Alert: Supreme Court Announces Minimum Pleading Requirements and Broader Authority for Dismissal of Deficient Claims

June 12, 2007

In a 7-2 vote last month, the United States Supreme Court announced that federal court plaintiffs would be required to state enough facts to state a claim for relief that is "plausible," not merely "conceivable," to survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6).  Bell Atlantic v. Twombly (May 21, 2007).  Although Justice Souter, writing for the Court, disclaimed any intent to require "heightened fact pleading of specifics," the ruling is likely to provide district courts with expanded authority to dismiss sparsely pleaded claims. 

The Bell Atlantic decision stems from an antitrust action brought on behalf of a class of local telephone and internet service subscribers.  The plaintiffs claimed that the defendants, local telecommunications companies, had engaged in parallel conduct designed to avoid and discourage competition among the local markets.  The Court held that the allegations of parallel conduct unfavorable to competition were insufficient to state a claim:

[S]tating such a claim requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made.  Asking for plausible grounds to infer an agreement does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement.

Prior to Bell Atlantic, the "accepted rule" in federal court had been that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."  Conley v. Gibson, 355 U.S. 41 (1957).  The Court in Bell Atlantic rejected the concept that this language in Conley set the standard for pleading and explained that the Conley language "described the breadth of opportunity to prove what an adequate complaint claims, not the minimum standard of adequate pleading to govern a complaint's survival."  The Court noted that a literal reading of Conley had been questioned by other courts, and concluded that:

[A]fter puzzling the profession for 50 years, this famous observation has earned its retirement.  The phrase is best forgotten as an incomplete, negative gloss on an accepted pleading standard:  once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations of the complaint.

Citing Conley, the Court in Bell Atlantic affirmed that Federal Rule of Civil Procedure 8(a) requires that a federal complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to give the defendant fair notice of what the .  .  .  claim is and the grounds upon which it rests."  However, "a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed;" otherwise, "the threat of discovery expense will push cost-conscious defendants to settle even anemic cases" before reaching summary judgment or trial.  The Court concluded that "[b]ecause the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed."

The Supreme Court's decision in Bell Atlantic provides federal district courts with broader authority to dismiss sparsely pleaded claims.  This should provide opportunities for resolution of speculative claims without requiring the parties to incur the time and expense of discovery, and may deter the filing of claims that lack adequate factual basis.  At the same time, where a deficient pleading may be cured, courts retain the authority to order dismissal without prejudice to file an amended complaint.