Twombly and Iqbal reconsidered.

• Author: Fitzpatrick, Brian T.

INTRODUCTION

Perhaps the most controversial decisions thus far from the United States Supreme Court under Chief Justice John Roberts may have been in the usually mundane area of civil procedure. (1) In a pair of decisions two years apart, Bell Atlantic Corp. v. Twombly (2) and Ashcroft v. Iqbal, (3) the Court made a jarring shift in its jurisprudence on what plaintiffs need to plead in their complaints in order to keep their suits from being dismissed at the very outset of litigation. These decisions have been described as "the most significant ... in a decade for day-to-day litigation in the federal courts...." (4) Indeed, the decisions are on pace to become the most cited Supreme Court cases of all time. (5) And the scholarly criticism of the two cases has been withering. (6)

In particular, commentators believe the decisions will spark a revolution in federal court litigation, and they have criticized the decisions as gifts to the business community that were delivered by judicial fiat. According to commentators, the Court ignored, distinguished, or disavowed long-standing precedents in order to find new meaning in the text of a Federal Rule of Civil Procedure--Rule 8(a)--that reads today as it has since 1938. As far as these commentators are concerned, these decisions are nothing short of "conservative judicial activism." (7)

Although I agree with some of this criticism, I think some of it is overstated. First, Twombly and Iqbal may not be nearly as revolutionary as first meets the eye; as a practical matter, lower federal courts long ago elevated pleading standards in the face of the exponential increases in discovery costs faced by corporate defendants. Second, charges of "judicial activism" in this context have a bit less salience than they do in the more typical contexts in which they are made--contexts in which the Court has usurped the authority of another branch of government--because the text the Court reinterpreted in these decisions was a Federal Rule of Civil Procedure, something that the Court itself promulgated and can change at any time. Finally, I think the Court's motives in Twombly and Iqbal--to recalibrate plaintiffs' discovery rights in light of the exponential increases in discovery costs that have developed in the years since the Federal Rules were first promulgated in 1938--were pure, even if its methods were not.

In Part I of this Essay, I describe the Court's decisions in Twombly and Iqbal and how they represent a break in the Court's pleading jurisprudence. In Part II, I respond to the criticism of Twombly and Iqbal as revolutionary, conservative judicial activism. In Part III, I argue that, although the Court's motives in Twombly and Iqbal were pure, there may be better responses than elevated pleading standards to the challenges of discovery that only Congress can impose, such as fee-shifting rules.

1. FROM "MERE NOTICE" TO "NOTICE PLUS PLAUSIBILITY" PLEADING

   In order to state a claim under Federal Rule of Civil Procedure 8(a), a plaintiffs complaint must set forth "a short and plain statement of the claim showing that the pleader is entitled to relief...." (8) If the plaintiffs complaint does not meet this standard, then the court can dismiss the plaintiffs complaint on a motion by the defendant before the case proceeds any further. (9) If the plaintiffs complaint does meet the requirements of Rule 8(a), then the case can go forward, the plaintiff can take discovery of the defendant, (10) and the defendant usually cannot stop the case again until discovery is completed and a motion for summary judgment is filed. (11)

   Until 2007, the Supreme Court had been consistent--and usually unanimous--in admonishing lower courts that Rule 8 did not require very much of plaintiffs. Indeed, the Federal Rules were designed to go easy on plaintiffs: one of the motivations behind their adoption in 1938 was to eradicate the treacherous technicalities of common law pleading and replace them with a "liberal" regime called "notice pleading." (12) Under this notice-pleading regime, plaintiffs were required only to plead enough to put the defendant on fair notice of what the plaintiff's claim was about (13)--i.e., just as many factual allegations as necessary to enable the defendant to file an answer to the complaint and prepare for discovery. (14)

   The example complaints--known as the "forms"--that are appended to the Federal Rules demonstrate what the Rules themselves call the "brevity" of what they require. (15) Form 11, for example, a complaint for negligence, says little more than the defendant's car hit the plaintiff in a particular location on a particular date. (16) Indeed, the entire nonjurisdictional content of the complaint could easily be reproduced in the previous footnote.

   The Supreme Court followed the plaintiff-friendly design of Rule 8 for some seventy years after its adoption. (17) Indeed, under the Court's precedents, plaintiffs usually had more to fear from pleading too much than from pleading too little. So long as the factual allegations in the plaintiff's complaint gave the defendant enough information to file an answer and a court could imagine some set of facts both consistent with the complaint as well as the legal elements of the plaintiffs claims, then the plaintiff's case could move forward. (18) As the Court put it on one occasion, "[a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." (19) Plaintiffs who pled more than necessary risked saying something that would render the complaint inconsistent with the legal elements of the claims. The best policy, then, was often to say as little as possible. (20)

   The Court made it very clear over the years that the plaintiff's complaint need not contain many factual allegations because the pleading stage was not the time to develop the facts; the proper time for that, the Court said, was during discovery. (21) Moreover, the only purpose of the complaint, the Court said, was to put the defendant on notice. (22) If any more confirmation was needed of that, the Court added, just look at the brevity of the forms that append the Rules. (23) Indeed, the Court made it clear that the pleading stage was not the time to dismiss unmeritorious suits; the place for that, the Court said, was summary judgment. (24) As the Court put it unanimously only nine years ago, "Rule 8 (a) establishes a pleading standard without regard to whether a claim will succeed on the merits. 'Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test.'" (25)

   In recent decades, lower federal courts have had trouble with the laxity of the Court's Rule 8 jurisprudence. I will have more to say about this below, but, for now, suffice it to say that, from time to time, lower federal courts tried to elevate the pleading requirements for what they thought were very sound policy reasons. Each time they did so, however, the Supreme Court reversed. Thus, in Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, (26) the Supreme Court unanimously turned back an effort by lower courts to heighten pleading standards in cases against government officials because of the burdens these suits imposed on state and local governments. (27) Similarly, in Swierkiewicz v. Sorema N.A., (28) the Court unanimously turned back an effort by lower courts, for similar reasons, to heighten pleading standards in cases alleging employment discrimination. (29) Both times, the Court said, although there may be sound reasons to elevate pleading standards, the proper way to go about doing it is to revise the Federal Rules of Civil Procedure. (30)

   It therefore came as something of a surprise when, in 2007, Twombly came down the way it did. In Twombly, the Court dismissed a nationwide class action complaint alleging that several telecommunications providers conspired both to protect themselves from each other and to exclude other competitors from their networks. (31) The antitrust laws required the plaintiffs to prove the providers had come to an agreement amongst themselves to do these things, and the plaintiffs dutifully alleged in the complaint that the providers had entered into such "agreements." (32) The Court, however, said that allegation was not enough. The Court said that the plaintiffs needed either to allege which of the providers and their employees entered into the agreements, and when and where they did so, (33) or to allege some story that, "in light of common economic experience," made the actions of the providers irrational in the absence of an agreement. (34)

   But what of the notion that, so long as there was some set of facts consistent with the complaint and the legal elements of the cause of action, the case could go forward? This was what the Court had called the "accepted rule" in 1957. (35) The Court was not shy about the jarring shift it was making: this "accepted rule"--"one of [the Court's] earliest statements about pleading under the Federal Rules" (36)--was, the Twombly Court said, going into "retirement." (37)

   The Court said that it was no longer enough for a complaint to put the defendant on notice of the claims against it; rather, the allegations in the complaint now have to show that it is "plausible" that the plaintiff's case will succeed. (38) For the complaint before it, the Court said it was "[a]sking for plausible grounds to infer an agreement" and a "reasonable expectation that discovery will reveal evidence of illegal agreement." (39) Gone was "mere notice" pleading; enter "notice plus plausibility" pleading.

   But what of the notions that discovery was the proper place to learn the facts of the case and that summary judgment after such discovery had closed--not the pleadings before such discovery had even begun--was the proper place to weed out meritorious claims? The...