Twombly Gets Iqbal-ed

An Update on the New Federal "and Tennessee?" Pleading Standard

In May 2007 the United States Supreme Court adopted a new pleading standard in Bell Atlantic Corp. v. Twombly.[1] An article in this Journal[2] explained how Twombly signified a remarkable change in the law of notice pleading by telling plaintiffs that they can no longer count on bare-bones, conclusory pleadings to get them past a Rule 12 motion to dismiss and into the discovery process in the hope of developing facts to support their claims.

The Supreme Court held that to survive a motion to dismiss a complaint must contain "enough facts to state a claim to relief that is plausible" and must suggest a "right to relief above a speculative level." "Labels and conclusions," "naked assertion[s]" without "further factual enhancement," or "a formulaic recitation" of the elements of a cause of action will not survive a motion to dismiss.

Twombly, of course, controls only federal litigation, but its influence will likely come to be felt in state civil litigation as well. In fact, the Tennessee Court of Appeals has already given Twombly a most favorable nod, finding it "consistent with Tennessee law and therefore recogniz[ing] its applicability."[3]

Because Twombly left room for questions about the applicability and implementation of its holding, the earlier article in this Journal speculated that the Supreme Court might take an opportunity to speak on these issues soon again. And so it has. The case is Ashcroft v. Iqbal,[4] a five-to-four decision handed down by the Supreme Court in May 2009.

Applicability of Twombly

Iqbal provides clarification about the applicability of the Twombly pleading standard.

1. Iqbal removes all doubt as to the applicability of the Twombly pleading standard: it applies in all federal civil cases.[5] Courts, such as the Sixth Circuit, that have inclined towards limiting Twombly to expensive, complex cases involving massive discovery can no longer do so.[6]

2. Iqbal also makes clear that the Twombly pleading requirements are not to be relaxed on the ground that the plaintiff will initially be allowed only some limited discovery. A plaintiff whose complaint is deficient under Fed. R. Civ. P. 8 (the notice pleading Rule) and thus fails to state a claim simply "is not entitled to discovery, cabined or otherwise."[7]

3. And Iqbal makes clear that the Twombly standard applies to all elements of a claim, including intent and knowledge, even when Rule 9(b) " which requires that certain special matters be pled with specificity " does not apply separately to require specificity in the pleading.

4. Iqbal warns that pleading only "the bare elements of his cause of action" and then labeling them "general allegation" will not work to avoid dismissal under the Twombly standard.[8] Rule 8 " the notice pleading requirement " may mark an improvement over the "hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions."[9]

Implementation of Twombly

In Iqbal the Supreme Court has attempted to flesh out the Twombly pleading standard by explaining the analytical approach to be taken when the sufficiency of a complaint is challenged under Rule 12. The reviewing court is advised to begin by noting the elements that the plaintiff must plead to state his claim, whatever that claim may be. Having established that context, the court should engage in a "two-pronged approach."

Step One: Weed out the legal conclusions. As step one, Iqbal requires the reviewing court to determine which of the allegations in the complaint are "legal conclusions" and which are "factual allegations."[10] When there are well-pleaded factual allegations, the court must assume " for purposes of the motion to dismiss " that they are true. Legal conclusions, on the other hand, are not entitled to a presumption of veracity. While legal conclusions can provide the framework of a complaint, they cannot, by themselves, provide the substance. Unless they are supported by factual allegations, legal conclusions are of no analytical significance for purposes of a motion to dismiss.

Step Two: Evaluate the factual allegations. As step two, the reviewing court must ask whether the plaintiff's factual allegations, standing alone, "plausibly suggest" that the defendant engaged in illegal action or "plausibly give rise to an entitlement of relief." If the complaint contains sufficient factual allegations that, when taken as true, state a claim for relief that is "plausible on its face" it will survive the motion to dismiss. But if the fact allegations, taken as true, do not permit the court "to infer more than the mere possibility of misconduct," the complaint must be dismissed. Although such a complaint may have "alleged" that the plaintiff is entitled to relief, it has not met the Rule 8(a)(2) requirement of "'showing ... that the pleader is entitled to relief.'"[11] This seems to suggest that the reviewing court should not draw inferences favorable to the plaintiff if a competing interpretation of the alleged facts is more "plausible" than the inference.

While all of this may sound like music to the ears of defendants, they might want to hold their applause " at least for a while. The Supreme Court has left the trial courts some room to maneuver when it comes to evaluating the fact allegations in a challenged complaint. Iqbal recognizes that evaluation of the factual allegations for "plausibility" is not an exact science, but an art: when all is said and done, determining whether a complaint states a plausible claim for relief is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense."[12]

Notes

1. 550 U.S. 544 (2007).

2. "A Higher Standard: 'Twombly' requires more for notice pleading," by Andrée Sophia Blumstein, August 2007 Tenn. Bar Journal. Read it at www.tba.org/Journal_TBArchives/tbj-2007_08.html

3. Hermosa Holdings Inc. v. Mid-Tennessee Bone and Joint Clinic P.C., Tenn. Ct. App. No. M2008-00597-COA-R3-CV (March 16, 2009).

4. 129 S.Ct. 1937; 2009 U.S. Lexis 3472 (May 18, 2009). The ruling dismissed a complaint filed by a Javaid Iqbal, a Pakistani Muslim, against former Attorney General John Ashcroft and FBI Director Robert Mueller, seeking to hold them liable for policies that allegedly led to harsh conditions of confinement of suspected terrorists incarcerated in the Metropolitan Detention Center in Brooklyn, N. Y., after the Sept. 11, 2001, terrorist attacks.

5. Id. at *39.

6. See, e.g., Tackett v. M&G Polymers, USA LLC, 561 F.3d 478, 488-89 (6th Cir. 2009).

7. 129 S.Ct. 1937, 2009 U.S. Lexis 3472 at *41-42.

8. Id. at *43-44.

9. 129 S.Ct. 1937, 2009 U.S. Lexis 3472 at *30.

10. For example, the Supreme Court determined that plaintiff Iqbal's allegation that Attorney General Ashcroft was the "principal architect" of a policy that subjected him to harsh conditions of confinement "solely on account of [his] religion, race, and/or national origin" was a legal conclusion because it "amount[s] to nothing more than a 'formulaic recitation of the elements' of a constitutional discrimination claim." On the other hand, the Court found Iqbal's allegation that FBI Director Mueller "arrested and detained thousands of Arab Muslim men ... as part of [the FBI's] investigation of the events of September 11" to be a factual allegation.

11. Id.

12. 129 S.Ct. 1937, 2009 U.S. Lexis 3472 at *32.


Andrée Sophia Blumstein ANDRÉE SOPHIA BLUMSTEIN is a partner at Sherrard & Roe PLC in Nashville. Her practice, which concentrates on appellate litigation, includes a special focus on state and federal antitrust counseling and litigation. She received her law degree from Vanderbilt University, where Don Paine taught her all about summary judgments and the other intricacies of Civil Procedure. She currently serves as chair of the Tennessee Bar Journal Editorial Board.