The Pleading Problem

Adam Steinman

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It is hard to imagine a topic in civil procedure that has garnered more attention recently than pleading standards. The Supreme Court’s decision last Term in Ashcroft v. Iqbal1 (which embraced its controversial 2007 decision in Bell Atlantic v. Twombly2) prompted an onslaught of commentary and critiques. A particularly troubling aspect of these decisions is their invitation for judges to subjectively determine—without hearing any evidence or testimony—whether the plaintiff’s claim is “plausible.” A pleading standard that focuses solely on plausibility can thwart meritorious claims by plaintiffs who, without the discovery process, cannot obtain the information needed to satisfy that standard. The crucial information needed to confirm a claim’s “plausibility” is often in the hands or mind of the defendant and, therefore, can realistically be obtained only through the pretrial discovery process.

This danger can be avoided, however, if Twombly and Iqbal are read carefully and with due regard for authoritative pre-Twombly sources such as the text of the Federal Rules, their Forms, and Supreme Court decisions that remain good law. Doing so reveals an approach that is not necessarily inconsistent with the notice-pleading framework that most attorneys, judges, and professors alive today learned when they were in law school. To urge this approach is not to praise Twombly and Iqbal. At best, they appear to be result-oriented decisions designed to terminate lawsuits that struck the majorities as undesirable. And incorporating the “plausibility” concept into pleading doctrine has proven troublesome (to say the least). Courts should not, however, compound these problems by misreading Twombly and Iqbal to drastically change federal pleading standards going forward.

I. Misreading Twombly and Iqbal

Many critiques of Twombly and Iqbal presume that these decisions have (1) abrogated core pre-Twombly precedents on pleading standards and (2) made “plausibility” the central inquiry at the pleadings phase. A careful reading of Twombly and Iqbal, however, refutes these presumptions.

First, the significant pre-Twombly authorities on pleading remain good law, even after Twombly and Iqbal. There is only a single instance where either Twombly or Iqbal explicitly abrogates earlier precedent; Twombly put into “retirement” the statement from Conley v. Gibson that “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 Twombly majority read this “beyond doubt . . . no set of facts” language as precluding dismissal “whenever the pleadings left open the possibility that a plaintiff might later establish some set of undisclosed facts to support recovery.”  Read this way, Conley’s phrase is indeed problematic—a complaint that alleged nothing more than “The planet Earth is round” would survive, because any number of actionable facts might be consistent with the Earth being round.  That Twombly “retire[d]” this view should not be cause for concern.

To be fair to Justice Black and his Conley opinion, this now-discredited phrase was subject to a far more sensible reading than the straw man that Twombly struck down. Its true meaning was simply that speculation about the provability of a claim is typically not a proper inquiry at the pleadings phase; provability is relevant only when it appears “beyond doubt” that the plaintiff cannot prove her claim. As to this point, Twombly fully agrees: “a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.” The dispositive question is—and always has been—what makes a complaint “well-pleaded”?  Again, Conley and Twombly provide precisely the same answer: “[A]ll the Rules require is ‘a short and plain statement of the claim’ that will give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.”  Twombly not only endorsed this crucial “fair notice” language from Conley; it also relied on many of the Court’s other pre-Twombly cases, including the unanimous Swierkiewicz v. Sorema decision from just five years earlier.

Admittedly, Twombly/Iqbal’s “plausibility” inquiry is a concept that was absent from the pre-Twombly pleading framework. But under Twombly and Iqbal, plausibility is not a basis for disregarding allegations in a complaint. Rather, plausibility is the second step in a two-part framework that actually makes the framework more lenient than it would be without it. Here are the two steps:

(1) Identify allegations that are mere legal conclusions, and disregard them for purposes of determining whether the complaint states a claim for relief.

(2) Determine whether the remaining non-conclusory allegations, accepted as true, plausibly suggest an entitlement to relief.

It follows that when a complaint contains non-conclusory allegations on every element of a claim for relief, the plausibility issue vanishes completely. A court must accept non-conclusory allegations as true. If such allegations address each element that would be needed to ultimately prove the plaintiff’s claim, then they do more than make an entitlement to relief “plausible”—they confirm an entitlement to relief, at least for purposes of the pleadings phase. Under this framework, only conclusoriness is grounds for refusing to accept an allegation as true (step one). The plausibility inquiry (step two) is not destructive, but generative. It allows a plaintiff to overcome the fact that a key element was alleged in a merely conclusory manner, provided the entitlement to relief is plausibly suggested by the valid, non-conclusory allegations. Properly understood, then, the true impact of Twombly and Iqbal will depend on how courts decide what allegations are “mere legal conclusions” that can be disregarded at step one of the new framework.

II. What Conclusory Means

Neither Twombly nor Iqbal provide much guidance on how to define “conclusory” for purposes of this new approach to pleading. It would be a serious mistake, however, to define conclusory in evidentiary terms—that is, to allow courts to disregard an allegation merely because its truth is not suggested by some other allegation in the complaint. While this is a common understanding of the term (judges and litigants often describe assertions that lack evidentiary support as “conclusory”) it should not be transplanted to the pleading context for several reasons.

An evidentiary approach would be flatly inconsistent with pre-Twombly authority that remains good law. Form 11’s model negligence complaint deems it sufficient to allege merely: “On <Date>, at <Place>, the defendant negligently drove a motor vehicle against the plaintiff.” It does not require allegations indicating that the defendant was, in fact, driving negligently. Form 18’s complaint for patent infringement, using the example of electric motors, deems it sufficient to allege: “The defendant has infringed and is still infringing the Letters Patent by making, selling, and using electric motors that embody the patented invention.” Form 18 does not require allegations suggesting that the defendant’s electric motors, in fact, embody the plaintiff’s invention. And the Supreme Court’s unanimous 2002 decision in Swierkiewicz—an employment discrimination case—held that federal courts “must accept as true all of the factual allegations contained in the complaint,” including Swierkiewicz’s allegation of his employer’s discriminatory intent.3 Swierkiewicz squarely rejected the idea that the complaint must indicate the availability of supporting evidence or facts suggesting that the allegations might be proven indirectly. The Court noted that the discovery process might reveal evidence of discrimination that was not yet known. It therefore found it “incongruous to require a plaintiff, in order to survive a motion to dismiss, to plead more facts than he may ultimately need to prove to succeed on the merits if direct evidence of discrimination is discovered” even where the plaintiff is “without direct evidence of discrimination at the time of his complaint.” Moreover, an evidentiary approach would be conceptually unworkable, because each new allegation offered to support an earlier allegation would itself require support. If taken to its logical extent, an evidentiary approach imposes on courts an endless cascade of inquiry that can never be satisfied.

A better approach is to define conclusory in transactional terms: an allegation is conclusory only when it fails to identify adequately the acts or events that entitle the plaintiff to relief from the defendant. What made the crucial allegations in Iqbal and Twombly impermissibly “conclusory” were legitimate (though certainly debatable) questions about whether those allegations were grounded in a series of real-world events. In Twombly, the Court was unsure whether the complaint contained an “independent allegation of actual agreement” or merely presumed that parallel conduct alone constituted an agreement for purposes of the Sherman Act. In Iqbal, it was unclear from the complaint what acts by Ashcroft and Mueller themselves were undertaken with discriminatory intent. These are not concerns about provability, but rather concerns about whether the complaints had identified a tangible set of events that would entitle the plaintiffs to relief.

Reasonable minds can differ over whether the crucial allegations in Twombly and Iqbal should have been deemed conclusory, and the Court’s spotty reasoning on that issue in both opinions is troubling. That said, the pre-Twombly examples discussed above are qualitatively different from a transactional standpoint. As cursory as Form 11 is, it identifies in “short and plain” terms the liability-generating event: the defendant negligently driving his car against the plaintiff. Form 18 does the same, identifying the plaintiff’s receipt of a patent for electric motors and alleging that the defendant is “making, selling, and using electric motors that embody the patented invention.” Swierkiewicz also provides a straightforward transactional narrative: the plaintiff was employed by the defendant and he was fired because of his age (fifty-three) and national origin (Hungarian). To be sure, these complaints characterize the underlying events with some conclusory language (e.g., that the Form 11 defendant drove “negligently”); but the liability-generating events themselves are identified in a fairly concrete way. This was arguably not so in Twombly and Iqbal, given the uncertainties over whether the Twombly plaintiffs had made an “independent allegation of actual agreement” and which (if any) decisions by Ashcroft and Mueller themselves were motivated by discriminatory animus. Again, one can legitimately question the Supreme Court’s reading of the Twombly and Iqbal complaints. But such concerns should incline courts to proceed cautiously in applying Twombly and Iqbal, rather than overreading them to compel a drastically more strict approach to pleading.

III. Closing Thoughts

The lower federal courts are paying a lot of attention to Twombly and Iqbal. Twombly is already the seventh-most-cited decision of all time, with about 24,000 federal-court citations in less than three years on the books. Iqbal is just getting started, but during its first year it has been cited at a remarkable rate of over 500 decisions per month. Of course, an opinion’s citation frequency alone does not reveal what courts are actually doing with that opinion. There are certainly federal courts who have used Iqbal to impose a much stricter pleading standard. Some lower federal courts, however, are on the right track.

One example is the Third Circuit’s decision in Fowler v. UPMC Shadyside,4 a disability discrimination case. Interestingly, the opinion starts by stating that Iqbal effectively overruled Swierkiewicz. But what follows in Fowler is vintage notice-pleading, entirely consistent with Swierkiewicz. The Third Circuit accepted Fowler’s allegations as true, without regard to whether they were “plausible,” and chastised the district court for taking a stricter approach. As to the complaint’s allegation that Fowler was disabled, the Third Circuit wrote:

At this stage of the litigation, the District Court should have focused on the appropriate threshold question — namely whether Fowler pleaded she is an individual with a disability. The District Court and UPMC instead focused on what Fowler can “prove,” apparently maintaining that since she cannot prove she is disabled she cannot sustain a prima facie failure-to-transfer claim. A determination whether a prima facie case has been made, however, is an evidentiary inquiry . . . . 

The Third Circuit also accepted the plaintiff’s allegations that she was “terminated because she was disabled” and that UPMC discriminated against her by failing to “transfer or otherwise obtain vacant and funded job positions” for her. It held that these were “‘more than labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action’” and concluded: “We have no trouble finding that Fowler has adequately pleaded a claim for relief under the standards announced in Twombly and Iqbal.”

There are also post-Iqbal decisions that affirm dismissals but do so in a way that is faithful to pre-Twombly principles. In Brooks v. Ross,5 the Seventh Circuit found the following allegation to be insufficient:

Plaintiff is informed, believes and alleges that the Defendants while acting in concert with other State of Illinois officials and employees of the Attorney General’s Office, Department of Corrections and Prisoner Review Board did knowingly, intentionally and maliciously prosecute Plaintiff and Ronald Matrisciano in retaliation for Plaintiff and the said Ronald Matrisciano exercising rights and privileges under the Constitutions and laws of the United States and State of Illinois.  

The Seventh Circuit’s reasoning was founded on notice principles, not the newfound plausibility inquiry. It wrote: “[T]his paragraph fails under Iqbal, because it is merely a formulaic recitation of the cause of action and nothing more. It therefore does not put the defendants on notice of what exactly they might have done to violate Brooks’s rights under the Constitution, federal law, or state law.” The Seventh Circuit explicitly rejected the argument “that Twombly had repudiated the general notice-pleading regime of Rule 8” and concluded: “This court took Twombly . . . to mean that at some point the factual detail in a complaint may be so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is entitled under Rule 8. This continues to be the case after Iqbal.”

As in Twombly and Iqbal, one can certainly question whether the key allegation in Brooks should have been disregarded as conclusory. But such questions were present even under a notice-pleading regime. Notice pleading was never a blank check. No court would have been forced to accept as true an allegation that “the defendant violated the plaintiff’s legal rights in a way that entitles the plaintiff to relief.” So there always lurked the question, what “notice” was required? As Judge, Dean & Federal Rules architect Charles Clark observed, a notice-pleading framework is not inherently a lenient one. It depends on what “content [is] given to the word ‘notice.’”

Likewise, a pleading standard that allows courts to disregard conclusory allegations is not inherently a strict one. It depends on how “conclusory” is defined. Twombly/Iqbal’s recognition that conclusory allegations need not be accepted as true does not necessarily mean the end of notice pleading. It merely cloaks the inquiry in different doctrinal garb. The silver lining might be this: Before Twombly and Iqbal, lower courts’ handling of this issue was often able to fly under the radar. Recent empirical studies on the effect of Twombly and Iqbal reveal remarkably high dismissal rates even before Twombly. After Twombly and Iqbal, however, the world is watching. And many judges, commentators, legislators, and rulemakers are giving more thought than ever to what pleading standards ought to look like.

Acknowledgments:

Copyright © 2010 Stanford Law Review.

Adam Steinman is a Professor of Law at the University of Cincinnati College of Law. Effective July 2010, he will be Professor of Law and Michael J. Zimmer Fellow at Seton Hall University School of Law.

This Legal Workshop Editorial is based on the following Law Review Article: Adam Steinman, The Pleading Problem, 62 STAN. L. REV. 1293 (2010).

  1. 129 S. Ct. 1937 (2009).
  2. 550 U.S. 544 (2007).
  3. 534 U.S. 506 (2002).
  4. 578 F.3d 203 (3d Cir. 2009).
  5. 578 F.3d 574 (7th Cir. 2009).

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