Have Iqbal/Twombly Impacted Federal Litigation in a Significant Way
By Ron Breaux and Chris Quinlan
Ashcroft v. Iqbal, 556 US 662 (2009),and Bell Atlantic Corp. v. Twombly, 550 US 544 (2007), initially shocked the federal litigation bar. The decisions abrogated the long-standing Conley pleading standard, which permitted dismissal only when it was “beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” In place of that “no set of facts” standard, the Supreme Court instituted plausibility pleading and ostensibly raised the bar for plaintiffs to survive motions to dismiss. Interestingly, critics and proponents alike predicted that Iqbal/Twombly would drastically increase the difficulty of defeating 12(b)(6) motions and have long-lasting repercussions.
Empiricists scrambled to quantify the Iqbal/Twombly effect and initially found evidence that Iqbal/Twombly were altering the pleading landscape. For example, Patricia Hatamyar, writing in the American University Law Review, found that the rate of 12(b)(6) motions granted increased significantly in the three months following Iqbal. However, in the years that followed, as more cases were decided under the new plausibility regime, empiricists struggled to duplicate previous results and confirm a long-term effect. Most notably, by 2011, a Federal Judicial Center report to the Judicial Conference Advisory Committee (FJC report) found “no increase in the rate of grants of motions to dismiss without leave to amend.”
How could holdings so widely seen by practitioners as revolutionary and cited thousands of times each year have so little effect? A memorandum from Andrea Kuperman to the Civil Rules Committee suggested a plausible explanation: circuit courts overrule aggressive applications of the Iqbal/Twombly standard and “instruct the district courts to be careful in determining whether to dismiss a complaint.” As subsequent commentators have stated more plainly, Iqbal/Twombly are not having a substantial long-term effect because lower courts are simply not following their precedent.
This theory, though plausible, is essentially unprovable: it contends that lower courts have adopted the language but not the import of Iqbal/Twombly—that Iqbal/Twombly are interpreted as “a new framework in which to analyze familiar pleading concepts” without “dramatically changing the application of the standards used to determine pleading sufficiency.” Because the Iqbal/Twombly standard is so subjective, district and appellate courts can pull back from Iqbal/Twombly without explicitly refuting Supreme Court precedent. In other words, a judge can talk the Iqbal talk but need not walk the Iqbal walk.
The subjectivity of applying the standard, however, also makes a case by case legal analysis ineffective at proving whether there has been judicial retreat fromIqbal/Twombly. As long as a judge adopts the plausibility language, it is difficult to distinguish between decisions to deny a motion to dismiss based on fact-intensive subjective factors and decisions that reflect an abandonment of the Iqbal/Twombly standard.
Additionally, the empirical backbone of the “Iqbal/Twombly have little effect” argument may be fatally deficient. See e.g., Gelbach, Jonah, Can the Dark Arts of the Dismal Science Shed Light on the Empirical Reality of Civil Procedure (2014), Faculty Scholarship, Paper 1046.This is because studies following the FJC report have primarily focused on one statistic: the success rate of motions to dismiss. That success rate, however, does not account for at least three important factors. First, as the FJC study itself confirms, 12(b)(6) motions have increased significantly since Iqbal. Second, defendants now file 12(b)(6) motions in cases where they may have had little chance of succeeding under Conley and therefore may not have filed. Third, plaintiffs may refrain from bringing cases that might have survived under Conley, but that have only very little chance under Iqbal. These factors alone would impact any analysis relying exclusively on the success rate of motions to dismiss, and therefore call into question the FJC study on which most commentators rely.
So, where are we? The empirical data, flawed as it may be, suggests the needle has not moved materially following the adoption of Iqbal/Twombly. Interestingly, many practitioners, particularly in the specialized fields of antitrust, employment and discrimination law, do not agree. To many, it simply “feels” like more cases are being tossed at the motion to dismiss stage. The debate will continue.