Civil Pleading Requirements After Bell Atlantic Corporation v. Twombly and Ashcroft v. Iqbal
Released: 2010-07-01T00:00:00

Introduction

To initiate a civil suit in federal court, a litigant submits a complaint "pleading" entitlement to legal relief. In a 2007 decision, Bell Atlantic Corp. v. Twombly , and more forcefully in a 2009 decision, Ashcroft v. Iqbal , the U.S. Supreme Court heightened the standard for evaluating such pleadings. Although the extent of its impact has yet to be determined, the change appears to reduce the likelihood that plaintiffs' claims will survive the pleadings stage in federal courts, particularly in cases in which plaintiffs plan to rely on evidence discovered during litigation to bolster their claims. Bills pending in the House and Senate Judiciary Committees, the Open Access to Courts Act of 2009 ( H.R. 4115 ) and the Notice Pleading Restoration Act of 2009 ( S. 1504 ), aim to reverse the effects of the rulings. This report discusses the context and implications of the Twombly and Iqbal decisions and the pending bills.

Pleading Rules in Civil Cases

Standards and procedures governing complaints in federal civil suits are governed by the Federal Rules of Civil Procedure. Although the Rules are promulgated by the U.S. Supreme Court pursuant to the Rules Enabling Act, Congress has ultimate authority over amendment of the Rules.

Under Federal Rule of Civil Procedure 8(a)(2), a complaint in a civil case must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." A related rule, Rule 12(b)(6), enables a defendant to bring a motion to dismiss a plaintiff's claim for failure to satisfy the 8(a)(2) requirement—that is, failure to state a claim upon which relief can be granted. If a court grants a defendant's Rule 12(b)(6) motion, the case will be dismissed and thus will not proceed. If a complaint survives the Rule 12(b)(6) motion to dismiss, then the process of discovery and pre-trial motions begin. During the discovery phase, litigants may petition the court for subpoenas to access evidence from the other parties.

With some exceptions, federal courts historically interpreted the Rule 8(a)(2) pleading requirement broadly and the corresponding Rule 12(b)(b) standard narrowly, meaning that complaints had to satisfy a relatively low bar in order to survive a motion to dismiss. The prevailing approach was articulated by the Supreme Court in Conley v. Gibson , a 1957 case: "[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."

The Conley "no set of facts" approach is described as "notice pleading" or the "access principle." It requires that a complaint "give the defendant fair notice of what the ... claim is and the grounds upon which it rests" rather than requiring that allegations be fully developed at the pleading stage. It is contrasted with a "heightened pleading standard," under which a complaint must allege a minimum number or type of facts. In practice, the notice pleading approach meant that civil complaints were sufficient as long as they asserted a claim which, if proved, could lead to a winning legal judgment. No evaluation was made regarding whether the allegations were likely to be proven in the case.

After the enactment of the Federal Rules of Civil Procedure in 1938, Rule 8(a)(2) and Rule 12(b)(6) were interpreted as having adopted a notice pleading approach to remove barriers to civil litigation in federal courts. The Supreme Court summarized the notice pleading rationale in a case decided shortly after the enactment of the Rules: "Pleadings are intended to serve as a means of arriving at fair and just settlements of controversies between litigants" and thus "should not raise barriers which prevent the achievement of that end." In Conley , the Court likewise explained that "[t]he Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits."

Although some lower federal courts departed from the notice pleading approach during the past few decades, the Supreme Court reaffirmed the approach in Leatherman v. Tarrant County Narcotics Intelligence & Coordination , a 1993 case, and again in Swierkiewicz v. Sorema N.A. , a 2002 case. In Swierkiewicz , a unanimous Court declined to apply a heightened pleading standard to an employment discrimination suit. It stated that such a heightened pleading standard would be "a result that 'must be obtained by the process of amending the Federal Rules, and not by judicial interpretation.'" Adhering to the Conley interpretation of Rule 8(a)(2) as having no "regard to whether a claim will succeed on the merits," the Court stated that "'[i]ndeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test."

As mentioned, despite the Leatherman and Swierkiewicz rulings, some lower court opinions scaled back the "notice pleading" approach in recent decades, particularly in complex areas such as bankruptcy, antitrust, and civil rights. The shift has been described as a response to concerns regarding the cost and delay of litigation resulting from an increased number and complexity of federal civil cases. By carving out exceptions for allegations characterized as "mere conclusions" or "bare bones," and by declaring in some instances that the "no set of facts" language from Conley "has never been taken literally," lower courts arguably set the stage for the changes made in Twombly and Iqbal .

Bell Atlantic Corporation v. Twombly

In Bell Atlantic Cor p oration . v. Twombly , a 7-2 decision, the Supreme Court appeared to depart from the notice pleading approach for the first time in a decision that arguably applied to all federal civil cases. The plaintiffs in Twombly were a group of television and Internet subscribers. Filing a complaint in the U.S. District Court for the Southern District of New York, they sued four "Incumbent Local Exchange Carriers," also known as "Baby Bells," alleging that the defendants had engaged in a conspiracy in violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. That section prohibits "a contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce[.]" To support their conspiracy allegation, the plaintiffs principally alleged facts intended to show that the defendants had engaged in "parallel conduct," that is, adjusted prices and taken other actions in a similar timeframe and manner.

The defendants brought a Rule 12(b)(6) motion to dismiss the plaintiffs' complaint for failure to state a claim, and the district court granted the motion. It held that even if true, the facts alleging parallel conduct would constitute only one piece of evidence in the antitrust case, and would not, alone, constitute a sufficient basis on which to prove that the defendant companies had engaged in a conspiracy in violation of 15 U.S.C. § 1.

The U.S. Court of Appeals for the Second Circuit reversed, but the U.S. Supreme Court reversed again. Echoing the district court's reasoning, Justice Souter's opinion for the Court emphasized that the plaintiffs alleged no facts other than parallel conduct that would point to the existence of an unlawful conspiracy. The opinion states that "[t]he need at the pleading stage for allegations plausibly suggesting (not merely consistent with) [a violation of section 1 of the Sherman Antitrust Act] reflects the threshold requirement of Rule 8(a)(2) that the 'plain statement' possess enough heft to 'sho[w] that the pleader is entitled to relief.'" Thus, the Court held that to survive a Rule 12(b)(6) motion to dismiss, an antitrust complaint must provide "enough factual matter (taken as true) to suggest that an agreement was made." Mirroring language rulings in which lower courts had similarly adopted narrow interpretations of the Rule 8(a)(2) pleading standard in antitrust cases, the Court also suggested that a "naked" allegation of conspiracy, without sufficient accompanying facts, would not survive a Rule 12(b)(6) motion to dismiss. Thus, the Supreme Court appeared to require a heightened pleading standard for the Rule 12(b)(6) motion, at least as applied to the antitrust claims. Speaking more broadly, the Court rejected the literal reading of the "no set of facts" language from Conley , holding that the phrase had "earned its retirement."

Other language in the opinion created doubt as to whether the Court intended a heightened pleading standard or appeared at least to limit the scope of the holding. For example, the Court clarified that "[a]sking for plausible grounds to infer an agreement does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement." Likewise, in a footnote, the Court cited the 1993 and 2002 cases in which the Court explicitly reaffirmed Conley and rejected a "heightened pleading standard." In addition, shortly after Twombly , the Court issued an opinion in which it appeared to adopt a narrow view of the decision.

In dissent in Twombly , Justice Stevens argued against what he perceived as the Court's decision to upend the long-standing notice pleading approach. "If Conley 's 'no set of facts' language is to be interred," he wrote, "let it not be without a eulogy." He then discussed the historical importance of notice pleading, for example as a vehicle by which litigants enforced civil rights laws. Justice Stevens also disputed the majority's practical arguments regarding the increasing cost of litigation. He argued that cases have long been allowed to proceed until "at least some sort of response" was obtained from defendants, with relatively little cost or delay.

Interpretations of Twombly differed among the lower federal courts. Some interpreted the decision as having introduced a general heightened pleading standard, while others viewed the holding as more limited. Several courts interpreted it as having established a "flexible" heightened pleading standard, which would apply to complaints brought in antitrust and other types of cases requiring factual specificity. Among legal commentators, a consensus seemed to emerge that despite containing some language to the contrary, the ruling creates a general heightened pleading standard.

Ashcroft v. Iqbal

In Ashcroft v. Iqbal , a 5-4 decision, the Supreme Court clarified, and arguably extended, the "plausibility" standard introduced in Twombly . Iqbal involved a suit brought against various federal officials by a Pakistani citizen, Javaid Iqbal, who had been detained in a detention facility in New York following an arrest on fraud and immigration charges. Iqbal was one of 184 individuals designated by the Federal Bureau of Investigation to be of "high interest" with regard to the government's investigation of the 9/11 terrorist attacks. On the basis of that designation, he was placed in a special unit within the detention facility, wherein he alleged that he endured beatings and slurs and was denied access to medical care and opportunities to practice his religion.

Iqbal eventually pled guilty on a fraud charge and served a prison sentence. His civil action did not contest the sentence or resulting imprisonment. Rather, it focused on alleged mistreatment during his pre-trial detention. Naming as defendants individuals ranging from prison guards to high-level federal officials in the Department of Justice, Iqbal brought an action for civil damages pursuant to Bivens v. Six Unknown Federal Narcotics Agents , under which federal officers may be subject to civil liability for violating individuals' constitutional rights. In his complaint, Iqbal alleged that his designation and subsequent mistreatment resulted from unconstitutional discrimination on the basis of his race and religion.

The U.S. District Court for the Southern District of New York considered the defendants' Rule 12(b)(6) motion to dismiss the case prior to the Supreme Court's 2007 Twombly decision. Applying Conley , it denied the motion to dismiss. Twombly , however, was handed down before the U.S. Court of Appeals for the Second Circuit considered the case on appeal. The Second Circuit interpreted Twombly as requiring an evaluation of the "plausibility" of facts alleged in Iqbal's Bivens claim, but it held that Iqbal's complaint satisfied that standard. In particular, it held that Iqbal had alleged more specific facts, and more facts drawn from personal experience, than were alleged in Twombly . Thus, it upheld the district court's denial of the motion to dismiss.

The Supreme Court reversed. Writing for the majority, Justice Kennedy clarified "two working principles" that follow from Twombly . First, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." As discussed infra , this statement arguably reintroduces a distinction between factual and legal elements in a complaint that existed prior to the enactment of the Federal Rules of Civil Procedure and the notice pleading approach. The opinion continues: "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice...." Taken together, these two principles preserve the rule that facts alleged in a complaint are not to be scrutinized for their veracity. However, they appear to require courts to identify components of a claim which may masquerade as fact, but are instead assertions of legal conclusions.

In addition, the Court reasserted the heightened "plausibility" pleading standard introduced in Twombly. Multiple lower courts have quoted the following words from the Iqbal opinion: "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" In other words, the inquiry appears to require courts to evaluate facts asserted to determine whether they are likely to result in a judgment in the claimant's favor.

The Iqbal decision seems to give lower courts greater latitude to make such determinations. The Court states:

Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. ... In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

Thus, the opinion appears to require federal courts to engage in a "common sense" inquiry to assess whether facts alleged in a complaint provide "plausible" support for a claim.

Applying this approach, the Court granted defendants' 12(b)(6) motion to dismiss. On appeal, claims against the high-ranking Justice Department officials were particularly at issue. The Court rejected Iqbal's assertions—for example, that Attorney General Ashcroft and other officials "knew of, condoned, and willfully and maliciously agreed to subject [him] to harsh conditions as a matter of policy"—as "bare assertions" which "amount[ed] to nothing more than a 'formulaic recitation of the elements' of a constitutional discrimination claim," and therefore did not satisfy the plausibility test.

Justice Souter, who had written the majority opinion in Twombly , wrote a dissenting opinion in Iqbal . He did not dispute the majority's general characterization of the Twombly holding, but argued that Iqbal's particular complaint should not have been dismissed under the Twombly principles. In particular, he viewed the Court as having chosen the most vague of Iqbal's allegations against the high-ranking officials, while ignoring more specific allegations, such as an assertion that Attorney General Ashcroft served as the "principal architect" of the allegedly discriminatory policy. He concluded that the "allegations singled out by the majority as 'conclusory' are no such thing."

Legal Implications

Although their impact has not been fully realized, it can be said that the Twombly and Iqbal rulings signal a departure from the notice pleading approach and establish a heightened pleading standard. The decisions are being interpreted in that manner by the lower federal courts. In addition, it is assumed that the rulings apply in all federal civil cases.

The potentially significant outcome of the rulings is that fewer cases will survive to the discovery phase in federal courts than would otherwise proceed to that stage. Commentators debate the practical likelihood of that result. Multiple federal courts, including many of the federal courts of appeals, have cited the decision when granting a Rule 12(b)(6) motion to dismiss. In many such cases, it is possible that a motion to dismiss would have been granted even in the absence of the Twombly and Iqbal precedents. In at least some such cases, however, language from majority or dissenting opinions suggests that a dismissal might not have been warranted prior to those rulings. Thus, it seems probable that at least to some extent, the decisions will decrease the quantity of civil complaints which survive a motion to dismiss. Moreover, while this decrease may not be perceivable from statistics on the total number of motions to dismiss granted, its effect may be meaningful for particular subsets of claims.

Whether decreases will continue or are a negative result is a subject for debate. Commentators who view the Iqbal ruling as a positive development note that an increase in both the quantity and complexity of federal civil cases in recent decades produced delay and increased the costs of civil litigation. They may argue that the Iqbal ruling will aid federal courts to weed out the weakest cases in a system in which delays and expense restrict litigants' access to the federal courts. Practically, they may also argue that plaintiffs' attorneys will respond to the Twombly and Iqbal decisions by crafting more detailed complaints. In addition, some commentators have asserted that the heightened pleading standard protects government officials from intrusions during the discovery stage, which may otherwise cause unneeded expense and inefficiency.

One counter argument suggests that discovery can be limited so as to minimize delay, cost, and unnecessary intrusion once a case survives the pleading stage. In his dissenting opinion in Twombly , Justice Stevens asserted that a characterization of discovery as inevitably costly "vastly underestimates a district court's case-management arsenal." Justice Breyer echoed that argument in a dissent in Iqbal , noting that federal courts "can structure discovery in ways that diminish the risk of imposing unwarranted burdens on public officials." However, it is unclear whether the reforms giving courts greater control over the discovery process have led to significant practical changes in the extent to which federal courts manage or control discovery in civil cases.

Another argument made by opponents of a heightened pleading standard emphasizes the potential for unintended consequences as a result of the types of complaints that might be dismissed as a result of Twombly and Iqbal . In particular, it has been asserted that the heightened pleading standard will weed out not the weakest cases but rather those which, by their nature, rely on access to the discovery process in order to build a case. Commentators suggest that cases will be particularly affected in areas in which civil litigation has an important "investigatory function." Civil rights, antitrust, environmental regulation, and other areas in which a federal statutory scheme relies on civil litigation, including the discovery process it entails, as a means of enforcement might be particularly affected. To illustrate the point, at least one commentator asserts that major twentieth century civil rights cases would have been unable to proceed under the Iqbal pleading standard.

Another concern suggests that Twombly and Iqbal reintroduce problems which prompted the enactment of the Rule 8(a)(2) notice pleading approach in 1938. For example, some commentators note that the Iqbal opinion appears to require federal courts to distinguish between factual assertions, which are entitled to a presumption of truth, and legal assertions, which are not. For example, in Iqbal , the majority opinion characterized the allegation that Attorney General Ashcroft served as the "principal architect" of a discriminatory policy as a legal conclusion subject to a plausibility test. In contrast, in his dissenting opinion in Iqbal , Justice Souter appeared to construe that allegation as a factual allegation which bolstered the plaintiff's legal claims. A similar distinction existed prior to the enactment of the Federal Rules of Civil Procedure in 1938 and was viewed as problematic, specifically because it resulted in arbitrary line-drawing between legal and factual assertions.

Similarly, to the extent that the Iqbal approach requires courts to take at least an initial look at the case's chance for success on the merits, it might become increasingly hard to draw a clear line between decisions made at the pleading stage and decisions which should wait for a later stage of litigation. For example, motions for summary judgment, which are submitted after at least some discovery of evidence has been conducted but before trial, had typically been a court's first opportunity to make a decision evaluating the plausibility of a case. One issue to be resolved is how the heightened pleading standard might affect decisions regarding summary judgment motions or other decisions.

Finally, some commentators who characterize the Twombly and Iqbal opinions as making a substantial change in the procedural rules argue that it is troubling that the Court effected such a change without formally amending the Federal Rules of Civil Procedure or obtaining congressional approval. Those who view the change as a more modest shift in interpretation are less likely to view the Court's approach as problematic.

Bills Pending in the House and Senate Judiciary Committees

Experts have testified as to Iqbal 's legal and practical effects in hearings held by the respective judiciary committees. In addition, as mentioned, two bills pending in the committees would require that the civil pleading standard be interpreted as it was prior to the Supreme Court's decisions in Twomb l y and Iqbal .

A bill pending in the House Judiciary Committee, the Open Access to Courts Act of 2009 ( H.R. 4115 ), would codify the "no set of facts" standard as articulated in Conley . It would expressly prohibit the dismissal of a complaint "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief."

A bill pending in the Senate Judiciary Committee, the Notice Pleading Restoration Act of 2009 ( S. 1504 ), would prohibit the dismissal of a complaint for failure to state a claim "except under the standards set forth ... in Conley v. Gibson ." The extent to which a reinstatement of the notice pleading approach adopted in Conley is intended to be tempered by refinements made to the interpretation of Conley since it was decided in 1957 is unclear. For example, although the Supreme Court in Twombly criticized the Conley decision, and in particular rejected the "no set of facts" language, the Court did not expressly overrule Conley . Thus, the Twombly and Iqbal opinions may be characterized as having overruled Conley only in part, or as having refined rather than overruled the Conley decision. Various Supreme Court decisions from the intervening years likewise cite Conley as the controlling precedent but might nevertheless be interpreted as having refined the Conley approach, albeit to a smaller degree than in Twombly .