### In the 

# United States Court of Appeals
For the Seventh Circuit

____________________ No. 14

- 1 729

M EGAN R UNNION , a minor, through her mother and next friend, E DIE R UNNION , Plaintiff

- A ppell ant,

v.

G IRL S COUTS OF G REATER C HICAGO

AND N ORTHWEST I NDIANA , Defendant

- Appell ee

.

____________________
Appeal from the United States District Court for the
Northern District of Illinois , Eastern Division

. No. 12 C 6066

— Harry D. Leinenweber

, Judge

.

____________________

A RGUED D EC EMBER 10

, 2014

— D ECIDED M AY 8, 2015

____________________

Before E ASTERBROOK , S YKES , and H AMILTON , Circuit Judges

.
H AMILTON , Circuit Judge

. This appeal presents substantive issues concerning the scope of the federal Rehabilitation Act’s coverage of private organizations (like the Girl Scouts) that receive federal funding. Before addressing the merits,2 No. 14

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though, we must address some recurring pro cedural issues involving Federal Rule of Civil Procedure 12(b)(6) dismissals and plaintiffs’ opportunities to amend complaints before e ntry of a final judgment of dismissal. In particular, we focus
on how the 2009 amendment to Federal Rule of Civil Proc edu re 15(a)(1) affects amendment practice in district courts.
Plaintiff Megan Runnion was active in a Girl Scout troop run by defendant Girl Scouts of Greater Chicago and Northwest Indiana, which is the largest regional Girl Scout organization in the United S tates. Megan is deaf. For several years she benefitted from sign language interpreters provi ded by the Girl Scouts that enabled her to participate fully in the troop’s activities. The Girl Scouts then stopped providing interpreters. When her mother complai ned, Megan’s entire troop was disbanded.
Megan alleges that the Girl Scouts violated the Rehabil itation Act by refusing to provide her with sign language se rvices and then by disbanding her troop because her mother complained. The district court ultimatel y dismissed the case under Rule 12(b)(6), finding that Megan had failed to allege sufficiently that the Girl Scouts are subject to the Rehabilit ation Act. Thinking amendment would be futile under its i nterpretation of the Rehabilitation Act, the district c ourt di smissed the case without leave to amend.
We reverse. We first set out the facts and procedural hi story of the case, including the substantive issue about the scope of the Rehabilitation Act’s coverage. We then turn to the procedural issues and seek to clarify the proper a pproach to motions for leave to amend complaints. We then
resolve the substantive issues under the Rehabilitation Act and conclude that the district court erred by dismissing theNo. 14

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entire case without giving plaintiff an opportunity t o amend her complaint. The district court corrected that error in part by vacating its judgment but then erred again by refusing to allow a proposed amended complaint that is more than su fficient to state a viable claim for relief.

I. Statutory and Procedural Background
Megan filed her original complaint under the Rehabilit ation Act in August 2012 when she was twelve years old. The Rehabilitation Act of 1973 uses the Congressional spending power to protect the rights of individuals with disabilities.
Section 5 04 of the Act provides: “No otherwise qualified i ndividual with a disability in the United States ... shall, solely by reason of her or his disability, be excluded from the pa rticipation in, be denied the benefits of, or be subjected to di scrimination under any program or activity receiving Federal financial assistance ... .” 29 U.S.C. § 794(a). A person who has been excluded, denied, or discriminated against may sue the recipient of federal funds to enforce her rights. 29 U.S.C. § 794a(a)(2) (incorporating “re medies, procedures, and rights” from Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq .).
Megan alleged that she has a hearing impairment, that she was otherwise qualified to participate in and to benefit from programs and activities offer ed by the Girl Scouts, and
that the defendant violated the anti

- discrimination prov isions of the Rehabilitation Act when it stopped providing her with sign language interpreters that she needs to partic ipate in group activities. The decision excluded her f rom pa rticipating in and denied her the benefits of Girl Scout pr ograms and services solely by reason of her disability. Megan also alleged that the Girl Scouts retaliated against her for r e-4 No. 14

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questing these services when they disbanded the troop in

response to her mother’s complaints.
This appeal does not present any question about whet her, if the Rehabilitation Act applies to the Girl Scouts, the o rganization must supply sign

- language interpretation. The disputed issue on the merits of this appeal is whethe r Megan alleged sufficiently that the activities from which she was excluded are covered under the Rehabilitation Act by virtue of the Girl Scouts receiving Federal funding. The act forbids discrimination on the basis of disability in any “program or

activ ity” receiving “Federal financial assistance.” 29 U.S.C. § 794(a). As relevant here, the Act defines “program or activ ity” as “all of the operations” of a private organization, 29 U.S.C. § 794(b), if either (i) the private organization “as a
whole” receive s federal financial assistance, § 794(b)(3)(A)(i), or (ii) the private organization receives some federal funding and “is principally engaged in the business of providing e ducation, health care, housing, social services, or parks and recreation,” § 794(b)( 3)(A)(ii). 1
In her initial complaint, Megan alleged without more that the Girl Scouts are “a recipient of federal financial assistance within the meaning of 29 U.S.C. § 794.” The Girl Scouts promptly moved to dismiss that complaint under Federal
Rules of Civil Procedure 12(b)(1) (lack of subject

- matter j urisdiction) and 12(b)(6) (failure to state a claim), arguing that Megan had not alleged sufficiently that they received federal financial assistance and were covered by the Rehabilitation

1 The Act also contains provisions covering schools systems and a wide range of other federal, state, and local government activities that receive federal financial assistance but those provisions are not relevant in this appeal. See 29 U.S.C. § 794(b)(1) & (b)(2).No. 14

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Act. All parties now agree (correctly) that whether the Girl
Scouts receive federal financial assistance has no effect on subject

- matter jurisdiction and that federal

- question jurisdi ction under 28 U.S.C. § 1331 is proper. See generally Arbaugh v. Y&H Corp ., 546 U.S. 500 ( 2006) (whether employer falls within the limited definition of an employer covered by Title VII of Civil Rights Act of 1964 is a merits

- related determin ation and does not concern subject

- matter jurisdiction). We need not worry further about subject

- matter jurisdiction.

In its first decision, issued October 26, 2012, the district court sided with the Girl Scouts in an opinion granting the motion to dismiss under Rule 12(b)(6). The district court found that Megan’s original complaint had not alleged with
suff icient factual detail that the Girl Scouts received federal financial assistance within the meaning of 29 U.S.C. § 794(b). Though Megan tried to argue that the defendant organiz ation received financial assistance as a whole or was princ ipally engaged in pr oviding education or social services, the district court concluded that she had failed to allege facts supporting either theory.
The conclusion that Megan needed to allege in her co mplaint facts supporting specific legal theories was problema tic, to say t he least. Even after Bell Atlantic Corp. v. Twombly

, 550 U.S. 544 (2007), and Ashcroft v. Iqbal , 556 U.S. 662 (2009), the Federal Rules of Civil Procedure do not require code pleading. Under the old pre

- Rules regime of code pleading, plaintiffs were requir ed to plead the elements of a cause of action along with facts supporting each element. 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Proc edure § 1216 (3d ed.) (describing code pleading as requiring “the pleader [to] set forth the ‘facts’ constituting a ‘cause of6 No. 14

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action’”). Under the modern regime of the Federal Rules, the complaint need contain only factual allegations that give the
defendant fair notice of the claim for relief and show the claim has “substantive plausibility.” Johnson v. City of Shelby

, 135 S. Ct. 346 (2014) (per curiam). As explained in Johnson : Petitioners stated simply, concisely, and direc tly events that, they alleged, entitled them to damages from the city. Having informed the city of the factual basis for their comp laint, they were required to do no more to stave off threshold dismissal for want of an adequate
statement of their claim.

135 S. Ct. at 347; accord, Bausch v. Stryker Corp ., 630 F.3d 546,

559

– 62 (7th Cir. 2010) (reversing dismissal where complaints gave f air notice of claims); Bartholet v Reishauer A.G. (Zurich)

, 953 F.2d 1073, 1078 (7th Cir. 1992) (Federal Rules of Civil Procedure do not require complaint to specify legal theory or statute that supports claim for relief). Plaintiff has not a rgued on appea l that her original complaint was sufficient, though, so we need not reach a conclusion on that question.
Normally, the plaintiff would have an opportunity to avoid any harm caused by a problematic dismissal by amending her complaint to try to add what the district court found was lacking. Here, however, the district court took an unusual step after finding that the original complaint failed to state a claim. Without affording plaintiff any opportunity to try to correct the deficiencies the court had identi fied, the district court entered final judgment in favor of defendant. 2

2 We must note the confusion about whether the district court e ntered a final judgment on October 26, 2012. The court’s opinion conclu d-No. 14

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In light of the presumption in favor of giving plaintiffs at least one opportunity to amend, see, e.g., Luevano v. Wal

Mart Stores, Inc. , 722 F.3d 1014, 1024 (7th Cir. 2013), denying

a plaintiff that opportunity carries a high risk of being deemed an abuse of discretion. The district court supported its decision with a finding that amendment would be futile, but that conclusion was based on a novel interpretation of
the Rehabilitation A ct and a preliminary view of the facts that could prove mistaken following amendment.

ed by saying only that “the Court grants Defendant’ s Motion to Di smiss.” Though the court considered whether amendment might be futile, it said nothing about dismissing the case, let alone dismissing it with prejudice or denying leave to amend the complaint. The same day the court docketed a separate piece of paper called “Judgment in a Civil Case,” but that document also failed to acknowledge the difference. It said: “It is hereby ordered and adjudged that the motion by defendant to dismiss is granted,” but said nothing about dismissal of the action or whether plaintiffs were denied all relief

. If that were all we had before us, those documents would not have amounted to a final judgment. See Paganis v. Blonstein , 3 F.3d 1067, 1070 (7th Cir. 1993) (noting that a judgment entry that simply grants a motion is too ambiguous to determine the dispos ition of the case). However, the court’s electronic docket entry for the “Judgment” includes a notation that is not on the judgment itself: “Case Terminated.” The discrepancy between the electronic docket and the docketed judgment is unfortunate,
but the “ Case Terminated” notation is a sufficiently clear indication that
the district court believed it was finished with the case , at least where no party was prejudiced by the inconsistency . The parties reasonably co ncluded that final judgment of dismissal had been entered. See Luevano v.
Wal

- Mart Stores, Inc. , 722 F.3d 1014, 1020

– 21 (7th Cir. 2013); Furnace v. Board of Trustees of Southern Illinois Univ. , 218 F.3d 666, 669

– 70 (7th Cir. 2000); Principal Mutual Life Ins. Co. v. Cincinnati TV 64 Ltd. Partnership

, 845 F.2d 674, 676 (7th Cir. 1988).8 No. 14

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Faced with a judgment entered without an opportunity to amend, Megan filed a motion to alter the judgment under Federal Rule of Civil Procedure 59(e) and for leave to fil e an amended complaint under Rule 15(a)(2). Megan attached a proposed amended complaint that set forth more specific allegations about the Girl Scouts’ funding and why she b elieved the defendant both had received funding as a whole and is an organization p rimarily engaged in education and social services. The proposed amended complaint cited pu blicly available information, including public statements by the Girl Scouts, about the organization’s funding and pr ogramming.

On March 12, 2013, the district court granted the motion and vacated the judgment of October 26, 2012. There was a catch, though. The court said Megan could try to establish that defendant was a private organization receiving financial assistance “as a whole,” but the court refused to allow h er to pursue the theory that the defendant was principally e ngaged in education or social services. The district court gave Megan thirty days to file a new amended complaint elab orating on only the “as a whole” theory for finding federal
financial assistan ce. Megan filed such an amended complaint on April 11, 2013. The Girl Scouts then filed a new motion to dismiss, which the district court granted on March 7, 2014. This time, the court’s judgment was clear: it said the court was indeed entering a final ju dgment in favor of defendant and against plaintiff. Megan then filed this appeal . S he no longer pu rsues the theory that the Girl Scouts receive federal financial assistance “as a whole.” She stakes her appeal instead on the argument that the district court erred by refusing to allowNo. 14

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her to pursue the theory that the Girl Scouts are “principally engaged in the business of providing education, health care, ... social services, or parks and recreation” as alleged in the proposed amended complaint submitted with her Rule 59(e)

motion.

II. Procedural Issues
Before turning to the merits, we must sort out some pr ocedural issues posed by the district court dismissing the original complaint and entering judgment without granting leave to amend the complaint. First, we cons ider the general approach district courts must take in reviewing motions for leave to amend. Second, we address how review of such m otions is affected by the district court’s entry of judgment. F inally, we examine the impact of the 2009 amendment to Rule

1 5(a)(1) on both pre

- and post

- judgment motions for leave to
amend.

A. General Rule

— Liberal Approach to Amending Pleadings
When the district court granted the motion to dismiss the original complaint, Megan no longer had a right to amend her complaint as a matter of course. See Fed. R. Civ. P. 15(a)(1) (right to amend expires 21 days after service of d efendant’s motion to dismiss under Rule 12(b)). Ordinarily, however, a plaintiff whose original complaint has been di smissed under Rule 12(b)(6) should be giv en at least one o pportunity to try to amend her complaint before the entire a ction is dismissed. We have said this repeatedly. E.g., Luevano
v. Wal

- Mart Stores, Inc. , 722 F.3d at 1024; Bausch v. Stryker Corp. , 630 F.3d at 562 ; Foster v DeLuca , 545 F.3d 582 , 584 (7th Cir. 2008); Barry Aviation Inc. v. Land O’Lakes Municipal Ai rport Comm’n , 377 F.3d 682, 687 & n.3 (7th Cir. 2004) (collec t-10 No. 14

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ing cases). Rule 15(a)(2) governs when court approval is needed to amend a pleading: “The court should freely give leave [t o amend] when justice so requires.” See generally
Foman v. Davis , 371 U.S. 178, 182 (1962) (reversing denial of leave to amend by citing to Rule 15(a)(2)’s mandate to freely give leave to amend and stating “this mandate is to be hee ded”).

When a district c ourt denies a plaintiff such an oppo rtunity, its decision will be reviewed rigorously on appeal. In Barry Aviation , we said that giving leave to amend freely is “especially advisable when such permission is sought after the dismissal of the first complaint . Unless it is certain from the face of the complaint that any amendment would be f utile or otherwise unwarranted, the district court should grant leave to amend after granting a motion to dismiss.” 377 F.3d at 687 (emphasis added). We also endorsed the re asons for this practice given by Professors Wright and Miller:
The federal rule policy of deciding cases on the basis of the substantive rights involved rather than on technicalities requires that plaintiff be given every opportunity to cure a formal defect in his pleading. This is true even though the court doubts that plaintiff will be able to ove rcome the defects in his initial pleading. Amendment should be refused only if it a ppears to a certainty that plaintiff cannot state a claim. The better pra ctice is to allow at least one amendment regardless of how unpromi sing the initial pleading appears because except in unusual circumstances it is unlikely that the court will be able to determine conclusively onNo. 14

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the face of a defective pleading whether pla i ntiff actually can state a claim.

Id . at 687, quoting 5A Charles Alan Wright & Arthur R. Mi ller, Federal Practice and Procedure § 1357 (2d ed. 1990).

Where it is clear that the defect cannot be corrected so that amendment is futile, it might do no harm to deny leave to amend and to enter an immediate final judgment, just as when an amendment has been unduly delayed or would cause undue prejudice to other parties. See, e.g., Airborne Beepers & Video, Inc. v. AT & T Mobility LLC , 499 F.3d 663, 666 (7th Cir. 2007); James Cape & Sons Co. v. PCC Construction Co

., 453 F.3d 396, 400

– 01 (7th Cir. 2006); see also Foman , 371 U.S. at 182 (leave to amend may be denied based on futility, u ndue delay, undue prejudice, or bad faith). Such cas es of clear futility at the outset of a case are rare, though, and this is not
one of them.
The liberal standard for amending under Rule 15(a)(2) is especially important where the law is uncertain. In the wake
of Twombly and Iqbal , there remain considerabl e uncertainty and variation among the lower courts as to just how d emanding pleading standards have become. For a good recent illustration, see the majority and dissenting opinions in McCleary

- Evans v. Maryland Dep’t of Transportation , 780 F.3d 582 (4th Ci r. 2015), which disagree about how to reconcile
Swierkiewicz v. Sorema N.A. , 534 U.S. 506 (2002), with Twombly
and Iqbal . In the face of that uncertainty, applying the liberal standard for amending pleadings, especially in the early stages of a lawsuit, is the best way to ensure that cases will be decided justly and on their merits. See Foman , 371 U.S. at

181

– 82, citing Fed. R. Civ. P. 1 (Federal Rules of Civil Proc edure “should be construed and administered to secure the12 No. 14

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just, speedy, and inexpensive deter mination of every action and proceeding.”).

B. Amendment Following Entry of Judgment Despite the liberal standard for amending pleadings, the Girl Scouts argue that our review of the district court’s dec ision to bar Megan from pursuing the “principally en gaged” theory of Rehabilitation Act coverage should be more defe rential because it was made as part of a decision on a Rule 59(e) motion to modify a final judgment. We reject this a rgument, which contends in essence that one error by the di strict court (pr ematurely entering a final judgment on the b asis of futility) should insulate another error (erroneously denying leave to amend on the basis of futility) from proper appellate review.

It is true that when a district court has entered a final judgment of d ismissal, the plaintiff cannot amend under Rule 15(a) unless the judgment is modified, either by the di strict court under Rule 59(e) or 60(b), or on appeal. Camp v. Gregory , 67 F.3d 1286, 1289 (7th Cir. 1995), citing Car Carriers,
Inc. v. Ford Motor Co. , 7 45 F.2d 1101, 1111 (7th Cir. 1984); see also Fed. R. Civ. P. 59(e) (motion to alter or amend jud gment); Fed. R. Civ. P. 60(b) (motion for relief from final judgment). It is also true that Rules 59(e) and 60(b) provide “extraordinary remedies reserved for t he exceptional case.”
Foster , 545 F.3d at 584, citing Dickerson v. Board of Educ. of Ford Heights , 32 F.3d 1114, 1116 (7th Cir. 1994); see also 6 Charles Alan Wright & Arthur R. Miller, Federal Practice and Proc edure § 1489 (3d ed.) (noting importance of f inality of jud gments and collecting cases noting same).

Because Rules 59(e) and 60(b) are reserved for extraord inary cases, the Girl Scouts urge us to apply a more deman d-No. 14

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ing standard to post

- judgment motions to amend than we do to motions to amend filed pr ior to the entry of judgment. But the extraordinary nature of these remedies does not mean that a different standard applies

— at least when judgment
was entered at the same time the case was first dismissed.
When the district court has taken the unusual ste p of ente ring judgment at the same time it dismisses the complaint, the court need not find other extraordinary circumstances and must still apply the liberal standard for amending pleadings under Rule 15(a)(2). See Foster , 545 F.3d at 584

– 85 (noting that district courts “routinely do not terminate a case at the same time that they grant a defendant’s motion to dismiss”); Bausch v. Stryker Corp. , 630 F.3d 546, 562 (7th Cir. 2010).
Lest there be any doubt about the soundness of applying
the liberal amendment policy of Rule 15(a)(2) to post

- motion judgment motions for relief, the Supreme Court’s decision in
Foman v. Davis , 371 U.S. 178 (1962), itself illustrates the point. The district court had granted a motion to dismiss a contract
claim based on the statute of frauds and immediately e ntered judgment dismissing the case. Id. at 179. Plaintiff sought post

- judgment relief that was treated as a Rule 59(e) motion, and because of some confusion about the timing of a notice of appeal, the appeal was dismissed. Foma n v. Davis

, 292 F.2d 85, 87 (1st Cir. 1961). The Supreme Court reversed, and it applied the liberal amendment policy of Rule 15(a)(2) to the post

- judgment motion for relief. Foman , 371 U.S. at

182.
Consistent with that approach, we have repeatedly a pplied that same liberal policy of amendment when reviewing district court decisions on post

- judgment motions for leave14 No. 14

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to amend. Bausch , 630 F.3d at 562; Foster , 545 F.3d at 584

– 85; Camp , 67 F.3d at 1290. We have reversed district court dec isions that provide n o explanation for why they denied
amendment. See Foster , 545 F.3d at 584

– 85 (vacating denial of post

- judgment relief made without explanation); accord,
Foman , 371 U.S. at 182 (“[T]he grant or denial of an oppo rtunity to amend is within the discretion of th e District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discr etion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.”). Similarly, we have a ffirmed a decision to grant post

- judgment leave to amend
when there was no reason the amendment should otherwise
have been denied. See Camp , 67 F.3d at 1289

– 90. Finally, we have reversed a decision denying post

- judgment amen dment when the reason giv en by the district court for denying
the amendment

— futility of amendment

— was not supported by the record. See Bausch , 630 F.3d at 562.
In other words, a district court cannot nullify the liberal right to amend under Rule 15(a)(2) by entering judgment

prem aturely at the same time it dismisses the complaint that would be amended. As with pre

- judgment motions for leave to amend, the district court must still provide some reason

— futility, undue delay, undue prejudice, or bad faith

— for denying leave to amend, a nd we will review that decision
under the same standard we would otherwise review dec isions on Rule 15(a)(2) motions for leave to amend.

C. Effect of the 2009 Amendment
The Girl Scouts also argue that the district court was right to reject Megan’s “princip ally engaged” theory because the 2009 amendment to Rule 15(a)(1) requires district courtsNo. 14

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reviewing motions for leave to amend under Rule 15(a)(2) to apply a more demanding standard than we have previously applied. The 2009 amendment imposed a new and shor ter deadline for a plaintiff to exercise her right to amend her complaint as a matter of course, so the Girl Scouts suggest that we should similarly restrict plaintiff’s ability to amend
with leave of the court.
Before 2009, a plaintiff who lost a Rule 12 (b)(6) motion challenging an original complaint had an absolute right to file an amended complaint. The rule then provided: “A party may amend its pleading once as a matter of course: ... before being served with a responsive pleading ... .” A motion u nder Rul e 12(b)(6) is not a “pleading,” so the plaintiff had a right to amend “as a matter of course” after the motion was granted. E.g., Camp , 67 F.3d at 1289.
In 2009, Rule 15(a)(1) was amended to limit this right to
amend as a matter of course:
A party may amen d its pleading once as a ma tter of course within:
(A) 21 days after serving it, or
(B) if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whiche ver is earlier.
The advisory committee notes explain that the 2009 amen dment

will force the pleader to consider carefully and promptly the wisdom of amending to meet the16 No. 14

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arguments in the motion. A responsive amendment may avoid the need to decide the
motion or reduce the number of issues to be decided, and will expedite determination o f i ssues that otherwise might be raised seriatim.
Based on the 2009 amendment, the Girl Scouts argue that if Megan thought she might need to amend her complaint in light of the motion to dismiss, she should have done so wit hin 21 days after she received th at motion to dismiss pointing out deficiencies in her complaint. Her decision not to amend, according to the Girl Scouts, exposed her to the risk that the district court would grant the motion to dismiss and enter judgment dismissing the entire case, which the Girl Scouts argue is reason enough to find that the district court did not abuse its discretion in denying leave to amend.
We disagree. The 2009 amendment did not impose on plaintiff’s choice a pleading regime of “one

- and

- done.” Adopting that regime would attribute to the 2009 amen dment of Rule 15(a)(1) a far greater coercive power than is e vident in the text of the amended rule or the advisory co mmittee’s explanation. The only coercive effect evident in the text is that 21 days after service of a Rul e 12 motion, a plai ntiff’s right to amend changes from one guaranteed under Rule 15(a)(1) to one governed by the liberal standard under Rule 15(a)(2). The loss of a guaranteed right to amend as a matter of course can be important, and the prospect of that loss may help persuade some plaintiffs confronted with a Rule 12 motion to respond by amending rather than spen ding time and money arguing about easily corrected deficie ncies, whether real or imagined. The advisory committeeNo. 14

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hoped that such a response migh t resolve a motion to di smiss without court action.
But a plaintiff who receives a Rule 12(b)(6) motion and who has good reason to think the complaint is sufficient may also choose to stand on the complaint and insist on a dec ision without losing the benef it of the well

- established liberal
standard for amendment with leave of court under Rule 15(a)(2). That subsection was not amended and still applies after the right to amend as a matter of course has lapsed. The
need for a liberal amendment standard remain s in the face of uncertain pleading standards after Twombly and Iqbal

. 3

III. Merits of the Proposed Amendment
This excursion through the procedural history brings us to the question whether the district court erred by refusing to consider the “principally engaged” theory of Rehabilit ation Act coverage alleged in Megan’s proposed amended complaint. Under that theory, all of the Girl Scouts’ oper ations would be subject to the Act if the organization “is pri ncipally engaged in the business of providing educati on, health care, housing, social services, or parks and recre ation.” 29 U.S.C. § 794(b)(3)(A)(ii). The sole reason the district court gave for denying amendment was that under its inte rpretation of the statute, any amendment asserting the “pri ncipally enga ged” theory would be futile. In the district court’s view, the complaint could never be amended to state a valid claim because the Rehabilitation Act excludes private

3 A district court does not have the discretion to remove the liberal amendment standard by standing order or other mechanisms requiring plaintiffs to propose amendments before the court rules on a Rule 12(b)(6) motion on pain of forfeiture of the right to amend.18 No. 14

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membership organizations like the Girl Scouts from its reach even if they might otherwise be principally engaged in providing one of the services designated in the statute.
Despite the Girl Scouts’ argument to the contrary, none of the other grounds for denying leave to amend apply here. Plaintiffs did not fail to take advantage of several op portun ities to amend. See, e.g., Agnew v. Nat’l Collegiate Athletic
Ass’n , 683 F.3d 328, 347 (7th Cir. 2012) (affirming denial of fourth opportunity to amend). Nor is there any evidence that Megan unduly delayed amending the complaint or acted in
bad faith . Once the district court told Megan that her co mplaint was deficient and entered judgment, she filed her Rule 59(e) motion and proposed amended complaint within 28 days. Upon consideration of that motion, the district court made no finding of delay or bad faith and was willing to a llow Megan to amend her complaint on the other theory in her motion seeking leave to amend

— that the Girl Scouts r eceived federal funding “as a whole.” The district court trea ted the two theories differently only because it though t one was futile while the other was not.
In this case there is a further reason for concluding that Megan did not unduly delay by waiting to amend her co mplaint until after it was dismissed by the district court: there is uncertainty as to whether the Re habilitation Act covers private organizations like the Girl Scouts. The relevant stat utory language has been the subject of relatively few dec isions, so this is not a case where a plaintiff obtusely failed to comply with well

- established legal standards. A ccordingly, Megan could reasonably have expected that the allegations in her original complaint would survive a motion to dismiss. Moreover, given how difficult it might be to discover all ofNo. 14

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the Girl Scouts’ activities, the disputed issue is one that may require considerable time, effort, and money to litigate. It was reasonable for her to avoid that expense until she was
sure that she failed to survive the motion to dismiss. Cf. Bausch v. Stryker Corp. , 630 F.3d at 560

– 61 (recognizing that plaintiffs’ pleading burden is “commensurate with the amount of information available to them”) (citation and i nternal quotation marks omitted).
That leaves us with a denial based on futility. Generally,
denials of leave to amend are reviewed for abuse of discr etion. Gandhi v. Sitara Capital Management, LLC , 721 F.3d 865, 868 (7th Cir. 2013). But when the basis for denial is futility, we apply the legal sufficiency standard of Rule 12(b)(6) to determine whether the proposed amended complaint fails to state a claim. See, e.g., General Electric Capital Corp. v. Lease Resolution Corp. , 128 F.3d 1074, 1085 (7th Cir. 1997). Accor dingly, our review for abuse of discretion of futility

- based d enials includes de novo review of the legal basi s for the futility.
See Gandhi , 721 F.3d at 868

– 69; accord, Ervin v. OS Restaurant Servs., Inc. , 632 F.3d 971, 976 (7th Cir. 2011) (“If ... the district court applies an incorrect legal rule as part of its decision, then the framework within which it has app lied its discr etion is flawed, and the decision must be set aside as an abuse.”).
We conclude that the district court erred by finding that amendment would be futile. The proposed amended co mplaint here did not fail to state a claim upon which relief
could be granted. Neither the text nor the legislative history of the Rehabilitation Act suggests that Megan’s claim is barred as a matter of law because organizations like the Girl Scouts are categorically exempt from the Rehabilitation Act.20 No. 14

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Absent that catego rical bar, Megan’s proposed amended complaint is more than sufficient to state a claim upon which relief can be granted.

A. The Rehabilitation Act and Private Membership Organiz ations
We turn first to whether the district court correctly inte rpreted § 794(b) (3)(A) as not applying to organizations like the Girl Scouts. In finding that private membership organ izations like the Girl Scouts could never be subject to the R ehabilitation Act, the district court found in the statute a r equirement that the private org anization provide a public service and be open to the public. This interpretation cannot be squared with the text of § 794(b)(3)(A). As written, the provision applies broadly to all sorts of private organizations so long as they receive federal funding and are “principally engaged” in providing one of the services enumerated in the statute. Since § 794(b)(3)(A)’s very purpose is to set out when private organizations are subject to the Rehabilitation Act, it is reasonable to assume that Congress would have b een more explicit if it had wanted to exempt private membership organizations.
For example, Congress might have expressly exempted private membership organizations or private organizations not open to the public, as it has done in other similar sta tutes. See, e.g., 42 U.S.C. § 2000a(e) (exempting from Title II of Civil Rights Act of 1964 “a private club or other esta blishment not in fact open to the public”); 42 U.S.C. § 2000e(b) (excluding “bona fide private membership club” from def inition of employer su bject to Title VII); 42 U.S.C. § 12111(5)(B)(ii) (excluding “bona fide private membershipNo. 14

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club” from definition of employer subject to A mericans with
Disabilities Act ).
No such express exemptions are found in the text of the
Rehabilitation Act. To find a broad exemption for private membership organizations, we would have to read into the statute an implied requirement that the private organization be open to the public. The district court did exactly that, supporting its categorical exemption with referenc e to case law interpreting similar anti

- discrimination statutes and with legislative history of the Civil Rights Restoration Act of 1987, which amended the Rehabilitation Act. The fact that
other anti

- discrimination statutes exempt private membe rship organ izations expressly, see Welsh v. Boy Scouts of Amer ica , 993 F.2d 1267, 1276

– 77 (7th Cir. 1993), does not support but instead undermines the argument for an implied exem ption here. We conclude that the Rehabilitation Act covers private organizations not ope n to the public if they receive federal financial assistance within the scope of § 794.
Because the text of the statute can apply so clearly to all private organizations that receive federal financial assi stance, there is no need to resort to legislative h istory. See EEOC v. Chicago Club , 86 F.3d 1423, 1434 (7th Cir. 1996). In any event, the nuggets of legislative history cited by the di strict court do not support a categorical exemption for private membership organizations or organizations not open to the public. In the district court’s reading of the legislative hist ory, the Rehabilitation Act should apply only to private ent ities that “provide[] a public service,” S. Rep. No. 100

- 64, at 4, 20 (1988), or “perform governmental functions,” id . at 20. In
the court’s view, a private membership organization cannot be deemed to provide a “public service” because it provides22 No. 14

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services only to its members and is not generally open to the public.
When read in context, however, the passages from the legislative histo ry merely explain why the provision was limited to covering organizations providing the enumerated services. See S. Rep. No. 100

- 64, at 4 (“ i f the corporation pr ovides a public service, such as social services, education, or housing, the entire corporation is covered”); id . at 18 (e xplaining that the bill under consideration would cover “pr ivate entities ... that provide services that are traditionally regarded as within the public sector, i.e., those enumerated in part (3)(A)(ii) of the definition of ‘progra m or activity’”);
id . at 20 (“Even private corporations are covered in their e ntirety ... if they perform governmental functions, i.e., are ‘principally engaged in the business of providing education, housing, social services, or parks and recreation.’”). To be sure, the services enumerated in the statute are often provi ded by governmental or public service entities. But private corporations choosing to provide these services

— whether to their own members (or tuition

- paying students) or to the public at large

— are providing a “public service” in the way Congress envisioned

. 4

4 Under the Girl Scouts’ narrower reading, it is difficult to explain the presence of 29 U.S.C. § 794(b)(2) , which provides that traditional pr ivate and public school systems are subject to the Rehabilitation Act. See 34 C.F.R. § 104.39; 65 Fed. Reg. 68050, 68051 (Nov. 13, 2000) (explaining application of Act to private schools). Thus, for § 794(b)(3)(A)(ii) to have any substance for education services, it must apply to private organiz ations providing education ser vices outside of the traditional school co ntext.No. 14

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Even so, private membership organizations could still be exempt from the statute if they were thought to be, as a cat egorical matter, principally engaged in businesses other than providing the services enumerated in the statute. Cf. S. Rep.
No. 100

- 64, at 18 (“Because they are principally religious o rganizations, institutions such as churches, dioceses and sy nagogues would not be considered to be ‘principally engaged in the business of provi ding education, health care, housing, social services or parks or recreation,’ even though they may conduct a number of programs in these areas.”). But nothing about the nature of private membership organizations makes it impossible for them to be engaged principally in providing the services found in the statute.
The primary activity of at least some private membership organizations that receive federal financial assistance is to engage in programs that fall within the statute. Others may not engage in any such programs, and some might engage in providing those sorts of services on the side. Whatever the case may be, the statute provides the standard

— “principally engaged in the business of providing education, health care, housing, social services, or parks and recreation”

— that can be applied on a case

- by

- case basis to private membership organizations to determine if they are covered by the Reh abilitation Act. Cf. Doe v. Salvation Army in U.S. , 685 F.3d 564, 571 (6th Cir. 2012) (declining to adopt a categori cal rule for religious organizations because the legislative history “says nothing about a religious organization whose participation in such programs is its primary activity, or that churches may never be subject to liability under 29 U.S.C. § 794(a) if

t he vast majority of their activities are the provision of social services”).24 No. 14

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B. “Principally Engaged” Coverage Under 29 U.S.C. § 794(b)(3)(A)(ii)
Since no categorical exemption applies, we next evaluate whether plaintiff’s proposed amendment was otherwise f utile. We apply the Rule 12(b)(6) standard for evaluating the legal sufficiency of a complaint. General Electric Capital , 128 F.3d at 1085 (“The opportunity to amend a complaint is futile if ‘the complaint, as amended, would fail to state a claim u pon which relief could be granted.’”) (citation omitted). That means we must accept as true all factual allegations in the complaint. Carlson v. CSX Transportation, Inc. , 758 F.3d 819, 826 (7th Cir. 2014). A claim for relief must be plausible rather than merely con ceivable or speculative. See Ashcroft v. Iqbal

, 556 U.S. 662, 678 (2009); Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 556 (2007); Carlson , 758 F.3d at 826

– 27. But all this means is that the plaintiff must “include ‘enough details about the subject

- matter of the case to present a story that holds together.’” Carlson , 758 F.3d at 827, quoting Swanson v. Citibank, N.A. , 614 F.3d 400, 404

– 05 (7th Cir. 2010). At this pleading stage, we do not ask whether these things actually happened; instead, “the proper que stion to ask is still ‘ could these things have happened.’” Id., quoting Swanson , 614 F.3d

at 404

– 05.
Turning to the requirements for establishing that the R ehabilitation Act covers a private organization under § 794(b)(3)(A)(ii), we know that a plaintiff m ust eventually prove that the private organization is “principally engaged in the business of providing education, health care, housing, social services, or parks and recreation.” The statute does not define what these individual businesses entail or expla inNo. 14

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what it means to be “principally engaged” in them. See Sa lvation Army , 685 F.3d at 568.

Because the list of activities in § 794(b)(3)(A)(ii) is written in the disjunctive, Megan must eventually show that d efendant engages in any one of these businesses . Megan f ocuses on the education and social services provided by the
Girl Scouts. 5 In terms of what businesses might qualify as providing education, the statute envisions that education is
not limited to the sort of instruction received in a traditional

sc hool system. As noted above, formal educational systems are covered by a separate provision, § 794(b)(2). Section 794(b)(3)(A)(ii), then, covers the sort of education offered by
stand

- alone schools or by other private organizations see king to train and dev elop individuals. As to what constitutes a social service, it is “an activity designed to promote social
well

- being” such as “organized philanthropic assistance of the sick, destitute, or unfortunate.” Salvation Army , 685 F.3d at 570, quoting Merriam Webst er’s Collegiate Dictionary 1115 (10th Ed. 1995). 6

5 Though she focuses on education and social services, plaintiff also points to some Girl Scout projects that involve providing health care and parks and recreation.

6 The district court adopted a definition of social service that r equired the service to be performed by trained personnel. Though some definitions of social services may hint at the need for trained personnel,

we see no textual basis for this limit, nor ca n we see why Congress
would have impose d such a requirement here. E ven if it had, nothing in the proposed amended complaint suggests that the Girl Scouts’ volu nteer efforts are carried out without supervision by trained personnel.
While the district court speculated that troop leaders are generally pa rent volunteers, it would be just as easy to infer that those volunteers26 No. 14

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What it means to be “principally engaged” in providing these services poses a distinct question. “Principally e ngaged” has been interpreted in other contexts to mean “the primary activities of a business, e xcluding only incidental
activities.” See Doe , 685 F.3d at 571. If any one of the desi gnated activities is principal, that would be sufficient. Contr ary to the Girl Scouts’ suggestion, however, a private organ ization would also fall within the statute if i t engages in a mix of the statutorily enumerated services, e.g., if it provides s ocial services and education services and those services in the aggregate make up the primary activities of the private o rganization. There is no reason to think Congress was laying out mutually exclusive conditions. R eading the statute this

way also ensures that organizations that focus on providing more than one of the enumerated public services without committing to just one are still covered. 7 This reading also
renders unnecessary the difficult task of classifying hybrid activities that provide, for example, both education and s ocial services. At bottom, then, the relevant inquiry is whether

have received at least some training from the organization. Either way, this is the sort of dispute that cannot be resolved on the pleadi ngs.

7 A simple example inspired by the federal government’s amicus
brief illustrates why this is the correct reading . Suppose a private organ ization devotes 35% of its resources to education, 25% to social services and 40% to selling food. If each enumera ted activity were considered in isolation, the organization might be deemed principally engaged in sel ling food even though 60% of its resources were spent providing the se rvices enumerated in the statute. Now suppose a second organization
devotes 51 % of i ts resources to education, 9 % to social services, and 40% to selling food. The second organization would certainly be covered. We
find it hard to believe that Congress intended the statute to cover the
second organization but not the first. Both are princi pally engaged in providing the enumerated services.No. 14

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providing the statutorily enumerated services

— the public services Congress speci fied

— make up the primary activities of the organization.
Megan’s proposed amended complaint alleges plausibly that the Girl Scouts are a private organization principally engaged in the business of pr oviding the services found in § 794(b)(3)(A)(ii). Beyond merely alleging that the Girl Scouts received federal funds and were engaged in some of those activities as their principal business activities, which would have been sufficient for pleading purposes, the pr oposed amended complaint went much further. Megan ’s complaint cites numerous instances in which the defendant has characterized itself and its programs as educational. The constitution of the national organization

— which plaintiff alleges the Chicago

- area defendant must follow

— provides that “Girl Scouting is a nonformal, experiential, and cooper ative education program that promotes girls’ personal growth and leadership development.” Plaintiff also cites a 2011 f inancial statement saying that defendant’s organization is “an

out

- of

- school educational program designed to help girls put into practice the fundamental principles of the Girl Scout
movement.” 8

8 It does not pose a problem for plaintiff that she attached these e xhibits to her complaint. In evaluating the sufficiency of a complaint, “the court may also consider documents attached to the pleading without converting the motion into one for summary judgment.” Wigod v. Wells Fargo Bank, N.A. , 673 F.3d 547, 556 (7th Cir. 2012), citing Fed. R. Civ. P. 10(c). Fur ther, and contrary to the district court’s sugges tion in its opi nion dismissing the first complaint, plaintiff also would have been permi tted to use these exhibits for the first time in opposition to a Rule 12(b)(6)
motion in the district court. Geinosky v. City of Chicago , 675 F.3d 743, 745 n.1 (7th Cir . 2012) (“a party opposing a Rule 12(b)(6) motion may submit28 No. 14

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Going even further, the proposed amended complaint identifies many examples of programs the organization o ffers that indicate the organization is principally engaged in providing the services enumerated in the statute. Many of these programs are plausibly classified as providing educ ation, health care, social services, or parks and recreation. The
defendant even classifies the sale of cookies

— perhap s the Girl Scouts’ most publicly visible program

— as an integral part of achieving its overall educational goals. Taken all t ogether, the allegations in the complaint exceed what is nee ded to allege plausibly that defendant is principally engaged
in the bus iness of providing the services enumerated in the statute. It would not have been futile to permit Megan to amend, and the district court’s contrary conclusion was a l egal error that caused it to abuse its discretion in denying
leave to amend.

Lest we be m isunderstood, a plaintiff need not provide all the level of detail provided by Megan’s proposed amen ded complaint to survive a motion to dismiss. As detailed as the proposed amended complaint is, we recognize that plaintiff has focused on the portion of de fendant’s activities and statements that are publicly available. Discovery may
reveal additional activities and other evidence that will i nform how best to classify defendant under the statute. That is why we have explained that plaintiffs’ “pleading burde n should be commensurate with the amount of information
available to them.” See Bausch , 630 F.3d at 561 (internal qu omaterials outside the pleadings to illustrate the facts the party expects to be able to prove”).No. 14

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tation marks omitted), quoting In re Medtronic, Inc. Sprint F idelis Leads Products Liability Litig. , 623 F.3d 1200, 1212 (8th Cir. 2010) (M elloy, J., dissenting). We cannot expect, nor does Federal Rule of Civil Procedure 8 require, a plaintiff to plead information she could not access without discovery.
The district court thus erred first when it entered jud gment on the original complaint an d again when it rejected as futile the “principally engaged” theory of Rehabilitation Act coverage in plaintiff’s proposed amended complaint. The final judgment of the district court is REVERSED and the case is REMANDED for further proceedings consistent w ith this opinion.