PDNHVFOHDUWKDWWKHstricter pleading standard announced in Twombly a - PDF document

I PDNHVFOHDUWKDWWKHstricter pleading standard announced in Twombly applies to all civil actions in federal court, not just to antiWUXVWRURWKHUFRPSOH[FDVHVDVPDQ\FRXUWVKDGKHOG Federal securities law claims have been subject to a heightened pleading standard since the advent of the P rivate Securities Litigation Reform A I cleared them. I n addition to complaining about the restrictive con- I qbal alleged that he was subjected to a series of abuses, including being beaten and denied medical care. I qbal pled guilty to fraud charges in connection Pleading State of Mind AfterAshcroft v. IqbalCAROLIN E N. MITCH E LL AND DA V ID L. WALLACHThe Supreme Court’s decision in A shcroft v. I IHGHUDOSOHDGLQJVWDQGDUG7KLVDUWLFOHH[SORUHVWKHEDFNJURXQGRIWKHFDVHWKHGHFLVLRQDQGLWVUDPL¿FDWLRQV7KHDXWKRUVFRQFOXGHWKDWE\UHTXLULQJVXI¿FLHQWVSHFL¿FLW\DQGSODXVLEOHDOOHJDWLRQVof misconduct or misfeasance in all civil actions, the Supreme Court has made clear that F INANCIAL F RA U D L AW RE PORT 202 with his presence in the U nited States and served an $IWHUKHZDVUHOHDVHGDQGGHSRUWHGWR3DNLVWDQ I qbal brought a DFWLRQDJDLQVWRI¿FLDOVDWYDULous levels of the federal government, from low-level prison staff all the way up to former A ttorney General A shcroft and current FB I director Robert Muel-ler. A shcroft and Mueller moved to dismiss, argu-inter alia, that the allegations of their involvement were too conclusory to state a claim. The trial court denied the motion to dismiss and defendants ap-pealed. W hile the appeal was pending, the Supreme C Bell Atlantic Corp. v. Twombly B ell Atlantic C orp. v. T wombly I Twombly, consumers brought a putative class action alleging that regional telephone and internet service providers engaged in an antitrust conspiracy WRVWLÀHFRPSHWLWLRQ The conspiracy allegation was stated on “information and belief” arising from the defendants’ parallel pricing and failure to attempt to compete in each other’s respective service areas. I an opinion by Justice Souter, the C ourt held that nei-ther the alleged parallel pricing nor the failure to enter each others’ areas gave rise to a plausible inference of conspiracy. The C ourt discounted the direct allegation that defendants engaged in a “contract, combination or conspiracy,” holding that “these are merely legal conclusions resting on the prior allegations.” Thus, the C ourt held that plaintiffs failed to state an TwomblyH[SUHVVO\RYHUUXOHGWKHVWDWHPHQWIURPConley 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.”Twombly held that a complaint which merely states the OHJDOWKHRU\RIWKHFODLPLVQRWVXI¿FLHQW “ W hile a complaint…does not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ for his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Thus, a complaint alleging conspiracy must include “enough factual matWHUWDNHQDVWUXHWRVXJJHVWWKDWDQDJUHHPHQWZDVmade.”107KH&RXUWHPSKDVL]HGWKHHQRUPRXVFRVWof discovery in antitrust suits and the impossibility of alleviating such costs through careful management of discovery or summary judgment.11 T he S econd C ircuit’s I nterpretation of T wombly 7KUHHZHHNVDIWHUTwombly, the Second C DI¿UPHGWKHGHQLDORIWKHPRWLRQWRGLVPLVVLQ The Second C ircuit noted that Twombly created “[c]onsiderable uncertainty concerning the standard for assessing the adequacy of pleadings.” The court WKHQH[DPLQHGTwombly in detail. I t concluded that Twombly “is not requiring a universal standard of heightened fact pleading, but is instead requiring a ÀH[LEOHµSODXVLELOLW\VWDQGDUG¶ZKLFKREOLJHVDSOHDGer to amplify a claim with some factual allegations in WKRVHFRQWH[WVZKHUHVXFKDPSOL¿FDWLRQLVQHHGHGWR A pplying this standard, the C ourt of A found that plaintiff’s allegations that A shcroft and 0XHOOHUNQHZRIFRQGRQHGDQGDJUHHGWRDSROLF\RIdetaining individuals in severe conditions based on discriminatory criteria were not implausible, and thus required no further factual enhancement. A LQJO\WKH&RXUWRI$SSHDOVDI¿UPHG T he S upreme C ourt’s E xplanation of T wombly The Supreme C ourt rejected the Second C ircuit’s and other lower courts’ readings of Twombly’s plausi- This welcome development makes it considerably more difcult for plaintiffs armed raises difcult questions about how to properly apply this new federal pleading standard and complicates the calculus for plaintiffs and defendants alike at the plead- P L E ADING S TAT E OF M IND A FT E R ASHCROFT V . IQB A L 203 bility requirement. The C ourt, in a decision written by Justice Kennedy, held that whether a complaint is “plausible,” as that term is used by Twombly, turns QRWRQZKHWKHUWKHDOOHJHGFRQGXFWLVXQOLNHO\EXWRQZKHWKHUWKHFRPSODLQWFRQWDLQVVXI¿FLHQWQRQconclusory factual allegations to support a reasonable To be clear, we do not reject these bald allegations on the ground that they are unrealistic or nonsen-VLFDO:HGRQRWVRFKDUDFWHUL]HWKHPDQ\PRUHthan the C ourt in Twombly rejected the plaintiffs’ H[SUHVVDOOHJDWLRQRIDµFRQWUDFWFRPELQDWLRQRUconspiracy to prevent competitive entry,’ because it thought that claim too chimerical to be maintained. I t is the conclusory nature of respondent’s DOOHJDWLRQVUDWKHUWKDQWKHLUH[WUDYDJDQWO\IDQFLful nature, that disentitled them to the presump-/LNHZLVHWKH&RXUWUHMHFWHGWKHQDUURZUHDGLQJWKDWhad been percolating in some lower courts that Twom-bly’sSOHDGLQJVWDQGDUGDSSOLHGRQO\WR³H[SHQVLYHFRPSOLFDWHGOLWLJDWLRQOLNHWKDWFRQVLGHUHGLQTwom- The C ourt held that “Twombly H[SRXQGHGWKHpleadings standard for ‘all civil actions,’…and it ap- QB A L ’ S TWO -P RONGED A PP ROAC H TO ANALYZING CO MP LAINTS , elaborating on Twombly, sets out a two-pronged approach for evaluating whether a complaint VDWLV¿HV5XOH¶VSOHDGLQJUHTXLUHPHQW)LUVWWKHcourt must “identify[] the allegations in the complaint that are not entitled to the assumption of truth.” That is, the court must separate pleadings of fact from SOHDGLQJVRIFRQFOXVLRQ1H[WWKHFRXUWPXVWHYDOXate the factual assertions to determine if “they plausi- T he First Prong: S eparating Facts from C onclusions How to differentiate fact from conclusion is un-FOHDU7KH¿YH-XVWLFHmajority easily found that the allegation that A shcroft and Mueller “each NQHZRIFRQGRQHGDQGZLOOIXOO\DQGPDOLFLRXVO\agreed to” the unconstitutional policies pursuant to I qbal was detained was too conclusory to be entitled to the presumption of truth. The four-Justice dissent — written by Justice Souter, the author of Twombly — just as easily viewed the same as allegation of fact. Lower courts have pointed to the tension between the Twombly pleading standard and Federal Rule of C ivil P rocedure 84, which provides that cerWDLQIRUPSOHDGLQJVVHWIRUWKLQWKH$SSHQGL[WRWKH)HGHUDO5XOHV³VXI¿FHXQGHUWKHVHUXOHVDQGLOOXVWUDWHthe simplicity and brevity that these rules contem Many of these form pleadings contain direct DOOHJDWLRQVVLPLODUWRWKRVHIRXQGLQVXI¿FLHQWLQTwombly)RUH[DPSOH)RUPSURYLGHVWKDWwomblydate, at , the defendant negligently drove a motor vehicle against the plaintiff.” Form 14 pro-vides that “[a]s a result of the defendant’s negligent conduct and the unseaworthiness of the vessel, the plaintiff was injured.” ,WLVGLI¿FXOWWRGUDZDFOHDUOLQHEHWZHHQWKHDOOHJDWLRQVIRXQGLQVXI¿FLHQWLQIqbal and Twombly, on the one hand, and the allegations of Forms 11 and 14, RQWKHRWKHUZKLFKDUHE\UXOHVXI¿FLHQW1HYHUWKHless, the distinction between factual allegations and those that are merely conclusory will often determine ZKHWKHUDJLYHQFRPSODLQWVXUYLYHVDEPRWLRQ I t remains to be seen whether lower courts will ORRNWRWKHXQLTXHIDFWXDODQGOHJDOLVVXHVJLYLQJULVH as a reference in trying to navigate this apparent tension — notwithstanding the C ourt’s assertion that the standard applies to all cases. P erhaps, a fair conclusion to draw from is that direct allegations of the legal elements of a claim are conclusions and adding adjectives and adverbs is not enough to A t the very least, PDNHVFOHDUWKDWDGLUHFWallegation that a defendant acted with a particular state of mind is a conclusion, not a fact, and therefore must be disregarded in ruling on a motion to dismiss. 5XOHEVWDWHVWKDW³>P@DOLFHLQWHQWNQRZOHGJHDQGother conditions of a person’s mind may be alleged generally.” I , the C ourt rejected the argument that, under Rule 9(b), a “general” allegation can be equated with a conclusory allegation. The C ourt held WKDW5XOHE³PHUHO\H[FXVHVDSDUW\IURPSOHDGing discriminatory intent under [the] elevated pleading standard” applicable to claims for fraud and mis-WDNH³,WGRHVQRWJLYH>@OLFHQVHWRHYDGHWKHOHVV F INANCIAL F RA U D L AW RE PORT 204 rigid — though still operative — strictures of Rule Thus, after , when an essential part of a FODLPLVWKDWWKHGHIHQGDQWDFWHGZLWKDVSHFL¿FVWDWHRIPLQGSODLQWLIIVPXVWDOOHJHIDFWVVXI¿FLHQWWRFUHate a plausible inference that the defendant acted with This brings the general pleading standard of Rule 8 much closer to the heightened standard of the P SL-R A . The P SLR A requires plaintiffs stating federal securities claims to plead scienter by “stat[ing] with particularity facts giving rise to a strong inference that the defendant acted with the required state of I 7HOODEV,QFY0DNRU,VVXHVDQG5LJKWV, the Supreme C ourt interpreted this requirement in the same term that it decided Twombly Rejecting WKH6HFRQG&LUFXLW¶VKROGLQJWKDWDSOHDGLQJVDWLV¿HVthis standard if it “alleges facts [from] which, if true, a reasonable person could infer that the defendant acted with the required intent,” the C ourt held that under the heightened standard created by the P SLR A “the inference of scienter must be more than merely ‘reasonable’ or ‘permissible’ — it must be cogent and The standard adopted by — that to prop-erly allege a defendant’s state of mind a C PXVWFRQWDLQIDFWVVXI¿FLHQWWRVXSSRUWDSODXVLEOHinference that the defendant had the requisite intent RUNQRZOHGJH²LVVWULNLQJO\VLPLODUWRWKH6HFRQG C ircuit’s interpretation of P SLR A . P Tellabs P SL-R A cases may thus provide valuable insight into how T he S econd Prong: D o the Facts Plausibly S uggest an E ntitlement to R elief? W ith respect to the second prong of the analysis, C ourt made clear that “plausibility” required un-der Rule 8 demands more than the “mere possibility of misconduct” and that if the facts in the complaint DUH³QRWRQO\FRPSDWLEOHZLWKEXWLQGHHGPRUHOLNHO\H[SODLQHGE\ODZIXOEHKDYLRU´WKHQWKHSOHDGLQJZLOOEHLQVXI¿FLHQW The C ourt found that to allege a cause of action, a plaintiff must plead facts which 7RDQDO\]HZKHWKHU,TEDOKDGGRQHVRWKH&RXUWVWDUWHGE\QRWLQJWKDWWKH6HSWHPEHUDWWDFNVZHUH³SHUSHWUDWHGE\$UDE0XVOLPKLMDFNHUVZKRcounted themselves members in good standing of $O4DHGD´DQGGHVFULEHG$O4DHGDDVDQ³,VODPLFfundamentalist group” headed by O sama bin Laden and “composed in large part of his A rab Muslim dis- N otably, none of these “facts” were from SODLQWLII¶VFRPSODLQWEXWWKH\SURYLGHGWKHEDFNground against which the C ourt assessed the plausi-ELOLW\RISODLQWLII¶VDOOHJDWLRQV:LWKWKLVEDFNJURXQG C ourt concluded that plaintiff needed to plead facts plausibly showing that the defendants “purpose-fully adopted a policy of classifying post-September-11 detainees as ‘of high interest’ because of their race, religion, or national origin.” The C ourt then KHOGWKDWWKHFRPSODLQWZDVQRWVXI¿FLHQWEHFDXVHthe facts that were pleaded — , “that the N ation’s WRSODZHQIRUFHPHQWRI¿FHUVLQWKHDIWHUPDWKRIDGHYDVWDWLQJWHUURULVWDWWDFNVRXJKWWRNHHSVXVSHFWHGterrorists in the most secure conditions available un-til the suspects could be cleared of terrorist activity” ²FRXOGEHHDVLO\H[SODLQHGE\DODZIXOPRWLYHDQGWKHUHIRUHZHUHQRW³VXI¿FLHQWWRSODXVLEO\VXJJHVW´the defendants’ “discriminatory state of mind.” ’s discussion of TwomblyUHFRJQL]HVWKDWdetermining whether well-pleaded facts plausibly VXJJHVWDQHQWLWOHPHQWWRUHOLHILVD³FRQWH[WVSHFL¿FWDVN´WKDWFDOOVXSRQDUHYLHZLQJFRXUW³WRGUDZRQLWVMXGLFLDOH[SHULHQFHDQGFRPPRQVHQVH´ Further, the Supreme C ourt’s analyses in TwomblySHUPLWVWKHWULDOFRXUWWRORRNEH\RQGWKHFRPSODLQWWRWKHVXUURXQGLQJIDFWXDOFRQWH[W²ZKHWKHUWKDWEHWRUHFRJQL]HWKHSUHYDOHQFHRIODZIXOSDUDOOHOSULFLQJRUWKHHYHQWVRIWKHWHUURULVWDWWDFNV+RZHYHU C ourt drew no clear boundary as to when such UHOLDQFHH[WHQGVWRRIDUDQGOLNHTwombly before it, provides little guidance for district courts attempting to apply this test in dissimilar circumstances, other 8QLWHG6WDWHVY/OR\GV76%%DQN3/& offers an H[DPSOHRIWKHW\SHVRI³FRPPRQVHQVH´DUJXPHQWVthat may succeed under the new standard. I Lloyds TSBthe government alleged that Lloyds, an E nglish company, joined with two C ypriot investors in a conspiracy to defraud A remisSoft, a publicly traded company, and to launder the proceeds of the A lthough the C omplaint stated claims against Lloyds only for money laundering, it based the asserWLRQRIH[WUDWHUULWRULDOMXULVGLFWLRQRQWKHFODLPWKDW A merican investors. The C omplaint included P L E ADING S TAT E OF M IND A FT E R ASHCROFT V . IQB A L 205 VSHFL¿FDOOHJDWLRQVRIVHYHUDOTXHVWLRQDEOHWUDQVDFtions in which Lloyds had purportedly participated, along with the direct allegation that it conspired to defraud investors and launder money. The court held that the direct allegation of conspiracy was merely a legal conclusion entitled to no weight under )XUWKHULWKHOGWKDWWKHVSHFL¿FDOOHJDWLRQVRITXHVWLRQDEOHWUDQVDFWLRQVVXI¿FHGWRFUHDWHDSODXVLEOHinference only that Lloyds conspired to launder the C ypriot investors’ ill-gotten funds, but not that it con-spired with them to defraud A remisSoft’s investors. I n reaching this conclusion, the court relied heavily Iqbal’s invitation to assess plausibility in light of WKHFRXUW¶V³MXGLFLDOH[SHULHQFHDQGFRPPRQVHQVH´The court found that “common sense counsels against LQIHUULQJWKDWDVXEVWDQWLDOLQWHUQDWLRQDOEDQNEHDULQJan historic name and presumably wishing to maintain a global reputation for integrity and honorable dealLQJZRXOGZLWKQRVWDNHLQWKHFULPLQDOVHFXULWLHVIUDXGLWVHOIDQGQR¿QDQFLDOLQFHQWLYHRWKHUWKDQWRmaintain the patronage of a fee-generating client, en-ter into a conspiracy with two C ypriot depositors to U nited States.”40I QB A L I MP LICATIONS F OR RULE 12()(6) OTION P RACTICE The obvious consequence of will be an LQFUHDVHLQ5XOHEPRWLRQSUDFWLFH$OWKRXJKsome courts were reluctant to apply Twombly’s de-SDUWXUHIURPWUDGLWLRQDO5XOHEDQDO\VLVWRDOO leaves no doubt that they now should do so. ’s two-pronged approach raises the bar a SODLQWLIIPXVWFOHDUWRVWDWHDFODLPIRUUHOLHI([DFWO\how much more is needed after is not clear. I is clear, however, that some cases previously permitted to proceed to discovery will, instead, end with the SOHDGLQJV,WLVDOVRFOHDUWKDWWKHYDJXHO\GH¿QHGOLQHbetween fact and conclusion in Twombly and coupled with Iqbal’s invitation to trial courts to draw RQWKHLURZQH[SHULHQFHDQGFRPPRQVHQVHYHVWVcourts with broad discretion to manage the course of :KLOHWKHQXPEHURIEPRWLRQVXQGRXEWHGO\ZLOOLQFUHDVHFDVHVSHFL¿FSUDFWLFDOFRQVLGHUDWLRQVVKRXOGJXLGHZKHWKHUVXFKDPRWLRQPDNHVstrategic sense in a given case. These will involve FDUHIXODQDO\VLVWKDWWDNHVLQWRDFFRXQWDYDULHW\RIIDFWRUVLQFOXGLQJWKHOLNHOLKRRGSODLQWLIIKDVVXI¿cient facts to re-plead, the potential costs associated with responding to a factually detailed complaint, the YDOXHLQSUHYLHZLQJSODLQWLII¶VNQRZOHGJHRIWKHFDVHthe possible merits of the claims and the scope and H[SHQVHRIGLVFRYHU\ I s a S uccessful 12(b)(6) Motion W ell S pent T ime and Money? D efendants will need to do an early strategic DQDO\VLVWREDODQFHWKHFRVWVDQGEHQH¿WVRIDPRWLRQto dismiss. The possibility of an early, successful mo-tion to dismiss is always attractive. But winning a EPRWLRQRQO\WRKDYHDSODLQWLIIUHSOHDGZLWKVXI¿FLHQWIDFWXDOGHWDLOPD\SURYHDKROORZYLFWRU\Moreover, responding to detailed factual allegations may require early investigation of a nature and scope unnecessary to respond to general, conclusory alleJDWLRQV7KHNH\VZLOOEHWU\LQJWRDVFHUWDLQZKDWDSODLQWLIINQRZVDQGDVVHVVLQJZKHWKHUWKHVL]HRIWKHFDVHDQGWKHSRVVLELOLW\RIVXFFHVVMXVWL¿HVWKHFRVWRI Sometimes a failure to plead adequate facts may QRWPHDQWKDWVXI¿FLHQWIDFWVDUHXQNQRZQWRSODLQWLII:KHQDWWHPSWLQJWRGLYLQHWKHOLNHO\VWDWHRISODLQWLII¶VNQRZOHGJHGHIHQGDQWVFDQWDNHFOXHVIURPVHYHUDOVRXUFHV([SHULHQFHZLWKRSSRVLQJFRXQVHOwhether government announcements or media reports WKDWODFNHGGHWDLOOLNHO\WULJJHUHGWKH¿OLQJZKHWKHUincluded facts are just dead wrong and the length of time between an event and an associated lawsuit are DOOXVHIXOSLHFHVRIGDWDZKHQGHFLGLQJZKHWKHUWR¿OH I n certain circumstances, even when plaintiffs KDYHVXI¿FLHQW³IDFWV´WRSURSHUO\UHSOHDGSRVWEPRWLRQVPD\KDYHYDOXH)LUVWWKH\PD\give defendants who are uncertain about the gen-esis of plaintiffs’ claims more information that will be useful in investigating the allegations internally and assessing the merits of the case early. Second, if plaintiffs do amend to survive , defendants PD\EHDEOHWRXVHWKHGHWDLOHGSOHDGLQJWRGH¿QHWKHboundaries of discovery and to frame an early sum-mary judgment motion. Limiting discovery in this ZD\ZLOOQRWRQO\UHGXFHWKHH[SHQVHDQGEXUGHQRIOLWLJDWLRQLWZLOODOVRPDNHLWPRUHGLI¿FXOWIRUSODLQ F INANCIAL F RA U D L AW RE PORT 206 WLIIVWR¿VKIRULQIRUPDWLRQLQRUGHUWRDPHQGWKHLUpleadings to add claims which they could not allege O f course, cases will continue to arise, as they have in the past, based on nothing more than a few morsels of fact, or even speculation, wrapped in le-gal conclusions. P laintiffs might have been able to VTXHDNE\EHIRUHE\¿OOLQJLQJDSVZLWK³LQIRUPDtion and belief” allegations. N ow, even if those types of allegations remain permissible, courts relying on VKRXOGYLHZVXFKSOHDGLQJVZLWKDVNHSWLFDOH\Hwhen deciding what is fact and what is conclusion. :KLOHSHUKDSVDSODLQWLIIFDQVSLQDZHEVXI¿FLHQWWRFOHDUWKHSOHDGLQJKXUGOHNQRZLQJKRZWKLQSODLQWLII¶VNQRZOHGJHLVDWWKHRXWVHWPD\KHOSIUDPHWKHdefense or an effective settlement strategy. I n some instances, where allegations in the complaint are ob-viously wrong or “information and belief” pleadings seem suspiciously thin, defendants may want to challenge the basis for the allegations by serving a Rule 11 motion under the safe harbor provision, to determine how willing plaintiffs are to stand by them. R equests for D iscovery S tays May B Favorably R eceived D istrict courts are often hostile to discovery stays during the pendency of motions to dismiss. D GDQWV¶FULHVRIH[SHQVLYH¿VKLQJH[SHGLWLRQVGLVJXLVHGas discovery have frequently been rejected. But now WKDWWKH6XSUHPH&RXUWKDVVSHFL¿FDOO\UHFRJQL]HGthe validity of the concern — “Rule 8…does not un-ORFNWKHGRRUVRIGLVFRYHU\IRUDSODLQWLIIDUPHGZLWKnothing more than conclusions” — defendants should EHEHWWHUDUPHGWRVHHNDWRWDORUOLPLWHGVWD\RIGLVcovery pending resolution of a motion to dismiss. C ourts must now require plaintiffs to plead a plau-VLEOHFODLPEHIRUHRSHQLQJWKHÀRRGJDWHVWRFRVWO\GLVFRYHU\$WOHDVWRQHFRXUWDOUHDG\UHFRJQL]HGWKHPHULWRIWKLVDSSURDFKIRUFRPSOH[FRVWO\FDVHVLQWKHZDNHRITwombly I ndeed, it would turn RQLWVKHDGWRDOORZSODLQWLIIVWRWDNHGLVFRYHU\based on a conclusory complaint simply because the defendant has not yet had time to get a motion to dis- A bsent a discovery stay, defendants intent on bringing a Rule 8 challenge to a complaint may want WRPRYHIRUZDUGTXLFNO\UDWKHUWKDQVHHNLQJWKHW\SLFDOH[WHQVLRQEHIRUH¿OLQJDPRWLRQWRGLVPLVV7KHQWKHFORFNZLOOEHZRUNLQJDJDLQVWSODLQWLIIVZKRDUHWU\LQJWRWDNHGLVFRYHU\WRVKRUHXSDQRWKHUZLVHGH SENATOR S P ECTER ’ S P RO P OSED BILL OVERRIDING I QB A L O n July 22, Senator A rlen Specter introduced proposed legislation designed to override Twombly. Specter’s bill, titled the “ N otice P ing Restoration A ct of 2009,” provides that “a Fed-eral court shall not dismiss a complaint under Rule ERUHRIWKH)HGHUDO5XOHVRI&LYLO3URFHGXUHH[FHSWXQGHUWKHVWDQGDUGVVHWIRUWKE\WKH6X C ourt of the U nited States in Conley v. Gibson U .S. 41 (1957).” C uriously, this proposed bill H[FOXGHVPRWLRQVXQGHU5XOHF7KLVFRXOGEHa conscious effort to create a two-tier system under which the standard would apply to motions to dismiss because they come early in the case, while WKHPRUHH[DFWLQJstandard would apply to motions for judgment on the pleadings which come later, after a plaintiff may have had an opportunity to XVHGLVFRYHU\WRÀHVKRXWKLVDOOHJDWLRQV+RZHYHUWKHRPLVVLRQRI5XOHFLVPRUHOLNHO\DUHVXOWRIsloppy drafting. This impression is buttressed by the fact that Specter’s bill would apply Conley’s plead-ing standard to FODLPVLQIHGHUDOFRXUW³>H@[FHSWDVRWKHUZLVHH[SUHVVO\SURYLGHGE\DQ$FWRI&RQJUHVVor by an amendment to the Federal Rules of C ivil P which takes effect after the date of enactment of this Act.” I f adopted as written, this would invalidate Rule 9(b), the P SLR A and any other curUHQWO\H[LVWLQJVWDWXWHRUFDVHODZFUHDWLQJDKHLJKWened pleading standard for particular types of claims. 7KHVHSHFXOLDULWLHVPDNHLWXQOLNHO\WKDW6SHFter’s bill will pass, at least in its current form. How- Iqbal’s two-pronged approach raises the bar a plaintiff must clear to state a claim for relief. Exactly how much more is is not clear. P L E ADING S TAT E OF M IND A FT E R ASHCROFT V . IQB A L 207 ever, it is yet to be seen whether Specter will succeed in gaining support for a more limited effort to effect a return to the lower pleading standard that applied Twombly. CONCLUSION GHFLVLRQPDUNVDZHOFRPHDQGVLJQL¿cant stiffening of the federal pleading standard. By UHTXLULQJVXI¿FLHQWVSHFL¿FLW\DQGSODXVLEOHDOOHJDtions of misconduct or misfeasance in all civil actions, WKH6XSUHPH&RXUWKDVPDGHFOHDUWKDWQRQVSHFL¿F“notice” pleadings can no longer unleash costly liti NOTES 1 See 550 U .S. 544 (2007).2 See 550 U .S. at 550-51. 3 Id. at 551. 4 Id5 Id See 355 U .S. 41 (1957).7 Twombly Id9 Id. at 555. 10 11 Id. at 557-59.12 See Iqbal v. Hasty, 490 F.3d 143 (2007). Id. at 155. 14 Id. at 155-58. 15 Id. at 157-58. Id17 See Iqbal v. Hasty)GDWv. Marva Collins Preparatory Sch.1RFY:/DW Q6'2KLR-XO\Thomas v. Social Sec. Admin1R:/ See Ashcroft v. Iqbal N o. 07-1015, slip. op. at 14 U .S. May 18, 2009).19 Id. at 17 (citation omitted).20 Gunasekera v. Irwin)GWK&LUVHHDOVRHJ)LOLSHNY.UDVV)6XSSG1',OOWalker v. Stewart N )-3'/':/DW Q0'/D-DQ,QUH3DSVW/LFHQVLQJ*0%+ &R)6XSSG''& See Iqbal, slip. op. at 20.22 Id.23 Id. 24 6HHHJ&%7)OLQW3DUWQHUV//&Y*RRGPDLOSystems, Inc.)6XSSG1'*D2007) (relying on Rule 84 to conclude that Twombly did not affect the pleading standard in patent cases). Slip. O p. at 23. See27 6HH7HOODEV,QFY0DNRU,VVXHV 5LJKWV/WG, 551 U .S. 308 (2007). 28 Id. at 317, 324.29 See Iqbal30 Id. at 17.31 Id. at 18. 32 Id. 33 Id. at 19-20.34 See id. at 15.35 :/6'1<$XJ Id37 Id38 Id39 Id40 Id.41 Sinaltrainal v. Coca-Cola Co., — F.5d —, 2009 :/WK&LUGLVUHJDUGLQJDOOHJDWLRQVRIconspiracy, inter alia, because they were stated on Id. at 14. 43 Coss v. Playtex Products, LLC N o. 08 C 50222, W L 1455358 ( N . D . I ll. May 21, 2009).