How Low Can the Pleadings Standard Go?

Recent legislation seeks to overturn the infamous Bell Atlantic v. Twombly and Ashcroft v. Iqbal cases responsible for holding plaintiffs to a higher pleadings standard. Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007); Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009). Before Twombly, FRCP Rule 8 laid out a notice pleading standard which required a short and plain statement of the claim showing that the pleader is entitled to relief in order to give defendants fair notice. At the initial pleadings stage, the plaintiff had the burden of making factual allegations that, if true, stated a cause of action on which relief could be granted. Although the allegations needed to satisfy all elements of the claim, no evidence was required.

However, in Twombly, the Supreme Court created a plausibility standard establishing that a pleading must contain something more than a statement of facts that merely create a suspicion of a legally cognizable right of action. Revisiting Twombly in Iqbal, the Court rejected the theory that the heightened standard applied only to antitrust conspiracies, claiming that “Twombly expounded the pleading standard for ‘all civil actions.’” 129 S.Ct. at 1955. Supporters of these decisions believe that the heightened standard will reduce the amount of frivolous claims and avoid cases in which discovery is unlikely to reveal relevant evidence.

Well, Senator Arlen Specter begs to differ. Proposing the Notice Pleading Restoration Act, he is joined by several other officials in arguing that a higher pleadings standard simply favors defendants who succeed in concealing evidence, especially large corporations. As a result, courts are more likely to wrongly dismiss cases.

In certain respects, I do agree that the standard may be too high. First, it seems unfair to say that a meritorious case is always factually supported from the beginning. For instance, the plausibility standard is likely to be invoked is discrimination cases where the defendants will succeed on the basis of pure information asymmetry. Sometimes, the information necessary to meet the standard is in the hands of the defendants, and plaintiffs get caught in the catch 22 of needing discovery documents to solidify their claim while being stopped short of actually engaging in discovery. Also, I think that courts are able to impose certain limits on the discovery process to avoid the idea that it merely becomes a fishing expedition amounting to a waste of time and money. However, I think the major attack comes from the idea that lawyers, judges, plaintiffs and defendants alike have absolutely no idea what a plausibility standard actually entails. As a result, the Iqbal decision seems to imply that judges are left to decide right from the start whether the plaintiff is likely to have a meritorious claim, and without enough information, this decision can be construed as rather arbitrary.

I will say that, in reading about this new legislation, I was intrigued by the vast number of Twombly supporters who truly believe that the heightened standard will promote worthy claims, save resources, and encourage settlements. I know that I am instinctively uncomfortable with both Twombly and Iqbal, but I am open to being persuaded otherwise.