standard implements a thick screening model. Those decisions should be made through the Enabling Act's formal rulemaking process or, as a second best alternative, by Congress.

  1. A BRIEF SUMMARY OF TWOMBLY AND IQBAL

    1. Bell Atlantic Corp. v. Twombly

      Bell Atlantic Corp. v. Twombly was a nationwide antitrust class action brought under Section 1 of the Sherman Act against the four largest telecommunications companies in the United States. The plaintiffs claimed that the defendants had conspired to divide territory and deter new entry by agreeing not to enter one another's markets and to resist entry by others. (11)

      The Supreme Court held that the complaint failed to state a claim upon which relief could be granted and reinstated the district court's 12(h)(6) dismissal. (12) The seven-Justice majority concluded that the allegations of parallel conduct--that no defendant ever attempted to enter another's market and that they all used similar entry-deterrence strategies--were insufficient because the conduct alleged was exactly what one would expect from vigorous competition in the telecommunications market, given its distinctive history and structure. (13) As for the few allegations that directly stated the existence of an agreement, the Court treated them as "merely legal conclusions resting on the prior allegations" (14) and therefore insufficient to make the existence of an agreement plausible.

      In my previous article, I argued that Twombly changed pleading law on both a policy and a doctrinal level. (15) On the policy level, the Court recognized the importance of using pleading to screen meritless suits. Before Twombly, the standard approach, notice pleading, envisioned the sole function of a complaint as giving fair notice to the defendant of what the dispute was generally about. (16) The Twombly complaint clearly satisfied this standard; the defendants knew what the plaintiffs were complaining about and could easily admit or deny the allegations. The Court held, however, that pleading standards should do more than give notice; they should also screen for meritless suits. (17)

      On the doctrinal level, the Court rejected the most generous version of notice pleading, the so-called "possibility" standard, that tolerates allegations if they are merely consistent with the possibility of wrongdoing. The Court held that Federal Rule of Civil Procedure 8(a) (2)'s "short and plain statement" standard requires plausibility, not just possibility. (18) The plaintiff must allege sufficient facts to support a plausible inference of the existence of each element of the legal claim. And the plaintiffs in Twombly failed to do this for the conspiracy element of their Sherman Act claim. (19)

    2. Ashcroft v. Iqbal

      Ashcroft v. Iqbal was a suit for damages brought by two Arab Muslim men against federal officials based on violations of the U.S. Constitution and federal statutes. (20) The claims focused on the harsh and demeaning treatment the plaintiffs received while confined with 182 other detainees as "persons of high interest" in a special maximum-security facility after the 9/11 attacks. (21) With respect to the discrimination claims, (22) the complaint alleged that the plaintiffs were detained and subjected to abusive treatment because of their race, religion, and national origin. (23)

      The plaintiffs sued all those involved in some significant way, including John Ashcroft, former Attorney General of the United States, and Robert Mueller, Director of the FBI. The claims against Ashcroft and Mueller were not based on their direct...

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