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New Plausibility Standard for Federal Civil Pleadings
June 2010
The Maryland Litigator (Maryland State Bar Association)
In Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), the Supreme Court, in a 5-4 decision, clarified and heightened the applicable pleading standard for all federal civil actions, by holding that Javaid Iqbal failed to state a claim under Federal Rule of Civil Procedure 8(a)(2). Rule 8(a)(2) requires that a complaint contain a "short and plain statement of the claim showing that the pleader is entitled to relief." In so holding, the Iqbal court reasoned that a complaint must also "state a claim to relief that is plausible on its face," not just conceivable, otherwise it will not survive a motion to dismiss. Further, the Court opined that Rule 8 "does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions" or "a formulaic recitation of the elements of a cause of actions." The Iqbal decision extended to all federal civil pleadings the Court's prior holding in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) an anti-trust case, which retired the "no-set-of-facts" test of Conley v. Gibson, 355 U.S. 41 (1957).
In Iqbal, the plaintiff, Mr. Iqbal, was arrested and detained by federal officials after September 11, 2001 as a person of "high interest." After release, he filed an action alleging that federal officials, namely former Attorney General John Ashcroft, adopted a policy which discriminated against persons on account of race, religion or national origin, in violation of the First and Fifth Amendments. The Supreme Court held his complaint stated only conclusory statements, which were not entitled to the assumption of truth. And even if taken as true, such allegations could not establish that federal officials adopted a policy because of race, religion or national origin, rather than in spite of — a required factor in proving a constitutional discrimination claim. The Iqbal Court reasoned that, pursuant to Twombly, Mr. Iqbal's allegations in his complaint did not "nudge his discrimination claims "across the line from conceivable to plausible." The Court remanded the case to the Court of Appeals for the Second Circuit to determine whether to allow Mr. Iqbal to seek to amend his pleading.
Therefore, according to Iqbal, when deciding a motion to dismiss for failure to state a claim, federal courts must now determine:
(1) If the claim is entitled to an assumption of truth because it states a plausible claim; and, if so,
(2) Whether the allegations plausibly entitle the plaintiff to relief.
The first step of the test questions the factual sufficiency of a complaint, followed by an inquiry into its legal sufficiency. The Iqbal test is arguably more complete as compared to the retired "no-set-of-facts" test of Conley, which tested only the legal sufficiency of a complaint by requiring that "a complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim."
However, Iqbal's two-step plausibility test has been criticized and questioned by two pending Congressional bills, Open Access to Courts Act of 2009, H.R. 4115, 111th Cong. (2009), and Notice Pleading Restoration Act of 2009, S. 1504, 111th Cong. (2009), which attempt to overturn both Iqbal and Tombley, thereby restoring the standard of Conley. Both bills were referred to the House and Senate Judiciary Committees, respectively.
The Maryland Court of Appeals has yet to adopt the Iqbal standard for Maryland civil pleadings. However, federal defendants can now successfully defend against plaintiffs, armed with only general accusations, who seek to gain access to discovery in the hopes of finding facts needed to state a claim.
