Twombly Reactions (Updated)
We have posted a little on Twombly and will have more in the future. Here is a quick round up of other thoughts and reports on the decision:
At the Antitrust & Competition Policy Blog, Daniel Sokol writes that
I cannot say that I am surprised by the decision nor do I disagree with it. We don’t want to allow for unnecessary fishing expeditions in our court system. If there is a good case, there should be evidence to support it.
Shubha Ghosh meanwhile writes that
the opinion seems consistent with the Court’s 2004 decision in Trinko: it’s darn hard, and perhaps frankly impossible, to challenge the RBOC’s under the antitrust laws. Trinko forecloses Section Two challenges, for the most part, and now the proof of agreement required after Twombly for a Section One claim seems insurmountable given how the Court understands the Telecommunications industry.
At Blawgletter, Barry Barnett thinks that
the repudiation of Conley v. Gibson will exert more gravitational force than the conclusion that competitors’ parallel conduct, without more, doth not an unlawful agreement make. Will Twombly open the way to searching review of pleadings on motions to dismiss?
At the Civil Procedure Prof Blog, Jeremy Counseller writes that the
court held that to state a claim under section 1 of the Sherman Act the complaint must present enough factual matter to suggest that there was an agreement to engage in anticompetitive conduct as opposed to facts suggesting parallel courses of conduct that prevent competition. I read this opinion and thought about Chris Fairman’s article, The Myth of Notice Pleading.
The Baseball Crank predicts that Twombly
will almost certainly be the most practically significant case of this term, a major, major win for defendants, especially corporate defendants.” And that Twombly “is welcome news. Given the broad latitude given to attorneys in discovery and courts’ traditional unwillingness to impose sanctions on all but the most obviously frivolous claims, there really is no meaningful substit[u]te for vigilance in reviewing initial pleadings to weed out lawsuits that act as a drag on the American economy.
Reuters, Bloomberg and the AP all have articles on Twombly. As does Tony Mauro at the Legal Times.
Update (5/22): Randy Picker at the University of Chicago Law School Blog discusses Form 9 from the Federal Rules of Civil Procedure and writes that:
Focus instead on what Form 9 says. As Justice Stevens notes in his dissenting opinion, see at page 6, the bare allegation of negligence in Form 9 would have been a conclusion of law under old-school pleading. But it is exactly what Form 9 contemplates and nothing in the word “negligence” gives the defendant any sense of the way in which negligence is claimed. It is just asserted, with nothing more. Footnote 10 of the majority opinion just skips over this entirely in emphasizing that the plaintiff there does list many facts. Yes, indeed; probably all of the facts known to the plaintiff but nothing about how the car was actually driven—something unknown to the plaintiff—just that it was driven negligently.
If we turn back to antitrust, as Justice Stevens notes at page 21 of his opinion, the assertion of negligence in Form 9 is no less bare than the standard assertion of the existence of a conspiracy in an antitrust complaint. The problem, of course, is the one-sidedness of the information available on the existence (or non-existence) of a conspiracy, a point that Justice Stevens emphasizes at pages 17 to 18 of his opinion. Often the plaintiffs won’t be able to get at actual facts of conspiracy—the who, what when and where contemplated by footnote 10—without discovery.
The majority opinion makes no effort to explain how we as a society should confront this core one-sidedness of information. This is hardly just an antitrust problem. We will constantly confront information that is systematically more available to one side more than the other, and we will see that in cases across the board, including the discrimination cases that receive some attention in today’s opinions. The whole point of the federal rules of civil procedure—rules controlled by the Supreme Court—is to figure out exactly how to manage that one-sidedness.
The critical question isn’t how to frame the answer, the problem posed by footnote 10, but rather how to frame discovery, and more generally, how to manage the one-sidedness of information. It is the fear of discovery run amok that drives the majority opinion—see the extensive quotation in footnote 6 of the majority opinion of a 1989 article by Judge Frank Easterbrook—and yet the Court offers no guidance as to how matters might be improved.
Guest blogging at the Volokh Conspiracy, Einer Elhauge argues that Twombly:
is quite insignificant, notwithstanding the view of the estimable Baseball Crank that it “will almost certainly be the most practically significant case of this term.” All the case holds is that bare allegations of a conspiracy and parallel conduct do not suffice without more specificity. That much was the widespread actual practice in the lower courts even before this decision. What we really needed guidance on was which “plus factors” would, coupled with parallel conduct, suffice to make out an antitrust conspiracy. On that the opinion is of no help. So all it really does is slap down one wayward decision without really settling anything important for the future.
Guest blogging at the Civil Procedure Prof Blog, Scott Dodson argues that Twombly “gutted” Conley v. Gibson and he is troubled by the decision:
First, the Court does not respond adequately to Justice Stevens’s point that plaintiffs in antitrust claims often do not have in their possession circumstantial evidence of an agreement to conspire (to say nothing of direct evidence), and requiring such evidence prior to discovery (when they might be able to obtain it) may bar many meritous cases. In my view, the Court should have weighed this concern when it discussed the burden on defendants confronted with costly litigation.
Second, it seems to me that the Court was motivated by the merits of the claim, rather than the sufficiency of the pleading. Why else would the Court have constructed the odd requirement of pleading some facts supporting the existence of an agreement but then not limiting the plaintiff to those facts? The reason is that the Court thinks that a plaintiff that cannot muster at least some facts supporting the existence of an agreement at the pleading stage will not have any facts at trial, either. This sentiment is buttressed by the Court’s statement that this case has no “reasonably founded hope” of “reveal[ing] relevant evidence” in discovery. In my view, that is, at best, contrary to what Rule 8 has stood for for 50 years and, at worst, just plain wrong.
Third, it is not clear what distinguishes this case from, say, a negligence case pleaded like Form 9. If the Court is saying that Rule 8 requires “notice-plus” pleading, then I think we shall see a sharp increase in Rule 12(b)(6) litigation on the sufficiency of fact pleading (which we may see anyway) and many more plaintiffs thrown out of court. If, on the other hand, the Court is saying that the combination of the § 1 requirements and the burdens on the defendant in this case justify requiring “notice-plus” pleading, then it is a troubling slippery slope that the Court heads down. Many other kinds of cases are “sprawling, costly, and hugely time-consuming,” as the Court describes this one. Mass torts, discrimination class actions, and a host of other causes of action require involved showings of proof (yet fall under Rule 8 rather than Rule 9) and have the potential to impose enormous costs on a defendant. The Court does not justify adequately, in my view, why the line is drawn at this case and not others.
The WSJ Law Blog also has a short post about the decision.
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