A "Plausible" Explanation of Pleading Standards: Bell Atlantic Corp. V. Twombly

Rule 8(a)(2) of the Federal Rules of Civil Procedure requires that plaintiff's complaint contain a short and plain statement of the claim showing that the pleader is entitled to relief. (1) Fifty-one years ago, in Conley v. Gibson, (2) the Supreme Court unanimously declared that a complaint should not be dismissed for failure to state claim unless it appears beyond doubt that the plaintiff can prove set of in support of his claim which would entitle him to relief. (3) Last term, in Bell Atlantic Corp. v. Twornbly, (4) the Court called into question this mantra, holding that plaintiffs alleging an antitrust conspiracy under section 1 of the Sherman Act (5) allege some factual context suggesting (6) In requiring that plaintiffs plead enough to state claim to relief that is plausible on its face, (7) the Court issued broad decision that appears to tighten the reins on pleading standards. The more stringent approach in Twombly signals growing hostility toward litigation and shift away from the liberal Conley mindset. Because Twombly's holding is somewhat ambiguous, however, lower courts and plaintiffs' lawyers have significant leeway to tease out the meaning of plausibility in different contexts. In 1984, telephone conglomerate AT&T underwent divestiture, leaving behind number of regional service monopolies. (8) Congress then passed the Telecommunications Act of 1996 to facilitate market entry and encourage these regional service providers to compete with one another. (9) In 2003, class of subscribers to local telephone and high-speed Internet services brought suit against the regional service providers, alleging violation of section 1 of the Sherman Act, (10) which prohibits [e]very contract, combination in the form of trust or otherwise, or in restraint of trade or commerce among the several States. (11) The plaintiffs' complaint alleged that the regional service providers conspired to restrain trade by inhibiting the growth of their competitors and by agreeing to refrain from competing against one another, as indicated by their common failure to pursue attractive business opportunities in one another's territories. (12) To support their conspiracy claim, the plaintiffs asserted showing parallel behavior, but showing concerted action or actual agreement. (13) The United States District Court for the Southern District of New York dismissed the complaint. (14) Citing precedent, the court noted that plaintiffs alleging conspiracy must always assert [in their complaint] that, if true, support the existence of such as motivation or conduct that lends itself to an inference of an (15) The district court concluded that plaintiffs' complaint in the instant case provide[d] reason to believe that defendants' parallel conduct was reflective of any (16) The United States Court of Appeals for the Second Circuit reversed the district court's dismissal. (17) The Second Circuit rejected the notion that the plaintiffs were required to plead facts, and instead reiterated the standard set forth in Conley v. Gibson (18) that a complaint should not be dismissed for failure to state claim unless it appears beyond doubt that the plaintiff can prove set of in support of his claim which would entitle him to relief. (19) The court concluded that the plaintiffs' allegations met this standard and thus were sufficient to give the defendant fair notice of what the ... claim is and the grounds upon which it rests. (20) The Supreme Court granted certiorari and reversed. Writing for the Court, (21) Justice Souter asserted that Conley's no set of facts language has earned its retirement, (22) holding that plaintiffs plead enough to state claim to relief that is plausible on its face. (23) Justice Souter conceded that allegations of parallel conduct are consistent with conspiracy, but added that, without more, such allegations are just as much in line with wide swath of rational and competitive business strategy unilaterally prompted by common perceptions of the market. …