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Federal pleading just got a little tougher

Last month, with relatively limited fanfare, the United States Supreme Court altered the federal pleading standard that has been in effect for the last half century. Those who practice civil litigation regularly in the federal courts are no doubt very familiar with the standard that a complaint should not be dismissed at the outset of litigation for failure to state a claim, unless it appears that the plaintiff can prove “no set of facts” in support of the claim. That oft-cited language comes from Conley v. Gibson, handed down by the Supreme Court in 1957, and was intended to encapsulate the minimal requirements of federal notice pleading in drafting complaints.

Now 50 years later, the Supreme Court, in the case of Bell Atlantic Corp. v. Twombly, Docket # 05-1126, 550U.S. – 2007, “retired” this standard as “best forgotten as an incomplete, negative gloss” because it invites litigants to draft complaints using conclusory statements at the expense of providing actual facts to support a claim. In its place, the Supreme Court set forth a “plausibility” standard – a complaint must recite “enough facts to state a claim to relief that is plausible on its face” to survive attack; that is, factual “concrete allegations,” assumed true, “must be enough to raise a right to relief above the speculative level.” Twombly reinforced that “once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Yet, a complaint with nothing “more than labels and conclusions” will be subject to dismissal.

Why the need to deviate from the well-established Conley standard? The Supreme Court expressed concern over what it views as a common practice in the federal system for unmeritorious cases not to be weeded out until well into the discovery phase. The court noted the enormous expense that discovery imposes on defendants, and that “a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed.”

Without spelling out in great detail how the new standard will work in practice, the Supreme Court did provide some useful examples of the level of factual content it is looking for in order for a complaint to survive a motion to dismiss.

The case at issue involved allegations of antitrust violations, which by federal statute require a plaintiff to allege the existence of an agreement between two companies to stifle competition. In the amended complaint, the plaintiffs alleged that the defendant companies “entered into a contract, combination, or conspiracy” to prevent competition in their respective markets. This language tracked the legal elements of the federal antitrust statute at issue in the case.

But the Supreme Court found these allegations to be too conclusory, without enough factual support in the complaint to back them up. The court noted that the pleadings “mentioned no specific time, place, or person involved in the alleged conspiracies,” and furnished no clue as to who at the companies made the agreement, “or when or where the illicit agreement took place.” Without these factual details in the complaint, “a defendant seeking to respond to plaintiff’s conclusory allegations in the [complaint] would have little idea where to begin.”

The Supreme Court also referenced a decision it rendered in 2002 in the employment discrimination case of Swierkiewicz v. Sorema, 534 U.S. 506 (2002). In that case, the Supreme Court found that the plaintiff had alleged a sufficient level of facts in his complaint to survive a motion to dismiss. The court noted that the complaint “detailed the events leading up to his termination, provided relevant dates, and included the ages and nationalities of at least some of the relevant persons involved with his termination.”

Clearly, the practical effect of the Supreme Court’s Twombly decision in will play out in federal courtrooms across the country in the months and years to come. For now one thing is certain: This decision is a wake-up call for plaintiffs that mere conclusory allegations will risk a lawsuit dismissal; and for defendants, this decision is new ammunition for seeking an early dismissal of a case.

Declan C. Leonard is a partner at Albo & Oblon LLP in Fairfax. His practice is devoted to employment and business counseling and litigation, as well as general civil litigation.

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