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Wednesday, May 20, 2009

Pleading and the evolution of federal court litigation

Some random thoughts on Iqbal and its future effects, particularly in light of the very interesting exchange that has attended this post.

First, over the weekend I finally read Richard Epstein's paper on Twombly from last spring, which was coincidental to Iqbal being released Monday. Epstein places Twombly (and we now can do the same with Iqbal) in the broader context of the evolution of federal litigation since 1938, noting the types of litigation that predominated in 1938 and the changes to litigation that have accompanied the expansion of substantive federal law.

The drafters of the original Federal Rules in 1938 primarily thought in terms of patent claims and straight-forward tort, debt, and contract actions. The sort of conclusory skeletal pleading allowed under Rule 8 (and Conley) made sense for simple claims involving one-time conduct and facts that the plaintiff likely knew (or could know) at the outset--what happened at the intersection, whether or not the debt was repaid, whether the patent was valid. Modern litigation involves more complex actions under federal antitrust, securities, and civil rights laws. Epstein argues that skeletal conclusory pleading makes less sense in these more complex modern cases--involving conduct occurring over a longer period, complex conduct that is as likely to be lawful as unlawful, and often turning on the defendant's state of mind. Skeletal pleading in these cases presents a greater risk of hindering socially beneficial conduct by tying people and entities up in burdensome and expensive discovery and litigation that ultimately will (or should) be unsuccessful.

The problem is that, from the plaintiff's standpoint, skeletal, conclusory pleading is more necessary in modern litigation because the information needed to plead essential factual details (such as state of mind or what happened in a secret closed-door meeting) is not available at the outset and may only be obtained through discovery once litigation has begun. Twombly and Iqbal both demonstrate: How can a plaintiff know whether there was a secret meeting and agreement among the telephone companies or what the AG was thinking when he approved a policy of detaining, in special conditions, Arab Muslims in the weeks after 9/11. The best he can do at this stage is a conclusory allegation. Tightening pleading keeps potentially meritorious claims out of court, in turn reducing the ability to identify and hold wrongdoers to account and to make injured persons whole.

Second and somewhat related is Bruce Boyden's argument in the earlier Comments that the Court's view of pleading in Twombly and Iqbal was "warped by concern in those cases about particularly onerous costs and burdens of discovery based on what seem to the majority to be far-fetched and meritless allegations." Both were unique "modern" cases, large in size and scope, precisely the kind that Epstein (and the Court, obviously) believe are too big and sprawling for notice pleading. But, he says, perhaps lower courts will be a bit more measured in "normal" litigation when it comes to allegations of state of mind and other "on information and belief" pleading.

Unfortunately, I think lower courts are more likely to run with the greater power to review and rethink facts as alleged. On this point, I would recommend Benjamin Spencer's recent paper (forthcoming in Mich. L. Rev.) in which he tries to construct a model to describe what pleading now requires, based on what lower courts had been doing with Twombly. Spencer argues that courts distinguish "objective facts" from "speculative suppositions" (basically what the Iqbal Court called bare or conclusory allegations) and the latter are deemed not sufficient to push neutral allegations over the line into plausibility. I expect to see courts being even more willing to disregard facts as too speculative--even though all a pleading really involves is speculation. Especially after Iqbal essentially told courts to ignore conclusory or bare allegations.

Third, there was some interesting discussion in the comments about whether the ratcheting up of federal pleading has been a top-down or bottom-up phenomenon. Hillel Levin suggests the latter: The lower courts for several years have been tightening pleading standards and, prior to Twombly, the Court had stepped in twice (Swerkiewicz and Leatherman) to say no. In Twombly and Iqbal, the Supremes switched and began encouraging courts to do more with 12(b)(6). It remains to be seen what lower courts will do now, but, again, I can see them being very receptive to more opportunities to clear docket space.

Fourth, on the subject of "good lines I wish I had thought up" and the next step for pleading: I paraphrase Hillel's proposed amended Rule 8 (from the Civ Pro ListServ): "When we gave you notice pleading, told you "short and plain statement," and gave Form 11 as an example, we really meant it."

Posted by Howard Wasserman on May 20, 2009 at 07:07 AM in Civil Procedure, Howard Wasserman | Permalink

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Comments

Great post Howard (including the parts that don't cite me!). And an excellent series. I think that this is one of the real benefits of blogs and listservs. In the olden days, the two to four civ pro nerds on a faculty might have had a little conversation in the halls about this case; and quite a few months later, someone would organize a conference or forum, and the law review articles would start appearing a few months later (or more).

One last thing I want to mention. I'm not sure Epstein is wrong, though the critique you level is pretty strong. In any case, though--and this is really how I felt about Twombly and now Iqbal--TELL IT TO THE RULES COMMITTEE OR CONGRESS! That's what you are supposed to do when you want to change the law.

Indeed, I have some sympathy to the notion that defendants are forced to defend frivolous lawsuits, and that the discovery and motion process are drawn out and expensive. Perhaps there does need to be some initial weeding out. (Again, Howard, I think your point is a very strong one, though.) But Twombly and Iqbal aren't the way you get there.

Posted by: Hillel Y. Levin | May 20, 2009 7:50:32 AM

Though not yet noted, perhaps an expansion of opportunities for prelawsuit discovery could ease the burdens of the new pleading regime, if it could be done in an inexpensive but fair way.

Posted by: jeff parness | May 20, 2009 10:06:25 AM

On Howard's and Hillel's last point -- a particularly sharp student of mine asked, after we discussed Twombly and the Iqbal 2nd Circuit case, "Is it possible the Court is trying to force the Rules Committee to act?" I.e., it's gotten tired of sending subtle signals like in Swierkiewicz, and has run rogue with the goal of forcing a debate over Rule 8. My response: "Gee, I hadn't thought of that, but it's possible!"

Posted by: Bruce Boyden | May 20, 2009 1:36:25 PM

Jeff:

Good thought, but I cannot imagine what that way would be. If the whole rationale of Twombly/Iqbal is "no discovery unless you can point to particular facts demonstrating the merit of your case," I doubt the Court would accept a pre-filing discovery regime that didn't contain some similar requirement as a threshold. Otherwise, it brings us back to the very thing the Court has been trying to get away from: Subjecting high officials/companies/officers of the expense and burden of discovery. The Court seems unwilling to accept the notion of even limited discovery without a detailed showing in the first instance.

Posted by: Howard Wasserman | May 20, 2009 3:01:09 PM

Bruce: Interesting idea. Of course, there was absolutely nothing subtle about Leatherman and the lower courts still couldn't help ratcheting it up.

Posted by: Howard Wasserman | May 20, 2009 3:02:54 PM

But of course prelawsuit discovery might include nonparties, who under threat of formal deposition, might talk informally.Not a lot of expense here. As well, prelawsuit discovery could require a court order, as with postlawsuit medical exams. In Illinois we have respondents in discovery, but you need a lawsuit against another first. I was thinking more of Texas Civ Pro Rule 202.

Posted by: jeff parness | May 20, 2009 6:42:36 PM

I've always made a joke, when introducing 1st semester students to the concept of Rules (as opposed to statutes and common law doctrines), to the effect that Congress is more interested in bringing home the bacon and, at times, in reforming health care and banking, than in fixing court procedure -- which is why they leave such matters to the distinguished nerds on the advisory committee. Do you all think there is any way that Congress would take time from its overflowing agenda to deal with pleading, as important as we law prof nerds know it is, especially given that efforts to undo Iqbal could be portrayed as encouraging frivolous litigation?

Posted by: Vladimir | May 20, 2009 7:27:44 PM

The likelihood of Congress stepping in is close to nil.

If discovery really is too expensive, then this should (a) be proven to the committee, (b) fixed in an open forum, and (c) have some sort of Rule 26.2 that allows for plausibility discovery that is more limited that regular discovery.

But instead we will engage in fact pleading as it relates to the motivations of defendants. A fact, which of course, is unknowable without discovery.

I think good trial judges will have to put a lot of stock in "information and belief" pleading.

Posted by: Lumen Mulligan | May 20, 2009 8:18:19 PM

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