Monday, May 18, 2009

Pro-Business Court? Eh.

No, no the U.S. Supreme Court's decision today in Iqbal v. Ashcroft, No. 07-1015, did not grant John Ashcroft, Robert Mueller, or anybody else blanket immunity for their actions in the aftermath of September 11, 2001. That just is not what happened today. If you want to understand what *did* happen, go over to Scotusblog and read Lyle Denniston. After that, you're on your own.

The decision is more interesting, at least to me, because it involves the Supreme Court's first exploration of the new pleading standard that it announced in Bell Atlantic v. Twombly. Before the Twombly case, the question was whether the plaintiff could prove "no set of facts" that would entitle it to relief. This was a bit tough from a metaphysical standpoint, the whole proving a negative thing was confusing, etc. It also allowed a lot of cases to make their way into discovery. So people -- at least those who didn't represent plaintiffs all the time -- were fed up.

The new standard requires the plaintiff to show that it has "a plausible claim for relief." The Court endorsed the 2d Circuit's formulation of what (the heck) this means: "Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience
and common sense." (Page 15).

Once they figure out that this is what really happened today (as opposed to Loook! There's John Ashcroft! Booooo!), at least one very smart person on the left side of the legal spectrum will decry this holding as being yet another example of the Roberts Court's pro-business leanings. And I will want to agree with that person.

But it just isn't, er, plausible. First off, businesses file lawsuits, too. And some of those suits are based on some pretty flimsy facts to which discovery will (they hope) add necessary heft. Second, though, if the Court's motivation is to help businesses, they've done a very poor job of it in the Twombly and Iqbal cases.

Here's why: businesses crave certainty. They want to know what the best-, worst-, and medium-case scenarios are when they find themselves embroiled in disputes. And they want to know before the scenarios actually happen. Twombly and Iqbal make this a much more complicated analysis than it was under the old pleading regime. Before, the advice was simple: "We can move to dismiss. It will be expensive. And we probably won't win because the judge will have to accept all the facts in the complaint as true. But it might be worth it because if we win, there's no discovery and that's when things get really expensive."

Now it's all about whether a particular district court judge thinks a claim is "plausible." And that will be "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." It's difficult to see a there there. Oh and it's not enough for plaintiffs to show a possible path to victory. You'll have to do something that "nudges" your clients' claims "across the line from conceivable to plausible."

So what do we know? We know that possible isn't enough. We know that conceivable isn't enough. Plausible is enough. But what's plausible again? That depends? How does that help anybody?


Anonymous said...

Actually, I think the only thing that has changed is that a court is now supposed to sit down with a complaint, draw a line through all of the legal conclusions, and then figure out if the remaining factual allegations "show[] that the pleader is entitled to relief." It seems to me that "plausible" raises the bar a little -- a plaintiff can't allege that "up is down" and "black is white" and demand that the court accept those facts as true, but otherwise, very little will change. I like the Twombly/Iqbal formulation (and they are terrific case names, to boot).

Terry Klein said...

Yeah, you say that. Give me a call the first time a court dismisses your claim because it isn't plausible based "on its judicial experience and common sense". We'll see how you feel about the new rule then. I'd prefer an actual rule. This is not a rule. It's an existential exercise.

Anonymous said...

On a scale of things to worry about in my practice, 1-10, I rate this a 1.