Willkie Farr & Gallagher
May 18, 2009

This Alert reviews holdings of the Supreme Court (in Ashcroft v Iqbal) that will make it harder for “civil plaintiffs to escape dismissal of claims brought in federal court.” Although delivered in the context of a discrimination claim, Iqbal [citing the Alert] expressly applies "to the pleading of each element, including knowledge and intent, of every [emphasis added] claim in federal court” and “adds a distinctly pro-defendant gloss” on existing pleading standards.

Iqbal stems from the 9-11 terrorist attacks and the subsequent detention of a Pakistani Muslim (Javaid Iqbal) who alleged that U.S government officials, including the former Attorney General John Ashcroft and former Director of the Federal Bureau of Investigation Robert Mueller (the “former officials”) detained him on account of his race, religion, and national origin in violation of his First and Fifth Amendments rights. At trial, the former officials moved to have the case dismissed based on Iqbal’s failure to sufficiently plead purposeful and unlawful discrimination; arguing that their actions in detaining Iqbal and others were not discriminatory but rather based on the furtherance of legitimate post 9-11 policies.

The District Court rejected this argument and the former officials appealed to the Second Circuit which reviewed Iqbal in light of the Supreme Court’s decision in Bell Atlantic Corp. v. Twombly (decided while Iqbal was pending appeal to the Second Circuit). In Twombly (an antitrust case), the Supreme Court had discussed the standard for evaluating whether a complaint is sufficiently plead to survive a motion to dismiss. In applying the Twombly standard to Iqbal, the Second Circuit concluded that Twombly called for a “flexible ‘plausibility standard,’ which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible.” The Second Circuit did not find Iqbal to be one of those contexts where further amplification was required, and found Iqbal’s pleading adequately plausible  to allege the former officials’ personal involvement in discriminatory (and unconstitutional) decisions.

The Supreme Court has now reversed and the Alert focuses on the majority’s “four broadly significant holdings.”

1. Twombly is not limited to the antitrust context. Iqbal had argued that Twombly should be limited to the antitrust context. This argument is explicitly rejected on the grounds that Rule 8 of the  Federal Rules of Civil Procedure (which Twombly interpreted and applied) governs the pleading standard “in all civil actions,” including those based on discrimination claims.
2. The heightened Twombly/Iqbal pleading standard applies to all elements of a claim, including knowledge and intent. Iqbal had argued that he was only required to allege discriminatory intent “generally” because Federal Rule of Civil Procedure 9(b) required particularity only when pleading “fraud or mistake,” while allowing “[m]alice, intent, knowledge, and other conditions of a person’s mind [to] be alleged generally.” The Supreme Court disagreed noting that Rule 9 does not give a litigant “license to evade the less rigid—though still operative—strictures of Rule 8."
3. A claim is not “plausible” if there exist “more likely explanations.” In order to satisfy Federal Rule of Civil Procedure 8(a)(2)’s requirement to “state a claim to relief that is plausible on its face,” a claim has to be accompanied by facts that “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”  This “facial plausibility” cannot be supported by “mere conclusory statements” and a reviewing court is required to “draw on its experience and common sense” in its determination of plausibility. In Iqbal, the existence of “more likely explanations” for the former officers’ conduct (ie valid policy reasons), left the Supreme Court to conclude that the discriminatory allegations did “not plausibly establish this [discriminatory] purpose.” 
4. Limited discovery does not allow for an opt out of the Twombly/Iqbal pleading standards. The fact that litigants have limited, or are willing to limit, the discovery process does not allow them to opt out of Twombly/Iqbal's heightened pleading standards. Rule 8’s [citing the Opinion] “generous departure from the hyper-technical, code-pleading regime of a prior era … does not [however] unlock the doors of discovery for a plaintiff armed with nothing more than conclusions” and therefore “the question presented by a motion to dismiss a complaint for insufficient pleadings does not turn on the controls placed upon the discovery process."