Tuesday, November 24, 2009

My Letter to the Senate Judiciary Committee Regarding Notice Pleading

[With the Senate Judiciary Committee set to hold a hearing on restoring notice pleading next week, I have sent the following letter:]

The Honorable Patrick J. Leahy, Chair
The Honorable Arlen Specter
The Honorable Sheldon Whitehouse
Committee on the Judiciary
SD-224 Dirksen Senate Office Building
Washington, DC 20510-6275

Dear Senators Leahy, Specter, and Whitehouse:

    I am writing regarding the hearing scheduled for December 2, 2009, on the following question: “Has the Supreme Court Limited Americans’ Access to Courts?”  The answer is clearly yes.  The only real question is what Congress should do in response.

    I have been teaching civil procedure and federal jurisdiction at the law schools of Rutgers University, Columbia University, and Cornell University for over seventeen years.  During that time, I have also represented both paying and pro bono clients in federal court litigation.  Based on my knowledge of and experience with the Federal Rules of Civil Procedure, I can say that the changes wrought by the recent two Supreme Court decisions that have occasioned the coming hearing--Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009)--are nothing short of revolutionary.  Since their adoption in 1938, the Federal Rules have been universally understood to establish a system of “notice pleading,” in which pleadings simply serve to place opposing parties and the court on notice of the nature of the plaintiff's case, with merits decisions on questions of contested fact to follow discovery.

    Although the Supreme Court’s rulings in Twombly and Iqbal formally pay lip service to the notion of notice pleading, in substance they discard it.  By requiring federal district judges to dismiss complaints that contain “conclusory” or “implausible” allegations, Twombly and Iqbal demand the impossible: Judges must now make determinations about what events are likely to have occurred before the parties have presented any evidence--indeed, before the parties have even had an opportunity to develop their evidence through discovery.

    Let me be clear that I do not have a political ax to grind.  I acknowledge that there are tradeoffs between a system of liberal notice pleading and a system of more demanding “fact pleading.”  Liberal notice pleading ensures that plaintiffs with meritorious, but difficult to prove, cases have an opportunity to avail themselves of discovery in order to obtain the evidence they need.  However, notice pleading also permits some plaintiffs with non-meritorious or even frivolous claims to impose potentially large discovery costs on defendants, thus inducing some of those defendants to settle the litigation for its nuisance value.  Conversely, the stricter regime of Twombly and Iqbal reduces the damage that can be done by frivolous suits, but it also prevents some plaintiffs with meritorious claims from ever having their day in court. 

    If Congress or the Rules Advisory Committee were writing on a clean slate, it would be appropriate to attempt to weigh the costs and benefits of looser or tighter pleading standards.  However, for three inter-related reasons, that sort of a priori cost-benefit analysis is inappropriate here.

     First, the Supreme Court lacked the legitimate authority to change the pleading standard.  Under the Court's own precedents, when interpreting the Federal Rules, its job is to effectuate the language and policy of those Rules, rather than to substitute its own policy judgment.  See Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002).  Congress has sometimes made the policy judgment that the particular combination of costs and benefits in some area of law call for a heightened pleading standard, as in the Private Securities Litigation Reform Act (PSLRA), 15 U.S.C. § 78u-4(b)(1).  But absent guidance from Congress, the Court has no business re-weighing the pros and cons of liberal versus restrictive pleading rules.

    Second, no one--not the Court, the Rules Advisory Committee, or Congress--is writing on a clean slate.  Notice pleading is simply one piece of the overall civil litigation system in the federal courts.  It is designed to work with the rest of the rules, including Rule 11, governing sanctions for improper filings, and Rules 26 through 37, governing discovery.  The Rules as a whole presume that merits decisions in cases of disputed facts will occur only after a fair opportunity for discovery.  Even when Congress has supplanted the notice pleading default, as it did in the PSLRA, it has been careful to adopt a standard--the specificity of the factual allegations--that a court can apply from the face of a complaint.  By contrast and as noted above, the Court’s “plausibility” standard makes no sense for district judges who have not yet heard any evidence.

     Third, if it ain’t broke, don’t fix it.  Neither the Supreme Court in its recent decisions nor any credible commentator has cited evidence that the traditional regime of notice pleading has led to systematic abuses that cannot be handled through the Rules Advisory Committee process.  Over the last three decades, the Rules Advisory Committee has repeatedly studied allegations of discovery abuse.  It has responded forcefully with extensive changes that have been working well.  The Rules Advisory Committee did not propose the changes wrought by Twombly and Iqbal because it did not think them necessary or useful.

    Accordingly, I urge you to reinstate the notice pleading standard as it existed before Twombly and Iqbal.  There are many different ways this can be accomplished.  Perhaps the simplest would be a statute providing that neither a complaint nor an answer which otherwise satisfies the requirements of Rule 8 shall be dismissed on the ground that it is “conclusory” or makes “implausible” factual allegations.  The supersession clause of the Rules Enabling Act, 28 U.S.C. § 2072(b), would remain in effect so that the Rules Advisory Committee could, pending further study, tinker with the pleading standard should evidence emerge that the costs of notice pleading substantially outweigh the benefits.

    Whether Congress uses the foregoing approach or one of the alternatives currently under consideration, the important thing is to roll back the illegitimate, incoherent, and ill-advised changes wrought by the Supreme Court in Twombly and Iqbal.



Bob Hockett said...

Hear hear, Mike. A stirring and all too rare combination of good old fashioned horse sense and inspiringness alike. If you should happen to send another version in the form of a petition, I and no doubt many other law profs would be honored to sign. (And I'm even among those who have taught Civil Procedure!)

All best,

Patrick S. O'Donnell said...

I second Bob's sentiment. And I'd sign the petition as a non-law adjunct instructor at a community college! (I have several books on civ pro although I can't say I've read them in their entirety.)

WB said...

While this is obviously a brief letter trying to influence Congress towards your preferred policy, I am still surprised at your description of the issues. You don't even mention Rule 8! Indeed, an ignorant reader could be forgiven for assuming that the Federal Rules had previously contained the words "notice pleading" or that the Supreme Court had announced that it was changing the Rules. In fact, as we know, Justice Souter in Twombly was explicitly interpreting the language and policy of Rule 8. Your criticism that the Court had “substitute[d] its own policy judgment” instead of “effectuat[ing] the language and policy” of the Rule is particularly poor reasoning. How was the Court not effectuating the language of Rule 8 in Twombly? And what is the “policy” of Rule 8 that the Court was supposedly refusing to effectuate? Where is it written and whose policy judgment is being illegitimate[ly]” displaced by the Court.

Souter's explanation of Rule 8's "short and plain statement of the claim showing that the pleader is entitled to relief" was perfectly plausible – there is nothing illogical about requiring a minimal pleading of a factually plausible claim or saying that legal conclusions are insufficient to “show” that the pleader is entitled to relief. (In fact, “showing” that the pleader is entitled to relief seems to require that some facts must pleaded; otherwise, Rule 8 could have said “saying [or claiming, or representing] that the pleader is entitled to relief”. Doesn’t “show” in this context connote some presentation or proffer of evidence?)

Perhaps more to the point, the strong form of notice pleading that you seem to prefer has not been generally used in the federal courts. Conley's "no set of facts" rhetoric -- which itself lacked any basis in the rule -- was routinely understood as not to be taken at face value. My experience was that while judges did sometimes set the "notice pleading" bar lower for favored plaintiffs, most litigants had either to come up with a plausible pleading with some factual basis or exit swiftly on a motion to dismiss. Complaints based on conclusory allegations – “Defendant violated Statute X”, “Defendant tortiously interfered with Plaintiff’s legitimate business expectations” -- were routinely dismissed. Having written 12(b)(6) motions before and after Twombly/Iqbal, my experience is that they are very useful because by clearing away the traditional kowtowing towards Conley’s “no set of facts” formula, they more clearly describe the actual pleading requirements that have been in play for some time. Twombly and Iqbal, however, do not seem to do more than that. I note that I could be persuaded that Twombly/Iqbal are actually revolutionary in effect – which might strengthen your argument -- but I have not seen any evidence supporting that conclusion to date. (And Twombly, at least, has been around for a while.)

Finally, you ask Congress to “reinstate the notice pleading standard as it existed before Twombly and Iqbal.” What does this mean – Conley or the actual spectrum of standards that existed in the lower courts requiring notice of some basic facts from most plaintiffs and generally disallowing pleadings based on legal conclusions?

Kenneth B. Morgan said...

Pardon me for asking, but by what constitutional authority would Congress hope to create legislation that would limit the Judiciary's authority to determine the minimal procedural (not substantive) requirements of a complaint?

Michael C. Dorf said...

1) Thanks to Bob and Patrick for offering to sign on, but I'm flying solo here.

2) WB: I and many other civil proceduralists have made the more detailed arguments elsewhere. For some of mine, see, e.g.,
as well as half a dozen of my blog entries that talk about, inter alia, Rule 8, as well as what is now designated Form 11, which is especially hard to square with the prohibition on "conclusory" allegations. I do not support (nor do I state here or elsewhere that I support) reinstating the Conley "no set of facts" language. My proposal to undo the requirements of non-conclusoriness (if that's a word) and plausibility does not purport to reinstate the Conley language.

3) Kenneth B. Morgan: Congressional power to make laws necessary and proper (Art I, sec. 8) to carry into execution its power under Article III, sec. 1, to "ordain and establish" "inferior courts" is more than ample to create procedural rules for the federal district courts. There is no reason to think that determining the minimal procedural content of a complaint falls outside this power. If it did, then then the PSLRA would be unconstitutional.

WB said...

Prof. Dorf:

I appreciate the response, but I still do not understand why it is correct to say that Iqbal and Twombly are both illegitimate and incoherent. They seem like plausible and workable interpretations of Rule 8's actual language by a court fully authorized to interpret the Federal Rules. After reading your Findlaw articles and the blog posts I could locate, I am still not certain of why you insist that “notice pleading” is absolutely required by the language of Rule 8. I get that you don’t like the change and that you believe that the Court did not adequately explain its departures from past precedents. But is that really enough to say that the Court’s decision to reinterpret Rule 8 was “illegitimate” (especially since you seem to concede that Conley’s interpretation of Rule 8 was a mistake) or that its interpretation of Rule 8’s text was so wrong that it is “incoherent”?

Did the drafters of the Federal Rules really expect that a plaintiff who could not articulate any plausible factual framework for a cause of action would nonetheless be able to conduct months or years of very expensive discovery, (often against multiple defendants)? If they did, why require plaintiffs to make a "showing" of entitlement to relief in their complaint? My understanding of the text and the history – which is doubtless inferior to yours -- is that the drafters of the Federal Rules wanted simpler pleading, but still wanted to bar plaintiffs who could not sketch out some entitlement to relief. So what in Twombly or Iqbal is unfaithful to that policy aim?

Form 11 is indeed short. Do you think that that it would no longer fly under the new plausibility standard? And would its factual allegations still be sufficient if, as a modern complaint would, it was also brought against the local government authority, the driver’s employer, a car manufacturer, a car dealer, an ambulance company, four doctors, two nurses, a medical practice, a hospital, and a medical device manufacturer? Why or why not?

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