Case: Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009).
Topic: Pleading Sufficiency Requirements Under Federal Rule of Civil Procedure 8(a)
A Pakistani Muslim arrested after 9/11 brought a civil rights action. The suit alleged his designation as a "high interest" person and subsequent placement in a highly restrictive detention unit occurred for prohibited discriminatory reasons. The district court and the court of appeals both found that his pleadings met the requirements of Rule 8(a) (an interlocutory appeal on the qualified immunity issue involved had been allowed because of the high ranking government officials named in the suit). The Supreme Court disagreed. In a 5-4 decision the Court reasserted the more stringent test for pleading sufficiency under Rule 8(a), as established in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Twombly requires the use of a two-prong" "facial probability" test. Courts reviewing the sufficiency of a pleading must first separate out legal conclusions because they do not receive the presumption of truth accorded allegations of fact. Factual allegations are taken as true but must show a "plausibility" of entitlement to relief. Facts that show the "mere possibility of liability" or which demonstrate actions that are "merely consistent" with liability are not enough. Here, the Court found that the complaint had not successfully "nudged" the claims of discrimination "across the line from conceivable to plausible." A vigorous dissent objected to both the majority's treatment of a key concession by the government and an inconsistent approach to what constituted legal conclusions and what constituted adequate factual assertions within the pleadings.
- Debate continues on the impact of Iqbal and Twombly. Clearly, the two decisions will continue to shape pleading and court questions of sufficiency for the foreseeable future.
- Already hundreds of decisions evaluating pleading have cited Iqbal as determinative precedent including several recent Circuit Court decisions such as Smith v. Duffey, et al, 576 F.3d 336 (7th Cir. Aug. 3, 2009) (dismissing fraud claims in connection with stock options cancellation in Chapter 11 reorganization).
- Despite strict Rule 8 interpretation from Iqbal, several decisions have still held in favor of the complainant. See, e.g., Braden v. Wal-Mart Stores, Inc., 2009 WL 4062105 (8th Cir. Nov. 25, 2009 [Murphy]) (reversing District Court Rule 12(b)(6) dismissal and stating in part that "[ ] Rule 8 does not require a plaintiff to plead facts tending to rebut all possible lawful explanations for a defendant's conduct"); and U.S. ex. rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849 (7th Cir. June 30, 2009 [Easterbrook]) (reversing in part and stating that "Rolls-Royce has been told exactly what the fraud entails").
When in doubt, plead it out. While the highly formalized code pleading of yesteryear is (allegedly) gone, with Iqbal and Twombly, when it comes to factual allegations yesterday's over-inclusion now looks like the "new" just enough.
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