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.