New Pleading in the Twenty-First Century : Slamming the Federal Courthouse Doors? 9780199993451, 9780199832507

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NEW PLEADING IN THE TWENTY-FIRST CENTURY

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NEW PLEADING IN THE TWENTY-FIRST CENTURY Slamming the Federal Courthouse Doors?

Scott Dodson

1

1 Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto

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Oxford is a registered trade mark of Oxford University Press in the UK and certain other countries. Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016 © Oxford University Press 2013 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by license, or under terms agreed with the appropriate reproduction rights organization. Inquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above. You must not circulate this work in any other form and you must impose this same condition on any acquirer. Library of Congress Cataloging-in-Publication Data Dodson, Scott. New pleading in the twenty-first century : slamming the federal courthouse doors? / Scott Dodson. pages cm Includes bibliographical references and index. ISBN 978-0-19-983250-7 (hardback : alk. paper) 1. Civil procedure—United States. I. Title. KF8840.D63 2013 347.73'5—dc23 2012048597 9 8 7 6 5 4 3 2 1 Printed in the United States of America on acid-free paper Note to Readers This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is based upon sources believed to be accurate and reliable and is intended to be current as of the time it was written. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Also, to confirm that the information has not been affected or changed by recent developments, traditional legal research techniques should be used, including checking primary sources where appropriate. (Based on the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.)

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CONTENTS

About the Author

vii

Preface

ix

Acknowledgments

xi

Introduction

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1. Federal Pleading Through 2007

6

2. New Pleading, 2007–2009

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3. The Effects of New Pleading

79

4. Curing New Pleading

127

5. Living with New Pleading

172

6. New Pleading in a Comparative Context

210

Index

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ABOUT THE AUTHOR

Scott Dodson is a Professor of Law at University of California Hastings College of the Law, where he teaches Civil Procedure and Federal Courts. He has authored more than thirty articles that have appeared in Stanford Law Review, Michigan Law Review, California Law Review, University of Pennsylvania Law Review, Virginia Law Review, Northwestern University Law Review, and Vanderbilt Law Review, among others. This is his second book.

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P R E FA C E

When the Supreme Court announced its opinion in Bell Atlantic Corp. v. Twombly in 2006, most people probably yawned. The decision was not about health care or the First Amendment or executive wartime powers or race discrimination. It was no Bush v. Gore. It was an antitrust-pleadings case—convoluted, technical, and, well, bland. But litigators and procedure scholars knew immediately that the case had the potential to alter the balance of power in civil litigation—to put the thumb on the defendant’s side of the ledger—by making it more difficult for plaintiffs to obtain discovery from defendants in a wide swath of cases. The decision was, to many in that circle, nothing short of revolutionary. By at least one measure, early predictions have been proven right. In Twombly’s wake, thousands of law-review articles have reflected upon it, and tens of thousands of court opinions have cited to it. Twombly and its companion Ashcroft v. Iqbal are on pace to be the most-cited decisions of all time. With all this ink spilled on such a dry topic, why write a book about it? I have two aims in mind. The first is to advance a fairly complex and technical normative argument to a schooled and highly critical audience. In my view, the New Pleading regime is wrong, and we should return to old pleading. Recognizing the improbability of that return, however, I also believe that New Pleading must be accompanied by discovery reforms to negate its harsher effects. Making that twofold argument, especially to the audience that is willing to listen, requires more than the length a typical law-review article allows. My second aim is to amass and analyze some important descriptive material—historical, doctrinal, and empirical—in a single place. The volume of articles and cases referencing Twombly and its progeny is daunting. Some of it is outdated; some, still forming. With this book, I hope to collect the sharpest needles in that haystack and set the record straight on a number of fronts relevant to modern civil pleading. In that vein, the book is designed to be broadly accessible and fundamentally useful.

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The result of combining these two aims is a bit unusual in form. Instead of being wide-scoped and theoretical like many monographs, this book is discrete and analytical. It strives to be both argument and resource. It probably has more footnotes than customary. It is pitched to procedural scholars, of course, but its practicality is designed also to speak to lawyers, judges, rulemakers, and perhaps even students. In whichever camp you cast yourself, I hope you find the book thought-provoking and illuminating. Scott Dodson San Francisco, CA December 1, 2012

ACKNOWLEDGMENTS

Although this book is unique as a stand-alone, comprehensive treatment of New Pleading, some discussion is based upon previously published articles. Portions of chapter 3 were derived or excerpted from material first published and copyrighted by the American Judicature Society in Scott Dodson, A New Look at Dismissal Rates in Federal Civil Cases, 96 Judicature 127 (2012). Portions of chapter 5 were derived or excerpted from material first published in Scott Dodson, Federal Pleading and Presuit Discovery, 14 Lewis & Clark Law Review 43 (2010), and Scott Dodson, New Pleading, New Discovery, 109 Michigan Law Review 55 (2010). Portions of chapter 6 derive from material first published in Scott Dodson, Comparative Convergences in Pleading Standards, 158 University of Pennsylvania Law Review 441 (2010), and Presuit Discovery in a Comparative Context, 6:2 Journal of Comparative Law 51 (2012). I thank those publishers for their permission to use portions of those articles here. I owe debts to many. The work of countless scholars has laid fertile ground that enables others to sprout. I could not do the work that I do without their influences. I could not name them all if I tried, so I will remain silently grateful. I am thankful to those who have read and commented on draft chapters or have otherwise helped crystallize my thinking through conversation, including Joe Cecil, Kevin Clermont, Lonny Hoffman, Eric Kades, Sarah Stafford, and Steve Subrin. I am particularly grateful for the comments of the anonymous peer reviewers of my proposal, and for the comments of an anonymous reviewer of my article New Pleading, New Discovery, which proved invaluable for focusing and deepening my thinking on my proposal. I workshopped or presented the ideas in several of the chapters at a number of law schools and conferences, and I benefited from the conversations and discussions generated there. I extend a special thanks to the many research assistants who have assisted with the researching, editing, proofreading, and cite-checking of this book: Matt Beard, Andrew Grindrod, Travis Gunn, Alden Hinds, Antonia Miller,

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Bill Novick, Chris Sickles, Demian von Poelnitz, Kate Ward, Andrew Wolf, and Sam Zimmerman. I am so fortunate to have Tony Lim and David Lipp as my editors at Oxford. They combed through early drafts judiciously but expertly, and their comments have dramatically improved the clarity of the book. Finally, I thank my lovely and talented wife Ami for going well beyond the call of duty by reading and commenting on my chapter and article drafts, by sagely redirecting me from pitfalls, by gamely putting up with me during these months of writing, and by astutely pointing out when the project could benefit from some rest and distance. Without her input, the book would not be as it is.

INTRODUCTION

In almost every modern legal system, civil pleading serves the important function of initiating a lawsuit. The initial pleading, called a “complaint” in the United States federal courts, sets forth the allegations of the complaining party and announces to the defendant and the court that the complainant wishes to pursue a legal claim. Often, the defending party can (or must) file its own pleading, called an “answer” in the United States, which responds to the initial pleading and may set forth the defendant’s allegations. Depending upon the particular legal system, additional rounds of responsive pleadings may be required or allowed. Together, these filings are collectively called “pleadings.” Pleadings may serve a number of goals, including notice giving, issue formulation, fact revelation, and merits screening. The initial pleading is arguably the most important pleading because it begins the lawsuit. The law governing that initial pleading thus controls the access of complaining litigants to the courthouse. Absent a proper complaint, a plaintiff may never have her claims heard on their merits. Pleading’s connection to court access is one of the most fundamental tensions in civil procedure. On the one hand, meritorious claims need broad access to courts for civil justice. On the other hand, meritless claims clog judicial dockets, impose costs on defendants, and raise the price of civil justice for everyone. The price is high on both sides, and so the law governing pleading must attempt to strike a balance. In an ideal world, the law would create a threshold pleading rule that allows in all meritorious claims and dismisses out all meritless claims. There are two principal reasons why such a grail is unattainable. The first is that evaluating merit can be difficult. Evaluating merit can be immensely difficult for the court, which knows only what the parties disclose about the facts of the case. It is often difficult for the plaintiff, particularly if the claim requires the plaintiff

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to prove facts that are hard for the plaintiff to obtain. It can even be difficult for the defendant in rare circumstances. The difficulty of assessing merit then creates problems for screening meritless cases because often neither the plaintiff (who is solely responsible for filing the complaint) nor the court (which is solely responsible for determining whether to allow the complaint to proceed) can be sure about the case’s worth. There are some exceptions to this general difficulty. A court can resolve immediately a claim whose merit depends upon a pure question of law. Say, for example, a plaintiff comes to court with a claim under Title VII, which is the federal statute that prohibits employment discrimination. She alleges that she was fired because she has red hair. She therefore sues for hair-color discrimination. Even assuming all of her allegations are true, the plaintiff must lose. Why? Because, as a matter of law, Title VII does not make hair-color discrimination unlawful. It makes unlawful other kinds of discrimination—such as on the basis of race or gender—but not hair-color discrimination. So, the law allows and encourages the court to dismiss such legally nonactionable claims quickly. Note that this kind of a dismissal—for legal insufficiency—is quite different from a dismissal for factual insufficiency. The plaintiff’s hair-color claim is resolvable even if all of the plaintiff’s facts are conceded. But what if the plaintiff also alleged that her employer discriminates against women, and therefore she asserted a claim for gender discrimination? Such a claim, assuming the other requirements of Title VII are properly alleged, would be legally sufficient. Any question of merit then would depend upon whether the plaintiff could prove the facts supporting her claim. She would have to prove, among other things, that the employer was motivated by her gender. And that fact can be a very tricky one to prove indeed. The plaintiff may not know what motivated her employer (the employer is unlikely to confess openly to unlawful conduct), and the court will have little basis for evaluating the likelihood of that fact. Setting a rule that resolves whether such a claim should proceed, and under what circumstances, is likely to be grossly imperfect. The second reason why a perfect pleading rule is unattainable is that different cases demand different rules. Some cases, such as many breach-of-contract cases, involve purely private interests, sophisticated parties with equal bargaining power, low litigation cost, and documentary proof. Other cases, such as certain civil-rights cases, involve public interests, unequal parties, and high litigation costs. The same pleading rule, all things being equal, ought not apply to both cases. All things are not equal. A system of claim-specific rules has its own costs. And those costs are so worrisome that the United States has opted for a

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procedural system founded upon transsubstantivity—the idea that rules of procedure should be basically uniform regardless of the substantive legal claim or factual circumstances. Thus, in U.S. federal court, the pleading rules that apply to a breach-of-contract claim are generally the same as those that apply to a civil-rights claim (or an employment-discrimination claim, or a negligence claim, or any other claim). As a result, the system realizes many virtues of uniformity, but it also suffers the costs of insisting upon general rules for different cases. Nevertheless, pleading rules must be set, despite their imperfections. For decades, the U.S. legal system has opted for a system of “notice pleading,” in which the complaint need only give the defendant “fair notice” of the claim and its grounds, and in which a claim may be dismissed only for legal insufficiency. Factual insufficiency beyond mere notice, by contrast, has been relegated to a stage of the lawsuit that allows some opportunity for discovery to flesh out those facts. Notice pleading tips the pleading balance in favor of court access for plaintiffs and away from protecting defendants and the courts from the costs of dealing with meritless claims. In essence, notice pleading assumes that allowing some meritless cases into discovery is more important than screening out some meritorious cases erroneously. And, it appeared, the U.S. Supreme Court embraced this ethos for fifty years. Then, in 2007, the Court issued a decision in Bell Atlantic Corp. v. Twombly that seemed abruptly to change course. The case involved a class action of telecommunications consumers against several telecommunications providers for antitrust conspiracies violating federal law. The plaintiffs’ complaint was clearly legally sufficient because federal law prohibited the antitrust conspiracies that the plaintiffs were alleging. And the plaintiffs’ complaint gave adequate notice of the claim. However, the Court held that the supporting allegations in the complaint did not create “plausible” grounds to infer that a conspiracy had, in fact, occurred. The Court’s express motivation for imposing a new “plausibility” requirement of factual sufficiency was to protect defendants and the civil system from the high costs of defending against legally sufficient but factually implausible claims. Accordingly, the Court held that the complaint should have been dismissed. Confusion ensued. Was Twombly a change in pleading rules? If so, how much of a change? Was it restricted to antitrust claims? To high-discovery suits? For two years, the lower courts and commentators grappled with and wrangled over these questions. In 2009, the Court answered some of them in a case called Ashcroft v. Iqbal. There, a detainee sued U.S. governmental officials for imposing disparate conditions of confinement on him because of his race, religion, and national

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origin. As in Twombly, Iqbal’s claims were legally sufficient because federal law prohibited the conduct he alleged. However, following Twombly, the Court held that his claims were not factually sufficient because his allegations did not supply “plausible” grounds for inferring unlawful discrimination. The Court also added a new twist, instructing lower courts to disregard “conclusory” allegations. As in Twombly, the Court was motivated by the desire to protect defendants from the high costs (this time, in the form of the disruption to government officials’ duties) of defending implausible claims. However, the Court clarified that the new standard is, like federal pleading rules generally, transsubstantive. Lower courts, lawyers, and academics quickly got the memo. SCOTUSblog’s Tom Goldstein anointed Iqbal as the most significant case in a decade for day-to-day civil litigation. The great Arthur Miller was quoted as reflecting: “I have spent my whole life with the federal rules, and this is one of the biggest deals I have ever seen.”1 As of December 1, 2012, Iqbal has been cited more than 100,000 times, putting it on pace to be the most-cited decision ever. It is no wonder, with such doctrinal upheaval after at least fifty years of relative stasis, that the Court’s decisions would generate deep and provocative questions. How does New Pleading fit with the history of U.S. pleading? Does it mark a significant break or a minor adjustment in pleading doctrine? How sound is the theory behind New Pleading? What practical effects is it having? How should rulemakers respond? And what role might New Pleading play on the global stage? Many, including myself, have attempted to address some of these questions piecemeal. Recent studies have produced some data of what effects the decisions are having. Proposals abound. The commentary is becoming voluminous and unwieldy. This book supplies a one-stop shop. It positions Twombly and Iqbal within the historical and doctrinal development of pleading. It offers a comprehensive theoretical account of New Pleading. It synthesizes and adds new data on the effects New Pleading is having. It surveys and comments upon the most prominent reform proposals made in response. And it situates New Pleading in a broader international comparative context. These components of the book are designed in part to be a resource for anyone interested or touched by federal pleading. These parts also set the stage for the book’s normative and prescriptive agendas. I argue that the costs of New Pleading—particularly the justice costs and increased motions-practice costs—outweigh its benefits. Based on this 1. Tony Mauro, Groups Unite to Keep Cases on Docket, Nat. L.J. 1, 32 (Sept. 21, 2009).

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calculus, my primary commitment is a return to Old Pleading. However, crediting some of the concerns animating New Pleading, I argue that a return to Old Pleading should be accompanied by a renewed focus on discovery-cost control and cooperative management. The system of Old Pleading already had the tools available to manage high-cost but low-merit cases. Judges, lawyers, and litigants just need to use those tools more often. Recognizing that a return to Old Pleading is unlikely, however, my secondary commitment is that if New Pleading is to stay, it must be accompanied by New Discovery. New Discovery is a structured, controlled, presuit-discovery mechanism. By providing information access to plaintiffs, it alleviates much of the justice concerns of New Pleading. By incorporating a presumption of one-way cost shifting on the plaintiff, it protects innocent defendants from unwarranted costs. By allowing the parties a quick and cheap peek at the critical facts, it encourages early resolution of both meritless and meritorious lawsuits, thereby benefitting the system as a whole. In short, New Discovery aspires to offer something for everybody. Judge, professor, and rulemaker Charles E. Clark once said, “I fear that every age must learn its lesson that special pleading cannot be made to do the service of trial and that live issues between active litigants are not to be disposed of or evaded on the paper pleadings.”2 Perhaps it is time to learn that lesson once again.

2. Charles E. Clark, Special Pleading in the “Big Case,” 21 F.R.D. 45, 46 (1957).

1

FEDERAL PLEADING THROUGH 2007

Introduction Pleading in U.S. federal courts has a storied history. Because that history colors present-day pleading, some background of where pleading has been is essential to understanding where pleading is today. This chapter is a descriptive and evaluative look back into the pleading of eras gone by. It traces the punctuated evolution of the roles, standards, and testing mechanisms of civil pleading. In the process, this chapter clarifies several components of modern pleading doctrine that will become important in later chapters to understanding the motivations, implications, and solutions to the problematic “New Pleading” that the Supreme Court adopted in 2007. The story of civil procedure in the United States is undoubtedly coupled to larger and richer stories of society, context, and politics. I could not possibly do it justice in a single chapter. My strictly proceduralist perspective should not be construed to deny those broader strands. Perhaps readers will forgive my artificial limitations for the sake of brevity and background.

Overview Because this chapter describes pleading mechanisms and their evolution in some detail, it begins with this brief overview. Pleading has two primary, and historically opposing, traditions: law and equity. The law tradition featured rigidity and technicality, but its virtues were simplicity and certainty. By contrast, the equity tradition focused on justice, with sensitivity to public interests, but its vices were inefficiency, uncertainty, and delay. Prior to 2007, pleading in the United States underwent three temporal and mechanistic experiments. The first was common-law pleading, which was inherited from England and was comprised of both common law and equity. In the 1800s, pleading underwent

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a reform to attempt to make it more flexible and accommodating. The result was the Field Code, which spawned numerous code variations in the state courts. Finally, 1938 marked the beginning of rule pleading under the Federal Rules of Civil Procedure, a flexible, deemphasized, and uniform system of pleading in the U.S. federal courts. As I will argue, 2007 ushered in a fourth era, what I call “New Pleading.” Pleading is intimately connected to discovery, particularly under the Federal Rules. Pleading typically precedes discovery and functions to help frame it. Thus, as pleading has evolved, so has discovery, from the extremely restricted discovery of the common law to the extremely wide-ranging and costly discovery of the Rules. The details that follow explain how procedure has developed, how different normative theories have driven that development, and how different mechanisms have attempted to implement those theories. This is well-trodden ground,3 but the history helps situate current pleading norms and practice within a broader temporal scope and in the context of modern discovery. That background is essential to understanding what current practice means, to evaluating its success, and to considering what changes to make in the future. With that in mind, the rest of this chapter lays out that background in detail.

English Common Law In medieval times, English civil litigation was divided into common-law courts and equity courts. Each court system followed a different set of procedural rules. At English common law, a prospective plaintiff initiated a suit by obtaining a writ from the King’s Chancellor. A writ summoned the defendant before the court and specified a “form of action,” which directed the procedural and substantive rules governing the particular claim, such as trespass, trover, or assumpsit. The requirements of each form of action were unique and inflexible. Once the writ was served on the defendant, pleading ensued. Common-law pleading was a back-and-forth colloquy, often done orally in medieval times. The plaintiff began by setting out the facts, guided by the dictates of the writ’s form of action. The defendant could respond in one of several ways. She could

3. For seminal overviews in article form, see Robert G. Bone, Mapping the Boundaries of a Dispute: Conceptions of Ideal Lawsuit Structure from the Field Code to the Federal Rules, 89 Colum. L. Rev. 1 (1989); Stephen N. Subrin, How Equity Conquered Common Law: The Federal Rules of Civil Procedure in Historical Perspective, 135 U. Pa. L. Rev. 909 (1987).

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(1) deny everything, thereby creating a “general issue” for resolution by a jury; (2) deny a particular fact, thereby creating a “specific issue” for resolution by a jury; (3) demur, thereby conceding the facts but challenging the legal sufficiency of the claim; or (4) confess and avoid, thereby admitting the facts as stated but alleging new facts that defeated the claim. Confession and avoidance required the plaintiff to respond with a pleading akin to the defendant’s options. This back-and-forth continued until it had reduced the dispute to a single issue of law or fact. Goals of common-law pleading included the following: to produce predictability and uniformity in the law among specific claims, to streamline litigation after pleadings had closed, and to narrow the case to a single disputed issue of law or fact. Those goals put pressure on pleadings to accomplish all this, and, as a result, pleadings practice by the 1500s had become technical, complicated, and stylized. In addition, because a writ’s procedures were tied to a particular form of action, procedures governing a claim varied widely among the different substantive claims, creating a non-transsubstantive law of formulaic pleading requirements unique to each form of action. Discovery, however, was sharply limited in almost all cases. Indeed, the common law provided no way to compel disclosure of facts and evidence from an opponent, and it proscribed party testimony as inherently incredible.4 The rigidity of the common law’s pleading system demanded strict compliance with its technicalities. In addition, the insistence on single-issue resolution forced parties to choose among potential viable factual and legal theories, thus forgoing valid claims or defenses. Consequently, parties often lost on these technicalities and choices rather than on the merits of the claim. Further, because the pleadings in effect became the crucial part of the case, litigation concerning only the technical requirements of the pleadings consumed the courts, delaying the merits and causing, at times, unjust results. As Jonathan Swift remarked of pleading attorneys at the time, “In pleading they studiously avoid entering into the Merits of the Cause; but are loud, violent and tedious in dwelling upon Circumstances which are not to the Purpose.”5 English equity courts were quite different. Equity courts offered an alternative to the common-law system for exceptional cases, such as fraud and breach of fiduciary duty, that did not appear to fit into the rigid forms of action. Instead of a writ, the petitioner sought a bill in equity. Presiding over an exceptional proceeding unconfined by the rigidity of the common law, Chancellors

4. Fleming James, Jr., Discovery, 38 Yale L.J. 746, 746 (1929); Subrin, supra note 3, at 919. 5. Jonathan Swift, Gulliver’s Travels 352–53 (Harold Williams ed. 1926) (1st ed. 1726).

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tended to follow an abstract sense of justice rather than formalistic rules and procedures. Indeed, equity courts came to be known as courts of conscience. Because of the moral implications at stake, juries usually were not allowed. Relatively unconcerned with efficiency, equity proceedings liberalized pleading and joinder rules in an effort to bring the whole story before the court. Pleadings were to be factually detailed and potentially wide-ranging. Sitting as a court of conscience, a Chancellor could compel parties to testify and answer, under oath, each charge of a petitioner’s bill. And the mandate of doing justice encompassed a consideration of the public interests as well as the private interests at stake.6 The result was a free-form, somewhat unpredictable, holistic approach to the varied interests at stake, which also often led to complexity and delay.7 Importantly, the two systems occasionally intersected with each other. Because common-law courts disallowed discovery, parties litigating in law courts turned to equity courts to obtain it via an equitable bill of discovery. The equitable bill only could be sought against parties, only for non-self-incriminating information, and, in the case of documents, only if the documents were identified with particularity.8 As one can imagine, the difference between common-law and equity procedures was night and day. Common-law proceedings began as a rigid, technical, and unforgiving pleading system but concluded in a relatively predictable, uniform, and simple result. Equity proceedings relaxed the technical limitations of pleadings but encouraged detailed and fact-intensive storytelling, which could burgeon quickly into a complex, long, expensive, and wideranging mess.9

American Common Law Colonial courts inherited the English common-law and equity practices, with some modifications. Colonists distrusted equity courts because of their reposition of power in the Chancellor rather than in a lay jury, which colonists saw as an important check on governmental power.10 At the same time, the

6. Subrin, supra note 3, at 918–20. 7. J.H. Baker, An Introduction to English Legal History 111–13 (4th ed. 2002). 8. Edward Bray, The Principles and Practice of Discovery 39, 104 (1885). 9. 1 W.S. Holdsworth, A History of English Law 645–46 (A.L. Goodhart & H.G. Hanbury eds., 7th ed. 1971); Subrin, supra note 3, at 919–21. 10. Subrin, supra note 3, at 926–27.

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roughness of colonial life naturally led to some relaxation of common-law strictures and incorporation of equity principles, though the colonial common law still retained much of the rigidity and technicality that dominated common-law pleading.11 Just before independence, the Continental Congress resolved that the colonies were entitled to the common law of England.12 After independence, most states passed reception statutes or constitutional provisions that adopted the English common law as their own, and the English common-law procedures came with it.13 Some states also created equity courts, and others authorized their common-law courts to hear actions in equity. The new Americans were passionate about juries, and many of the English limitations on juries were not adopted in the new states.14 To promote intrastate uniformity, Congress passed the Process Acts, which provided that procedure in federal courts generally should follow that of the state in which the federal court sat.15 Almost immediately, though, American judges began to restrict the power of juries by limiting what evidence they could hear, taking issues of law away from the jury, and setting aside jury verdicts.16 At the same time, substance and procedure—which had been intertwined under the common law—began to separate. The simultaneous consideration of common law and equity by the same courts, the rapid promulgation of statutory procedural devices in the states, and the federalism implications of applying different substantive law and different procedural law (i.e., state procedural law and federal substantive law in federal question cases) continued to separate substance and procedure. Further, American theorists became disenchanted with the rigidity and technicality of the common law because of its propensity for causing defaults on procedural grounds rather than decisions on the merits. Thus, although the American civil system largely adopted the English common-law and equity practices, subtle deviations and cultural pressures portended the need for a new system.17

11. William E. Nelson, Americanization of the Common Law: The Impact of Legal Change on Massachusetts Society, 1760–1830, at 2–23, 72–77 (1975). 12. Lawrence M. Friedman, A History of American Law 95–97 (1973). 13. Louis F. Del Luca & Alain L. Levasseur, Impact of Legal Culture and Legal Transplants on the Evolution of the U.S. Legal System, 58 Am. J. Comp. L. 1, 5–6 (2010). 14. Subrin, supra note 3, at 928. 15. Federal Judiciary Act of 1789, ch. 21 § 2, 1 Stat. 93, 93; Act of May 8, 1792, ch. 36 § 2, 1 Stat. 275, 276. 16. Subrin, supra note 3, at 929. 17. Id. at 929–31.

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Pleading and Discovery under the Field Code As American theorists were challenging the centuries-old law practice, England was doing the same through the Hilary Rules of 1834. These rules introduced a system of strict pleading that became even more technical than the common law. They were abandoned after only a few years as a “disastrous mistake.”18 The failure of the Hilary Rules convinced American theorists of the need for procedural rules that resisted technicalities that too often obscured the issues and caused unjust results. Influenced by the work of Jeremy Bentham, reformers looked for a new system that would merge law and equity courts, impose a more uniform system of procedure, and exalt simplicity and efficiency over technicality and expense.19 The American solution was the Field Code, named after its primary drafter, David Dudley Field, then New York’s Commissioner on Practice and Pleading. Field’s procedural reforms were adopted by New York in 1848, and about half the states swiftly adopted models of his code. One goal of the Codes was to reduce the technicalities of pleading by eliminating the “forms of action” and replacing them with a single “civil action,” relaxing the joinder rules, abolishing the distinction between law and equity, de-emphasizing the goal of issue-raising, and emphasizing the pleading of facts.20 In practice, the Codes did not achieve their aspirations, particularly with respect to pleadings and discovery. There are several reasons why. One is that it was difficult to break wholesale from the technicality of the common law. Field himself admired the predictability and restrictiveness of the common law, and, as a result, many aspects of the Codes had confining, formalistic qualities that were prevalent in common law.21 Strengthening the Codes’ connection to the common law were the many lawyers and judges whose ties to common-law traditions remained strong and whose practices helped incorporate technicalities back into the Codes.22

18. W.S. Holdsworth, The New Rules of Pleading of the Hilary Term, 1834, 1 Cambridge L.J. 261, 271 (1923). 19. Subrin, supra note 3, at 933. 20. David Dudley Field, What Shall be Done with the Practice of the Courts? (Jan. 1, 1847), reprinted in 1 Speeches, Arguments, and Miscellaneous Papers of David Dudley Field 226, 235–36, 239–41 (A.P. Sprague ed. 1884). Field’s agenda was complicated. For the definitive history, see Stephen N. Subrin, David Dudley Field and the Field Code: A Historical Analysis of an Earlier Procedural Vision, 6 Law & Hist. Rev. 311 (1988). 21. Subrin, supra note 20, at 323, 329. 22. David Marcus, The Federal Rules of Civil Procedure and Legal Realism as a Jurisprudence of Law Reform, 44 Ga. L. Rev 433, 477 n.240 (2010).

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Another reason is that forum disuniformity became increasingly problematic as federal dockets expanded. The Codes were creatures of state law, and, at the outset, the federal courts followed their former common-law and equity procedures even while state courts were following Code procedures. The Conformity Act of 1872 obligated federal courts hearing common-law cases to apply the procedural law of the state in which the federal court sat, but the Act required only that federal courts approximate state procedures “as near as may be” and in “like causes,” and it did not apply to federal claims at all.23 In addition, federal courts continued to adhere to their own equity rules.24 Meanwhile, discovery procedure varied considerably. Consistent with the premise that disputes should be adjudicated in a focused and inexpensive manner, the Codes limited discovery.25 A party could ask to inspect and copy a relevant paper that an opposing party possessed, but such requests were inconsistently granted, and penalties for lack of production were inconsistently enforced. The Field Code did not provide for interrogatories and allowed depositions of opposing parties only if the adverse party was not going to be called to testify orally at trial.26 Deposition procedure in federal courts, however, was complicated by the fact that the Conformity Act did not require deference to state-court deposition procedure. A different federal statute enabled federal law courts to authorize depositions in the mode prescribed by state law, but the Supreme Court held that this statute did not authorize pretrial discovery.27 Because federal courts could ignore state deposition procedures, and because the only federal law authorizing depositions did not allow pretrial discovery, federal courts of law effectively had no pretrial deposition procedure.28 However, federal equity rules allowed for pretrial depositions and interrogatories,29 and because law courts effectively had no pretrial discovery available, equity courts could issue an ancillary bill for discovery in aid of actions

23. Conformity Act of 1872, ch. 255 § 5, 17 Stat. 196, 197 (repealed 1930). 24. For a history of the development of equity procedures in the federal courts, see Kristin A. Collins, “A Considerable Surgical Operation”: Article III, Equity, and Judge-Made Law in the Federal Courts, 60 Duke L.J. 249, 266–74 (2010). 25. Stephen N. Subrin, Fishing Expeditions Allowed: The Historical Background of the 1938 Federal Discovery Rules, 39 B.C. L. Rev. 691, 696–97 (1998). 26. Id. at 696; Subrin, supra note 20, at 332–33. 27. Hanks Dental Ass’n v. Int’l Tooth Crown Co., 194 U.S. 303 (1904). 28. James A. Pike & John W. Willis, The New Federal Deposition-Discovery Procedure (pt. 1), 38 Colum. L. Rev. 1179, 1183–84 (1938). 29. Fed. Equity R. 58 (1912); C.C. Langdell, Discovery Under the Judicature Acts, 12 Harv. L. Rev. 151, 153 (1898).

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at law.30 Thus, although common-law actions generally had carefully limited discovery, equity courts allowed relatively broad discovery, and even for use in actions at law. Perhaps the most famous reason why the Codes did not succeed for the long haul is that even when they were designed for simplification, they ultimately injected their own technicalities into the procedural regime at a time in which procedural thought was becoming more realist. Pleading rules, for example, underwent a major renovation under the Codes. Disavowing the use of technical legalese to fit into a rigid form of action, Code reformers instead believed that the cause of action should track the facts. They believed that the plaintiff need only set out the facts in a manner that allowed the judge to determine what cause of action arose from them. In a nutshell, the Codes replaced “writ pleading” with “fact pleading,” requiring a complaint to provide “[a] statement of the facts constituting the cause of action, in ordinary and concise language, without repetition, and in such a manner as to enable a person of common understanding to know what is intended.”31 Code pleading allowed pleading on information and belief, but plaintiffs had to spell out the factual allegations in detail and could not rely on inferences drawn from their complaints in stating a civil action.32 Those facts alleged, and the specific rights that arose from them, then bound the plaintiff. This was because Field thought that detailed pleadings should disclose each party’s version of the facts in an effort to narrow and simplify the controversy to only those facts actually disputed.33 In short, the fact-pleading regime of the Codes was designed to be simpler, informative, understandable, and useful. But hyper-technicality was not to be vanquished so easily. The Codes distinguished between “ultimate facts,” which were to be pleaded, and “evidentiary facts” and “conclusions of law,” which were not to be pleaded. The idea was that conclusions of law were too general and should be the province of the judge, while evidentiary facts were too specific to be pleaded and should be reserved for trial.34

30. Pike & Willis, supra note 28, at 1185. 31. An Act to Simplify and Abridge the Practice, Pleadings and Proceedings of the Courts of this State, ch. 379, § 120(2), 1848 N.Y. Laws 497, 521 (1848) (current version at N.Y. C.P.L.R. § 3013 (McKinney 2010)). 32. Subrin, supra note 20, at 330. 33. Id. at 330; Subrin, supra note 3, at 936. 34. Christopher M. Fairman, Heightened Pleading, 81 Tex. L. Rev. 551, 555 (2002).

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This Goldilocks distinction led to widespread confusion as to whether allegations were ultimate facts, evidence, or legal conclusions and spawned a “whole new corpus of legal technicality at the pleading stage.”35 Numerous legal thinkers argued that there was no logical distinction between “statements of fact” and “conclusions of law.”36 Walter Wheeler Cook, for example, argued that facts could not be stated without some filtering mechanism that the legal regime provided. He argued that the allegation that an item “belong[s] to the plaintiff” necessarily encompasses legal concepts, while the legal conclusion that “defendant owes plaintiff $500” was just as factual as legal.37 To Cook and other realists, facts and law simply could not be disaggregated in many cases. Practice proved them right: the distinctions caused disuniformity among judicial opinions and a sense of failed justice for plaintiffs.38 The law/fact distinction also put defendants in a predicament. Demurrer practice was harsh and complex. With some state variation, a defendant basically had two options in responding to a complaint: either concede the sufficiency of the pleading and answer the facts, or concede the facts and challenge the sufficiency of the pleading with a demurrer. In early Code years, a demurrer was a risky strategy: a sustained demurrer resulted in a judgment against the plaintiff, while an overruled demurrer resulted in a judgment against the defendant. The extreme penalty of a successful or failed demurrer accentuated the importance of pleadings and led to a cottage industry of pleading experts. In later years, courts began allowing pleading amendment if the demurrer was sustained and answers if the demurrer was overruled, but the demurrer still caused mischief by abuse, and pleading technicalities still persisted.39

35. Fleming James, Jr., et al., Civil Procedure § 3.5, at 187 (5th ed. 2001). 36. E.g., Charles E. Clark, History, Systems and Functions of Pleading, 11 Va. L. Rev. 517, 534 (1924); Walter Wheeler Cook, Statements of Fact in Pleading Under the Codes, 21 Colum. L. Rev. 416 (1921); Rules of Civil Procedure for the District Courts of the United States: Hearing on The “Rules of Civil Procedure for the District Courts of the United States” Adopted by the Supreme Court of the United States Pursuant to the Act of June 10, 1934 (48 Stat. 1064) and on H.R. 8892, Before the H. Comm. on the Judiciary, 75th Cong. 94 (1938) (statement of Edgar B. Tolman). Skepticism of the useful distinction between law and fact persists today. See Richard L. Marcus, The Revival of Fact Pleading Under the Federal Rules of Civil Procedure, 86 Colum. L. Rev. 433, 438 (1986). 37. Walter Wheeler Cook, “Facts” and “Statements of Fact,” 4 U. Chi. L. Rev. 233, 238–43 (1936); Cook, supra note 36, at 419. 38. Subrin, supra note 25, at 693. 39. James A. Pike, Objections to Pleadings Under the New Federal Rules of Civil Procedure, 47 Yale L.J. 50, 50–51 (1937).

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Meanwhile, equity pleading, though seemingly similar on the books (requiring “a short and simple statement of the ultimate facts upon which the plaintiff asks relief”40), allowed more flexibility. Equity rules provided for a motion to dismiss rather than a demurrer and permitted a defendant to assert both an answer and defenses simultaneously.41 This flexibility mitigated the harshness of a demurrer and lessened the focus on pleading technicalities. In the end, Code pleading’s own formalism caused problems similar to those experienced under the common law—many cases ultimately turned on small and perhaps illusory technicalities in pleading unrelated to the merits, and pleading practice became both costly and complex. Some have gone so far as to proclaim that the Code’s technical pleading system “rivaled the waste, inefficiency, and delay of the common-law practice it was designed to reform.”42 These effects, coupled with the disuniformity in federal courts under the Conformity Act, set the stage for the next phase of reform.

A Revolution Brewing As things settled in the early 1900s, the reform movement kicked up again with the sense that the Code experiment, while a modest improvement, remained a significant barrier to efficiency and justice. The problematic distinctions between facts, evidence, and law remained unresolved, and the strident critiques did not abate. Legal realists, believing that the role of procedural rules was to facilitate the efficient and just resolution of cases on their substantive merits rather than procedural pitfalls, maligned the Codes for sacrificing justice for technicality and pointed out that the Field Code’s salutary purpose of efficiency was actually being undercut by its technicality. Roscoe Pound, for example, famously decried the technical pitfalls and “sporting theory of justice” of the Codes.43 To make matters worse, special-interest lobbying efforts had caused numerous complicating and obfuscatory amendments to the Codes.44 Spurred by the legal-realism movement, reformers strove to liberalize procedure, and, specifically, pleadings and discovery. They sought to merge

40. Fed. Equity R. 25 (1912). 41. Fed. Equity R. 29 (1912). 42. Fairman, supra note 34, at 555–56. 43. Roscoe Pound, Speech at the American Bar Association Annual Meeting: The Causes of Popular Dissatisfaction with the Administration of Justice (Aug. 29, 1906), in Report of the Twenty-Ninth Annual American Bar Association Meeting 395, 417 (1906). 44. See Stephen N. Subrin, Federal Rules, Local Rules, and State Rules: Uniformity, Divergence, and Emerging Procedural Patterns, 137 U. Pa. L. Rev. 1999, 2046 (1989).

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law and equity into a single system and to create a set of rules that would be applied uniformly in federal courts.45 As Steve Subrin has chronicled, “Their arguments were repeated so often and so forcefully that they become the new orthodoxy.”46 The legal community rallied around the proposed modernization of the rules because lawyers and judges alike stood to benefit from liberalization. Lawyers generally supported the vision of the drafters because broadened discovery promised them the ability to create new theories and defenses and to engage in extensive discovery for which they would be paid by the hour. At the same time, the proposed modernization of the rules of civil procedure was favored among members of the judiciary because it promised to return to judges some of the discretion withheld under the Codes.47 After a long and contentious battle, documented in Steve Burbank’s definitive historical account,48 Congress passed the Enabling Act of 1934. The Act authorized the Supreme Court to promulgate a uniform set of procedural rules governing federal courts. Importantly, the rules could not “abridge, enlarge, [or] modify [any] substantive right[],” and Congress retained a veto power over the rules as promulgated.49 In June of 1935, the Supreme Court appointed an Advisory Committee to prepare a unified set of procedural rules. The Advisory Committee consisted of fourteen members composed of nine practitioners and five law professors. Charles Edward Clark, then Dean of the Yale Law School, was appointed Reporter for the new Advisory Committee, in part because of his strong personality and great confidence.50 Under his leadership, the reformers started drafting.

A New Procedure Theory Clark and his like-minded legal-realist colleagues had an agenda.51 They believed that procedure was an agent of justice, not an end in and of itself. 45. Subrin, supra note 25, at 739–40. 46. Id. at 743. 47. Id. at 741. 48. Stephen B. Burbank, The Rules Enabling Act of 1934, 130 U. Pa. L. Rev 1015 (1982). 49. Pub. L. No. 73–415, 48 Stat. 1064 (June 19, 1934), codified as amended at 28 U.S.C. § 2072. 50. Stephen N. Subrin, Charles E. Clark and His Procedural Outlook: The Disciplined Champion of Undisciplined Rules, in Judge Charles Edward Clark 115, 145 (Peninah Petruck ed. 1991). 51. For historical accounts of the drafters and their motivations, see Robert G. Bone, Making Effective Rules: The Need for Procedure Theory, 61 Okla. L. Rev. 319, 323–25 (2008); Marcus, supra note 22, at 493–501; Judith Resnik, Failing Faith: Adjudicatory Procedure in Decline, 53 U. Chi. L. Rev. 494, 502–507 (1986); Subrin, supra note 20, at 327–28.

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Their sense of justice, coming out of the Great Depression, had a social dimension: a concern for broadening the common person’s access to the courts. The formalism of the common law and the Codes was indifferent to consequences; the legal realists wanted procedure to be sensitive to them. Accordingly, the drafters turned away from the formal rigidity and technicality of the Field Code and toward a pragmatic method of decision-making characterized by flexible rules and judicial discretion. In the process, they shepherded a revolutionary shift in procedure theory that borrowed heavily from the equity tradition.52 They favored flexibility, guided by judicial discretion; broad access to courts governed by simplified pleading; liberal joinder of parties; and comprehensive discovery. They took a holistic approach that, because of its clarity and transsubstantivity, would be simpler to follow and administer. As Richard Marcus famously put it, the drafters were motivated by a “liberal ethos,” under which “the preferred disposition is on the merits, by jury trial, after full disclosure through discovery.”53 Advisory Committee member Edson Sunderland was assigned to draft the discovery rules, and the liberal provisions that resulted largely reflected his personal views. He believed that the restrictiveness of discovery under the Codes led to inaccuracies adjudicating the merits. Influenced by George Ragland’s important book, Discovery Before Trial, Sunderland disdained formalistic limitations and favored a broader, more common-sense approach to discovery. The benefits of expanded discovery included eliminating surprise, diminishing the importance of pleadings, and permitting each side to assess the strengths and weaknesses of its case in advance in order to determine if a settlement could be reached.54 Sunderland and other committee members recognized, however, that adversarial lawyering could encourage counterproductive discovery tactics— through both overbroad requests and unjustified stonewalling—and that such abuse of the system would require courts to spend significant time considering and ruling on discovery motions.55 Committee member Robert G. Dodge argued, “In some way the courts must have control . . . and power to check abuses.”56 Committee chairman William DeWitt Mitchell predicted, “We are going to have an outburst against this discovery business unless we can hedge

52. Subrin, supra note 3, at 922. 53. Marcus, supra note 36, at 439. 54. Subrin, supra note 25, at 697–716. 55. Id. at 704–707. 56. Id. at 721.

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it with some appearance of safety against fishing expeditions.”57 Sunderland’s solution was not to impose rigid, ex ante limitations but instead to authorize appropriate exercises of judicial discretion to strike a balance between the costs and benefits of discovery in individual cases. Thus, the discovery rules would permit “fishing expeditions,” but they would empower the judge to control excesses and abuses when petitioned by an aggrieved party. Pleadings theory changed as well. Charles Clark tasked himself with reforming pleadings. He subscribed to Pound’s view that “the sole office of pleadings should be to give notice to the respective parties of the claims, defenses and cross-demands asserted.”58 Clark believed that the issue pleading of the common law was unjust and that the fact pleading of the Codes was ineffective. Frustrated by the complexity and pitfalls of these pleading regimes, Clark set out to de-emphasize, liberalize, and simplify pleadings by avoiding the troublesome ambiguities of facts and law and broadening access to the courts. His aim was to reduce the issue-narrowing and fact-disclosure functions of pleadings and, instead, focus on the notice-giving function of pleadings. As he explained, Experience has shown . . . that we cannot expect the proof of the case to be made through the pleadings, and that such proof is really not their function. We can expect a general statement distinguishing the case from all others, so that the manner and form of trial and remedy expected are clear, and so that a permanent judgment will result.59 With pleadings focused primarily on notice, they would become less important as a screening mechanism and less prominent as a point of contention between the parties. The idea was not to screen litigants out but rather to keep them in. As for the other traditional functions of pleading—issue narrowing, fact disclosure, and merits screening—Clark proposed that the system delay them to later stages of the litigation process: discovery, judicial supervision, settlement, summary adjudication, and, in the end, trial.60 He agreed to fashion

57. Id. at 722. 58. Roscoe Pound, Principles of Practice Reform, 71 Cent. L.J. 221, 223 (1910); compare Charles E. Clark, Handbook of the Law of Code Pleading 157 (1928) (stating that pleadings “should not be objectionable . . . so long as reasonably fair notice of the pleader’s cause of action is given”). 59. Charles E. Clark, The New Federal Rules of Civil Procedure: The Last Phase—Underlying Philosophy Embodied in Some of the Basic Provisions of the New Procedure, 23 A.B.A. J. 976, 977 (1937). 60. Marcus, supra note 36, at 493–94.

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some limited mechanisms for challenging pleadings, but he was determined to make pleadings subservient to the ends of justice, instead of in opposition to them.

Theory Codified The revolutionary system of rules that resulted from the committee’s efforts was a holistic and comprehensive codification of the drafters’ liberal ethos. The new procedural system represented triumphs of the equity paradigm over the common-law paradigm, of discretion over formalism, and of citizen access over restrictiveness. Nowhere was this truer than in the area of discovery. Before 1938, discovery was limited in scope, availability, and method. The 1938 rules, through Sunderland’s efforts, provided broader and greater access to discovery than any state or federal jurisdiction.61 The new rules made available wide-ranging discovery, including document exchange, depositions, and interrogatories. They gave a party the right to inspect an opposing party’s property and to inspect and copy other parties’ documents. They permitted a party to force both other parties and witnesses to sit for oral depositions. “Fishing expeditions” were encouraged as a way to develop the facts necessary to resolve the dispute.62 The rules proposed to control discovery not through ex ante limits but through judicial discretion focused on the circumstances of the case.63 The new pleading rules reflected a similar liberality. Rule 8 was the keystone of pleading. It required—and still requires today—only “a short and plain statement of the claim showing that the pleader is entitled to relief.”64 Rule 8’s brevity is significant. The rulemakers intentionally avoided mention of the troublesome categories of facts, law, or evidence; indeed, the word “facts” is conspicuously absent.65 Rule 8 requires no stylized, technical, or formulaic pleading. It seeks a “plain telling of the story” that gives rise to the

61. Subrin, supra note 25, at 719. 62. Jeffrey W. Stempel, Ulysses Tied to the Generic Whipping Post: The Continuing Odyssey of Discovery “Reform,” 64 Law & Contemp. Probs. 197, 202 (2001). 63. Subrin, supra note 25, at 743. 64. Fed. R. Civ. P. 8(a)(2). 65. Geoffrey C. Hazard, Jr., From Whom No Secrets are Hid, 76 Tex. L. Rev. 1665, 1671 (1998); Marcus, supra note 36, at 433; 5 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1216 at 207 (3d ed. 2004).

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claim for relief.66 That storytelling clearly requires some facts, and those facts must relate an actual event. After all, Clark reasoned, “an allegation which says simply that the defendant did injure the plaintiff through his negligence is too general and would not stand, for really that tells you no differentiating features about the case whatsoever, except the very broad word ‘negligence.’”67 But, as Clark clarified, the complaint need only recount the general nature of the case and the circumstances or events upon which it is based, so as to differentiate it from other acts or events, to inform the opponent of the affair or transaction to be litigated—but not of details which he should ascertain for himself in preparing his defense—and to tell the court of the broad outlines of the case.68 Rule 8 also requires a “showing,” but a showing can be made simply by using conclusions of law. As Clark stated, “[T]he statement of the act in question in a general way, and with a characterization that it is negligence, is sufficient.”69 Other committee members agreed that conclusions of law could be used to meet the requirements of Rule 8. Edson Sunderland, for example, insisted that “[a] legal conclusion may serve the purpose of pleading as well as anything else.”70 In sum, the drafters intended Rule 8 to allow a complaint that distinguishes the circumstances generally from other circumstances, ties them explicitly or implicitly to a legal claim, and identifies the relief sought. The Forms that accompany the Federal Rules, which Clark deemed “the most important part of the rules,”71 illustrate these principles. Form 11 (renumbered from its original designation as Form 9) sets out a model complaint for negligence. Its operative allegation states only the following: “On June 1, 1936, in a public highway called Boylston Street in Boston, Massachusetts, defendant negligently drove a motor vehicle against plaintiff who was then crossing said highway.”72 The characterization of the defendant driving “negligently”

66. Federal Rules of Civil Procedure: Proceedings of the Institute at Washington, D.C. October 6, 7, 8, 1938 and of the Symposium at New York City October 17, 18, 19, 1938, at 308 (Edward H. Hammond ed. 1939). 67. Id. at 241. 68. Charles E. Clark, Simplified Pleading, 2 F.R.D. 456, 460–61 (1943). 69. Proceedings of the Institute at Washington, D.C., supra note 66, at 241. 70. Edson R. Sunderland, The New Federal Rules, 45 W. Va. L.Q. 5, 12 (1938). 71. Charles E. Clark, Pleading Under the Federal Rules, 12 Wyo. L.J. 177, 191 (1958). 72. Fed. R. Civ. P. Form 11.

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is a conclusion of law that would have been disregarded under Code pleading, but it is useful and sufficient under rule pleading because the recitation distinguishes the circumstances and states the intended claim in a way that gives notice of the claim to the defendant. As Charles Clark explained Form 11’s adequacy: That this affords adequate basis for res judicata is clear; plaintiff will not have many accidents of that kind at that time and place. But to a trained mind the kind of case it is, with respect to trial or calendar practice, is quite clear; and there are only certain kinds and numbers of misdeeds—speed, signals, position on the highway, failure to look, and so on—which either party can commit. These each party should prepare himself to face; even if they be unstated, a wise counsel will not face trial without considering their contingency.73 Pleading under Rule 8, then, simply initiates the action and notifies the parties and the court of the claims and their nature. Although Rule 8 applies generally to pleading, the rulemakers codified a few exceptions. Rule 9(b), for example, requires that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”74 The rulemakers recognized that some claims, specifically those involving fraud, required pleading with greater particularity in order to protect plaintiffs’ reputations, deter frivolous claims, and provide clear notice. These exceptions to general pleading were already well established at common law and in equity.75 Rule 9(b) emphasizes, however, that “[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.”76 Perhaps against Clark’s own preferences, the rules provide mechanisms for testing pleadings. Rule 12 eliminates demurrers and replaces them with answers and motions. Rule 12(e), which replaced the bill of particulars in 1948, permits a party to move for a more definite statement if the pleading “is so vague or ambiguous that the party cannot reasonably prepare a response.”77 The rule addresses the problem of inadequate notice, and the remedy is a repleading that provides clearer notice of the claim and relevant 73. Clark, supra note 68, at 462. 74. Fed. R. Civ. P. 9(b). 75. Robert G. Bone, Twombly, Pleading Rules, and the Regulation of Court Access, 94 Iowa L. Rev. 873, 897–98 (2009). 76. Fed. R. Civ. P. 9(b). 77. Fed. R. Civ. P. 12(e).

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circumstances.78 Rule 7(a) grants the court discretion to order the plaintiff to file a “reply” pleading to the defendant’s answer.79 Finally, if the pleadings together show that judgment is appropriate, Rule 12(c) permits the court to enter a judgment on the pleadings.80 Rule 12(b)(6) allows a party to move to dismiss a complaint for failure to state a claim.81 As later chapters will explain, there is some dispute over the meaning of this rule. In my view, the correct interpretation is that Rule 12(b)(6) tests legal sufficiency only, not factual sufficiency. The idea behind legal sufficiency is that if the law does not recognize the claim, or if the law prohibits relief under the circumstances that the pleader has alleged, then relief cannot be granted even if all of the plaintiff’s allegations are true, and Rule 12(b)(6) permits dismissal. For example, a complaint that states a claim for discrimination on the basis of baldness should be dismissed because the law does not recognize such a claim and provides no relief for it. Because Rule 12(b)(6) tests only legal sufficiency, and not factual sufficiency, a court deciding such a motion must construe all factual allegations in the complaint as true and all inferences in favor of the pleader, unless contravened by facts of which the court must take judicial notice or unless wholly incredible.82 Note how these testing mechanisms work together. If the complaint fails to plead sufficient facts to supply notice, then the defendant can move for a more definite statement. If the defendant asserts a defense that the judge believes demands a pleading response, the judge can order the plaintiff to file a reply. If the pleadings together show that judgment is appropriate, such as if the pleadings establish that the statute of limitations has run and no tolling or exceptions apply, then the court can enter a judgment on the pleadings. If the complaint asserts a claim not permitted by law, then the defendant can move to dismiss. Importantly, dismissal is reserved only for legal insufficiency, not factual insufficiency. Largely unremediable at the pleading stage are weak or implausible claims; those quintessentially merits-based defects are adjudged at later stages.

78. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002) (“If a pleading fails to specify the allegations in a manner that provides sufficient notice, a defendant can move for a more definite statement under Rule 12(e) before responding.”); Glus v. Brooklyn E. Dist. Terminal, 359 U.S. 231, 235 (1959); Pike, supra note 39, at 62. 79. Fed. R. Civ. P. 7. 80. Fed. R. Civ. P. 12(c). 81. Fed. R. Civ. P. 12(b)(6). 82. Arthur R. Miller, McIntyre in Context: A Very Personal Perspective, 63 S.C. L. Rev. 465, 473 (2012); Kevin M. Clermont & Stephen C. Yeazell, Inventing Tests, Destabilizing Systems, 95 Iowa L. Rev. 821, 837–38 (2010).

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The rules, then, reflect the rulemakers’ ideal that pleadings should accomplish very little. They exist to provide notice to the parties and the court.83 Factual development and issue narrowing are relegated to later stages of open discovery, after which the factual soundness of the claims and defenses can more effectively be scrutinized. The Federal Rules were approved by the Supreme Court and were reported to Congress in January of 1938. They took effect, as a result of congressional inaction, on September 16, 1938. By almost all accounts, they have been a remarkable success. They merged law and equity to create a uniform system of procedure in federal court. They made litigating easier, simpler, and more just. The Rules have guided litigators and courts for more than 70 years with relatively little modification.84

Resistance to Liberality The liberality of the new procedural regime, particularly pleading and discovery, met with hostility among members of the bench and bar almost immediately. Old practices die hard, and many were legitimately concerned that pleadings would do too little, particularly given the expansiveness of the discovery that would follow the pleadings. Accordingly, courts continued to impose the stricter pleading standards and formalities that the Federal Rules purported to inter.85 Several New York federal judges, in particular, pursued what Clark called “something bordering on a revolt against the existing rule.”86 In 1944, the Second Circuit attempted to put the discord to rest with Dioguardi v. Durning, an opinion written by none other than Charles Clark, who had by then been appointed to a judgeship on that court. The pro se complaint in that case was a messy hodgepodge of disjointed statements. It failed to allege many key elements and failed to identify any legal theory. The trial court had twice granted the defendant’s motions to dismiss for failure to state a claim. But the Second Circuit reversed, holding that “however inartistically they may be stated, the plaintiff has disclosed his claims.”87 Even today, 83. Clark himself disavowed the term “notice pleading,” ostensibly to avoid giving the impression that Rule 8 lacked meaningful standards. Clark, supra note 2, at 49–50, 53–54; Charles E. Clark, The Texas and the Federal Rules of Civil Procedure, 20 Tex. L. Rev. 4, 12 (1941). 84. Rex R. Perschbacher & Debra Lyn Bassett, The Revolution of 1938 and its Discontents, 61 Okla. L. Rev. 275, 275 (2008). 85. Subrin, supra note 3, at 983–84. 86. Clark, supra note 2, at 49. 87. Dioguardi v. Durning, 139 F.2d 774, 775 (2d Cir. 1944).

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the decision is seen as a paradigm of the application of liberal notice-pleading principles. In a way, however, the case backfired for Clark. On remand, the plaintiff failed to prove his claim on the facts, and the defendant won a judgment.88 The plaintiff again appealed, but this time, the Second Circuit affirmed. The case became a rallying cry for critics of Rule 8 who believed that more stringent pleading requirements could save judicial resources that were being wasted under the current regime.89 While the lower courts were struggling to define rule pleading, the U.S. Supreme Court decided Hickman v. Taylor in 1947.90 The Court wrote: Under the prior federal practice, the pre-trial functions of notice-giving, issue-formulation and fact-revelation were performed primarily and inadequately by the pleadings. Inquiry into the issues and the facts before trial was narrowly confined and was often cumbersome in method. The new rules, however, restrict the pleadings to the task of general notice-giving and invest the deposition-discovery process with a vital role in the preparation for trial.91 As a discovery-privilege case, Hickman had something to say about discovery, too. Hickman affirmed the liberal ethos of the Federal Rules by holding that the discovery rules were to be afforded a broad and open interpretation.92 The Court asserted: “No longer can the time-honored cry of ‘fishing expedition’ serve to preclude a party from inquiring into the facts underlying his opponent’s case.”93 The Court stressed that, absent the privilege, anything relevant to the subject matter of the case was discoverable.94 Thus, the Court essentially endorsed the pleading and discovery regime advocated by supporters of the 1938 rules. The year after Hickman, the rules committee amended the discovery rules to provide expanded access to discovery. The amendments allowed earlier

88. O.L. McCaskill, The Modern Philosophy of Pleading: A Dialogue Outside the Shades, 38 A.B.A. J. 123, 126 (1952). 89. Fairman, supra note 34, at 559. 90. 329 U.S. 495 (1947). 91. Id. at 500–501 (footnotes omitted). 92. Stempel, supra note 62, at 204. 93. Hickman, 329 U.S. at 507. 94. Id. at 509–10.

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depositions, lifted court control over interrogatories, and broadened the availability of document requests. The amendments also widened the scope of discovery to any testimony that “appears reasonably calculated to lead to the discovery of admissible evidence.”95 In the wake of these developments, opposition to the liberality of discovery and pleadings surged. One of the leaders of the resistance, Professor Oliver L. McCaskill, sought an amendment that would require a plaintiff to allege enough facts to make out a recognized legal claim, a standard similar to the old Code norm of “facts constituting a cause of action.”96 In 1952, the Ninth Circuit Judicial Conference recommended that Rule 8 be amended to require “a short and plain statement of the claim showing that the pleader is entitled to relief, which statement shall contain the facts constituting a cause of action.”97 In 1955, the Advisory Committee, led by Clark, rejected that proposal,98 but that did not quiet the opposition. In 1956, Judge Archie Dawson of the Southern District of New York dismissed an antitrust complaint, writing, If a complaint contains nothing more than general allegations that defendants have violated various provisions of the anti-trust laws combined with a prayer for relief, such a pleading . . . becomes a springboard from which the parties dive off into an almost bottomless sea of interrogatories, depositions, and pre-trial proceedings on collateral issues, most of which may have little relationship to the true issue in the case.99 Dawson’s analysis was misleading; as the Rules Committee had affirmed a year earlier, Rule 8 had never sanctioned the pleading of “a bare averment that the plaintiff wants relief and is entitled to it.”100 But the sentiment underlying the opposition—a fear of discovery costs imposed by liberal pleadings— was real. Two years later, Judge Dawson tied his argument more forcefully to

95. Fed. R. Civ. P. 26(b) (1946). 96. McCaskill, supra note 88. 97. Claim or Cause of Action: A Discussion on the Need for Amendment of Rule 8(a)(2) of the Federal Rules of Civil Procedure, 13 F.R.D. 253, 253 (1953). 98. Advisory Comm. on Rules for Civil Procedure, Report of Proposed Amendments to the Rules of Civil Procedure for the United States District Courts 18–19 (1955), available at http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Reports/CV10-1955.pdf. 99. Baim & Blank, Inc. v. Warren-Connelly Co., 19 F.R.D. 108, 109–10 (S.D.N.Y. 1956) (internal quotation marks omitted). 100. Report of Proposed Amendments, supra note 98, at 18–19.

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discovery costs, particularly in large, complex cases: “The filing of a complaint in federal court is, in effect, a license to the plaintiff to subject the defendant to the expense and difficulties of extensive discovery proceedings.”101 A pleadings war was bubbling, and neither the rules committee nor individual judges seemed able to stop it.

Conley v. Gibson The Supreme Court entered the fray with Conley v. Gibson. In the 1940s, racial discrimination in union representation was rampant. At the time, no federal laws directly prohibited such discrimination, but, in 1944, the Supreme Court interpreted the Railway Labor Act (RLA) of 1926 to impose a duty of “fair representation” on unions, a duty that entailed representation of all employees within the bargaining unit “without hostile discrimination, fairly, impartially, and in good faith.”102 In Conley, black members of the Brotherhood of Railway and Steamship Clerks brought a putative class action against the union and its officers, including its chairman Pat Gibson. John D. Conley was one of the named plaintiffs. The plaintiffs worked for the Texas and New Orleans Railroad, and the union was the exclusive bargaining representative for the plaintiffs. The railroad had eliminated forty-five jobs held by the plaintiffs and then either hired whites in their place or rehired black employees with lost seniority. The plaintiffs sued the union for failing to protect their jobs, claiming that because the union failed to represent them as it would have represented white employees, the union discriminated against them based on their race.103 The union moved to dismiss on a number of grounds, including lack of jurisdiction (asserting that exclusive jurisdiction was only before the National Railroad Adjustment Board) and failure to state a claim upon which relief could be granted under Rule 12(b)(6). The district court dismissed only on the jurisdictional ground, and, on appeal, the Fifth Circuit affirmed. The plaintiffs appealed to the U.S. Supreme Court. At the time, the Supreme Court was actively and broadly attempting to dismantle race discrimination. Justice Hugo Black was among the antidiscrimination leaders on the Court. He also exhibited “impatience with procedural

101. Archie O. Dawson, The Place of Pleading in a Proper Definition of the Issues in the “Big Case,” 23 F.R.D. 319, 431 (1958). 102. Steele v. Louisville & Nashville R.R., 323 U.S. 192, 204 (1944). 103. Conley v. Gibson, 355 U.S. 41, 43 (1957).

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niceties,” particularly when they prevented claims of racial injustice from being fully aired.104 In a unanimous opinion issued just twenty-eight days after oral arguments, the Supreme Court, with Justice Black writing, reversed the Fifth Circuit. The Court first resolved the jurisdictional issue, holding that a dispute between employees and their union was not covered by the exclusive-jurisdiction provision of the RLA.105 It then turned to the pleading issue left unaddressed by the lower courts. The union had made two primary arguments against the sufficiency of the plaintiffs’ complaint—a legal-sufficiency argument and a factual-sufficiency argument. On legal sufficiency, the union argued that the mere failure to protest the firings by the railroad was not actionable under the RLA.106 In response, the Court held that the legal claim identified by the plaintiffs was actionable under the RLA, and it famously pronounced the following: In appraising the sufficiency of the complaint we follow, of course, the accepted rule 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. Here, the complaint alleged, in part, that petitioners were discharged wrongfully by the Railroad and that the Union, acting according to plan, refused to protect their jobs as it did those of white employees or to help them with their grievances all because they were Negroes. If these allegations are proven there has been a manifest breach of the Union’s statutory duty to represent fairly and without hostile discrimination all of the employees in the bargaining unit. This Court squarely held in Steele and subsequent cases that discrimination in representation because of race is prohibited by the Railway Labor Act. . . . The bargaining representative can no more unfairly discriminate in carrying out [its] functions that it can in negotiating a collective agreement.107 As to factual sufficiency, the union argued that the factual allegations in the complaint were too vague and conclusory to assert a claim and argued that 104. Emily Sherwin, The Story of Conley: Precedent by Accident, in Civil Procedure Stories 295, 308 (Kevin M. Clermont ed., 2d ed. 2008). 105. Conley, 355 U.S. at 44. The Court also disposed of a Rule 19 joinder issue. 106. Br. for Resp. at 32, Conley v. Gibson, 355 U.S. 41 (1957), 1957 WL 87662. 107. Conley, 355 U.S. at 45–46 (footnotes omitted).

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Rule 8 required greater specificity in exactly how the union discriminated, such as via factual allegations detailing instances in which the union actually protected white jobs more aggressively.108 The Court responded: The decisive answer to this is that the Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is “a short and plain statement of the claim” that will give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.109 The Court also pointed to Rule 12(e) as the vehicle for remedying a complaint that fails to detail sufficient facts to provide “notice” and “grounds.”110 Many have criticized Conley’s “no set of facts” language as lifting all standards out of the pleading rules. The eminent Geoffrey Hazard, for example, has written that “[l]iteral compliance with Conley v. Gibson could consist simply of giving the names of the plaintiff and the defendant, and asking for judgment.”111 That sentiment has been echoed by opponents of notice pleading for decades, even to the present day, to argue that the Conley standard is virtually meaningless. One group of commentators, as recently as 2010, wrote that “Conley’s ‘no set of facts’ standard did not appear to require the recitation of any facts at the pleading stage.”112 Another prominent pair stated ominously, “Taken literally, the Conley dictum could make it impossible for a defendant to win a motion to dismiss, thus rendering Federal Rule of Civil Procedure 12 a nullity.”113 There are two problems with this line of argument. The first is that Conley’s “no set of facts” language applies only to legal-sufficiency challenges. Thus,

108. Br. for Resp., supra note 106, at 26–27, 31. The Complaint was factually detailed, ironically enough. As Emily Sherwin has suggested, “The complaint in Conley probably accomplished all that O.L. McCaskill would have asked from pleadings.” Sherwin, supra note 104, at 316. 109. Conley, 355 U.S. at 47 (footnote omitted). 110. Has the Supreme Court Limited Americans’ Access to Courts?: Hearing Before the S. Comm. on the Judiciary, 111th Cong. 95 (2009) (prepared statement of Stephen B. Burbank). 111. Hazard, supra note 65, at 1685. 112. Rebecca Love Kourlis, et al., Reinvigorating Pleadings, 87 Denv. U. L. Rev. 245, 252 (2010). 113. Mark Hermann & James M. Beck, Opening Statement, Plausible Denial: Should Congress Overrule Twombly and Iqbal?, 158 U. Pa. L. Rev. PENNumbra 141, 143 (2009), available at http://www.pennumbra.com/debates/pdfs/PlausibleDenial.pdf.

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what Conley meant by that phrase was that legal sufficiency can—and should— be tested based on the law, not based on the factual possibilities. And this is how it should be. Pure questions of law do not depend upon factual disagreements or uncertainties: Title VII either prohibits discrimination based on hair color or it does not. Because the “no set of facts” phrase applies only to questions of legal sufficiency, it is inapposite to the other requirement of Rule 8: providing fair notice. As Conley recognized, and as the drafters of Rule 8 tried to emphasize, fair notice has always demanded some facts. Clark himself conceded that “it has always been insufficient to allege merely that the plaintiff’s injury was due to the defendant’s negligence.”114 Thus, as Emily Sherwin has pointed out, “a complaint seeking relief on a bare statement that ‘defendant wronged plaintiff’ would be insufficient for lack of factual detail” under the notice requirement of rule pleading, even if not subject to dismissal for legal insufficiency under the “no set of facts” rubric.115 The two requirements—that a complaint both be legally sufficient and provide fair notice—are conjunctive; failing either one renders the pleading defective. The second problem is that the argument’s premise—that the “no set of facts” standard is toothless116—is almost certainly wrong, even under a dismissal regime that polices only legal sufficiency. Any number of legal defects might doom a claim. Perhaps the claim is preempted by federal law. Perhaps the complaint misconstrues the scope of the law governing the claim. Perhaps the plaintiff alleges specific facts that, as a matter of law, preclude the claim. In such cases, the claim should be dismissed under Rule 12(b)(6) on a legal-sufficiency challenge and under the Conley “no set of facts” language because the plaintiff could not recover on her particular legal theory under any set of facts consistent with those alleged in the complaint. The legal-sufficiency requirement of Rule 12(b)(6), even as understood by Conley, erects a useful barrier to such obviously meritless claims.

114. Clark, supra note 58, at 300–301. 115. Sherwin, supra note 104, at 316 n.83. Many others have recognized this point. See, e.g., Robert G. Bone, Plausibility Pleading Revisited and Revised: A Comment on Ashcroft v. Iqbal, 85 Notre Dame L. Rev. 849, 865 (2010); Stephen B. Burbank, Pleading and the Dilemmas of “General Rules,” 2009 Wis. L. Rev. 535, 550–51; Wendy Gerwick Couture, Conley v. Gibson’s “No Set of Facts” Test: Neither Cancer Nor Cure, 114 Penn St. L. Rev. Penn Statim 19, 29 (2010); Marcus, supra note 36, at 446; Arthur R. Miller, From Conley to Twombly to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke L.J. 1, 18 n.59 (2010); Adam N. Steinman, The Pleading Problem, 62 Stan. L. Rev. 1293, 1321 (2010). 116. William M. Janssen, Iqbal “Plausibility” in Pharmaceutical and Medical Device Litigation, 71 La. L. Rev. 541, 548–49 (2011).

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The importance of legal-sufficiency challenges is not limited to obvious defects. Such a standard has an important role to play in close legal questions, too. The development of the law is a crucial societal concern, one that the courts most appropriately oversee at the motion-to-dismiss stage. Whether the Constitution protects flag burning, what legal standard applies to gender discrimination under the Equal Protection Clause, whether Title VII applies extra-territorially—these are all important legal questions that, if properly raised by a complaint, potentially can be answered by the courts without any further factual enhancement. A legal-sufficiency challenge, even as framed by the “no set of facts” language, tees these legal questions up for judicial decision. For these reasons, and others as explored more fully in other chapters, the Conley standard is neither toothless nor unworkable. Conley did, however, evince a clear commitment to deemphasizing pleadings and to purporting to resolve the pleadings war in favor of liberalized treatment. Debate about Rule 8’s meaning ended, and the early objectors lost their fervor in advocating for a return to the formalism of Code pleading.117 The Supreme Court subsequently entrenched the liberality of pleading by instructing courts to construe allegations favorably to the pleader118 and to take all nonfanciful factual assertions as true.119 As Ben Spencer has written, Conley “sealed the deal” in making notice the ultimate touchstone.120 Open opposition to the liberality of Rule 8 subsided. Clark, for the moment, had won his battle.

The Rise of Litigation and the Counterrevolution The war, however, was not over—it merely switched to other facets of the litigation process. Conley was not a high-stakes damages action that extorted an unjust settlement, nor did it present broad discovery and complex evidence.121 It was, instead, similar to much litigation in 1938, which was mostly small, confined, and manageable, with relatively straightforward and light discovery.122 Conley did manifest one telling difference: it was a case with significant public implications as opposed to a case of primarily private concerns. That feature presaged a major shift in litigation culture. 117. Marcus, supra note 36, at 434, 492. 118. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). 119. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n.1 (2002). 120. A. Benjamin Spencer, Understanding Pleading Doctrine, 108 Mich. L. Rev. 1, 20 (2009). 121. Sherwin, supra note 104, at 317. 122. Daniel J. Meador, A Perspective on Change in the Litigation System, 49 Ala. L. Rev. 7 (1997).

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The sixties saw a movement away from reliance on the administrative state to protect the public interest and toward private litigation, spurred by new federal laws inspired by the Great Society.123 As Paul Carrington has recorded, “By the 1960s, this form of litigation had become in many minds a preferred form of regulating business in the public interest.”124 In the 1960s and 1970s, Congress passed new federal laws broadly regulating private activities. To encourage enforcement of these regulations through private litigation, Congress often provided for fee awards or multiple damages. Meanwhile, rulemakers emboldened by Conley and the successes of the judiciary in vindicating individual rights continued liberalizing the Federal Rules. In 1966, they broadened the class-action rules. In 1970, they made insurance policies discoverable as a matter of course, eliminated the requirement of “good cause” for document discovery, removed the need for judicial approval of routine depositions, broadened the scope of interrogatories and admissions, and allowed parties to conduct as much discovery—and in any order—they wished. Rulemakers expressly disputed charges of systemic discovery abuse, finding “[n]o widespread or profound failings” in discovery and that the “costs of discovery do not appear to be oppressive.”125 In short, 1970 was the “highwater mark” of liberalized discovery.126 The culture of the legal profession, however, was trending in the opposite direction. In 1938, the legal community was fairly homogenous and local, litigating relatively small numbers of modest disputes involving mostly private interests. Most complaints had simple discovery tasks.127 By the 1970s, the legal profession looked quite different. Lawyers and their growing law firms became more national and even international, and they cared less about maintaining a good local reputation. Lawyers began employing litigation tactics designed to wear down opponents with costs and effort. In particular, the rise of the billable hour as a standard model of defense representation

123. For accounts, see Abram Chayes, The Role of the Judge in Public Law Litigation, 89 Harv. L. Rev. 1281 (1976); Sean Farhang, Public Regulation and Private Lawsuits in the American Separation of Powers System, 52 Am. J. Pol. Sci. 821 (2008). 124. Paul D. Carrington, Politics and Civil Procedure Rulemaking: Reflections on Experience, 60 Duke L.J. 597, 606 (2010). 125. Advisory Committee’s Explanatory Statement Concerning Amendments of the Discovery Rules, Proposed Amendments to the Federal Rules of Civil Procedure Relating to Discovery, 48 F.R.D. 487, 489–90 (1970). 126. Richard L. Marcus, Discovery Containment Redux, 39 B.C. L. Rev. 747, 748 (1998). 127. Richard A. Epstein, Of Pleading and Discovery: Reflections on Twombly and Iqbal with Special Reference to Antitrust, 2011 U. Ill. L. Rev. 187, 190–91; Resnik, supra note 51, at 508.

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incentivized leave-no-stone-unturned discovery, kitchen-sink motions, and expensive expert-testimony practice. At the same time, the liberality of the rules and litigation culture were having an effect; dockets began swelling.128 The result was a counterrevolution. The debate about the counterrevolution’s scope, magnitude, causes, and goals is ongoing. Without denying its complex history, my focus here is on its implications for pleadings and discovery, and there is no question that those two features of civil litigation were prime targets of the counterrevolution, which cast litigation as costly and inefficient.129 Some questioned whether the courts could handle those costs effectively.130 Others challenged the fairness of broad discovery to defendants.131 Still others felt that the jury system was overcompensating plaintiffs in tort cases and ignoring the law in order to provide relief for sympathetic victims.132 Many believed that judges were not consistently using their discretion to limit discovery as justice required.133 Leaders of the legal profession met at the 1976 Pound Conference to discuss these concerns. Deliberations focused on “over discovery,” docket congestion, and the suspicion that plaintiffs were using lawsuits as fishing expeditions.134 William Erickson, reflecting on the conference, wrote, “Unnecessary intrusions into the privacy of the individual, high costs to the litigants, and correspondingly unfair use of the discovery process as a lever toward settlement have come to be part of some lawyers’ trial strategy.”135 It was clear that the tide had begun to turn against mega-litigation and broad discovery.

128. Robert G. Bone, Improving Rule 1: A Master Rule for the Federal Rules, 87 Denv. U. L. Rev. 287, 294–95 (2010); Carrington, supra note 124, at 610. 129. Arthur R. Miller, The Pretrial Rush to Judgment: Are the “Litigation Explosion,” “Liability Crisis,” and Efficiency Clichés Eroding Our Day in Court and Jury Trial Commitments?, 78 N.Y.U. L. Rev. 982, 985–86 (2003). 130. Simon H. Rifkind, Are We Asking Too Much of Our Courts?, in The Pound Conference: Perspectives on Justice in the Future 51, 61 (A. Leo Levin & Russell R. Wheeler eds. 1979). 131. Miller, supra note 129, at 987. 132. Id. at 988. 133. Stempel, supra note 62, at 198. 134. See Francis R. Kirkham, Complex Civil Litigation—Have Good Intentions Gone Awry?, in The Pound Conference: Perspectives on Justice in the Future 209, 212–14 (A. Leo Levin & Russell R. Wheeler eds. 1979); Edward F. Sherman & Stephen O. Kinnard, Federal Court Discovery in the ’80s—Making the Civil Rules Work, 95 F.R.D. 245, 246 & nn.1-2 (1982); see generally The Pound Conference: Perspectives on Justice in the Future, supra. 135. William H. Erickson, The Pound Conference Recommendations: A Blueprint for the Justice System in the Twenty-First Century, 76 F.R.D. 277, 288 (1978).

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The counterrevolution pressured rulemakers to scale back discovery and exert more control over the pretrial process. New rule amendments went into effect in 1980. They provided generally for more judicial management of discovery by establishing a mandatory discovery conference, requiring counsel to sign discovery requests and certify that the request was justified, and mandating that judges curtail disproportionate discovery.136 The rules were amended again in 1983 in a major set of reforms designed to rein in discovery and abusive litigation tactics. The 1983 amendments required attorney certification that a discovery request or objection was legally justified, not imposed for delay or improper purpose, or unduly burdensome in light of the discovery at issue.137 The amendments also required attorney certification that a pleading or motion was “well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it was not interposed for any improper purpose.”138 Sanctions for improper certification were mandatory. The amendments also widened judicial managerial power under Rule 16, with a specific goal of paring down claims.139 Finally, the amendments required the court to limit discovery based on certain objections, including the objection that “the discovery is unduly burdensome or expensive, taking into account needs of the case, the amount in controversy, limitations on the parties’ resources, and the importance of the issues at stake in the litigation.”140 In short, the 1970s and 1980s saw the pendulum swing toward more restrictive control over discovery and narrowing its scope.141 In 1985, the Supreme Court added its voice to the counterrevolution with a trilogy of cases encouraging the use of summary judgment to terminate weak cases. In Celotex Corp. v. Catrett, the Court held that a movant can seek summary judgment merely by showing that there is an absence of evidence to support an essential element of the non-moving party’s case, a burden significantly lower than the previous articulation, which required the movant to affirmatively

136. Stempel, supra note 62, at 207. 137. Id. at 209. 138. Miller, supra note 129, at 1007. 139. Fed. R. Civ. P. 16(c)(2); Thomas D. Rowe, Jr., Authorized Managerialism Under the Federal Rules—And the Extent of Convergence with Civil-Law Judging, 36 Sw. U. L. Rev. 191, 195–96 (2007). 140. Fed. R. Civ. P. 26(b)(2)(iii) (Supp. 1984). 141. See Marcus, supra note 126, at 752; Stempel, supra note 62, at 197–98; Subrin, supra note 3, at 984.

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disprove an essential element.142 In Anderson v. Liberty Lobby, Inc., the Court explained that the nonmoving party must respond to a properly-supported motion with affirmative evidence and not just assert that the jury might disbelieve the movant.143 And, in Matsushita Electrical Industrial Co. v. Zenith Radio Corp., an antitrust case, the Supreme Court held “if the factual context renders [the plaintiffs’] claim implausible—if the claim is one that simply makes no economic sense—[the plaintiffs] must come forward with more persuasive evidence to support their claim than would otherwise be necessary” to survive summary judgment.144 Together, the trilogy represented “a significant departure from the Court’s prior cautious approach to summary judgment” and increased the likelihood of summary judgment in many cases.145 Despite these efforts, the call for litigation reform and the rhetoric of a litigation explosion of frivolous filings and discovery abuse continued. In 1990, the Quayle Council on Competitiveness spearheaded an initiative to reduce the cost of litigation, and, the following year, released its Agenda for Civil Justice Reform, recommending a number of fundamental changes to civil litigation.146 The Agenda was largely seen as a political ploy, rather than a disinterested push for reform.147 It did, however, have the effect of keeping anti-litigation sentiment strong, well-financed, and in the public eye. With the exception of scaling back the failed Rule 11 experiment of 1983,148 rule amendments in the 1990s and 2000s validated this rhetoric by continuing the trend of narrowing discovery, empowering judicial oversight, and curbing costs. In 1993, Rule 16 was amended to specifically authorize judges to consider, at pretrial conferences, “the control and scheduling of discovery,” and Rule 26 was amended to preclude discovery until the parties had prepared a discovery plan.149 The amendments imposed presumptive limits of twenty-five interrogatories and ten depositions per side.150 They mandated automatic

142. Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986). 143. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250–57 (1986). 144. Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). 145. Miller, supra note 129, at 1033, 1036. 146. President’s Council on Competitiveness, Agenda for Civil Justice Reform in America (1991). 147. Carrington, supra note 124, at 628–30. 148. Stephen B. Burbank, The Transformation of American Civil Procedure: The Example of Rule 11, 137 U. Pa. L. Rev. 1925, 1938 (1989). 149. Fed. R. Civ. P. 16(c) (1993); Fed. R. Civ. P. 26(f) (1993). 150. Stempel, supra note 62, at 199.

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disclosure of certain basic information before any discovery could be undertaken, provided greater pretrial access to opponent’s experts, and heightened the duty to supplement information in the discovery process.151 In 2000, Rule 26 narrowed the scope of discovery to that “relevant to the claim or defense of any party” instead of discovery “relevant to the subject matter,” which could be obtained only upon a showing of good cause.152 In 2006, the rules were amended to account for e-discovery, relieving parties of the burden of producing e-discovery that is not reasonably accessible because of undue cost or burden absent good cause.153 Meanwhile, Congress specifically addressed the primary cause of the rise in civil filings—prisoner complaints—with two new statutes. The first, the Antiterrorism and Effective Death Penalty Act of 1996, imposed stricter standards and limitations on habeas-corpus petitions.154 The second, the Prisoner Litigation Reform Act of 1996, authorized sua sponte dismissal of frivolous prisoner complaints and in forma pauperis cases that are frivolous.155

Pleading after Conley Despite these litigation-restricting changes in discovery, case management, and summary judgment, Rule 8 remained unchanged. Throughout this time period, rulemakers consistently rejected proposals to tighten pleading.156 Nevertheless, lower courts—perhaps attempting to do their part to facilitate the counterrevolution, perhaps merely taking the easy way out—began to take pleadings matters into their own hands by requiring fact pleading in areas that experienced significant growth during the 1960s and 1970s, including civil rights, discrimination, and conspiracy claims.157 As a way to protect defendants from the potential discovery and presumptive frivolity of such claims, many courts demanded that a plaintiff allege a prima facie case at the pleadings stage. In the 1968 case Valley v. Maule, for example, a district court dismissed a conspiracy claim brought against the City

151. Miller, supra note 129, at 1014. 152. Fed. R. Civ. P. 26(b)(1) (2000). 153. Fed. R. Civ. P. 26(b)(2)(B) (2006). 154. Pub. L. No. 104-132, 110 Stat. 1214 (2006). 155. Pub. L. No. 104-134 §§ 801-10, 110 Stat. 1321, 1321-66 to 1321-77 (1996). 156. For a history, see Lonny Hoffman, Rulemaking in the Age of Twombly and Iqbal, U.C. Davis L. Rev. (forthcoming 2014). 157. Marcus, supra note 36, at 449–50, 492.

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of Bristol and certain police officers under Rule 12(b)(6) because the complaint was “utterly devoid of any factual allegations.”158 The court reasoned, without citing any direct authority, that while notice pleading was generally sufficient, “an exception has been created with cases brought under the Civil Rights Acts.”159 The exception was justified, continued the court, by the important public policy of weeding out frivolous and insubstantial cases at early stages of litigation. Similar standards were widely adopted by federal appellate courts in the 1970s.160 At the same time, courts began imposing new pleading requirements on plaintiffs facing qualified-immunity defenses.161 In civil-rights actions against municipalities, for example, the Fifth Circuit required a complaint to “state with factual detail and particularity the basis for the claim which necessarily includes why the defendant-official cannot successfully maintain the defense of immunity.”162 The result was a heightened pleading standard in civil-rights cases that required plaintiffs to plead fact-specific information that was often in the hands of the defendant. Without the benefit of discovery, the plaintiff did not have access to this information and could not satisfy the heightened pleading burden. As a consequence, heightened pleading often proved fatal to civil-rights claims.163 In 1993, however, the Supreme Court abrogated the Fifth Circuit’s heightened pleading standard for civil-rights claims in a case called Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit. There, a unanimous Court held that the heightened pleading standard imposed by the Fifth Circuit was “impossible to square” with the liberal system of notice pleading under Rule 8(a)(2) and instructed the lower courts to apply the notice-pleading standard of Conley.164 In what has been maligned as lawless defiance,165 lower courts disregarded or marginalized Leatherman and continued to impose heightened pleading in

158. Valley v. Maule, 297 F. Supp. 958, 960 (D. Conn. 1968). 159. Id. 160. Fairman, supra note 34, at 577. 161. Id. at 567. 162. Elliott v. Perez, 751 F.2d 1472, 1473 (5th Cir. 1985). 163. Fairman, supra note 34, at 576. 164. Leatherman v. Tarrant Cnty Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 168 (1993). 165. Has the Supreme Court Limited Americans’ Access to Courts?: Hearing Before the S. Comm. on the Judiciary, 111th Cong. 90 (2009) (prepared statement of Stephen B. Burbank).

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many areas, most prominently in employment-discrimination cases.166 In 2001, the Second Circuit heard an appeal in the case of Swierkiewicz v. Sorema, N.A., in which the plaintiff alleged age and national origin discrimination against his employer. In his complaint, the plaintiff alleged his age and national origin, as well as his replacement’s age and national origin, and he alleged that he had more experience than his replacement. The Second Circuit held that the allegations did not make out a prima facie case under a burden-shifting evidentiary standard previously set out by the Supreme Court. Failing that evidentiary standard, the Second Circuit held that the complaint must be dismissed: “It is well settled in this Circuit that a complaint consisting of nothing more than naked assertions, and setting forth no facts upon which a court could find a violation of the Civil Rights Acts, fails to state a claim under Rule 12(b)(6).”167 The Supreme Court granted certiorari and, in another unanimous opinion, held that an employment-discrimination complaint need not contain specific facts establishing a prima facie case. The Court reaffirmed its holding in Leatherman, stating that the complaint must only comport with Rule 8’s requirement of a “short and plain statement of the claim.”168 Harkening again to Conley, the Court stated, “A court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.”169 It mattered not that the plaintiff had not pleaded a prima facie case; providing notice and meeting the test for legal sufficiency was all that was required.

Resolvable Countercases Although some lower courts continued to resist Conley and its progeny,170 others seemed convinced by the forceful pronouncements of Leatherman and Swierkiewicz. The Seventh Circuit, for example, wrote: “‘I was turned down for a job because of my race’ is all a complaint has to say” to state a Title VII race-discrimination claim.171 Another Seventh Circuit panel admonished,

166. Fairman, supra note 34, at 584. 167. Swierkiewicz v. Sorema N.A., 5 F. App’x 63, 64 (2d Cir. 2001), rev’d 534 U.S. 506 (2002). 168. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508, 512 (2002). 169. Id. at 514 (emphasis added). 170. Christopher M. Fairman, The Myth of Notice Pleading, 45 Ariz. L. Rev. 987 (2003). 171. Bennett v. Schmidt, 153 F.3d 516, 518 (7th Cir. 1998) (Easterbrook, J.); see also Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1115 (D.C. Cir. 2000) (asserting that a complaint need only state, “I was turned down for a job because of my race”).

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“[A] judicial order dismissing a complaint because the plaintiff did not plead facts has a short half-life.”172 Yet another stated, “Any district judge (for that matter, any defendant) tempted to write ‘this complaint is deficient because it does not contain [X]’ should stop and think: What rule of law requires a complaint to contain that allegation?”173 Similarly, a fourth panel wrote that an opinion “declaring ‘this complaint is deficient because it does not allege X’ is a candidate for summary reversal.”174 Of all the circuits, the Seventh appeared to be the most committed to impressing upon its district courts the need to take the liberal Conley standard to heart. It has been fashionable among commentators to agree with the Seventh Circuit’s reactions and to characterize the Supreme Court precedent in this era as unambiguous.175 But my view is that things are more complicated. The Supreme Court has issued at least five pleadings-related decisions that appear to create tension with Leatherman and Swierkiewicz. Two of these decisions can in fact be read as consistent with Conley and its progeny, but the other three are more troubling. These five cases have received less scrutiny than Leatherman and Swierkiewicz, but they are important evidence of a countercurrent to the narrative that the Seventh Circuit adopted. I begin with the two resolvable countercases. The first, Associated General Contractors v. California State Council of Carpenters, was a 1983 antitrust case in which a plaintiff union alleged that a multi-employer association and its members coerced third parties to enter into business relationships with nonunion firms, which thereby restrained the business activities of the union and caused a violation of § 4 of the Clayton Act.176 In an opinion by Justice John Paul Stevens, the Court noted that, in order to prove entitlement to recovery, the union would have to show that the restraint caused the union injury within the meaning of the antitrust laws. In interpreting the antitrust laws to discern what injury was compensable, the Court held that the injury asserted was not the type remediable by the Clayton Act, and thus the allegations of harm were “insufficient as a matter of law.”177 Hence, the union “[wa]s not a person injured by reason of a violation of the

172. Vincent v. City Colls. of Chi., 485 F.3d 919, 923 (7th Cir. 2007). 173. Doe v. Smith, 429 F.3d 706, 708 (7th Cir. 2005). 174. Kolupa v. Roselle Park Dist., 438 F.3d 713, 715 (7th Cir. 2006). 175. For a notable exception, see Edward H. Cooper, King Arthur Confronts TwIqy Pleading, 90 Or. L. Rev. 955, 963–64 & n.27 (2012) (listing four potential countercases). 176. Associated Gen. Contractors of Cal., Inc. v. Cal. St. Council of Carpenters, 459 U.S. 519, 520–21 (1983). 177. Id. at 540, 545.

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antitrust laws within the meaning of § 4 of the Clayton Act.”178 As a result, the dismissal was a matter of legal insufficiency rather than factual insufficiency. The Court assumed that the conduct alleged could have been unlawful under the Clayton Act had the injury been cognizable. In a cryptic footnote of dictum elaborating on that assumption, the Court opined: Had the District Court required the Union to describe the nature of the alleged coercion with particularity before ruling on the motion to dismiss, it might well have been evident that no violation of law had been alleged. In making the contrary assumption for purposes of our decision, we are perhaps stretching the rule of Conley v. Gibson, 355 U.S. 41, 47–48 (1957), too far. Certainly in a case of this magnitude, a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed.179 This dictum appears to suggest that a district court could escape the “no set of facts” language by pinning the plaintiff down to a set of allegations that effectively pleads the plaintiff out of court. In other words, the Court read the “no set of facts” language to be cabined by facts consistent with the plaintiff’s affirmatively pleaded allegations. This is not necessarily inconsistent with Conley. Rule 12(b)(6) has always been available to dismiss a claim where, for example, the plaintiff affirmatively alleges that the statute of limitations applies and has expired.180 The best reading of the Associated General Contractors dictum, then, is that the Court was simply recognizing that a district court could exercise its discretion to seek, perhaps by ordering a reply pleading under Rule 7(a) or a more definite statement under Rule 12(e), more specific allegations from the plaintiff that might then reveal whether the plaintiff’s claim should be dismissed as legally insufficient. In one other section worth mentioning, Associated General Contractors does address factual sufficiency. In determining whether to construe the complaint to allege an injury that was remediable under the Clayton Act, the Court stated: “It is not, however, proper to assume that the Union can prove facts that it has not alleged or that the defendants have violated the antitrust laws in ways that have not been alleged.”181 This language is consistent with Conley because the Conley “no set of facts” language was part of the legal-sufficiency standard.

178. Id. at 545–46. 179. Id. at 528 n.17. 180. See, e.g., Early v. Bankers Life and Casualty Co., 959 F.2d 75, 79 (7th Cir. 1992). 181. Associated Gen. Contractors, 459 U.S. at 526.

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By contrast, any factual insufficiency of the Associated General Contractors complaint was a failure to provide notice of potential alternative theories. That failure of notice could have been remedied by a motion for a more definite statement under Rule 12(e). The second decision is the 1998 case of Crawford-El v. Britton, also written by Justice Stevens, in which the Court confronted a prisoner lawsuit under § 1983 based on allegations that prison officials intentionally misdirected the petitioner’s property in retaliation for his outspoken criticism of prison conditions and management.182 The Court kept the complaint alive by vacating the dismissal and remanding the case, but it acknowledged the “obvious concerns with the social costs of subjecting public officials to discovery and trial, as well as liability for damages,” particularly when “an official’s state of mind is ‘easy to allege and hard to disprove,’” and it affirmed a lower court’s power to “insist that the plaintiff ‘put forward specific, nonconclusory factual allegations’ that establish improper motive” in order to “protect[] the substance of the qualified immunity defense . . . so that officials are not subjected to unnecessary and burdensome discovery or trial proceedings.”183 Crawford-El, however, did not suggest that heightened pleading was an appropriate implementation of the lower court’s power to protect qualified immunity. Indeed, the Court appeared to restrict the power to insist upon specific, nonconclusory factual allegations to orders under Rule 7(a) or Rule 12(e).184 In the alternative, as a way to resolve the threshold question of immunity as a matter of law without the need for discovery, the district court could “determine whether, assuming the truth of the plaintiff’s allegations, the official’s conduct violated clearly established law.”185 These pleading-stage procedures are consistent with Conley and Rule 8 notice pleading. Associated General Contractors and Crawford-El thus reflect the Court’s recognition that mechanisms other than Rule 12(b)(6) exist to give the district court flexibility and discretion in complex or troublesome cases. They do not sanction the use of Rule 12(b)(6) to dismiss cases for factual insufficiency, and thus they do not deviate from the Conley tradition.

182. Crawford-El v. Britton, 523 U.S. 574, 578 (1998). 183. Id. at 584–85, 597–98 (1998) (quoting Siegert v. Gilley, 500 U.S. 226, 236 (1991) (Kennedy, J., concurring)). 184. Id. at 598 (opining that the trial judge could “insist that the plaintiff ‘put forward specific, nonconclusory factual allegations’ that establish improper motive” by ordering a reply under Rule 7(a) or by granting a motion for a more definite statement under Rule 12(e)) (quoting Siegert, 500 U.S. at 236 (Kennedy, J., concurring)). 185. Id.

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True Countercases At least three other cases, however, do create tension with Conley and the liberal notice-style pleading seemingly reaffirmed by its progeny. These cases have been underappreciated in the literature to date, and therefore some explanation of them is necessary. The first is the 1975 case Warth v. Seldin, a putative class-action case against a municipal zoning board and its members claiming that the board’s zoning excluded persons of low and moderate income from living in the town, in violation of various constitutional rights.186 The issue was one of the named plaintiffs’ standing. The Court presumed the truth of the allegations that the zoning ordinance and the pattern of enforcement by the officials had the purpose and effect of excluding persons of low and moderate income and that such practices would violate the excluded persons’ constitutional and statutory rights.187 But the Court struggled to find allegations showing that the named plaintiffs were such excluded persons: In their complaint, petitioners . . . alleged in conclusory terms that they are among the persons excluded by respondents’ actions. . . . But there remains the question whether petitioners’ inability to locate suitable housing in Penfield reasonably can be said to have resulted, in any concretely demonstrable way, from respondents’ alleged constitutional and statutory infractions. Petitioners must allege facts from which it reasonably could be inferred that, absent the respondents’ restrictive zoning practices, there is a substantial probability that they would have been able to purchase or lease in Penfield and that, if the court affords the relief requested, the asserted inability of petitioners will be removed. . . . We find the record devoid of the necessary allegations . . . . Instead, petitioners claim that respondents’ enforcement of the ordinance against third parties—developers, builders, and the like—has had the consequence of precluding the construction of housing suitable to their needs at prices they might be able to afford . . . . Here, by their own admission, realization of petitioners’ desire to live in Penfield always has depended on the efforts and willingness

186. Warth v. Seldin, 422 U.S. 490, 493 (1975). 187. Id. at 502.

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of third parties to build low- and moderate-cost housing. The record specifically refers to only two such efforts. . . . But the record is devoid of any indication that these projects, or other like projects, would have satisfied petitioners’ needs at prices they could afford, or that, were the court to remove the obstructions attributable to respondents, such relief would benefit petitioners. Indeed, petitioners’ descriptions of their individual financial situations and housing needs suggest precisely the contrary—that their inability to reside in Penfield is the consequence of the economics of the area housing market, rather than of respondents’ assertedly illegal acts. In short, the facts alleged fail to support an actionable causal relationship between Penfield’s zoning practices and petitioners’ asserted injury. . . . [Petitioners] rely on little more than the remote possibility, unsubstantiated by allegations of fact, that their situation might have been better had respondents acted otherwise, and might improve were the court to afford relief. We hold only that a plaintiff who seeks to challenge exclusionary zoning practices must allege specific, concrete facts demonstrating that the challenged practices harm him, and that he personally would benefit in a tangible way from the court’s intervention.188 Standing is a jurisdictional issue, and thus the pleading of standing is covered by Rule 8(a)(1)’s pleading requirement of “a short and plain statement of the grounds for the court’s jurisdiction,” which could be characterized as a lighter requirement than Rule 8(a)(2)’s “showing” requirement for claims for relief. In addition, challenging subject-matter jurisdiction falls under Rule 12(b)(1), which requires dismissal on an ultimate finding of “lack of subject-matter jurisdiction,”189 as opposed to Rule 12(b)(6), which focuses on whether the complaint fails to state a claim. Taken together, one could construe these rules to impose a lighter burden on pleading jurisdiction than pleading claims for relief. If so, then Warth’s focus on the need for factual support for the standing allegations is in tension with Conley’s leniency on merits allegations. Indeed, Warth’s disregard of the plaintiffs’ “remote possibility” of standing is in contrast with an opinion issued just one year before stating that

188. Id. at 503–508 (footnotes omitted). 189. Fed. R. Civ. P. 12(b)(1); cf. Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”).

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allegations should not be disregarded even if “it may appear on the face of the pleadings that a recovery is very remote and unlikely.”190 Perhaps the Warth Court believed it had sufficient evidence to render a conclusive finding on standing. The Court’s opinion does reference “the record” several times, and it recognizes that the district court considered both the pleadings and “extensive supportive materials” submitted by the plaintiffs.191 The opinion also mentions “the trial court’s power to allow or to require the plaintiff to supply, by amendment to the complaint or by affidavits, further particularized allegations of fact deemed supportive of plaintiff’s standing” and that “[i]f, after this opportunity, the plaintiff’s standing does not adequately appear from all materials of record, the complaint must be dismissed.”192 So, perhaps the Court determined that the district court correctly and conclusively found a lack of standing based on the whole record before it. That would not explain away, though, the Court’s insistence, in the context of a dismissal, on “alleg[ing] specific, concrete facts demonstrating [standing]” and the Court’s other references to what the plaintiffs should have pleaded. Even a charitable interpretation of Warth, then, creates some tension between pleading standing and pleading claims. The second case, Papasan v. Allain, decided in 1986, involved allegations that Mississippi state mismanagement of public-school land grants caused a disparity between the financial support available to various public schools in the state. The plaintiffs alleged that that disparity deprived certain counties’ schoolchildren of a minimally adequate level of education and of the equal protection of the laws.193 In agreeing that the claim based on a minimally adequate level of education should be dismissed, the Court held that a court deciding a motion to dismiss may disregard a “legal conclusion couched as a factual allegation.”194 It then disregarded the allegation that the plaintiffs had been deprived of a minimally adequate education as just such a legal conclusion because “they allege[d] no actual facts in support of their assertion.”195

190. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). 191. Warth, 422 U.S. at 497. 192. Id. at 501–502. 193. Papasan v. Allain, 478 U.S. 265, 268–70, 274, 286 (1986). 194. Id. at 286. 195. Id. at 286. However, the Court did appear to credit, despite the failure to allege supporting facts, the allegation that “the State is distributing the income from . . . [l]ands or funds unequally among the school districts, to the detriment of the Chickasaw Cession schools and their students.” Id. at 287–88.

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Papasan appears inconsistent with Conley. Even though the plaintiffs provided notice of the claim and its grounds, the Court seemed to dismiss on factual-insufficiency grounds because the plaintiffs had not alleged with sufficient specificity what kind of education the deprived children had received. Further, the Court’s creation of a dichotomy between legal conclusions and factual allegations reflected the old Code-pleading distinctions rejected by the drafters of Rule 8. Perhaps Papasan would have been consistent with Conley had it held that the bare assertion of deprivation of a minimally adequate education failed the notice requirement, but that does not appear to be how the Court characterized the complaint’s defect and, in any case, the Court did not apply what would have been the appropriate remedy of remanding for consideration of whether a motion for a more definite statement should be entertained. Papasan is therefore a countercase to Conley and its progeny. The third case is the 2005 case of Dura Pharmaceuticals, Inc. v. Broudo, in which a unanimous Court held that a private plaintiff claiming securities fraud under the Private Securities Litigation Reform Act must plead the statutory element of economic loss causation by alleging some description of the economic loss and its causal connection.196 The class-action complaint alleged on that issue that the plaintiffs, “[i]n reliance on the integrity of the market, . . . paid artificially inflated prices for Dura securities [and suffered] damage[s].”197 The district court dismissed, and the Supreme Court agreed that the complaint was deficient even under the “simple” notice-plus-grounds test of Conley.198 According to the Court, The complaint’s failure to claim that Dura’s share price fell significantly after the truth became known suggests that the plaintiffs considered the allegation of purchase price inflation alone sufficient. The complaint contains nothing that suggests otherwise. For reasons set forth . . . however, the ‘artificially inflated purchase price’ is not itself a relevant economic loss. And the complaint nowhere else provides the defendants with notice of what the relevant economic loss might be or of what the causal connection might be between that loss and the misrepresentation concerning Dura’s ‘spray device.’199 The Court, citing Swierkiewicz, conceded that pleading ordinarily is lenient. But, the Court continued, 196. Dura Pharm., Inc v. Broudo, 544 U.S. 336, 342, 347 (2005). 197. Id. at 339–40, 347. 198. Id. at 346. 199. Id. at 347.

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[I]t should not prove burdensome for a plaintiff who has suffered an economic loss to provide a defendant with some indication of the loss and the causal connection that the plaintiff has in mind. At the same time, allowing a plaintiff to forgo giving any indication of the economic loss and proximate cause that the plaintiff has in mind would bring about harm of the very sort the statutes seek to avoid. It would permit a plaintiff ‘with a largely groundless claim to simply take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value, rather than a reasonably founded hope that the [discovery] process will reveal relevant evidence.’200 Dura is at least in tension with Conley and Swierkiewicz. Dura’s requirement of pleading loss causation with some detail is a factual-sufficiency standard that should be evaluated under the notice requirement and remedied by a Rule 12(e) more definite statement, yet the element-based level of notice Dura required is not truly consistent with Swierkiewicz. Perhaps the unique statutory framework at issue and its connection to fraud potentially distinguish Dura from Swierkiewicz sensibly, but Dura was unclear about those connections. Further, the remedy allowed by the Court—dismissal under Rule 12(b)(6)—is contrary to the notice-failure remedy of vacating and remand for consideration of a Rule 12(e) more definite statement. The Court confusingly characterized the complaint as “legally insufficient,”201 as if the complaint alleged a cause of action that did not exist or facts that negated relief, but that is a mischaracterization. The complaint alleged a viable cause of action under the statute; the Court deemed it insufficient because the plaintiffs failed to allege the factual grounds supporting a certain element of the claim. Thus, the Court’s dismissal was for factual insufficiency, not legal insufficiency. For these reasons, Dura is in tension with rule pleading under Conley.

Pleading and Litigation in the 2000s The new millennium thus saw pleadings doctrine in some turbulence. Although the statements by Leatherman and Swierkiewicz purported to be assertive, they were tempered by the Court’s quieter pursuit of a counter-narrative in other cases. In the lower courts, judges divided on how closely to hew to Conley and its progeny. Meanwhile, the advent of e-discovery provided a new

200. Id. (internal quotation marks omitted). 201. Id. at 348.

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rallying cry for defense interests to rail against Conley.202 In truth, Conley had settled little. It was in this peculiar place in history that the Supreme Court found itself in 2007. For the drafters of the Federal Rules, and for many years after, Rule 8 had represented the triumph of access to justice over technicality and of flexibility over formalism. That liberal ethos, though never directly overturned, gradually eroded after Conley as judicial resistance and increasingly strident industry calls for cost-based reform began gaining prominence. Rightly or wrongly, there was a growing belief that the costs of litigation had reached a scale unforeseen by the 1938 realists, and that old notice-style pleading was simply insufficient for many twenty-first century cases.203 Yet despite these movements, few had any idea that the age of New Pleading was about to begin.

202. Hermann & Beck, supra note 113, at 143. 203. Epstein, supra note 127, at 192; Martin H. Redish, Electronic Discovery and the Litigation Matrix, 51 Duke L.J. 561, 589–92, 628 (2001); Victor E. Schwartz & Christopher E. Appel, Rational Pleading in the Modern World of Civil Litigation: The Lessons and Public Policy Benefits of Twombly and Iqbal, 33 Harv. J.L. & Pub. Pol’y 1107, 1109–10 (2010).

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Bell Atlantic Corp. v. Twombly was decided in the spring of 2007 and shocked the legal community by holding that Rule 8 required a complaint to state a “plausible” claim for relief. Ashcroft v. Iqbal followed two years later and confirmed the revolutionary New Pleading regime. This chapter analyzes both opinions to explain how New Pleading developed, what makes it novel, and what it means for pleadings going forward.

Twombly Background In 1984, the U.S. Government broke up the AT&T monopoly into an oligopoly of “Baby Bells,” which became known as Incumbent Local Exchange Carriers, or “ILECs.” The ILECs controlled local service in regional monopolies that parceled out the country. A decade later, to promote competition in local service, Congress passed the Telecommunications Act of 1996, which required ILECs to share their networks with each other and with new competitors known as Competitive Local Exchange Carriers, or “CLECs.” The Act’s purpose was “to promote competition and reduce regulation” in the telecom industry.204 The desired competition did not materialize. Over the next several years, the ILECs struggled against the CLECs to maintain their local monopolies and, at times, adopted business practices that discouraged competition from the CLECs.205 Each ILEC also refused to enter rival ILECs’ markets, despite the possibility of capturing some of a rival’s market share in its geographical region. There was no dispute that the Baby Bells were acting anticompetitively, and perhaps in violation of the Telecommunications Act. Indeed,

204. Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, preamble. 205. Covad Commc’ns Co. v. FCC, 450 F.3d 528, 533–34 (D.C. Cir. 2006).

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Bell Atlantic entered into a consent decree with the FCC under which Bell Atlantic paid $3 million and was fined $10 million by the New York Public Service Commission for Bell Atlantic’s failure to make its facilities available to AT&T.206 In 2002, a group of plaintiffs purporting to represent a class of all subscribers of local telephone and Internet services from February 8, 1996, to the present then sued a group of four ILECs (BellSouth, Qwest, SBC, and Verizon) for antitrust violations, including antitrust conspiracies under § 1 of the Sherman Antitrust Act. Their complaint alleged that the ILECs, which together controlled 90 percent or more of the market for local telephone service in the continental United States, engaged in “conscious parallel conduct,” meaning that each ILEC adopted (and knew that the others adopted) similar anticompetitive practices.207 The anticompetitive conduct alleged included double billing of CLEC customers who converted from ILECs, the failure to provide a quality interconnection between their own networks and those of competitors, and the decision not to compete in other ILEC territories, resulting in inflated prices for telephone and Internet services.208 Conscious parallel conduct, even conscious parallel anticompetitive conduct, is not itself unlawful under § 1 of the Sherman Act, however, because it could just as well be based on rational, self-interested, independent action.209 Consider an Exxon gas station and a Chevron gas station on opposite corners of the same intersection. They almost always will charge approximately the same amount for gas. Sometimes the number goes up, and sometimes it goes down, but it rarely diverges between the two stations more than a few cents. The idea is that the market dictates each station’s price fluctuations, and that, unless market factors dictate otherwise, each station has an incentive to drop its price to capture the other’s customers. When one does, the other will follow, thereby lowering prices for all customers. If prices go up, the assumption is that the market independently forces both up, perhaps because the price of oil has increased. These actions might have anticompetitive effects, by, for example, hindering new entrants into the market, and each station knows what the other is charging, but each station’s price decisions are independently market driven. 206. Verizon Commc’n, Inc. v. Law Offices of Curtis V. Trinko, 540 U.S. 398, 403–404 (2004). 207. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 550–51 (2007). 208. Compl. ¶ 47, Twombly v. Bell Atl. Corp., 425 F.3d 99 (2d Cir. 2005) (No. 02-CIV-10220), 2003 WL 25629874. 209. Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 227 (1993).

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One way to obstruct the effects of the market would be for the two station managers to get together and agree to keep prices artificially high—each agrees to resist consumer pressure to drop prices. Such an agreement would benefit the stations at the expense of customers. Or, say a new, smaller oil company that could offer lower prices wanted to build a station on a third corner of the intersection and, to keep that competitor out, the two existing stations agreed to lower prices to a level that prohibited the new oil company from being able to afford to build the new station. Such an agreement would harm the existing stations for a short time but ultimately benefit them in the long run by reducing new competition into their shared market. The antitrust laws therefore recognize that what should be unlawful is an agreement to be anticompetitive. Absent an agreement, price fluctuations and other business practices may very well reflect competitive, free-market pressures, even if they mimic antitrust agreements.210 An unlawful antitrust violation, therefore, requires an agreement or conspiracy to restrain trade or commerce.211 Twombly was a market-division case rather than a parallel-pricing case,212 but the general idea is the same; an agreement not to compete is required for a § 1 Sherman Act violation. As it happened, the plaintiffs alleged evidence only of conscious parallel conduct; they did not offer direct evidence that the ILECs had agreed or conspired to engage in anticompetitive actions. No matter; the notice-pleading rules of Rule 8 and Conley would require the plaintiffs to provide only notice of their antitrust claim, not evidence or particulars. Factual proof of an agreement or conspiracy could come later. Accordingly, the plaintiffs alleged the following: Beginning at least as early as February 6, 1996, and continuing to the present, the exact dates being unknown to Plaintiffs, Defendants and their co-conspirators engaged in a contract, combination or conspiracy to prevent competitive entry in their respective local telephone and/or high speed internet services markets by, among other things, agreeing not to compete with one another and to stifle attempts by others to

210. Richard A. Epstein, Bell Atlantic v. Twombly: How Motions to Dismiss Become (Disguised) Summary Judgments, 25 Wash. U. J.L. & Pol’y 61, 67 (2007); Herbert Hovenkamp, The Pleading Problem in Antitrust and Beyond, 95 Iowa L. Rev. Bull. 55, 61 (2010). 211. 15 U.S.C. § 1 (2006). 212. For an econometric analysis of the particular geographic-market competition at issue in Twombly, see Celeste K. Carruthers, Twombly and the Evolution of Telecom Regulation, 53 Antitrust Bull. 95, 105–10 (2008).

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compete with them and otherwise allocating customers and markets to one another in violation of Section 1 of the Sherman Act.213 To provide the details needed to give notice, the plaintiffs explained what those anticompetitive activities were. The plaintiffs alleged that each ILEC consciously avoided competing in the others’ geographical market.214 The plaintiffs also alleged that the ILECs consciously engaged in the following parallel anticompetitive practices to discourage competition from CLECs: (a) Defendants have failed to provide the same quality of service to competitors that Defendants provided to their own retail customers; (b) Defendants have failed to provide access to their operational support systems (“OSS”), including on-line customer service records (“CSRs”), on a nondiscriminatory basis that places competitors at parity. Moreover, competitors do not have access to unbundled elements on the same basis on which Defendants accessed the same elements; (c) Defendants’ competitors have experienced undue delays in the provisioning of unbundled elements. Such delays are discriminatory and preclude competitors from offering service as attractive to customers as Defendants’ services and on a basis that places competitors at parity with a respective Defendant; (d) Defendants have billed customers of competitors who are converted from Defendants’ retail service. As a result of Defendants’ practices, customers of competitors are double-billed. Defendants’ practices have severely impacted competitors’ relationships with customers; (e) Defendants have failed to provide interconnection between the network and those of competitors that is equal in quality to the interconnection that each provided itself; (f) Defendants have refused to sell to competitors, on just, reasonable, and non-discriminatory terms, access to components of the network on an unbundled or individual basis; (g) Defendants have refused to sell to competitors local telephone and/or high speed internet services at wholesale prices that are just, reasonable and nondiscriminatory, thereby preventing Defendants’ competitors from being able to competitively resell the services to Plaintiffs and members of the Class;

213. Compl. ¶ 64, supra note 208. 214. Id. ¶ 39.

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(h) Defendants have refused to allow competitors to connect to essential facilities, consisting of, but not limited to, local telephone lines, equipment, transmission and central switching stations (central office) and “local loop” on just, reasonable and non-discriminatory terms; (i) Defendants have used discriminatory and error filled methods to bill local telephone service competitors in order to discourage competition by making it virtually impossible for competitors to audit the bills they received from Defendants; (j) Defendants have imposed slow and inaccurate manual order processing causing competitors to devote significant time, effort and expense to identify and rectify problems to ensure that orders were ultimately processed correctly; (k) Defendants have used monopoly power in their respective wholesale local telephone and/or high speed internet services market in order to gain or maintain a competitive advantage in the retail market for the provision of local telephone and/or high speed internet services; and (l) Defendants have used their respective monopoly power and exclusive control over essential facilities consisting of, but not limited to, local telephone lines, equipment, transmission and central switching stations (central office) and “local loop” to negotiate agreements on unfair terms with competitors who were seeking access to their respective local telephone networks. Each Defendant, possessing the exclusive and sole source of entry into its own local telephone and/or high speed interest services market, was in a superior bargaining position to competitors and potential competitors and used that superior bargaining position to dictate unfair terms upon competitors.215 Additionally, the plaintiffs alleged circumstantial evidence of an agreement among the ILECs to engage in this anticompetitive conduct. To show that the anticompetitive conduct was against market-motivated interests, the plaintiffs quoted Richard Notebaert, the CEO of ILEC defendant Qwest, as saying that it would be wrong to compete in Southwestern Bell territory, even though it “might be a good way to turn a quick dollar.”216 The plaintiffs also alleged that the ILECs had ample opportunity to communicate among themselves through industry organizations.217 In essence, the plaintiffs alleged a

215. Id. ¶ 47. 216. Id. ¶ 42. 217. Id. ¶ 46.

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market motivation to compete, an opportunity to conspire collusively against that market motivation, and conscious parallel anticompetitive conduct. Under these circumstances, the plaintiffs alleged, noncompetition would be unlikely without an agreement among the ILECs.218 The plaintiffs also had a past-practice argument going for them; although the alleged parallel conduct could have been the product of independent action, there was no dispute that the telecommunications industry had long had a history of anticompetitive, monopolistic conduct. Such a complaint would undoubtedly suffice under Conley-style notice pleading. The allegations set out a viable legal claim and provided notice of the circumstances giving rise to the claim, easily enabling the defendants to admit or deny the allegations. Indeed, Charles Clark, as a judge on the Second Circuit, had previously written an opinion holding allegations of conscious parallel conduct alone sufficient to meet the Rule 8 standard for pleading a § 1 Sherman Act claim.219 Nevertheless, the district court granted the defendants’ motion to dismiss under Rule 12(b)(6) for failure to state an unlawful antitrust conspiracy. The Second Circuit reversed, holding that the complaint stated a claim for relief, and the Supreme Court granted certiorari. In April 2007, the Court issued a bombshell decision reversing the Second Circuit and ordering the complaint dismissed. No amendment allowed, no more definite statement ordered, no discovery suggested, no answer required. Dismissed. .

The Twombly Opinion The Court reached its decision through a rather opaque combination of complaint construction, pleading, and antitrust. Each topic is important and warrants discussion. In multiple paragraphs, the complaint alleged an antitrust “conspiracy.”220 The Court, however, construed these allegations as derivative conclusions rather than independent allegations.221 By the Court’s reading of the complaint, those allegations could not have been direct allegations of a conspiracy because they would have failed to provide the requisite notice,222 much like a “the defendant

218. Id. ¶ 40. 219. Nagler v. Admiral Corp., 248 F.2d 319, 325 (2d Cir. 1957). 220. Compl. ¶¶ 51, 64, supra note 208. 221. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 564 (2007). 222. Id. at 565 n.10.

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negligently hit me” allegation. Instead, the Court construed those allegations as statements of an inference the plaintiffs drew from the conscious parallel conduct and other circumstantial-evidence allegations.223 Thus, according to the Court, the plaintiffs did not directly allege illegal agreement but instead “proceed[ed] exclusively via allegations of parallel conduct.”224 This was a dubious interpretation of the complaint as a whole or of the intentions of its drafters. It seems far more cogent to read the complaint as asserting a direct allegation of a conspiracy, with the allegations of parallel conduct to support and explain what the agreement was about and to provide the requisite notice. That is, after all, the way plaintiffs allege all kinds of claims involving a defendant’s state of mind. Viewed that way, the complaint alleged an agreement directly. But instead the Court viewed the allegations of conscious parallel conduct as the core allegations and the allegation of an agreement as a mere conclusory inference. Viewing the complaint from that perspective then led the Court to make an unexpected move. Because they were merely inferential conclusions designed to tie the factual allegations to the legal claim, the Court held, they were not factual allegations at all but rather legal conclusions that should be disregarded.225 Treating inferential factual allegations as legal conclusions is highly questionable. A direct assertion of an “agreement” can—and usually does—represent an allegation of a real-world, factual event: a meeting of the minds between two parties. Even an inferential allegation can be an allegation of fact. True, inferences speak for themselves, and one party’s conclusions from those inferences might justifiably be disregarded when a factfinder tests the inferences for herself at the proof stages of the lawsuit. But that merely shows that they are inferences of fact. And allegations of fact—even conclusory or inferential ones—have long been afforded deference on a motion to dismiss unless wholly incredible.226

223. Id. at 564. 224. Id. at 565 n.11. 225. Id. at 555. 226. See Christopher v. Harbury, 536 U.S. 403, 406 (2002); Swierkiewicz v. Sorema N.A., 534 U.S. 508, 995 n.1 (2002); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); cf. 5B Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. § 1357 (3d ed. 2004) (“A proposition that is . . . of universal acceptance . . . is that for purposes of the motion to dismiss . . . all reasonable inferences that can be drawn from the pleading are drawn in favor of the pleader.”); id. § 1357 (“For purposes of the motion to dismiss, (1) the complaint is construed in the light most favorable to plaintiff, (2) and its allegations are taken as true. . . . Basically what this means, . . . is [the court] will accept the pleader’s description of what happened to him or her along with any conclusions that can reasonably be drawn therefrom.”).

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But even had the complaint’s allegations of an agreement been entirely “legal,” they still need not have been disregarded. Legal conclusions can support pleading requirements by providing notice of how the fact allegations give rise to the legal claim asserted, a function that rule pleading, prior to Twombly, had always accepted. As Justice Stevens recognized in his dissent, an allegation of only parallel conduct would not have made the required “showing” of tying the factual circumstances to the legal cause of action.227 Form 11, for example, contains the allegation that the defendant “negligently” drove his car against a pedestrian. Without the conclusory word “negligently,” the form complaint does not tie the facts to a particular legal claim, and the defendant would not know what legal claim was being asserted. The facts might support any of the following legal claims: battery, negligence, recklessness (potentially giving rise to punitive damages). Only with the word “negligently” do the facts give the defendant notice of the claim against him. Nearly all of the Forms contain such conclusory allegations.228 Similarly, Twombly’s allegations of an agreement and conspiracy connected the factual allegations describing the defendants’ conduct to a § 1 antitrust claim in a way that helped establish notice. The Court, however, had something different in mind. By casting out the allegations as conclusory, the Court sought to test the factual inference for itself under a new factual-sufficiency test independent of notice. Indeed, the Court conceded that the complaint provided the requisite notice. Instead, the Court meant to test the plausibility of the factual inference: How likely, given the allegations of conscious parallel conduct in the complaint, was an agreement? Such a test was something new, and the Court needed a legal justification for it. Initially citing Conley, the Court acknowledged that Rule 8 requires only a short and plain statement showing entitlement to relief in order to give “fair notice” of the claim and its grounds, and the Court conceded that “detailed factual allegations” are unnecessary.229 However, the Court stated that the pleading of some facts is necessary because Rule 8 requires a “‘showing,’ rather than a blanket assertion, of entitlement to relief,” and a description of the “‘grounds’ on which the claim rests.”230

227. Twombly, 550 U.S. at 580 n.6 (Stevens, J., dissenting). 228. Kevin M. Clermont & Stephen C. Yeazell, Inventing Tests, Destabilizing Systems, 95 Iowa L. Rev. 821, 836 & n.54 (2010) (citing Forms 10, 13, 15, 17–21). 229. Twombly, 550 U.S. at 555. 230. Id. at 555 n.3.

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Had this been the sum total of the Court’s recitation of pleading standards, Twombly might have looked a bit odd but probably would not have generated much commentary. Rule pleading has always required enough factual allegations to provide notice of what the claim is and of the grounds for it. It has never allowed a bare allegation that defendants conspired to restrain trade, without some factual context providing notice, to suffice. Twombly’s focus on the terms “showing” and “grounds” as the basis for the need for facts does deviate from previous pleadings decisions, which tended to focus on legal sufficiency and notice, but Twombly’s assertions about them are not inconsistent with rule-pleading tradition. But the Court went beyond notice in a new “plausibility” direction, explaining that to meet rule pleading’s requirements, the “[ f ]actual allegations must be enough to raise a right to relief above the speculative level.”231 The Court asserted this requires the factual allegations to “possess enough heft” to show entitlement to relief.232 The new pleading standard in Twombly took several forms of iteration: demanding “enough factual matter (taken as true) to suggest that an agreement was made,” “[a]sking for plausible grounds to infer an agreement,” “call[ing] for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement,” and requiring “allegations plausibly suggesting (not merely consistent with) agreement.”233 In addition, the Court was clear that the new standard was not a “particularity” or “specificity” standard—the problem was not the absence of particular or specific facts. Rather, the problem was one of sufficient facts—the need for facts showing a plausible entitlement to relief on the merits, something more than a “conceivable” or “possible” entitlement.234 This new factual-sufficiency standard has come to be known as a “plausibility” standard. Although no party or amicus urged the adoption of “plausibility” as a moniker, “plausibility” exists as a legal standard in other contexts. As Ed Brunet has convincingly shown, “plausibility” is something of a term of art in substantive antitrust law, which requires plausible proof at later stages of

231. Id. at 555. 232. Id. at 557. 233. Id. at 556–57. 234. Id. at 569 n.14, 570; cf. Scott Dodson, Pleading Standards After Bell Atlantic Corp. v. Twombly, 93 Va. L. Rev. In Brief 135, 140 (2007), available at http://www.virginialawreview.org/inbrief. php?s=inbrief&p=2007/07/09/dodson. Some commentators see only “imperceptible” differences between plausibility and particularity. E.g., Arthur R. Miller, From Conley to Twombly to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke L.J. 1, 88 (2010).

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litigation.235 But the Court did not expressly draw that connection between its more general pleading standard and substantive antitrust law. Whatever its origins, this “plausibility” standard is new to pleading.236 The common-law demurrer, the code motion to dismiss, and the pre-Twombly Rule 12(b)(6) motion all focused on a complaint’s legal sufficiency. Under Conley and the traditional rule-pleading regime, factual sufficiency was measured in terms of notice, not plausibility. Even Papasan, which required more detail, was not framed in such terms. The only colorable pleading precedent for Twombly’s new formulation is Warth v. Seldin’s criticism of standing allegations that offered “little more than [a] remote possibility, unsubstantiated by allegations of facts.”237 But none of the Twombly opinions cited to Warth. Further, testing factual inferences at the pleading stage has never been so difficult. Pre-Twombly pleading law evaluated factual inferences in the light most favorable to the pleader.238 Indeed, because conscious parallel conduct supports an inference of antitrust conspiracy and is admissible circumstantial evidence of an agreement at the proof stages,239 Twombly’s complaint should have survived under pre-Twombly standards construing inferences at the pleading stage.240 But Twombly changed the deference afforded factual inferences. After Twombly, such inferences must be “plausible.”

235. Edward Brunet, Antitrust Summary Judgment and the Quick Look Approach, 62 SMU L. Rev. 493, 510–11 (2009). 236. See Clermont & Yeazell, supra note 228, at 832–34. But see Benjamin P. Cooper, Iqbal’s Retro Revolution, 46 Wake Forest L. Rev. 937 (2011) (arguing that New Pleading borrows from the 1983 amendments to Rule 11); Allan Ides, Bell Atlantic and the Principle of Substantive Sufficiency Under Federal Rule of Civil Procedure 8(a)(2): Toward a Structured Approach to Federal Pleading Practice, 243 F.R.D. 604 (2007) (arguing that pre-Twombly pleading doctrine required “substantive sufficiency” and incorporated the substantive law’s inference rules). 237. For a discussion of Warth, see chapter 1. 238. See, e.g., Sybil Dunlop & Elizabeth Cowan Wright, Plausible Deniability: How the Supreme Court Created a Heightened Pleading Standard Without Admitting They Did So, 33 Hamline L. Rev. 205, 210 (2010) (giving a brief summary of the Conley case and standard). Even common-law pleading took this view. Columbian Ins. Co. v. Catlett, 25 U.S. (12 Wheat.) 383, 389 (1827) (“[T]he Court is at liberty to draw the same inferences in favour of the plaintiff, which the jury might have drawn from the facts stated. The evidence is taken most strongly against the party demurring to the evidence. This is the settled doctrine in this Court. . . . ”). 239. Theatre Enterprises, Inc. v. Paramount Film Distrib. Corp., 346 U.S. 537, 540–41 (1954). More evidence, called “plus factors,” would be required at the proof stages, but conscious parallel conduct could be considered by the factfinder as supporting evidence. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986) (summary judgment); Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 768 (1984) (directed verdict). 240. See, e.g., Bhd. of Locomotive Eng’rs & Trainmen Gen. Comm. of Adjustment v. Union Pac. R.R. Co., 537 F.3d 789, 791 (7th Cir. 2008) (Easterbrook, C.J., joined by Posner, J., concurring

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The plaintiffs, for their part, argued that Conley’s “no set of facts” language prohibited a dismissal based on the failure to allege certain facts. As discussed above, the plaintiffs’ argument was misplaced; that phrase from Conley was part of the legal-sufficiency standard, not a factual-sufficiency standard. Nevertheless, the Court in Twombly stated: Conley’s “no set of facts” language has been questioned, criticized, and explained away long enough. . . . [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 in the complaint.241 This is not what Conley meant, of course. Conley meant what it said, and what it said states the obvious: A complaint cannot be dismissed for legal insufficiency except by resort to the law, not by resort to the facts (or lack thereof). Perhaps legal insufficiency can be based upon pleadings whose factual allegations negate relief (though that would seem a more appropriate candidate for a Rule 12(c) judgment on the pleadings), but legal insufficiency cannot be based upon pleadings whose allegations, even if implausible, are consistent with relief. Nevertheless, the Court bought into the common lamentation that, “[o]n such a focused and literal reading of Conely’s ‘no set of facts,’ a wholly conclusory statement of claim would survive a motion to dismiss.”242 This assertion, while true, elides other available remedies for lack of notice, such as more definite statements under Rule 12(e) and reply pleadings under Rule 7(a), which provide checks on wholly conclusory statements. Importantly, however, the Court, by striking down what was in fact a legal-sufficiency straw man, created space for its new factual-sufficiency rubric. By casting “no set of facts” as a factual-sufficiency component and then eliminating it, the Court raised the bar for establishing factual sufficiency through plausibility. It was not the case, then, that the antitrust claim in Twombly was legally insufficient; the Sherman Act claim was legally viable, and the facts alleged

in the denial of rehearing en banc) (“In Bell Atlantic the Justices modified federal pleading requirements and threw out a complaint that would have been deemed sufficient earlier.”). 241. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562–63 (2007). 242. Id. at 561.

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were not inconsistent with it. Nor did the plaintiffs plead themselves out of court, as some commentators (not unreasonably) argued, by asserting a nonexistent claim for conscious parallel conduct.243 Twombly’s complaint failed because it did not allege sufficient facts to convince the Court that liability on an admittedly viable legal claim was plausible. That is a factual-sufficiency problem, not a legal-sufficiency problem. The Court tried to characterize its plausibility standard as a screen for purely meritless lawsuits. Conley pleading, opined the Court, opens the courthouse doors too wide and “dispense[s] with any showing of a reasonably founded hope that a plaintiff would be able to make a case.”244 Thus, the Court attempted to equate factual insufficiency with implausibility and implausibility with meritlessness. Both equations are problematic, as I will explain in the next chapter. But in some ways, the Court did not care, because it finally had accepted the rhetoric of discovery abuse and litigation explosions. And in a fundamental reconceptualization of the role of pleading, the Court insisted upon creating a more robust merits-screening function because judicial supervision of discovery was insufficient to control costs: It is no answer to say that a claim just shy of a plausible entitlement to relief can, if groundless, be weeded out early in the discovery process through “careful case management,” given the common lament that the success of judicial supervision in checking discovery abuse has been on the modest side. . . . [T]he threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching [summary judgment]. Probably, then, it is only by taking care to require allegations that reach the level suggesting conspiracy that we can hope to avoid the potentially enormous expense of discovery in cases with no reasonably founded hope that the discovery process will reveal relevant evidence to support a § 1 claim.245

243. See, e.g., Ides, supra note 236, at 620. 244. Twombly, 550 U.S. at 562 (internal quotation marks omitted). 245. Id. at 559–60 (citing Frank Easterbrook, Discovery as Abuse, 69 B.U. L. Rev. 635, 648 (1989) (other internal quotation marks and alterations omitted)); see also id. at 560 n.6 (“[D]etermining whether some illegal agreement may have taken place between unspecified persons at different ILECs (each a multibillion dollar corporation with legions of management level employees) at some point over seven years is a sprawling, costly, and hugely time-consuming undertaking not easily susceptible to the kind of line drawing and case management that the dissent envisions. . . . Given the system that we have, the hope of effective judicial supervision is slim.” (citing Easterbrook, supra, at 638–39)).

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Twombly was the first time the Court had ever questioned the efficacy of judicial case management,246 and it did so while largely ignoring most of the discovery amendments that, since the 1970s, have reined in discovery and enabled more control over the discovery-cost problem. As Justice Stevens pointed out wryly in dissent, “the legal fees [the ILECs] have incurred in arguing the merits of their Rule 12(b) motion have far exceeded the cost of limited discovery.”247 Thus, unlike prior pleading standards, Twombly requires plaintiffs to plead more than mere consistency with liability. Equivocal or neutral pleadings no longer suffice. Rather, the pleading must suggest liability. Applying these pleading standards to the complaint, the Court found no plausible statement of an antitrust conspiracy. After the conclusory allegations of agreement were removed, only allegations of conscious parallel conduct and the comments from Notebaert were left. The Court, finding that “parallel conduct does not suggest conspiracy,”248 reasoned that such an allegation “needs some setting,” “some further factual enhancement,” a “further circumstance pointing toward a meeting of the minds,” lest the allegation “stay[] in neutral territory.”249 By way of example, the Court contrasted parallel conduct with circumstances that antitrust commentators believed would imply concerted behavior.250 Thus, the Court concluded, “when allegations of parallel conduct are set out in order to make a § 1 claim, they must be placed in a context that raises a suggestion of a preceding agreement, not merely parallel conduct that could just as well be independent action.”251 The Court then analyzed the complaint to determine if it offered the “further factual enhancement” needed to “suggest” a conspiracy and held that it did not. Although the Court conceded that the complaint alleged anticompetitive conduct, the Court found no reason to infer that the ILECs conspired to do what they were naturally and economically incentivized to do individually: [The noncompetition] was not suggestive of conspiracy, not if history teaches anything. In a traditionally unregulated industry with low

246. Robert G. Bone, Twombly, Pleading Rules, and the Regulation of Court Access, 94 Iowa L. Rev. 873, 898–99 (2009). 247. Twombly, 550 U.S. at 596 (Stevens, J., dissenting). 248. Id. at 557. 249. Id. 250. Id. at 556 n.4. 251. Id. at 557.

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barriers to entry, sparse competition among large firms dominating separate geographical segments of the market could very well signify illegal agreement, but here we have an obvious alternative explanation. In the decade preceding the 1996 Act and well before that, monopoly was the norm. . . . The ILECs were born in that world, doubtless liked the world the way it was, and surely knew the adage about him who lives by the sword. Hence, a natural explanation for the noncompetition alleged is that the former Government-sanctioned monopolists were sitting tight, expecting their neighbors to do the same thing.252 Thus, the Court found that the complaint failed to allege facts necessary to state a plausible claim for relief. In a nutshell, then, Twombly made four new contributions to pleadings law. First, it allowed courts to disregard conclusory statements of factual inferences. Second, it created a new plausibility standard for testing inferences of unlawful conduct at the pleading stage. Thus, the Court elevated the factual-sufficiency standard from pure notice to notice-plus-plausibility. Third, it buried the Conley “no set of facts” language, which had been a mainstay of pleadings jurisprudence. And, fourth, it did so for purposes of screening meritless lawsuits because the Court lacked faith in the fundamental division of labor between pleadings and later screening mechanisms. All told, Twombly is a remarkable decision.

Between Twombly and Iqbal Twombly immediately caused prolific commentary and rampant confusion. I was the first to call Twombly “a significant statement from the Court from a proceduralist perspective.”253 Others quickly followed. Ettie Ward announced a “new narrative” for pleadings.254 Ben Spencer declared that “[n]otice pleading is dead.”255 Others, however, disagreed. Some argued that Twombly made no

252. Id. at 567–68. 253. Dodson, supra note 234, at 137; see also Scott Dodson, Prof. Dodson on Bell Atlantic, Civil Procedure & Federal Courts Blog (May 21, 2007), available at http://lawprofessors. typepad.com/civpro/2007/05/prof_scott_dods.html (noting the procedural importance of Twombly on the day it was decided). 254. Ettie Ward, The After-Shocks of Twombly: Will We “Notice” Pleading Changes?, 82 St. John’s L. Rev. 893, 905 (2008). 255. A. Benjamin Spencer, Plausibility Pleading, 49 B.C. L. Rev. 431, 431 (2008).

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significant pleadings changes.256 Others argued that any change was minor, restricted to antitrust conspiracies, or tied to the type of massive-discovery case at issue in Twombly itself.257 The bench, meanwhile, was suddenly thrown into disarray. As one judge stated, “We district judges suddenly and unexpectedly find ourselves puzzled over something we thought we knew how to do with our eyes closed: dispose of a motion to dismiss a case for failure to state a claim.”258 Other courts expressed similar confusion.259 To complicate matters, the Court issued a brief per curiam decision just two weeks after Twombly called Erickson v. Pardus. There, a pro se prisoner asserted a claim based on officials’ deliberate indifference to his serious medical needs, a claim cognizable under the Eighth Amendment. The prisoner alleged that he had been diagnosed with hepatitis C and had begun a treatment regimen of weekly injections but that, as purported punishment for

256. Keith Bradley, Pleading Standards Should not Change After Bell Atlantic v. Twombly, 102 Nw. U. L. Rev. Colloquy 117, 121–22 (2007), available at http://colloquy.law.northwestern.edu/main/2007/11/pleading-standa.html; Einer Elhauge, Twombly—The New Supreme Court Antitrust Conspiracy Case, Volokh Conspiracy (May 21, 2007), available at http:// volokh.com/posts/1179785703.shtml; Ides, supra note 236, at 635–36. 257. See, e.g., Limestone Dev. Corp. v. Village of Lemont, 520 F.3d 797, 803–804 (7th Cir. 2008) (Posner, J.) (tying Twombly to “big” cases with costly discovery); Bone, supra note 246, at 877 (arguing that Twombly’s import is modest); Scott A. Moss, Litigation Discovery Cannot Be Optimal but Could Be Better: The Economics of Improving Discovery Timing in a Digital Age, 58 Duke L.J. 889, 932 n.185 (2009) (suggesting that Twombly’s standard could be tied to antitrust); J. Douglas Richards, Three Limitations of Twombly: Antitrust Conspiracy Inferences in a Context of Historical Monopoly, 82 St. John’s L. Rev. 849, 851 (2008) (“Twombly raises the bar for pleadings . . . only in the very narrow context of (1) antitrust conspiracy complaints [and] (2) only when those complaints explicitly rest allegations of conspiracy on pleaded inferences rather than factual allegations . . . . ”); Douglas G. Smith, The Twombly Revolution?, 36 Pepp. L. Rev. 1063, 1083–85 (2009) (suggesting that Twombly applies only to complex, costly-discovery cases). But see Dodson, supra note 234, at 138 (“The best reading of Bell Atlantic is that the new standard is absolute, that mere notice pleading is dead for all cases and causes of action.”). 258. Colleen McMahon, The Law of Unintended Consequences: Shockwaves in the Lower Courts After Bell Atlantic v. Twombly, 41 Suffolk U. L. Rev. 851, 853 (2008). 259. See, e.g., Phillips v. County of Allegheny, 515 F.3d 224, 230 (3d Cir. 2008) (“What makes Twombly’s impact on the Rule 12(b)(6) standard initially so confusing is that it introduces a new ‘plausibility’ paradigm for evaluating the sufficiency of complaints. At the same time, however, the Supreme Court never said that it intended a drastic change in the law, and indeed strove to convey the opposite impression; even if rejecting Conley’s ‘no set of facts’ language, the Court does not appear to have believed that it was really changing the Rule 8 or Rule 12(b)(6) framework.”); Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327, 337 n.4 (6th Cir. 2007) (“We have noted some uncertainty concerning the scope of Bell Atlantic Corp. v. Twombly.”); see also Moss v. U.S. Secret Serv., 572 F.3d 962, 968 (9th Cir. 2009) (“Much confusion accompanied the lower courts’ initial engagement with Twombly.”).

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suspicion of illicit drug use, prison officials stopped providing him with his medication. The lower courts dismissed his complaint as too conclusory, but the Supreme Court reversed. Quoting an uncontroversial portion of Twombly that mirrored language from Conley, the Court reiterated that “[s]pecific facts are not necessary; the statement need only give the defendant fair notice of what the claim is and the grounds upon which it rests.”260 The Court held that the prisoner’s allegation that prison officials removed his medication in a way that endangered his life was enough to satisfy Rule 8(a)(2). The Court also noted that a pro se complaint “must be held to less stringent standards than formal pleadings drafted by lawyers.”261 The Court had held the Erickson opinion over until after Twombly had been decided, and that timing, coupled with Erickson’s plain-vanilla holding, suggested to some that the Court issued Erickson as a “don’t get carried away” opinion to temper the import of Twombly.262 But the complaint in Erickson clearly met even Twombly’s pleading standard and fell under the more liberalized standards for pro se cases. Erickson did not change the import of Twombly.263 To be fair, the Twombly opinion was not a model of clarity. Whether Twombly announced a general, transsubstantive pleading rule and how strong the new screening mechanism was were reasonably debatable questions. And, importantly, although the Court suggested that allegations of an antitrust conspiracy should be assessed “in light of common economic experience,”264 the Court did not explain how judges were to assess “plausibility” in other contexts. So, although different commentators and judges proffered different answers, it was clear that it would take another pronouncement from the Court to answer them definitively.

260. Erickson v. Pardus 551 U.S. 89, 93 (2007) (per curiam) (internal quotation marks and ellipsis omitted). 261. Id. at 94 (internal quotation marks omitted). 262. See Amy Howe, More on Yesterday’s Decision in No. 06–7317, Erickson v. Pardus, SCOTUSblog (June 5, 2007), available at http://www.scotusblog.com/2007/06/more-on-yesterdays-decisionin-no-06–7317-erickson-v-pardus/; cf. Michael O’Shea, How Cautionary is Erickson v. Pardus? (with an excursus on Commerce Clause disillusionment), Concurring Opinions (June 6, 2007), available at http://www.concurringopinions.com/archives/2007/06/how_cautionary_1.html (detailing arguments on both sides). 263. Dodson, supra note 234, at 140; Scott Dodson, Prof. Dodson on Erickson, Civil Procedure & Federal Courts Blog (June 12, 2007), available at http://lawprofessors.typepad.com/ civpro/2007/06/dodson_on_erick.html. 264. Twombly, 550 U.S. at 565.

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Ashcroft v. Iqbal On September 11, 2001, nineteen young Muslim men hijacked commercial airlines and flew them into the World Trade Center in New York City and the Pentagon outside of Washington, D.C. In the immediate aftermath of that attack, the U.S. government went into overdrive. Congress passed the PATRIOT Act in record time, giving the President broad powers. The Executive Branch began designing and implementing policies and procedures to ensure the future safety of Americans on U.S. soil. The FBI mobilized more than 4,000 special agents and 3,000 support personnel into action. Within months, the FBI detained and interrogated more than 1,000 people with suspected ties to the attacks or other terrorist activities. Most were held on immigration charges. A 184-member group was deemed “high interest” and held under restrictive conditions designed to prevent them from communicating with other detainees or the outside world.265 Javaid Iqbal, a Pakistani Muslim, was one of those detainees. In November 2001, the FBI arrested Iqbal in New York on federal charges related to identity theft. He pleaded guilty and was sentenced to sixteen months in prison.266 He was placed in the Metropolitan Detention Center (“MDC”) in Brooklyn, NY. The FBI then designated Iqbal a person of “high interest,” which allowed the government to house him in the MDC’s Administrative Maximum Special Housing Unit (“ADMAX”), a unit specially created after 9/11 to hold detainees. ADMAX incorporates the maximum securities conditions allowable under the Federal Bureau of Prison regulations. According to Iqbal’s complaint, persons housed in the ADMAX facility were subjected to highly restrictive conditions of confinement, including solitary confinement for 23 hours a day (spending the remaining hour outside their cells in handcuffs and leg irons and accompanied by a four-officer escort), verbal and physical abuse, routine strip and body-cavity searches, and restricted access to medical care, legal counsel, proper exercise, nutrition, and protection from cold and exposure. The small, solitary-confinement cells had the lights on for 24 hours a day. Iqbal spent 150 days in the ADMAX, after which he was reassigned to the general population. In January 2003, Iqbal was deported to Pakistan.267 265. For more detail on 9/11 and its aftermath, see 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United States (2004), available at http://www.9-11commission.gov/report/911Report.pdf. 266. Elmaghraby v. Ashcroft, No. 04-CIV-1809, 2005 WL 2375202, at *1 & n.1 (E.D.N.Y. 2005). 267. First Amend. Compl. ¶¶ 1-2, 60, 63, 82-89, 96, Elmaghraby, 2005 WL 2375202.

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In April 2003, the Department of Justice’s Office of the Inspector General, which reviewed 762 detentions in the wake of 9/11, issued a report concluding that the detainees were almost all young Pakistani Muslim men. The Report determined that the FBI “made little effort” to distinguish between detainees with ties to terrorism and those without. It also determined that the process of designating detainees as “high interest” was inconsistent and imprecise.268 Shortly after, Iqbal sued Attorney General John Ashcroft, FBI Director Robert Mueller, and other governmental officers, alleging that his designation as a person of “high interest” was based solely on his race, religion, or national origin, rather than on any legitimate purpose such as ties to terrorism. Iqbal asserted claims under the First Amendment for religious discrimination and under the Fifth Amendment’s equal protection principle for discrimination based on race and national origin. The complaint alleged that “the [FBI], under the direction of Defendant MUELLER, arrested and detained thousands of Arab Muslim men . . . as part of its investigation of the events of September 11.”269 It further alleged that “[t]he policy of holding post-September-11th detainees in highly restrictive conditions of confinement until they were ‘cleared’ by the FBI was approved by Defendants ASHCROFT and MUELLER in discussions in the weeks after September 11, 2001.”270 The complaint claimed that Ashcroft and Mueller “each knew of, condoned, and willfully and maliciously agreed to subject” respondent to harsh “conditions of confinement as a matter of policy, solely on account of [his] religion, race, and/or national origin and for no legitimate penological interest.”271 It named Ashcroft as the “principal architect” of the policy and identified Mueller as “instrumental in [its] adoption, promulgation, and implementation.”272 Prior to any discovery, Ashcroft and Mueller, among others, moved to dismiss the complaint under Rule 12(b)(6) on the grounds of qualified immunity and that the complaint was insufficient to establish a viable claim against them. Qualified immunity protects government officials from civil damages liability unless their conduct violates clearly established federal rights of which 268. Office of the Inspector General, U.S. Department of Justice, The September 11 Detainees: A Review of the Treatment of Aliens Held on Immigration Charges in Connection with the Investigation of the September 11 Attacks (Apr. 2003), available at http://www.justice.gov/oig/special/0306/index.htm. 269. First Amend. Compl. ¶ 47, supra note 267. 270. Id. ¶ 69. 271. Id. ¶ 96. 272. Id. ¶¶ 10-11.

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a reasonable person would have known. Qualified immunity exists to allow government officers to do their jobs without worrying about being sued later for actions of arguable legality.273 On September 27, 2005, the district court denied the motion to dismiss, reasoning that Iqbal had stated a claim sufficiently under the liberal notice pleading standard of Conley v. Gibson. Ashcroft and Mueller took an interlocutory appeal, as allowed under the qualified immunity doctrine. While the appeal was pending, the Supreme Court decided Twombly. Nevertheless, on June 14, 2007, the Second Circuit affirmed the district court’s denial of the motion to dismiss. In the Second Circuit’s view, the post-9/11 climate made it plausible that Ashcroft and Mueller were taking an intense interest and were personally involved in the detention policies and practices, and, therefore, the allegation that they knew, condoned, and agreed to those policies was plausible. Accordingly, the court affirmed the denial of the motion to dismiss the constitutional claims against Ashcroft and Mueller.274 The Supreme Court granted certiorari. In their merits brief, Ashcroft and Mueller argued that a plaintiff must put forward specific, nonconclusory factual allegations that establish cognizable injury before allowing a suit to survive a prediscovery motion for dismissal or summary judgment on the basis of qualified immunity. They argued that Iqbal’s complaint was deficient for failing to allege the who, what, when, and where of any direct wrongdoing by the defendants.275 The Supreme Court, in a 5–4 decision, reversed the Second Circuit and held Iqbal’s complaint to be factually insufficient to state a plausible claim against Ashcroft and Mueller. In reciting the applicable pleading standards, the Court relied heavily, almost exclusively, on Twombly. It affirmed that Twombly set a universal, transsubstantive pleading standard for claims governed by Rule 8, regardless of type of claim or potential costliness of discovery.276 That holding of transsubstantivity is important; the Court could have fashioned a qualified-immunity-specific rule for pleadings, something that the Government supported. In other words, the Court could have come to the same results in both Twombly and Iqbal 273. Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). 274. Iqbal v. Hasty, 490 F.3d 143, 175–78 (2d Cir. 2007), rev’d, Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009). 275. Br. for Pet’rs at 39, Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), available at 2008 WL 4063957. 276. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1953 (2009).

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by treating them as “oddball” cases with unique problems and extreme cost asymmetries.277 Instead, Iqbal opted to interpret Twombly as a general pleading standard, applicable to all Rule 8 claims. That standard, clarified the Court, is a two-step process. The first step is to identify and disregard conclusory allegations. Citing Twombly, the Court stated: “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”278 Such statements, the Court explained, “because they are no more than conclusions, are not entitled to the assumption of truth.”279 As the Court later summed up, “the Federal Rules do not require courts to credit a complaint’s conclusory statements without reference to its factual context.”280 Turning to the complaint, the Court disregarded the allegations that petitioners “knew of, condoned, and willfully and maliciously agreed to subject” Iqbal to harsh conditions “as a matter of policy, solely on account of [his] religion, race, and/or national origin”; that Ashcroft was the “principal architect” of the policy; and that Mueller was “instrumental” in adopting and executing it. In the Court’s view, these assertions “amount to nothing more than a ‘formulaic recitation of the elements’ of a constitutional discrimination claim. . . . As such, the allegations are conclusory and not entitled to be assumed true.”281 Iqbal’s treatment of conclusoriness is susceptible to different interpretations—perhaps stemming from the elusive meaning of the term itself282— but all are problematic extensions of Twombly. Perhaps Iqbal meant to define conclusoriness as the use of terminology that tracks the legal standard.283 Edward Hartnett, drawing on Charles Clark’s explanation of the Field Code’s distinction between legal conclusions and ultimate facts, has argued that a conclusory allegation under Iqbal asserts the final and ultimate legal conclusion that the court is to draw, while a nonconclusory factual allegation is one

277. See Suja A. Thomas, Oddball Iqbal and Twombly and Employment Discrimination, 2011 U. Ill. L. Rev. 215. 278. Iqbal, 129 S. Ct. at 1949. 279. Id. at 1950. 280. Id. at 1954. 281. Id. at 1951; id. at 1954 (characterizing the allegations as “the bare elements of [the] cause of action”). 282. See Donald J. Kochan, While Effusive, “Conclusory” Is Still Quite Elusive: The Story of a Word, Iqbal, and a Perplexing Lexical Inquiry of Supreme Importance, 73 U. Pitt. L. Rev. 215 (2011). 283. A. Benjamin Spencer, Iqbal and the Slide Toward Restrictive Procedure, 14 Lewis & Clark L. Rev. 186, 193 (2010).

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step back—the grounds that allow the court to draw the conclusion. Put into more concrete terms, Hartnett would characterize the allegation of an element of the claim as conclusory, but not an allegation that would allow the court to conclude that the element is met.284 If Hartnett is correct about Iqbal, then Iqbal suffers from the same flaws that doomed Code pleading. Consider the following allegations: 1. On January 10, 2009, in rejecting the plaintiff’s employment application, the defendant’s hiring supervisor told Plaintiff, “We only hire whites here.” Plaintiff is a black man. 2. Defendant discriminated against the plaintiff on the basis of race. 3. Defendant therefore violated Title VII. Allegation #2 more naturally is an allegation of fact entitled to deference. It states the inference raised tacitly by allegation #1: that the defendant’s motivation was racial discrimination. Whether the defendant in fact had that motivation is a question of fact, not law. Allegation #2 is not a legal conclusion because it does not tie the facts to any legal cause of action; for all we know from reading allegation #2, the plaintiff could be asserting a claim for intentional infliction of emotional distress, not a violation of Title VII. Allegation #3 is the legal conclusion that the plaintiff will argue follows from proof of fact allegation #2. Treating allegation #2 as a legal conclusion, as Hartnett believes Iqbal so held, creates oddities. What would an allegation “one step back” look like, and how is that one step back different from the Code category of “evidence”? Similarly, if allegation #2 is a legal conclusion, then what is the one-step-forward allegation in #3, “Defendant therefore violated Title VII?” Hartnett’s explanation merely re-injects the Code problems of yore back into modern pleading. As Steve Burbank has observed, “[O]ne person’s ‘factual allegation’ is another’s ‘conclusion,’”285 and this seems especially apt for allegations like “discrimination.” One might object by saying that an allegation is left out between #1 and #2, something along the lines of “Defendant hires only whites.” The objection would be that that allegation is the ultimate fact, while allegations #2 and #3 are conclusions of law, and allegation #1 is evidence. The problem with this 284. Edward A. Hartnett, Taming Twombly, Even After Iqbal, 158 U. Pa. L. Rev. 473, 491–93 (2010). 285. Has the Supreme Court Limited America’s Access to Courts?: Hearing Before the S. Judiciary Committee, 111th Cong. 96 (2009) (prepared statement of Stephen B. Burbank), available at http://judiciary.senate.gov/pdf/12-02-09%20Burbank%20Testimony.pdf.

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objection is that whether the defendant hires only whites overstates what is necessary for the claim. The claim only needs to show that the defendant discriminated against the plaintiff on the basis of race. (Note the similarity to allegation #2.) The statement by the hiring supervisor reported in #1 may or may not be true, but regardless of its truth, the statement shows discriminatory animus against the plaintiff. That is all the connection needed between #1 and #2. Another problem with this definition of conclusoriness is that the law is often defined in real-world terms, and, even when it is not, judicial extrapolations of a legal claim into its “elements” are. Title VII, for example, uses the terms “discriminate” and “because of.” The Sherman Act uses the term “conspiracy.” Negligence is composed of the element of “causation.” These terms define the legal standard, but they also describe real-world conduct and occurrences. Prohibiting plaintiffs from using these terms in their allegations, simply because they are part of the legal landscape, makes it much harder for plaintiffs to plead their allegations and to tie those allegations to legal claims. One court, for example, recently held the allegation that a student “was not afforded notice of a hearing prior to his removal from the [academic] program” as conclusory because it was an element of the student’s claim,286 but how else was the student to frame the allegations? Likewise, one might reasonably ask what other words Iqbal could have used to set out the allegations in his complaint. Similar lamentations were made about the Codes’ distinction between law and fact. As one contemporaneous critic wrote, “To say that A is married is to state a legal conclusion and yet in common every-day speech it is also a generalization of fact and should be treated as such.”287 A final problem with equating conclusoriness to legal terminology is that it causes tension with the federal forms, many of which use legal language to characterize the allegations. Form 11 in particular uses the term “negligently” to describe the car-pedestrian accident. That term is even closer to the legal standard than the allegations disregarded in Iqbal, yet the form complaint is per se sufficient under the Federal Rules. As Edward Cooper recently remarked, “The bare allegation of negligence in Form 11 suffices, at least for now, but it expresses a legal conclusion based on applying a standard of care to unpleaded facts.”288 Steve Subrin has put it more concisely: “If ‘negligently’ isn’t conclusory, I don’t know what is.”289 286. Brown v. Rectors & Visitors of Univ. of Va., 361 F. App’x 531, 534 (4th Cir. 2010). 287. C.E.C., Comment, Pleading Negligence, 32 Yale L.J. 483, 485 (1923). 288. Edward H. Cooper, King Arthur Confronts TwIqy Pleading, 90 Or. L. Rev. 950, 975 (2012). 289. Stephen Subrin, Ashcroft v. Iqbal: Contempt for Rules, Statutes, the Constitution, and Elemental Fairness, 12 Nev. L.J. 571 (2012).

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The instability of Iqbal’s equation of legal language to legal conclusions suggests that Iqbal defined conclusoriness not as tracking legal language but rather as an unwarranted leap to a level of generality. In this sense, “conclusory” can mean simply a legal or factual statement that purports—but fails—to speak for itself without supporting specifics. As Bob Bone and Adam Steinman have shown, however, no principled line defines what level of generality is too high.290 All allegations are conclusory to some degree, and deeper support can always be sought. Defining conclusoriness as a level of generality untethers conclusoriness from any guidepost at all. As Ben Spencer has argued, an assertion that is “too general” means “one that lacks evidence under circumstances in which the Court feels that such evidence is required.”291 At bottom, how conclusory is too conclusory is in the eyes of the beholder. Indeed, Justice Souter, in dissent, stated that he could not understand why the Court accepted some allegations as true and disregarded others: “[T]he majority’s holding that the statements it selects are conclusory cannot be squared with its treatment of certain other allegations in the complaint as nonconclusory.”292 Either definition of conclusoriness—in terms of legal terminology or as some abstract level of generality—is broader than Twombly’s. Twombly found allegations of an “agreement” and a “conspiracy” to be conclusory because the complaint, read as a whole, used them to restate inferences drawn from conscious parallel conduct. Twombly, then, held allegations conclusory if merely restatements of factual inferences, and it determined whether the allegations were restatements by reading the complaint as a whole. Iqbal, by contrast, looked at the targeted allegations in isolation from the rest of the complaint.293 Though susceptible to other interpretations, the Court did not appear to read the complaint itself as casting those allegations as restatements of inferences

290. See Robert G. Bone, Plausibility Pleading Revisited and Revised: A Comment on Ashcroft v. Iqbal, 85 Notre Dame L. Rev. 849, 861 (2010); Adam N. Steinman, The Pleading Problem, 62 Stan. L. Rev. 1293, 1329–30 (2010). This observation is not new. Legal realists from the early 1900s recognized this in criticizing the Codes. See C.E.C., supra note 287, at 485 (“[T]he distinction is between a general and a specific statement. . . . [T]he problem is to determine how specifically the occurrence in question should be detailed.”). 291. Spencer, supra note 283, at 195. 292. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1961 (2009) (Souter, J., dissenting); id. at 1961 (Souter, J., dissenting) (“By my lights, there is no principled basis for the majority’s disregard of the allegations linking Ashcroft and Mueller to their subordinates’ discrimination.”); see also Scott Dodson, New Pleading, New Discovery, 109 Mich. L. Rev. 53, 61 (2010) (“It is not entirely clear why these allegations are conclusory while an allegation that the allegedly discriminatory policy was ‘approved’ by the defendants is not.”). 293. Iqbal, 129 S. Ct. at 1955, 1960–61 (Souter, J., dissenting).

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derived from other factual allegations. Instead, the Court cast the allegations as conclusory either because they tracked the governing legal standard or because they were alleged at too high a level of generality. Either way, Iqbal imposes a standard for conclusoriness that is broad, unprincipled, and outside the plaintiff’s control, with the result that courts may disregard both inferential and direct factual allegations. Only factual allegations that are either one level back from the legal terminology or one level lower in generality—essentially, evidentiary allegations—are credited. Such a requirement is in significant tension with prior precedent and practice under the Rules. The second step in the new pleading standard requires the judge to determine whether the remaining well-pleaded factual allegations plausibly state entitlement to relief. Here, the plaintiff does not receive the benefit of the doubt, and a court need not resolve all inferences in the plaintiff’s favor. Instead, Iqbal states: A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. . . . Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief. . . . [W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged— but it has not “show[n]”—“that the pleader is entitled to relief.”294 Answering one of the open questions from Twombly on how a judge should assess plausibility, Iqbal states: “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”295 Iqbal then applied this second step to the allegations in Iqbal’s complaint. The remaining, non-disregarded allegations included the allegation that the FBI, under Mueller’s direction, arrested and detained thousands of Arab Muslims, and that Ashcroft and Mueller approved of the policy of designating certain detainees of “high interest.” The law of constitutional discrimination, as interpreted by the Court, requires that the defendants themselves act with discriminatory purpose and not merely that they supervised subordinates who discriminated. Iqbal held that the complaint’s allegations, while

294. Id. at 1949 (alteration in the original) (internal citations and quotation marks omitted). 295. Id. at 1950.

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consistent with the defendants’ purposeful discrimination, did not plausibly state such a claim. Instead, the Court surmised, innocent explanations were “more likely.”296 The Court reasoned that because the 9/11 attacks were perpetrated by Arab Muslims, [i]t should come as no surprise that a legitimate policy directing law enforcement to arrest and detain individuals because of their suspected link to the attacks would produce a disparate, incidental impact on Arab Muslims, even though the purpose of the policy was to target neither Arabs nor Muslims. On the facts respondent alleges the arrests Mueller oversaw were likely lawful and justified by his nondiscriminatory intent to detain aliens who were illegally present in the United States and who had potential connections to those who committed terrorist acts. As between that “obvious alternative explanation” for the arrests and the purposeful, invidious discrimination respondent asks us to infer, discrimination is not a plausible conclusion.297 And, the Court continued, the complaint contained no facts supporting the argument that Ashcroft and Mueller intentionally discriminated on the basis of religion or national origin in the classification of persons as “high interest” (as opposed to the initial detention).298 Disregarding the operative allegations of discriminatory animus and the allegations of Ashcroft and Mueller’s direct involvement in the discriminatory policy surely made Iqbal’s resolution of the plausibility analysis easier, but a number of difficulties still inhere in the Court’s analysis. First, Iqbal assessed plausibility by comparing the likelihood of plaintiff’s proffered inference of illegality with the likelihood of potential competing inferences of lawful conduct. Such a comparative assessment is akin to the pleading standard in the Private Securities Litigation Reform Act, or PSLRA, which was designed to tighten Rule 8 pleading only for the scienter element of certain claims of securities fraud.299 The PSLRA’s pleading standard, as interpreted by the Court, is that “an inference of scienter must be more than merely plausible or reasonable—it

296. Id. at 1942–43, 1948, 1951. Iqbal was a Pakistani, not an Arab, but the complaint focuses on Arabs. 297. Id. at 1951–52. 298. Id. at 1952. 299. 15 U.S.C. § 78u-(h)(4)(B).

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must be cogent and at least as compelling as any opposing inference of nonfraudulent intent,” or “at least as likely as any plausible opposing inference.”300 As Steve Burbank has argued, it is difficult to see the difference between that statute-specific standard and plausibility pleading.301 And it is problematic that the Court would unilaterally broaden the scope of a narrow, substance-specific pleading standard to encompass all claims. Second, although plausibility necessarily entails a judgment about the likelihood of the claim, courts and commentators have struggled to define it as a standard.302 Ed Hartnett and Bob Bone both have argued that plausibility requires a judge to assess the claim against the judge’s baseline assumptions about how the world works.303 This interpretation does seem consistent with Iqbal’s directive that judges should use their “experience and common sense.” Thus, for example, a whiteshoe law firm that rejects a receptionist applicant with facial tattoos likely made its decision on appearance rather than gender, absent some other evidence suggesting unlawful gender discrimination. But if that is an easy case, things get more complicated quickly. What if the applicant had no distinguishing facial markings but instead was an Arab? What if a male applicant for a secretarial position was turned down? The plausibility of an inference of unlawful discrimination based on nationality or gender depends upon one’s baseline assumptions about employment discrimination generally. If one believes that unlawful discrimination is rare, then one might view the inference of discrimination as implausible without more facts. Not all judges have the same baseline assumption, though, because each judge has different life experiences. And, the more specialized the circumstance (antitrust or patents, for example), the more likely that a judge will have too little exposure to even have a baseline assumption. Thus, outcome differences across a range of judges are likely to be high because different judges will have different baseline assumptions.

300. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 314, 328 (2007) (internal emphasis omitted). 301. Stephen B. Burbank, Pleading and the Dilemmas of “General Rules,” 2009 Wis. L. Rev. 535, 552; see also Douglas G. Smith, The Evolution of a New Pleading Standard: Ashcroft v. Iqbal, 88 Or. L. Rev. 1053, 1072–73 (2010) (arguing that the plausibility standard is a more-likely-than-alternates standard). But see Edward A. Hartnett, Taming Twombly: An Update After Matrixx, 75 L. & Contemp. Probs. 73, 44–46 (2012) (arguing that plausibility can be influenced by “more likely” competing inferences but need not always be comparative). 302. See Alex Reinert, Pleading as Information-Forcing, 75 L. & Contemp. Probs. 1, 2, 16 (2012). 303. Bone, supra note 246, at 885–86; Hartnett, supra note 284, at 498.

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Even generally shared experiences, such as the allegations in Form 11, may be complicated. Many people might share the baseline assumption that if a car hits a pedestrian, the driver must have acted unlawfully.304 But how accurate is that assumption? The accident might not have been the driver’s fault, for a number of reasons. Perhaps there was an ice slick that not even a reasonably careful driver could have avoided. Perhaps the pedestrian suddenly jaywalked in front of the car.305 Might a judge need to seek statistical analyses and expert opinions before determining the plausibility of the claim? Might a judge in Manhattan hold a different set of baseline assumptions about pedestrian accidents than a judge in Des Moines? As Dan Kahan and others have shown, even interpretations of widely shared experiences such as driving vary depending upon one’s individual experience.306 As for myself, I have never been involved in, seen, or known someone involved in a pedestrian accident; I would not have the first clue of how to evaluate the plausibility of liability from the allegations in Form 11 under Twombly and Iqbal. The factual circumstance in Iqbal itself illustrates these difficulties. The Court concluded that the possibility of a legitimate, nondiscriminatory motive (rounding up persons with ties to terrorism) that had a disparate impact on Arab Muslims was more likely than direct discrimination based on race and religion. Perhaps this belief stemmed from a baseline assumption, shared by the justices in the majority, that governmental officials typically do not discriminate on these grounds. One might reasonably argue, however, that that baseline assumption has it exactly backward. Officials in the wake of 9/11 had strong incentives to do whatever they could to catch the perpetrators and forestall another attack, even if that meant violating, or at least potentially violating, the Constitution. The United States has a history, including during the time at issue in Iqbal, of encroaching on constitutional rights during times of war.307 Worse, officials’ efforts in the aftermath of 9/11 were frenzied and 304. See Bone, supra note 290, at 872; Bone, supra note 246, at 886; A. Benjamin Spencer, Understanding Pleading Doctrine, 108 Mich. L. Rev. 1, 15 (2009). 305. Bone, supra note 290, at 872–73. Some statistics indicate that a majority of pedestrian-accident fatalities occurs at non-intersections. Pedestrian Accident Statistics, Law Information (Mar. 18, 2008), available at http://legalcatch.wordpress.com/2008/03/18/ pedestrian-accident-statistics/. 306. Daniel Kahan et al., Whose Eyes Are You Going to Believe? Scott v. Harris and the Perils of Cognitive Illiberlism, 122 Harv. L. Rev. 837 (2009); see also Cooper, supra note 288, at 974; Jeffrey J. Rachlinski, Processing, Pleadings and the Psychology of Prejudgment, 60 DePaul L. Rev. 413, 413–14 (2011). 307. See Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952); Korematsu v. United States, 323 U.S. 214 (1944); Memo. from Jay S. Bybee to Alberto R. Gonzalez Re: Standards for Conduct for Interrogation under 18 U.S.C. §§ 2340-2340A (Aug. 1, 2002).

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relatively blind. What they did suspect with strong confidence, however, was that the group responsible was composed predominantly of Arab Muslims. Under these circumstances, it is most plausible to assume that Ashcroft and Mueller intended to target Arab Muslims.308 Indeed, the Second Circuit found intentional discrimination by Ashcroft and Mueller under these circumstances not only plausible but likely.309 Finally, Iqbal confirms that the purpose of the plausibility mechanism is to control defense costs. The Court cast successful pleading as a prerequisite to discovery, explaining that Rule 8 “does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.”310 Although Justice Breyer, in dissent, properly noted that the district court “can structure discovery in ways that diminish the risk of imposing unwarranted burdens upon public officials,”311 the Court retorted that a plaintiff whose “complaint is deficient under Rule 8 . . . is not entitled to discovery, cabined or otherwise.”312 Iqbal does clarify some aspects of New Pleading, such as its transsubstantivity, but it also raises additional questions.313 Perhaps the elephant in the room is Swierkiewicz, the 1993 employment-discrimination case in which the Court unanimously reaffirmed the conclusory, Conley-style pleading of pre-Twombly days. True, Iqbal does not expressly reject or overrule Swierkiewicz, but neither does Iqbal follow or reaffirm it. In fact, Iqbal does not mention Swierkiewicz at all, not even once. This silence is itself telling, considering how important Swierkiewicz is to rule pleading and considering that both cases deal with pleading unlawful intentional discrimination. Perhaps the best explanation for why Iqbal does not discuss Swierkiewicz is that the two cases are difficult to reconcile; even Adam Steinman, who makes a tremendous effort to reconcile them, can do so only by staking out a particularly optimistic middle ground that construes Swierkiewicz strictly, Iqbal charitably, and pleading uniquely.314 Perhaps the simplest assessment is Charlie Sullivan’s observation that Swierkiewicz’s

308. Bone, supra note 290, at 877; Michael C. Dorf, Iqbal and Bad Apples, 14 Lewis & Clark L. Rev. 217, 227 (2010). 309. Iqbal v. Hasty, 490 F.3d 143, 175–76 (2d Cir. 2007, rev’d sub nom. Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009)). 310. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009). 311. Id. at 1961 (Breyer, J., dissenting). 312. Id. at 1954. 313. David L. Noll, The Indeterminacy of Iqbal, 99 Geo. L.J. 117, 133–47 (2010). 314. Steinman, supra note 290.

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viability depends upon how broadly one reads it.315 Regardless of how one reads it, however, the point is the same: Iqbal controls.

New Pleading Together, Twombly and Iqbal erect a new pleading standard for testing Rule 8 claims on a motion to dismiss. Old Pleading required the existence of a viable legal claim (legal sufficiency), which could be tested on a motion to dismiss; and proper notice of the claim and its grounds, which could be tested on a motion for a more definite statement or remedied by a Rule 7 reply. Old Pleading also required the court to credit all factual allegations and inferences unless wholly incredible. Under these rules, Old Pleading screened only obviously meritless claims and left it to later mechanisms to weed out claims revealed as meritless after discovery.316 Importantly, as Kevin Clermont and Stephen Yeazell have asserted, New Pleading does not disturb either the notice or the legal-sufficiency requirement of Old Pleading.317 Rule 8 still requires notice and legal sufficiency. Thus, it was wrong for one district court recently to apply the plausibility standard to the question of legal sufficiency. In Florida v. U.S. Department of Health & Human Services, Senior Judge Roger Vinson considered a facial constitutional challenge to the controversial federal healthcare-reform law. The plaintiffs challenged the law on, inter alia, the ground that it exceeded Congress’s Commerce Clause authority. Judge Vinson refused to dismiss the claim, finding the claim “novel” and “unprecedented,” hence reasoning that “at this stage of the case, the plaintiffs have most definitely stated a plausible claim with respect to this cause of action.”318 Of course, what should have happened—under both pre-Twombly and post-Iqbal law—is that the judge should have decided the pure issue of law presented. Either the Commerce Clause provides authority or it does not. Answering that question is, and always has been, proper on a motion to dismiss. If a mere “plausible” legal theory precludes a motion to dismiss, then New Pleading not only vitiates the longstanding core purpose of Rule 12(b)(6) but it also, paradoxically, opens the courthouse doors wider than they had been prior to Twombly. So, to repeat, New Pleading does not disturb the requirements that existed under Old Pleading. The crucial point is that Rule 8 no longer requires just these things. New Pleading adds an additional factual-sufficiency requirement 315. Charles A. Sullivan, Plausibly Pleading Employment Discrimination, 52 Wm. & Mary L. Rev. 1613 (2011). 316. See Dodson, supra note 292, at 62–63. 317. Clermont & Yeazell, supra note 228, at 830. 318. Florida v. U.S. Dep’t Health & Hum. Servs., 716 F. Supp. 2d 1120 (N.D. Fla. 2010).

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to screen cases on their potential for merit. And it changes the way courts construe allegations. Neither of these New Pleading overlays has anything to do with notice or legal sufficiency.319 Pleading analysis now has three steps. The first step—call it Iqbal Step Zero—existed under Old Pleading: a legal-sufficiency inquiry into whether the claim is viable as a matter of law. If the plaintiff sues under a fictitious statute or sues under a statute that simply does not cover the claim asserted, the claim should be dismissed under Rule 12(b)(6) for legal insufficiency. And, as pre-Twombly law recognized, if the complaint fails to give adequate notice, then Rule 12(e) justifies an order for a more definite statement. In Iqbal Step One, a court should disregard all conclusory allegations, including conclusory factual allegations. Some confusion about how to establish conclusoriness exists—either an allegation tracks the legal terminology too closely or it asserts facts at too high a level of generality—but any interpretation of Iqbal allows a court to characterize a range of factual allegations as conclusory and to disregard such allegations if they lack evidentiary support. In Iqbal Step Two, the court assesses the remaining, well-pleaded factual allegations and their inferences to determine whether, in the judge’s experience and common sense, the facts plausibly state entitlement to relief. A court should consider alternate, lawful explanations in a comparative inquiry. Only if the plaintiff’s explanation of illegality is “plausible” in light of these alternatives will the claim survive a motion to dismiss. As a practical matter, New Pleading is a fact-pleading requirement. Both steps require the pleader to allege more supporting facts, either by discrediting the pleader’s factual allegations or by simply requiring more facts. Under pre-Twombly rule pleading, a claimant had to allege some facts because a bare legal claim without factual context would not provide the requisite notice. But factual sufficiency was tied to notice. New Pleading, by contrast, requires factual support for “conclusory” allegations even if those allegations adequately provide notice. New Pleading also requires facts sufficient to establish “plausibility.” Both requirements necessitate fact pleading beyond mere notice pleading.320 It is worth noting that New Pleading’s fact pleading differs from that of the Codes in its purpose; whereas Code-style fact pleading was intended to be an information-forcing, issue-focusing mechanism, Twombly and Iqbal impose fact pleading for the purpose of identifying and screening weak claims to protect defendants from discovery costs.321 319. Spencer, supra note 304, at 19. 320. Clermont & Yeazell, supra note 228, at 830; Scott Dodson, Comparative Convergences in Pleading Standards, 158 U. Pa. L. Rev. 441, 457–60 (2010); Spencer, supra note 304, at 13. 321. Kevin M. Clermont, Three Myths About Twombly–Iqbal, 45 Wake Forest L. Rev. 1337, 1340–50 (2010); Clermont & Yeazell, supra note 228, at 832.

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New Pleading also differs from the fact-pleading standard of Rule 9(b). Some commentators have argued that plausibility pleading imposes an obligation that approaches that of the “particularity” requirement of Rule 9(b),322 but there are important differences. Rule 9(b) requires specific facts—the who, what, when, where, and how—for purposes of setting out more detail rather than “sufficient” facts for purposes of establishing plausibility on the merits. These differences from prior pleading regimes highlight a crucial distinctive feature of New Pleading—its purpose. Code pleading and common-law pleading were designed to narrow the issues and develop the facts at an early stage. Rule pleading was designed to provide notice of the claim and to erect a light screening mechanism for legal insufficiency. Unlike these past regimes, New Pleading erects a screening mechanism not unlike summary judgment to protect defendants from burdensome discovery costs at the behest of weak claims.323 The revolutionary part of New Pleading is that whereas Old Pleading was designed to keep plaintiffs in, New Pleading is designed to keep them out, in the name of controlling costs. As Ben Spencer has argued, New Pleading is the latest in a series of efforts to replace the liberal ethos of the 1938 rules with a “restrictive ethos” designed to discourage claims and elevate expediency over access to justice.324 Twombly and Iqbal, then, are about shifting the pleadings conversation from one of liberal access for plaintiffs to one of reducing costs for defendants. After seventy years, the Court has finally accepted the claims that frivolous litigation and abusive discovery are rampant evils that must be addressed. Although I will explain my skepticism of these claims in later chapters, I support a pleadings conversation that incorporates cost-based concerns. Rule 1 denotes three master values, and efficiency is one of them (the others are justice and speed).325 The system—and any reforms—should take litigation costs into 322. Spencer, supra note 255, at 475 (calling Twombly’s plausibility-pleading standard “tantamount to a particularity requirement”); id. at 476 (“Requiring specific facts that back up a conclusory allegation of wrongdoing is the very definition of particularized pleading.”); see also Dunlop & Wright, supra note 238; Marc. I Steinberg & Diego E. Gomez-Cornejo, Blurring the Lines Between Pleading Doctrines: The Enhanced Rule 8(a)(2) Plausibility Pleading Standard Converges with the Heightened Fraud Pleading Standards Under Rule 9(b) and the PSLRA, 30 Rev. Litig. 1 (2010). 323. Richard A. Epstein, Bell Atlantic v. Twombly: How Motions to Dismiss Become (Disguised) Summary Judgments, 25 Wash. U. J.L. Pol’y 61, 62 (2007); Suja A. Thomas, The New Summary Judgment Motion: The Motion to Dismiss Under Iqbal and Twombly, 14 Lewis & Clark L. Rev. 15, 18–31 (2010). For more on their similarities and differences, see Lonny S. Hoffman, Burn up the Chaff with Unquenchable Fire: What Two Doctrinal Intersections can Teach us about Judicial Power over Pleadings, 88 B.U. L. Rev. 1217, 1240–41 (2008). 324. Spencer, supra note 255, at 433, 479; see also A. Benjamin Spencer, The Restrictive Ethos in Civil Procedure, 78 Geo. Wash. L. Rev. 353, 359 (2010). For a similar account, see Arthur R. Miller, Don’t Look Now, But They May be Closing the Courthouse Doors: Reflections on a Life with Federal Procedure, 88 N.Y.U. L. Rev. (forthcoming 2013). 325. Fed. R. Civ. P. 1.

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account and should take particular pains to avoid imposing those costs on innocent defendants. If it appears that costs have become a problem, then I think it right to look for cost-based solutions. The problem with Twombly and Iqbal is that the Court was institutionally ill-equipped to design a new pleading mechanism based on cost control.326 The Rules Enabling Act (REA) process sets out the better mechanism for studying and proposing such a fundamental change in pleading rules. Committees can take the time to gather empirical data, conduct surveys of the bench, bar, and academy, and hold public hearings. Proposed rules and amendments undergo at least seven stages of formal comment and review.327 By the time rules and amendments are referred to the Supreme Court, they have been widely and rigorously scrutinized by relevant interest groups and the public at large; revisited, tweaked, or discarded in light of comments received; and subjected to debate and deliberation by a broadly representative rulemaking body. The REA process is designed to be disinterested, broadly democratic, informed by deliberation and data, accountable to all three branches of government,328 and “utterly transparent.”329 The Supreme Court, on the other hand, must reform rules within the context of a case and without the time to develop a detailed study of the issue. The Court’s membership is not representative, and justices who never served as civil litigators, trial judges, or procedure professors may be relatively unschooled in the nuances of civil pleading. The rulemaking system has its flaws, and, in some instances, reform by the Court might be preferable to resort to the REA process. But the risk is that the justices will make mistakes because they are in a poor position to make fundamental changes. The Court made just such a mistake with New Pleading. Twombly and Iqbal were about controlling rampant discovery costs. But the Court’s solution—a generally applicable rule of pleading—both fails to correct the problem and causes its own problems. As the next chapter sets out, New Pleading’s costsaving benefits are muted and its detrimental impact on plaintiffs’ access to justice is substantial. In short, New Pleading is a poor solution.

326. Bone, supra note 290, at 851. 327. Catherine T. Struve, The Paradox of Delegation: Interpreting the Federal Rules of Civil Procedure, 150 U. Pa. L. Rev. 1099, 1103 (2002). 328. Paul D. Carrington, Politics and Civil Procedure Rulemaking: Reflections on Experience, 60 Duke L.J. 597, 605 (2010). 329. Mark R. Kravitz, To Revise, or Not to Revise: That Is the Question, 87 Denv. U. L. Rev. 213, 216 (2010).

3

THE EFFECTS OF NEW PLEADING

Twiqbal was supposed to be about controlling high discovery costs in weak cases based on a perception of system failure in those cases. Let me be clear: cost control is a noble goal, an important aspect of both fairness and accessibility, and I support cost-conscious reform proposals. But reform measures must take a number of considerations into account. And Twiqbal’s solution rests on several dubious propositions and causes a number of problematic ancillary effects. As I will show in this chapter, New Pleading is having both justice effects and cost effects. On the justice side, the evidence is fairly convincing that New Pleading is screening out at least some meritorious claims that would have been successful under Old Pleading. On the cost side, New Pleading is probably providing some cost savings by screening out meritless cases that would have been let in as false positives under Old Pleading. However, the proportion of screened meritless cases is very small. Further, the set of screened cases comprises primarily low-cost prisoner cases, rather than the paradigmatic high-cost class-action case that generated Twombly. Although New Pleading appears to be having a screening effect on only a small percentage of cases, it is increasing the cost of litigation in a much broader swath by forcing more intensive fact investigation and more prolix complaints, encouraging the filings of motions to dismiss generally, and by allowing amendment of complaints more often than in the past. In short, New Pleading’s small cost savings are not worth its many downsides. For these reasons, my primary commitment—advanced in chapter 4—is a return to Old Pleading, with a few tweaks to address the narrow but real concerns animating Twiqbal. I believe those concerns can be addressed effectively within the confines of the Federal Rules as they existed prior to Twombly. A return to Old Pleading seems infeasible, however, and so my secondary commitment—argued in chapter 5—is a modest move toward adopting a

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formalized New Discovery protocol that entails limited presuit discovery as a way to ameliorate some of the justice concerns—and perhaps even some of the costs—of New Pleading. These next steps depend upon the effects New Pleading is having, and it is to that question that this chapter turns. At the outset, one might object to a consideration of these effects of New Pleading by arguing that Twombly and Iqbal are not revolutionary, that they are narrow, or even that the Court just didn’t mean it and plans to scale back its pronouncements. I will have more to say about the possibility of Court revision in a later chapter, but as for whether Twombly and Iqbal work meaningful changes to pleading doctrine, the lower courts have already made up their minds. Twombly has the fastest rate of citation, even more so than cases in the famed summary-judgment trilogy.330 In just over five years, it has garnered more than 156,000 citations, according to Westlaw Keycite as of August 2, 2012. The reigning champ, Celotex Corp. v. Catrett,331 has just over twice than that (355,600) as of the same date, but that’s a 1986 case, with more than twenty years’ head start. Iqbal has been cited more than 91,000 times in its first three years, putting it on a trajectory similar to that of Twombly. By contrast, Brown v. Board of Education,332 the famous school-desegregation case, and one of the most revered decisions of all time, has been cited fewer than 20,000 times in more than fifty years. These citation rates suggest that lower courts are taking Twombly and Iqbal to heart, and not just as the most recent iteration of an enduring standard.333 To the contrary, lower courts almost universally hail the decisions as, together, creating a sea change in pleading standards.334 Judge Sidney H. Stein, of the Southern District of New York, for example, recently pronounced that Twiqbal represents “a major shift in how I have to approach motions to dismiss.”335 Another judge confessed, “We district court judges suddenly and unexpectedly

330. Kevin M. Clermont & Stephen C. Yeazell, Inventing Tests, Destabilizing Systems, 95 Iowa L. Rev. 821, 823 n.4 (2010). 331. 477 U.S. 317 (1986). 332. 347 U.S. 483 (1954). 333. Contra Michael R. Huston, Note, Pleading with Congress to Resist the Urge to Overrule Twombly and Iqbal, 109 Mich. L. Rev. 415, 434 (2010) (suggesting that the widespread lower-court reaction may be nothing more than a temporary “rhetorical splash”). 334. See, e.g., Fowler v. UPMC Shadywide, 578 F.3d 203, 210 (3d Cir. 2009). Virtually every commentator agrees. See Alex Reinert, Pleading as Information-Forcing, 75 L. & Contemp. Probs. 1, 1–2 (2012). 335. Pamela Atkins, Twombly, Iqbal Introduce More Subjectivity to Rulings on Dismissal Motions, Judge Says, 78 U.S.L.W. 2667 (May 11, 2010) (quoting Judge Stein).

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find ourselves puzzled over something we thought we knew how to do with our eyes closed: dispose of a motion to dismiss a case for failure to state a claim.”336 As one prominent practitioner stated, “[Iqbal] is the most significant Supreme Court decision in a decade for day-to-day litigation in the federal courts.”337 Accordingly, the time to evaluate its costs and benefits—both the expected and the unexpected—is ripe. Recall that the New Pleading is premised on the reduction of meritless lawsuits and that reduction’s attendant cost savings for courts and litigants. This chapter evaluates the effects of New Pleading using statistical and anecdotal data, including my own original dataset of dismissals in the pre-Twombly and post-Iqbal eras. For a number of reasons discussed below, the most accurate empirical tests on the effect of Twiqbal would be very difficult to develop.338 As such, the studies done so far have limitations and should be taken with perhaps more than a few grains of salt. Nevertheless, even with those limitations, the data that we have today are useful and worthy of evaluation and comment.

The Screening Effects of New Pleading In a perfect world, every plaintiff knows and is responsive to the applicable legal standards. Plaintiffs who can get more facts will get them and include them in order to meet the new pleading standard. They may be able to obtain necessary information through publicly available resources, self-investigation, informal discovery, or, perhaps, even formal discovery.339 Plaintiffs who cannot get more facts will not file at all because they rightly anticipate a swift dismissal, or at least will file only for the purpose of settling for a marginal amount before a motion is decided.340 In a perfect world, then, dismissal rates should be low and relatively static, both pre-Twombly and post-Iqbal.341 Defendants, for their part, would rarely file motions to dismiss because the

336. Hon. Colleen McMahon, The Law of Unintended Consequences: Shockwaves in the Lower Courts After Bell Atlantic Corp. v. Twombly, 41 Suffolk U. L. Rev. 851, 853 (2008). 337. Adam Liptak, 9/11 Case Could Bring Broad Shift on Civil Suits, N.Y. Times, July 20, 2009, at A10 (quoting Tom Goldstein). 338. Kevin M. Clermont, Three Myths About Twombly-Iqbal, 45 Wake Forest L. Rev. 1337, 1365 (2010). 339. See Scott Dodson, New Pleading, New Discovery, 109 Mich. L. Rev. 53, 72–86 (2010); Scott Dodson, Federal Pleading and State Presuit Discovery, 14 Lewis & Clark L. Rev. 43 (2010). 340. See Robert G. Bone, Modeling Frivolous Suits, 145 U. Pa. L. Rev. 519, 522–29 (1997). 341. Clermont, supra note 338, at 1366 n.140.

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vast majority of complaints—filed by rational plaintiffs—would meet the applicable pleading standard. Changing the dismissal standard should not affect this litigation paradise. Post-Iqbal plaintiffs who would have succeeded under the Conley standard will just adjust their conduct and expectations accordingly. If they can somehow obtain the necessary information to file a factually sufficient complaint, and the cost to do so is worth the expense, then they will, with the result being a sufficient complaint that is not challenged by a motion to dismiss. If they cannot, then they will not file. Perhaps more of them will choose not to file.342 Indeed, the sole screening effect of New Pleading should be on initial filings, as rational plaintiffs forgo unwinnable lawsuits entirely. But, in an ideal world, changing the pleading standard should not affect the dismissal rate because, under any standard, there should be no such dismissals.343 We clearly do not operate in an ideal world. Uncertainty complicates matters considerably. Iqbal may have imparted some clarity, but it did not answer, nor could it have answered, all questions about the state of the legal standard. To some degree, Iqbal itself imposed uncertainty by instructing district courts to use their judicial experience and common sense in assessing complaints. In addition, parties take risks. For example, a plaintiff may file a complaint and hope that the defendant does not file a motion to dismiss, a calculation that is not entirely irrational if the cost to the defendant to file a motion to dismiss is close to or exceeds the cost to settle the case.344 Or, a plaintiff trying to stay ahead of the applicable limitations period may file an insufficient complaint on the hope that he obtains the necessary evidence before having to answer the motion to dismiss. Plaintiffs and defendants may simply miscalculate the legal standard itself. Or, one party may hope that the judge misunderstands (or misapplies) the legal standard in a way favorable to that party.345 Some plaintiffs simply may not be rational. The evidence proves the suboptimal picture—motions to dismiss are a routine part of pretrial practice. One need only look at the shockingly high rates of dismissal of class complaints filed 342. See Kevin M. Clermont & Stewart J. Schwab, Employment Discrimination Plaintiffs in Federal Court: From Bad to Worse?, 3 Harv. L. & Pol’y Rev. 103 (2009). 343. See George L. Priest & Benjamin Klein, The Selection of Disputes for Litigation, 13 J. Legal Stud. 1 (1984). 344. See Bone, supra note 340, at 548–49, 555–56. 345. Different pressures may push judges in different directions. The fear of reversal may cause some judges to deny close calls because a granted motion to dismiss is appealable, and those judges may fear reversal. See Evan H. Caminker, Precedent and Prediction: The Forward-Looking Aspects of Inferior Court Decisionmaking, 73 Tex. L. Rev. 1, 77–78 (1994). On the other hand, the pressure to clear dockets may cause other judges to grant close calls.

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under the PSLRA—around 40 percent according to one study346—to understand the imperfections of our litigation world and to appreciate the continuing importance of dismissal rates. In this irrational world of appreciable dismissal rates, New Pleading, by making it more difficult for plaintiffs to survive a motion to dismiss in federal court,347 ought to increase dismissal rates. Not only must they plead under the Old Pleading standard—a lax standard to be sure, but with strictures nonetheless—but also they must plead sufficiently under the New Pleading standard, which imposes a heavier fact-pleading burden both on the nature of individual allegations to distinguish conclusory from nonconclusory allegations and on the “plausibility” of the claim overall. To be sure, many complaints filed under the Conley standard might have met the New Pleading standard simply because plaintiffs often include far more detail than they believe required under Rule 8. But it seems safe to assume that at least some plaintiffs who could successfully survive a motion to dismiss under Old Pleading might not survive a motion to dismiss under New Pleading. Anecdotal evidence supports this: Steve Burbank has assembled an abbreviated list of judicial opinions asserting that the complaints at issue would have met the pre-Twombly standard but did not meet the post-Iqbal standard.348 Intuitively, this anecdotal evidence makes sense. It is no longer the case, for example, that the simple allegation “I was turned down for a job because of my race” suffices, as some circuits explicitly had held prior to Iqbal.349 One might suspect, therefore, that dismissal rates would increase from the pre-Twombly era to the post-Iqbal era.

Post-Twombly Studies of Dismissal Rates Twombly immediately spurred empirical interest in pleading standards, though it appears that these studies were premature. To date, I know of four studies considering the impact of Twombly alone on dismissal rates. Each one,

346. Stephen J. Choi & A.C. Pritchard, The Supreme Court’s Impact on Securities Class Actions: An Empirical Assessment of Tellabs, 27 J.L. Econ. & Org. (Aug. 25, 2011). 347. More precisely, the difficulties apply to “claimants,” including defendants with counterclaims. Twombly and Iqbal apply to all claims under Rule 8, whether they are asserted by plaintiffs or defendants. In the vast majority of cases, however, the claims will be asserted by plaintiffs, and so I refer to “plaintiffs” for simplicity’s sake here. 348. Has the Supreme Court Limited Americans’ Access to Courts?: Hearing Before the S. Comm. on the Judiciary, 111th Cong. 90 (2009) (prepared statement of Stephen B. Burbank); see also Memo. from Andrea Kuperman to the Civil Rules Committee and Standing Rules Committee 3 (July 26, 2010) (acknowledging the same point). 349. See, e.g., Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1115 (D.C. Cir. 2000).

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using Westlaw databases, found non-statistically significant increases in overall rates.350 One study did find a statistically significant increase of 11 percent in the dismissal rate of civil-rights cases (from 41.7 percent pre-Twombly to 52.9 percent post-Twombly),351 but the other three found only non-statistically significant increases in civil-rights or employment-discrimination cases. Perhaps most interestingly, each found pre-Twombly dismissal rates (grants as a function of motions filed) of around or greater than 50 percent. Each study suffers from one significant flaw: it fails to account for Iqbal. As discussed above, Twombly left the state of the law in great uncertainty, not only from litigants’ perspectives but also from courts’ perspectives. In the period between Twombly and Iqbal, courts struggled to make sense of Twombly and came to different conclusions about how to apply it.352 The data from these studies might be as indicative of the confusion surrounding the Twombly standard as the changing rate of dismissal under the actual standard. For this reason, each of these studies’ results would seem to understate the effect of New Pleading, because some courts no doubt were wrongly interpreting Twombly to be narrower than Iqbal later confirmed. To capture the true meaning of Twombly, post-Iqbal data were needed.

Post-Iqbal Westlaw Study of Dismissal Rates—Hatamyar In the first empirical study of post-Iqbal dismissal rates, Patricia Hatamyar compared a random sample of pre-Twombly, post-Twombly, and post-Iqbal cases and concluded that overall dismissal rates rose significantly over time. Hatamyar’s methodology was similar to that of previous studies. Using a random-number generator, she chose 500 cases from the two years before Twombly, 500 cases in the two years between Twombly and Iqbal, and 200 cases in the three months after Iqbal. She used Westlaw searches specifically to find cases in pre-Twombly years citing Conley’s “no set of facts” language and cases in post-Twombly years citing Twombly’s “plausibility” language or

350. Kendall W. Hannon, Note, Much Ado About Twombly? A Study on the Impact of Bell Atlantic Corp. v. Twombly on 12(b)(6) Motions, 83 Notre Dame L. Rev. 1811, 1830 (2008); Joseph A. Seiner, The Trouble with Twombly: A Proposed Pleading Standard for Employment Discrimination Cases, 2009 U. Ill. L. Rev. 1011; Joseph A. Seiner, Pleading Disability, 51 B.C. L. Rev. 95 (2010); William H.J. Hubbard, The Problem of Measuring Legal Change, with Application to Bell Atlantic v. Twombly (draft of June 14, 2011). 351. Hannon, supra note 350, at 1831–34. 352. Id. at 1830; Seiner, Pleading Disability, supra note 350, at 97 (finding wide disparities in how courts were applying the Twombly standard to disability discrimination).

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citing to Iqbal.353 She excluded Rule 9, PSLRA, and other heightened-pleading cases. She excluded dismissal motions made under provisions other than Rule 12(b)(6). She also excluded cases that were sua sponte reviews of PLRA complaints under § 1915A(b)(1) and complaints submitted with an application for in forma pauperis treatment under § 1997e(c)(1). She included Rule 12(c) motions.354 These exclusions and inclusions left her with 444 Conley cases, 422 Twombly cases, and 173 Iqbal cases. Hatamyar then coded for, among other things, circuit, pro se status, nature of the suit, authority (Conley, Twombly, or Iqbal), and outcome. By her own admission, classifying the “nature” of the suit was problematic because multiple claims might be asserted in a single case. She started with the major categories listed on the federal district court civil cover sheet, including contract, real property, torts, civil rights, prisoner petitioner, forfeiture/penalty, labor, immigration, bankruptcy, intellectual property rights, social security, federal tax, and other. But she found that few 12(b)(6) cases involved real property, forfeiture/penalty, immigration, bankruptcy, social security, and federal tax, so she lumped these as “other” or, perhaps, “contract.” Prisoner petitions overwhelmingly fell into the civil-rights categories. That left six major categories: contract, tort, civil rights (§ 1981–85, Title VII, and other employment discrimination), labor (ERISA, FLSA, LMRA), IP, and other (all others, including antitrust, consumer credit, and RICO). She coded each “case” by the first count appearing in the opinion subject to a Rule 12(b)(6) dismissal, unless later counts were “more indicative of the case as a whole.” She used only the parties’ and courts’ designations of the claims rather than her own interpretations. Her “outcomes” variable was coded as “grant without leave,” “grant with leave,” “mixed,” and “deny.”355 Hatamyar found an increase in complete dismissal rates over time, from 46 percent (Conley) to 48 percent (Twombly) to 56 percent (Iqbal), with the Iqbal figures being statistically significant. Complete denials fell from 26 percent to 23 percent to 18 percent, with the Iqbal figures being statistically significant. She found similar increases in civil-rights cases (50 percent to 53 percent to 58 percent) and constitutional civil-rights cases (50 percent to 55 percent to 60 percent). She found that civil-rights and “other” claims had the highest rates of dismissal, while contract and IP cases had the lowest.356 Pro se status

353. Patricia W. Hatamyar, The Tao of Pleading: Do Twombly and Iqbal Matter Empirically?, 59 Am. U. L. Rev. 553, 584–85 & n.200 (2010). 354. Id. at 585–88. 355. Id. at 589–96. 356. Id. at 599–604.

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was strongly correlative with dismissal propensity.357 Hatamyar’s multinomial logistic regression analysis revealed statistically significant variations in grant v. deny when combining all cases post-Twombly. The bottom line was that the odds of a motion to dismiss being granted were 1.5 times greater under Twombly and Iqbal than under Conley, holding all other variables constant. The strongest predictor of this variation was pro se status, but civil rights and “Other” cases are also strong predictors.358 A year later, Hatamyar amplified her study with 467 additional random post-Iqbal cases.359 She found that the rate of motions granted without leave to amend increased by a factor of 1.67 under Iqbal as opposed to under Conley, and that the rate of grants with leave to amend increased by a factor of 5.9 times (both significant at the 95 percent confidence interval).360 Hatamyar found statistically significant higher risks of dismissal in constitutional civil-rights cases than contract cases, and statistically significant higher risks of dismissal in pro se cases than represented cases. Excluding pro se constitutional civil-rights cases still showed an increase in dismissal rates, but only to the 93 percent confidence interval. Constitutional civil rights cases were more likely to be granted without leave to amend (as compared to denials) after Iqbal at the 95 percent confidence interval, and also more likely to be granted with leave to amend (as compared to denials) at the 95 percent confidence interval.361 Hatamyar’s study is illuminating in several ways. It confirms the preIqbal findings of modest but statistically insignificant increases overall after Twombly. It also suggests that post-Iqbal trends are far more important because New Pleading after Iqbal is causing a statistically significant increase in dismissal rates overall and in pro se and civil-rights cases especially. Finally, it suggests that New Pleading’s effect is being felt in dismissals with and without leave to amend.

Post-Iqbal PACER Study of Dismissal Rates—FJC Study Recently, the Federal Judicial Center published a study on dismissal rates using civil dockets rather than Westlaw databases. The FJC selected the two districts

357. Id. at 613–15. 358. Id. at 621–22. 359. Patricia W. Hatamyar Moore, An Updated Quantitative Study of Iqbal’s Impact on 12(b)(6) Motions, 46 U. Rich. L. Rev. 603, 605 (2011). 360. Id. at 605. 361. Id. at 618, 622–23.

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in each circuit with the largest dockets in 2009, plus the District for the District of Columbia. These 23 district courts accounted for 51 percent of all federal civil cases filed during the FJC’s studied timeframe. The FJC used the courts’ own coding to identify filed motions to dismiss and orders on such motions. It then searched the documents for the following terms: “facts sufficient,” “sufficient facts,” “plausible claims,” “fails to state a claim,” “failed to state a claim,” “failing to state a claim,” “12 (b) (6),” and “12(b)(6).” The FJC used only those motions filed from October 2005 to June 2006 (pre-Twombly) and from October 2009 to June 2010 (post-Iqbal). It coded for the nature of the parties, whether the motion responded to an amended complaint, presence of other 12 motions, and judicial action taken (granted in part, in whole, or denied). For motions granted in part or in whole, the FJC coded for whether the plaintiff was allowed to amend the complaint. The FJC excluded all prisoner and pro se cases.362 The FJC found a statistically significant increase in overall grant rates of 9 percent (from 66 percent in 2006 to 75 percent in 2010).363 Breaking down the data by type of case revealed increases in the dismissal rate across all types, and a substantial increase in civil-rights cases. These findings support some of the initial data revealed by prior dismissal-rate studies by showing a statistically significant, single-digit increase in the overall grant rate, coupled with a notable increase in the dismissal rate of civil-rights cases. However, although each type of case saw an increase, the only statistically significant increase was in financial-instrument cases.364 Accordingly, the FJC concluded that the increase in overall dismissal rates is driven by the financial-instrument cases rather than civil-rights or employment-discrimination cases. Upon a closer inspection, however, the FJC’s conclusion is suspect for three reasons. First, the FJC’s breakdown of the data by type of case left fairly low numbers in each bin,365 making any statistical significance unlikely at the modest rates of increases that other studies have found. For example, the number of pre-Twombly and post-Iqbal employment-discrimination orders was 17 and 28, respectively.366 Yet despite the smallish Ns, it is illuminating to note that many p values were extremely close to statistical significance. 362. Joe S. Cecil et al., Motions to Dismiss for Failure to State a Claim After Iqbal 5-6 (Fed. Judicial Ctr. 2011). 363. Id. at 13. 364. Id. at 19–21. 365. Id. at 14. 366. Lonny Hoffman, Twombly and Iqbal’s Measure: An Assessment of the Federal Judicial Center’s Study of Motions to Dismiss, 6 Fed. Cts. L. Rev. 1, 24 (2012).

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For example, civil-rights cases experienced a 7.7 percent increase in the grant rate (from 70.3 percent of 172 cases to 78 percent of 232 cases), which correlates to a p value of 0.08 using a two-tailed test (significant at the 90 percent confidence interval) and a p value of 0.04 using a one-tailed test (significant at the 95 percent confidence interval).367 The combination of low Ns and low p values suggests that a bit more data would cause the increase of civil-rights cases to have indisputable statistical significance. Second, the FJC’s own data suggest that the financial-instrument cases are not the exclusive driver. Although not reported by the FJC, removing the financial-instrument cases leaves 683 motions and 453 grants pre-Twombly (66 percent) and 986 motions and 700 grants post-Iqbal (71 percent), and that a 5 percent increase in the grant rate is significant at the 95 percent confidence interval. Thus, even without the financial-instrument cases, the FJC’s study still shows a statistically significant (though non-regressed), single-digit increase (5 percent) in overall grant rates. Third, because the study excluded all pro se and prisoner complaints, it likely understates the true overall grant rate (as well as the civil-rights rate), because, as other studies have shown, New Pleading tends to hit pro se and prisoner complaints especially hard. It is worth noting, however, that in a follow-up study, the FJC found no statistically significant increase in the rate of final dismissals (i.e., after the opportunity for amendment) in those classes of cases.368 Fourth, the FJC’s dataset was limited by a number of factors, the effect of which on the results is not known. For example, the FJC captured only motions filed within 90 days of the original complaint, a cutoff that, as the principal author of the FJC’s study has admitted, likely excluded many motions,369 such as cases in which the defendant was not served properly or waived service, in which the defendant received an extension to file a motion, or in which the plaintiff filed an amended complaint. In addition, the FJC’s search terms likely failed to capture many motions that otherwise would have been probative.370 The FJC’s study relied on coding by court clerks as to the nature of the suit, and it appears that certain districts employ idiosyncratic coding practices.371 Finally, the FJC’s database includes heightened pleading cases

367. Id. at 26. 368. Joe S. Cecil et al., Update on Resolution of Rule 12(b)(6) Motions Granted with Leave to Amend 13–14 (Fed. Judicial Ctr. 2011). 369. Joe S. Cecil, Of Waves and Water: A Response to Comments on the FJC Study at 9 (draft). 370. Hoffman, supra note 366, at 33–36. 371. Cecil, supra note 369, at 3.

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such as fraud or PSLRA cases.372 It is unclear whether these conditions of the FJC’s study, if altered, would change the study’s results. At a minimum, then, the FJC data show a statistically significant, singledigit increase in the overall grant rate (excluding pro se and prisoner complaints), consistent with the other dismissal-rate studies. Given the low Ns and low p values, the FJC’s study indicates that more data is needed before concluding that Twiqbal is affecting specific types of cases, but it certainly does not rule out that possibility.373

Single-Set Post-Iqbal Study—Janssen One might rightly object that studies comparing dismissal rates across two different sets of cases separated temporally may not truly be comparing apples to apples. Perhaps other factors might explain any increase in dismissal rates. One way to test this criticism would be to apply both the pre-Twombly and the New Pleading standards to a single set of cases. William Janssen, in a 2011 study, did just that. He studied a single set of post-Iqbal dismissals in pharmaceutical- and medical-device litigations and determined if they would have come out differently under Conley.374 He read all 264 pharmaceutical- and medical-device dismissals published on Westlaw during the fifteen-month period after Iqbal, gauged whether the outcome would have been different under the Conley standard, and concluded that the outcome would have been different in more than 20 percent of the cases.375 Further, Janssen concluded, in about 8 percent of the cases (all of which would have survived under Conley), the plaintiff probably could not have obtained the detail that the courts held to be missing without formal discovery.376 Janssen’s absolute numbers were too small, however, to reveal any statistical significance.377

My Study All of the preceding studies suffered from at least two common flaws. First, they did not distinguish between legal and factual sufficiency. New Pleading 372. Id. at 24. 373. Hoffman, supra note 366, at 19. 374. William M. Janssen, Iqbal “Plausibility” in Pharmaceutical and Medical Device Litigation, 71 La. L. Rev. 541 (2011). 375. Id. at 543, 598. It appears that Janssen included Rule 12(c), Rule 15(a), Rule 9(b), and PSLRA motions. Id. at 586–90. The inclusion of these may call into question any conclusions about the impact of New Pleading solely on Rule 12(b)(6) motions. 376. Id. at 620. 377. Id. at 625.

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imposes a new factual-sufficiency standard that did not exist under Old Pleading. One might then expect to see an increase in dismissals for factual insufficiency under New Pleading. However, as chapter 2 explained, New Pleading leaves the test for legal sufficiency intact. A Title VII claim for hair-color discrimination should be dismissed under both Old and New Pleading, regardless of any additional requirements New Pleading imposed. The grant rate among legal-sufficiency challenges, then, should not vary between Old Pleading and New Pleading. Inclusion of a relatively constant subset of legal-insufficiency challenges could overwhelm and mask the significance of any increase in dismissals for factual insufficiency.378 Thus, distinguishing between the bases for the outcomes is a crucial omission.379 Second, each prior study grouped all claims in a case into a single data point by coding cases rather than claims. That choice could lead to classification difficulties if, for example, a plaintiff joined civil-rights claims with tort claims. That grouping also required the introduction of the ambiguous outcome classification “mixed” to refer to cases in which at least one claim was dismissed and at least one claim was not dismissed. Coding by claim would better measure the impact of New Pleading and allow for a closer look at the data. To address these gaps, I studied the impact of Twombly and Iqbal on dismissal rates using an original dataset with an eye toward exploring the detail left out of previous studies.380 Using the Westlaw circuit-specific databases “FedX-all,” where “X” is each circuit, I ran the following searches: Pre-Twombly: dismiss! /p (rule-12 12(b)(6) conley (fail! /3 state /3 claim)) & da(aft 21/5/2006) & da(bef 21/5/2007) Post-Iqbal: dismiss! /p (rule-12 12(b)(6) conley twombly iqbal (fail! /3 state /3 claim)) & da(aft 18/5/2009) I designed these searches to be extremely broad. For example, I did not limit the searches only to cases citing the permissive Conley or the restrictive Twombly, as other studies did. Instead, I used those terms only in the disjunctive, to capture cases that may have used them as a proxy for the motion-to-dismiss standard instead of referencing Rule 12 or “failure to state a claim.” In addition,

378. Janssen, for example, acknowledges that many of the dismissals he studied were dismissals for legal insufficiency that would have been decided the same under Old and New Pleading. Id. at 590–92. 379. Clermont, supra note 338, at 1367 n.140. 380. This study and its results were initially published in Scott Dodson, A New Look at Dismissal Rates in Federal Civil Cases, 96 Judicature 127 (2012).

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I included the term “Conley” in the post-Iqbal search. I thereby hoped to reduce the risk of any sample-skewing effect from potentially loaded search terms.381 Finally, I used a full twelve-month period in each search to avoid any seasonal biases.382 Each search generated a list of cases, and I first excluded all Supreme Court and circuit opinions to isolate district courts. District courts are on the front line and have the most experience with motions to dismiss. Including appellate decisions may have skewed the results because generally only grants of dismissal motions are appealable. Further, although district courts follow circuit law as well as Supreme Court decisions, Iqbal was relatively clear on the legal standard, and so there is little difference among the circuits on New Pleading. To control for any latent differences in circuit law, I coded for circuit. Using a randomized-number generator from www.randomizer.org, I selected 100 opinions from each search list. Thus, I ended up with 100 pre-Twombly and 100 post-Iqbal district-court opinions from each circuit. I then read each case and excluded opinions that did not resolve a Rule 12(b)(6) motion to dismiss under the Rule 8(a)(2) standard. This was an important step because many cases that cited to Conley or Twombly or Iqbal or that used 12(b)(6) terminology actually did not resolve a motion to dismiss for failure to state a claim. The intentional breadth of my search terms assured a relatively high number of false hits, making the reading stage important for catching and excluding them. In this reading stage, I discarded opinions resolving only motions for summary judgment (notwithstanding commentary drawing similarities between summary judgment and New Pleading), Rule 12(c) motions, jurisdictional dismissals under Rule 12(b)(1) or (b)(2), venue dismissals, and motions to dismiss only on heightened pleading grounds such as Rule 9(b) or the PSLRA. The reason I disregarded each of these is because they potentially were subject to a different dismissal or pleading standard. The standards of Twombly and Iqbal may apply beyond merits pleading under Rule 8(a)(2), but the courts have not resolved so definitively (and, in fact, many courts have refused to so apply them). By contrast, virtually every court holds New Pleading applicable to Rule 8(a)(2) claims (including counterclaims and third-party claims). Accordingly, to maintain a pure sample, I excluded all non-Rule 8(a)(2) claims.

381. Clermont & Yeazell, supra note 330, at 839 n.66. 382. There is some evidence of a seasonal bias in dismissal rates. See Moore, supra note 359, at 635 (finding a denial rate of 30 percent in the first six months of 2006 and a 37 percent denial rate in the last six months of 2006).

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I coded the remaining cases. I did not code based on whole opinion, as other studies have done; rather, I coded each Rule 8(a)(2) claim decided on a Rule 12(b)(6) motion to dismiss. Thus, I was not confined to difficult characterizations of grouped claims, such as classifying the type of a whole case. Nor did I have the ambiguous category of “mixed” decisions. I coded each claim in the following categories: Category Circuit Judge’s Political Affiliation Published Opinion IFP or PLRA383 Pro Se Claimant Claim Outcome Rationale

Designations 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, DC, Fed Democrat, Republican, Magistrate, Bankruptcy Yes, No Yes, No Yes, No Civil Rights, Employment Discrimination, Tort, Contract, IP, Other Dismissed, Not Dismissed Fact, Law, Both

A few notes about my coding. First, I used the political-party affiliation of the judge’s appointing president to code the judge’s political affiliation. There are some problems with this proxy, but the proxy seems to be an acceptable one in most studies using similar measurements.384 Second, I designated a claim as a published opinion if it was published or slated to be published in an official reporter, as indicated by Westlaw. All others were coded as unpublished. Third, in the “Pro Se Claimant” category, I coded as “no” claimants who litigated on their own behalf but who identified themselves as attorneys or who were corporations using in-house counsel. Fourth, I coded for claim based on several groupings. “Civil Rights” included § 1983 and Bivens actions against public officials and entities, most prisoner-government litigation, and habeas corpus petitions. “Employment Discrimination” included Title VII, ADA, ADEA, and other like claims against

383. These acronyms stand for decisions based on the In Forma Pauperis statute, 28 U.S.C. § 1915A, or the Prisoner Litigation Reform Act, Pub. L. No. 104-134, both of which permit sua sponte dismissal of claims for failure to state a claim upon which relief can be granted. 384. See, e.g., Stephen J. Choi & G. Mitu Gulati, Bias in Judicial Decisions: A Window into the Behavior of Judges, 37 J. Legal Stud. 87, 94 (2008).

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private defendants. “Tort” included intentional torts, medical malpractice, negligence, FTCA, and other common-law and statutory torts. “Contract” included breach of contract, breach of implied warranties, indemnification, and other similar kinds of contract or quasi-contract claims. “IP” included statutory and common-law claims commonly associated with intellectual-property disputes. “Other” included all other claims, including antitrust, ERISA, RICO, and environmental statutes. Fifth, I included as “dismissed” claims that were found insufficiently pleaded but that were technically not dismissed because the court stayed its decision to permit repleading or because the finding was contained in a report and recommendation by a magistrate without a corresponding adoption of the finding by a district judge. Sixth, I coded rationale as “Fact” if the court determined that the complaint was factually sufficient or insufficient, “Law” if the court determined that the complaint was legally sufficient or insufficient, and “Both” if the court decided both bases. Seventh, I did not code for the presence of an amended complaint. I acknowledge this failure as a potential weakness in my study because the FJC recently has concluded that the presence of an amended complaint is correlative with grant rates.385 My explanations are that it may have been difficult to discern whether an amended complaint had been filed from the Westlaw data that I had, and that the FJC made its findings public only after I had completed the coding of my data. I leave it to others to determine how much this weakness affects my findings. My results show an overall increase in the dismissal rate of all claims from 73.3 percent pre-Twombly to 77.2 percent post-Iqbal. This increase, though only a 4 percent increase, was significant to the 99 percent confidence interval using a two-tailed test. The overall dismissal rate in each category increased after Iqbal, in most cases significantly. Table 3.1 sets out the data results for all claims using a two-tailed test, where significance is measured at 90 percent by *, 95 percent by **, and 99 percent by ***. Importantly, the statistical significance of the “All claims” differential in Table 3.1 holds up using a multivariate probit regression analysis controlling for all other variables (dummies used for Other Claim, Democratic Judge, Eleventh Circuit, Represented, Not PLRA, and Unpublished; Z = 2.96, statistically significant to the 99 percent confidence interval). This adds to the robustness of the two-tailed tests above, suggesting that the significance of the

385. Cecil et al., supra note 362, at 15, 29.

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Table 3.1 Overall Dismissal Rate (as a function of motions)

All claims Published opinions Unpublished opinions IFP/PLRA Non-IFP/PLRA Pro se Represented

Pre-Twombly

Post-Iqbal

Z Value

73.3% 65.8% 75.0% 76.6% 72.0% 81.0% 65.2%

77.2% 74.5% 77.8% 86.8% 73.5% 86.8% 67.0%

2.77*** 2.48** 1.88* 4.35*** 0.86 3.50*** 1.74*

differences in overall dismissal rates of all claims pre-Twombly and post-Iqbal are not due to changes in the distributions of types of cases, litigants, or judges. These results add confirmatory support to other studies, which have found single-digit but significant increases in the overall dismissal rate of cases after Iqbal. These results also suggest that studies finding non-significant increases just didn’t have enough data points to generate significance. The data now appear to overwhelmingly support the conclusion that New Pleading is affecting the dismissal rate of claims and cases in federal court. My results also lead to several observations. First, the dismissal rate pre-Twombly was already shockingly high at 73 percent of all claims, and no category revealed dismissal rates lower than 65 percent. There is some selective effect because these rates are based upon motions filed, so the rate is a percentage of motions rather than cases, but the figure seriously undermines the argument that motions to dismiss under the old Conley standard had no teeth. It also is consistent with other studies of pre-Twombly dismissal rates, such as an IAALS study that found more than 70 percent of all Rule 12 motions to be granted at least in part.386 The IAALS concluded, “contrary to some post-Twombly pronouncements that Rule 12(b)(6) had been in a sleepy state of relative disuse before the Supreme Court’s ruling, the data here suggest that motions to dismiss were in fact well-used by attorneys, and frequently granted by the district courts, in the pre-Twombly era.”387 My results lend confirmatory weight to this suggestion.

386. Civil Case Processing in the Federal District Courts: A 21st Century Analysis 47–48 (IAALS 2009). 387. Id. at 47–48.

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Second, the data suggest that prisoner and pauperis litigation, as well as pro se complainants, are highly correlative with dismissal-rate increases. Including these categories makes my study more representative than other studies that exclude them. One might suppose that these cases would drive the results in the other direction, away from dismissals, because IFP/PLRA complaints are screened under sua sponte review provisions,388 often without adversarial input from the defendant. Pro se cases, for their part, are traditionally afforded leniency in pleading sufficiency.389 These factors might lead one to surmise that dismissal rates in these cases ought to be lower than other cases. But my data reveal instead that these cases exhibit relatively high dismissal rates even before Twombly and strongly significant increases after Iqbal. These results could be explained by the meaningful assistance that attorneys provide in drafting complaints, or perhaps by the absence of meaningful attorney-selection mechanisms at the filing stages. Regardless of the explanation, the data strongly suggest that any study of New Pleading’s effects that does not include such cases is incomplete. Third, the data speak to the distinction between published and unpublished cases. Some have cautioned against relying on published cases alone because of the possibility of selection bias in the judge’s decision to publish a case and because unpublished opinions make up a large volume of cases that might go unstudied.390 On dismissal rates, the conventional suspicion is that denials of motions to dismiss are more likely to go unpublished than grants because denials are unappealable (in most cases) and thus less likely to be reduced to a written opinion.391 My data suggest that the publication status of the case is less important for dismissal-rate studies of New Pleading than these general criticisms would caution. I found the dismissal rate of unpublished opinions to be higher than that of published opinions, undermining one of the prime rationales for questioning reliance on published cases alone. True, the increase in dismissal rate after Iqbal was less significant in unpublished opinions than in published

388. 28 U.S.C. §§ 1915A(b)(1), 1997e(c)(1) 389. Erickson v. Pardus, 551 U.S. 89 (2007). 390. Stephen B. Burbank, Vanishing Trials and Summary Judgment in Federal Civil Cases: Drifting Toward Bethlehem or Gomorrah?, 1 J. Empirical Legal Stud. 591, 604 (2004); Kevin M. Clermont & Theodore Eisenberg, CAFA Judicata: A Tale of Waste and Politics, 156 U. Pa. L. Rev. 1553, 1558–60 (2008); see also Brian N. Lizotte, Publish or Perish: The Electronic Availability of Summary Judgments by Eight District Courts, 2007 Wis. L. Rev. 107, 130 (showing a selection bias in publication of summary-judgment opinions). 391. Cecil et al., supra note 362, at 2.

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opinions, but it was still independently significant at the 90 percent confidence interval, and the probit analysis suggests that any temporal variation in the publication status did not affect the overall dismissal rates. My results therefore lend some support to other studies that rely on published decisions alone.392 These published/unpublished results might have rational explanations. Let’s assume that judges ordinarily do not publish denials of motions to dismiss because they often neither are appealable nor present novel questions of law. Under the Conley regime, then, one might expect only a small percentage of denials to be published. In the wake of Twombly and Iqbal, however, a far greater percentage of denials would be published because Twombly and Iqbal were new, important, and potentially unclear cases, and thus motions to dismiss were more likely to present novel questions of law. Relying only on published cases, then, potentially overestimates the grant rate under Conley and reduces the differential in dismissal rates. Alternatively, if dismissals of pro se cases are disproportionately more likely to generate unpublished opinions, yet pro se cases also are disproportionately more likely to show increased rates of dismissal after Iqbal, then studying only published opinions is likely to understate the effects of Twiqbal on dismissal rates.393 My data indicate that studies capturing only published decisions, and studies excluding pro se claims, are likely to understate the effects of Twiqbal. The most accurate study will capture both published and unpublished, and both pro se and represented, lawsuits. A related selection issue is Westlaw capture. My set of unpublished decisions reflects only those that Westlaw captured. Westlaw captures some, but not all, unpublished opinions that are issued, and the rate of capture varies widely by district.394 It has been reported that Westlaw includes every opinion it can find unless asked specifically not to.395 It does not seem to me

392. It is worth noting that many commentators have defended the utility of published-only studies despite their potential for underrepresentation. See, e.g., Clermont & Eisenberg, supra note 390, at 1560; Theodore Eisenberg & Geoffrey Miller, The Role of Opt-Outs and Objectors in Class Action Litigation: Theoretical and Empirical Issues, 57 Vand. L. Rev. 1529, 1542 n.59 (2004); Theodore Eisenberg & Sheri Lynn Johnson, The Effects of Intent: Do We Know How Legal Standards Work?, 76 Cornell L. Rev. 1151, 1195 (1991). 393. One researcher found nearly identical dismissal-rate increases among Westlaw-only and PACER datasets when filtered for represented parties. See Patricia Hatamyar, Thoughts on the Federal Judiciary Committee’s Study of 12(b)(6) Motions After Iqbal, Civil Procedure & Federal Courts Blog (July 11, 2011), available at http://lawprofessors.typepad.com/civpro/2011/07/ thoughts-on-the-federal-judiciary-committees-study-of-12b6-motions-after-iqbal.html. 394. Cecil et al., supra note 362, at 37 n.47. 395. Cecil, supra note 369, at 27.

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that this selection criterion is biased against capturing unpublished denials. Accordingly, absent some evidence of a selection bias in Westlaw capture, my data strongly suggest that Iqbal affects dismissal rates across the publication divide. In addition to coding by claim instead of by case, a primary innovation of my study is its coding of the rationale of the opinion. New Pleading, after all, was supposed to affect only factual sufficiency, not legal sufficiency. Segregating the grounds out could provide better clues as to how New Pleading is affecting dismissals. Segregation reveals both predictable and surprising results. The factualinsufficiency dismissal rate, as a percentage of dismissals, has increased in all categories of cases, and significantly so in most. This result is predictable. Based on New Pleading, which gave new authority for courts to dismiss more readily for factual insufficiency, one might expect to see factual-insufficiency reasons consume a greater percentage of dismissals overall. The data confirm this supposition. Table 3.2 sets out the data. Table 3.2 Factual-Insufficiency Dismissal Rate (as a function of dismissals)

All claims Published opinions Unpublished opinions IFP/PLRA Non-IFP/PLRA Pro se Represented

Pre-Twombly

Post-Iqbal

Z Value

34.5% 30.0% 35.4% 48.6% 28.2% 41.5% 25.4%

47.9% 40.2% 49.6% 50.4% 46.8% 50.1% 44.9%

7.33*** 2.27** 7.09*** 0.48 8.57*** 3.51*** 7.15***

These data show that courts are using factual insufficiency more often as a justification for dismissals than before Twombly. The increases in the proportion of factual-insufficiency dismissals is fairly stark, highly significant and in double digits for most categories. The fairly uncontroversial conclusion is that courts are taking Twombly and Iqbal to heart. Predictably, the rate of dismissal for factual insufficiency as a function of all motions has also increased after Iqbal. Table 3.3 sets out those data below. In other words, for any given claim, the likelihood that the claim will be dismissed for factual insufficiency is higher after Iqbal. This is true, and highly significant (using a two-tailed test, where significance is measured at 95 percent by ** and 99 percent by ***) for all categories of claims.

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Table 3.3 Fact-Based Dismissal Rate (as a function of motions)

All claims Published opinions Unpublished opinions IFP/PLRA Non-IFP/PLRA Pro se Represented

Pre-Twombly

Post-Iqbal

Z Value

25.3% 19.8% 26.5% 37.2% 20.3% 33.6% 16.6%

37.0% 33.5% 38.6% 43.8% 34.4% 43.5% 30.1%

7.84*** 3.96*** 7.27*** 2.17** 8.27*** 4.53*** 6.88***

What may be surprising about these data is that there are any pre-Twombly dismissals for factual insufficiency. Clearly, Rick Marcus and Chris Fairman were right: Even before Twombly, lower courts were holding a significant number of claims to a pleading standard not recognized (and arguably disavowed) by the Supreme Court.396 Also potentially surprisingly, the rate of dismissal for legal insufficiency as a function of motions has decreased after Iqbal for most categories. Table 3.4 provides data on these changes using a two-tailed test, where *** represents significance at the 99 percent confidence interval: Table 3.4 Law-Based Dismissal Rate (as a function of motions)

All claims Published opinions Unpublished opinions IFP/PLRA Non-IFP/PLRA Pro se Represented

Pre-Twombly

Post-Iqbal

50.2% 49.6% 50.3% 45.1% 52.3% 45.5% 56.1%

43.2% 46.4% 42.4% 46.1% 42.1% 45.9% 39.4%

Z Value –4.33*** –0.77 –4.40*** 0.28 –5.35*** 0.12 –7.27***

396. Christopher M. Fairman, The Myth of Notice Pleading, 45 Ariz. L. Rev. 987 (2003); Christopher M. Fairman, Heightened Pleading, 81 Tex. L. Rev. 551 (2002); Richard L. Marcus, The Puzzling Persistence of Pleading Practice, 76 Tex. L. Rev. 1749, 1755–56 (1998); Richard L. Marcus, The Revival of Fact Pleading Under the Federal Rules of Civil Procedure, 86 Colum. L. Rev. 433 (1986).

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Importantly, the statistical significance of the “All claims” differentials in Tables 3.3 and 3.4 remains significant to the 99 percent confidence interval using a multivariate probit regression analysis controlling for all other variables (dummies used for Other Claim, Democratic Judge, Eleventh Circuit, Represented, Not PLRA, and Unpublished, Z = 5.36 and -6.25, respectively). These results lead to several conclusions. First, they confirm the strength of the effect of New Pleading on factual-sufficiency issues. Factual-insufficiency dismissal rates increased significantly overall (more than 11 percent) and in every category, with one of the largest increases (13.5 percent) in cases in which the plaintiff was represented by an attorney. Second, the data show high pre-Twombly dismissal rates. More than half of all claims (a figure that holds fairly steady across categories) were dismissed for legal insufficiency even before Twombly. An additional 25 percent were dismissed for factual insufficiency. (The totals exceed Table 3.1’s overall pre-Twombly dismissal rate because a few claims were dismissed on both law and fact and so were counted in both Table 3.3 and Table 3.4.) These are surprisingly large percentages, again undermining the ubiquitous mantra that pre-Twombly dismissal law was ineffective. The takeaway is that defendants fared extremely well under Old Pleading (though one might question whether lower courts were applying the proper legal standard). Third, the data seem to show a shift in the dismissal rationale from legal insufficiency to factual insufficiency. I can offer three explanations, all of which may in fact be at play here. One is that claims dismissed for legal insufficiency under Old Pleading are still being dismissed for legal insufficiency under New Pleading, but because of an increased incidence of motions filed under New Pleading, and because most of the grants under those new motions would result in dismissals for factual insufficiency, the legal-insufficiency percentage as a function of motions appears to decline. Another likely explanation for this is that movants are relying more heavily on factual-sufficiency challenges for their dismissal motions.397 This makes some sense. If legal insufficiency is perceived as a weak argument, and factual insufficiency a stronger, then movants are more likely to rely and focus on factual insufficiency. In effect, New Pleading has changed the cost-benefit calculus of making factual-insufficiency arguments. A third possible explanation is that some courts were, pre-Twombly, stretching the legal-insufficiency standard to reach

397. See Scott Dodson, Pleading Standards After Bell Atlantic Corp. v. Twombly, 93 Va. L. Rev. In Brief 135, 142 (2007) (predicting this effect).

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certain claims, perhaps questionably so, and that New Pleading now gives those courts cover to do lawfully what they had been trying to do under Old Pleading.398 In other words, New Pleading may be legitimizing a practice by some district judges to dismiss claims that, while not technically legally insufficient, struck the judge as so doubtful or unlikely that the judge thought justice might be served by dismissing them. These explanations probably help explain the data on “represented” claims, whose law-based dismissal rate plummeted but whose fact-based dismissal rate shot up. If one assumes that attorneys generally do not file claims that are clearly legally insufficient on their face, then these data make some sense. The high dismissal rate for legal insufficiency pre-Twombly might be explained by two types of claims: (1) claims in which lawyers are pushing novel interpretations of the law, such that a decision on a motion to dismiss that determines what the law reaches is appropriate; and (2) claims that clearly meet the legal sufficiency standard but strike a sensible judge as so highly unlikely on the merits that the judge believes dismissing them is in the interests of justice. New Pleading affects both types of claims. The first type may involve very difficult questions of law; many claims of this type might be more easily dismissed for factual insufficiency under New Pleading. The second type was of questionable dismissibility under Old Pleading, but New Pleading offers lawful justification. In either case, one could expect some claims dismissed as legally insufficient before Twombly to be more readily dismissed as factually insufficient after Iqbal. More study is necessary to bear this supposition out. The more general story here is that factual-insufficiency dismissals are up and dismissals overall are up. The overall increase is modest—only a single digit—but statistically significant. The increase appears to be highly correlated with unrepresented parties, prisoner complainants, and civil-rights plaintiffs.

Post-Iqbal Study of Defendant-Selection Effects—Gelbach The choice to file a motion in the first place is an event that affects dismissal rates (as a function of cases). In other words, if New Pleading causes an increase in the percentage of cases in which the defendant files a motion, and if at least some of the motions in those cases are granted, then New Pleading has increased the dismissal rate as a function of cases filed, even if the dismissal rate as a function of motions filed remains steady or even decreases. Defendant selection in the choice to file a motion in the first instance, then, can augment New Pleading’s screening effect. None of the previous studies has taken this defendant selection into account. 398. See Marc Moller, Procedure’s Ambiguity, 86 Ind. L.J. 645, 667 (2011).

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Jonah Gelbach, however, has published a study, using the FJC study’s published data, measuring the effect of New Pleading with defendant selection taken into account.399 He calculated the effect as causing at least 15 percent of cases to be dismissed under New Pleading that would not have been dismissed under Old Pleading, primarily because the defendant-selection effect increased the rate of motions filed. The screening effect is statistically significant overall and with respect to specific types of cases, including employment-discrimination and civil-rights cases. His study suggests that studies of dismissal rates as a function of motions filed (such as my own), which do not account for defendant selection, significantly underreport the screening effect of New Pleading at the motion stage.400 Gelbach does make a number of simplifying assumptions that clearly do not reflect reality in most cases: that each case involves a single plaintiff and a single defendant, that each case involves a single claim, that Rule 12(b)(6) is the only type of MTD that can be filed, and that when MTDs are granted, they are always granted without leave to amend.401 Still, his study tends to suggest that the defendant-selection effect is an important factor exacerbating New Pleading’s screening effect.

Post-Iqbal Study of Merit—Reinert None of the studies above says anything about the merit of the claims or cases being dismissed. Twombly was premised on the assumption that New Pleading would screen out only meritless claims. Iqbal was premised on a similar, though less absolutist, assumption. It is possible that any increase in dismissal rates attributable to New Pleading affected only meritless claims. If New Pleading is working as intended in sifting out only meritless cases, then any increase in the dismissal rate helps justify New Pleading as an overall social good in terminating such false negatives early in the litigation process before the parties and court incur substantial litigation costs. Alex Reinert tackled this question by studying circuit reversals of dismissals from the pre-Twombly years of 1990–1999, determining which circuit decisions would have been affirmances under Twombly and Iqbal, and then following those cases on remand to determine their ultimate outcome on the

399. Jonah B. Gelbach, Note, Locking the Doors to Discovery? Assessing the Effects of Twombly and Iqbal on Access to Discovery, 121 Yale L.J. 2270 (2012). 400. Id. at 2330–32. 401. Id. at 2296.

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merits.402 He defined as meritorious any settlement, stipulated dismissal, or judgment for the plaintiff. He found that more than 55 percent of the cases that would have been dismissed under New Pleading standards ultimately were successful.403 This success rate reflected only non-significant differences in the success rate of his control group of cases from the same era that would have survived the New Pleading standard. Thus, Reinert concluded that pleadings filed under a notice pleading standard that would not survive a Twiqbal motion to dismiss are just as likely to be successful as those that would. New Pleading’s screening mechanism, in other words, has almost nothing to do with the merits of the case, and, indeed, that screening mechanism captures meritorious cases more than half the time.404 Reinert also found that the success rate of civil-rights claims jumped significantly based on whether the plaintiff was represented or was pro se.405 Reinert does not measure the effect of plaintiff selection—that had some plaintiffs faced a New Pleading regime, they would have added more factual content to their complaints and thus filed a complaint that would have survived a motion to dismiss. Such plaintiff selection likely reduces the screening effect that Reinert found. However, as Janssen concluded, some plaintiffs likely would not have been able to add the necessary factual content. Reinert’s study thus provides evidence—so far unrebutted—that New Pleading screens significant numbers of meritorious cases at the dismissal stage.

New Pleading’s Screening Effect on Filings None of the above studies tested the effect of New Pleading on discouraging the initial filing of lawsuits or what the merit of those unfiled lawsuits might be. New Pleading thus has two separate screening mechanisms. One is the new dismissal standard imposed on complaints that are filed. The studies above attempt to assess this screen. But an earlier screening mechanism is the increased threat of dismissal that prospective plaintiffs face. Some of these prospective plaintiffs no doubt will not file at all in the face of that increased

402. Alexander A. Reinert, The Costs of Heightened Pleading, 86 Ind. L.J. 119, 134 (2011). 403. Id. at 137–39, 145. Nearly all of the successes were from settlements or stipulated dismissals. Id. at 145. Three resulted in judgments for the plaintiff. Id. at 154. 404. Id. at 149–50, 161. 405. Id. at 146–48. This is consistent with other students showing a correlation between representation and success. See, e.g., Theodore Eisenberg & Stewart J. Schwab, The Reality of Constitutional Tort Litigation, 72 Cornell L. Rev. 641, 681 (1987).

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threat.406 Thus, New Pleading imposes an antecedent screening mechanism on the decision to file a complaint in the first instance. No study has tested the screening effect of New Pleading at the filing stage, but there are two points of reference that may be useful. The first is the general civil-filing data collected by the Statistics Division of the Administrative Office of the U.S. Courts. These data are not compiled with New Pleading in mind, but they do provide additional probative evidence of its effects. The AO data show that overall civil filings fluctuated around 265,000 new filings from 2002–2007. The year after Twombly saw a drop in new filings from 272,067 in 2007 to 256,354 in 2008. However, that figure increased each year, with a jump in 2010 to 285,215 new civil filings.407 Overall, the number of new civil filings has increased 16.7 percent from 2006 to 2010.408 Chart 3A shows the trend over time. chart 3 a New Federal Civil Filings Annually 2002–2010 290,000 280,000 270,000 260,000 250,000

Civil Filings

240,000 230,000 220,000 2002 2004 2005 2006 2007 2008 2009 2010

Interestingly, new civil antitrust filings spiked in 2008, the year after Twombly, but steadily decreased to 2010, their lowest level since 2003. New RICO cases, however, which are often conspiracy based, have steadily increased after Twombly to pre-Twombly levels in 2010. Chart 3B graphically sets out these trends.

406. Robert G. Bone, The Economics of Civil Procedure 148 (2003). 407. These statistics come from Statistics Division, Administrative Office of the United States Courts, Statistical Tables for the Federal Judiciary (June 30, 2006, 2008, 2010). 408. Statistics Division, Administrative Office of the United States Courts, Statistical Tables for the Federal Judiciary 6 (June 30, 2010). This statistic is supported by the FJC study, which found that civil case filings in 23 popular district courts increased by 7 percent from 2006– 2010. Cecil et al., supra note 362, at 21.

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chart 3 b New Federal Civil Filings in SEC, Antitrust, and RICO Cases Annually 2005–2010 2,500 2,000 1,500

SEC Filings Antitrust Filings

1,000

RICO Filings 500 0

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2006

2007

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Similarly, new civil-rights cases have steadily increased after Twombly to pre-Twombly levels in 2010, as Chart 3C depicts.409 chart 3 c New Civil-Rights Filings Annually 2005–2010 39,000 38,000 37,000 36,000 35,000 34,000 33,000 32,000 31,000 30,000 29,000 28,000

New Civil-Rights Filings

2005

2006

2007

2008

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2010

Thus, with the possible exception of antitrust cases, these data do not support the theory that New Pleading is discouraging new civil filings. Because of the generalized nature of these data, however, we should be cautious in interpreting it with an eye toward New Pleading; if New Pleading is having a small effect relative to the overall numbers of new claims being filed, then other noise in the data would tend to mask the screening effect of New Pleading. Or, perhaps plaintiffs are filing the same number of cases but are not filing the same number of claims; in other words, the filing screen affects individual 409. These statistics come from Statistics Division, Administrative Office of the United States Courts, Statistical Tables for the Federal Judiciary (June 30, 2006, 2008, 2010).

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claims more than whole cases. There is some survey evidence that this is happening.410 The most that can be concluded from the AO’s general civil-filing data is that New Pleading does not seem to be discouraging new filings dramatically enough to be noticeable using general filing data. In theory (and design), however, New Pleading should have some screening effect at the filing stage. Parties generally bear their own costs, so plaintiffs who fear dismissals more under New Pleading should be more hesitant to file a complaint under the new standard. Similarly, attorneys fearing dismissals should be more likely to shy away from borderline or uncertain cases. There is some survey evidence that plaintiff’s attorneys are screening cases with New Pleading in mind.411 Empirical studies, such as one by Kevin Clermont and Stewart Schwab, have shown that lowered prospects of success in employment-discrimination cases have depressed their filing numbers over time.412 It would be sensible to predict that some cases, such as those studied by Reinert and Janssen, would never have been filed under a New Pleading regime. No studies of this screening effect of New Pleading exist, but, analogously, Stephen Choi and others have published a study that tested the screening effect of the PSLRA’s heightened-pleading standard on securities class-action lawsuits.413 They found a statistically significant screening effect on the filing of meritorious claims (claims that would be settled for non-nuisance value) and no statistically significant effect on the filing of meritless claims (claims that would be dismissed or worth only a nuisance settlement). The screening effect of the PSLRA on meritorious claims was strongest when the claimants lacked “hard evidence” of fraud (such as a public announcement of an accounting restatement or an SEC investigation or enforcement action), suggesting that information asymmetry plays a significant role in discouraging lawsuits.414 The screening effect on meritorious claims was significant up to a $6-million-settlement threshold.415 Thus, this study suggests that the PSLRA’s heightened-pleading standard’s screening effect on claim filings affects meritorious claims but, paradoxically, not meritless claims. One should exercise caution in extrapolating these findings to the New Pleading context. The PSLRA’s heightened-pleading standard is not identical 410. Emery G. Lee III, Early Stages of Litigation Attorney Survey 16 (Fed. Judicial Ctr. 2012). 411. Id. at 16. 412. See generally Clermont & Schwab, supra note 342 (documenting the low success rate of employment discrimination claims and their decreasing rate of filings). 413. Stephen J. Choi et al., The Screening Effect of the Private Securities Litigation Reform Act, 6 J. Empirical L. Stud. 35 (2009). 414. Id. at 37, 43. 415. Id. at 42, 59–61 & n.23.

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to Twombly’s and Iqbal’s, and the securities class-action context is a niche industry that may not be representative of more generalized Rule 8 lawsuits. Much more work should be done, if it can be, on the filing-screening effect of New Pleading. Still, given the data that exist and the theory that appears to support it, one can tentatively say that New Pleading likely has some screening effect at the filing stage, and there is reason to suspect that the screen is affecting at least some meritorious cases.

Some Thoughts on the Screening Data The data above tend to support the theory that New Pleading is having a variety of effects on lawsuit dismissals. My data tend to show that legal-insufficiency dismissals are down, but factual-insufficiency dismissals are up. This result has implications for both access concerns and cost concerns, which I will address in more detail below. Overall, I find a small net increase in dismissal rates that is supported by every study performed to date, though not all studies have found statistical significance. The dismissal-rate increases found by the studies to date likely underreport the screening effect of New Pleading at the motion stage because motions to dismiss are being filed at a greater rate. Based on an inflated denominator of motions filed, one might expect the dismissal rate to decrease because of the increased number of doubtful motions filed. This result especially ought to be true if Twiqbal has little effect on the substantive pleading standard. The evidence of an increased dismissal rate despite the corresponding increase of motions filed suggests that Twiqbal is having an effect on dismissal rates that is even greater than existing studies tend to show.416 This supposition seems confirmed by Gelbach’s study showing that dismissal-rate studies comparing rates as a function of motions tend to underreport rate increases by at least 14 percent because they do not take into account the increased number of motions filed after Iqbal. Another consideration is the potential screening effect on filings that Choi and others have identified in other pleading contexts. One might think that a raised pleading standard should have its most significant impact at the filing stage—screening out meritless lawsuits before they are even filed—while leaving the dismissal stage relatively unchanged or, perhaps, even decrease the dismissal rate because the filing screen has already screened out many meritless claims that otherwise would have inflated the dismissal rate. In other words, a heavy discouragement to filing might cause plaintiffs and their lawyers to be choosier about the cases they file, ultimately increasing 416. See Clermont, supra note 338, at 1367 n.140.

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the proportion of meritorious cases filed, thereby reducing the dismissal rate of those cases. This relationship between the filing screen and the dismissal screen is not perfect; in some respects, the two screens affect different aspects of the case (with the filing screen affecting perception of merit or leverage and the dismissal screen affecting the sufficiency of the allegations). But, in the abstract, one might expect the two screens to be inversely related. The data, however, suggest that the screens imposed by New Pleading are having symmetric effects at both stages, with each stage screening out meritorious claims. Only two studies to date—Choi et al. and Reinert—tend to support this conclusion, and so one must be cautious in relying too heavily on them. But no study to date has offered any contraindications. If these two existing studies do accurately depict New Pleading, then New Pleading seems to be having the unintended, pernicious effect of screening out meritorious claims at an increased rate at both the filing and the dismissal stages.

Explaining New Pleading’s Screening Effects on Meritorious Cases As the studies described above show, New Pleading likely is screening out some meritorious cases that would have prevailed under Old Pleading. One might justifiably ask how this could be. If plaintiffs have meritorious claims, why wouldn’t they then just plead them in a way that meets the New Pleading standard? There are at least four potential reasons. First, some plaintiffs with meritorious claims may not be aware of them. The lay public is generally uneducated in the details of the substantive law and may simply be unaware that a legal claim exists for a given set of circumstances. This possibility is relevant to a later discussion in chapter 4, but here I will point out that plaintiff awareness of a substantive claim generally does not depend upon the particular pleading standard that attaches to it. Generally, then, New Pleading ought not impose a heavy screen on cases left unfiled because of plaintiff ignorance. Exceptions to this general rule might include cases that are primarily lawyer-driven, in which lawyers with an incentive to seek out claims bolster plaintiff awareness of claims (such as the kinds of TV commercials one sees for pharmaceutical-liability or asbestos-liability claims, or possibly small-value consumer class-action cases that go unnoticed by most plaintiffs until a class-action notice arrives in the mail). These exceptional cases might be affected by a change in pleading standards if the lawyers who generally handle such cases are discouraged by the change from pursuing the cases, thereby reducing overall plaintiff awareness of such cases.

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Second, some plaintiffs may be aware of or strongly suspect they have a meritorious claim but make a conscious, nonlegal decision not to pursue it, perhaps because of the stigma of filing a lawsuit.417 As long as the decision is independent of the applicable pleading standards, then New Pleading ought not have an appreciable impact on this class of cases, either. Third, some plaintiffs with meritorious claims may be able to file successful complaints but instead file deficient complaints. The reasons for doing so are numerous. Perhaps the plaintiff’s lawyer is just not very good. Perhaps the plaintiff miscalculates how the particular judge will apply his “judicial experience and common sense.”418 Perhaps the plaintiff is pro se and simply fails to appreciate the technical nuances of pleading rules. Fourth, some plaintiffs with meritorious cases cannot reasonably meet the new pleading standard. In this kind of case, called an information-asymmetry case, the plaintiff believes she has a claim and wants to file a lawsuit but simply does not have sufficient facts in her possession to be able to meet the New Pleading standard and cannot obtain the facts without unreasonable expense (perhaps because presuit investigation is prohibitively expensive in light of the expected value of the case) or without formal discovery (because the critical information is in the hands of the defendant). These cases are of the type that Janssen discovered in his study (assuming they were meritorious) and that amounted to approximately 8 percent of the cases in his dataset. This fourth kind of case deserves additional discussion.

Information-Asymmetry Cases “Litigation depends on information,” Graham Hughes once cogently declared,419 and New Pleading embraces that mantra by requiring the plaintiff to plead facts plausibly suggesting wrongdoing. But a wrongdoer will not usually broadcast his own wrongdoing. Cases depending upon information

417. Studies have shown that the overwhelming percentage of claimants suffering an actionable injury never file suit. See Harvard Medical Practice Study, Patients, Doctors, and Lawyers: Medial Injury, Malpractice Litigation and Patient Compensation in New York (1990) (estimating that lawsuits were filed in only about 1 of every 7 actionable injuries); Patricia M. Danzon, Medical Malpractice: Theory, Evidence, and Public Policy 24 (1985) (estimating 1 in 10); David M. Trubek, et al., The Costs of Ordinary Litigation, 31 UCLA L. Rev. 72, 86–87 (1983) (same). 418. As others have noted, this standard gives district courts very broad discretion. See Liptak, supra note 337, at A10. 419. Graham Hughes, Administrative Subpoenas and the Grand Jury: Converging Streams of Criminal and Civil Compulsory Process, 47 Vand. L. Rev. 573, 574 (1994).

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unilaterally held by wrongdoers, such as conspiratorial agreements or states of mind, theoretically will suffer under New Pleading because the plaintiff will lack ready access to such secretive information.420 As one leading antitrust scholar has explained, Naked market-division conspiracies must be kept secret by the parties to the agreement because antitrust enforcers will prosecute them when they are detected—potentially producing criminal liability. This inherent secrecy, which the Twombly opinion did not discuss, has dire consequences for plaintiffs under a standard that requires them to plead all essential facts with specificity.421 Another scholar has written similarly: Plaintiffs will often have much less information about possible liability than defendants. To situate that in antitrust, plaintiffs are rarely invited to the proverbial smoke-filled rooms in which price-fixing conspiracies are hatched. The best price-fixing conspiracies will be those in which the least is known publicly. This information asymmetry poses a dilemma if we intend to rely on private enforcement of antitrust statutes. . . . [T]he alternative to these fishing expeditions seems to be to allow some defendants to get away with antitrust violations or to hope that the government will target these conspiracies.422 The same problem inheres in discrimination cases, in which the state of mind of the defendant is a crucial fact. Michael Kaufman and Joan Wunderlich have asserted: “Direct evidence of a defendant’s mental state is rare because it is usually limited to an actual admission by the defendant under oath or the

420. Robert G. Bone, Plausibility Pleading Revisited and Revised: A Comment on Ashcroft v. Iqbal, 85 Notre Dame L. Rev. 849, 873–74 (2010); Suzette M. Malveaux, Front Loading and Heavy Lifting: How Pre-Dismissal Discovery can Address the Detrimental Effect of Iqbal on Civil Rights Cases, 14 Lewis & Clark L. Rev. 65, 107 (2010); Arthur R. Miller, From Conley to Twombly to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke L.J. 1, 45 (2010). 421. Herbert Hovenkamp, The Pleading Problem in Antitrust and Beyond, 95 Iowa L. Rev. Bull. 55, 58 (2010); see also Randal C. Picker, Twombly, Leegin, and the Reshaping of Antitrust, 2007 Sup. Ct. Rev. 161, 164 (“Twombly will shrink substantially the ability of antitrust plaintiffs to file a complaint and find conspiracies through discovery.”). 422. Picker, supra note 421, at 164–65.

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testimony of a witness based upon personal knowledge.”423 Most evidence of discrimination usually is not available to the plaintiff until discovery.424 The Federal Rules themselves recognize the difficulty of pleading state of mind, confirming in Rule 9 that such allegations may be stated “generally.”425 Because available factual information at the pleading stage often supports both lawful and unlawful intent, plaintiffs usually plead discriminatory motive in a conclusory fashion.426 After Iqbal, such conclusory pleading will lead to dismissal. Of course, not every secretive-conduct or state-of-mind case will fail New Pleading. Fortunate plaintiffs may possess direct evidence of the conduct or motive,427 but such fortune is, as the Supreme Court has acknowledged, highly unusual.428 Absent direct evidence, plaintiffs must proceed on the basis of circumstantial evidence, but even circumstantial evidence can be hard to come by. Discrimination in hiring and promotion, for example, depends upon a comparison with similar-situated applicants, and that information is likely to be unavailable to the complainant without discovery.429 The celebrated case Ledbetter v. Goodyear Tire & Rubber Co.,430 which upheld a limitations defense to an Equal Pay Act claim, is a concrete illustration. There, the plaintiff did not know that she was paid disparately less because she was not privy to other employees’ pay rates, which were kept confidential by the company.431 Thus, even crucial circumstantial evidence can be difficult to obtain. In other cases, information asymmetry may be harmless because the non-secretive facts themselves plausibly suggest wrongdoing. But for most conspiracy and state-of-mind cases, the information available to the plaintiff is usually consistent with both lawful and unlawful conduct,432 and thus the 423. See Michael J. Kaufman & Joan M. Wunderlich, The Judicial Access Barriers to Remedies for Securities Fraud, 75 L. & Contemp. Probs. 55, 56 (2012). 424. Roy L. Brooks, Conley and Twombly: A Critical Race Theory Perspective, 52 How. L.J. 31, 68–69 (2008). 425. Fed. R. Civ. P. 9(b). 426. Charles A. Sullivan, Plausibly Pleading Employment Discrimination, 52 Wm. & Mary L. Rev. 1613, 1646 (2011). 427. For one example, see al-Kidd v. Ashcroft, 580 F.3d 949 (9th Cir. 2009). 428. U.S. Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 716 (1983); Bailey v. Alabama, 219 U.S. 219, 233 (1911). 429. Miller, supra note 420, at 45–46. 430. Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct. 2162 (2007), abrogated by The Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-2, 123 Stat. 5 (2009). 431. Malveaux, supra note 420, at 91–92. 432. See id. at 68, 87–88.

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information asymmetry is a critical barrier to the plaintiff’s ability to meet the new pleading standards. Some plaintiffs may be able to remediate disadvantageous information asymmetry through their own investigative efforts.433 Technological and regulatory changes have made it easier for plaintiffs to obtain information from public securities filings, product recall notices, and FOIA requests.434 But information resources are still quite limited when it comes to secretive conduct and state of mind, and even new information-searching capabilities may be of marginal benefit if the defendant is not subject to information-disclosure requirements or regulatory oversight, or where secretive behavior is unlikely to be widely shared or known.435 As a result, many plaintiffs will be able to overcome information asymmetry only through formal discovery or through financially infeasible front-end investigative costs.436 As I have written elsewhere, this puts the plaintiff in a classic catch-22: the plaintiff needs discovery in order to obtain those facts to plead her claim properly, but she may not be able to obtain discovery without first surviving a motion to dismiss.437 In these cases, New Pleading screens for information asymmetry rather than for meritlessness.438 New Pleading assumes that a case is meritless if the plaintiff does not plead facts suggesting liability.439 That assumption may be a good one in those cases in which the plaintiff ought to be able to plead the critical facts if they exist.440 It is a bad one, however, in the information-asymmetry cases discussed above. A complaint may be devoid of such facts not because they do not exist but rather because they are being hidden by the defendant or too costly to obtain without formal discovery.441 In such a case, plausibility is a poor proxy for meritlessness and will tend to screen out some meritorious cases based on information asymmetry. As Bob Bone has written: [T]he plaintiff will not get past the pleading stage if she cannot ferret out enough facts before filing to get over the merits threshold for each 433. See Dodson, New Discovery, supra note 339, at 65. 434. Colin T. Reardon, Note, Pleading in the Information Age, 85 N.Y.U. L. Rev. 2170, 2188–90 (2010). 435. Id. at 2203–205. 436. Miller, supra note 420, at 68. 437. Dodson, New Discovery, supra note 339, at 54. 438. A. Benjamin Spencer, Understanding Pleading Doctrine, 108 Mich. L. Rev. 1, 24 (2009). 439. Bell Atl. Corp. v. Twombly, 550 U.S. 555, 559 (2007). 440. See Dodson, New Discovery, supra note 339, at 55–56. 441. See Dodson, supra note 397, at 138–39.

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element of her claim. As a result, strict pleading will screen some meritorious suits, even ones with a high probability of trial success but a probability that is not evident at the pleading stage before access to discovery.442 If New Pleading is screening some cases based on information asymmetry instead of merit, the result could help explain the data above that suggest New Pleading is screening out some meritorious cases, particularly those discrimination and civil-rights cases in which state of mind is a critical issue.443

Increased Costs of New Pleading: Motions and Pleading Practice Understandably, the focus of study to date has been on New Pleading’s screening effects. Screening is, after all, the purpose of New Pleading. And, the available data tend to support the theory that New Pleading is having a modest screening effect. The assumption is that the screening effect has a net positive economic benefit by cutting off costly meritless cases early in the litigation, before parties expend time and effort in discovery. But, to date, there have been no studies of New Pleading’s cost-saving effects. In theory, New Pleading should screen out some meritless cases and thus save some costs. Reinert’s study, for example, suggests that New Pleading might have knocked out as much as 45 percent of the meritless cases that Conley would have let in (although that figure assumes that those plaintiffs either would not or could not adjust their pleadings to conform to the New Pleading standard). But no studies have attempted to measure those savings. New Pleading is justified almost entirely on its cost-saving effects, and yet we know almost nothing about them. Balanced against those cost savings are two considerations. The first is the denial of justice to a small percentage of meritorious cases that can no longer meet New Pleading’s strictures because of information asymmetry. The second consideration is New Pleading’s generation of new costs. New

442. Bone, supra note 420, at 879. 443. For the perspective that the complaint in Hopkins v. Price Waterhouse, a famous gender discrimination case that the plaintiff ultimately won, would not have survived a motion to dismiss under New Pleading, and likely could not have been amended to survive, see Brooke D. Coleman, What If?: A Study of Seminal Cases as if Decided Under a Twombly/Iqbal Regime, 90 Or. L. Rev. 1147, 1160 (2012).

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Pleading should, in theory, spur an increase in motions and pleading practice, and these costs should be part of New Pleading’s assessment.444 Twombly and Iqbal give defendants more incentive to file dismissal motions. New Pleading adds the new weapon of plausibility to the dismissal arsenal; defendants who previously would not have wanted to spend the money to file a dismissal motion under the forgiving Conley standard may now think a motion more fruitful and thus worth the expense. After all, if the motion to dismiss is the new summary judgment in both standard and effect,445 but at a vastly reduced cost in terms of time and money, what defendant wouldn’t file a dismissal motion? Kevin Clermont has even opined that, after Iqbal, a defense lawyer “commits legal malpractice if he or she fails to move to dismiss” a minimalist complaint.446 Accordingly, the incidence of dismissal motions should increase under New Pleading.447 Available data support this theory. The Administrative Office of the U.S. Courts conducted a general study in 2010 of the filing rates of all Rule 12 motions to dismiss filed in the four months before Twombly and in the four months after Iqbal. It found a 34.4 percent motion rate pre-Twombly and a 36.2 percent motion rate post-Iqbal. This increase, while modest in absolute terms, is significant to the 99 percent confidence interval. The motion rate increased to 37 percent over the 13 months after Iqbal, also significant to the 99 percent confidence interval.448 The study does not distinguish among different types of dismissal motions, and so the size of the increase is probably depressed by the numbers of other types of dismissal motions that New Pleading does not affect, such as Rule 12 motions to dismiss based on jurisdiction, service, or venue. The FJC study described above that looked at dismissal rates also collected data on motions practice. That data showed a statistically significant (to the 99 percent confidence interval) increase in Rule 12(b)(6) motions filed, up from 4 percent pre-Twombly to 6.2 percent post-Iqbal. The significance of the increase held after controlling for overall differences in filing rates across districts and types of cases.449

444. Bone, supra note 420, at 879 n.141. 445. Suja A. Thomas, The New Summary Judgment Motion: The Motion to Dismiss Under Iqbal and Twombly, 14 Lewis & Clark L. Rev. 15, 17 & n.3 (2010). 446. Clermont & Yeazell, supra note 330, at 840. 447. Dodson, supra note 397, at 142 (suggesting that Twombly “encourages defendants to file motions to dismiss”). 448. Statistics Division, Administrative Office of the United States Courts, Motions to Dismiss: Information on Collection of Data (2010); Janssen, supra note 374, at 575 (compiling a table from the data). 449. Cecil et al,, supra note 362, at 8–10.

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In absolute terms, the percentages found by the FJC seem low, something that may be attributed to the fact that the FJC did not capture all Rule 12(b)(6) motions but rather only those that cited to certain search terms, that were coded properly by court clerks, that were in non-prisoner and non-pro-se cases, and that were filed within ninety days of the complaint.450 Timing matters because local rules or individual orders may prevent motions prior to a status conference, which could delay the filing of a motion to dismiss until after ninety days into a lawsuit.451 Other FJC studies of Rule 12(b)(6) motions have found filing rates closer to 15 percent, so it is likely that this study’s absolute percentages are underreported.452 The primary author of the FJC’s study has agreed that these limitations likely resulted in an underestimation of the motion-filing rates.453 The more important takeaway, then, is the statistically significant increase in the relative percentages of cases with a Rule 12(b)(6) motion filed, coupled with the fact that the 50 percent increase in the filing rate after Iqbal is a significant spike in the otherwise steady trend from the last several decades,454 supporting the theory that New Pleading is encouraging motion practice. These data accord with anecdotal evidence. In a survey of attorney members of the National Employment Lawyers Association, 75 percent of respondents reported responding to motions to dismiss that they believed would not have been filed before Twombly.455 Others have recognized that motions to dismiss have “become routine” across the board.456 For example, John Freedman, a partner at Arnold & Porter, was quoted as asserting, “I am more likely now to file a motion to dismiss under Rule 12(b)(6) in almost every case.”457 James Wareham, the chair of Paul Hastings’s Washington-based litigation group, reports raising Twombly and Iqbal in “nearly every securities

450. See Hoffman, supra note 366, at 12–15. 451. Cecil et al., supra note 362, at 15 (acknowledging that two large districts, EDNY and SDNY, had low filing rates because a number of those judges have procedures requiring a pre-motion conference). 452. Id. at 10 n.21. 453. Cecil, supra note 369, at 4, 10. 454. See Hoffman, supra note 366, at 4. 455. Emery G. Lee III & Thomas E. Willging, Attorney Satisfaction with the Federal Rules of Civil Procedure 11–12 (Fed. Judicial Ctr. 2010). 456. Miller, supra note 420, at 20. 457. Janet Cecelia Walthall, Iqbal, Twombly Pleading Standards Hotly Debated by Conference Panelists, 78 U.S.L.W. 2782, 2782 (2010).

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case he handles.”458 The reports are that defendants have used New Pleading with glee, even for such tactical purposes as getting one-sided discovery.459 All of these accounts suggest that New Pleading has increased the filing rate of motions to dismiss. That, in turn, surely results in more clogged dockets and pretrial delays,460 costs in drafting and responding to the motions, more appeals from granted motions, and more filings of (and motions to file) amended complaints.461 One might be tempted to opine optimistically that the incidence of a motion to dismiss increases settlement chances appreciably, but the evidence does not support that hope.462 In the end, FJC researchers are probably correct to surmise that New Pleading seems likely, “at least in the short run, to increase [rather] than decrease the costs of litigation in the broad spectrum of cases by providing incentives to file unproductive 12(b)(6) motions to dismiss.”463 New Pleading will increase costs in other ways. Even before any motion is filed, New Pleading will induce plaintiffs to provide more detail in their complaints to meet the new pleading requirements imposed by the courts. It is true that plaintiffs, particularly represented plaintiffs, have always tended to include far more information than what even notice pleading required.464 Detailed pleadings ostensibly educate the judge about the probable merits of the case and persuade the defendant of the seriousness of the allegations.465 So, even before New Pleading, good practice dictated that plaintiffs err on the side of inclusiveness. As one example, although Form 15 sets out a model claim for conversion in just 43 words, one complaint for conversion was filed at 3,000 words.466

458. Leslie A. Gordon, For Federal Plaintiffs, Twombly and Iqbal Still Present a Catch-22, A.B.A. J. (Jan. 1, 2011). 459. Clermont, supra note 338, at 1365–66. 460. One study found a mean disposition time in 2009 for Rule 12 motions of almost 130 days. Civil Case Processing, supra note 386, at 48. 461. Cecil et al., supra note 362, at 13; Arthur R. Miller, From Conley to Twombly to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke L.J. 1, 69, 89 (2010). 462. Christina L. Boyd & David A. Hoffman, Litigating Towards Settlement, 28 J. L., Econ. & Org. (June 2012). 463. Thomas E. Willging & Emery G. Lee III, In Their Words: Attorney Views About Costs and Procedures in Federal Civil Litigation 25 (Fed. Judicial Ctr. 2010). 464. See Jackson v. Marion County, 66 F.3d 151, 154 (7th Cir. 1995) (Posner, C.J.). 465. Ettie Ward, The After-Shocks of Twombly: Will We “Notice” Pleading Changes?, 82 St. John’s L. Rev. 893, 899 (2008); Am. Nurses’ Ass’n v. Illinois, 783 F.2d 716, 723–24 (7th Cir. 1986). 466. Compare Doll v. Chi. Title Ins. Co., 517 F. Supp. 2d 1273 (D. Kan 2007) (conversion claim of almost 3,000 words), with Fed. R. Civ. P. Form 15 (model conversation claim of 43 words).

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Twombly and Iqbal, though, make the Forms look plain silly, and they codify into law what formerly was just good practice. Some courts now require, in garden-variety negligence cases, fact allegations showing the manner of injury and the nature of the negligence. For assault, courts are requiring allegations of the circumstances that would induce a reasonable apprehension of bodily harm.467 One leading antitrust scholar has suggested that Twombly may require plaintiffs to engage an expert and conduct a preliminary statistical inquiry to be able to plead plus factors in order to survive a motion to dismiss in an antitrust case.468 Consequently, plaintiffs are unlikely to ignore the adjustments made by New Pleading; rather, they are likely to adjust as well. Plaintiffs who are fortunate enough to have access to sufficient facts to survive a motion to dismiss under Twombly and Iqbal will gather those facts and then plead them. In so doing, they will have to expend additional resources to obtain that information and additional attorney’s fees to ensure that their claims are sufficiently pleaded.469 In antitrust, plaintiffs may engage a pre-complaint expert and conduct a preliminary statistical inquiry to be able to survive a motion to dismiss under the New Pleading standards.470 Employment-discrimination attorneys reported in significant numbers more efforts to investigate facts prior to filing a complaint,471 and the other anecdotal evidence from business litigators rings similarly.472 Thus, New Pleading will increase even the cost of filing a meritorious complaint. Further, plaintiffs are likely to overcompensate—to continue to attempt to plead well on the safe side of New Pleading’s line (if they can). Such a strategy

467. Farash v. Continental Airlines, Inc., 337 F. App’x 7, 9–10 (2d Cir. 2009). 468. Hovenkamp, supra note 421, at 63. 469. Miller, supra note 420, at 67–68. 470. Hovenkamp, supra note 421, at 63. One recent study suggested that generalist judgments may require expert testimony to be able to make reliable rulings on motions involving specialized substantive law, such as antitrust. See Michael R. Baye & Joshua D. Wright, Is Antitrust Too Complicated for Generalist Judges? The Impact of Economic Complexity & Judicial Training on Appeals, 54 J.L. & Econ. 1 (2011). Justice Stevens has made a similar point. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 595 (2007) (Stevens, J., dissenting) (“I fear that the unfortunate result of the majority’s new pleading rule will be to invite lawyers’ debates over economic theory to conclusively resolve antitrust suits in the absence of any evidence.”). 471. See Lee & Willging, supra note 455, at 12. 472. Gordon, supra note 460 (quoting Fred Isquith, a partner at a New York plaintiff-litigation firm).

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has always been the norm, even under Code pleading.473 The result is that complaints filed under New Pleading standards are likely to be more prolix and bloated than before. As Judge Easterbrook has predicted, “[T]reating the allegations of the complaint as a statement of the party’s proof leads to windy complaints and defeats the function of Rule 8.”474 Anecdotal evidence supports this. One leading antitrust commentator has reported that “Twombly’s approach . . . in antitrust at least—has produced prolix complaints sometimes running to more than one-hundred pages.”475 Survey results of employment-discrimination attorneys reveal that a substantial majority of respondents is adding more facts to complaints as a direct result of Twombly and Iqbal.476 Other survey results indicate that plaintiff’s attorneys generally have increased their factual investigation prior to filing and have included more factual detail in complaints.477 In addition to increasing the costs of filing original complaints, New Pleading will also increase the costs of the amendment process. A New Pleading dismissal is likely to be with a right to amend because it is based on factual insufficiency, something that the plaintiff presumably could cure by repleading. Some have even suggested that the plaintiff’s liberal right to amend minimizes any impact of Twiqbal.478 A recent FJC update to its original study does tend to show that the greater availability of amendment reduces the defendant’s ultimate win rate. But allowing repleading will be of little value for a plaintiff who failed to meet the pleading standard because those cures were unattainable in the first instance, and the FJC wisely clarified that its findings “do not rule out the possibility that the pleading standards established in Twombly and Iqbal may have a greater effect in narrower categories of cases in which respondents must obtain the facts from movants in order to state a claim.”479 Indeed, repleading only holds meaning for those plaintiffs who foolishly had (or could have obtained) the necessary information to survive a motion to dismiss but

473. C.E.C., Comment, Pleading Negligence, 32 Yale L.J. 483, 487 (1923) (“[I]t is but to be expected that lawyers, following the legal axiom of safety first, will see that their complaints are specific beyond question, and hence we have the intricate, complex, verbose, repetitious, and ridiculous complaints of modern [Code] pleading.”). 474. Bennett v. Schmidt, 153 F.3d 516, 519 (7th Cir. 1998). 475. Hovenkamp, supra note 421, at 56–57. 476. See Lee & Willging, supra note 455, at 12. 477. Lee, supra note 410, at 1, 16. 478. Cecil et al., supra note 368; Huston, supra note 333, at 436. 479. Cecil et al., supra note 368, at 5.

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declined to add it in the original complaint. In such cases, it is not clear that the Twiqbal dismissal has any value at all, for it is merely forcing parties to brief and litigate the motion and then refile a new complaint that ultimately survives the New Pleading crucible. If Twiqbal is about factual notice and narrowing of issues, forcing more detailed repleading might make some sense. But if Twiqbal is about screening meritless claims, it makes no sense. Repleading does not solve the problem of screening meritorious information-asymmetry cases and only increases the cost of pleading other meritorious cases. On the defense-pleading side, more detailed complaints (or amended complaints) lead to more detailed answers, for the answer must specifically admit or deny each allegation.480 It may lead to the assertion of more defenses and, overall, of more issues at play at the pleading stage. Consequently, New Pleading likely increases defendants’ costs of answering complaints and amended complaints filed after Iqbal. It is an open question, and one on which lowers courts are split, as to whether New Pleading applies to affirmative defenses asserted in an answer.481 Some have argued that extending it to defenses would help level the playing field between plaintiffs and defendants by forcing defendants to lay out more detailed facts supporting their defenses. They argue that frivolous affirmative defenses can be costly, just as frivolous claims can be, and that the same sauce for claims ought to be sauce for defenses. They argue that consistency in all pleading standards helps clarify and streamline the law. Finally, they argue that defendants often have facts in their possession to be able to plead defenses in a way that meets the plausibility standard and that, even if they do not, liberal amendment rules permit them to do so at later dates without the fear of a limitations problem (as plaintiffs might have for claims).482 Others have argued that textual differences between the “showing” requirement of Rule 8(a)(2) for claims and the lack of such a requirement in Rule 8(c) for defenses makes equivalence in pleading standards problematic. They also

480. See Fed. R. Civ. P. 8(b). 481. Compare, e.g., Charleswell v. Chase Manhattan Bank, N.A., 2009 WL 4981730 (D.V.I. 2009) (applies), with Burget v. Capital W. Sec., Inc., 2009 WL 4807619 (W.D. Okla. 2009) (does not apply). 482. Catherine Frizell, Note, Reestablishing Balance: Twombly-Iqbal and Affirmative Defenses, 77 Brook. L. Rev. (forthcoming 2012); Melanie A. Goff & Richard A. Bales, A “Plausible” Defense: Applying Twombly and Iqbal to Affirmative Defenses, 34 Am. J. Trial Adv. 603, 635–38 (2012); Joseph A. Seiner, Plausibility Beyond the Complaint, 53 Wm. & Mary L. Rev. 987, 1011–15 (2011); Tom Tinkham & Eric Janus, Plausible Answers and Affirmative Defenses, 79 U.S.L.W. 2271, 2272–73 (Mar. 29, 2011).

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argue that defenses are dependent upon claims, and defendants must state affirmative defenses twenty-one days after the complaint, giving defendants far less time to investigate the bases for potential defenses than plaintiffs have to investigate claims. Finally, they argue that the cost problems of frivolous defenses are far less troubling, both because the discovery scope of defenses is usually narrow and because plaintiffs opened the discovery door willingly by filing suit.483 The lower courts are decidedly split on the issue.484 For my purposes here, I only point out that if New Pleading does apply to defenses, then we might expect to see additional incidental costs in the form of increased pleading of facts supporting those defenses, defense investigation, and filings of motions to strike. I note that there are a host of non-merits allegations that, if New Pleading applies to defenses, are also candidates for application, including class-action allegations and jurisdictional allegations.485

A Normative Picture of New Pleading’s Effects The available data, then, suggest that New Pleading is screening out some cases with merit while increasing the cost of drafting pleadings and engaging in motion practice. One might reasonably ask here whether the game is worth the candle. My answer is no. A detailed look at the ledger helps explain why. On the plus side, New Pleading probably does screen out some meritless cases earlier, thus conserving party and court resources otherwise wasted on those meritless cases.486 483. Clermont, supra note 338, at 1359–63; Anthony Gambol, Note, The Twombly Standard and Affirmative Defenses: What is Good for the Goose is Not Always Good for the Gander, 79 Fordham L. Rev. 2173, 2201–203 (2011). 484. Some courts apply New Pleading to defenses. See, e.g., Racick v. Dominion Law Assocs., 270 F.R.D. 228 (E.D.N.C. 2010); Francisco v. Verizon South, Inc., 2010 WL 2990159 (E.D. Va. 2010) (collecting cases); Bradshaw v. Hilco Receivables, LLC, 725 F. Supp. 2d 532 (D. Md. 2010); Palmer v. Oakland Farms, Inc., 2010 WL 2605179 (W.D. Va. 2010); Holtzman v. B/E Aerospace, Inc., 2008 WL 2225668, at *2 (S.D. Fla. 2008); Home Mgmt. Solutions, Inc. v. Prescient, Inc., 2007 WL 2412834, at *3 (S.D. Fla. 2007). Others do not. See, e.g., Lopez v. Asmar’s Mediterranean Food, Inc., 2011 WL 98573 (E.D. Va. 2011); Ameristar Fence Prods., Inc. v. Phoenix Fence Co., 2010 WL 2803907 (D. Ariz. 2010); McLemore v. Regions Bank, 2010 WL 1010092, at *12-*13 (M.D. Tenn. 2010); Holdbrook v. SAIA Motor Freight Line, LLC, 2010 WL 865380 (D. Colo. 2010); Romantine v. CH2M Hill Eng’rs, Inc. 2009 WL 3417469 (W.D. Pa. 2009); Charleswell v. Chase Manhattan Bank, N.A., 2009 WL 4981730 (D.V.I. 2009); First Nat’l Ins. Co. of Am. v. Camps Servs., Ltd., 2009 WL 22861 (E.D. Mich. 2009); Westbrook v. Paragon Sys., Inc., 2007 U.S. Dist. LEXIS 88490, at *2 (S.D. Ala. 2007). 485. For discussions, see Clermont, supra note 338, at 1359–63; Robin J. Effron, The Plaintiff Neutrality Principle: Pleading Complex Litigation in the Era of Twombly and Iqbal, 51 Wm. & Mary L. Rev. 1997 (2010). 486. Dodson, New Discovery, supra note 339, at 64–65.

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Meritless cases have soft costs, too: unjust wealth transfers from settlement, emotional costs to litigants and other parties involved, and reputational costs to defendants. There is no hard data—zero—on how much of a minimizing effect New Pleading is having on these costs, but there are good reasons to suspect that the cost savings of New Pleading are not as high as one might initially expect. One reason is that the screen seems relatively limited—i.e., it will affect only a small percentage of cases. The data tend to support this. Dismissal rates have increased, but only by single digits in most studies. And, based on the general civil-cases data, the filing screen also appears to be modest. This makes quite a bit of sense. At the filing stage, litigation costs already provide an effective disincentive for plaintiffs to file a known frivolous case.487 At the motion stage, Old Pleading provided a fairly robust screening mechanism already. Most cases that can survive Old Pleading’s standard likely can survive New Pleading’s standard as well because plaintiffs will have access to sufficient information to survive the pleading crucible. New Pleading will affect some cases—namely, cases that are of uncertain merit at the time of pleading and that can only be properly evaluated after some discovery. These kinds of dismissals are important from a justice perspective—because they likely screen out some meritorious cases unfairly488— but their numbers are low relative to the numbers of civil filings. Consequently, the actual cost savings of New Pleading’s screen of meritless cases that would not have been screened under Old Pleading is likely to be quite marginal. The availability of amendment further erodes the cost savings of New Pleading. Dismissals based on factual insufficiency generally are ordered with leave to amend because the default assumption is that the pleading of additional facts could permit the claim to survive. This fact was at the heart of the FJC’s recent supplemental study, which found final termination rates to be much lower than previously reported because plaintiffs successfully amended their complaints after a finding of factual insufficiency. Many studies, including my own, did not code for whether amended complaints were successfully filed, but the FJC’s data suggest that the availability of amendment significantly diminishes the cost-savings effect of New Pleading. As the principal author of the FJC study has written, “there is a consensus that the judicial response to such motions, at least in terms of the rate at which motions are granted without leave to amend across broad categories of cases, has either not increased, or increased at most by only a modest amount.”489 487. Drawing on the seminal work of Bob Bone, I elaborate on this in more detail in chapter 4. 488. Bone, supra note 420, at 879; Marcus, Revival, supra note 396, at 468; Miller, supra note 420, at 49. 489. Cecil, supra note 369, at 48.

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In addition, the type of case matters. The small subset of cases screened under New Pleading but not under Old Pleading generally does not include the high-cost cases that might justify claims of significant cost savings. The data reveal New Pleading’s effect to be focused primarily on civil-rights, pro se, prisoner complaints—a class of cases that typically imposes very few discovery or business-reputation costs.490 Thus, one can reasonably theorize that New Pleading is reaping very modest cost savings. Of course, more empirical work on cost savings must be done. But, in theory, the plus side does not seem very strong. On the minus side, New Pleading imposes a number of new costs. First, as discussed above, New Pleading increases litigation costs for all parties and the court in the form of more prolix complaints, more plaintiff-side presuit investigation, increased numbers of defense-side motions, and more amended complaints. These “process costs,” as Bob Bone has called them, should be part of the cost calculus,491 and it may very well be that these cost increases alone exceed the cost savings of New Pleading.492 Indeed, there is some irony in statements like that of John Freedman, a partner at Arnold & Porter, who said, “I am more likely now to file a motion to dismiss under Rule 12(b)(6) in almost every case but that does not necessarily mean the motions will be granted,”493 or in the arguments of some commentators who suggest that New Pleading dismissals are “not much of a problem” because they can be cured by amendment.494 Isn’t that the worst of all worlds? If New Pleading is increasing costs in a large percentage of cases and screening out very few, then, really, what’s the point? Second, screening out even small numbers of meritorious cases that could be winners after discovery presents a serious justice problem and a tremendous social cost.495 Other procedures that terminate cases early, such as summary judgment, do so only after all of the facts have been disclosed and the judge determines that the nonmovant has no hope of prevailing, even construing all doubts in his favor.496 Even Rule 12(b)(6) as it was meant to

490. Emery G. Lee III & Thomas E. Willging, Defining the Problem of Cost in Federal Civil Litigation, 60 Duke L.J. 765, 769–70 (2010). 491. Bone, supra note 420, at 879. 492. Miller, supra note 420, at 69. 493. Walthall, supra note 457 (quoting John A. Freedman). 494. Bradley Scott Shannon, I Have Federal Pleading All Figured Out, 61 Case W. L. Rev. 453, 464 (2012). 495. Bone, supra note 420, at 878. 496. See Fed. R. Civ. P. 56.

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function, dismissing only matters for legal insufficiency, precludes only nonviable claims. These procedures are proper shortcuts because merit is not sacrificed. New Pleading, by contrast, screens out some cases that are winners. Worse, the kinds of meritorious claims screened out—civil rights and secretive wrongs—are those that have the greatest public value. Third, even screening weak or meritless claims has its costs. One prominent defender of New Pleading has asked rhetorically, “Why should implausible litigation be allowed?”497 The question has several non-rhetorical answers. One answer is that process has a value independent of substantive merit. New Pleading undermines fair and meaningful procedure by putting the proof cart before the pleadings horse,498 a shift that may be unconstitutional499 and is certainly impractical. Long ago, Charles Clark wrote that “we cannot expect the proof of the case to be made through the pleadings” because “such proof is really not their function.”500 Even Judge Easterbrook, on whose writings the Twombly Court relied, similarly opposed such a move, writing: But the next time saving step—resolving under Rule 12(b)(6) matters that formerly were handled by summary judgment—is incompatible with the Rules of Civil Procedure. Litigants are entitled to discovery before being put to their proof, and treating the allegations of the complaint as a statement of the party’s proof . . . defeats the function of Rule 8.501 By imposing on pleadings a function they are not capable of performing, New Pleading threatens, as Kevin Clermont and Steve Yeazell have argued, to destabilize the entire system of civil justice.502 Another answer that piggybacks on the first is that the individualized standard of “judicial experience and common sense,” which is used to separate

497. Mark Hermann & James M. Beck, Opening Statement, Plausible Denial: Should Congress Overrule Twombly and Iqbal?, 158 U. Pa. L. Rev. PENNumbra 141, 146 (2009), available at http://www.pennumbra.com/debates/pdfs/PlausibleDenial.pdf. 498. Spencer, supra note 438, at 23. 499. See Suja A. Thomas, Why the Motion to Dismiss Is Now Unconstitutional, 92 Minn. L. Rev. 1851, 1882 (2008) (Seventh Amendment); A. Benjamin Spencer, Iqbal and the Slide Toward Restrictive Procedure, 14 Lewis & Clark L. Rev. 185, 197 (2010) (First Amendment). 500. Charles E. Clark, The New Federal Rules of Civil Procedure: The Last Phase—Underlying Philosophy Embodied in Some of the Basic Provisions of the New Procedure, 23 A.B.A. J. 976, 977 (1937). 501. Bennett v. Schmidt, 153 F.3d 516, 519 (7th Cir. 1998). 502. See generally Clermont & Yeazell, supra note 330.

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weak claims from meritless claims, is a poor yardstick at the pleadings stage and will result in disuniform application across judges. Stephen Burbank has said that this standard “obviously licenses highly subjective judgments . . . . [and] is a blank check for federal judges to get rid of cases they disfavor,”503 but even judges who dispassionately follow the law may err in their assumptions about what is plausible because their judicial experiences are inapt for the decision at hand.504 As one example, there is a widespread judicial perception, particularly in the so-called “post-racial” Obama era,505 that race and gender discrimination are being effectively eradicated, leading to a presumption of lawful conduct.506 Yet substantial data suggest that employment discrimination continues to be a systemic, common occurrence.507 Today’s discrimination may be subtle and latent rather than overt, but it persists.508 One 2004 study, for example, found substantial differences in callback percentages for job seekers with “black-sounding” names like “Lakisha Washington” as opposed to those with “white-sounding” names like “Emily Walsh.”509 The study showed that African-American applicants needed to send about five additional resumes to receive a callback than applicants with white-sounding names. The white-sounding name was the equivalent of about eight years of experience. Other recent studies have found continued employment discrimination faced by women, blacks, and the elderly.510 This cognitive dissonance

503. Adam Liptak, 9/11 Case Could Bring Broad Shift on Civil Suits, N.Y. Times, July 20, 2009, at A10. 504. Spencer, supra note 499, at 197. 505. PBS Newshour: Debate on Race Emerges as Obama’s Policies Take Shape (PBS Sept. 16, 2009). 506. See, e.g., Chad Derum & Karen Engle, The Rise of the Personal Animosity Presumption in Title VII and the Return to “No Cause” Employment, 81 Tex. L. Rev. 1177, 1179, 1196 (2003); Vicki Shultz & Stephen Petterson, Race, Gender, Work, and Choice: An Empirical Study of the Lack of Interest Defense in Title VII Cases Challenging Job Segregation, 59 U. Chi. L. Rev. 1073, 1180 (1992). See also Grutter v. Bollinger, 539 U.S. 306, 342 (2003) (suggesting that affirmative action could be unnecessary in a few years). 507. Joseph A. Seiner, After Iqbal, 45 Wake Forest L. Rev. 179, 181, 196 (2010). 508. See Tristin K. Green, Work Culture and Discrimination, 93 Calif. L. Rev. 623, 646–48, 659 (2005). 509. Marianne Bertrand & Sendhil Mullainathan, Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination, 94 Am. Econ. Rev. 991 (2004). 510. Joanna N. Lahey, Age, Women, and Hiring: An Experimental Study, J. Hum. Resources 30 (Winter 2008); Devah Pager, The Use of Field Experiments for Studies of Employment Discrimination: Contributions, Critiques, and Directions for the Future, Ann. Am. Acad. Pol. & Soc. Sci. 104, 114 (Jan. 2007).

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between elitist assumptions and on-the-ground reality is exacerbated by the difficulty of showing discriminatory motivations in court, particularly under New Pleading’s plausibility standard.511 Yet another answer is that the screening of civil-rights and other public-law cases—whether meritorious or not—presents a regulatory-deterrence problem. Public-norm litigation has high social value, and, as a result, our system tolerates extreme measures to ferret out socially harmful conduct. In these cases, even frivolous claims can have significant social benefits. Evidence suggests, for example, that the deterrent effect of just having litigation available has improved product safety.512 Litigation, even if not all is meritorious, helps keep public officials and commercial actors honest, improves transparency, and reduces the need for regulatory oversight and governmental bureaucratization. As the courthouse doors close to private enforcers, public agencies must assume the enforcement burden,513 leading to over-regulation, bloated government, higher taxes, and potentially suboptimal enforcement.514 A final answer is that civil litigation serves as an important social institution in its own right. An accessible civil-justice system provides a equalizing function by enabling the unempowered to air grievances against established powers and social and economic elites that compels them to listen and answer truthfully (as well as providing the opportunity for those defendants to exonerate themselves in a public forum).515 This function of civil litigation is consonant with America’s deeply seated notions of egalitarianism, citizen empowerment, and governmental redress. In many ways, litigation, even implausible litigation, is democracy at its best.516 The marginal benefits and significant costs convince me that New Pleading is fundamentally wrongheaded. To illustrate, let me attempt to put a few very

511. Malveaux, supra note 420, at 68, 87–88. One study has found an increase in the dismissal rates of race-discrimination claims. Victor D. Quintanilla, Beyond Common Sense: A Social-Psychological Study of Iqbal’s Effect on Claims of Race Discrimination, 17 Mich. J. Race & L. 1, 30–43 (2011). 512. Miller, supra note 420, at 72. 513. Picker, supra note 421, at 164. 514. Edward Brunet, The Primacy of Private Attorney General Enforcement in the United States, Ind. J. Alt. Disp. Resol. (forthcoming 2012). 515. See Robert G. Bone, Making Effective Rules: The Need for Procedure Theory, 61 Okla. L. Rev. 319, 338–40 (2008); Owen Fiss, Against Settlement, 93 Yale L.J. 1073, 1076 (1984). 516. For an account of the adverse societal and institutional effects of shutting certain classes of plaintiffs out of court, see Brooke D. Coleman, The Vanishing Plaintiff, 42 Seton Hall L. Rev. 501 (2012).

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rough figures on it. Leaving plaintiff-filing selection effects aside because of the difficulty of measuring them, say that 100 identical cases are filed pre-Twombly and post-Iqbal. Based on the results of previous FJC studies, assume that the filing rate of motions to dismiss is around 13 percent under Old Pleading and 20 percent under New Pleading.517 Of the 100 cases, then, 80 would not be subject to a motion to dismiss under either standard. Although not tested by a motion to dismiss, those 80 might still be affected by New Pleading’s cost increases because wary plaintiffs would investigate more and include more detailed allegations in their complaints, while defendants would then have to make additional efforts to respond to those more detailed complaints. Let us turn now to the remaining 20. Under Old Pleading, 13 would be subject to a motion to dismiss and 7 would not. Based on the dismissal-rate studies discussed above that found around a 50 percent success rate on average, let us assume that 6 of the 13 are granted for legal insufficiency, one is granted for factual insufficiency (arguably an incorrect basis for dismissal under Conley), and 6 are denied. In percentages, then, 54 percent of the motions are granted. Under New Pleading, the dismissal rate has increased modestly, let’s say to 60 percent; so, of the 20 motions, 12 are successful. Those 12 include the same 6 granted for legal insufficiency under Conley, the same one granted for factual insufficiency under Old Pleading (perhaps erroneously), and an additional 5 granted for factual insufficiency under New Pleading. Note that these numbers are consistent with the data in my study showing a dramatic increase in factual-sufficiency dismissals (here, from 8 percent to 30 percent) and a significant decrease in legal-sufficiency dismissals (here, from 46 percent to 30 percent). Turning back to the numbers, overall, New Pleading has resulted in dismissal of only an additional 5 of the 100 original cases. But factual-insufficiency dismissals are usually made with leave to replead, and the amendment process proves fruitful for some. Assume, then, that 2 of the 5 are successfully repleaded. The true screening effect of New Pleading at the motion stage, then, is about 3 cases out of 100.518

517. Compare Paul R.J. Connolly & Patricia A. Lombard, Judicial Controls and the Civil Litigative Process: Motions (Fed. Judicial Ctr. 1980) (finding a 15 percent–19 percent motion-filing rate), and Thomas E. Willging, Use of Rule 12(b)(6) in Two Federal District Courts (Fed. Judicial Ctr. 1898) (finding a 13 percent motion-filing rate), and Cecil, supra note 362 (finding a 4 percent motion-filing rate but agreeing that this figure likely underreports the true filing rate), with id. (finding a 55 percent increase in the motion-filing rate after Iqbal). 518. This is consistent with Gelbach’s model calculating New Pleading’s effect of at least 15 percent of cases facing a motion: at that rate, of 20 cases facing a motion, 3 cases would be dismissed under New Pleading that would not have been under Old Pleading.

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Let us assume that one of these cases is a meritorious informationasymmetry case, and two are not meritorious. The marginal benefit of New Pleading, under these assumptions, is to spare innocent defendants the costs of discovery in 2 percent of cases, a positive but very modest achievement. It is difficult to assess how much savings are to be had without knowing what the cost implications would have been in those cases—perhaps some of the 2 percent were low-cost cases anyway—or what alternative cost-control measures could have been employed under the existing rules. The marginal downsides of New Pleading seem more substantial. Under these assumptions, it erroneously screens out meritorious cases amounting to 1 percent of all cases. This effect may not be cataclysmic, but it may still be quite significant because it presents both individual justice concerns for those plaintiffs erroneously screened out and also potentially social and systemic justice concerns for the public at large, depending upon the nature of the cases screened. An unremedied public harm, even in just one failed case, may be of far greater magnitude than imposing private discovery costs upon two innocent defendants, particularly if those costs can be limited in other ways. In addition, New Pleading imposes potentially new pleading costs on 80 percent of all cases that do not face motions under either regime. It also imposes new motions costs on an additional 4 percent of all cases (ones that would survive under both regimes). Of those, New Pleading also imposes new amendment costs (and even more motions costs) on 2 percent of all cases. To be sure, these figures are the product of gross supposition, estimated from widely varying results of different studies. But if they are anywhere close to being correct, I simply do not see how the benefits of New Pleading outweigh its costs. The next question is what to do about it. In the following two chapters, I propose some solutions. Chapter 4 argues for a primary commitment to restoring Old Pleading, with a few tweaks. Chapter 5 suggests, assuming we are stuck with New Pleading, some ways to ameliorate its justice concerns.

4

CURING NEW PLEADING

The best way to cure the ills of New Pleading is to eradicate it entirely and return to Old Pleading, with small changes designed specifically for the cost-control problems animating New Pleading. Contrary to the rhetoric of New Pleading’s supporters, neither Old Pleading nor the litigation system as a whole is irredeemably broken; rather, the huge discovery-cost problems of meritless cases arise in only a small percentage of cases. And the Federal Rules already provide a comprehensive mechanism for addressing these problems. A return to Old Pleading, coupled with more focused attention to the Rules’ existing utility, would solve these problems without incurring the new problems that New Pleading causes. This chapter sets the record straight on Old Pleading, explains how Old Pleading ought to work effectively and efficiently, and evaluates the practical options for restoring Old Pleading.

Old Pleading Worked Reasonably Well The New Pleading rhetoric consistently charges Old Pleading with enabling out-of-control costs and frivolous litigation. Conley is ineffective, so the argument goes, because of its inability to guard against these abuses. Plaintiffs armed with frivolous claims, pleaded cheaply with bare-bones complaints, can threaten abusive discovery in order to coerce unjust settlements from innocent defendants, raising the price of products and services for the general consumer, and diverting precious court resources away from those few legitimate lawsuits. Marty Redish, for whom I have great respect, has argued as much in support of New Pleading: “[U]nless the pleading standards effectively perform some form of meaningful gate keeping . . . excessive and burdensome discovery could easily overwhelm the adjudication in much of modern high stakes litigation.”519 519. Martin H. Redish, Pleading, Discovery and the Federal Rules: Exploring the Foundations of Modern Procedure, 64 Fla. L. Rev. 845 (2012).

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Redish is surely correct up to a point. Old Pleading almost certainly does let in more meritless claims than New Pleading. Those false positives can be costly to defendants, to the system, and to society.520 The New Pleading rhetoric, however, vastly overstates the magnitude of the problem of Old Pleading, and it completely ignores the solutions already available within the Federal Rules. Frivolous litigation has not proven to be a problem in most areas of the law. When they do file, plaintiffs generally plead with thoughtfulness, care, and detail. Litigation costs and settlements are, for the most part, reasonable. There are a few bad apples, but the system already provides the means to deal with them effectively. The following subsections debunk six myths that fan the rhetorical flames underlying the push for New Pleading.

Myth #1: Frivolous Litigation Is Rampant The oft-repeated claim that frivolous lawsuits are a rampant problem lacks empirical foundation.521 In part, this is because frivolous lawsuits are particularly difficult to study.522 What is a frivolous suit can be difficult to determine definitionally and factually, and settlements are often confidential.523 Nevertheless, economic and game-theory modeling can shed some light on frivolous lawsuits. At the outset, there are some obvious, legally imposed disincentives to filing a known frivolous claim. Rule 11 and ethics codes proscribe frivolous claims and can result in personal sanctions against the attorney who files them.524 The tort of abuse of process may be available. Other disincentives exist as well. The filing of a lawsuit may present reputational and emotional costs to a plaintiff. Losing plaintiffs must bear their own, and perhaps even the defendants’, litigation costs. Rational plaintiffs’ attorneys are sensitive and responsive to the costs and expected values of a case. They screen potential cases and decline those that have little prospective payoff.525 520. Mark Anderson & Max Huffman, Iqbal, Twombly, and the Expected Cost of False Positive Error, 20 Cornell J.L. & Pub. Pol’y 1, 20–24 (2010). 521. Arthur R. Miller, The Pretrial Rush to Judgment: Are the “Litigation Explosion,” “Liability Crisis,” and Efficiency Clichés Eroding Our Day in Court and Jury Trial Commitments?, 78 N.Y.U. L. Rev. 982, 985–96 (2003). 522. See Robert G. Bone, Modeling Frivolous Suits, 145 U. Pa. L. Rev. 519, 520 (1997). 523. Id. at 527–28. At the least, frivolousness is different than negative expected value, which may be a meritorious but low-value lawsuit. Id. at 530. 524. Geoffrey Miller, A Modest Proposal for Securities Fraud Pleading After Tellabs, 75 L. & Contemp. Probs. 93, 99 (2012). 525. Arthur R. Miller, From Conley to Twombly to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke L.J. 1, 67 (2010).

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In light of these disincentives, why would a plaintiff ever pursue a frivolous lawsuit, and why would a rational plaintiff’s attorney on a contingency fee ever file one? The answer is that they wouldn’t, in the vast majority of cases, and that is why frivolous litigation almost certainly is quite rare. Lawyers generally refuse cases that are not cost-effective,526 and the system generally imposes sufficient disincentives for litigation actors to self-screen most frivolous litigation out.527 Additional pleadings-based screens simply are unnecessary for these cases. But for other cases, the answer to why a plaintiff would ever file a frivolous lawsuit is more complicated and depends upon the relative balance of costs and information. Perhaps a plaintiff believes that litigation-cost pressure will force the defendant to settle the lawsuit even if the lawsuit is known to be frivolous. Such settlements are surely unjust, but it is difficult to know how much of a problem they actually are. Game theory can help identify the magnitude of this problem. Bob Bone’s definitive game-theory model of frivolous lawsuits528 suggests that frivolous lawsuits with information symmetry—when both parties know the lawsuit is frivolous—generally settle early (usually even before filing), with little cost, and for very low amounts.529 From the defendant’s vantage point, it is far better to throw a couple thousand dollars at a disgruntled ex-employee than spend $50,000 defending a race-discrimination lawsuit to summary judgment. The plaintiff may face litigation costs that exceed his expected payoff, but if the defendant’s litigation costs are far greater than the plaintiff’s, the defendant is likely to blink first.530 These kinds of settlements, while rational, represent unjustified wealth transfers.531 But they are small problems, not the kind of social ill that spurred New Pleading. Frivolous lawsuits with information asymmetry—usually when the defendant knows the lawsuit is meritless but the plaintiff does not532—cause a 526. Corina Gerety, Excess & Access: Consensus on the American Civil Justice Landscape 9 (IAALS 2011), available at http://www.du.edu/legalinstitute/pubs/ExcessandAccess.pdf (noting that over 80 percent of surveyed attorneys acted in such a manner). 527. Robert G. Bone, The Economics of Civil Procedure 45–49, 150–55 (2003). 528. See generally Bone, supra note 522. 529. Id. at 541. 530. See Paul Stancil, Balancing the Pleading Equation, 61 Baylor L. Rev. 90, 130–31 (2009). 531. Bone, supra note 522, at 549 (1997); see also David Rosenberg & Steven Shavell, A Model in Which Suits are Brought for Their Nuisance Value, 5 Int’l Rev. L. & Econ. 3, 3 (1985). 532. The reverse case, where the plaintiff knows of the frivolousness but the defendant does not, does pose a significant social problem but would seem to be a particularly rare occurrence because the defendant usually holds (and the plaintiff usually lacks) such information. See Bone, supra note 522, at 547–50.

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different problem. The plaintiff should want to rectify her information deficiency as quickly and cheaply as possible. If the cost of presuit investigation is low, she generally will investigate first to determine the merit of the prospective claim. If she finds that the claim is frivolous, she will not file it. Presuit investigation—which can be made easier and cheaper by technological advances—can reduce the overall number of frivolous suits filed. But if the cost of presuit investigation is high, some plaintiffs will roll the dice.533 Because these plaintiffs do not know if their claims are meritorious, they will resist settling for mere nuisance value until they have obtained some discovery. In such cases, information asymmetry can lead to either high discovery costs or higher-than-nuisance-value settlements. These are social ills, but the civil system has the capability to minimize both the risk of high discovery costs and the injustice of higher-than-nuisance-value settlements. On the discovery-cost side, the defendant can help his own cause. After all, if the defendant knows the lawsuit is frivolous, the defendant ought to want to show the lawsuit’s meritlessness as cheaply and as quickly as possible. To do so, the defendant could open its file doors and allow the plaintiff to see the truth via inspection, which effectively shifts the costs of discovery to the plaintiff. If that course is too disruptive or invasive of sensitive information, the defendant might offer an exculpatory affidavit under oath or disclose an exculpatory document. The combination of exculpatory evidence and the plaintiff’s lack of inculpatory information may give the judge good reason to be skeptical of the merit of the claim. If so, the judge can restrict any further discovery to the narrow and dispositive issue identified by the defendant, with an invitation for expedited summary judgment if the evidence on that issue shows that the plaintiff’s claim is meritless. Further, the judge might allow additional discovery only upon some cost-shifting condition imposed on the plaintiff, thus shifting the cost to the risk-seeking party.534 In this way, judicial attention and intervention may be able to minimize the defendant’s discovery costs even in a frivolous lawsuit that survives to discovery. On the settlement-cost side, a countervailing boon to defendants from information-asymmetry lawsuits may undermine the injustice of settling nuisance lawsuits. The boon is that information-asymmetry lawsuits that are in fact meritorious may be settled for far less than the value of the claim. It is, therefore, not clear that information-asymmetry settlements as a whole cause a net cost to defendants. 533. Id. at 552–58. 534. Bone proposes a similar solution, to reduce the informational asymmetry, in the form of a bond. See id. at 573–75.

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To illustrate, consider a plaintiff’s attorney who regularly represents terminated employees in employment-discrimination lawsuits. The attorney understands that most terminations, say 90 percent, are not unlawful. But identifying which terminations are lawful and which are not is extremely difficult for the attorney because the filtering information is in the hands of the employers. Say ten similarly situated terminated employees of a particular company retain the attorney. In reality, the attorney’s estimation of possible merit is correct: one plaintiff was terminated unlawfully, and the other nine were terminated lawfully. Because the plaintiff’s attorney does not know which one has the meritorious claim, however, the attorney estimates that each has a 10 percent chance of winning on the merits. If the value of a meritorious claim is $1,000, then each plaintiff would settle for $100, regardless of her individual claim’s merit. In the aggregate, things would then even out for the defendant: the defendant was in fact liable for $1,000 and settled for a total of $1,000 (in ten equal payments of $100). True, a distributional justice problem remains for the plaintiffs because the one plaintiff with a meritorious claim was underpaid by 90 percent for that claim, while the nine plaintiffs with meritless claims each received a small windfall. But that is not a justice problem for the defendant. From the defendant’s perspective, there is little difference. Grouping all information-asymmetry settlements together, then, suggests that a higher-than-nuisance-value settlement of a frivolous lawsuit may not be the defense-side problem that it seems. Reality is, of course, far more complex than the simplistic model discussed here. But the model at least helps to explain why it is incomplete to view nuisance settlements in isolation. Indeed, recent research suggests that defendants may even reap a net benefit when settlements are viewed collectively.535 I need not go that far here—I need only make the point that the presence of lower-than-proper-value settlements for meritorious claims counterbalances some of the injustice to defendants of nuisance settlements. Class-action settlements present a more complex problem. They have been characterized as “judicial blackmail” of defendants who face the prospect of massive class liability.536 But such pressures can do good, as in the case of asbestos, tobacco, defective-pharmaceutical, commercial-fraud, and antitrust

535. See Jeffrey J. Rachlinski, Gains, Losses and the Psychology of Litigation, 70 S. Cal. L. Rev. 113, 144–46 (1996). 536. In re Matter of Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1298 (7th Cir. 1995) (Posner, C.J.) (“[S]ettlements induced by a small probability of an immense judgment in a class action [is called] ‘blackmail settlements.’” (quoting Henry J. Friendly, Federal Jurisdiction: A General View 120 (1973))); Allan Kanner & Tibor Nagy, Exploding the Blackmail Myth: A New Perspective on Class Action Settlements, 57 Baylor L. Rev. 681, 683 (2005) (“Rhone has become synonymous with the notion that ‘class certification creates insurmountable pressure on defendants to settle.’” (quoting Castano v. Am. Tobacco Co., 84 F.3d 734, 746 (5th Cir. 1996))).

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litigation.537 In any event, a class settlement must be approved by the court, which must first find that the settlement is fair, adequate, and reasonable (and presumably not the product of judicial blackmail).538 Indeed, many settlements are refused on grounds that they are not fair to plaintiffs. A recent example is the Google Book settlement, which was rejected for that very reason.539 Surely problem lawsuits exist. But how much of a problem they are is difficult to quantify. The Supreme Court has asserted that “[m]ost frivolous and vexatious litigation is terminated at the pleading stage or on summary judgment, with little if any personal involvement by the defendant.”540 The economic and game-theory accounts above support this observation, suggesting that frivolous claims do not pose a significant problem for defendants as a group or the civiljustice system as a whole.541 At the very least, they undermine the calls for pleadings reform that are grounded in the existence of rampant frivolous litigation.

Myth #2: Plaintiffs Plead Barebones Complaints The beautiful simplicity of the Federal Forms has never been a reliable model. Few filed complaints are as spartan.542 Instead, Plaintiffs frequently veer to the opposite pole by providing exhaustive detail.543 Anecdotes of thousand-page complaints are legendary.544 Although these anecdotes may represent outliers in their own right (and they are to be condemned as much as bare-boned complaints545), they undermine the belief that plaintiffs are motivated to save costs by filing minimalist pleadings.

537. See Arthur R. Miller, McIntyre in Context: A Very Personal Perspective, 63 S.C. L. Rev. 465, 468 (2012). 538. Fed. R. Civ. P. 23(e)(2). 539. Authors Guild v. Google, Inc., 770 F. Supp. 2d 666, 679–80 (S.D.N.Y. 2011). 540. Clinton v. Jones, 520 U.S. 681, 708 (1997). 541. Lance P. McMillian, The Nuisance Settlement “Problem”: The Elusive Truth and a Clarifying Proposal, 31 Am. J. Trial Advoc. 221, 227 (2007). 542. Ettie Ward, The After-Shocks of Twombly: Will We “Notice” Pleading Changes?, 82 St. John’s L. Rev. 893, 899 (2008). 543. Richard A. Epstein, Of Pleading and Discovery: Reflections on Twombly and Iqbal with Special Reference to Antitrust, 2011 U. Ill. L. Rev. 187, 205. 544. See, e.g., Passic v. State, 98 F. Supp. 1015, 1016 (E.D. Mich. 1951) (addressing a habeas petition “of approximately two thousand pages”). 545. Dismissal for prolixity goes to far in condemnation; nevertheless, one court recently dismissed a 465-page complaint as violating Rule 8(a), saying that brevity, being the soul of wit, “is also the soul of a pleading.” Presidio Group, LLC v. GMAC Mortg., LLC, No. 08-05298 RBL, 2008 WL 2595675, at *1 (W.D. Wash. June 27, 2008).

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Plaintiffs have an incentive to identify their claims clearly, with reasonable support. The complaint is often the first statement of the plaintiff’s case seen by the defendant, court, and public. A detailed pleading is usually a more convincing pleading. A convincing pleading sends a message to the defendant that the plaintiff is serious, and a message to the court and public that the case is strong. Such a complaint encourages either early and favorable settlement offers or early and public disclosure of the defendant’s responses to the allegations.546 These incentives help explain why studies show that the vast majority of attorney-filed complaints are crafted sensibly with reasonable detail.547 For the rest, the rules provide relief. Rule 11 prohibits, under penalty of sanctions, allegations and claims that lack any reasonably founded belief. Rule 12(e) is available to force clarification and restatement of scattershot or confusing allegations. Rule 7(a) can be employed to force a reply to the defendant’s response. Rule 12(f) can be used to strike irrelevant or redundant matter. The improper pleading that could slip through these cracks should be a rarity. Some cases, however, do lend themselves to impertinently crafted complaints that require more control than the rules generally provide. But there is no need to throw out the baby with the bathwater. For these rarities, a problem-specific solution can provide targeted relief. One needs only to determine the bounds of those problem suits and address them directly. For pro se or prisoner litigation, for example, which often fails to conform to the pleading ideal, Congress has enacted statutes giving courts additional authority to address any defects in such complaints without ever involving the defendant.548 But these kinds of cases are exceptional. In the main, plaintiffs plead with sufficient detail.

Myth #3: Old Pleading Is Toothless and Serves No Purpose Despite the real controls on defective pleading and the widespread norm of appropriate pleading, advocates of New Pleading repeatedly castigate Old Pleading—particularly, Conley’s “no set of facts” language—as impotent. 546. Ward, supra note 542, at 899. 547. Thomas E. Willging & Emery G. Lee III, In Their Words: Attorney Views About Costs and Procedures in Federal Civil Litigation 3 (Fed. Judicial Ctr. 2010), available at http://www.fjc. gov/public/pdf.nsf/lookup/costciv3.pdf/$file/costciv3.pdf (disclosing survey results showing that most plaintiff’s attorneys report that they include more information than necessary under the rules). 548. See, e.g., 28 U.S.C. §§ 1915–1915A (2006) (providing courts with the discretion to dismiss sua sponte claims of prisoners and parties proceeding in forma pauperis).

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One commentator has asserted that Conley, taken literally, is “broad beyond limitation,” would “impos[e] virtually no pleading requirements whatsoever,” and would burden defendants with discovery costs “in virtually every case.”549 Another has stated that “the ‘notice pleading’ standard of Rule 8 would open the door to discovery for virtually every plaintiff.”550 Still other prominent commentators have argued that “the Conley dictum could make it impossible for a defendant to win a motion to dismiss, thus rendering Federal Rule of Civil Procedure 12 a nullity.”551 This view ignores the importance of the core function of Rule 12(b)(6), which is to short-circuit legally insufficient pleadings.552 Complaints implicate such issues frequently. What is the legal test for whether gender discrimination violates the Equal Protection Clause? Does an independent contractor count as an “employee” for purposes of Title VII’s employee-numerosity requirement? Are state claims preempted by a federal statute? What limitations does “proximate cause” impose in a tort case? Does a statute facially violate the First Amendment? Each of these important questions depends upon the reach of the law. Accordingly, they generally can be resolved by a motion to dismiss testing the legal sufficiency of a claim, without resort to any discovery, and no further detail (aside from providing notice) need be provided by the plaintiff. Opportunities to dismiss on grounds of legal insufficiency are common. The conventional wisdom is that legal-insufficiency dismissals are rare.553 But the recent studies described in chapter 3 demonstrate that legal-insufficiency dismissals meaningfully filter out meritless claims. Pre-Twombly, around 15 percent of all cases faced a Rule 12(b)(6) motion to dismiss for failure to state a claim,554 and 50 to 70 percent of those resulted in a dismissal of at

549. Michael R. Huston, Note, Pleading with Congress to Resist the Urge to Overrule Twombly and Iqbal, 109 Mich. L. Rev. 415, 428, 438 (2010). 550. Harvey Kurzweil et al., Twombly: Another Swing of the Pleading Pendulum, 9 Sedona Conf. J. 115, 115 (2008). 551. Mark Hermann & James M. Beck, Opening Statement, Plausible Denial: Should Congress Overrule Twombly and Iqbal?, 158 U. Pa. L. Rev. PENNumbra 141, 143 (2009), available at http://www.pennumbra.com/debates/pdfs/PlausibleDenial.pdf. 552. Neitzke v. Williams, 490 U.S. 319, 326 (1989). 553. Wendy Gerwick Couture, Conley v. Gibson’s “No Set of Facts” Test: Neither Cancer Nor Cure, 114 Penn St. L. Rev. Penn Statim 19, 21 (2010) (citing cases and describing the prevailing sentiment that such dismissals are “relatively unusual”); 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed. 2004) (calling them “rarely granted”). 554. Joe S. Cecil, et al., Motions to Dismiss for Failure to State a Claim After Iqbal 10 n.21 (Fed. Judicial Ctr. 2011).

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least some claims.555 Even after Iqbal, with factual insufficiency as a potent additional basis for dismissal, legal-insufficiency dismissals comprise the dominant form of dismissals.556 These figures demonstrate that the 12(b)(6) challenge is and always has been a significant and widespread weapon, even under the liberal Conley standard, for filtering out legally meritless claims. Critics of Conley also malign its “no set of facts” language for permitting factually insufficient pleadings. They argue that Conley permits a complaint to allege only that the defendant harmed the plaintiff and that the plaintiff wants relief. Gregory Garre, for example, testified before Congress that Conley imposes “virtually no limit on the type of conclusory and bare-bone allegations that could subject such officials to the burdens of civil litigation.”557 According to Geoff Hazard, “Literal compliance with Conley v. Gibson could consist simply of giving the names of the plaintiff and the defendant, and asking for judgment.”558 Rebecca Love Kourlis has written, “On its face, Conley’s ‘no set of facts’ standard did not appear to require the recitation of any facts at the pleading stage.” Adam Steinman has argued that, if Conley were literal, “a complaint that alleged nothing more than ‘The planet Earth is round’ would survive, because any number of actionable facts might be consistent with the Earth being round.”559 Many others have made similar assertions.560

555. See supra chapter 3, Table 1 (finding around 50 percent of pre-Twombly motions to be granted for legal insufficiency); Patricia W. Hatamyar, The Tao of Pleading: Do Twombly and Iqbal Matter Empirically?, 59 Am. U. L. Rev. 553, 598–99 (2010) (finding around 50 percent of motions granted pre-Twombly); Civil Case Processing in the Federal District Courts: A 21st Century Analysis 47–48 (IAALS 2009) (finding around 70 percent grant/grant-in-part rate pre-Twombly). 556. See supra chapter 3, Table 3 and Table 4. 557. Evaluating the Supreme Court’s Decisions in Twombly and Iqbal: Hearing Before the S. Comm. on the Judiciary, 111th Cong. 28 (2009) (prepared statement of Gregory G. Garre), available at http://judiciary.senate.gov/pdf/12–02–09%20Garre%20Testimony.pdf. 558. Geoffrey C. Hazard, Jr., From Whom No Secrets Are Hid, 76 Tex. L. Rev. 1665, 1685 (1998). 559. Adam N. Steinman, The Pleading Problem, 62 Stan. L. Rev. 1293, 1321 (2010). 560. See, e.g., Martin B. Louis, Intercepting and Discouraging Doubtful Litigation: A Golden Anniversary View of Pleading, Summary Judgment, and Rule 11 Sanctions Under the Federal Rules of Civil Procedure, 67 N.C. L. Rev. 1023, 1028 n.44 (1989) (“[Conley], if taken literally, would foolishly protect from challenge complaints alleging only that defendant wronged plaintiff or owes plaintiff a certain sum.”); Hermann & Beck, supra note 551, at 143 (asserting that the Conley language “could make it impossible for a defendant to win a motion to dismiss, thus rendering Federal Rule of Civil Procedure 12 a nullity”); Miller, supra note 525, at 99 (stating that Conley’s “literal application seems unworkable”); see also Allan Ides, Bell Atlantic and the Principle of Substantive Sufficiency Under Federal Rule of Civil Procedure 8(a) (2)

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Responding to this fear, courts regularly state that Conley should not be applied literally.561 The argument that Conley permits such complaints falters on two interrelated grounds. First, Conley’s “no set of facts” language is part of the test for legal sufficiency, not factual sufficiency.562 If a plaintiff asserts a valid legal claim, then a motion to dismiss on the basis of legal insufficiency should be denied unless no set of facts could support a judgment for the plaintiff on that claim. This is as it should be. The “no set of facts” phrase does not, however, render courts powerless to dismiss a legally insufficient claim. After all, a claim for discrimination under Title VII based on hair color is properly dismissible; no set of facts could give rise to such liability under the statute. Second, even for a legally sufficient claim, Rule 8(a)(2) has always required sufficient facts to provide adequate notice.563 Thus, although a complaint consisting solely of the allegation “the world is round” would survive a legal-sufficiency challenge because of Conley’s “no set of facts” language, it would fail a factual-sufficiency challenge based on a failure to provide notice because the defendant would have no idea what the cause of action was. Even if the complaint identified a proper legal claim, such as a violation of Title VII based on race discrimination, the complaint would still fail to provide notice of what circumstances the legal claim is based upon. Rule 12(e), which permits a party to move for a “more definite statement of a pleading” if the pleading “is so vague or ambiguous that the party cannot reasonably prepare a response,”564 has always been available to remedy such “defendant harmed me” complaints.565

Toward a Structured Approach to Federal Pleading Practice, 243 F.R.D. 604, 629 (2006) (calling Twombly’s treatment a “sensible ‘revision’ of Conley”). 561. See, e.g., Marmon Group, Inc. v. Rexnord, Inc., 822 F.2d 31, 34 (7th Cir. 1987); Gen-Probe, Inc. v. Amoco Corp., Inc., 926 F. Supp. 948, 961 (S.D. Cal. 1996); see also Richard L. Marcus, The Puzzling Persistence of Pleading Practice, 76 Tex. L. Rev. 1749, 1749–51 (1998) (describing institutional resistance to both the Rule 8(a)(2) requirement and Conley standard). But see Epstein, supra note 543, at 192 & n.21 (arguing that, generally, the “no set of facts” language was followed in many cases, particularly Supreme Court cases). 562. Couture, supra note 553, at 25; Miller, supra note 525, at 18 n.59. 563. 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1215 (3d ed. 2009) (“In federal practice, the test of a complaint’s sufficiency simply is whether the document’s allegations are detailed and informative enough to enable the defendant to respond.”). 564. Fed. R. Civ. P. 12(e). 565. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002); Hearing on Whether the Supreme Court has Limited Americans’ Access to Court: Hearing Before the S. Comm. on the Judiciary, 111th Cong. 18 (2009) (prepared statement of Stephen B. Burbank), available at http://judiciary.senate.gov/pdf/12-02-09%20Burbank%20Testimony.pdf; Robert G. Bone, Plausibility Pleading Revisited and Revised: A Comment on Ashcroft v. Iqbal, 85 Notre Dame L. Rev. 849, 865 (2010).

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Because of this notice standard, it is an overstatement to malign Rule 8(a) for allowing “a claimant [to] proceed to discovery without any legally relevant allegations at all.”566

Myth #4: The Discovery System Is Broken Pleadings reform is usually clandestine discovery reform. The underlying assumption of the discovery-based pleadings criticism discussed above is that discovery, particularly for defendants and business litigants, is unfair, unduly costly, and uncontrollable. Longstanding concerns of “predatory discovery,”567 “discovery abuse,”568 and “fishing expeditions”569 dominate debates about discovery. Defense and corporate attorneys publicly decry the high costs of discovery570 and claim that “[o]ur discovery system is broken.”571 As some commentators have written, Only the most well-heeled litigants can afford to bring or defend a case that is likely to generate significant discovery, as most cases in this electronic age do. Until the default is reversed from “all you can eat” discovery . . . , the courthouse doors will remain closed to legitimate cases that the average citizen cannot afford to bring or defend.572

566. Hazard, supra note 558, at 1685. 567. Marrese v. Am. Acad. of Orthopaedic Surgeons, 726 F.2d 1150, 1162 (7th Cir. 1984) (en banc), rev’d on other grounds, 470 U.S. 373 (1985). 568. Section of Litig., ABA, Report of the Special Committee for the Study of Discovery Abuse 1 (1977), reprinted in 92 F.R.D. 149 (1982). 569. Bruno & Stillman, Inc. v. Globe Newspaper Co., 633 F.2d 583, 597 (1st Cir. 1980) (“As a threshold matter, the court should be satisfied that a claim is not frivolous, a pretense for using discovery powers in a fishing expedition.”). But the Supreme Court has suggested that such expeditions are allowed. See Hickman v. Taylor, 329 U.S. 495, 507 (1947) (“No longer can the time-honored cry of ‘fishing expedition’ serve to preclude a party from inquiring into the facts underlying his opponent’s case.”). See generally Stephen N. Subrin, Fishing Expeditions Allowed: The Historical Background of the 1938 Discovery Rules, 39 B.C. L. Rev. 691, 729 (1998) (explaining how the 1937 Rule Amendments, as passed, included “every major discovery device . . . with fewer constrain[ts] . . . than . . . originally drafted or . . . contemplated by the Advisory Committee”). 570. See, e.g., Hermann & Beck, supra note 551, at 146 (“All fair observers acknowledge the skyrocketing cost of discovery.”). 571. Gordon W. Netzorg & Tobin D. Kern, Proportional Discovery: Making it the Norm, Rather than the Exception, 87 Denv. U. L. Rev. 513, 513 (2010). 572. Id.

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Of course, a litigation system is bound to be costly when founded upon adversarialism, designed to dig deep to uncover the truth, and driven by attorneys who exact high fees. The American default is that parties—win or lose— bear their own litigation costs. As a result, at least one of the parties (usually the prevailing one, but perhaps even both) will always think that “[l]itigation is too expensive.”573 That perception, however, ought not be mistaken for reality. There is no sustained empirical evidence of excessive discovery; to the contrary, empirical research consistently has shown that discovery generally is proportional, reasonable, and unproblematic.574 Most lawsuits involve little or no discovery at all.575 In lawsuits with discovery, recent studies by researchers at the Federal Judicial Center (FJC) found that 60 percent of respondents reported that discovery generated the “right amount” of information (and another 17 percent indicated that the costs were “too little”), leaving only 23 percent complaining about disproportionately high discovery costs.576 The median estimate of discovery costs as a percentage of overall litigation costs was between 20–30 percent, and the median of e-discovery costs was around 5–10 percent of the total discovery costs.577 Total discovery costs, including attorney’s fees, amounted to a median of 1.6–3.3 percent of the stakes of the litigation.578 Arthur Miller has quipped that “real estate brokers (and others) charge a higher percentage for their services.”579 A final report of the FJC found that the median total

573. Gerety, supra note 526, at 9 (reporting practitioner concerns that discovery abuse is an ongoing problem). 574. Stephen B. Burbank, Rebuttal, Plausible Denial: Should Congress Overrule Twombly and Iqbal?, 158 U. Pa. L. Rev. PENNumbra 141, 151 (2009); Miller, supra note 525, at 82–83; Linda S. Mullenix, Discovery in Disarray: The Pervasive Myth of Pervasive Discovery Abuse and the Consequences for Unfounded Rulemaking, 46 Stan. L. Rev. 1393, 1432 (1994); Thomas E. Willging et al., An Empirical Study of Discovery and Disclosure Practice Under the 1993 Federal Rule Amendments, 39 B.C. L. Rev. 525, 527 (1998); Elizabeth G. Thornburg, Giving the “Haves” a Little More: Considering the 1998 Discovery Proposals, 52 SMU L. Rev. 229, 246–49 (1999). 575. Lee H. Rosenthal, From Rules of Procedure to How Lawyers Litigate: ’Twixt the Cup and the Lip, 87 Denv. U. L. Rev. 227, 240 (2010). 576. Emery G. Lee III & Thomas E. Willging, National, Case-Based Civil Rules Survey: Preliminary Report to the Judicial Conference Advisory Committee on Civil Rules 27–28 (Fed. Judicial Ctr. 2009), available at http://www.fjc.gov/public/pdf.nsf/lookup/dissurv1.pdf/$file/ dissurv1.pdf. 577. Id. at 2; see also Nathan Koppel, Using Software to Sift Digital Records, Wall St. J., Nov. 23, 2010, at B6 (reporting e-discovery costs of around 7 percent of total litigation costs). 578. Lee & Willging, supra note 576, at 2. 579. Miller, supra note 525, at 64.

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discovery cost was $15,000 for plaintiffs and $20,000 for defendants.580 On the basis of these data, the FJC researchers concluded that “the limited empirical evidence that exists does not support the broad statement that litigation costs, in general are out of control.” Rather, the monetary stakes of the particular case are the “best predictor” of costs, and, in most federal civil cases, the costs are proportionate to those stakes.581 This finding is consonant with the conclusion of the Federal Civil Rules Advisory Committee that, in the majority of cases, discovery works effectively and efficiently.582 As FJC researchers concluded, “[T]he typical case has relatively little discovery, conducted at costs that are proportionate to the stakes of litigation, and . . . discovery generally . . . yields information that aids in the just disposition of cases.”583 This is the case even in the age of electronically stored information.584 Plainly, the sky is not falling on the civil-litigation system as a whole. The evolving nature of discovery does repeatedly pose new challenges. Photocopiers dramatically increased document discovery in the 1960s and 1970s,585 and the computer age has dramatically increased electronic discovery. The rise of class actions and public litigation in the 1960s and 1970s ushered in an era of big-discovery cases. In many cases, defendants disproportionately bear discovery costs.586 Citing these challenges, critics often point out that the discovery of today was never contemplated by the drafters of 1938.587 The discovery rules of today, however, are not the discovery rules of 1938. Since 1970, discovery rules have been scaled back six times to, among other things, restrict the scope of discovery scope, inject a proportionality principle,

580. Judicial Conference Advisory Comm. on Civil Rules and the Comm. on Rules of Practice and Procedure, Report to the Chief Justice of the United States on the 2010 Conference on Civil Litigation 3 (2010); Emery G. Lee III & Thomas E. Willging, Defining the Problem of Cost in Federal Civil Litigation, 60 Duke L.J. 765, 770 (2010). 581. Id. at 768, 771–72. 582. Paul V. Niemeyer, Here We Go Again: Are the Federal Discovery Rules Really in Need of Amendment?, 39 B.C. L. Rev. 517, 523 (1998) (noting this efficiency as being “routine”). 583. Willging et al., supra note 574, at 527. See generally Thornburg, supra note 574 (exposing the myths of pervasive discovery abuse). 584. Danya Shocair Reda, The Cost-and-Delay Narrative in Civil Justice Reform: Its Fallacies and Functions, 90 Or. L. Rev. 1085 (2012). 585. See Epstein, supra note 543, at 190–91 (describing how pre-1938 federal litigation was a fairly straightforward affair, not prone to extensive discovery). 586. Id. at 192. 587. See, e.g., Victor E. Schwartz & Christopher E. Appel, Rational Pleading in the Modern World of Civil Litigation: The Lessons and Public Policy Benefits of Twombly and Iqbal, 33 Harv. J.L. & Pub. Pol’y 1107, 1109–10 (2010).

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toughen court supervision, impose presumptive limits, and encourage cost shifting for e-discovery.588 The recent e-discovery amendments in particular reflect a priority of cost control over disclosure and were adopted at the behest of a community concerned about the unique discovery costs that e-discovery could impose.589 The evidence showing that e-discovery has not been a major problem in most cases suggests that the discovery rules are up to the task of addressing evolving discovery concerns. It is true that, while discovery is generally proportionate and reasonable, a small subset of cases does encounter disproportionate and excessive discovery costs.590 Attorneys on both sides can, and sometimes do, engage in abusive discovery tactics, including making overbroad discovery requests and unjustifiably refusing to produce discovery.591 The FJC researchers found that the top 5 percent of discovery-cost cases revealed median discovery costs of $850,000 for plaintiffs and $991,900 for defendants.592 These often are large commercial disputes between sophisticated but evenly matched parties, with

588. Rosenthal, supra note 575, at 229–30 (explaining that the multitude of amendments is a result of not only attempting to keep the Rules “abreast with fundamental changes in practice,” but to also help establish reasonable limits on the broad scope of discovery). Whether these amendments have been successful is in some dispute. See Emery G. Lee III & Thomas E. Willging, Attorney Satisfaction with the Federal Rules of Civil Procedure 1 (Fed. Judicial Ctr. 2010) (citing attorney-survey disagreement that the cumulative effect of post-1976 discovery amendments has significantly reduced discovery abuse). 589. See, e.g., Thomas Y. Allman, The Need for Federal Standards Regarding Electronic Discovery, 68 Def. Couns. J. 206, 206–207 (2001); Martin H. Redish, Electronic Discovery and the Litigation Matrix, 51 Duke L.J. 561, 589–92, 628 (2001). Whether the e-discovery amendments have been successful is in some dispute. Compare Robert Hardaway et al., E-Discovery’s Threat to Civil Litigation: Reevaluating Rule 26 for the Digital Age, 63 Rutgers L. Rev. 521, 534–35 (2011) (arguing that, even in the face of the e-discovery amendments, “the rulemakers have failed to enact rigorous and realistic solutions to the problem”), with Emery G. Lee III & Kenneth J. Withers, Survey of United States Magistrate Judges on the Effectiveness of the 2006 Amendments to the Federal Rules of Civil Procedure, 11 Sedona Conf. J. 201, 202 (2010) (publishing survey results suggesting that judges believe the e-discovery rules have been productive). 590. Willging, supra note 574, at 530–92 (summarizing the Federal Judicial Center research by noting that “for most cases, discovery costs are modest and perceived by attorneys as proportional to parties’ needs and the stakes in the case” (emphasis added)); see also Thornburg, supra note 574, at 248 (estimating that about 5–10 percent of cases involve heavy and burdensome discovery); Stephen N. Subrin, Discovery in Global Perspective: Are We Nuts?, 52 DePaul L. Rev. 299, 308–309 (2002) (remarking that anywhere between 5–15 percent of cases involve abusive discovery tactics). 591. Joseph L. Ebersole & Barlow Burke, Discovery Problems in Civil Cases 1–5 (Fed. Judicial Ctr. 1980). 592. Judicial Conference Report, supra note 580, at 3.

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document discovery involving millions of documents.593 To illustrate, the electronic document depository in the Enron securities litigation contained over 20 million documents.594 Such document caches can require significant expense to process. E-discovery vendors can charge $3 million just to preserve and gather a defendant’s documents, and document review often entails page-bypage inspection by attorneys, which drives attorney’s fees into the millions of dollars.595 Although these are often the high-value lawsuits as well, there is little dispute that discovery costs in a small subset of cases are problematically high. The solution to these outlier cases, however, is not to impose an across-the-board, restrictive pleadings requirement.596 Instead, it is far more appropriate to make custom changes to deal with the few bad apples, as the Rules Committees have attempted to do with e-discovery. Indeed, the Rules already empower judges to deal with problem cases on their own terms. Rule 16 in particular provides a variety of tools for judges to effectively supervise discovery and structure a case’s pretrial process to fit the needs of the case based on its cost, complexity, issues, and party wishes.597 For example, a judge has the explicit power under Rule 16 to “discourag[e] wasteful pretrial activities,”598 set and modify the “extent of discovery,”599 “obtain[]

593. See Hazard, supra note 558, at 1675 (explaining that, when the stakes in litigation are high, discovery “occurs on [such] a massive scale” that it goes “far beyond” what is experienced in any other legal system in the world); see also Robert G. Bone, Discovery, in Procedural Law and Economics (Chris William Sanchirico ed., 2d ed. 2012) (explaining that excessive discovery usually attends to the “small set of complex, multi-party cases involving high stakes”). Notably, discovery in civil-rights litigation remains decidedly modest. See Paul D. Carrington, Politics and Civil Procedure Rulemaking: Reflections on Experience, 60 Duke L.J. 597, 610–11 (2010). 594. Diane M. Sumoski, Enron: Navigating the Civil Side of the Corporate Case of the Century 6 (2007), available at http://www.ccsb.com/pdf/Publications/Business%20 Litigation/Navigating_the_civil_side.pdf. 595. Mark Hermann & James M. Beck, Closing Statement, Plausible Denial: Should Congress Overrule Twombly and Iqbal?, 158 U. Pa. L. Rev. PENNumbra 141, 157 (2009), available at http://www.pennumbra.com/debates/pdfs/PlausibleDenial.pdf; Schwartz & Appel, supra note 587, at 1141. 596. But see Richard Marcus, Confessions of a Federal “Bureaucrat”: The Possibilities of Perfecting Procedural Reform, 35 W. St. U. L. Rev. 103, 113–14 (2007) (questioning if across-the-board changes might be necessary if a “rules-based method” for identifying those cases involving problematic discovery cannot be adopted). 597. Rosenthal, supra note 575, at 238. 598. Fed. R. Civ. P. 16(a)(3). 599. Fed. R. Civ. P. 16(b)(3)(B)(ii).

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admissions and stipulations about facts and documents to avoid unnecessary proof,” and “control[] and schedul[e] discovery.”600 In addition, Rule 16 permits the judge wide latitude in “formulating and simplifying the issues,” “eliminating frivolous claims or defenses,” “amending the pleadings,” “determining the appropriateness and timing of summary adjudication under Rule 56,”601 and generally “expediting disposition.”602 Rule 16 also authorizes the power to “adopt[] special procedures for managing potentially difficult or protracted actions that may involve complex issues, multiple parties, difficult legal questions, or unusual proof problems.”603 In short, district judges have broad discretion to develop a discovery plan to fit the needs of the case.604 Judges, therefore, retain maximum flexibility to fit the level of management to the needs of the case. While a simple case might have only a set of deadlines, a complex case may look very different. In a complex case, the Rules permit and encourage the judge to take an active role in structuring case-specific discovery solutions to maximize benefits while minimizing costs. If the complaint lacks detail and specificity, the judge can structure discovery in a focused and stepwise manner to test what issues really exist before opening up broader discovery. If the complaint pursues suspiciously weak claims with massive discovery, the judge can allow targeted discovery only on the weakest parts of the claims first and then invite motions and amendments on those claims if the discovery reveals no support. If, for example, the sheer number of relevant documents responsive to a request might be overburdensome when it is unknown what information those documents contain, the court can order production of a random sample of the documents first to cut down on costs and to provide a preliminary assessment of their importance to the case. If privacy concerns hinder full production, redaction of irrelevant sensitive information can be ordered. If information is particularly sensitive, the judge can order that nonsensitive discovery be conducted first to determine if that information would render the sensitive discovery unnecessary. The point is that even in complex cases, discovery can be structured in creative and thoughtful ways to make it efficient yet still effective.

600. Fed. R. Civ. P. 16(c)(2)(C), (F). 601. Fed. R. Civ. P. 16(c)(2)(A), (B), (E). 602. Fed. R. Civ. P. 16(a)(1). 603. Fed. R. Civ. P. 16(c)(2)(L). 604. For some reflections on the costs and benefits of Rule 16 discretion, see generally David L. Shapiro, Federal Rule 16: A Look at the Theory and Practice of Rulemaking, 137 U. Pa. L. Rev. 1969 (1989).

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Although judges, academics, and practitioners alike have questioned the efficacy of judicial case management,605 the evidence suggests that case management has been an effective tool in controlling discovery costs and streamlining pretrial litigation.606 This seems true even in big cases and cases involving significant e-discovery.607 Courts do not hesitate to pare back overbroad discovery requests, often with some impatience.608 The Manual for Complex Litigation provides a useful and effective resource for managing highly complex cases.609 Overall, most attorneys view case management as welcome and effective, though some surveys indicate that judges do not always exert the necessary oversight in certain high-cost cases.610 Summary judgment also can help control costs. It is true that summary judgment generally requires that discovery be complete, and thus a defendant may expend some time and resources in discovery before ever winning summary judgment. But, coupled with case management, summary judgment can be a powerful tool. It can be used before full discovery is concluded if the issue that is moved on has had its discovery concluded. The expansive use of summary judgment in employment-discrimination cases, for example, is striking.611 If a defendant sued under Title VII asserts that it has only fourteen 605. See, e.g., Frank H. Easterbrook, Discovery as Abuse, 69 B.U. L. Rev. 635, 638 (1989) (“Judges can do little about impositional discovery when parties control the legal claims to be presented and conduct the discovery themselves.”); Hermann & Beck, supra note 595, at 157 (“[C]ourts are institutionally incapable of controlling discovery.”), available at http:// www.pennumbra.com/debates/pdfs/PlausibleDenial.pdf. 606. Lee & Willging, supra note 576, at 66–68; Miller, supra note 521, at 1013–15. 607. Corina Gerety, Trial Bench Views: Findings from a National Survey on Civil Procedure 3 (IAALS 2010), available at http://www.du.edu/legalinstitute/pdf/Trial_Bench_Views.pdf; James S. Kakalik et al., Discovery Management: Further Analysis of the Civil Justice Reform Act Evaluation Data, 39 B.C. L. Rev. 613, 676–77 (1998). For a recent approval of the capabilities of the existing rules to address social-media discovery, see Steven Gensler, Special Rules for Social Media Discovery?, 65 Ark. L. Rev. 7 (2012). 608. Daniel C. Girard & Todd I. Espinosa, Limiting Evasive Discovery: A Proposal for Three Cost-Saving Amendments to the Federal Rules, 87 Denv. U. L. Rev. 473, 475 (2010). 609. Edward D. Cavanaugh, Twombly, the Federal Rules of Civil Procedure and the Courts, 82 St. John’s L. Rev. 877, 888 (2008). 610. Ebersole & Burke, supra note 591, at 1; Emery G. Lee III, Early Stages of Litigation Attorney Survey 7 (Fed. Judicial Ctr. 2012); Lee & Willging, supra note 576, at 62–64; Judicial Conference Report, supra note 580, at A-4. 611. Memorandum from Joe Cecil & George Cort on Report of Summary Judgment Practice Across Districts with Variations in Local Rules 3 (Fed. Judicial Ctr. 2008), available at http:// www.fjc.gov/public/pdf.nsf/lookup/sujulrs2.pdf/$file/sujulrs2.pdf. But see Rebecca Love Kourlis, et al., Reinvigorating Pleadings, 87 Denv. U. L. Rev. 245, 255–56 (2010) (asserting that summary judgment is largely ineffective as a mechanism to narrow the issues in any given litigation).

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employees (the statute only covers employers with fifteen or more),612 the court could stay discovery on all other issues and then invite a motion for summary judgment on that ground. Further, parties themselves can make cost-savings efforts. Self-regulation against abuse is always available.613 Defendants faced with massive document requests or complicated e-discovery obligations can shift the production costs to their opponents by allowing, in lieu of production, the plaintiffs to inspect the documents on their own dimes. Discovery production can be outsourced cheaply—large U.S. firms are using foreign lawyers routinely, at a cost-savings of up to $200 per hour for ordinary document review.614 Cooperation between the plaintiff’s counsel and the defendant’s counsel can streamline costs.615 A recent FJC survey of 1,000 attorneys of record in recently terminated civil cases revealed that 60 percent of respondents who met and conferred under Rule 26(f) reported that the meeting assisted with proportional discovery; 30 percent reported that the meeting helped resolve the case promptly.616 Rule 54(d)(1) generally requires the plaintiff to reimburse the defendant’s litigation costs (though not attorney’s fees) if the defendant prevails on dismissal, summary judgment, or at trial.617 Rule 68 allows defendants to hedge their cost risk even if the plaintiff prevails.618 Many federal statutes have fee-shifting provisions for certain prevailing defendants.619 And the discovery rules permit immediate fee- and cost-shifting in some instances.620 In other words, even if an innocent defendant must slog through some discovery to reach summary judgment, the system offers opportunities for the defendant to reduce her costs, perhaps significantly.

612. 42 U.S.C. § 2000e(b) (2006). 613. Self-regulation also appears, at least anecdotally, to be prevalent. Lee & Willging, supra note 580, at 774. 614. See R.L. Marcus, The Balkanized American Legal Profession, in The Landscape of the Legal Professions in Europe and the USA: Continuity and Change 3, 24–25 (A. Uzelac & C.H. van Rhee eds. 2011). 615. Gerety, supra note 526, at 14. 616. Lee, supra note 610, at 1. 617. See Fed. R. Civ. P. 54(d)(1). 618. See Fed. R. Civ. P. 68. For the argument that Rule 68 is designed to compensate defendants forced to defend in court against unreasonable litigation in light of the defendant’s admitted liability, see Robert G. Bone, “To Encourage Settlement”: Rule 68, Offers of Judgment, and the History of the Federal Rules of Civil Procedure, 102 Nw. U. L. Rev. 1561 (2008). 619. See, e.g., 42 U.S.C. § 1988(b), (c) (2006); cf. City of Burlington v. Dague, 505 U.S. 557, 561–62 (1992) (listing various federal fee-shifting provisions). 620. See, e.g., Fed. R. Civ. P. 26(c).

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Finally, although the e-discovery conversation has focused on increased burdens, the technology age also brings new opportunities for discovery-cost savings. Information resources continue to expand and become more accessible. The Internet makes investigation cheap and information widely available. The ease of investigation is likely to make formal discovery of such information less costly. Indeed, the Rules balance accessibility and discoverability inversely; as self-discovery becomes easier and cheaper for the requestor, the responder has more ground to refuse to incur the burdens of producing that information.621 Technological advances could offer greater incentives for private investigation to lighten the burdens of formal discovery. Other technological advances are easing the burdens of discovery logistics. Depositions, for example, can be conducted by videoconference to minimize travel costs. Technology can even lessen the burden of e-discovery, the perennial whipping boy for proponents of discovery reform. The leading case on e-discovery reported, in its early days, “Electronic evidence is frequently cheaper and easier to produce than paper evidence because it can be searched automatically, key words can be run for privilege checks, and the production can be made in electronic form obviating the need for mass photocopying.”622 Today, the information market is advancing faster. E-discovery vendors, numbering more than 600 in population as of 2012, offer a variety of technology-based review software and services that can be far cheaper than manual physical review.623 In January 2010, for example, the company Blackstone Discovery helped analyze 1.5 million documents for under $100,000.624 The company’s software, which contains sociological artificial intelligence, does more than search terms. It can discern patterns of behavior across documents, perhaps more easily than a staff of individual attorneys. It can find numerical anomalies, deduce suspicious activity, and tag red flags.625 Also in 2010, a new software helped the law firm DLA Piper search through 570,000 documents in two days; the law firm then needed just one more day to identify the 3,070 documents that needed to be produced.626 The National Law Journal reported

621. See id. (allowing a court “to protect a party . . . from . . . undue burden or expense” (emphasis added)). 622. Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 318 (S.D.N.Y. 2003). 623. See George Socha & Tom Gelbmann, Strange Times, L. Tech. News, Aug. 1, 2009. 624. John Markoff, Armies of Expensive Lawyers, Replaced by Cheaper Software, N.Y. Times, Mar. 5, 2011, at A1. 625. Id. 626. Id.

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in 2009 that the average price for an e-discovery vendor to process, search, and export 1GB of data (approximately 100,000 pages of typed text) was $400; the estimated manual-review cost is approximately $35,000.627 Existing reports suggest that technology-assisted review can reduce attorney review to a meager 1.9 percent of the documents.628 Industry leaders predict that software will soon allow one attorney to oversee discovery that would have taken 500 attorneys.629 And the evidence suggests that technology-assisted review can be more accurate than manual review.630 If a computer can beat the best human chess player and defeat the best Jeopardy! contestant, what are a few million documents to analyze? Courts and attorneys seem to be taking note. A recent case illustrates the potential of technology-assisted discovery production. In Moore v. Publicis Groupe, a federal magistrate judge, after exhaustively reviewing the pros and cons of using technology, ordered computerized predictive coding for automated e-discovery in an employment-discrimination class action. Using an initial human review of 2,399 documents, the parties created a “seed set” to determine an appropriate protocol for training the new software, Axcelerate. Once trained, Axcelerate will code and categorize the remaining 3 million documents without any further human review.631 Coupled with the recent rule amendments allowing clawback agreements to preserve privilege in the event of an inadvertent waiver, technology-assisted review has enormous promise to keep discovery costs proportional while enhancing discovery access. All this is not to say that discovery could not be streamlined or made more efficient. I concede that some discovery is more expensive than it needs to be and that abuses do occur, and I support efforts to trim excess and waste. But discovery expense and abuse are not the out-of-control problems that critics rail against. In the vast majority of cases, discovery is modest and appropriate, and technology advancement is providing useful cost-saving alternatives.

627. See Megan Jones, Giving Electronic Discovery a Chance to Grow Up, Nat’l L.J., Dec. 14, 2009, at 18; Donald Wochna, Electronic Data, Electronic Searching, Inadvertent Production of Privileged Data: A Perfect Storm, 43 Akron L. Rev. 847, 853 (2010); Gideon Mark, Federal Discovery Stays, 45 U. Mich. J.L. Reform 405, 420 (2012). 628. See Maura R. Grossman & Gordon V. Cormack, Technology-Assisted Review in E-Discovery Can Be More Effective and More Efficient Than Exhaustive Manual Review, Rich. J.L.& Tech. (Spring 2011), at 43. 629. Markoff, supra note 624, at A1. 630. See Grossman & Cormack, supra note 628, at 48. 631. See Moore v. Publicis Groupe, 11 Civ. 1279 (S.D.N.Y. Feb. 24, 2012), available at http:// pdfserver.amlaw.com/legaltechnology/DaSilva_Moore_11_civ_1279_Opinion_20120224.pdf.

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A few outlier cases have more discovery, sometimes on a massive scale, but the discovery and case-management rules, at least in theory, give judges the tools to help control it. Surely if judges can be trusted to make judgments based on “judicial experience and common sense,”632 they can be trusted to exercise their authority under the rules to effectively control discovery.

Myth #5: Litigation Is out of Control Modern procedural reform movements often include the claim that litigation is running out of control and posing a liability crisis for U.S. businesses.633 It is true that American reliance on the administrative system to enforce public norms began to wax in the 1960s, and the advent of the Civil Rights Era and procedural mechanisms like class actions dramatically increased federal docket loads.634 Total federal cases increased from around 68,000 in 1940 (for around 180 district judges) to around 340,000 cases in 2006 (for around 675 district judges).635 Since the 1970s, concern about these rising caseloads has pressured rulemakers to scale back the liberal ethos animating the rules.636 Careful studies, however, have “demonstrate[d] that the [so-called] ‘litigation explosion’ and ‘liability crisis’ are largely myths.”637 True, the number of criminal cases has increased, spurred by an expanded federal criminal law.638 632. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009). 633. See, e.g., Hermann & Beck, supra note 551, at 145. For a thorough exposé, see Miller, supra note 521, at 985–96. 634. Carrington, supra note 593, at 601–606; Abram Chayes, The Role of the Judge in Public Law Litigation, 89 Harv. L. Rev. 1281, 1288–304 (1976). 635. See Rex R. Perschbacher & Debra Lyn Bassett, The Revolution of 1938 and Its Discontents, 61 Okla. L. Rev. 275, 276 (2008). 636. See Jack H. Friedenthal, The Rulemaking Power of the Supreme Court: A Contemporary Crisis, 27 Stan. L. Rev. 673 (1975); Richard Posner, The Federal Courts: Crisis and Reform 59–95 (1985). 637. Robert W. Gordon, The Citizen Lawyer—A Brief Informal History of a Myth with Some Basis in Reality, 50 Wm. & Mary L. Rev. 1169, 1199 (2009); see also Stephen Carroll & Nicholas Pace, Assessing the Effects of Tort Reform (1987), available at http://www. rand.org/content/dam/rand/pubs/reports/2007/R3554.pdf (analyzing the effects of various legislative “tort reform” initiatives on civil litigation); Stephen B. Burbank et al., Private Enforcement of Statutory and Administrative Law in the United States 29–30, 53 (Mar. 4, 2011), available at http://lsr.nellco.org/upenn_wps/356/ (noting various studies and sources that debunk these myths). 638. See Miller, supra note 521, at 990–92 (attributing such expansion to the transformation of traditionally state criminal laws into federal offenses, the promulgation of federal “procedural regulations” to expedite criminal case processing, and the passage of various legislation expanding the scope of federal offenses).

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And prisoner litigation has driven an increase in the federal civil caseload,639 inducing Congress to devise ways to deal specifically with prisoner litigation via statutes such as the Prisoner Litigation Reform Act of 1997 and the habeas-corpus provisions of the Antiterrorism and Effective Death Penalty Act of 1996. But non-prisoner civil litigation has not increased dramatically.640 Generally speaking, the reputation of American litigation as a big-payout lottery is unfounded.641 If anything, litigation is underused. Empirical research has convincingly shown that Americans—despite their litigious reputation—routinely attempt to resolve disputes privately (and often to their satisfaction) before turning to the courts.642 Data reveal that up to 95 percent of all legally cognizable grievances are never brought to court,643 either because the financial and non-financial costs to the plaintiff are too great or because the parties resolve the dispute privately before filing suit.644 Despite the lack of evidence of a civil-litigation “crisis,” the Supreme Court’s recent rulings have done their part to disincentivize civil litigation further, by imposing drastic limitations on punitive damages,645 restricting the 639. Marc Galanter, The Day After the Litigation Explosion, 46 Md. L. Rev. 3, 16–18 (1986) (finding that prisoner litigation is one of the five types of cases which experienced a “heavily concentrated” filing increase during the nine-year survey period). 640. See Miller, supra note 521, at 990–95. 641. J. Mark Ramseyer & Eric B. Rasmusen, Are Americans More Litigious? Some Quantitative Evidence, in An American Illness (Frank Buckley ed. 2011), available at http://buckleysmix. com/wp-content/uploads/2010/10/Rasmusen-Ramseyer.pdf (attributing such a mischaracterization to the “mishandling [of ] a few special aspects of law,” and not because of the normal operation of American courts). 642. See Richard E. Miller & Austin Sarat, Grievances, Claims, and Disputes: Assessing the Adversary Culture, 15 Law & Soc’y Rev. 525, 537 (1981) (finding that almost 90 percent of grievance claimants do not file a lawsuit). 643. See id. at 537, 544; David M. Trubek et al., The Costs of Ordinary Litigation, 31 UCLA L. Rev. 72, 86–87 (1983); see also Harvard Medical Practice Study, Patients, Doctors, and Lawyers: Medical Injury, Malpractice Litigation and Patient Compensation in New York 7–1 (1990), available at http://nysl.nysed.gov/uhtbin/cgisirsi/20111026145555/ SIRSI/0/518/0/21331963/Content/1?new_gateway_db=ILINK (estimating that lawsuits were filed in only about one of every eight actionable injuries); Patricia M. Danzon, Medical Malpractice: Theory, Evidence, and Public Policy 24 (1985) (estimating one lawsuit in every ten negligent injuries caused by medical malpractice). 644. See Nancy A. Welsh, I Could Have Been a Contender: Summary Jury Trial as a Means to Overcome Iqbal’s Negative Effects upon Pre-Litigation Communication, Negotiation and Early, Consensual Dispute Resolution, 114 Penn St. L. Rev. 1149, 1168–70 (2010). 645. See, e.g., Exxon Shipping v. Baker, 554 U.S. 471, 501 (2008); State Farm Mut. Automobile Ins. v. Campbell, 538 U.S. 408, 425 (2003); BMW of N. Am. v. Gore, 517 U.S. 559, 574–75 (1996).

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use of class actions,646 and sanctioning the use of privatized arbitration as a substitute for litigation.647 Put simply, there is no civil-litigation crisis.

Myth #6: Plaintiffs and Their Attorneys Are Behind These Problems A common lament is that plaintiff’s attorneys are to blame for all of these supposed ills: armed with nothing more than conclusory implausible allegations, they seek ridiculously overbroad and costly discovery in order to blackmail defendants into unjust settlements. In truth, the civil system works remarkably well, as previous subsections in this chapter have shown. Abusive litigation and discovery tactics can present problems in a relatively few individual cases, but plaintiff’s attorneys are not entirely to blame. As Arthur Miller has quipped, “First, frivolous litigation is the lawsuit the other side brings against one’s client; second, abuse is whatever the opposing counsel does.”648 To illustrate, consider the charge of abusive discovery. Rational plaintiff’s attorneys, particularly those on a contingency fee, know that an overbroad discovery request is a losing bet. Overbroad discovery results in either a slew of objections and motions or a haystack of discovery responses that cost an inordinate amount to analyze.649 Additionally, Rule 37 sanctions are available to shift costs and fees for unjustified discovery requests.650 Because of these controls, self-regulation almost certainly occurs regularly. Both parties, recognizing a shared interest in cost-effective discovery and recognizing the mutual benefit in targeted requests and responses, may come up with solutions to discovery-cost problems, such as using agreed-upon search terms to find relevant electronic documents. I concede that some plaintiffs’ discovery requests are overbroad, careless, and counterproductive. That is a problem that I will address in more detail below. For now, the point I want to make is that whatever problem exists is not exclusively, or even primarily, a plaintiff-side problem.651 Both the

646. See, e.g., Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011); Ortiz v. Fibreboard Corp., 527 U.S. 815, 864 (1999); Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 622 (1997). 647. See, e.g., AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1748 (2011). 648. Miller, supra note 525, at 82. 649. See id. at 67. 650. Fed. R. Civ. P. 37(a)(5)(B). 651. See Willging, supra note 574, at 553 (finding that 58 percent of plaintiffs and 42 percent of defendants reported abusive discovery tactics).

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plaintiff’s bar and the defense bar agree that higher litigation costs correlate with representation by a large law firm, usually on the defense side.652 That is not surprising. Hourly billing and contemporaneous payment—primarily a defense-side practice that, in some cases, exceeds $1,000/hour for senior partners and $500/hour for associates653—are resource-consumptive motivators.654 They incentivize massive discovery in a “leave no stone unturned” attitude, excessive and dubious motions raising kitchen-sink legal theories, unjustified discovery stonewalling, haystack discovery responses, and expensive expert-testimony practice.655 A particularly egregious but common practice, one that mirrors the complaint of overbroad requests, is the insertion of boilerplate objections.656 As two practitioners lament:

Parties routinely (and seemingly indiscriminately) object to virtually every request on the same grounds, including broad relevancy objections, objections that requests are unduly burdensome, harassing, or assume facts not in evidence, privacy objections, and attorney-client privilege/work-product objections. A typical set of discovery responses begins with a list of “general objections” that run the gamut from ambiguity, undue burden, overbreadth and irrelevance, to objections that the requests seek confidential, proprietary, or trade secret information, work product, or attorney–client communications. Rarely tailored to the actual requests or the facts of the case, the objections often appear to be the responding law firm’s state-of-the-art boilerplate insert.

652. Emery G. Lee III & Thomas E. Willging, Litigation Costs in Civil Cases: Multivariate Analysis 1 (Fed. Judicial Ctr. 2010), available at http://www.fjc.gov/public/pdf.nsf/lookup/ costciv1.pdf/$file/costciv1.pdf. 653. Nelson D. Schwartz & Julie Creswell, Who Knew Bankruptcy Paid So Well?, N.Y. Times, May 2, 2010, at BU1. 654. See Robert L. Nelson, The Discovery Process as a Circle of Blame: Institutional, Professional, and Socio-Economic Factors that Contribute to Unreasonable, Inefficient, and Amoral Behavior in Corporate Litigation, 67 Fordham L. Rev. 773, 778–79 (1999). 655. Carrington, supra note 593, at 610–11; Michael J. Kaufman & Joan M. Wunderlich, The Judicial Access Barriers to Remedies for Securities Fraud, 75 L. & Contemp. Probs. 55, 77 (2012); Miller, supra note 525, at 66–67. 656. Daniel C. Girard & Todd I. Espinosa, Limiting Evasive Discovery: A Proposal for Three Cost-Saving Amendments to the Federal Rules, 87 Denv. U. L. Rev. 473, 482 (2010).

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The responses to specific requests usually incorporate the litany of “general objections” in its entirety, add some additional (or sometimes even duplicative) objections, and then state that “subject to and without waiving the foregoing objections,” the responding party will produce documents in response to the request. Alternatively, the response may state that “based upon the foregoing objections” the responding party will not produce documents in response to the request. It is not unusual for a single discovery request to be met with a dozen or more objections, regardless of whether the responding party agrees to produce responsive documents. The propounding party cannot determine whether any documents are actually being withheld on the basis of any of the objections, or even the specific objections relied upon. Compounding the problem is the common practice of asserting general objections “to the extent” they may apply to a particular request.657 These cost-driving tactics are good for defense lawyers, but they often are driven by the defense clients themselves. Why? Because by shifting litigation from a battle of the facts to a battle of costs, the deepest pockets gain leverage. As R.J. Reynolds’s counsel once explained, [T]he aggressive posture we have taken regarding depositions and discovery in general continues to make these cases extremely burdensome and expensive for plaintiffs’ lawyers, particularly sole practitioners. To paraphrase General Patton, the way we won these cases was not by spending all of [RJR]’s money, but by making that other son of a bitch spend all of his.658 Subjecting plaintiffs, who may have more resource limitations, to abusive discovery can coerce plaintiffs into settlements favoring defendants.659 A recent article quoted Diane Sullivan, a defense attorney at Dechert LLP, as saying that plaintiff’s attorneys “have been more willing to settle at lower dollar amounts”

657. Id. at 482–83. 658. Haines v. Liggett Group, Inc., 814 F. Supp. 414, 421 (D.N.J. 1993). 659. See Tom Baker & Sean J. Griffith, How the Merits Matter: Directors’ and Officers’ Insurance and Securities Settlements, 157 U. Pa. L. Rev. 755, 778–89 (2009); Gillian K. Hadfield, Exploring Economic and Democratic Theories of Civil Litigation: Differences Between Individual and Organizational Litigants in the Disposition of Federal Civil Cases, 57 Stan. L. Rev. 1275, 1285–86 (2005). But see Hardaway, supra note 589, at 538–39 (conceding that both parties may engage in abusive discovery practices but arguing that plaintiffs benefit more).

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and are “choosing cash now over investing in prolonged litigation.”660 In significant part, that trend is due to the cost pressure that large defense firms can impose on smaller plaintiff’s firms.661 In sum, the defense bar and corporate interests point the finger of blame for the ills of the litigation system at everyone but themselves. Yet defenseside and corporate lawyers bear responsibility as well. How much of the problem resides with one side or the other is unclear.662 But it seems obvious that whatever problem exists cannot—and ought not—be rectified exclusively by plaintiff-side pleading changes.

Proposal: Restore Old Pleading, with Some Renewed Focus I agree with Keith Hylton that, economically, “early dismissals, by eliminating low-merit claims before they become costly, offer benefits to society in comparison to late dismissals.”663 But, as I have shown above, the system can already do that, even without New Pleading. Old Pleading and the rest of the pretrial system have the tools to manage civil litigation just fine in the vast majority of cases—and perhaps in every case. But not every case works out that way. A principal reason, Judge and Standing Committee Chair Lee Rosenthal has explained, is that there is “a gap between the cup of the rules and the lip of judges, lawyers, and litigants applying them.”664 In other words, although the civil system already provides the right tools, judges and attorneys are not using them effectively. In essence, we need more fidelity to the Rules, not changes to them. To improve the system, then, a return to Old Pleading should be accompanied by a renewed focus on active judicial case management and a close attention to discrete classes of problem suits. I will briefly explain each.

660. Claire Zillman, Developments: Cash-Flow Woes, Am. Law. (Nov. 1, 2009), available at http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202434635336&slreturn=1&hbxlogin=1 &slreturn=1&hbxlogin=1. 661. See Thomas E. Willging & Emery G. Lee III, In Their Words: Attorney Views About Costs and Procedures in Federal Civil Litigation 12 (Fed. Judicial Ctr. 2010), available at http://www. fjc.gov/public/pdf.nsf/lookup/costciv3.pdf/$file/costciv3.pdf (attributing the source of such pressure arising not out of the large nature of the defense firm, but of the size and resources of the defense firm’s client). 662. Miller, supra note 525, at 63. 663. Keith N. Hylton, When Should a Case be Dismissed? The Economics of Pleading and Summary Judgment Standards, 16 Sup. Ct. Econ. Rev. 39, 41 (2008). 664. Rosenthal, supra note 575, at 230.

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Embracing Case Management Attention to case management requires recognition that all of the players share responsibility for achieving the common goal of making pretrial litigation efficient and effective. The court ultimately has the most power in imposing case-management tools, and judges should be liberal in deploying them when the case warrants. Passive adjudication may be appropriate in some cases,665 but the myths discussed above hide an underlying truth: certain complex and troublesome cases demand a more active model. In those cases, district judges should not hesitate to engage the facts themselves or refer the matter to a magistrate judge or special master to oversee. As Judge Rosenthal has written: “[T]he critical element in bridging the gap between the rules and their application is making the district judge more accessible to the lawyers, more involved in the details of discovery in cases that need such involvement, and more present in the cases that require such supervision.”666 Several mechanisms for increased involvement exist, hold promise, and are readily available to courts. These mechanisms include a rigorous insistence upon good-faith consultation when parties meet and confer on discovery and other pretrial issues; sensitivity and deference to defense-side suggestions for organizing or structuring discovery; a willingness to think creatively about discovery and its costs, including sensitivity to the timing of discovery; a constant recalibration of the costs and benefits of discovery, as informed by discovery already taken and any changes to the case; and a more affirmative use of partial summary judgment to focus issues and discovery. These are just a few generalized options listed for illustrative purposes. Individual cases will present their own particularized opportunities for increased judicial involvement. Parties, too, bear responsibilities to self-regulate and to cooperate with the court in identifying issues that could benefit from judicial intervention. There is a pervasive attitude of tit-for-tat discovery rather than cooperative management.667 Parties should resist the urge to combat overbroad requests with 665. See Carrie Menkel-Meadow, For and Against Settlement: Uses and Abuses of the Mandatory Settlement Conference, 33 UCLA L. Rev. 485, 511–14 (1985); Judith Resnik, Managerial Judges, 96 Harv. L. Rev. 374, 378–80 (1982); E. Donald Elliott, Managerial Judging and the Evolution of Procedure, 53 U. Chi. L. Rev. 306, 314 (1986). 666. Rosenthal, supra note 575, at 231 (emphasis in original). Richard Epstein agrees: “The single most important reform, therefore, is to make sure that district (or more likely magistrate) court judges exercise a strong hand over how the process is operated.” Epstein, supra note 543, at 206. 667. See Subrin, supra note 569, at 706–707; cf. Miller, supra note 525, at 9 (“[T]oday’s civil litigation is neither civil nor litigation as previously known.”).

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overbroad objections; instead, parties should recognize the shared interest in keeping discovery costs low, and they should work together to limit and structure discovery in the way most appropriate for the case, as envisioned by the Federal Rules.668 Failing agreement, parties should not hesitate to bring irreconcilable disputes to the court’s attention immediately, and judges should welcome such action. Parties and the court should consider using neutral third parties—mediators, masters, experts, or other agents—to help identify realistic discovery goals, to serve as intermediaries to reduce the risk of exploitation, to be “discovery escrow agents” to encourage exchange, or to provide non-partisan expert analyses.669 Overall, the parties and their attorneys should work with the court to get the appropriate level of oversight and proportionality control that best suit the needs of a particular case. The combination of liberal pleading, case management, and improved technology could create incentives for defendants to reduce litigation and discovery costs by disclosing exculpatory explanations. For example, innocent defendants who engage in behavior that might nevertheless induce a lawsuit could publicize signals of lawful conduct. Preemptive, public explanations of otherwise suspicious conduct are likely to dissuade some potential lawsuits. Even if kept private, the signals might be amassed and stored in an easily accessible way such that limited production on the issue, if a lawsuit is filed, is quick, cheap, and dispositive. An employer expecting to terminate an employee for sustained poor performance, for example, should document that performance in the employee’s file. No doubt these and like practices are followed already in many circumstances. I do not mean to suggest that all or even a significant explanatory burden ought to be placed on innocent defendants, but perhaps some explanatory effort would be appropriate, especially in information-asymmetry suits. And making that effort could be an easy, inexpensive, and effective way to stave off extensive discovery. What I propose, then, is an attitudinal shift toward collaborative cost-minimization. This book is not the venue to lay out and defend such a plan in detail, and I readily acknowledge that such a shift would not be easy. Old habits die hard; the adversarial system is ingrained; some clients expect or demand aggressive representation; and busy judges let supervision lag. No

668. See, e.g., Fed. R. Civ. P. 26(f). 669. John Lande, How Neutrals Can Provide Early Case Management of Construction Disputes, JAMS Global Construction Solutions (JAMS Global Eng’g & Constr. Grp., New York, N.Y.), Spring 2011, at 6, 7, available at http://www.jamsadr.com/files/Uploads/Documents/ GEC-Newsletter/JAMS-GEC-News-2011-Spring.pdf.

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doubt I will need more than a few paragraphs to convince skeptics that the solution is within reach. Yet there are reasons to suspect that the trend toward collaborative managerialism is already happening. The Southern District of New York is piloting two new initiatives to address excessively adversarial discovery. The first, developed by the Federal Judicial Center, allows individual judges to adopt new initial-discovery protocols in lieu of mandatory disclosures under Rule 26(a) for adverse-action employment cases. The initial discovery is an expanded set of document requests and interrogatories typical for such cases that must be responded to within thirty days of the defendant’s answer or motion.670 For example, one request asks for “[a]ll communications concerning the factual allegations or claims at issue in this lawsuit between the plaintiff and the defendant.”671 The hope is to “encourage parties and their counsel to exchange the most relevant information and documents early in the case, to assist in framing the issues to be resolved and to plan for more efficient and targeted discovery.”672 The second initiative develops best practices for managing “complex” civil cases (generally encompassing derivative suits, products liability, antitrust, patent, trademark, securities, environmental, MDL, and class actions). The initiative spans from matters as mundane as the page limits for briefs to more important matters, such as a fill-in-the-blanks checklist for managing e-discovery. Early reactions from the bar are favorable, and the hope is that the initiative will focus both judges’ and parties’ attention on the importance of streamlining discovery.673 There is still quite a ways to go before real institutional change can occur, but who is to say that these small steps will not gather momentum? At the least, we ought to applaud and encourage the efforts to realize the potential of the existing system rather than changing it prematurely.

Targeted Pleading or Discovery Rules for Problem Lawsuits A great virtue of the Federal Rules is their transsubstantivity, which makes them generally applicable to all claims and causes of action. Transsubstantivity 670. Pilot Project Regarding Initial Discovery Protocols for Employment Cases Alleging Adverse Action 2 (Fed. Judicial Ctr. 2011). 671. Id. at 6. 672. Id. at 1. 673. Available at http://www.uscourts.gov/news/TheThirdBranch/11–12–01/Pilot_Project_ Hopes_to_Tame_Complex_Civil_Cases.aspx

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makes the procedure easier to learn and use because, regardless of the substantive claim in dispute, the procedural rules are uniform. Indeed, transsubstantivity was a primary goal of the 1938 reformers, who were dismayed by the procedural morasses created by the common law and by the stark differences in law and equity procedures.674 F.W. Maitland once wrote: “The forms of action we have buried, but they still rule us from their graves.”675 But one need not advocate for a return to the Forms of Action to suggest that a modest erosion of transsubstantivity is appropriate today.676 The Federal Rules themselves implicitly acknowledge that rigid uniformity is neither attainable nor desirable.677 Rule 9(b) sets out pleading with particularity for fraud and a few other issues. Rule 16 gives case-by-case powers to federal judges to modify the procedures of individual cases as they see fit. Local rules create additional specific rules for different geographical jurisdictions, and even individual judges have their own rules.678 Although local and individual rules are supposed to be sub-procedural,679 such rules have “limit[ed] the number of interrogatories, provid[ed] for six-member juries, and [regulated] e-discovery.”680 Other classes of federal civil cases, including habeas corpus cases and bankruptcy cases, have their own unique Federal Rules attached to them. These individualizations demonstrate that the Federal Rules exhibit, at best, a faint-hearted transsubstantivity. Further, statutes can override the rules, and Congress has, on occasion, determined that a specific class of claims warrants a unique procedure.

674. See supra chapter 1. 675. F.W. Maitland, Lecture I, in The Forms of Action at Common Law 1 (A.H. Chaytor & W.J. Whittaker eds. 1968). 676. For attacks on transsubstantivity, see Robert G. Bone, Securing the Normative Foundations of Litigation Reform, 86 B.U. L. Rev. 1155 (2006); Stephen B. Burbank, Of Rules and Discretion: The Supreme Court, Federal Rules and Common Law, 63 Notre Dame L. Rev. 693 (1988); Robert M. Cover, For James Wm. Moore: Some Reflections on a Reading of the Rules, 84 Yale L.J. 718 (1975); Stephen N. Subrin, The Limitations on Transsubstantive Procedure: An Essay on Adjusting the “One Size Fits All” Assumption, 87 Denv. U. L. Rev. 377 (2010). For defenses of transsubstantivity, see Paul D. Carrington, Making Rules to Dispose of Manifestly Unfounded Assertions: An Exorcism of the Bogy of Non-Trans-Substantive Rules of Civil Procedure, 137 U. Pa. L. Rev. 2067 (1989); Geoffrey C. Hazard, Jr., Discovery Vices and Trans-Substantive Virtues in the Federal Rules of Civil Procedure, 137 U. Pa. L. Rev. 2237 (1989). 677. Cf. Amanda Frost, Overvaluing Uniformity, 94 Va. L. Rev. 1567, 1584–606 (2008). 678. See Samuel P. Jordan, Local Rules and the Limits of Trans-Territorial Procedure, 52 Wm. & Mary L. Rev. 415, 432–36, 441–44 (2010). 679. See Miner v. Atlass, 363 U.S. 641, 650 (1960). 680. See Perschbacher & Bassett, supra note 635, at 294.

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For example, Congress passed the Private Securities Litigation Reform Act,681 which imposes heightened pleading and proof in certain securities lawsuits,682 in response to lobbying by business industries to combat a perception of nuisance litigation.683 Congress passed the Prison Litigation Reform Act,684 which makes dismissal of prisoner complaints easier,685 to curb frivolous prisoner litigation.686 The infamous Class Action Fairness Act,687 motivated by the fear that some state courts were engaging in class-action “blackmail,”688 directly modifies removal procedure and statutory diversity jurisdiction for certain class actions.689 Several other notable examples, including the Y2K Act690 and the Civil Justice Reform Act,691 exist. These modest intrusions into transsubstantivity are perfectly appropriate. Although the time may come when wholesale revision of civil procedure becomes preferable to minor, tailored adjustments, the system of having a general default rule subject to a few necessary exceptions is sound. If a small class of cases presents a problem that the general default rule is inadequate to resolve sufficiently, we should treat the problem with a small solution tailored to the problem. We should not allow the exceptional cases to direct wholesale revisions of the general rule. Yet that exactly describes New Pleading. The class of cases motivating New Pleading encompasses governmental-defendant suits and high-discovery-cost cases like antitrust, RICO, and large commercial disputes. According to data collected by the Administrative Office of the U.S. Courts,

681. Pub. L. No. 104-67, 109 Stat. 737 (1995). 682. 15 U.S.C. § 78u-4(b)(1)-(2) (2006). 683. James D. Cox et al., Do Differences in Pleading Standards Cause Forum Shopping in Securities Class Actions?: Doctrinal and Empirical Analyses, 2009 Wis. L. Rev. 421, 423 (2009). 684. Pub. L. No. 104-134, tit. VIII, 110 Stat. 1321–66 (1996) (codified at scattered sections of 11, 18, 28, and 42 U.S.C.). 685. 42 U.S.C. § 1997e(c) (2006) (providing for sua sponte dismissal of certain prisoner complaints). 686. Riley v. Kurtz, 361 F.3d 906, 917 (6th Cir. 2004). 687. Pub. L. No. 109–2, 119 Stat. 4 (2005). 688. Jeffrey L. Roether, Interpreting Congressional Silence: CAFA’s Jurisdictional Burden of Proof in Post-Removal Remand Proceedings, 75 Fordham L. Rev. 2745, 2754 (2007). 689. 28 U.S.C. § 1332(d) (2006). 690. Pub. L. No. 106-37, 113 Stat. 185 (1999) (codified at 15 U.S.C. §§ 6601-6617 (2006)). 691. Pub. L. No. 101-650, tit. I, 104 Stat. 5089 (1990) (codified as amended at 28 U.S.C. §§ 471–482 (2006)).

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antitrust (as in Twombly), RICO, and non-prisoner civil-rights actions against the federal government (as in Iqbal) all together amounted to just over 1 percent of all new federal civil filings in 2010.692 Even accepting the high-range estimate that the percentage of high-discovery cases is 10 percent, the problem cases that animated New Pleading comprise a comparable or smaller subset than prisoner litigation. Yet unlike the reforms directed specifically at the ills of prisoner litigation, New Pleading sets a general pleading rule for all cases. Restoring Old Pleading, then, reflects a commitment to a default set of transsubstantive rules that reflects the holistic approach taken by the 1938 reformers, coupled with a willingness to employ specific, targeted, non-transsubstantive exceptions as needed. Indeed, some have argued for alternate procedural mechanisms for different types of cases based on the level of complexity and for allowing parties to be able to choose the type of procedure applicable.693 Steve Subrin, for example, has proposed different default discovery limits for different fields of litigation that are the most susceptible to high discovery costs.694 He also has advocated for a simplified procedure for non-complex claims, perhaps indicated by claims for only monetary relief less than a certain dollar figure, which would entail more “detailed pleading . . . , more limited discovery, more constrained joinder, and less . . . case management.”695 Some evidence suggests that experiments with simplified procedures have been successful.696 Interestingly, the Rules Committee considered a “simplified rules” track several years ago but shelved it for lack of support because of the belief that Rule 16 already permits such a procedure for specific cases.697

692. Statistics Division, Administrative Office of the United States Courts, Statistical Tables for the Federal Judiciary 28–30 tbl.C-2 (2010), available at http://www.uscourts.gov/uscourts/ Statistics/StatisticalTablesForTheFederalJudiciary/2010/C02Jun10.pdf. 693. E.g., Paul David Menair, Recasting Complaints: An Argument for Procedural Alternatives, 12 Chap. L. Rev. 333, 338 (2008). 694. Stephen N. Subrin, Fudge Points and Thin Ice in Discovery Reform and the Case for Selective Substance-Specific Procedure, 46 Fla. L. Rev. 27, 47–49 (1994). 695. Stephen N. Subrin, Reflections on the Twin Dreams of Simplified Procedure and Useful Empiricism, 35 W. St. U. L. Rev. 173, 174–77 (2007). 696. Corina Gerety, Surveys of the Colorado Bench and Bar on Colorado’s Simplified Pretrial Procedure for Civil Actions 1–3 (IAALS 2010), available at http://www.du.edu/legalinstitute/ pdf/16.1FINALForWeb.pdf (“According to respondents, [Colorado] Rule 16.1 has beneficial effects, in terms of time to disposition and cost to litigants. . . . [And] the simplified procedure is not viewed as less fair. . . . [But] there is a certain degree of dissatisfaction with practice under and enforcement of the Rule. . . . ”) . 697. Judicial Conference Report, supra note 580, at 9.

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As another intriguing example, Gideon Mark has proposed a mandatory (with exceptions) stay of e-discovery pending resolution of a motion to dismiss.698 The assumption here—that e-discovery is a particularly pernicious problem that requires fixing—may be overstated, but the general idea is a good one: that specific problems deserve specific solutions. As an aside, if e-discovery were such a problem, I might be sympathetic to Mark’s proposal, particularly in a pre-Twombly world. In such a world, there is no access-to-justice problem because testing purely legal sufficiency should not depend upon e-discovery facts. The only downsides are the delay from segmenting pretrial phases and the additional costs associated with the increased incentive to file motions. Those delays and costs require justification, but they may indeed be justified by the harm to defendants in having to provide discovery in a legally insufficient case. In any event, the broader point—what works well for some cases does not always work well for others—is a truth worth considering, whether by legislatures for special classes of cases or for by judges for individual cases under Rule 16. The point leads to the conclusion that if a subset of cases presents uniquely troublesome issues, it should be dealt with on its own terms and in a targeted way, instead of by modifying the default general rule.

Resurrect Fact Pleading? I would not go so far as to adopt fact pleading, as some have proposed.699 Such a regime would require that a “party must plead material facts sufficient to support each element of an asserted claim.”700 Fact pleading is useful, so the argument goes, for framing and narrowing the issues at an early stage, and this early narrowing will help circumscribe discovery.701 I am not unsympathetic to a return to fact pleading under the right circumstances, but those circumstances are not present. Proponents of the fact-pleading model justify their proposal on the same ills that proponents of New Pleading do: discovery is too costly and cannot be controlled.702 But, as I have argued above, I believe the current system allows for appropriate control

698. See Mark, supra note 627. 699. See, e.g., Kourlis, supra note 611, at 278–84. 700. Id. at 280. 701. Id. at 246–47, 279. 702. Id. at 253–55.

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of discovery even under notice pleading. Indeed, part of that control is the power already provided by the Federal Rules to insist upon pleading additional facts in appropriate cases. Because the current rules already permit the application of fact pleading in a more flexible model, I am not yet convinced that fact pleading needs to be an inflexible requirement of all cases. Additionally, fact pleading has downsides similar to that of New Pleading. If the plaintiff does not have the facts necessary to meet the fact-pleading standard, how will she get them? Advocates of fact pleading stress that motions to dismiss would be rare, with amendments liberally allowed, and that the preferred method for rectifying deficient pleadings would be the use of a motion for a more definite statement.703 But each of those remedies is effective only if the plaintiff already has reasonable access to the facts. Given the evidence that plaintiffs generally plead with more facts than necessary without the fact-pleading requirement, it is likely that a fact-pleading requirement will catch predominantly those who cannot meet its strictures. Although it may “not be designed to restrict access to the courts,”704 proponents of the fact-pleading model admit that it surely would screen some information-asymmetry claims unless it also permitted pre-dismissal discovery.705 The leading proponents of fact pleading claim that “procedural mechanisms already exist to secure access to relevant facts for such claims,” but they cite only to state presuit-discovery mechanisms.706 A guarantee of pre-dismissal discovery in federal court would require additional amendments. As I explain in the next chapter, such amendments could be useful, but I am skeptical that a new fact-pleading regime plus a novel pre-dismissal-discovery regime is a better solution than a refocused return to the rules as they currently are written. In sum, then, the Federal Rules already provide the right tools—we need more attention to them, not changes to them.

How Twombly and Iqbal Could Have Worked under Old Pleading As an illustration of how Old Pleading and heightened attention to the Federal Rules might be effective in even the most troublesome cases, reconsider the 703. Id. at 247. 704. Id. at 247. 705. Id. 706. Id. at 264 & n.126 (citing Lonny Sheinkopf Hoffman, Access to Information, Access to Justice: The Role of Presuit Investigatory Discovery, 40 U. Mich. J.L. Reform 217 (2007)). As I explain in more detail in the next chapter, state presuit discovery is not an adequate

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cases of Twombly and Iqbal. These cases were dismissed at the pleading stage under New Pleading. What could have happened in those cases had they survived under the old model? Recall that in Twombly, the critical issue was whether the defendants agreed not to compete. The district judge dismissed the complaint because the plaintiffs failed to allege facts suggesting that the conscious parallel conduct was the product of a conspiracy rather than market conditions.707 The Supreme Court upheld the dismissal, explaining that such a claim would generate: [E]xpense . . . obvious enough in the present case: plaintiffs represent a putative class of at least 90 percent of all subscribers to local telephone or high-speed Internet service in the continental United States, in an action against America’s largest telecommunications firms (with many thousands of employees generating reams and gigabytes of business records) for unspecified (if any) instances of antitrust violations that allegedly occurred over a period of seven years. . . . . Probably, then, it is only by taking care to require allegations that reach the level suggesting conspiracy that we can hope to avoid the potentially enormous expense of discovery . . . . 708 Was the Supreme Court right? Not, I believe, if the district judge had taken the following steps. First, the judge could have used Rule 12(e) to order the plaintiffs to submit a more definite statement about what “especially attractive business opportunit[ies]” the ILECs passed up709 and about any direct allegations of an agreement. If the defendants’ answer denied a conspiracy, the judge could have ordered a reply under Rule 7(a) to determine what additional information, if any, the plaintiffs had supporting a conspiracy. If any allegations made by the plaintiffs had no evidentiary support or were not likely to have evidentiary support after a reasonable opportunity for further investigation or discovery, then the judge could have suggested that the plaintiffs withdraw those allegations for failure to comply with Rule 11(b)(3). substitute for federal presuit discovery. The advocates seem to acknowledge this when they set out some principles for a federal presuit-discovery mechanism. Kourlis, supra note 611, at 281. 707. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 552 (2007). 708. Id. at 559. 709. Id. at 568 (alteration in original) (quoting Consolidated Amended Class Action Complaint at ¶ 40, Twombly v. Bell Atl. Corp., 313 F. Supp. 2d 174 (S.D.N.Y. 2003) (No. 02 CIV. 10220 (GEL)), 2003 WL 25629874).

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Next, the judge could have allowed limited, targeted, and closely supervised discovery on any remaining allegations of conspiracy, with an eye toward inviting a motion for summary judgment on the § 1 claim. Specifically, the judge could have stayed all document requests and depositions until a preliminary set of written interrogatories had been answered. Those interrogatories would be aimed at correcting the information asymmetry, so that not only the parties but also the court would know the viability of the plaintiff’s claims. These interrogatories might have asked for explanation of Notebaert’s public comments, all known explanations for the alleged noncompetition and parallel conduct, and any economic self-interest the ILECs believe they would incur by competing or not competing in each other’s territories. Depending upon the evidence adduced in this brief discovery, carefully circumscribed oral depositions of key persons, including Notebaert, might be appropriate, and perhaps one or two limited document requests. Simultaneously, the judge could have allowed the defendants to seek full discovery from the plaintiffs as to any expert testimony or other evidence suggestive of conspiracy in the hands of the plaintiffs. Perhaps the defendants would submit voluntary affidavits from key persons disclaiming any conspiracy. Finally, the judge could schedule a Rule 16 conference to discuss eliminating any claims lacking evidentiary support. If the plaintiffs wished to continue to press forward without any evidence or indication that evidence would support a conspiracy, then the judge could require the plaintiffs to bear all of the defendants’ expenses in responding to such discovery. And, the Federal Rules would give ample authority for the judge to require the plaintiffs to reimburse all the defendants’ litigation costs, though perhaps not attorney’s fees, if the defendants prevailed on summary judgment.710 Iqbal is perhaps an even easier illustration to make. Recall that the crucial issue there was whether Ashcroft and Mueller personally acted with discriminatory purpose. The Supreme Court disregarded certain “conclusory” allegations and held that the remaining nonconclusory allegations did not plausibly show the defendants’ personal discrimination.711 Although the Court used the purposes behind the qualified immunity doctrine to explain why the Court’s rejection of careful case management was especially important in governmental-defendant cases, the Court did not purport to create a special rule for qualified-immunity cases.712

710. See Fed. R. Civ. P. 54(d)(1). 711. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1951–52 (2009). 712. Id. at 1953–54.

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As in Twombly, the district judge in Iqbal could have asked more of the plaintiffs before even venturing into discovery. For example, the plaintiffs could have been required to submit a more definite statement detailing Ashcroft’s and Mueller’s personal involvement. Using the tools provided in Rules 7, 11, and 12(e), the district court could have elicited more information (as long as the plaintiffs had it) connecting Ashcroft and Mueller to discriminatory conduct. As for discovery, it is true that qualified immunity is designed in part to protect officials from the burdens of defending a lawsuit, including excessive burdens of discovery.713 Of course, qualified immunity does not—and cannot—shield an official from all burdens of defense. The defendant at least has the burden to assert the qualified-immunity defense itself. By asserting the defense, the defendant effectively consents to some litigation, and likely discovery, about the propriety of qualified immunity in her own case. Perhaps for these reasons, the Court previously made clear that qualified immunity is not a blanket exception from discovery; rather, it is a policy that should be taken into account when considering discovery limitations.714 In light of the qualified-immunity defense, the district court could have taken a number of paths. First, the district court could have crafted a special discovery-stay rule for qualified-immunity cases.715 Whatever one thinks of expanding qualified immunity in this way, it at least has the benefit of preserving the Old Pleading regime as a default and simply making a special exception for qualified-immunity cases. It might also have the advantage, if fashioned as a part of federal common-law qualified-immunity doctrine, of binding state courts under the Supremacy Clause, which otherwise does not require state-court adherence to New Pleading. If the district court declined to craft a specific common-law rule for qualified-immunity cases, the court could tailor discovery in a way that would accommodate the public interest behind the qualified-immunity defense. Thus, the district court might begin by allowing discovery only of nonparties or other defendants. As for Ashcroft and Mueller, because only they really know what motivated them, affirmative discovery against them could be focused cheaply and easily. It certainly need not inevitably amount to a “crippling burden,” as some have

713. Mitchell v. Forsyth, 472 U.S. 511, 526 (1985) (asserting that because such suits are particularly disruptive of effective government, “even such pretrial matters as discovery are to be avoided if possible”). 714. See Crawford-El v. Britton, 523 U.S. 574, 593 n.14 (1998). 715. See Stephen B. Burbank, Pleading and the Dilemmas of “General Rules,” 2009 Wis. L. Rev. 535, 537 (2009) (making this suggestion).

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argued.716 Instead, it might begin with no more than three modest requests for admissions, asking each to admit that race, national origin, or religion was a factor in whether Iqbal was designated a person of high interest. An intermediate approach, or a subsequent approach, might allow an interrogatory seeking all reasons why Iqbal was designated a person of high interest. A skeptic might respond that discovery cannot be so limited, at least not fairly. The defendant should not be allowed simply to deny a particular state of mind under oath, but instead a plaintiff should have full access to that individual’s files, documents, and correspondence.717 But if we take Rule 11 seriously for plaintiffs, then we should take perjury and other discovery controls seriously for defendants. If the responses to these preliminary requests raised doubts, discovery could be broadened. If the responses tended to refute discrimination, the district judge could exercise extremely close supervision and circumscription of future discovery—if allowing any more at all—with an eye toward eliminating issues quickly on partial summary judgment. Finally, the judge could impose cost-shifting or fee-shifting measures to lighten or even eliminate the defendants’ expenses. In sum, if the Supreme Court could allow discovery of a sitting President on the grounds that early and unobtrusive resolution of vexatious litigation is likely,718 limited discovery of former officials should not present weightier issues. These thought experiments of how Twombly and Iqbal could have been are meant to be illustrative only; I hope those who would object to them on specifics would consider the general point that they make. I also concede that it is difficult to predict what information will be uncovered and where that information ought to lead the discovery process, so the paths and options I have outlined here are necessarily speculative. But these speculations and suggestions should demonstrate that use of the powers and controls already available in the system could have provided cheap and vastly more meaningful adjudicative processes than dismissals. In fact, under these closely supervised conditions, the defendants in each case probably would have spent far less in discovery than they actually spent drafting and litigating their motions to dismiss.

716. Evaluating the Supreme Court’s Decisions in Twombly and Iqbal: Hearing Before the S. Comm. on the Judiciary, 111th Cong. 28 (2009) (statement of Gregory G. Garre), available at http://judiciary.senate.gov/pdf/12-02-09%20Garre%20Testimony.pdf. 717. See Anderson & Huffman, supra note 520, at 27. 718. Clinton v. Jones, 520 U.S. 681, 708 (1997).

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Assessing the Likelihood of Restoring Old Pleading My primary commitment, then, is to a restoration of Old Pleading, with the modest adjustments discussed above. Practically, however, restoring Old Pleading would be difficult. The public, the rulemakers, and the courts have largely bought into the rhetoric, and each passing year brings more acceptance of the Court’s precedent. Those factors pose significant—and likely insurmountable—obstacles to restoring Old Pleading. The remainder of this Chapter sets out the practical barriers to restoring Old Pleading.

Option #1: The Supreme Court The Supreme Court itself could either overrule Twombly and Iqbal or recharacterize them in a way that diminishes their impact. The Court is not afraid to do so in other contexts, such as in campaign-finance reform.719 Perhaps the Court will experience a change in heart (or membership) and restore Old Pleading.720 The truth is that the Supreme Court is, for the most part, ill-equipped to make major revisions to procedure rules. One justice has trial experience, and two have taught civil procedure as law professors; the rest have had little experience with the civil rules except as appellate judges. Justice Breyer, in the Iqbal oral argument, even confessed, “I can’t remember my civil procedure course.”721 It is true that private litigants, intervening interest groups, and amicus briefs can give the Court a broad perspective, and, in some instances, the concreteness of the case at hand provides a vehicle for a grounded illustration of the rules in action. But the Court has neither the time nor the resources to conduct empirical analyses or broad surveys of the bench and bar. Its decisions are constrained by precedent and the facts of a particular case. And the Court cannot realistically consider multiple rule changes at once, even if the rule at issue implicates a number of other rules. Perhaps recognizing some of these deficiencies, the Court has expressed a preference for deferring to rulemakers in other cases.722

719. See Citizens United v. Fed. Election Comm’n, 130 S. Ct. 876, 913 (2010) (overruling McConnell v. Fed. Election Comm’n, 540 U.S. 93 (2003), in part and Austin v. Mich. Chamber of Commerce, 494 U.S. 652 (1990), in full). 720. Scott Dodson, New Pleading, New Discovery, 109 Mich. L. Rev. 53, 55 (2010). 721. Tr. of Oral Arg. at 18, Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) (No. 07–1015), 2008 WL 5168391 at *13-*17, available at http://www.supremecourt.gov/oral_arguments/argument_ transcripts/07–1015.pdf. 722. See, e.g., Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (2009) (appellate jurisdiction over collateral orders).

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Even were the Supreme Court equipped to take up the issue, however, it would be unlikely to restore Old Pleading. Because all of the Justices in the Iqbal majority remain on the Court, restoring Old Pleading is unlikely to command majority support without some personnel changes. In addition, because stare decisis has more weight in non-constitutional cases,723 perhaps even some Iqbal dissenters would reaffirm New Pleading (although respect for precedent did not stop the Twombly Court from interring the Conley gloss on Rule 8). Importantly, two recent opinions from 2011 seem to accept New Pleading standards and principles. In Matrixx Initiatives, Inc. v. Siracusano,724 the Supreme Court considered whether a plaintiff can state a claim for securities fraud based on a pharmaceutical company’s failure to disclose reports of adverse events associated with a product even if the number of adverse events was not statistically significant. A unanimous Court quoted Twombly and Iqbal and repeatedly followed the plausibility-pleading standard.725 In Skinner v. Switzer,726 the Court cited Swierkiewicz for the unremarkable proposition that review of a dismissal grant was not whether the plaintiff would ultimately prevail but whether the complaint was sufficient to cross the federal court’s threshold. Notably, the Court stated that Rule 8(a)(2) “generally requires only a plausible ‘short and plain’ statement of the plaintiff’s claim.”727 No justice expressed continuing adherence to views expressed in Twombly and Iqbal dissents, as justices occasionally do.728 These cases entrench New Pleading

723. See Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 887, 899 (2007). 724. Matrixx Initiatives, Inc. v. Siracusano, 131 S. Ct. 1309 (2011). 725. Interestingly, the Court took a scattershot approach to using the term “plausibly,” suggesting, perhaps, that the Court was unsure itself how to apply the standard. Id. at 1314 (“[R]espondents have alleged facts plausibly suggesting that reasonable investors would have viewed these particular reports as material.”); id. at 1322 (“Matrixx received information that plausibly indicated a reliable causal link between Zicam and anosmia.”); id. at 1322 n.12 (“For all the reasons we state in the opinion, respondents’ allegations plausibly suggest that Dr. Jafek and Linschoten’s conclusions were based on reliable evidence of a causal link between Zicam and anosmia.”); id. at 1322 n.13 (“[T]he existence of the studies suggests a plausible biological link between zinc and anosmia. . . . ”). It also is unclear whether the Court was applying the Twombly plausibility standard or the Tellabs plausibility standard for competing inferences under the PSLRA. Id. at 1324 (citing Tellabs for the PSLRA’s standard that courts should take into consideration “plausible opposing inferences”). 726. Skinner v. Switzer, 131 S. Ct. 1289 (2011). 727. Id. at 1296 (emphasis added). 728. See, e.g., Fed. Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743, 788 (2002) (Breyer, J., dissenting) (invoking a need for “continued dissent” to the Court’s prior state sovereign-immunity holdings).

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among the justices and decrease the likelihood that the Supreme Court will restore Old Pleading on its own.729

Option #2: Congress Congress rarely intercedes in federal procedure, seemingly having neither the time nor the inclination to do so.730 In the rare instances that Congress has legislated pleadings standards, it has done so only for specific causes of action and only to impose greater restrictions rather than fewer.731 Nevertheless, in the immediate aftermath of Iqbal, members of the House and Senate introduced bills designed to restore Old Pleading. Senator Arlen Specter introduced the Notice Pleading Restoration Act of 2009, which provided: Except as otherwise expressly provided by an Act of Congress or by an amendment to the Federal Rules of Civil Procedure which takes effect after the date of enactment of this Act, a Federal court shall not dismiss a complaint under rule 12(b)(6) or (e) of the Federal Rules of Civil Procedure, except under the standards set forth by the Supreme Court of the United States in Conley v. Gibson, 355 U.S. 41 (1957).732 Similarly, Representative Jerrold Nadler introduced the Open Access to Courts Act of 2009, which stated: A court shall not dismiss a complaint under subdivision (b)(6), (c) or (e) of Rule 12 of the Federal Rules of Civil Procedure unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief. A court shall not dismiss a complaint under one of those subdivisions on the basis of a determination by the judge that the factual contents of the complaint 729. Edward A. Hartnett, Taming Twombly: An Update After Matrixx, 75 L. & Contemp. Probs. 73, 73–74 (2012). 730. Dodson, supra note 720, at 55; Richard L. Marcus, The American Pleading Wars 29 (Dec. 13, 2011). Notable exceptions include the Removal and Venue Clarification Act, the Civil Justice Reform Act, the Private Securities Litigation Reform Act, and the Class Action Fairness Act. In light of these efforts, perhaps Congress’s indifference to procedural reform is waning a bit. See Richard L. Marcus, Modes of Procedural Reform, 31 Hastings Int’l & Comp. L. Rev. 157, 174–84 (2008) (making this point). 731. See supra notes 681–691. 732. S. 1504, 111th Cong. § 2 (2009).

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do not show the plaintiff’s claim to be plausible or are insufficient to warrant a reasonable inference that the defendant is liable for the misconduct alleged.733 Both the House and the Senate held committee hearings and took testimony on the bills. But despite the initial impetus for designing a legislative solution,734 interest faltered, particularly with the defeat of Senator Specter, and opposition mounted.735 The Chamber of Commerce, for example, publicly and stridently opposed the Senate bill,736 and even the Judicial Conference opposed the bill because it felt that congressional intervention was not wise.737 Hope for a legislative solution has now faded. Since those hearings, neither the House nor the Senate has taken action on the bills. They now have effectively died in committee, and they are unlikely to be revived in the future.

Option #3: Rule Amendments The rulemaking route is the most appropriate vehicle for restoring Old Pleading. Rulemakers certainly have the authorization to do so because Congress has delegated the formal rule-amendment process to the rulemaking bodies.738 Unlike Congress and the Supreme Court, rulemakers are institutionally well-equipped to consider and propose procedural reform.739

733. H.R. 4115, 111th Cong. § 2078(a) (2009). 734. See Roger M. Michalski, Assessing Iqbal, Harv. L. & Pol’y Rev. Online (Dec. 8, 2010, 5:44 AM), available at http://hlpronline.com/2010/12/assessing-iqbal/ (arguing that a legislative solution is “the sole realistic path” back to Conley). A number of academics proposed their own language. See Scott Dodson, Federal Pleading and State Presuit Discovery, 14 Lewis & Clark L. Rev. 43, 44 n.4 (2010) (citing proposals). 735. See Hartnett, supra note 729, at 38; Huston, supra note 549, at 427–45. It is worth noting that congressional intervention on this issue would likely be partisan, a rulemaking motivation that has its vices. See Richard L. Marcus, Of Babies and Bathwater: The Prospects for Procedural Progress, 59 Brook. L. Rev. 761, 771–76 (1993). 736. Letter from Multiple Industries to Senator Leahy, Chairman, Sen. Comm. on the Judiciary (Dec. 1, 2009), available at http://www.uschamber.com/issues/letters/2009/091201s1504. htm. 737. Lonny Hoffman, Twombly and Iqbal’s Measure: An Assessment of the Federal Judicial Center’s Study of Motions to Dismiss, 6 Fed. Cts. L. Rev. 1, 5 (2012). 738. See Nathan R. Sellers, Note, Defending the Formal Federal Civil Rulemaking Process: Why the Court Should Not Amend Procedural Rules Through Judicial Interpretation, 42 Loy. U. Chi. L.J. 327, 330–31 (2011). 739. See Burbank, supra note 574, at 150.

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There are several reasons why. One reason is that the rulemaking process is deliberate.740 Proposed changes undergo many stages of formal comment and review, and successful changes, even minor ones, take at least three years to complete.741 The Advisory Committee on the Federal Rules of Civil Procedure, what I will shorten to the “Rules Committee,” often gathers empirical data, conducts surveys of the bench, bar, and academy, and holds hearings on proposed changes before making recommendations to the Judicial Conference’s Standing Committee on Rules of Practice and Procedure. Rulemaking can consider holistic changes to multiple rules at once to ensure consistency and minimal disruption to overall coherence. Another reason is that the process is broadly participatory. Members of the Rules Committee include judges, practitioners, and academics. They are intimately familiar with, and often use on a daily basis, the rules that they consider. Rule proposals are published for public comment and reviewed by thousands of persons, organizations, and interest groups.742 The Judicial Conference, which exercises final approval authority, consists of the chief judge of every judicial circuit, the chief judge of the Court of International Trade, a district judge from each circuit, and the Chief Justice of the United States Supreme Court.743 Although some have criticized the rulemaking process for preferring certain voices over others,744 and as being influenced by politics and biases,745 it is widely seen as the most democratic process currently available. The deliberate and democratic nature of the rulemaking process also makes it cumbersome for major or controversial reforms. The rulemaking process is painfully slow; most rules that make it through “have been considered 740. Edward H. Cooper, King Arthur Confronts TwIqy Pleading, 90 Or. L. Rev. 955, 958 (2012); Mark R. Kravitz, To Revise, or Not to Revise: That Is the Question, 87 Denv. U. L. Rev. 213, 216 (2010). 741. Cooper, supra note 740, at 958; Catherine T. Struve, The Paradox of Delegation: Interpreting the Federal Rules of Civil Procedure, 150 U. Pa. L. Rev. 1099, 1103 (2002). 742. Thomas F. Hogan, Summary for the Bench and Bar (Administrative Off. of the U.S. Courts 2010), available at http://www.uscourts.gov/RulesAndPolicies/FederalRulemaking/ RulemakingProcess/SummaryBenchBar.aspx. 743. 28 U.S.C. § 331 (2006). 744. See, e.g., Stephen B. Burbank, Ignorance and Procedure Law Reform: A Call for a Moratorium, 59 Brook. L. Rev. 841, 847–48 (1993) (bemoaning the lack of influence of practitioners); Miller, supra note 525, at 86 n.327 (criticizing the influence of special-interest groups). But see Paul D. Carrington, “Substance” and “Procedure” in the Rules Enabling Act, 1989 Duke L.J. 281, 301–302 (1989) (praising the “apolitical approach” of the rulemaking process as a way of enabling under-voiced constituencies to be heard). 745. See Linda S. Mullenix, Hope Over Experience: Mandatory Informal Discovery and the Politics of Rulemaking, 69 N.C. L. Rev. 795, 856 (1991).

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for at least three years.”746 It is conservative and incremental rather than revolutionary. Small changes are the norm. Major amendments are considered infrequently and passed only after a long waiting period and often with great difficulty. The Rules Committee’s prime directive is “First, do no harm.”747 As a result, sweeping reform is unlikely to come without years of study tending to show widespread support.748 In addition, although the Rules Committee is studying New Pleading in earnest,749 it shows little inclination to restore Old Pleading.750 The chair of the Rules Committee during Iqbal’s immediate aftermath, Judge Mark Kravitz, a former Rehnquist clerk and George W. Bush appointee, publicly cautioned against tinkering with New Pleading.751 The Rules Committee’s agenda materials indicate that the Committee is unlikely to consider amendments to pleading rules scaling back Twombly and Iqbal without convincing evidence of a problem.752 Further, the agenda materials indicate that the Committee finds the Federal Judicial Center’s study, despite its flaws and counter-indications, persuasive in counseling resistance to rule reform of pleadings.753 Judge Kravitz recently wrote in a memo on the issue: “The FJC study—and the promise of its next study—combines with the review of judicial decisions to suggest there is no urgent need for immediate action on pleading standards.”754 Without more support on the Committee, the reality is that proposals to overturn or limit Twombly and Iqbal are unlikely to proceed.755

746. Kravitz, supra note 740, at 216. 747. Id. at 217. 748. As Rick Marcus put it, “The days of breakthrough reforms from the expert group is over in America.” Marcus, supra note 730, at 169. 749. Lee H. Rosenthal, Pleading, for the Future: Conversations After Iqbal, 114 Penn. St. L. Rev. 1537, 1542–45 (2010) (providing a summary of the “long-term and tensive study of pleading” in the wake of Twombly and Iqbal). 750. Dodson, supra note 720, at 55 & nn.8–9; Miller, supra note 525, at 100. 751. See Tony Mauro, Plaintiffs Groups Mount Effort to Undo Supreme Court’s “Iqbal” Ruling, Nat’l L.J., Sept. 21, 2009, available at http://www.law.com/jsp/scm/PubArticleSCM. jsp?id=1202433933286. 752. See Hoffman, supra note 737, at 4. 753. See id. at 4–5. 754. Memo. from Hon. Mark R. Kravitz to Hon. Lee H. Rosenthal 53–57 (May 2, 2011); see also Civil Rules Committee Report to Standing Committee, Agenda Materials at 215–16 (June 2011) (same). 755. For additional insight into the possible motivations and deliberations of the post-Iqbal Rules Committee, see Lonny Hoffman, Rulemaking in the Age of Twombly and Iqbal (draft).

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Finally, even were the Rules Committees to recommend rule amendments restoring Old Pleading, they would not go into effect until approved by the Supreme Court, which has shown skepticism of—even hostility to—Old Pleading.756 As Professor Cathie Struve has argued, “a Court that has changed a Rule via interpretation may be reluctant to approve a proposed amendment that would undo its work.”757 Justices have dissented from approvals of rule amendments in the past,758 and no doubt any tinkering with the current Court’s new pleadings regime would face some, and perhaps even fatal, resistance at the approval stage. For each of these reasons, although I believe the best course is to return to Old Pleading with a renewed commitment to making the system work, I do not hold out much hope.

756. See Dodson, supra note 720, at 55. 757. Struve, supra note 741, at 1135–36. 758. E.g., Amendments to the Federal Rules of Civil Procedure, 146 F.R.D. 401, 507–10 (1993) (Scalia, J., dissenting) (Rule 11 amendments).

5

LIVING WITH NEW PLEADING

If we are stuck with New Pleading, what can we do about it? In this chapter, I discuss several existing proposals for working with New Pleading and conclude that they are either too problematic or too modest. I then offer and defend my own proposal for living with New Pleading: New Discovery.

Solutions Within the Current System Are Inadequate Even in an imperfect world, litigation actors can still act rationally. One might expect plaintiffs confronting a more difficult pleading standard to find other ways to pursue their claims. If so, then the screening effects supported by the data above may be merely transitory, as actors modify their behaviors to find other avenues for relief. I will discuss a few ways that could happen here. Specifically, I will evaluate proposals to apply New Pleading more flexibly, to use pre-dismissal discovery in federal courts, to use presuit discovery in state courts, and to take advantage of state courts’ more liberal pleading rules. Although these mechanisms have some value, they fall far short of a full solution to New Pleading.

Applying New Pleading Flexibly Ben Spencer has suggested that New Pleading’s screening effects on meritorious plaintiffs facing information asymmetry could be ameliorated if courts did not apply the New Pleading standards in such circumstances.759 As a practical matter, however, courts have nearly universally held that Twombly and Iqbal do not admit such exceptions. The Sixth Circuit, for example, has written:

759. See A. Benjamin Spencer, Understanding Pleading Doctrine, 108 Mich. L. Rev. 1, 29–30 (2009).

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The [plaintiffs] argue that they have alleged sufficient facts to allow [the defendant] to respond to their complaint, and that information about claims submitted to the government is exclusively within [the defendant]’s control. . . . This court, however, has rejected the argument that a claim should survive a motion to dismiss on the basis that necessary information is exclusively within the defendant’s control, even in the context of the less rigorous pleading requirements of Federal Rule of Civil Procedure 8.760 Other circuits have held similarly.761 Frankly, these courts seem right. Twombly and Iqbal themselves were cases in which critical information was likely to be within the exclusive control of the defendants. Yet, in each case, the Court applied New Pleading to the plaintiff’s complaint. As these cases make clear, information asymmetry does not relieve a plaintiff from the strictures of New Pleading.

Pre-Dismissal Discovery in Federal Court A number of commentators, most prominently Professor Edward Hartnett and Professor Suzette Malveaux, have argued that Rule 26 allows pre-dismissal discovery in a way that might ameliorate the harsher effects of New Pleading.762 The idea is that plaintiffs who file factually insufficient complaints may nevertheless obtain some discovery before the court decides a Rule 12(b)(6) motion to dismiss under Twombly and Iqbal. I am sympathetic to this view, and I agree that the text of the Rules clearly permits a court to authorize pre-dismissal discovery. Many have suggested that the motion to dismiss is the legal gateway to discovery—that without

760. Chesbrough v. VPA, P.C., 655 F.3d 461, 472 (6th Cir. 2011). 761. See, e.g., Santiago v. Warminster Twp., 629 F.3d 121, 134 n.10 (3d Cir. 2010); S. Cherry St., LLC v. Hennessee Group LLC, 573 F.3d 98, 113–14 (2d Cir. 2009). But cf. Cordero-Hernández v. Hernández-Ballesteros, 449 F.3d 240, 244 (1st Cir. 2006) (allowing pre-dismissal discovery when the claim was evaluated under a stricter pleading standard and the information needed was likely to be exclusively in the hands of the defendant). 762. See Edward A. Hartnett, Taming Twombly, Even After Iqbal, 158 U. Pa. L. Rev. 473, 503– 15 (2010); Suzette M. Malveaux, Front Loading and Heavy Lifting: How Pre-Dismissal Discovery Can Address the Detrimental Effect of Iqbal on Civil Rights Cases, 14 Lewis & Clark L. Rev. 65, 123–41 (2010); see also William H. Page, Twombly and Communication: The Emerging Definition of Concerted Action Under the New Pleading Standards, 5 J. Competition L. & Econ. 439, 466–68 (2009).

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surviving the motion, there can be no discovery.763 But the Rules make clear that this order is not unalterable. Rule 26 permits parties to exchange discovery requests upon completion of their initial discovery conference,764 which may occur while a motion to dismiss is pending. Thereafter, a court may stay discovery only upon a showing of good cause,765 and issuances of such stays are not routine, even in the face of a pending motion to dismiss.766 It is true that the structure of pretrial litigation generally positions discovery after pleadings. This ordering ensures that pretrial litigation progresses in a stepwise fashion. Establishing a test point for pleadings before entering discovery protects the parties from expending time and resources fighting over a nonviable complaint. For this reason, it has been said that pre-dismissal discovery “fits the current Rules awkwardly at best.”767 I might have agreed with this sentiment prior to Twombly and Iqbal. Some evidence suggests that, at least as an originalist matter, the drafters of the Federal Rules probably did not contemplate pre-dismissal discovery in aid of pleading. They assumed that discovery would not be needed to survive a Rule 12(b)(6) motion to dismiss under the liberalized pleading standard of Rule 8.768 This assumption seems generally sound. Under Old Pleading,

763. See, e.g., Mark Anderson & Max Huffman, Iqbal, Twombly, and the Expected Cost of False Positive Error, 20 Cornell J.L. & Pub. Pol’y 1, 20 (2010) (“The pleading standard of Rule 8 controls a plaintiff’s access to later stages of the litigation process.”); Lonny S. Hoffman, Burn up the Chaff with Unquenchable Fire: What Two Doctrinal Intersections Can Teach Us About Judicial Power over Pleadings, 88 B.U. L. Rev. 1217, 1268 (2008) (“[A] pleading sufficiency challenge is designed to be made before the case advances to the discovery stage.”); A. Benjamin Spencer, Plausibility Pleading, 49 B.C. L. Rev. 431, 471 (2008) (“[P]laintiffs are required to offer such facts at the pleading phase before discovery may occur.”); Adam N. Steinman, The Pleading Problem, 62 Stan. L. Rev. 1293, 1294 (2010) (“If a plaintiff seeking judicial redress is unable to provide an adequate ‘statement of the claim’ at the pleadings phase, then that claim is effectively stillborn. There will be no court-supervised discovery, no ability to present evidence to a judge or jury, and no hope of obtaining any judicial remedy. The complaint will be dismissed, without even an obligation on the part of the defendant to admit or deny the plaintiff’s allegations.”). 764. Fed. R. Civ. P. 26(f). 765. Fed. R. Civ. P. 26(c). 766. Page, supra note 762, at 466. Some substance-specific statutes provide exceptions. Securities law, for example, automatically stays discovery until a motion to dismiss has been decided. See 15 U.S.C. §77z-1(b)(1) (2006). 767. Robert G. Bone, Twombly, Pleading Rules, and the Regulation of Court Access, 94 Iowa L. Rev. 873, 933–35 (2009). 768. See James A. Pike & John W. Willis, The New Federal Deposition-Discovery Procedure: I, 38 Colum. L. Rev. 1179, 1192 (1938); George Ragland, Jr., Discovery Before Trial 54, 60–61 (1932).

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discovery s largely unnecessary for opposing a Rule 12(b)(6) motion because the motion tests the legal sufficiency of the complaint. That screening test can be conducted without discovery. Old Pleading, then, appears to support a more rigid, stepwise progression from pleadings to discovery. New Pleading, however, focuses on factual sufficiency, which depends entirely upon factual information. As discussed in previous chapters, a plaintiff must have access to information to survive a Rule 12(b)(6) motion under New Pleading. If the critical information is unobtainable except through formal discovery, then discovery ought to bleed into pleadings to give the plaintiff an opportunity to meet the factual-sufficiency standard of New Pleading. While discovery during pleading puts the cart before the horse under Old Pleading, testing pleadings for factual sufficiency before discovery puts the cart before the horse under New Pleading. In this post-Iqbal world, it makes some sense—from both a textual perspective and a normative perspective— for courts to recognize their power to authorize discovery prior to dismissing a claim on factual-insufficiency grounds.769 I therefore support efforts to recognize pre-dismissal discovery pending a motion to dismiss based on factual insufficiency. Unfortunately, the Supreme Court seems directly opposed to such pre-dismissal discovery under the current discovery paradigm.770 The whole purpose of New Pleading is to prevent plaintiffs with factually insufficient claims from imposing discovery costs on defendants.771 Twombly rejected the limited predismissal discovery proposed by Justice Stevens in his dissent,772 explaining: It is no answer to say that a claim just shy of a plausible entitlement to relief can, if groundless, be weeded out early in the discovery process through “careful case management”. . . . [I]t is only by taking care to require allegations that reach the level suggesting conspiracy that we can hope to avoid the[se] potentially enormous expense[s] of discovery. . . . 773 769. Others generally agree. See, e.g., Bone, supra note 767, at 932–35; Samuel Issacharoff & Geoffrey P. Miller, An Information-Forcing Approach to the Motion to Dismiss (draft); Arthur R. Miller, From Conley to Twombly to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke L.J. 1, 107–109 (2010); A. Benjamin Spencer, Understanding Pleading Doctrine, 108 Mich. L. Rev. 1, 30–31 (2009). 770. See Miller, supra note 769, at 109. 771. See Scott Dodson, New Pleading, New Discovery, 109 Mich. L. Rev. 53, 69 (2010). 772. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 593–95 (2007) (Stevens, J., dissenting). 773. Id. at 559; id. at 560 n.6 (“Given the system that we have, the hope of effective judicial supervision is slim . . . . ”); id. at 564 n.8 (“[B]efore proceeding to discovery, a complaint must allege facts suggestive of illegal conduct.” (emphasis added)).

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And Iqbal stated, “Rule 8 . . . does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.”774 Lest doubt remain, Iqbal concluded: “Because respondent’s complaint is deficient under Rule 8, he is not entitled to discovery, cabined or otherwise.”775 Iqbal is particularly devastating to those who support pre-dismissal discovery under New Pleading. Because qualified immunity is a defense that may require some additional facts for determination, courts have traditionally allowed limited discovery on an asserted qualified-immunity defense before dismissing a claim on that ground.776 But Iqbal effectively disallowed discovery on the qualified-immunity defense.777 By implication, then, it closed the doors on pre-dismissal discovery for all cases.778 The fundamental message of Twombly and Iqbal is that a plaintiff may seek discovery only if armed with a complaint that satisfies New Pleading.779 This message strongly supports a motion to stay all merits discovery under Rule 26(c) on the sole ground that the defendant has filed a motion to dismiss for factual insufficiency. To fall within the “good cause” justification for a discovery stay, the defendant need only argue that Twombly and Iqbal characterize any merits discovery as an “undue burden” when the complaint contains no plausible claim for relief. Even under Old Pleading, judges rarely allowed discovery prior to deciding a Rule 12(b)(6) motion.780 New Pleading erects an even higher bar to pre-dismissal discovery. Recent cases reveal a trend in the lower courts toward embracing this reasoning and staying discovery pending the resolution of a Twiqbal motion to dismiss.781 For example, the Sixth Circuit recently wrote: 774. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009). 775. Id. at 1954. 776. See Malveaux, supra note 762, at 113. 777. Iqbal, 129 S. Ct. at 1954; cf. Moss v. U.S. Secret Serv., 572 F.3d 962, 974 (9th Cir. 2009) (affirming a district court’s stay of all discovery pending resolution of the motion to dismiss on the defendants’ qualified immunity defense). 778. Professor Hartnett has argued that the qualified-immunity focus of Iqbal may open the door to pre-dismissal discovery in other kinds of cases. See Hartnett, supra note 762, at 511. That argument, however, is hard to square with the express language in the Court’s opinion endorsing the transsubstantive effect of New Pleading. See, e.g., Iqbal, 129 S. Ct. at 1950, 1953; see also Robert G. Bone, Plausibility Pleading Revisited and Revised: A Comment on Ashcroft v. Iqbal, 85 Notre Dame L. Rev. 849, 859 (2010) (noting that although Iqbal could have limited its rejection of pre-dismissal discovery to qualified immunity cases, “it uses language that suggests a broader application”). 779. Dodson, supra note 771, at 70. 780. See Bone, supra note 767, at 933 n.249. 781. See Kevin J. Lynch, When Staying Discovery Stays Justice: Analyzing motions to Stay Discovery When a Motion to Dismiss Is Pending, 47 Wake Forest L. Rev. 71, 71–82 (2012).

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Before Twombly and Iqbal, courts would probably have allowed this case to proceed so that plaintiff could conduct discovery in order to gather the pricing information that is solely retained within the accounting system of [the defendants]. . . . The plaintiff apparently can no longer obtain the factual detail necessary because the language of Iqbal specifically directs that no discovery may be conducted in cases such as this, even when the information needed to establish a claim of discriminatory pricing is solely within the purview of the defendant or a third party, as it is here. . . . [The] plaintiff must allege specific facts of price discrimination even if those facts are only within the head or hands of the defendants. The plaintiff may not use the discovery process to obtain these facts after filing suit. The language of Iqbal, “not entitled to discovery,” is binding on the lower federal courts.782 And again, in a subsequent case: [The plaintiff] is not entitled to discovery to determine whether her doctors infused her with Aredia manufactured by [the defendant]. The Supreme Court’s decisions in Twombly and Iqbal do not permit a plaintiff to proceed past the pleading stage and take discovery in order to cure a defect in a complaint. . . . Therefore, the district court did not err by denying [the plaintiff] leave to conduct discovery.783

For some specific cases, see, e.g., Moss, 572 F.3d at 974–75; Beck v. Dobrowski, 559 F.3d 680, 682 (7th Cir. 2009); Limestone Dev. Corp. v. Vill. of Lemont, 520 F.3d 797, 803 (7th Cir. 2008); Harris v. Adams Cnty. Commc’ns Ctr., No. 09-cv-01728-MSK-KMT, 2010 WL 882648, at *1–2 (D. Colo. Mar. 8, 2010); Comm. for Immigrant Rights of Sonoma Cnty. v. Cnty. of Sonoma, 644 F. Supp. 2d 1177, 1210–11 (N.D. Cal. 2009); Bierer v. Bd. of Trs. of Metro. State Coll., No. 09-cv-01034-WYD-KMT, 2009 WL 2242209, at *1–2 (D. Colo. July 24, 2009); Schwartz ex rel. Estate of Grafner v. Jefferson Cnty. Dep’t of Human Servs., No. 09-cv-00915-WYD-KMT, 2009 WL 2132416, at *1–2 (D. Colo. July 10, 2009); Kyle v. Holinka, No. 09-cv-90-slc, 2009 WL 1867671, at *2 (W.D. Wis. June 29, 2009); Albion Int’l, Inc. v. Am. Int’l Chem., Inc., No. 2:07 cv 994 CW, 2009 WL 1835024, at *1 (D. Utah June 19, 2009); Coss v. Playtex Prods., LLC, No. 08 C 50222, 2009 WL 1455358, at *2–3, 5 (N.D. Ill. May 21, 2009); Kregler v. City of New York, 608 F. Supp. 2d 465, 475 (S.D.N.Y. 2009); DSM Desotech Inc. v. 3D Sys. Corp., No. 08 CV 1531, 2008 WL 4812440, at *2–3 (N.D. Ill. Oct. 28, 2008); McLafferty v. Deutsche Lufthansa A.G., No. 08–1706, 2008 WL 4612856, at *2 & n.2 (E.D. Pa. Oct. 15, 2008). But see Edward A. Hartnett, Taming Twombly: An Update After Matrixx, 75 L. & Contemp. Probs. 73, 49–50 (2012) (collecting cases allowing or applauding pre-dismissal discovery). 782. New Albany Tractor, Inc. v. Louisville Tractor, Inc., 650 F.3d 1046, 1051 (6th Cir. 2011) (emphasis in original). 783. Patterson v. Novartis Pharms. Corp., No. 10–5886, 2011 WL 3701884, at *3 (6th Cir. Aug. 23, 2011).

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The Third Circuit has expressed similar sentiments, albeit in the context of the abuse-of-discretion standard: Mann contends that it was an abuse of discretion for the District Court to stay discovery while it considered the defendants’ motions to dismiss. In certain circumstances it may be appropriate to stay discovery while evaluating a motion to dismiss where, if the motion is granted, discovery would be futile. See Iqbal, 129 S. Ct. at 1954 (“Because respondent’s complaint is deficient under Rule 8, he is not entitled to discovery.”). That is precisely the case here. As laid out above, none of Mann’s claims entitle him to relief. That, as Mann contends, he could have produced “a litany of facts” substantiating his claims (Appellant’s Br. at 30), if he had more time to conduct discovery, misses the mark. . . . Accordingly, the District Court did not abuse its discretion in staying discovery pending resolution of the motions to dismiss.784 So has the Second Circuit: [The plaintiff] argues that because such facts would be peculiarly within the knowledge of the defendants, it had no obligation to include such an allegation in the Complaint . . . , intimating that it might hope to develop some such evidence in discovery. To be sure, South Cherry should not include such an allegation in its pleading without having a factual basis or justification. . . . But “before proceeding to discovery, a complaint must allege facts suggestive of illegal conduct,” Twombly, 550 U.S. at 564 n.8, 127 S. Ct. 1955; and a plaintiff whose “complaint is deficient under Rule 8 . . . is not entitled to discovery,” Iqbal, 129 S. Ct. at 1954. South Cherry’s confessed inability to offer more than speculation that there may have been such unlawful conduct underscores, rather than cures, the deficiency in the Complaint.785 Pre-dismissal discovery faces a practical obstacle as well. Absent a court order authorizing discovery, the Rules automatically stay discovery until the parties hold their Rule 26(f) conference, which can occur as late as ninety-nine days after any defendant is served with the complaint.786 By that time, the court

784. Mann v. Brenner, 375 F. App’x 232, 239–40 (3d Cir. 2010). 785. S. Cherry St., LLC v. Hennessee Group LLC, 573 F.3d 98, 113–14 (2d Cir. 2009) (internal citation and quotation marks omitted). 786. See Fed. R. Civ. P. 16(b)(2), 26(d)(1), 26(f)(1).

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may have already resolved a motion to dismiss. If not, the court’s scheduling order, entered after the conclusion of the initial conference, may contain a stay of discovery as a matter of course until the court resolves the motion to dismiss. In either case, the Rules themselves may end up shielding from discovery a defendant who files a motion quickly. For these reasons, those who push for pre-dismissal discovery as a way of dealing with New Pleading are overly optimistic. Pre-dismissal discovery after Twombly and Iqbal requires a plaintiff to file an admittedly deficient pleading and hope that a district judge allows discovery in the face of the Court’s opinions justifying immediate dismissal of such pleadings as the only effective way to control discovery costs. That scenario is unlikely to play out in enough cases to provide a meaningful cure for the ills of New Pleading.787

Presuit Discovery in Federal Court Could a plaintiff seek discovery before filing a formal lawsuit? Rule 27 of the Federal Rules permits presuit discovery to “perpetuate testimony” if needed to “prevent a failure or delay of justice.”788 As the verb “perpetuate” implies, the Rule’s original purpose was to preserve discovery that was about to be lost.789 It was not designed as a vehicle for investigating facts irrespective of the need for perpetuation.790 The historical reason for limiting Rule 27 in this way is tied to the liberal nature of Rule 8: causes of action should be able to be pleaded without the need for investigative discovery.791 Things are different after Twombly and Iqbal—and I will have more to say about what New Pleading means for Rule 27 later—but the drafters of Rule 27 were working under the assumption of Old Pleading that even a skeletal complaint should satisfy Rule 8, thereby opening the doors to full-fledged Rule 26 discovery. Any additional information gleaned from that discovery could be used to justify an amendment to the complaint under the liberal Rule 15.792

787. Dodson, supra note 771, at 70; David L. Noll, The Indeterminacy of Iqbal, 99 Geo. L.J. 117, 141–42 (2010). 788. Fed. R. Civ. P. 27(a)(1), (3). 789. See Nicholas A. Kronfeld, Note, The Preservation and Discovery of Evidence Under Federal Rule of Civil Procedure 27, 78 Geo. L.J. 593, 598–602 (1990). 790. Id. at 612; Pike & Willis, supra note 768, at 1193. 791. Kronfeld, supra note 789, at 613; James A. Pike & John W. Willis, Federal Discovery in Operation, 7 U. Chi. L. Rev. 297, 321–22 (1940). 792. See Pike & Willis, supra note 768, at 1193–94; Pike & Willis, supra note 791, at 321–22.

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Still, at the time of enactment, drafters disagreed as to whether the text of Rule 27 nevertheless allowed presuit investigative discovery.793 Advisory Committee Chair Judge William Mitchell stated his view that the rules clearly prohibited presuit investigative discovery.794 Committee member Professor Edson R. Sunderland expressed some doubt whether Rule 27 was clear enough but stated that “the whole scheme of Rule 27 is inappropriate for obtaining information in an ordinary suit to enable one to draw a complaint.”795 Professor William W. Dawson, on the other hand, thought that Rule 27 might be used for presuit investigative discovery.796 Whatever the original understanding of its text, caselaw has conclusively rejected the ability to seek presuit investigative discovery under Rule 27.797 The sole exception appears to be In re Alpha Industries, Inc.,798 which has not been followed by any other court and has been treated as an aberration.799 With that one exception, courts and commentators universally construe Rule 27 as not authorizing presuit investigative discovery in federal court. It is possible—but unlikely—that federal courts would recognize an equitable power to order presuit discovery outside of the parameters of the Federal Rules. Before the adoption of the Federal Rules in 1938, Equity Rules 47 and 58 did authorize bills of discovery in federal court, but the history of their use in federal court is unclear.800 What is clearer is that the independent equitable action for discovery in federal court fell into disuse after the adoption of the Federal Rules.801 The existing Rules, which allow broad discovery of both parties and nonparties, effectively displaced the need for equitable bills.

793. Pike & Willis, supra note 791, at 321. 794. Am. Bar Ass’n, Rules of Civil Procedure for the District Courts of the United States with Notes and Proceedings of the Institute on Federal Rules at Cleveland, Ohio 293 (William W. Dawson ed. 1938) (comments of Judge William Mitchell). 795. Id. at 292–93 (comments of Professor Edson R. Sunderland). 796. Id. at 97. 797. Lonny Hoffman, Access to Information, Access to Justice: The Role of Presuit Investigatory Discovery, 40 U. Mich. J.L. Reform 217, 227 (2007); see generally Ann K. Wooster, Annotation, Construction and Application of Fed. R. Civ. P. 27, 37 A.L.R. Fed. 2d 573 (2009) (citing cases). 798. 159 F.R.D. 456, 457 (S.D.N.Y. 1995). 799. See Hoffman, supra note 797, at 227. 800. Kronfeld, supra note 789, at 596–602. 801. Only a few exceptions exist. See, e.g., Lubrin v. Hess Oil Virgin Islands Corp., 109 F.R.D. 403, 404–405 (D.V.I. 1986) (holding that an equitable action could enable a plaintiff to inspect equipment in the hands of a third party for purposes of determining whether a cause of action based on defects in the equipment was viable).

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As one commentator has said, “Further amendments in 1991 to Rules 34 and 45, however, probably have eliminated most—if not all—legitimate grounds for resort to an independent equitable action,”802 and the Advisory Committee Notes seem to confirm that the rulemakers could think of few instances in which an equitable action would be provident.803 All told, resort to presuit investigative discovery in federal court under current law offers little opportunity for circumventing New Pleading.

Presuit Discovery in State Court Although federal law currently prohibits it, some states allow presuit investigative discovery for the purpose of filing a sufficient complaint. Plaintiffs who otherwise may be trapped in federal court with information asymmetry can use these state procedures as a way to rectify that asymmetry before facing a motion in federal court. In other words, a plaintiff who suspects she might be confronted with a federal motion to dismiss under Twombly and Iqbal could initiate a state presuit-discovery action to get information she needs to survive such a motion. After obtaining the information, the plaintiff could then either file in federal court (assuming the claim has a jurisdictional basis) or file in state court with the expectation that the case would be removed to federal court and subject to a federal motion to dismiss.804 Many states allow presuit-discovery actions to perpetuate testimony.805 But a plaintiff facing New Pleading does not need presuit discovery for purposes of perpetuation. Rather, the plaintiff needs presuit discovery for purposes of enabling her to file a factually sufficient complaint. She needs presuit investigative discovery. As documented by Professor Lonny Hoffman, a leader of state presuit-discovery research, most states pattern their presuit-discovery mechanisms on Federal Rule 27, restricting presuit discovery only for perpetuation and not allowing purely investigative discovery.806 A few states, however, including Texas, Alabama, Pennsylvania, New York, Ohio, and possibly Vermont, do allow presuit investigative discovery. Texas is perhaps the strongest proponent of presuit investigative discovery

802. Hoffman, supra note 797, at 234. 803. Fed. R. Civ. P. 34, Adv. Cmte. Note 1991. 804. Dodson, supra note 771, at 71–72. 805. Hoffman, supra note 797, at 235–36 & n.65. 806. See Lonny Hoffman, Using Presuit Discovery to Overcome Barriers to the Courthouse, Litig., Summer 2008, at 31, 33–34; Hoffman, supra note 797, at 235–36.

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for purposes of framing a complaint. Rule 202 of the Texas Rules of Civil Procedure allows presuit discovery whenever justice or some other benefit outweighs the burden and expense of the discovery requested,807 and the Texas courts have interpreted this mandate broadly.808 The Texas rule applies in Texas state court to both state and federal causes of action.809 Texas courts grant presuit-discovery petitions “almost as a matter of course.”810 Professor Hoffman, in a study of Texas’s presuit-discovery mechanism, has estimated that Texas presuit discovery was used more than 4,000 times from 1999–2005, with the majority of petitions being investigative rather than preservational. In those cases, the reason for initiating discovery was “to make sure that the case . . . would be valid under the rules.”811 Alabama, like Texas, has a strong policy favoring presuit discovery for claim investigation, though it is unclear how often presuit investigative discovery is used in Alabama.812 Rule 27 of the Alabama Rules of Civil Procedure allows pre-action discovery for “[a] person who desires to perpetuate [his] own testimony or that of another person or to obtain discovery under Rule 34 or Rule 35 regarding any matter that may be cognizable in any court of this state.”813 Despite the phrase “to perpetuate” in the text of the rule, the Alabama Supreme Court construed the rule to allow presuit discovery “regardless of any need to perpetuate evidence” if the plaintiff wishes to use it to determine whether she has a reasonable basis for filing a lawsuit.814 Pennsylvania also allows presuit discovery for purposes of composing a complaint. Rule 4003.8 of the Pennsylvania Rules of Civil Procedure permits a plaintiff to “obtain pre-complaint discovery where the information sought is material and necessary to the filing of the complaint and the discovery will

807. Tex. R. Civ. P. 202.1, 202.4. 808. Hoffman, supra note 797, at 241–45. 809. See Jeffrey Liang, Note, Reverse Erie and Texas Rule 202: The Federal Implication of Texas Pre-Suit Discovery, 89 Tex. L. Rev. 1491, 1493–95 (2011). 810. Id. at 1494. 811. Hoffman, supra note 797, at 251–55. 812. One study found only a dozen reported appellate cases from 1994–2002, but it seems likely that petitions rarely result in reported opinions. See Kevin Walding, Petitions for Pre-Action Discovery Under Rule 27, Alabama Rules of Civil Procedure: A Primer, 63 Ala. Law. 110, 110 & n.1 (2002). 813. Ala. R. Civ. P. 27(a)(1). 814. Ex parte Anderson, 644 So. 2d 961, 964 (Ala. 1994); Driskill v. Culliver, 797 So. 2d 495, 497–98 (Ala. Civ. App. 2001).

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not cause unreasonable annoyance, embarrassment, oppression, burden or expense to any person or party.”815 Because Pennsylvania is a fact-pleading state requiring more than merely fair notice in complaints,816 presuit discovery “play[s] a critically important role in Pennsylvania’s pleading scheme” by allowing a plaintiff to gather the facts necessary to successfully plead his case.817 Other states are less overt about the availability of presuit discovery but nonetheless recognize its existence. New York statute provides: “Before an action is commenced, disclosure to aid in bringing an action . . . may be obtained, but only by court order.”818 To be entitled to this presuit discovery, the applicant must make a prima facie showing that a cause of action exists.819 That does not mean that the applicant must already be able to plead the cause of action; to the contrary, the application will be denied if the applicant has sufficient information upon which to frame a complaint.820 After all, if the plaintiff is already able to plead a claim properly, then she presumably does not need investigative discovery presuit. Thus, New York law allows presuit discovery if the plaintiff makes a prima facie showing of a cause of action but does not possess the information necessary to plead the claim sufficiently in a complaint.821 Similarly, Ohio allows a petitioner to bring an action for discovery when she is otherwise unable to file a complaint without that discovery. Rule 34(D) (1) of the Ohio Rules of Civil Procedure provides that “a person who claims to have a potential cause of action may file a petition to obtain discovery as provided in this rule.”822 Under this rule, “[a]n action for discovery is to be used only to uncover facts necessary for pleading,”823 including facts that would allow a plaintiff to “determine if [she] has a valid cause of action against a known” defendant.824 The rule gives the plaintiff the opportunity to show that she has a non-frivolous lawsuit by determining who the proper defendant is 815. Pa. R. Civ. P. 4003.8(a). 816. Pa. R. Civ. P. 1019(a); Miketic v. Baron, 675 A.2d 324, 330 (Pa. Super. Ct. 1996). 817. McNeil v. Jordan, 894 A.2d 1260, 1269 (Pa. 2006). 818. N.Y. C.P.L.R. § 3102(c). 819. See Holzman v. Manhattan & Bronx Surface Transit Operating Auth., 707 N.Y.S.2d 159, 161 (N.Y. App. Div. 2000). 820. See In re Henry, 843 N.Y.S.2d 891, 892 (N.Y. App. Div. 2007); W. Inv. LLC v. Georgeson S’holder Sec. Corp., 841 N.Y.S.2d 40, 41 (N.Y. App. Div. 2007). 821. For a more skeptical read of New York caselaw, see Hoffman, supra note 797, at 237–38. 822. Ohio Civ. R. 34(D)(1). 823. Huge v. Ford Motor Co., 803 N.E.2d 859, 861 (Ohio Ct. App. 2004). 824. Brenner v. Walker Ambulance Co., 692 N.E.2d 1053, 1055 (Ohio Ct. App. 1997).

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and what wrong occurred when the potential defendant or a third party can “hide these facts needed by the plaintiff.”825 Finally, at least one other state, Vermont, appears to have a rule allowing presuit discovery to be used in the way I suggest: “A person who desires to perpetuate testimony or to obtain discovery under Rule 34 or 35 regarding any matter that may be cognizable in any court of the state may file a verified petition in the superior court in the county of the residence of any expected adverse party.”826 The case law, however, is too sparse to conclude that Vermont courts would allow presuit investigative discovery.827 In addition to statutory or rule-based authorizations for presuit discovery, most states—though not all—allow equitable bills of discovery.828 Equitable bills of discovery were the primary mechanism to obtain discoverable information in civil cases prior to the adoption of the Federal Rules of Civil Procedure and their state analogues.829 Because common-law courts provided no mechanism for discovery at all, equity courts created the bill as an exercise of ancillary jurisdiction in aid of actions at law. Although modern discovery rules and the merger of law and equity have largely replaced the need for equitable bills of discovery, the majority of states still allow the bill. Courts generally have restricted the bill to instances in which discovery cannot otherwise be had under the applicable rules and statutes, and where discovery is necessary to secure justice in the underlying proceeding.830 Thus, most states lacking a statute or rule authorizing presuit investigative discovery recognize an equitable action for a bill of discovery instead. For example, the fact-pleading state Connecticut recognizes an independent equitable action for a bill of discovery to enable a plaintiff to obtain evidence for use in an affirmative action for relief.831 The Connecticut Supreme Court 825. Id. 826. Vt. R. Civ. P. 27(a)(1) (emphasis added). 827. See, e.g., Vt. R. Civ. P. 27 reporter’s notes (stating that Vermont’s “Rule 27(a)(1) provides for a verified petition for perpetuation of testimony or other appropriate discovery before action” (emphasis added)); In re Burlington Bagel Bakery, Inc., 549 A.2d 1044, 1045 (Vt. 1988) (interpreting the rule to “give[] the presiding judge discretion to grant a petition for preaction discovery if he or she ‘is satisfied that the perpetuation of the testimony or other discovery may prevent a failure or delay of justice’” (emphasis added)) (quoting Vt. R. Civ. P. 27(a)(3)). 828. See, e.g., Austin v. Johnston Coca-Cola Bottling Group, Inc., 891 P.2d 1143, 1146 (Kan. Ct. App. 1995) (holding that Kansas does not recognize the equitable bill of discovery). 829. See Rupert F. Barron, Annotation, Existence and Nature of Cause of Action for Equitable Bill of Discovery, 37 A.L.R. 5th 645, 658–59 & n.5 (1996). 830. See id. 831. Berger v. Cuomo, 644 A.2d 333, 337 (Conn. 1994).

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has admonished Connecticut courts to grant a bill of discovery “unless there is some well founded objection against the exercise of the court’s discretion.”832 So, a plaintiff fearing a federal Twiqbal motion might be able to get the discovery she needs under a state presuit-discovery mechanism first. The idea would be to seek presuit discovery in a state-court action under either state rules permitting such an action or an equitable bill of discovery, obtain the information necessary to plead a complaint that would survive a motion to dismiss in federal court, and then file the complaint in federal court (or file a removable action in state court). Employing state presuit-discovery mechanisms could be a good strategy to enable some plaintiffs to solve a Twiqbal catch-22. State presuit-discovery mechanisms appear to apply to most underlying substantive claims, including federal claims. A few states, such as Alabama and Vermont, limit presuit discovery to causes of action that can be heard in the courts of those states.833 But state courts can generally hear federal causes of action unless Congress provides otherwise. Even if Congress provides for exclusive federal jurisdiction, as it has for federal antitrust and securities claims,834 state law may recognize sufficiently analogous causes of action—such as breach of fiduciary duties, unfair competition, or even state antitrust claims—that can serve as the underlying basis for state presuit discovery. Further, plaintiffs invoking state presuit-discovery mechanisms need not worry about the defendant removing the presuit-discovery action to federal court, where such a mechanism does not exist. State presuit-discovery actions are not removable to federal court because they are not “civil actions” within the meaning of the federal removal statute.835 In some cases, then, state 832. Id. 833. See Ala. R. Civ. P. 27(a)(1); Vt. R. Civ. P. 27(a)(1). 834. 15 U.S.C. §§ 4, 15(a), 77v (2006). 835. See Young v. Hyundai Motor Mfg. Ala., LLC, 575 F. Supp. 2d 1251, 1254 (M.D. Ala. 2008); McCrary v. Kansas City S. R.R., 121 F. Supp. 2d 566, 569 (E.D. Tex. 2000); In re Hinote, 179 F.R.D. 335, 336 (S.D. Ala. 1998). But see In re Texas, 110 F. Supp. 2d 514, 522–23 (E.D. Tex. 2000) (finding a petition for presuit discovery, when “look[ing] at the proceeding as a whole,” is a civil action under the removal statutes), rev’d on other grounds sub nom. Texas v. Real Parties in Interest, 259 F.3d 387, 395 (5th Cir. 2001); cf. Jeffrey Liang, Note, Reverse Erie and Texas Rule 202: The Federal Implication of Texas Pre-Suit Discovery, 89 Tex. L. Rev. 1491, 1504 (2011) (arguing that presuit-discovery actions should be removable). Courts also have held equitable bills of discovery nonremovable, though as an independent action, that seems less certain. See Wilson v. Belin, 20 F.3d 644, 651 n.8 (5th Cir. 1994) (suggesting that an equitable bill of discovery is not removable because it does not state a claim); Young v. Hyundai Motor Mfg. Ala., LLC, 575 F. Supp. 2d 1251, 1254–55 (M.D. Ala. 2008) (specifically adopting the Fifth Circuit’s rationale of removal and equitable bills of discovery). But see Hernandez Perez v. Citibank, N.A., 328 F. Supp. 2d 1374, 1379 (S.D. Fla. 2004) (holding an equitable bill of discovery under Florida law to be removable under the Edge Act).

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presuit discovery may be a viable and relatively inexpensive strategy for plaintiffs expecting to lose a Twiqbal motion to obtain needed information.836 There are, however, several major limitations on the utility of state presuit-discovery mechanisms. Some states permit equitable bills of discovery only after the petitioner has filed a substantive action, and it is unclear whether a state court would entertain the bill if the substantive action is before a federal court.837 As for rule-based regimes, asymmetry in pleading standards may undermine an attempt to use state presuit-discovery mechanisms. If the state applies a notice-pleading standard to the substantive claims, then the state court may allow only presuit discovery sufficient to meet that notice-pleading standard rather than the stricter federal standard. These legal restrictions reduce the number of cases in which state-discovery mechanisms could be useful. The limited number of states allowing presuit investigative discovery also decreases efficacy. A plaintiff cannot simply file in any state that happens to authorize viable presuit discovery. Long-arm statutes and federal due-process considerations cabin state-court authority over defendants. Thus, a plaintiff may find herself excluded from all viable presuit-discovery mechanisms because they all are in states that lack adjudicatory authority over the defendant.838 This limitation is particularly severe in light of the Supreme Court’s recent decisions restricting extraterritorial state adjudicatory authority under the Due Process Clause.839 Even if a plaintiff happens to find herself able to use a presuit-discovery mechanism in a state that has adjudicatory authority over the defendant, spending time and resources pursuing discovery in a presuit-discovery action may be too risky for a plaintiff if the limitations period on the substantive claim is short and untolled by the presuit-discovery action.840 Most states do provide that a presuit-discovery action tolls the limitations period of the underlying substantive claim in state court.841 Federal courts hearing state

836. See Dodson, supra note 771, at 71–72. 837. See Scott Dodson, Federal Pleading and State Presuit Discovery, 14 Lewis & Clark L. Rev. 43, 62–63 (2010). 838. See Dodson, supra note 771, at 72. 839. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2855–56 (2011) (tightening general jurisdiction); J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780, 2790–91 (2011) (narrowing the scope of the “stream of commerce” analysis in a specific-jurisdiction determination). 840. See Dodson, supra note 771, at 72. 841. Dodson, supra note 837, at 64.

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substantive claims likely would credit that state tolling rule in the absence of contrary codified federal law.842 As a result, state claimants who can sue their defendant in one of the few states with a presuit-discovery mechanism may be able to employ that tolling mechanism to keep their substantive claims viable. But federal courts hearing federal claims would not be required, based solely on state tolling rules, to toll federal limitations periods during the pendency of a presuit-discovery action in state court. Perhaps a federal court would toll the limitations period as a matter of federal common law or comity, but perhaps it would not. Thus, risk-averse federal claimants may find state presuit discovery to be of little assistance. A final downside to state presuit-discovery mechanisms is the potential for political backlash. Courts, rulemakers, and legislatures may find it troubling—even unseemly—that plaintiffs would use a state presuit-discovery mechanism to get discovery, otherwise unobtainable in federal court, just to survive a motion to dismiss in federal court. State presuit-discovery mechanisms were not intended to be used as an end-run around the procedural limitations on pleading and discovery in federal court. Accordingly, routine use of state presuit-discovery mechanisms for this purpose could induce state lawmakers and judges to attempt to limit the availability of state presuit-discovery mechanisms.843 Such a reaction is not mere speculation. In 1998, Congress passed the Securities Litigation Uniform Standards Act, which authorizes federal courts to stay state-court discovery, because of a perception that securities plaintiffs were using liberal state-court discovery procedures to circumvent stricter federal discovery limitations.844 For these reasons, state presuit-discovery mechanisms have some utility for the plaintiffs who are able to use them. These mechanisms could enable those plaintiffs to obtain discovery from a defendant that would enable those plaintiffs to survive a motion to dismiss in federal court. Because of the legal, geographical, and practical limitations, however, few plaintiffs likely could take advantage of state presuit-discovery mechanisms. Accordingly, most plaintiffs will have to find a different way to obtain the discovery they need.

842. See Walker v. Armco Steel Corp., 446 U.S. 740, 752–53 (1980). 843. See Dodson, supra note 771, at 72. 844. See Securities Litigation Uniform Standards Act (SLUSA) of 1998, Pub. L. No. 105–353, 112 Stat. 3227 (codified in scattered sections of 15 U.S.C.). For a discussion of the congressional backlash that prompted SLUSA, see Newby v. Enron Corp., 338 F.3d 467, 471–72 (5th Cir. 2003).

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Choosing State Court to Adjudicate the Merits Plaintiffs who cannot seek state presuit discovery might simply file in a state court whose rules provide a more favorable dismissal standard. State courts and state rulemakers are free to adopt their own pleading rules that differ from federal standards. And even if the language of a state’s rules tracks the Federal Rules, that state’s courts are free to interpret the state rules differently than the U.S. Supreme Court has interpreted Federal Rule 8. Under this parallel system of civil justice, a complaint that would be screened out of federal court by New Pleading could survive if filed in a state court that applies more lenient pleading standards. In theory, such a strategy holds promise. A state court would surely test state claims under its own state pleading standard.845 Even federal claims, unless they contained a specific heightened-pleading standard as part of their statutory foundation,846 would be governed by the state pleading standard. There is some uncertainty here,847 but the Supreme Court has never held the reverse-Erie doctrine or principles of preemption to supplant more lenient state pleading standards with stricter, non-statutory, federal pleading standards.848 The viability of such a forum-based strategy depends upon which states follow a pleading standard more lenient than New Pleading. Sixteen states follow a fact-pleading model akin to New Pleading.849 The remaining thirty-four states and the District of Columbia follow a notice-pleading model akin to Old Pleading. Of these, many have not yet decided whether to follow or reject New 845. See Anthony J. Bellia Jr., Federal Regulation of State Court Procedures, 110 Yale L.J. 947, 963–1001 (2001). 846. A few do. See, e.g., 15 U.S.C. § 78u-4(b) (securities fraud); 15 U.S.C. § 6607 (“Y2K” litigation). 847. See Brown v. W. Ry. of Ala., 338 U.S. 294, 298 (1949) (requiring state courts to apply more lenient federal pleading standards to a federal claim when application of stricter state standards would “impose unnecessary burdens” on the federal right). 848. See Dodson, supra note 837, at 56 n.74. For more on reverse-Erie, see generally Kevin M. Clermont, Reverse-Erie, 82 Notre Dame L. Rev. 1 (2006). 849. John B. Oakley & Arthur F. Coon, The Federal Rules in State Courts: A Survey of State Court Systems of Civil Procedure, 61 Wash. L. Rev. 1367, 1378 (1986) (listing such states); see also Kevin M. Clermont, Three Myths About Twombly-Iqbal, 45 Wake Forest L. Rev. 1337, 1340 n.19 (2010) (noting that Nebraska has adopted notice pleading since the 1986 survey). I have not investigated whether any of these states’ rules have been interpreted by their courts to be more lenient than the language of their texts suggests, though there are reports that some fact-pleading states may operate as notice-pleading states in practice. See Oakley & Coon, supra at 1383.

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Pleading. As of May 2012, a handful has rejected New Pleading and held fast to notice pleading and, in some cases, even Conley’s “no set of facts” standard.850 Those include Arizona, Iowa, Montana, Tennessee, Vermont, Washington, and West Virginia.851 But an equal number, including Colorado, the District of Columbia, Maine, Massachusetts, Minnesota, Nebraska, and South Dakota, has followed the U.S. Supreme Court’s lead in imposing New Pleading,852 and other states appear to be leaning in that direction.853 850. For commentary discouraging state courts from following the U.S. Supreme Court’s lead in imposing New Pleading, see Z.W. Julius Chen, Note, Following the Leader: Twombly, Pleading Standards, and Procedural Uniformity, 108 Colum. L. Rev. 1431, 1453–70 (2008); Anala C. Joshum, Note, Pleading in Ohio After Bell Atlantic v. Twombly and Ashcroft v. Iqbal: Why Ohio Shouldn’t “Notice” a Change, 58 Clev. St. L. Rev. 495, 521–27 (2010). 851. Cullen v. Auto-Owners Ins. Co., 189 P.3d 344, 345–48 (Ariz. 2008); Hawkeye Foodservice Distrib., Inc. v. Iowa Educators Corp., 2012 WL 592430, No. 08–2056, at *7 (Iowa Feb. 24, 2012); McKinnon v. W. Sugar Coop. Corp., 225 P.3d 1221, 1223 (Mont. 2010); Webb v. Nashville Area Habitat for Humanity, Inc., 346 S.W.3d 433, 427–37 (Tenn. 2011); Colby v. Umbrella, Inc., 955 A.2d 1082, 1086 n.1 (Vt. 2008); McCurry v. Chevy Chase Bank, 233 P.3d 861, 862–64 (Wash. 2010); Roth v. DeFelicecare, Inc., 700 S.E.2d 183, 188–89 & n.4 (W. Va. 2010). The intermediate courts of appeals of Indiana, Kansas, Michigan, North Carolina, and Oklahoma have rejected New Pleading, though some have done so not on policy grounds but rather simply to maintain the status quo until the state supreme court decides to follow the federal lead. Droscha v. Shepherd, 931 N.E.2d 882, 887 & n.1 (Ind. App. 2010); Smith v. State, 272 P.3d 1287 (Kan. App. 2012); Holleman v. Aiken, 668 S.E.2d 579, 584 (N.C. App. 2008); Edelen v. Bd. of Comm’rs of Bryan Cnty., 266 P.3d 660, 663 (Okla. App. 2011). 852. Denver Post Corp. v. Ritter, P.3d 1083, 1088 (Colo. 2011) (noting that, in review of a motion to dismiss, the court is “not required to accept as true legal conclusions that are couched as factual allegations,” citing authority relying on Twombly); Potomac Dev. Corp. v. District of Columbia, 28 A.3d 531, 543–44 & n.4 (D.C. 2011); Bean v. Cummings, 939 A.2d 676, 680–81 (Me. 2008) (relying on Twombly to apply a new heightened pleading to perjury claims, though not clearly adopting Twombly for all civil claims); Iannacchino v. Ford Motor Co., 888 N.E.2d 879, 889–90 (Mass. 2008); Bahr v. Capella Univ., 788 N.W.2d 76, 80 (Minn. 2010) (citing Twombly and stating that “a legal conclusion in the complaint is not binding on us” and “[a] plaintiff must provide more than labels and conclusions” (internal quotation marks omitted)); Doe v. Bd. of Regents of the Univ. of Neb., 788 N.W.2d 264, 274–78 (Neb. 2010) (relying on Twombly and Iqbal to set forth the standards to “prevail against a motion to dismiss”); Sisney v. Best Inc., 754 N.W.2d 804, 808–809 (S.D. 2008). 853. The Georgia Supreme Court has cited approvingly to Twombly. See Charles H. Wesley Educ. Found., Inc. v. State Election Bd., 654 S.E.2d 127, 132 & n.7 (2007). While not expressly adopting New Pleading, the Alabama Supreme Court has cited Iqbal with approval while simultaneously noting that Alabama pleading rules are to be interpreted similarly to federal pleading rules. See Am. Suzuki Motors Corp. v. Burns, 2011 WL 4425556, at *3 & n.5 (Ala. Sept. 23, 2011). The intermediate courts of appeals of Florida, Kentucky, Ohio, and Utah have followed Twombly and Iqbal. MYD Mar. Distrib., Inc. v. Int’l Paint Ltd., 76 So. 3d 42, 46–47 & n.4 (Fla. App. 2011); Espinosa v. Jefferson/Louisville Metro Gov’t, 2009 WL 277488, at *1 (Ky. Ct. App. Feb 06, 2009); Boske v. Massillon City Sch. Dist., 2011 WL 444175, at *3–4 (Ohio App. Feb 07, 2011); Fink v. Twentieth Century Homes, Inc., 2010 WL 4520482, at *3 (Ohio App. Nov 10, 2010); Parsons v. Greater Cleveland Reg’l Transit Auth., 2010 WL 323420, at *2 (Ohio App. Jan. 28, 2010); Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Registration Sys., Inc., 263 P.3d 397, 404 (Utah App. 2011).

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This research shows that a sizable percentage of notice-pleading states is opting to follow New Pleading, thereby decreasing the number of states in which a plaintiff might try to avoid New Pleading in state court. In total, about half of the states require either fact pleading or New Pleading. Of the other half, only six have expressly recommitted to notice pleading in the aftermath of Iqbal. Plaintiffs filing in those six states can be assured of a more lenient pleading standard than they would face in federal court. This state-court alternative may be less useful than it seems, however, for a variety of reasons. First, personal jurisdiction may limit a particular lawsuit to a state or states that impose strict pleading. Second, filing in state court may have its own costs because the peculiarities of state practice or procedure may harbor its own disadvantages for a particular plaintiff. Third, a savvy defendant will remove a case to federal court whenever possible to take advantage of the New Pleading standard.854 Removal would quickly be followed by a defense motion to dismiss based on the federal standard. To combat this strategy, the plaintiff could attempt to cabin removability by filing only state claims either in one defendant’s home state855 or against at least one nondiverse defendant. These options for limiting removal are fairly narrow, apply only to state claims, and require some additional sacrifice by the plaintiff in terms of forum, relief, or suable defendants. The fact remains that removal is a powerful weapon for defendants to shuttle a case from a state court with notice pleading to a federal court with New Pleading. These limitations on the use of favorable state courts reduce the utility of state notice-pleading rules considerably. Perhaps for these reasons, one study found that securities-litigation class plaintiffs forum-shopped infrequently based on differences in pleading standards.856 In short, the presence of a handful of states reaffirming notice pleading in the face of Twombly and Iqbal is not an effective alternative to New Pleading.

Other Potential Options I will mention a few other options available to plaintiffs under the current regime. First, a plaintiff might be able to plead a claim sufficiently (Claim 1) while recognizing the availability of a related second claim that she could not 854. See Kevin M. Clermont & Stephen C. Yeazell, Inventing Tests, Destabilizing Systems, 95 Iowa L. Rev. 821, 832 n.41 (2010). 855. See 28 U.S.C. § 1441(b). 856. See James D. Cox et al., Do Differences in Pleading Standards Cause Forum Shopping in Securities Class Actions?: Doctrinal and Empirical Analyses, 2009 Wis. L. Rev. 421, 425–29.

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plead sufficiently (Claim 2) and, during discovery on Claim 1, obtain information on Claim 2, either from the Claim 1 defendant or via subpoena-based third-party discovery under Rule 45, that would allow her to amend her complaint to add Claim 2 with sufficient factual support. Incidentally, Javaid Iqbal employed a similar strategy, though probably not with foresight. While the dismissal of his claims against Ashcroft and Mueller were pending on appeal, Iqbal proceeded with discovery on other claims that were not dismissed. After the Supreme Court decided his case and upheld the dismissal of his insufficient claims, Iqbal refiled against Ashcroft and Mueller with the new information. Those defendants then settled for $265,000.857 Assuming that settlement amount is appropriate, Iqbal was able to solve his pleading dilemma by linking insufficient claims with sufficient claims. The opportunity for such a solution, however, seems infrequent. The plaintiff would have to have at least one claim that she could plead sufficiently, and the discovery needed for the insufficient claim must be relevant to the sufficient claim.858 If the discovery must come from a third party via subpoena, a plaintiff must meet a higher burden to obtain that discovery because courts protect nonparties from discovery more readily than parties.859 Because of these limitations, this potential solution has minimal value.860 Second, plaintiffs could spend more time and effort investigating their claims before filing a complaint to obtain the facts needed to survive a motion to dismiss. At least one commentator has argued that advances in technology make information more accessible and cheaper to obtain, thereby reducing the number of plaintiffs caught by New Pleading’s catch-22.861 Perhaps technological advances could help in some cases, but I am not convinced that those advances are having anything other than a marginal

857. See Proposed Order of Dismissal with Prejudice, Elmahgraby v. Ashcroft, No. 1:04-cv01809-JG-SMG (E.D.N.Y. Nov. 9, 2009). Although the docket does not indicate the amount, Alan Morrison has reported the settlement figure. See Alan Morrison, The Necessity of Tradeoffs 42, available at http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/ Duke%20Materials/Library/Alan%20Morrison,%20The%20Necessity%20of %20Tradeoffs. pdf. 858. See Fed. R. Civ. P. 26(b)(1) (limiting discovery, absent good cause, to information “relevant to any party’s claim or defense”). For a criticism of this discovery limitation, see Thomas D. Rowe, Jr., A Square Peg in a Round Hole? The 2000 Limitation on the Scope of Federal Civil Discovery, 69 Tenn. L. Rev. 13, 18–24 (2001). 859. See Fed. R. Civ. P. 45(c). 860. See Dodson, supra note 771, at 71. 861. Colin T. Reardon, Note, Pleading in the Information Age, 85 N.Y.U. L. Rev. 2170, 2188–91 (2010).

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impact on the cases most affected by New Pleading. The reason is that although developing methods of information acquisition often facilitate the process of gathering facts, those technologies do not necessarily improve the quantity or quality of the available information. The kind of information that truly disadvantaged plaintiffs need under New Pleading—facts about states of mind and secretive activities—naturally resists wide documentation and disclosure. Even if technology makes searching for that information easier, if the information is kept secret, it will stay secret. Third, some plaintiffs could attempt to negotiate around New Pleading.862 The Supreme Court’s deference to agreed-upon arbitration procedures863 suggests that parties could replace New Pleading with a notice-pleading standard in an arbitration agreement. Although theoretically possible, this potential option is not meaningful in practice because plaintiffs have few opportunities to negotiate pleading rules. Parties generally choose arbitration agreements when they have an ongoing financial, employment, or commercial relationship. Torts, civil-rights claims, and similar actions are not as likely to be governed by an arbitration agreement. In other areas, arbitration agreements are contracts of adhesion developed by defense interests; few prospective defendants would voluntarily ease the pleading standards for prospective plaintiffs. It is possible that a growth in the ubiquity of arbitration agreements and attention to mutual interests in streamlined procedures could produce a widely used arbitration system founded upon notice pleading, but I am not aware of anything like that in existence today. For these reasons, plaintiffs’ opportunities to use the existing system to rectify the unfairness of New Pleading are quite limited. Most affected plaintiffs would need systemic change.

Changing Twiqbal Acknowledging the need for systemic change, commentators have offered a range of suggestions. One group of commentators has advocated for a flexible pleading standard that varies depending upon the needs of the case. Ron Allen and Alan Guy, for example, have argued that notice pleading ought to 862. Daphna Kapeliuk & Alon Klement, Contracting Around Twombly, 60 DePaul L. Rev. 1, 15–28 (2010). 863. See, e.g., AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1752 (2011). For recent commentary on the privatization of procedure, see Robert G. Bone, Party Rulemaking: Making Procedural Rules Through Party Choice, 90 Tex. L. Rev. 1329 (2012), Jaime Dodge, The Limits of Procedural Private Ordering, 97 Va. L. Rev. 723 (2011), and Judith Resnik, Courts: In and Out of Sight, Site, and Cite, 53 Vill. L. Rev. 771 (2008).

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be applied when information and costs are relatively symmetric, but Twiqbal pleading should be applied in other contexts.864 Keith Hylton has argued that pleading standards should vary with the social costs of litigation.865 Richard Epstein has argued that the pleading standard ought to depend upon a case-specific evaluation: “given what is known already about the case, is the expected value of getting new and reliable information large enough to justify the additional expenditure of resources?”866 Other proposals abound.867 These pleading-based proposals offer useful opportunities for discussion, but, as I pointed out in chapter 4, pleading-based reform is unlikely to catch the attention of the Supreme Court, Congress, or rulemakers. Additionally, it remains to be seen how practical these pleading-based proposals are. None adequately appreciates the difficulties of implementation. For pleading based on symmetrical costs and information, how are the relative symmetries of costs and information to be measured, and what level of asymmetry meets the tipping point? For pleading based on social costs, how are the social costs of litigation to be assessed in a specific case? Answers, if they exist, are elusive. For example, Epstein’s cost-benefit proposal, which is based on the information disclosed in the case, holds great promise as a discovery principle but seems difficult to implement as a pleading tool. As a discovery principle, Epstein’s proposal parallels the ideal of the discovery rules: if the expected burden of the discovery outweighs its expected benefit, the court can protect against the discovery.868 This cost-benefit principle focuses on the particular

864. Ronald J. Allen & Alan E. Guy, Conley as a Special Case of Twombly and Iqbal: Exploring the Intersection of Evidence and Procedure and the Nature of Rules, 115 Penn. St. L. Rev. 1, 3 (2010). 865. Keith N. Hylton, When Should a Case Be Dismissed? The Economics of Pleading and Summary Judgment Standards, 16 Sup. Ct. Econ. Rev. 39, 62–63 (2008). 866. Richard A. Epstein, Of Pleading and Discovery: Reflections on Twombly and Iqbal with Special Reference to Antitrust, 2011 U. Ill. L. Rev. 187, 201. 867. See, e.g., Ray Worthy Campbell, Getting a Clue: Two Stage Complaint Pleading as a Solution to the Conley-Iqbal Dilemma, 114 Penn. St. L. Rev. 1191, 1239–45 (2010) (urging a first step of notice pleading and limited discovery, followed by plausibility pleading); Rebecca Love Kourlis et al., Reinvigorating Pleadings, 87 Denv. U. L. Rev. 245, 278–82 (2010) (proposing fact pleading); Morrison, supra note 857, at 39–45 (proposing a defendant-choice, two-track pleading system, with the defendant prohibited from moving to dismiss based on factual insufficiency if the defendant refuses to produce documentary evidence negating the claim); Paul Stancil, Balancing the Pleading Equation, 61 Baylor L. Rev. 90, 150–64 (2009) (proposing a plaintiff-choice, two-track pleading system, with the notice-based system being “paid” by a bond requirement imposed on the plaintiff). Each of these proposals would require significant restructuring of the current pleading regime. Any significant restructuring seems unlikely to be adopted by the current Supreme Court. 868. Fed. R. Civ. P. 26(c)(1).

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discovery at hand and may shift as new information is revealed. At the front end, it weighs in favor of targeting the low-hanging fruit—information that is inexpensive to disclose but that may reveal much about the case. If that low-hanging fruit turns out to be unhelpful to the plaintiff’s case, then more costly efforts to dig deeper (when expected information was not available cheaply) begin to weigh against the plaintiff. Eventually, a court can protect against discovery sought by a plaintiff who is searching the haystack for a needle that, by all accounts, almost certainly does not exist. A sensitive cost-benefit analysis would proceed best in a stepwise fashion, evaluating the marginal values and costs of the next logical piece of information to be disclosed. As a discovery rule, then, Epstein’s proposal makes quite a bit of sense. But as a pleading rule, his proposal is saddled by the all-or-nothing, front-end character of the motion to dismiss. The pleading stage is a difficult time to make an accurate prediction of the relative merit and cost of continuing the litigation. It also is a one-time event that fails to allow an ongoing, more nuanced development of the cost-benefit analysis. Twombly itself is a great example. There, the defendants filed a motion to dismiss without ever filing an answer. The dissenters in Twombly expressed sympathy to the kind of cost-benefit balance proposed by Epstein, and they at least would have required the defendants to file an answer. To them, the cost-benefit balance in requiring the next pleading in sequence—the answer—tilted toward the benefit side. Nevertheless, the Court took an all-or-nothing approach to the dismissal motion. Perhaps anticipating the difficulty of evaluating the costs and benefits at the complaint stage, Epstein adopts a bright-line rule, especially in antitrust-conspiracy cases: a court should grant a Twiqbal motion to dismiss if the public information supporting dismissal is dispositive and the plaintiff has no nonpublic information to the contrary.869 This principle raises two additional issues. The first is that what is dispositive may be unclear to a generalist judge faced with the task of applying complex economic theories to antitrust evidence.870 A judge might reasonably require expert testimony, and if the defendant hires an expert, so might the plaintiff. Competing experts could very well then cloud, rather than clarify, the issue.871 They will certainly increase the expense of the motion.

869. Richard A. Epstein, Bell Atlantic v. Twombly: How Motions to Dismiss Become (Disguised) Summary Judgments, 25 Wash. U. J.L. & Pol’y 61, 81–82 (2007). 870. See Michael R. Baye & Joshua D. Wright, Is Antitrust Too Complicated for Generalist Judges? The Impact of Economic Complexity & Judicial Training on Appeals, 54 J.L. & Econ. 1, 20–21 (2011). 871. See Jeffrey L. Harrison, Reconceptualizing the Expert Witness: Social Costs, Current Controls and Proposed Responses, 18 Yale J. on Reg. 253, 263–64 (2001); see also L. Timothy

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The second issue is that Epstein’s principle seems to render his proposal functionally equivalent to the procedural system as it existed prior to Twombly. Even under Old Pleading, summary judgment has always allowed dismissal before discovery on the basis of public information.872 Perhaps, as Epstein claims, summary judgment is rarely used this way,873 but its existence suggests that Epstein’s reform should focus on bolstering case management and expedited summary judgment rather than pleading. In short, I am convinced that cost-benefit assessments at the pleading stage engender both decisional and error costs that are likely to reduce considerably, and perhaps even outweigh, any corresponding benefit.

Changing Discovery in Light of Twiqbal I therefore fall into the group of commentators that has looked for ways to ameliorate New Pleading by changing discovery.874 This is not to say that some of the pleadings-based proposals detailed above might not be used in conjunction with my proposal below. But Discovery changes have the practical advantage of leaving the Supreme Court’s recent decisions alone and working within their strictures. They also focus attention on the underlying impetus of New Pleading, which is a concern about discovery costs. Finally, they directly respond to the justice problems of New Pleading: screening out meritorious

Perrin, Expert Witnesses Testimony: Back to the Future, 29 U. Rich. L. Rev. 1389, 1390 (1995) (“[E]xperts testify to matters beyond their expertise, render opinions that are unreliable, speculative or outside what the experts would be willing to say in their own disciplines, and misrepresent the certainty of many scientific principles they rely on and conclusions they reach.”) 872. See Fed. R. Civ. P. 56(c)(2). 873. Epstein, supra note 869, at 70–71. 874. For some of the literature supporting discovery-based modifications, see, e.g., Clermont & Yeazell, supra note 854, at 855–56 (proposing the possibility of requiring “something like probable cause” that discovery will “yield significant pertinent evidence” in order to get discovery prior to a dismissal); Edward A. Hartnett, Responding to Twombly and Iqbal: Where Do We Go from Here?, 95 Iowa L. Rev. Bull. 24, 33–35 (2010) (employing Rule 11(b)(3) to create a opportunity for courts to allow pre-dismissal discovery); Geoffrey Miller, A Modest Proposal for Securities Fraud Pleading After Tellabs, 75 L. & Contemp. Probs. 93, 103–104 (2012) (arguing that plaintiffs should have some opportunity for discovery pre-dismissal if they bear some of the risk); Noll, supra note 787, at 142–43 (arguing that courts should “recalibrate” the good-cause showing for a discovery stay under Rule 26(c) to a higher standard); Nancy A. Welsh, I Could Have Been a Contender: Summary Jury Trial as a Means to Overcome Iqbal’s Negative Effects upon Pre-Litigation Communication, Negotiation and Early, Consensual Dispute Resolution, 114 Penn St. L. Rev. 1149, 1185–88 (2010) (arguing for a nonbinding summary jury trial before dismissal).

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plaintiffs because of information asymmetry. Changing the discovery rules may not alleviate the cost concerns of New Pleading—which is why my primary commitment is to a return to Old Pleading—but they can at least help to address the justice concerns. If New Pleading is here to stay, then we should consider adopting New Discovery.

New Discovery—Theory New Discovery encompasses new discovery rules that would allow presuit or pre-dismissal discovery with significant, prescribed limitations in scope and cost allocation. Others have voiced support for the idea of New Discovery,875 but I am the first to offer a robust defense of New Discovery and a detailed set of principles that define and guide New Discovery.876 The idea is simple. New Pleading has two premises: The current system for exchanging information—full-blown discovery—is too expensive; and the scope and cost controls in the existing discovery rules are too ad hoc, too discretionary, and too uncertain to alleviate the cost concerns.877 The solution, therefore, is to provide plaintiffs trapped in a catch-22 a limited opportunity for discovery, carefully circumscribed with specific, ex ante controls, and targeted at the facts causing the catch-22 in the first place. New Discovery is designed to “rectify the imprecision and injustice of New Pleading” while simultaneously accommodating the cost concerns animating New Pleading.878 New Discovery has the potential to meet the needs of plaintiffs, defendants, and the civil justice system writ large.879 The benefit to plaintiffs is the most obvious. New Discovery would help alleviate the information asymmetry that confronts them. Favorable discovery would then enable plaintiffs otherwise screened out by New Pleading to plead their claims with plausibility and bolster conclusory allegations with nonconclusory factual support. Perhaps less obviously, New Discovery benefits defendants. It would provide a mechanism for innocent defendants, under the formal rules, to show that the claim against them is, in fact, meritless. Plaintiffs faced with information 875. See, e.g., Bone, supra note 767, at 892–93; Clermont & Yeazell, supra note 854, at 855–56; Edward H. Cooper, King Arthur Confronts TwIqy Pleading, 90 Or. L. Rev. 950, 977, 987–89 (2012); Hoffman, supra note 797, at 270–80; Spencer, supra note 769, at 29–30. 876. I first offered my proposal in Dodson, supra note 771. 877. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1953 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 554, 558–59 (2007). 878. Dodson, supra note 771, at 57, 73–74. 879. Id. at 73–74.

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asymmetry can engage gaming strategies that are costly to defendants.880 But powerful economic pressures dissuade plaintiffs from pursuing a lawsuit they know to be meritless.881 The defense-side benefit of New Discovery is the same as the plaintiff-side benefit: to rectify a plaintiff’s information asymmetry, show that the plaintiff’s claims are, in fact, meritless, and thereby convince the plaintiff to decline to file a lawsuit at all. Escaping a lawsuit saves defendants the costs of litigating a motion to dismiss and the risks of litigation generally. It also saves defendants the non-litigation costs of being a defendant (even a successful one), which may include reputational damage or formal reporting obligations to boards, agencies, and insurers.882 These defense-side benefits are real and have spurred analogous discovery reforms elsewhere. In Florida, for example, medical-malpractice law requires prospective plaintiffs and defendants to share critical information before litigating the substantive claim.883 The Florida mechanism is designed to alleviate the information asymmetry endemic to med-mal claims in an effort to deter meritless claims and to encourage early settlement of meritorious claims.884 One might object that innocent defendants will be marginally worse off under a system of New Pleading and New Discovery because New Discovery allows some plaintiffs who would have been dissuaded from pursuing legal claims at all under New Pleading will pursue at least New Discovery. This argument arises from the misconception that rational plaintiffs who cannot survive New Pleading without access to New Discovery will not file a lawsuit at all. But as chapter 3 explained, the considerable uncertainties of New Pleading— particularly the individualized standard of judicial experience and common sense—induce even rational plaintiffs to test the waters. It is far from clear, then, that costs to innocent defendants will rise under a system with New Discovery. Further, as I explain in more detail below, the protections that I propose to control New Discovery—particularly the cost-shifting mechanism— attempt to protect innocent defendants from the costs of New Discovery. 880. Robert G. Bone, Modeling Frivolous Suits, 145 U. Pa. L. Rev. 519, 559–63 (1997). 881. See Herbert M. Kritzer, Risks, Reputations, and Rewards: Contingency Fee Legal Practice in the United States 10–19 (2004) (describing the work of contingency fee lawyering as “portfolio theory,” in that each case “represents an investment of the lawyer’s time and resources in the hopes of a return”). Even if filed, known frivolous suits are likely to settle quickly, at low values, with few litigation costs. Bone, supra note 880, at 541. 882. Hoffman, supra note 806, at 34. 883. Fla. Stat. §§ 766.106,.201-.206 (West 2011); see generally Edward J. Carbone, Presuit Nuts “N” Bolts, Trial Advoc. Q., Fall 2007, at 27. 884. Musculoskeletal Inst. Chartered v. Parham, 745 So. 2d 946, 949–50 (Fla. 1999); see also Fla. Stat. § 766.201(2) (2011).

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I believe, therefore, that New Discovery has great potential to be a cost-saving benefit for innocent defendants. One might lodge a second objection that guilty defendants will disguise their guilt in their New Discovery disclosures, hoping that successful dissemblance will dissuade suit. As a consequence, rational plaintiffs will discount the value of disclosures even made by innocent defendants because plaintiffs cannot distinguish the innocent and honest defendants from the guilty and dishonest defendants. This is a potent objection, but it assumes that only the parties exercise decision-making authority over disclosures and the evaluation of the information disclosed. In my proposal, the judge is an active but neutral participant in both the scope and the evaluation of New Discovery. The judge can expand the scope of New Discovery or impose sanctions if she suspects noncompliance, thereby helping to dissuade and guard against defense-side discovery abuse. While some discovery abuse will escape notice, these same cracks in the system also exist in ordinary discovery. I do not contend that New Discovery is faultless but rather only that it is a net benefit. That benefit inures to the good of the civil system as a whole. By giving the plaintiff more information up front—information the plaintiff would not otherwise have under New Pleading—New Discovery should reduce the error costs caused by plaintiff uncertainty. It should reduce the number of frivolous claims filed by making the meritlessness known to the plaintiff. And it should increase the number of meritorious claims pursued, by giving plaintiffs the information needed to plead them successfully. It should reduce the costs to innocent defendants by enabling them to escape suit altogether and to bear minimal expense and burden during New Discovery. And it will help prevent the guilty defendant from winning a dismissal simply because of information asymmetry. The potential loser in a New Discovery regime is the court system, which must bear the additional administrative costs of New Discovery. At this time, more empirical work needs to be done to gauge the magnitude of those costs, but there is good reason to believe that the cost increases of New Discovery would be offset, at least in part, by a decrease in formal case filings. If New Discovery works as proposed, fewer meritless cases will be filed at all because plaintiffs with questionable claims will receive confirmation of their meritlessness. A claim whose merit is questionable because of factual uncertainty may not be sanctionable under Rule 11; a case whose frivolousness is apparent from New Discovery becomes far more risky under Rule 11. Further, more meritorious cases will settle early—perhaps even before filing—and for more accurate amounts because guilty defendants have less room to hide. And, because New Discovery is limited in scope, its costs should pale in comparison to the costs

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of full-blown discovery in a comparable case. As a result, the cost savings of fewer litigated cases has the potential to compensate for the increased cost of New Discovery. Evidence from state systems suggests New Discovery will have all these benefits. Recall that Texas allows presuit discovery for the express purpose of investigating claims when justice or some other benefit outweighs the burden and expense of the discovery requested.885 The rule was passed, in part, as a way of helping to reduce the filing of meritless lawsuits.886 The available empirical evidence suggests that investigative presuit discovery under the Texas rule is widely used and often results in presuit settlement of the substantive claim. One study concluded that perhaps as much as 40 percent of cases settled after presuit discovery but before a formal lawsuit was filed.887 This study suggests that presuit investigative discovery can be a net cost gain because early peeks at critical evidence may result in no lawsuit ever being filed, either because the evidence is too scanty to be worth anything other than a meager settlement, or because the evidence is substantial enough that the defendant wishes to settle rather than defend a lawsuit.888 Because of these benefits, several commentators (including some who support New Pleading or fact pleading) have voiced support for the kind of discovery proposal that I set out with New Discovery.889 Nevertheless, skeptics may dismiss these theoretical benefits as naïve, believing that plaintiffs will not stop until they get the facts that they want, that defendants will fight any and all discovery requests, and that the court will be unable to control the process. That concern is real. Old habits die hard, which is one reason why

885. Tex. R. Civ. P. 202.1, 202.4. 886. See Hoffman, supra note 797, at 242–46 (noting that “plaintiffs’ interest groups” described presuit discovery rules as “faciliat[ing] responsible lawyering” by allowing meritless claims to be “non-suited” before “expensive discovery”). 887. Id. at 260. 888. Dodson, supra note 771, at 74. 889. See, e.g., Kourlis, supra note 867, at 281 (setting forth the standards by which presuit discovery would be permitted in the proposed “fact-based pleading regime”); Miller, supra note 769, at 106–107 (discussing an amended Federal Rule 27 in light of perceived benefits and flaws of Texas Rule 202.1); Miller, supra note 874 (allowing plaintiffs, upon a court order for dismissal of a complaint for insufficiently alleged facts, to engage in some discovery at the risk of paying costs and expenses if the defendant wins at summary judgment); Morrison, supra note 857, at 39–45 (proposing and describing the features of an optional “pre-suit exhaustion process”); Michael R. Huston, Note, Pleading with Congress to Resist the Urge to Overrule Twombly and Iqbal, 109 Mich. L. Rev. 415, 444 (2010) (urging for Congress to “not react hastily” to Twombly and Iqbal, but suggesting that “perhaps . . . access to discovery” could be “modified”).

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I explained above that pre-dismissal discovery under the current discovery rules would be very difficult to control. But as I explain in the next section, my proposal to implement New Discovery includes new, concrete methods to control these tactics.

New Discovery—Guiding Principles The concerns of both plaintiffs and defendants—to rectify information asymmetry without imposing burdensome costs—naturally lead to three principles to structure New Discovery: (1) it should be used sparingly; (2) when used, it should be narrowly focused and minimize undue cost; and (3) it should toll the running of any applicable limitations period.890

Sparingly Used New Discovery is limited to those claims that cannot otherwise survive a motion to dismiss under the New Pleading standards. I am not necessarily opposed to exploring more robust presuit-discovery mechanisms under the right circumstances, as the Woolf Reforms in the U.K. have.891 But broad expansion of presuit discovery would fundamentally alter the current litigation structure, which presumes that pleadings precede discovery. My purpose here is to make the case for a mild reordering based on the specific problem of New Pleading. Consequently, I adhere to the assumption that discovery generally should be severely limited for claims that have not been tested by (or that have failed) a motion to dismiss. New Discovery, then, must be limited to the particular problem at hand without disrupting the presumptive order of pretrial litigation. The limitations of New Discovery’s scope should mirror the reasons for its availability. In other words, New Discovery ought to be limited to those circumstances in which the plaintiff needs the discovery in order to survive a motion to dismiss for factual insufficiency. To ensure that the scope remains limited, the plaintiff should bear the burden of establishing the need for New Discovery. Procedurally, a plaintiff filing a petition should be required to make specific assertions showing entitlement to New Discovery. The defendant then would have an opportunity to dispute these assertions by filing an objection to the petition. A judge would then grant or deny the petition. 890. Dodson, supra note 771, at 75. 891. Lord Robin Byron, An Update on Dispute Resolution in England and Wales: Evolution or Revolution?, 75 Tul. L. Rev. 1297, 1302–303 (2001).

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The plaintiff would have to make two showings in the petition. First, the plaintiff must identify the facts needed to state a claim and to survive a motion to dismiss. To do so, the plaintiff would have to (1) identify the substantive claim, (2) explain why existing facts within the plaintiff’s knowledge are insufficient to meet New Pleading standards, and (3) state the missing facts that would enable the plaintiff to survive a motion to dismiss. Thus, a conspiracy plaintiff might petition for New Discovery on the ground that he has only evidence of conscious parallel conduct and therefore, under Twombly, needs facts tending to show the existence of an agreement. A discrimination plaintiff might state that she was fired from her job under conditions that are consistent with, but not plausibly suggestive of, an inference of discrimination and therefore, under Iqbal, needs facts tending to show or imply a discriminatory motive. Note that this requirement is unlikely to generate much controversy or satellite litigation. The reason is that this requirement forces a plaintiff to concede that the claim should be dismissed without additional discovery. Thus, plaintiffs would ask for New Discovery only when they could not survive a motion to dismiss without it. For their part, defendants would rarely contest plaintiffs’ requests, for a contestation would be an acknowledgment that a motion to dismiss should fail. These pressures would ensure that petitions for New Discovery would be infrequently filed and rarely challenged.892 Second, the plaintiff must show that the missing facts are likely to be in the hands of the defendant and are not otherwise available to the plaintiff. To do so, the plaintiff must assert that (1) the information is the type that ought to be (if it exists at all) in the hands of the defendant or hostile third parties; (2) the plaintiff has informally asked the party for the information but has not received it; and (3) the information is not reasonably available to the plaintiff through other means.893 The third assertion is designed to prevent lazy plaintiffs from seeking New Discovery without first engaging in appropriate informal investigation. To encourage plaintiffs to take these requirements seriously but reasonably, New Discovery would shift to the plaintiff the defendant’s costs and attorney fees of successfully opposing the plaintiff’s petition. Thus, if the information the plaintiff sought were readily and easily accessible from, say, the Internet, the defendant could point this fact out without incurring litigation costs. Such a mechanism for establishing plaintiff entitlement to New Discovery is not completely new. Many of the state systems that allow presuit discovery

892. Dodson, supra note 771, at 76. 893. Id. at 78.

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have analogous requirements. In Alabama, for example, the petitioner must file a verified petition that identifies both the expected substantive action and the information the petitioner desires to obtain, and that states that he presently is unable to bring the action without the information.894 A Connecticut petitioner must show that the discovery sought “is material and necessary for proof” of the claim and that there are “no other adequate means of enforcing discovery of the desired material.”895 A Pennsylvania petitioner is required to “describe with reasonable detail the materials sought, and state with particularity probable cause for believing the information will materially advance his pleading, as well as averring that, but for the discovery request, he will be unable to formulate a legally sufficient pleading.”896 These state analogues indicate that similar requirements in federal court should be adequate and workable. No study of which I am aware has suggested otherwise. The presuit-discovery petition mechanism that I propose has the additional virtue of being analogous to the federal summary-judgment mechanism. Rule 56(d) allows a nonmovant to oppose a motion for summary judgment by filing an affidavit or declaration that the nonmovant needs more time to obtain additional facts essential to justify its opposition.897 Generally, the affidavit or declaration must state what information the nonmovant expects to obtain, why she needs discovery to obtain it, and how the information will help her oppose the summary-judgment motion. Courts find these oppositions particularly compelling when the information that the nonmovant needs is in the hands of the movant.898 Given the parallels between a New Pleading motion to dismiss and a motion for summary judgment,899 summary-judgment procedure provides analogous support for New Discovery. The additional controls that my proposal places on the plaintiff’s ability to obtain New Discovery should help to ensure that New Discovery is used infrequently and only when in fact needed. 894. Ala. R. Civ. P. 27(a)(1). 895. Berger v. Cuomo, 644 A.2d 333, 337 (Conn. 1994). 896. McNeil v. Jordan, 894 A.2d 1260, 1278 (Pa. 2006); see also id. at 1274 (“[P]re-complaint discovery should be restrictively allowed, narrowly drafted, and permitted only when a complaint capable of surviving preliminary objections cannot be filed without aid of the requested discovery.”). 897. Fed. R. Civ. P. 56(d). 898. Edward Brunet, The Timing of Summary Judgment, 198 F.R.D. 679, 700–707 (2001). 899. Epstein, supra note 869, at 62; Suja A. Thomas, The New Summary Judgment Motion: The Motion to Dismiss Under Iqbal and Twombly, 14 Lewis & Clark L. Rev. 15, 41 (2010); cf. Hoffman, supra note 763, at 1239–43 (analyzing the similarities and differences of Twombly and summary judgment).

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Narrow Focus and Controlled Costs In line with its limited purpose of providing access to the discovery needed to state a claim under New Pleading, New Discovery should have a narrow focus to avoid spilling into full-blown discovery before any formal pleadings have framed the dispute. In addition, because it is designed to be conducted before the parties formally litigate a claim, New Discovery should strive to be inexpensive. The basic idea is that New Discovery ought to provide a quick and cheap look at the key facts needed to state a plausible claim. One might suspect that plaintiffs using New Discovery would exercise voluntary self-restraint to keep its scope limited and its costs low. A plaintiff truly confronted with ex ante uncertainty about his claims should want to obtain decisive information as quickly and cheaply as possible, for he may find that he has only a meritless claim. Nevertheless, there is still at least a theoretical risk that plaintiffs will abuse New Discovery. After all, serving discovery usually is far less expensive than responding to discovery. As a result, without appropriate controls, plaintiffs could use New Discovery more liberally than necessary. Perhaps some plaintiffs would want to put cost pressure on defendants. Or perhaps they would want cheap, one-way looks at the defendant’s evidence beyond what they need to actually plead their claims. Or they would want to use the information for either public relations or other non-litigation purposes, or to try to force a quick settlement. In addition, cheap New Discovery may open the doors to fishing expeditions that would otherwise be deterred by the investment of filing a formal lawsuit. Finally, there is a moral unfairness to a defendant who knows she has no evidence of liability but who will have to foot the bill to demonstrate that to a plaintiff armed only with suspicions.900 These are perfectly valid concerns, and New Discovery ought to discourage such practices. Accordingly, New Discovery must incorporate methods of achieving scope and cost control. To keep it narrow, New Discovery should require a court ordering New Discovery to impose ex ante limits on the scope of discovery. Those limits would be based on the parties’ submissions in identifying what facts would, if substantiated, solve the plaintiff’s catch-22. To keep discovery within its limits, the order could define stepwise progressions of discovery, set defaults, or restrict initial discovery to certain types of discovery vehicles. These controls are neither onerous nor unusual. Federal district courts generally supervise Rule 56(d) discovery (in the context of summary judgment)

900. Dodson, supra note 771, at 80.

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in a similar fashion.901 Normal federal discovery already deploys default limitations,902 though I think any default limits in New Discovery should be even stricter. Some state courts ordering presuit discovery, such as in Texas, often impose similar limits on discovery.903 Default limits and close supervision should circumscribe the scope of New Discovery. Narrow discovery itself leads to fewer costs. However, even modest costs present significant fairness and due-process concerns when borne by an innocent defendant. To address these concerns, New Discovery should impose a presumption that the plaintiff will foot the entire cost of New Discovery. Such cost allocation will protect innocent defendants from the cost of being compelled, via discovery, to show their innocence. It also will induce self-restraint by the plaintiff: a plaintiff faced with paying both parties’ discovery costs will think long and hard before engaging in a fishing expedition or going well beyond what the plaintiff might otherwise need.904 Practitioners have long held the view that a real threat of fee shifting is the best way to prevent discovery abuse in the first place.905 Although the general rule is that each party bears its own discovery costs,906 alternative cost allocation is not unprecedented. Federal courts have long recognized the power to order cost shifting in appropriate cases even under normal discovery.907 Recently, the Federal Rules have taken a stronger position on cost allocation by expressly imposing costs on parties requesting discovery of electronically stored information that is difficult to produce.908 And 901. See Brunet, supra note 898, at 690–93 (describing that parties must file an affidavit “to guarantee . . . the effort to contest summary judgment is trustworthy and made in good faith,” but that it nevertheless “is not uncommon for courts to grant [Rule 56(d)] motions, and, at the same time, to place limits on further discovery”); First Nat’l Bank v. Cities Serv. Co., 391 U.S. 253, 298 (1968) (approving the lower court’s ordering of discovery pursuant to Rule 56(d), being “less extensive in scope than the general discovery obtainable under Rule 26”). 902. See, e.g., Fed. R. Civ. P. 30 (limiting oral depositions); Fed. R. Civ. P. 33 (limiting interrogatories). 903. See Hoffman, supra note 797, at 259 (reporting figures for judicially-imposed limitations on Texas presuit discovery). 904. Dodson, supra note 771, at 82. 905. See Thomas E. Willging et al., Fed. Judicial Ctr., Discovery and Disclosure Practice, Problems, and Proposals for Change: A Case-Based National Survey of Counsel in Closed Federal Civil Cases 1, 10, 44 (Fed. Judicial Ctr. 1997). 906. Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247 (1975). 907. See, e.g., Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 358–59 (1978); Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 317–20 (S.D.N.Y. 2003). 908. See, e.g., Fed. R. Civ. P. 26(b)(2)(B) (allowing the court to compel discovery of such information and to “specify conditions for the discovery”); id. advisory committee’s note to 2006

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several statutes authorize cost and fee shifting under certain circumstances.909 With New Discovery, which will be one-way discovery, the risk is high that a requesting plaintiff would force the producing defendant to shoulder the lion’s share of the cost of rectifying the information asymmetry, resulting in a litigation subsidy for plaintiffs with doubtful claims.910 Thus, both sound policy and past precedent support an alternate cost-allocation principle for New Discovery. The presumptive “claimant pays” rule ought to have two catches, though. First, a defendant should not escape from the costs of discovery that uncovers evidence of culpability. If the plaintiff uncovers sufficient evidence of wrongdoing to survive a motion to dismiss, then both sides should bear their own costs of New Discovery under the normal cost-allocation rule for Rule 26 discovery. Second, a court should have the authority to shift costs back on the defendant if the defendant stonewalls proper discovery requests. The normal discovery rules already allow cost shifting as a sanction for obstructionist discovery tactics, and that sanction should continue to be available for New Discovery as well.911 I am mindful of the disincentivizing effect that cost shifting may have on New Discovery in the first instance.912 Too much cost burden shifted on plaintiffs—particularly plaintiffs who, because of information asymmetry, face uncertainty about the merits of their claims—may make even New Discovery too risky for some plaintiffs.913 But those plaintiffs are no worse off than under New Pleading and Old Discovery, in which they might not even have that option. Cost shifting is likely to be most problematic for the plaintiff proceeding in forma pauperis, who cannot be expected to pay for cost shifting at all. That

amend. (stating that such conditions include requiring “payment by the requesting party of part or all of the reasonable costs of obtaining information from sources that are not reasonably accessible”). Cost-shifting for electronic discovery had vocal supporters even before the amendments to the Rules. See, e.g., Martin H. Redish, Electronic Discovery and the Litigation Matrix, 51 Duke L.J. 561, 608–18 (2001). 909. See, e.g., 28 U.S.C. § 2412; 42 U.S.C. § 1988(b). 910. Cf. Martin H. Redish & Colleen McNamara, Back to the Future: Discovery Cost Allocation and Modern Procedural Theory, 79 Geo. Wash. L. Rev. 773, 776–77 (2011) (questioning the propriety of forcing parties to bear discovery-response costs). 911. Dodson, supra note 771, at 83. 912. Spencer, supra note 769, at 31. 913. Dodson, supra note 771, at 83.

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plaintiff’s access to New Discovery must be restricted in other ways, either by close court supervision of the discovery requests or by elimination of the opportunity for New Discovery altogether. As an alternative, perhaps the government might establish a fund from which defendants who successfully move to dismiss such a lawsuit after New Discovery could seek reimbursement for their New Discovery expenses.914 Finally, litigation insurance may provide opportunities for reducing the risk of cost shifting. I readily concede the imperfection of my proposed scope and cost controls. Some New Discovery will be overbroad, perhaps even abused. Cost shifting may not fully compensate innocent defendants for the cost of complying with invasive discovery at the insistence of a plaintiff with implausible allegations. But while panaceas are rare, improvements may still be available. If we must have New Pleading, then I believe that New Discovery meaningfully improves upon it.

Tolling Aside from the problems of scope and cost, New Discovery also presents a potential problem for plaintiffs confronting a limitations deadline to file a formal complaint. Defendants, particularly defendants with something to hide, may reduce the efficacy of New Discovery by drawing out New Discovery requests. Defendants could continue the tactic until the plaintiff, faced with the running of the limitations period, must give up New Discovery in order to file a timely formal claim. To prevent this defense-side gamesmanship, New Discovery ought to toll the running of the limitations period for the underlying claim. Plaintiff-side gamesmanship—using New Discovery primarily for the purpose of tolling the limitations period of the underlying substantive claim—is not unthinkable, but it is less concerning than defense-side gamesmanship. For one, plaintiffs would not lightly subject themselves to the costs of an unsuccessful New Discovery action. For another, a tolling of a limitations period during New Discovery is consistent with the purposes of limitations periods, regardless of the plaintiff’s motivations. Limitations periods are designed to promote repose, minimize stale evidence, and encourage prompt filings.915 Tolling the limitations period during the pendency of New Discovery does not undermine repose significantly because an application for New Discovery 914. Id. at 83. 915. Tyler T. Ochoa & Andrew J. Wistrich, The Puzzling Purposes of Statues of Limitation, 28 Pac. L.J. 453, 460–500 (1997).

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puts the putative defendant on notice that an action is being pursued (albeit preliminarily), much as a formal lawsuit does. Tolling also does not undermine the goal of minimizing stale evidence; to the contrary, the use of New Discovery might promote the preservation and accuracy of the evidence. And, finally, although New Discovery would delay the filing of a formal complaint, the reason for the delay—to ensure that a complaint is properly justified and supported—more than overcomes the marginal benefit of forcing a plaintiff to file a formal complaint earlier.916 Implementing a tolling provision by Federal Rule could prove tricky. The Federal Rules may not “abridge, enlarge, or modify any substantive [state] right,”917 and the Supreme Court has held that state tolling rules apply to state claims heard in federal court absent any codified federal law on point.918 But Rule 15(c) permits the tolling of state limitations periods in federal court in certain circumstances even when state law otherwise would not allow tolling.919 And, if there is any doubt, Congress could either enact the tolling feature by statute, as it has in the supplemental-jurisdiction statute,920 or amend the Rules Enabling Act to expressly allow the Federal Rules to toll state limitations periods.921

New Discovery—In Practice How might these New Discovery principles be employed in practice? In theory, an appropriate course of action would be for the defendant to move for a more definite statement under Rule 12(e) and identify those portions of the complaint that fail to meet the standards of New Pleading. The court then can grant the motion (if the complaint in fact fails to meet those standards) and order New Discovery targeted to those deficiencies.922 Indeed, courts have done similar things—under Old Pleading and Old Discovery—in the past.923 916. Dodson, supra note 771, at 84–85. 917. 28 U.S.C. § 2072(b). 918. See Ragan v. Merchs. Transfer & Warehouse Co., 337 U.S. 530, 532–34 (1949). 919. See Fed. R. Civ. P. 15(c). 920. 28 U.S.C. § 1367(d). The Supreme Court has upheld the constitutionality of this statutory provision. Jinks v. Richland Cnty., 538 U.S. 456, 461 (2003). 921. Cf. 28 U.S.C. § 2072(c) (allowing the Federal Rules to determine what is “final” for purposes of appellate jurisdiction). 922. Dodson, supra note 771, at 85. 923. See, e.g., Old Time Enter. v. Int’l Coffee Corp., 862 F.2d 1213, 1216 (5th Cir. 1989). The practice apparently is routine in Missouri state courts. See Kourlis, supra note 867, at 277–78.

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Unfortunately, defendants rarely move for more definite statements, preferring instead the toothier motion to dismiss. And this preference is likely to become even stronger after Twombly and Iqbal, which invite such motions and make New Pleading a more formidable weapon. Given that, there are basically two possibilities for deployment of New Discovery: pre-dismissal and presuit.924 As discussed above, pre-dismissal discovery may be available under the Rules but is unlikely to be used in the current discovery paradigm because of the admonition in Twombly and Iqbal that sufficient pleading is a precondition to discovery.925 That admonition, however, was predicated on Old Discovery and its perceived dangers of discovery abuse. One way for judges to be more confident in ordering pre-dismissal discovery, even in light of Iqbal, would be to impose the kinds of restrictions I have described for New Discovery. A plaintiff faced with a motion to dismiss might, in its opposition to the motion or directly thereafter, seek limited discovery. In many cases, the necessary facts would already be identified in the defendant’s motion, and so the plaintiff would need only to demonstrate a likelihood that those facts are within the defendant’s possession and affirm that they are not within the plaintiff’s possession. In response, the court could allow discovery under the limiting principles and cost-shifting controls that I describe above. The court could do so either while holding the motion in abeyance or after conditionally granting the motion but staying the entry of judgment until the plaintiff has had the opportunity to engage in New Discovery and file an amended complaint on the basis of the newly discovered facts.926 Ultimately, I think the New Discovery paradigm has the potential to give judges appropriate security that permitting pre-dismissal discovery under its principles would not fly in the face of Twombly and Iqbal. But I am still skeptical that judges will allow discovery in this way as often as it is warranted without some affirmative authorization.927 In addition, the potential 924. Dodson, supra note 771, at 85. New Discovery might also occur after the granting of a motion to dismiss, but I do not view this as an independent possibility. Either the court conditionally grants the motion to dismiss to allow the plaintiff an opportunity to file an amended complaint, in which case any discovery technically would be pre-dismissal, or the court formally dismisses the case and thereafter lacks rule authority to allow discovery except as provided under Rule 27. See, e.g., In re Flash Memory Antitrust Litig., No. C 07-0086 SBA, 2008 WL 62278, at *5 (N.D. Cal. Jan. 4, 2008). But see Hartnett, supra note 762, at 512 (suggesting that even after a dismissal, “the case is still alive and the discovery rules still apply”). 925. See supra notes 762–787 and accompanying text. 926. Dodson, supra note 771, at 86; Spencer, supra note 768, at 30. 927. Cf. Bone, supra note 767, at 934–35 (“If pleading-stage discovery is a good way to deal with the uninformed plaintiff, the Federal Rules should be revised to authorize it explicitly.”).

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for divergent practices across judges calls for rule-prescribed standardization. Thus, the better course would be for the Rules Committee to consider amending Rule 26 to specifically allow pre-dismissal discovery under prescribed New Discovery principles.928 Perhaps an even better alternative to pre-dismissal discovery would be to amend Rule 27 expressly to allow New Discovery presuit. Presuit discovery would eliminate the need for the defendant to expend any effort in filing a motion to dismiss. As explained above, existing Rule 27 does not authorize investigative discovery.929 The historical reason is tied to the principles of Old Pleading: under a liberal notice pleading regime, causes of action could be pleaded in nearly every case without the need for such presuit discovery. New Pleading demands, mutatis mutandis, a reevaluation of the need for presuit discovery, with appropriate sensitivity to the Supreme Court’s concern about runaway discovery costs. For these reasons, the Rules Committee should consider amending Rule 27 to specifically allow presuit discovery under prescribed New Discovery principles.930 Whether as an amendment to Rule 26 or Rule 27, codifying New Discovery is promising because it would leave the Court’s preferred plausibility-pleading standard undisturbed while creating a vehicle for discovery that is cabined by the same concerns that animated those decisions in the first place. Further, New Discovery need not be developed in a vacuum; as discussed above, several states have codified presuit discovery, and their experiments can be studied and perhaps modeled for a federal New Discovery paradigm.931 I’ll note also that there is some congressional precedent: Congress has authorized presuit discovery in federal court for use in foreign tribunals.932 Finally, New Discovery would improve courts’ ability to separate meritless from meritorious claims more accurately and at an earlier stage, with potentially less cost to the parties and the court. If we cannot return to Old Pleading, we should at least adopt New Discovery.

928. Dodson, supra note 771, at 86. 929. See supra notes 788–99 and accompanying text. 930. One commentator contends that federal presuit discovery, though potentially beneficial, is barred by the limitations of subject-matter jurisdiction because it does not create a case or controversy within the meaning of Article III of the U.S. Constitution. See Campbell, supra note 867, at 1236–39. I am skeptical of that argument, but, if valid, it would doom existing Rule 27 as well. 931. Dodson, supra note 771, at 87–88. 932. See 28 U.S.C. § 1782(a); Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 253–54, 258–59 (2004) (explaining that § 1782(a) can be used even if the foreign proceeding has not yet been instituted but is only within a “reasonable contemplation”). For an analysis of § 1782 and Intel, see generally Anand Suryakant Patel, International Judicial Assistance: An Analysis of Intel v. AMD and Its Effect on § 1782 Discovery Assistance, 18 Fla. J. Int’l L. 301 (2006).

6

N E W P L E A D I N G I N A C O M P A R AT I V E CONTEXT

The previous chapters have focused exclusively on U.S. pleading and discovery. After all, federal civil procedure in the United States is quite peculiar compared to the civil-procedure systems of virtually every other country. American-style notice pleading, for example, is unique within a global norm of fact pleading.933 Discovery in U.S. federal courts is far more liberal than discovery in any other country.934 Class actions and punitive damages are routine only in U.S. litigation.935 No other country broadly employs the civil jury.936 Federal trial judges are among the most passive in the world, despite recent trends toward more active roles.937 The American Rule—that parties 933. Edward F. Sherman, Transnational Perspectives Regarding the Federal Rules of Civil Procedure, 56 J. Legal Educ. 510, 515 (2006). 934. Linda S. Mullenix, Lessons from Abroad: Complexity and Convergence, 46 Vill. L. Rev. 1, 6 (2001) (“[N]o other country in the world has any system of discovery approaching that provided for in the Federal Rules of Civil Procedure.”); Sherman, supra note 933, at 517 (“No other country provides for as extensive discovery, including civil law countries and even common law countries like the United Kingdom.”); Stephen N. Subrin, Discovery in Global Perspective: Are We Nuts?, 52 DePaul L. Rev. 299, 306–307 (2002) (“[T]he number of discovery mechanisms available to the American lawyer as a matter of right, the degree of party control over discovery, the extent to which liberal discovery in the United States has become what almost looks like a constitutional right, and the massive use of discovery of all kinds in a substantial number of cases surely sets us apart.” (footnote omitted)). 935. See Scott Dodson, The Challenge of Comparative Civil Procedure, 60 Ala. L. Rev. 133, 131–42 (2008). A recent report, however, suggests that U.S. plaintiff’s attorneys are looking to class-action opportunities in Canada to avoid recent restrictions imposed on securities class actions in U.S. federal courts. See Ashby Jones, Lawyers Looking to Canada for Shareholder Litigation, Wall St. J. (Feb. 27, 2012). 936. John Henry Merryman & Rogelio Pérez-Perdomo, The Civil Law Tradition: An Introduction to the Legal Systems of Europe and Latin America 113 (3d ed. 2007); Geoffrey C. Hazard, Jr., From Whom No Secrets Are Hid, 76 Tex. L. Rev. 1665, 1674 (1998); Richard L. Marcus, Putting American Procedural Exceptionalism into a Globalized Context, 53 Am. J. Comp. L. 709, 712–13 (2005). 937. Thomas D. Rowe, Jr., Authorized Managerialism Under the Federal Rules— and the Extent of Convergence with Civil-Law Judging, 36 Sw. U. L. Rev. 191, 210–11 (2007).

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bear their own costs—is an exception to the transnational norm of the “loser pays” rule.938 Given America’s exceptionalist tendencies, one may assume that other countries’ systems have few insights to offer U.S. procedure. Nevertheless, comparative study can illuminate domestic issues even in exceptional systems. Further, the federal switch to New Pleading moves the United States away from notice pleading and toward a fact-pleading model fundamentally more akin to that of the rest of the world. This move makes comparative study even more important to the development of federal pleading in the wake of Twombly and Iqbal because it leads to insights in the way other countries have confronted problems similar to those caused by New Pleading. As I will explain, several fact-pleading systems have instituted a presuit-discovery mechanism similar to my proposal for New Discovery. Although there are differences to be acknowledged, I believe the recent embrace of presuit discovery in other countries supports its pursuit in the United States.

Comparing New Pleading Fact Pleading as a Global Norm Despite the gulf between the civil law and the common law, they typically follow a similar pleading structure of fact pleading.939 Civil-law countries generally place central importance on pleadings.940 The purpose of this focus is not to deter frivolous filings; other procedural mechanisms do that, including the prevailing loser-pays rule. Rather, the reason is that the pleadings frame the entire case by identifying, circumscribing, and substantiating the disputed issues.941 The design of civil-law pleading is not to screen but to streamline. To facilitate this goal, civil-law countries endorse fact pleading. The German system, for example, requires “specific fact pleading and does not permit mere notice pleading.”942 The statement of the claim must include “the

938. See Dodson, supra note 935, at 141–42. 939. Although I necessarily use some generalizations of these two great traditions, I recognize that even systems within one of these traditions vary significantly and exhibit dynamism. Where those variances are meaningful, I attempt to point them out. For a seminal comparison of civil-law and common-law traditions generally, see Merryman & Pérez-Perdomo, supra note 936. 940. See Andrew J. McClurg et al., Practical Global Tort Litigation: United States, Germany and Argentina 65 (2007). 941. See James R. Maxeiner, Pleading and Access to Civil Procedure: Historical and Comparative Reflections on Iqbal, a Day in Court and a Decision According to Law, 114 Penn. St. L. Rev. 1257, 1284 (2010). 942. Peter L. Murray & Rolf Stürner, German Civil Justice 198 (2004).

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details of the factual circumstances” giving rise to a legal remedy.943 The complaint must state facts so precisely that, based on the information provided, the court could determine that the legal relief sought should be granted if the allegations are true.944 In addition, German parties must substantiate their factual assertions by identifying the evidence or mode of proof that will establish the facts. The plaintiff must list the supporting documents in her possession, describe other documents that are publicly available, and identify all witnesses that will support her position.945 If, however, the factual information is largely in the defendant’s hands, a judge is less likely to require detailed substantiation by the plaintiff.946 Other civil-law countries have slightly different pleading standards but uniformly require some level of fact pleading beyond the American system’s notice regime.947 Common-law systems exhibit similar fact-pleading standards. In England and Wales, each pleading must contain a concise statement of the material facts on which the pleader relies.948 The parties may, but are not required to, proffer supporting evidence. Other common-law systems, such as those of India, Australia, Hong Kong, and Canada, have similar requirements.949 Even the hybrid system of Japan, which reflects an Americanization of civil-law procedure,950 endorses fact pleading. Japan’s Code requires the complaint to

943. Oscar G. Chase et al., Civil Litigation in Comparative Context 171 (2007). 944. James R. Maxeiner, Legal Certainty: A European Alternative to American Legal Indeterminacy?, 15 Tul. J. Int’l & Comp. L. 541, 587–88 (2007). 945. Chase, supra note 943, at 171–72; Maxeiner, supra note 944, at 587; Murray & Stürner, supra note 942, at 197–98. 946. See, e.g., Murray & Stürner, supra note 942, at 231 n.211, 595; Antonio Carchiette, Responsabilità Civile del Medico e Della Struttura Sanitaria e Canoni di Repartizione dell’Onere Probatorio tra Vittima e Convenuto [Liability in Torts of the Doctor and the Hospital and the Criteria for Distributing the Burden of Proof Between the Plaintiff and the Defendant], Diritto e Giustizia 2010, 0, 18 (It.). 947. See Thomas O. Main, Global Issues in Civil Procedure: Cases and Materials 28 (2006) (Spain); id. at 29 (Austria); Michele Taruffo, Civil Procedure and the Path of a Civil Case, in Introduction to Italian Law 159, 166 (Jeffrey S. Lena & Ugo Mattei eds. 2002) (Italy); Peter F. Schlosser, Lectures on Civil-Law Litigation Systems and American Cooperation with Those Systems, 45 U. Kan. L. Rev. 9, 13 (1996) (France). 948. C.P.R. § 16.4(1); Neil Andrews, English Civil Procedure: Fundamentals of the New Civil Justice System 254 (2003); Adrian Zuckerman, Zuckerman on Civil Procedure: Principles of Practice 238–40 (2d ed. 2006). 949. Fed. Ct. R. 16.02–16.03 (Austl.); Alta. R. Ct. 13.6; Ont. R. Civ. P. 25.06(1); C.K. Takwani, Civil Procedure 107–12 (3d ed. 1994) (India); Udhav Singh v. Madhav Rao Scindia, 1976 SCR (2) 246 (India); H.K. Rules of the High Court, O. 18, r. 7(1), r. 12(1), r. 21(3). 950. Hiroshi Oda, Japanese Law 409 (3d ed. 2009).

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specify and particularize the claim, identify the facts supporting the allegations, delineate indirect facts related to the claim, and itemize the evidence corresponding to each point the plaintiff will prove.951 Like civil-law pleading, these requirements are designed primarily to define the nature of the dispute and facilitate orderly process.952 Thus, despite the vast differences in procedure around the globe, fact pleading is fairly uniform. Countries’ pleading rules require different levels of detail or perhaps even evidence, but they all are grounded in a common emphasis on facts.

New Pleading as Fact Pleading Conley-style notice pleading is not fact pleading. As detailed in chapter 1, under the Conley Court’s formulation, “the Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases his claim.”953 Rule 8 does not even contain the word “fact.” To be sure, proper notice requires some factual setting—but only enough to differentiate the claim, not to detail or substantiate it. Notice pleading, therefore, has a fundamentally different focus than fact pleading.954 New Pleading, by contrast, is a species of fact pleading. As described in chapters 2 and 3, New Pleading brings a new emphasis on factual sufficiency to federal pleading in the United States. The old system, with its emphasis on notice, still exists. But federal pleading is no longer solely focused on notice. New Pleading imposes a new, and substantially more important, emphasis on facts. The Court’s opinions make clear that New Pleading is, in form and function, a kind of fact pleading. In Twombly, the Court explained that the problem with the complaint was that it did not contain “enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement.”955 In another passage, the Court focused on whether the complaint contained “facts

951. Carl F. Goodman, Justice and Civil Procedure in Japan 257 (2004); Oda, supra note 950, at 417. For a somewhat older exposition, see Takeshi Kojima, Japanese Civil Procedure in Comparative Law Perspective, 46 U. Kan. L. Rev. 687, 697 (1998). 952. Scott Dodson, Presuit Discovery in a Comparative Context, 6:2 J. Comp. L. 51 (2012). 953. Conley v. Gibson, 355 U.S. 41, 47–48 (1957). 954. Dodson, supra note 952; Scott Dodson, Comparative Convergences in Pleading Standards, 158 U. Pa. L. Rev. 441, 443 (2010). 955. Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 556 (2007).

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that are suggestive enough” to render the claim plausible.956 Labels, conclusions, and formulaic recitations were not enough; what Twombly required was facts. Iqbal confirmed Twombly’s emphasis by repeatedly referring—more than twenty times—to the need for facts in both steps of New Pleading. In Step One, courts should disregard conclusory allegations unless they are accompanied by “further factual enhancements.”957 In Step Two, a court must assess plausibility by determining whether the claim is supported by “sufficient factual matter.”958 There can be no doubt that New Pleading requires, both formally and functionally, the pleading of facts. New Pleading, then, is a species of fact pleading. But it is important to understand what kind of fact pleading it is. There are different types. Rule 9(b) of the Federal Rules of Civil Procedure, for example, is a fact-pleading rule that requires pleading with “particularity”: the who-what-when-where-why-how of the claim.959 New Pleading does not impose a particularity requirement of detail for detail’s sake. New Pleading imposes a plausibility requirement that measures not the particularity of the facts but rather their qualitative support for the legal claim.960 Plausibility is fact pleading because it cannot be pleaded without sufficient facts, but it is different from fact pleading under Rule 9(b). Likewise, New Pleading is different from the Code pleading that preceded the adoption of the Federal Rules. Although both are variants of fact pleading, they have instrumental differences.961 New Pleading is a screening device, designed to improve the efficiency of the system and of frivolous cases by 956. Id. 957. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); see also id. at 1950 (“While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.”); id. at 1954 (“But the Federal Rules do not require courts to credit a complaint’s conclusory statements without reference to its factual context.”). 958. Id. at 1948–49; see also id. at 1949 (“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.”) (internal quotation marks omitted); id. at 1951 (“We next consider the factual allegations in respondent’s complaint to determine if they plausibly suggest an entitlement to relief.”); id. at 1952 (“[T]he complaint must contain facts plausibly showing that petitioners purposefully adopted a policy of classifying post-September 11 detainees as ‘of high interest’ because of their race, religion, or national origin.”); id. (asserting that Iqbal “would need to allege more by way of factual content”); id. (“Yet respondent’s complaint does not contain any factual allegation sufficient to plausibly suggest petitioners’ discriminatory state of mind.”); id. at 1954 (“[R]espondent’s complaint fails to plead sufficient facts to state a claim.”). 959. Fed. R. Civ. P. 9(b). 960. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 569–70 & 569 n.14 (2007). 961. See Kevin M. Clermont, Three Myths About Twombly-Iqbal, 45 Wake Forest L. Rev. 1337, 1340–50 (2010).

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weeding out early those claims suspected of being meritless. Code pleading was an issue-narrowing mechanism, designed to improve the internal efficiency of all claims by forcing early disclosure of facts. New Pleading thus represents a new kind of fact pleading. It is a species of fact pleading because its practical effect is to require the same kind of factfocused pleadings as other forms of fact pleading, and its overall goal is to favor efficiency over access. But its design for achieving that efficiency is to screen for merit rather than to promote early disclosure. The question for the next section is whether a comparison of these features of New Pleading to foreign fact pleading yields useful insights.

Some Comparative Lessons To begin, it is odd that relatively few judges or commentators have engaged such a comparative perspective on New Pleading.962 Notice pleading, after all, has been a focus of comparativism in the past, with commentators contrasting notice pleading with the fact pleading of other regimes.963 If New Pleading is a departure from notice pleading and a movement toward fact pleading, then one would expect the movement to be spurred, or at least accompanied, by comparativist arguments in support of or in opposition to it. But neither Twombly nor Iqbal even mentions the pleading regimes of other countries. And neither supporters nor opponents of New Pleading have done much to use comparative perspectives. This is surprising. Fact pleading is the dominant global model. Many countries employ it successfully. Supporters of New Pleading could argue that these successes suggest that fact pleading is an appropriate way to balance the values underlying civil pleading. Opponents could emphasize the differences between the goals of fact pleading and the goals of New Pleading. They also could contend that the way the federal system as a whole balances access to justice, efficiency, economy, and fairness makes federal adoption of foreign pleading unsuitable. Wherever one sides, it would seem that the incorporation of comparative analyses could enliven and enrich the domestic debate over New Pleading. For my part, I think a comparative perspective highlights—and thus promotes a deeper understanding of—both the differences between, and the

962. I count myself among them. See Dodson, supra note 935; Dodson, supra note 954; see also Clermont, supra note 961. 963. See, e.g., Hazard, supra note 936, at 1671–72; Maxeiner, supra note 943, at 543–44.

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similarities of, federal and foreign pleading.964 The instrumental differences are real. For foreign countries, fact pleading helps ensure that the plaintiff has carefully considered her options and deliberately chosen to frame her claims in a way that fits the facts. It enables the parties and the court to identify disputed issues early and to streamline the litigation going forward. The primary motivation for foreign fact pleading is not to screen meritless cases but rather to promote litigation efficiency for cases that may have merit. New Pleading’s value preference is also for efficiency, but it approaches efficiency somewhat differently. New Pleading is designed to screen out meritless or suspect claims. Early weeding of meritless claims increases efficiency both of meritless cases and of the entire civil justice system.965 It is not designed to increase the efficiency of meritorious cases. In this instrumental respect, then, the pleadings trend in the United States is not moving in a straight line directly toward foreign pleading regimes.966 Although one ought not let similarities mask differences, one also ought not let differences mask similarities.967 In particular, although their designs differ, their general motives (efficiency) and their practical effects (fact pleading) are the same. Further, each system ends up promoting the other’s goal, regardless of design. Foreign fact pleading necessarily erects a screen to meritless cases, and New Pleading necessarily forces early information disclosure even for meritorious cases. Their instrumental differences, then, seem small compared to their formal and functional similarities. In practice and in effect, New Pleading reflects a fact-based system intrinsically akin to foreign pleading regimes. For these reasons, I think it profitable to compare the U.S.’s New Pleading paradigm with the fact pleading of other countries.

964. Cf. Chase, supra note 943, at 1–2; Kevin M. Clermont, Integrating Transnational Perspectives into Civil Procedure: What Not to Teach, 56 J. Legal Educ. 524, 535 (2006); John H. Langbein, The Influence of Comparative Procedure in the United States, 43 Am. J. Comp. L. 545, 545 (1995); Main, supra note 947, at 2. 965. See Keith N. Hylton, When Should a Case be Dismissed? The Economics of Pleading and Summary Judgment Standards, 16 Sup. Ct. Econ. Rev. 39, 41 (2008). 966. Compare Clermont, supra note 961, at 1344 (“Commentators who stress that the new and old pleading standards both required more factual detail than does notice pleading mask some big differences. The more useful message would be that the Court did not reimpose fact pleading.”), and Richard Marcus, Exceptionalism and Convergence: Form versus Content and Categorical Views of Procedure, 49 Sup. Ct. L. Rev. 521 (2010) (suggesting that any convergence is likely a matter of form that masks meaningful differences of substance), with Arthur R. Miller, From Conley to Twombly to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke L.J. 1, 20–21 (2010) (calling New Pleading “a form of fact pleading” akin to code and common-law pleading). 967. Dodson, supra note 952.

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Comparing the similarities between New Pleading and foreign fact pleading accents the paradigm shift in value preference that New Pleading represents. Notice pleading represents an American commitment to open access (despite its costs), democracy in litigation, and the efficacy of private civil actions to safeguard public interests.968 Because other countries do not hold these civil-litigation values as deeply, it makes some sense that those countries follow fact pleading.969 Consider the following reflection of the great Geoffrey Hazard during the time of notice pleading: It is my impression that lawyers in other common-law countries, for plaintiffs as well as defendants, believe that a civil case should not be commenced unless the claimant has among his own resources—in testimony, documents and other proof—enough to establish a prima facie case without obtaining any further evidence from the defendant. In contrast, the outlook in this country is that a case can legitimately be prosecuted if the claimant’s lawyer reasonably supposes that a case can be established through use of discovery.970 The particular pleading requirement thus reflects the particular country’s “outlook” of how much litigation to tolerate. New Pleading, by curtailing litigation in ways akin to fact pleading, reflects a shift in federal pleading’s value preferences from access to efficiency.971 In that vein, New Pleading can be seen as one manifestation of a larger American movement away from access-driven notice pleading. In 1995, Congress passed the Private Securities Litigation Reform Act,972 which requires pleading with particularity for claims based on misleading statements or omission and for claims containing an element of scienter.973

968. See Sean Farhang, The Litigation State: Public Regulation and Private Lawsuits in the U.S. 3 (2010); Robert A. Kagan, Adversarial Legalism: The American Way of Law 15–16 (2001). 969. See Hein Kötz, Civil Justice Systems in Europe and the United States, 13 Duke J. Comp. & Int’l L. 61, 77 (2003). 970. Hazard, supra note 936, at 1681–82. 971. See, e.g., Rex R. Perschbacher & Debra Lyn Bassett, The Revolution of 1938 and Its Discontents, 61 Okla. L. Rev. 275, 286–87 (2008); A. Benjamin Spencer, Plausibility Pleading, 49 B.C. L. Rev. 431, 433 (2008). 972. Private Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737, codified in scattered sections of 15 U.S.C. §§ 77-78. 973. 15 U.S.C. § 78u-4(b).

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In 1999, Congress passed the Y2K Act,974 which requires a claimant to set out “a statement of the facts giving rise to a strong inference” of scienter, to provide “a statement of specific information” regarding “the nature and amount of each element of damages and the factual basis for the damages calculation,” and to disclose “the manifestations of the material defects and the facts supporting a conclusion that the defects are material.”975 Although the PSLRA and Y2K Act do not focus on “plausibility” as New Pleading does, all three exhibit crucial similarities. Like New Pleading, the motivation behind the statutory pleading requirements was to curb frivolous claims.976 Like New Pleading, they burden the plaintiff with the duty to plead additional facts, and especially facts to which the plaintiff may lack ready access. In the main, the statutes represent a newfound willingness to experiment, albeit in confined subject-matter areas, with fact-pleading standards as a way to control litigation.977 They therefore complement New Pleading as a movement to reexamine federal pleading standards and move away from the traditional, liberal, notice-pleading standard. This value shift from access to efficiency has ramifications that can be informed by comparison with foreign systems.978 Restricting private litigation risks systemic underenforcement of public rights. That underenforcement must either be accepted or be dealt with in other ways. In France, for example, pleading and discovery limitations have pushed employment discrimination claims out of the civil system and into the criminal system, so that antidiscrimination norms are enforced primarily through criminal prosecutions.979 Some see that shift from private civil enforcement to public criminal enforcement as producing ancillary effects, such as a concomitant narrowing of the substantive rights at issue.980 If true, perhaps foreign systems can provide a predictive

974. Id. §§ 6601–17. 975. Id. § 6607. 976. See S. Rep. No. 104–98, at 4 (1995), reprinted in 1995 U.S.C.C.A.N. 679, 683; Hillary A. Sale, Heightened Pleading and Discovery Stays: An Analysis of the Effect of the PSLRA’s Internal-Information Standard on ‘33 and ‘34 Act Claims, 76 Wash. U. L.Q. 537, 552–57 (1998). 977. Dodson, supra note 954, at 455–56. 978. Cf. Richard L. Marcus, Modes of Procedural Reform, 31 Hastings Int’l & Comp. L. Rev. 157, 178 (2008) (“[T]he PSLRA sought to substitute for the Federal Rules’ attitude toward initiating a lawsuit a view more symptomatic of the rest of the world.”). 979. See generally Julie C. Suk, Procedural Path Dependence: Discrimination and the Civil-Criminal Divide, 85 Wash. U. L. Rev. 1315 (2008). 980. See generally id.

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window of what New Pleading may hold in store for the enforcement of U.S. legal norms. New Pleading has procedural, substantive, and structural consequences, and we would be wise to consider whether we are prepared to accept them without altering other mechanisms in our civil system.

Comparing New Discovery In addition to putting New Pleading in perspective, a global, wide-angle focus also sheds light on my proposal for New Discovery. In civil litigation around the globe, including in the United States, the usual process is that investigative discovery is allowed, if at all, only after the complainant files an initial pleading.981 There are limited exceptions, such as for preserving discovery in imminent danger of being lost,982 or equitable discovery of an involved third party.983 But presuit investigative discovery from the putative defendant historically has not been permitted. Recently, however, a growing number of jurisdictions—most notably England, Hong Kong, Singapore, Japan, and several of the states of the United States—have adopted mechanisms for presuit investigative discovery of the putative defendant. These new procedures are designed to encourage a putative defendant to divulge to the putative plaintiff information under no risk of spoliation even before the commencement of a formal, substantive action. These presuit-discovery mechanisms in foreign systems portend support for New Discovery in the United States under the proposal detailed in chapter 5. They suggest that presuit discovery can be an effective tool and a workable mechanism for promoting informal resolution and for enabling putative complainants to be able to comply with New Pleading’s requirements. This section sets out the foreign models and then turns to potential insights applicable to the United States.

Foreign Presuit Discovery—England and Wales In 1998, upon the Final Report and Recommendations of the Right Honorable Lord Woolf,984 England adopted a series of procedural reforms designed to promote early and inexpensive dispute resolution and to relegate litigation to

981. Chase, supra note 943, at 238. 982. See, e.g., Anton Piller KG v. Mfg. Processes Ltd., 1 All ER 779 (1976). 983. See, e.g., Norwich Pharmacal Co. v. Comm’rs of Customs & Excise, 2 All ER 943 (1973). 984. Available at http://www.dca.gov.uk/civil/final/index.htm.

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a last alternative. In particular, England adopted a set of pre-action Protocols for specific claims and a general pre-action Practice Direction for all claims. The Protocols and Practice Direction are designed to promote a cards-onthe-table approach that facilitates informal dispute resolution before formal commencement or, if presuit settlement fails, to make subsequent formal proceedings more efficient.985 Under these reforms, a prospective plaintiff must send the prospective defendant a detailed account of the prospective allegations and a summary of the evidence the plaintiff has supporting them. She may also identify the opponent’s documents that she wishes to inspect. The defendant then will respond with disclosures. If the defendant disputes the case, she must explain why and detail her own supporting evidence.986 Parties must act reasonably in this pre-action disclosure exchange and in attempting to avoid the necessity of formal litigation.987 Although the pre-action procedure is not mandatory, failure to follow it in good faith can result in adverse cost apportionment in a subsequent formal lawsuit.988 This cost consequence “provides a potent incentive for adopting reasonable attitudes” in pre-action communication and disclosure.989 It appears anecdotally that the pre-action reforms have had a salutary impact. In 2006, Adrian Zuckerman wrote: “There can be little doubt that the pre-action protocols and the culture of co-operation to which they give tangible expression have changed the character of English litigation for the better.”990 Because the pre-action protocols are not directly enforceable, however, they may be unable to aid a prospective plaintiff faced with an uncooperative adversary, especially if the adversary possesses the information necessary for the prospective plaintiff to commence a formal action. Like most other countries, England traditionally did not allow formal pre-action disclosure, except

985. Practice Direction: Pre-Action Conduct ¶ 1; Zuckerman, supra note 948, at 42. 986. Practice Direction: Pre-Action Conduct ¶ 7.1 & Annex A. 987. Id. § III & Annex A. 988. C.P.R. §§ 31.11, 44.3; Practice Direction: Pre-Action Conduct ¶ 4.6. 989. Zuckerman, supra note 948, at 43. 990. Id. at 43–44. This echoes the assessments of earlier commentators. See Andrews, supra note 948, at 8 (noting that evaluative empirical evidence of the efficacy of the reforms shows improved quality of presuit contact between parties); Lord Robin Byron, An Update on Dispute Resolution in England and Wales: Evolution or Revolution?, 75 Tul. L. Rev. 1297 (2001) (reporting that the Woolf Reforms generally have been successful at changing the culture from pro-litigation to pro-mediation).

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in very limited circumstances. As Zuckerman has recognized: “This could be a cause of considerable hardship where a victim of a wrong was unable to ascertain whether he had a cause of action against another person without access to that person’s documents.”991 Lord Woolf’s report recommended expanding formal pre-action disclosure, and that recommendation has been adopted in a general pre-action disclosure mechanism in C.P.R. § 31.16. The idea is, in part, “to assist potential claimants who could not otherwise establish whether they had grounds for action.”992 A court will order presuit disclosure under § 31.16 if the prospective parties are likely to become formal parties, if the documents requested fall into the category of standard disclosure, and if disclosure prior to action is desirable in order to dispose fairly of the anticipated proceedings, assist the dispute to be resolved without proceedings, or save costs.993 The lodestone is desirability, which is tied to the requested disclosure’s scope and cost. The court is more likely to issue an order if the disclosure sought is focused and limited and needed to plead a claim sufficiently.994 To ensure that the parties do not abuse the pre-action disclosure mechanism, the court will usually award costs to the party prevailing on the application.995 However, the court has discretion to allocate costs differently depending upon the parties’ conduct.996

Foreign Presuit Discovery—Hong Kong Hong Kong pre-action procedure generally tracks English procedure, with some differences. A prospective plaintiff who lacks sufficient facts to survive a striking of the complaint or summary judgment can apply for a pre-action order of investigative discovery under Rule 7A of Order 24. Under Rule 7A, a prospective plaintiff may obtain, by court order, pre-action investigative discovery of documents relevant to the putative claim.997 Although the purpose of

991. Zuckerman, supra note 948, at 564. 992. Id. 993. C.P.R. § 31.16. 994. Id.; First Gulf Bank v. Wachovia Bank Nat’l Assn., 2005 EWHC 2827; Snowstar Shipping v. Graig Shipping PLC, 2003 EWHC 1367. 995. C.P.R. § 48.1; Andrews, supra note 948, at 614. 996. Zuckerman, supra note 948, at 571. 997. H.K. Rules of the High Court O. 24 r. 7A.

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the provision is to facilitate negotiation, trial preparation, and pre-trial settlement, a court may order disclosure only of particular documents, not general discovery.998 For this investigative discovery to be allowed, the petition must be supported by an affidavit specifying the documents sought, demonstrating the documents’ relevance to an issue likely to arise out of the prospective claim, showing that the respondent is likely to have the documents in his possession, and stating the grounds on which the claim will be made. If the court finds that these requirements have been met, then the court may grant the pre-action disclosure order if relevant and necessary for fairly disposing the case or for saving costs.999 Until recently, pre-action disclosures under Rule 7A were restricted only to personal-injury cases because of concerns that broad pre-action discovery would lead to excessive front-load costs1000 or harassing fishing expeditions.1001 In 2004, however, the Hong Kong Working Party on Civil Justice Reform published a Final Report with recommendations that largely followed the lead of the Woolf Reforms.1002 The Final Report noted a broad consensus of support for more generalized pre-action investigative discovery modeled after C.P.R. § 31.16.1003 It further recognized that “in some cases, a plaintiff with a potentially meritorious claim may be shut out from asserting it in a sustainable form without pre-action disclosure of key documents.”1004 The Working Party also recognized that pre-action disclosures could facilitate early settlement.1005 An initial proposal to eliminate the restriction of pre-action investigative discovery to personal-injury and death cases was broadly supported by judges, masters, the Bar Association, the Law Society, a set of barrister’s chambers, and three firms of solicitors.1006 Several supporters, however, stressed the

998. Hong Kong Civil Procedure 517 (2011). 999. H.K. Rules of the High Court O. 24 r. 8(2); Hong Kong Civil Procedure 517 (2011). 1000. Hong Kong Civil Procedure 453, 517–18 (2011); see also Camille Cameron & Elsa Kelly, Principles and Practice of Civil Procedure in Hong Kong 226 (2001). 1001. CJR Final Report § 16.3(a)(i) (2004), available at http://www.civiljustice.gov.hk/fr/ paperhtml/toc_fr.html. 1002. See Kun Fan, Mediation and Civil Justice Reform in Hong Kong, 27 Int’l Litig. Q. 11, 11 (2011). 1003. CJR Final Report, supra note 1001, at § 16.3(a)(iii). 1004. Id. at § 16.3(a)(i). 1005. Id. at § 16.3(a)(iv). 1006. Id. at § 16.3(a)(iii).

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importance of having clearly defined rules for granting a order and clear limits on the scope of discovery.1007 In response, the Working Party proposed that “[p]arties should be empowered to seek discovery before commencing proceedings . . . along the lines provided for by the CPR.”1008 Accordingly, the Final Report recommended amending Rule 7A “to broaden” the court’s power “to order disclosure before commencement of proceedings to encompass all types of cases (and not merely cases involving personal injury and death claims).”1009 The Working Party noted that any order should list “specific documents or classes of documents which are ‘directly relevant’ to the issues in the anticipated proceedings,” and “should not extend to ‘background’ documents or possible ‘train of inquiry’ documents.”1010 The Working Party reasoned that “such a rule strikes a reasonable balance between the need to protect against harassment and fishing applications on the one hand and the need to enable a potentially meritorious plaintiff to bring a claim which could not effectively otherwise be brought.”1011 Following that recommendation, the Hong Kong judiciary adopted an amendment to Rule 7A in 2008 that eliminated the personal-injury limitation.1012 Rule 7A now allows for pre-action investigative discovery in all cases.1013

Foreign Presuit Discovery—Singapore A pleading filed in Singapore must describe the events and material facts forming the basis of the claim but should not include evidence or law.1014 If the information disclosed within the pleading fails to identify a reasonable cause of action, the case will be dismissed.1015 1007. Id. at § 16.3(a)(iii). 1008. Id. at Proposal 28. 1009. Id. at Recommendation 75. 1010. Id. at § 16.3(a)(iv). 1011. Id. at § 16.3(a)(iv). 1012. Gary Meggitt, Civil Justice Reform in Hong Kong—Its Progress and Its Future, 38 Hong Kong L.J. 89, 121–23 (2008). 1013. Rules of the High Court (Amendment) Rules 2008, L.N. 152 at B2787 (explaining that the purpose of the amendment was to “widen [Rule 7A’s] scope of application to cover cases other than those related to personal injury or death claims”), available at http://www. legco.gov.hk/yr07-08/english/subleg/negative/ln152-08-e.pdf. 1014. Singapore Rules of Court, O. 18, r. 7(1); 1 Jeffrey Pinsler, Civil Practice in Singapore and Malaysia, Ch. 3, at 1–10 (1998-); Charles Platto, Trial and Court Procedures Worldwide 69 (1991). 1015. Platto, supra note 1014, at 69.

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Singapore gives its courts the discretion to order pre-action discovery for the purposes of obtaining information supporting the plaintiff’s putative claims. The Supreme Court of Judicature Act expressly empowers rulemakers to prescribe court rules allowing court-ordered presuit discovery.1016 And, in turn, the Rules provide for discovery of documentary and written information in a pre-suit action, via originating summons, prior to the commencement of a substantive lawsuit.1017 They also provide for sanctions for noncompliance with discovery requests in the pre-suit action.1018 An application for presuit discovery must be supported by an affidavit asserting that the respondent is likely to be a party to subsequent substantive proceedings and identifying the material facts pertaining to the intended proceedings.1019 The affidavit must also describe the documents or interrogatory answers sought, explain how the documents or interrogatory answers are relevant to an issue likely to arise out of the intended claim, and show that the respondent is likely to have the documents in his possession.1020 A court will grant the application only if the presuit discovery is necessary for disposing fairly of the cause or for saving costs.1021 An order for presuit discovery may be conditioned on the applicant “giving security for the costs of the person against whom it is made or on such other terms, if any, as the court thinks just.”1022 Unless the court orders otherwise, the respondent “shall be entitled to his costs of the application, and of complying with any order made thereon on an indemnity basis.”1023 The scope of document discovery is limited to what could have been obtained via normal discovery.1024

Foreign Presuit Discovery—Japan As discussed above, the Japanese civil-justice system requires the complaint to be specific about underlying facts and to itemize the evidence that will be used 1016. Supreme Court of Judicature Act, First Schedule ¶ 12 (2007). 1017. Singapore Rules of Court, O. 24, r. 6(1), (5) & O. 26A, r. 1(1), (5). 1018. Singapore Rules of Court, O. 24, r. 16(1). The court also has an inherent power to make procedural orders in the interests of justice. See Jeffrey Pinsler, Is Discovery Available Prior to the Commencement of Arbitration Proceedings?, 2005 Sing. J. Legal Stud. 64, 64. 1019. Singapore Rules of Court, O. 24, r. 6(3) & O. 26A, r. 1(3). 1020. Id. 1021. Singapore Rules of Court, O. 24, r. 13(1) & O. 26A, r. 2. 1022. Singapore Rules of Court, O. 24, r. 6(6)(a) & O. 26A, r. 3. 1023. Singapore Rules of Court, O. 24, r. 6(9) & O. 26A, r. 5. 1024. Singapore Rules of Court, O. 24, r. 6(7)(a).

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to prove each allegation.1025 Before 1996, post-filing discovery was severely limited. Although the Code imposed a “duty of cooperation” on the parties,1026 the Code did not permit court-ordered disclosures.1027 The duty of cooperation is in tension with a Japanese lawyer’s ethical duty to zealously represent his client,1028 and, as a result, many lawyers refused to voluntarily disclose relevant information to opponents. In 1996, the Code was amended to allow parties to submit to each other “inquiries” adapted from the U.S. interrogatory procedure. The inquiries posed must be specific, factual, reasonable, relevant to a contested issue, non-offensive, and non-repetitive. Answers are mandatory, but the Code does not impose a formal sanction for noncompliance.1029 The 1996 amendments changed only post-filing discovery in Japan. In 2003, however, the Code was amended again to adopt a pre-suit inquiry process.1030 The motivation for adopting this new pre-action procedure was to enable complainants to be able to meet Japan’s fact-pleading standard.1031 Under this new procedure, a prospective plaintiff must notify the prospective defendant of an intent to sue, along with the reasons for the suit. Once notification is complete, each party has four months to submit a written inquiry to the opposing party to discover facts clearly necessary for preparing the contention or proof.1032 The notification need not contain the details necessary for a formal complaint.1033 The goal of the mechanism is to give a prospective plaintiff an opportunity to have some factual investigation of a claim that might otherwise be insufficient without having to pay the relatively high filing fee for a formal lawsuit. Another

1025. See supra note 951. 1026. Kojima, supra note 951, at 697–702. 1027. Carl F. Goodman, Japan’s New Civil Procedure Code: Has It Fostered a Rule of Law Dispute Resolution Mechanism?, 29 Brook. J. Int’l L. 511, 526–27 (2004). 1028. Id. at 573. 1029. Oda, supra note 950, at 414. 1030. Act to Amend Civil Procedure Act and Other Relevant Acts, 15 Heisei (2003) Statute No. 108, Articles 132–2 to 132–9, codified at Minji Soshōhō [Minsohō] [C. Civ. Pro.] art. 132–2 to 132–9. The Japanese Code has long allowed a plaintiff to request a presuit evidentiary hearing if necessary to preserve evidence, but this provision has never been held to encompass investigative discovery. Oda, supra note 950, at 414. 1031. Chase, supra note 943, at 239. 1032. Minji Soshōhō [Minsohō] [C. Civ. Pro.] art. 132–2, available at http://www.japaneselawtranslation.go.jp/law/detail/?id=1940&vm=02&re=02&new=1; see also Oda, supra note 950, at 415. 1033. Goodman, supra note 1027, at 577.

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hope is that the inquiry process will bring the parties together in facilitation of presuit dispute resolution.1034 Like post-filing discovery, however, the Code imposes no formal sanctions for noncompliance with presuit inquiries.1035 Although a lack of justification can be taken into consideration by the court if a formal complaint is filed, courts have allowed parties to refuse to answer presuit inquiries on privacy grounds.1036 The lack of sanctions and the broad leeway for refusal have led the Japanese Bar to conclude that the inquiry procedure has been relatively useless as a discovery device.1037

Foreign Presuit Discovery—Civil-Law Countries Civil-law countries have little, if any, formal discovery in the first place, so one might expect little from them in the way of presuit discovery.1038 But even in core civil-law systems, the idea of presuit discovery is spreading. France and Italy, though not formally adopting a pre-action disclosure mechanism, do have procedures for court-ordered disclosure of documents and evidence required for their preservation.1039 Recently, courts have indicated a willingness to expand upon that power to circumstances in which the disclosure is not truly necessary for preservation of evidence but rather would facilitate resolution of the dispute.1040 It is unclear whether this practice is fleeting or indicative of more concrete change, but it at least provides additional support for presuit discovery.

U.S. State Presuit Discovery In addition to foreign nations, several states of the United States have experimented with presuit-discovery mechanisms. Texas is perhaps the strongest proponent of presuit discovery for purposes of framing a complaint. It allows presuit investigative discovery whenever justice or some other benefit outweighs the burden and expense of the discovery requested.1041 The Texas 1034. Id. at 578. 1035. Id. 1036. Oda, supra note 950, at 415. 1037. Goodman, supra note 1027, at 572–74. 1038. Merryman & Pérez -Perdomo, supra note 936, at 114–17. 1039. Chase, supra note 943, at 238–39. 1040. Id. 1041. Tex. R. Civ. P. 202.1 & 202.4.

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presuit discovery procedure is routinely used to assist plaintiffs in drafting their complaints.1042 Alabama, like Texas, has a strong policy favoring presuit discovery for claim investigation. Alabama Rule 27 allows presuit discovery for “[a] person who desires to perpetuate his own testimony or that of another person or to obtain discovery under Rule 34 or Rule 35 regarding any matter that may be cognizable in any court of this state.”1043 The Alabama Supreme Court has construed the rule to allow presuit discovery “regardless of any need to perpetuate evidence” if the plaintiff wishes to use it to determine whether she has a reasonable basis for filing a lawsuit.1044 Similarly, Ohio allows a petitioner to bring an action for discovery when she is otherwise unable to file a complaint without the discovery. Ohio Rule 34(D) provides that “a person who claims to have a potential cause of action may file a petition to obtain discovery as provided in this rule.”1045 Under this rule, an action for discovery may be used “to uncover facts necessary for pleading,”1046 including facts that would allow a plaintiff to determine if she has a valid cause of action.1047 The Ohio Court of Appeals has added that “the rule acts as a safeguard against charges that the plaintiff filed a frivolous lawsuit in a case where the wrongdoer or a third party has the ability to hide the facts needed by the plaintiff to determine who is the wrongdoer and exactly what occurred.”1048 Pennsylvania also allows presuit discovery for purposes of composing a complaint. The Pennsylvania rules allow “any party” to “take the testimony of any person, including a party, by deposition upon oral examination or written interrogatories for the purpose of discovery, or for preparation of pleadings, . . . or for any combination of the foregoing purposes.”1049 The Pennsylvania Supreme Court has interpreted this rule to allow pre-complaint discovery when necessary to formulate a legally sufficient complaint.1050

1042. Lonny Sheinkopf Hoffman, Access to Information, Access to Justice: The Role of Presuit Investigatory Discovery, 40 U. Mich. J.L. Reform 217, 251–52 (2007). 1043. Ala. R. Civ. P. 27. 1044. Ex parte Anderson, 644 So. 2d 961, 964 (Ala. 1994); see also Driskill v. Culliver, 797 So. 2d 495, 497–98 (Ala. App. 2001). 1045. Ohio R. Civ. P. 34(D)(1). 1046. Huge v. Ford Motor Co., 803 N.E.2d 859, 861 (Ohio App. 2004). 1047. Benner v. Walker Ambulance Co., 692 N.E.2d 1053, 1055 (Ohio App. 1997). 1048. Id. 1049. Pa. R. Civ. P. 4001(c) (emphasis added). 1050. McNeil v. Jordan, 894 A.2d 1260, 1275–78 (Pa. 2006).

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Other states are less overt about the availability of presuit discovery but nonetheless do recognize it. New York statute provides: “Before an action is commenced, disclosure to aid in bringing an action . . . may be obtained, but only by court order.”1051 To be entitled to this presuit discovery, the applicant must make a prima facie showing that a cause of action exists.1052 But that does not mean that the applicant must already be able to plead the cause of action; to the contrary, the application will be denied if the applicant already has sufficient information upon which to frame a complaint.1053 Thus, New York law allows presuit discovery when necessary to plead a claim.1054 In addition to statutory or rule-based authorizations for presuit discovery, most states—though not all1055—allow equitable bills of discovery. Equitable bills of discovery were the primary mechanism to obtain discoverable information in civil cases prior to the adoption of the Federal Rules of Civil Procedure and the state analogues.1056 The common law courts provided no mechanism for discovery at all, and, to ameliorate that result, equity courts created the bill as an exercise of ancillary jurisdiction in aid of actions at law.1057 Although modern state and federal discovery rules and the merger of law and equity have largely replaced the need for equitable bills of discovery, the majority of states still allows the bill.1058 Courts generally have restricted the bill to instances in which discovery cannot otherwise be had under the applicable rules and statutes but when discovery is necessary to secure justice in the underlying proceeding.1059 Thus, most states that do not have a statute or rule allowing for presuit discovery to frame a complaint allow an equitable action for a bill of discovery instead. Connecticut, for example, recognizes an independent equitable action for a bill of discovery.1060 The bill is designed to obtain evidence for use in an action

1051. N.Y. C.P.L.R. 3102(c) (2012). 1052. Holzman v. Manhattan & Bronx Surface Transit, 707 N.Y.S.2d 159 (N.Y. App. 2000). 1053. Matter of Henry, 843 N.Y.S.2d 891, 892 (N.Y. App. 2007); W. Inv. LLC v. Gorgeson Shareholder Sec. Corp., 841 N.Y.S.2d 40, 41 (N.Y. App. 2007). 1054. For a more skeptical view, see Hoffman, supra note 1042, at 237–38. 1055. See, e.g., Austin v. Johnston Coca-Cola Bottling Group, 891 P.2d 1143 (Kan. App. 1995). 1056. Rupert F. Barron, Existence and Nature of Cause of Action for Equitable Bill of Discovery, 37 A.L.R. 5th 645, 658 (1996). 1057. Id. 1058. Id. 1059. Id. 1060. Berger v. Cuomo, 644 A.2d 333, 337 (Conn. 1994).

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for affirmative relief.1061 “[B]ecause a pure bill of discovery is favored in equity, it should be granted unless there is some well[-]founded objection against the exercise of the court’s discretion.”1062 To sustain the bill, the petitioner must demonstrate that what he seeks to discover is material and necessary for proof of, or is needed to aid in proof of or in defense of, another action already brought or about to be brought. The petitioner must show that he has no other adequate means of enforcing discovery of the desired material, where “adequate” takes into consideration convenient, effective, and full relief.1063

Using the Global Perspective The principal takeaway from this survey of presuit discovery around the world is that presuit discovery is surprisingly prevalent among common-law systems. Although broad presuit investigative discovery is a relatively new phenomenon, its growth has spread rapidly, and its acceptance has increased. Empirical assessments of presuit discovery are few, but it appears that many systems believe that presuit discovery is an effective and workable way to rectify information-asymmetry problems. To be sure, not all jurisdictions have adopted presuit discovery for the same purpose—rectifying information asymmetry for enabling pleading—that I have proposed. Many focus, at least ostensibly, on promoting settlement. But regardless of the motivation, all presuit-discovery mechanisms help equalize information distribution in practice. The stated rationale is less important than its effects. A second takeaway is that the details of presuit-discovery mechanisms around the world are strikingly similar across countries and to my New Discovery proposal for the U.S. federal system. In part, this similarity may reflect the habit of common-law countries to follow England’s lead, though that follow-the-leader tendency does not adequately explain the adoption of presuit discovery in U.S. states, which typically avoid looking to international models. In any case, nearly all of the presuit-discovery mechanisms provide for notice (the plaintiff must identify the claim, defendant, and information sought), limited scope (the information sought must be relevant and discoverable but no broader than what is necessary to enable the plaintiff to file a formal complaint, to facilitate the resolution of the dispute, or to save costs), cost shifting

1061. Id. 1062. Id. 1063. Id.

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(except in U.S. states, the plaintiff bears some risk of having to pay costs if she loses her petition for presuit discovery or the subsequent substantive lawsuit), and incentives for compliance (the defendant has some legal duty or financial incentive to comply with the presuit-discovery request). New Discovery incorporates all of these features. Urging procedural reform based on foreign models is dangerous business, particularly for a country as exceptionalist as the U.S. The American federal system is like no other with its history of notice pleading, its long commitment to the most liberal discovery in the world, its love affair with juries, its relative openness to class actions and joinder, and its value of public litigation.1064 Civil procedure draws from cultural and social norms that run deep,1065 and the longstanding uniqueness of American procedure makes transplantation tricky.1066 Further, procedure within a system is interconnected—rules of pleading drive and are influenced by rules of discovery and joinder.1067 Changing one rule may change another in unanticipated ways.1068 For these reasons, scholars of U.S. procedural law, already infamously provincial,1069 often declare themselves to be comparative skeptics. Likewise,

1064. See Dodson, supra note 935, at 141–42. I and others, however, see movement away from U.S. exceptionalism in a number of areas. Dodson, supra note 954; Scott Dodson & James M. Klebba, Global Civil Procedure Trends in the Twenty-First Century, 34 B.C. Int’l & Comp. L. Rev. 1 (2011); Rowe, supra note 937, at 193; cf. Richard Marcus, Confessions of a Federal “Bureaucrat”: The Possibilities of Perfecting Procedural Reform, 35 W. St. U. L. Rev. 103, 108 (2007). 1065. Chase, supra note 943, at 278; see also Kevin M. Clermont, Why Comparative Civil Procedure?, Foreword to Kuo-Chang Huang, Introducing Discovery into Civil Law ix, xi-xii (2003); Kötz, supra note 969, at 71. 1066. Marcus, supra note 936, at 740. 1067. Charles Alan Wright & Mary Kay Kane, Law of Federal Courts § 68, at 466–67 (7th ed. 2011). 1068. See Clermont, supra note 1065, at xi-xii; Marcus, supra note 936, at 710; John C. Reitz, Why We Probably Cannot Adopt the German Advantage in Civil Procedure, 75 Iowa L. Rev. 987, 988 (1990). 1069. Antonio Gidi, Teaching Comparative Civil Procedure, 56 J. Legal Educ. 502, 502 (2006). But see Paul R. Dubinsky, Is Transnational Litigation a Distinct Field? The Persistence of Exceptionalism in American Procedural Law, 44 Stan. J. Int’l L. 301, 355 (2008) (“[T]he current crop of American scholars in civil procedure and conflict of laws is perhaps as well versed in the comparative and international dimensions of their field as any group of American legal scholars and any generation of American proceduralists.”); Jeffrey S. Parker, Comparative Civil Procedure and Transnational “Harmonization”: A Law-and-Economics Perspective 1–2 (George Mason Univ. Law & Econ. Research Paper Series, Paper No. 09–03, 2008), available at http://ssrn.com/abstract_id=1325013 (“[R]ecent trends show increasing attention to comparative procedural law, and in particular to civil procedure.”).

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U.S. lawmakers and judges look inward, rather than outward, in drafting and interpreting American procedural rules.1070 Perhaps this self-centeredness is cautionary rather than hubristic. But either way, it reinforces the obstacles to procedural reform.1071 Despite these barriers, I hold out hope for New Discovery. I have made a purely domestic case for it in chapter 5. The current chapter’s use of comparativism plays only a supporting role. Further, I see New Discovery as a modest adjustment—rather than a large-scale change. In some ways, the obstacles to comparative reform work in New Discovery’s favor. A fundamental change has already happened: New Pleading. That change has moved the United States closer to the global norm, which makes comparative reform more plausible and less jarring.1072 New Pleading’s change also tugs at the interconnected web of civil procedure and suggests that a conforming change to discovery might be appropriate. With foreign and state presuit-discovery mechanisms available for emulation, we ought not be so wary that we affirmatively ignore them. Finally, it is worth noting that the comparative perspective is not entirely foreign: many U.S. states have adopted presuit-discovery mechanisms akin to New Discovery. We need not look skeptically across oceans for insightful models. We have only to look in our own backyard. At a minimum, a comparative approach suggests that it would be wrong to think of New Discovery as novel or outlandish. To the contrary, a look at other systems suggests that a pleading system that requires facts before discovery needs some release valve for facts that cannot be known before discovery. If we must have New Pleading, we should also have New Discovery.

Conclusion This book offers a comprehensive descriptive account of New Pleading, its role in U.S. doctrine, its effects on parties and courts, and its place on the global stage. It also advances a normative agenda for repealing New Pleading and restoring Old Pleading, with some renewed emphasis on cost-control measures. Failing that, the book prescribes a framework for New Discovery

1070. Paul R. Dubinsky, Is Transnational Litigation a Distinct Field? The Persistence of Exceptionalism in American Procedural Law, 44 Stan. J. Int’l L. 301, 308 (2008). 1071. Dodson, supra note 954, at 445–47. 1072. Geoffrey P. Miller, The Legal-Economic Analysis of Comparative Civil Procedure, 45 Am. J. Comp. L. 905, 917–18 (1997) (noting that one of the difficulties in comparative civil procedure is overcoming the cost of learning a new system).

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to complement New Pleading, if New Pleading is here to stay. I believe there is something for everyone here—plaintiffs, defendants, and judges—and that those interests can be happily accommodated. Nevertheless, procedural systems always involve tough policy choices. As Richard Marcus has noted, the perfect procedural system is a chimera—we cannot have it all.1073 Some may prefer a civil-justice system that furthers efficiency above all. Others may favor access above all. My book may not resonate with those at the extremes. My hope is that it will strike a chord with those willing to meet in the middle. And perhaps even those at opposite poles will consider it a second-best option.

1073. Marcus, supra note 1064, at 105.

INDEX

Alabama, 181, 182, 185, 202, 227 Allen, Ron, 192 Alpha Indus., Inc., In re, 180 American common law, 9–10 colonial courts, 9–10 English common law practices, 10 equity courts, 10 Process Acts, 10 Anderson v. Liberty Lobby, Inc., 34 Antiterrorism and Effective Death Penalty Act of 1996, 35, 148 arbitration, 149, 192 Arizona, 189 Ashcroft v. Iqbal. See Iqbal Associated Gen. Contractors of Cal., Inc. v. California St. Council of Carpenters, 38, 39, 40 Australia, 212 Bentham, Jeremy, 11 bill of discovery, 9, 184–85, 228–29 Black, Justice Hugo, 26–27 boilerplate objections, 150 Bone, Robert, 69, 72, 111, 121, 129 Brown v. Board of Educ., 80 Brunet, Ed, 55–56 Burbank, Steve, 16, 67, 72, 83, 123

Canada, 210, 212 Carrington, Paul, 31 Celotex Corp. v. Catrett, 33, 34, 80 Choi, Stephen, 105, 106, 107 Civil Justice Reform Act, 157 civil-rights actions, 2–3, 35–36, 84–88, 90, 92, 101–4, 112, 121, 124, 158, 192 Civil Rights Acts, 36–37 Civil Rights Era, 147 Clark, Charles Edward, 5, 16, 18–19, 20–25, 29–30, 52, 66, 122 Class Action Fairness Act, 157 Clayton Act, 38–39 Clermont, Kevin, 75, 105, 113, 122 Colorado, 189 Columbian Ins. Co. v. Catlett, 56 Commerce Clause, 75 common law pleadings, 6–7 American common law, 9–10 English common law pleadings, 7–9 Conformity Act of 1872, 12 Conley v. Gibson background, 26–31 counter cases, 41–45 Dodson dismissal rate study, 90, 91, 94, 96 e-discovery, impact on, 45–46 issue of standing, 42–43

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Conley v. Gibson (Cont.) “no set of facts” language, 27–30, 39, 57, 60, 84, 133–36, 167, 189 notice-plus grounds test, 44–45 post-Conley pleading, 35–37 resolvable countercases, 37–40 Twombly, 49, 52, 54, 56, 57, 60 Cook, Walter Wheeler, 14 Cooper, Edward, 68 Crawford-El v. Britton, 40, 163 Dawson, Archie, 25–26 Dawson, William W., 180 defendant-selection effects on dismissal rate (Gelbach), 100–101, 106 demurrer practice, 14–15, 21, 56 Dioguardi v. Durning, 23 discovery abuses, 31, 34, 58, 137, 198, 204, 208 fishing expeditions, 19 predatory discovery, 137 connection to pleadings, 7 current system, inadequate solutions, 172 English common law pleadings, 9 evolution under Federal Rules, 7 Federal Rules of Civil Procedure, Rule 8, 173 Federal Rules system, 19 liberalization of procedure, 17–18 Field Code (See Field Code) information asymmetry New Discovery, 196–98, 200 procedural reform options for working with New Pleadings, 193, 196 New Discovery (See New Discovery) procedural reform options for working with New Pleadings, 172–96 applying flexibly, 172–73

choosing state court to adjudicate the merits, 188–90 cost-benefit proposal, 193–95 fundamental message of Twombly and Iqbal, 176 information asymmetry, 172–73, 193, 196 linking sufficient and insufficient claims to obtain information, 190–91 negotiation around New Pleading, 192 New Discovery option (See New Discovery) other potential options, 190–92 plaintiff investigation of claims, technological advances, 191–92 pleading based proposals, 191–95 pre-dismissal discovery in Federal Court, 173–79 presuit discovery Federal Court, 179–81 state court, 181–87 principles of preemption (reverseErie doctrine), 188 state court adjudication the merits, 188–90 presuit discovery, 181–87 Twibal, 192–95 dismissal rate studies, 83–102 Dodson study (See Dodson dismissal rate study) normative effect of New Pleading, 120, 125–26 post-Iqbal studies defendant-selection effects (Gelbach), 100–101, 106 merit (Reinert), 101–2, 105, 107, 112 PACER Study of Dismissal Rates (FJC Study), 86–89

Index single-set study of post-Iqbal dismissals (Janssen), 89, 102, 105, 108 Westlaw study of dismissal rates (Hatamyar), 84–86 post-Twombly studies of dismissal rates, 83–84 screening (See screening, effects on dismissal rate) District of Columbia, 189 Dodge, Robert G., 17 Dodson dismissal rate study, 89–100 case coding, 92–93 category/designations, 92 conclusions, 99–100 data selection, 90–91, 96–97 fact-based dismissal rate, 98 factual-insufficiency dismissal rate, 97–98, 99 law-based dismissal rate, 98, 99 legal and factual sufficiency, distinction, 89–90 observations, 94–96 overall dismissal rate (table), 94 published and unpublished opinions, 92–99 represented claims, 100 segregation results, 97 Westlaw circuit-specific searches, 90–92, 96–97 Due Process Clause, 186 Dura Pharms., Inc. v. Broudo, 44–45 Easterbrook, Judge, 117, 122 e-discovery, 35, 45, 138, 140–46, 155–56, 159 Eighth Amendment, 61 Elmaghraby v. Ashcroft, 63, 191 Enabling Act of 1934, 16 England, 6, 10, 11, 212, 219–21, 229 English common law pleadings, 7–9

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American common law, adoption of practices, 10 discovery, 9 equity courts (courts of conscience), 8–9 goals, 8 procedures, 7–9 rigidity of system, 8–9 Epstein, Richard, 193–95 Equal Pay Act, 110 Equal Protection Clause, 30, 134 Erickson, William H., 32 Erickson v. Pardus, 61–62, 95 ERISA claims, 85, 93 fact pleading as a global norm, 211–13 New Pleading as fact pleading, 213–15 Old Pleading restoration, 159–60 requirement, 76–77 Rule 9(b) fact pleading requirement, distinction, 77 factual-sufficiency standard (plausibility standard) Dodson dismissal rate study factual-insufficiency dismissal rate, 97–98, 99 legal and factual sufficiency, distinction, 89–90 factually implausible claims, 3 Federal Rules system, 22 introduction in 2007 by Twombly, 3 Iqbal, 3–4, 70–75 New Pleading development, 2007–2009, 75–76 Old Pleading, legal insufficiency and factual insufficiency, 2, 3 plausibility requirement, 3–4 screening, effects on dismissal rate, 106 Twombly, 3, 55–60

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Fairman, Chris, 98 Federal Judicial Center (FJC), 93, 101, 113–15, 117, 120, 125, 138–40, 144, 155, 170 PACER Study of Dismissal Rates, 86–89 Federal Rules system approval by Supreme Court, 23 Clark, Charles Edward, 16, 18–19, 20–25 codification of system, 19–23 discovery evolution under Rules, 7 liberalization of procedure, 17–18, 19 Enabling Act of 1934, 16 Form 11, 20–21 forms accompanying Rules, 20–21 legal-realism movement reformers, 15–16 legal sufficiency and factual sufficiency, 22 liberalization of procedure, 16–19 1938 rules, 19–23 amendments, 24–25 1983 amendments, 33–35 pleadings theory, liberalization, 18–19 procedural flexibility guided by judicial discretion, 17 procedural rules, goal, 15–16 reform-movement, 1900s, 16–23 resistance to liberalization, 23–26 Dioguardi v. Durning, 23 Hickman v. Taylor, 24 Rules Enabling Act (REA), 16 tolling, 207 transsubstantivity, 17 Field, David Dudley, 11, 13 Field Code, 7, 11–15, 17, 66 Bentham, Jeremy, 11 Conformity Act of 1872, 12, 15

demurrer practice, 14 deposition procedure, 12 discovery procedure, 12–13 England, 11 equity pleading, 15 Field, David Dudley, 11 forms of action, 11 forum disuniformity problems, 11–12 Hilary Rules, 11 law-fact distinction, 14 need for procedural rules, 11 pleading rules, 13 procedure, 11–13 reduction of technicalities, goal, 11 technicalities and formalism of Codes, 13–15 Fifth Amendment, 64 First Amendment, 64, 134 Florida v. U.S. Dep’t of Health & Human Servs., 75 Form 11, 20–21, 54, 68, 73 Freedman, John, 114, 121 game theory modeling, 128–29, 132 Garre, Gregory, 135 Gelbach, Jonah, 100–101, 106 Germany, 211–12 Goldstein, Tom, 4 Google Book settlement, 132 Guy, Alan, 192 Hartnett, Edward, 66, 67, 72, 173 Hastings, Paul, 114 Hatamyar, Patricia, 84–86 Hazard, Geoffrey, 28, 135, 217 Hickman v. Taylor, 24, 137 Hilary Rules, 11 Hoffman, Lonny, 181–82 Hong Kong, 212, 219, 221–23 Hughes, Graham, 108 Hylton, Keith, 152, 193

Index IAALS Study (Rule 12 motions), 94 IFP/PLRA complaints, 92, 94–95, 97–98 information asymmetry case management, 154 discovery, procedural reform options for working with New Pleadings, 193, 196 frivilous lawsuits, 129–31 generally, 108–12 increased investigative costs, 111 New Discovery, 196–98, 200, 205, 229 New Pleading effects, 118 normative effects of New Pleading, 126 Old Pleading, 160, 162 procedural reform options for working with New Pleadings, 172–73 public securities filings, 111 screening effects on filings, 105 secretive conduct and state-of-mind cases, 109–10 state court, presuit discovery, 181, 186 technology and regulatory changes, 111 Iowa, 189 Iqbal allegations, 64, 67–69 background, 63–65 certiorari granted, 65 citation rates, effect of New Pleading, 80 conclusoriness and legal terminology, 66–70 Conley v. Gibson, 65, 74 control of defense costs, purpose of plausibility mechanism, 74 Dodson dismissal rate study, 89–91, 94–98, 100 Form 11, 68, 73

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increased costs of New Pleading, 113–14, 116–18 information asymmetry, 110 9/11 and impact on case, 63–64, 65, 71, 73 normative effects of New Pleading, 125 Old Pleading, case under, 160–61, 162–64, 165–67 plausibility standard, 70–75 procedural reform options for working with New Pleadings, 172–78, 181, 185–86, 190 qualified immunity, 64–65 Rule 8, 66 screening, effect on filings, 105, 106 Janssen, William, 89, 102, 105, 108 Japan, 212, 219, 224–26 Kahan, Dan, 73 Kaufman, Michael, 109 Kourlis, Rebecca Love, 135 Kravitz, Mark, 170 Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 36, 37, 45 Ledbetter v. Goodyear Tire & Rubber Co., 110 legal sufficiency Dodson dismissal rate study, legal and factual sufficiency distinction, 89–90 Federal Rules system, legal sufficiency and factual sufficiency, 22 New Pleading development, 2007–2009 Rule 8, legal notice and sufficiency requirement, 75 Old Pleading

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legal sufficiency (Cont.) legal insufficiency and factual insufficiency, 2, 3 legal insufficiency dismissals, 133–37 screening, effects on dismissal rate, 106 Maine, 189 Maitland, F.W., 156 Malveaux, Suzette, 173 Marcus, Richard, 17, 98, 232 Mark, Gideon, 159 Massachusetts, 189 Matrixx Initiatives, Inc. v. Siracusano, 166 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 34, 56 McCaskill, Oliver L., 25 merit screening, dismissal rate. See screening, effects on dismissal rate Miller, Arthur, 4, 138 Minnesota, 189 Mitchell, William DeWitt, 17, 180 Montana, 189 Moore v. Publicis Groupe, 146 Nadler, Jerrold, 167 Nebraska, 189 New Discovery, 196–209, 219–29 abuse of discovery, 204, 208 concept, 5 cost-shifting mechanism, 196–97 defense-side benefits, 197–98 foreign presuit discovery, global comparisons, 219–26 civil-law countries, 226 England, 219–21, 229 global perspectives, 229–31 Hong Kong, 219, 221–23 Japan, 219, 224–26

procedural reform based on foreign models, barriers, 230–31 Singapore, 223–24 Wales, 219–21, 229 guiding principles, 200–207 information asymmetry, 196–98, 200, 205 narrow focus and controlled costs, 203–6 in practice, 207–9 presuit discovery, 209 pre-trial discovery potential, 208–9 sparingly used, 200–202 theory, 196–200 tolling, 206–7 U.S. State presuit discovery, comparisons, 226–29 Alabama, 227 Connecticut, 228–29 New York, 228 Ohio, 227 Pennsylvania, 227 Texas, 226–27 New Pleading. See also New Pleading, effects; New Pleading, global comparisons case management, 153–55 development, 2007–2009, 46–75, 47–78 factual sufficiency requirement, 75–76 Iqbal, 63–75 Old Pleading requirement, 75–76 Rule 8, legal notice and sufficiency requirement, 75 Rules Enabling Act (REA), 78 Twombly, 47–60 between Twombly and Iqbal, 60–62 discovery, procedural reform options for working with (See discovery)

Index procedural reform options for working with New Pleadings (See New Discovery) New Pleading, effects, 79–126 citation rates of Twombly and Iqbal, 80 costs, increase, 112–19, 120–21, 122, 124 affirmative defenses, 118–19 amendment process, 117–18 considerations, 112–13 dismissal motions, filing rate, 113, 115 increased investigative costs, 111 justice effects and cost effects, 79 lack of studies, 112 motions to dismiss, filing rate increase, 115 process costs, 121 reduction of meritless lawsuits and cost savings, premises of, 81 dismissal motions, filing rate, 113, 115 dismissal rates (See dismissal rate studies; Dodson dismissal rate study) information asymmetry, 108–12, 126 judicial perception, 123–24 normative effects, 119–26 Old Pleading comparisons, 125 process costs, 121 reduction of meritless lawsuits and cost savings, premises of, 81 screening (See screening, effects on dismissal rate) social value of litigation, 124 New Pleading, global comparisons, 211–19 Ashcroft v. Iqbal, 211, 214–15

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Australia, 212 Bell Atl. Corp. v. Twombly, 211, 213–14, 215 Canada, 212 comparative context, 210–32 comparative lessons, 215–19 England, 212 Germany, 211–12 Hong Kong, 212, 219, 221–23 Japan, 212 Private Securities Litigation Reform Act (PSLRA), 217, 218 Wales, 212 Y2K Act, 218 New York, 11, 23, 155, 181, 183, 228 Notebaert, Richard, 51, 59, 162 Notice Pleading Restoration Act of 2009, 167 notice pleading system, generally, 1, 3 Ohio, 181, 183, 227 Old Pleading, 3–5, 127–28, 160–71 background, 3–4 boilerplate objections, 150 broken discovery system, 137–47 attorneys, abusive discovery tactics, 140–41, 149–51 e-discovery, 140–46 evolving nature of discovery, 139 judges, 141–43 parties self-regulation, 144 summary judgment, 143–44 technological advances and discovery burdens, 145–46 class action settlements, 131–32 factual sufficiency, new plausibility requirement, 3–4 frivolous lawsuits with information asymmetry, 129–30, 129–32

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Old Pleading (Cont.) historic background (See U.S. Federal pleading history, pre-2007) Iqbal under Old Pleading, 160–61, 162–64, 165–67 legal insufficiency and factual insufficiency, 2, 3 legal insufficiency dismissals, 133–37 myths, 128–52 New Pleading, comparisons, 125 notice pleading system, generally, 3 out of control litigation, 147–49 parties self-regulation, 144, 153–54 plaintiffs and their attorneys are cause of problems, 149–52 plaintiffs plead barebones complaints, 132–33 plaintiffs pleading barebones complaints, 132–33 presuit investigation costs, 130 qualified immunity defense, 162–63 rampant frivolous litigation, 128–32 requirement, 75–76 restoration of Old Pleading assessement of the likelihood, 165 collaborative cost minimization, 154–55 Congress, 167–68 options, 165–71 problem lawsuits, targeted pleading or discovery rules, 155–59 proposal, 152 Rule amendments, 168–71 Supreme Court, 165–67 transsubstantivity rules, 155–58 settlement costs, 130–32 threshold pleading rule concept, 1–3 Twombly under Old Pleading, 160–62, 163–66, 170 Open Access to Courts Act, 167

PACER Study of Dismissal Rates (FJC), 86–89 Papasan v. Allain, 43–44 Patriot Act, 63 Pennsylvania, 181, 182–83, 202, 227 plausibility standard. See factualsufficiency standard (plausibility standard) pleadings fact revelation, 1 factual sufficiency (See factual-sufficiency standard (plausibility standard)) goals of pleadings, 1 historical background (See U.S. federal pleading history, pre-2007) initial pleadings, general explanation, 1 issue formulation, 1 legal insufficiency, generally, 2, 3 merit screening, 1 New Pleading (See New Pleading) notice pleading, 1 notice pleading system, 3 Old Pleading (See Old Pleading) pleadings, general explanation, 1 set pleading rules, 3 threshold pleading rule concept, 1–3 Pound Conference of 1976, 32 presuit discovery Federal Court, 179–81 New Discovery (See New Discovery) Old Pleading, investigation costs, 130 state court, 181–87 principles of preemption (reverse-Erie doctrine), 188 prisoner complaints, 35, 40, 61–62, 79, 85, 87–89, 95, 100, 114, 121, 133, 148, 157–58

Index Prison Litigation Reform Act, 35, 148, 157 Private Securities Litigation Reform Act (PSLRA), 44, 71, 83, 85, 89, 91, 105, 157, 217, 218 Process Acts, 10 pro se complaints, 23, 61–62, 85–89, 92, 94–98, 102, 108, 114, 121, 133 PSLRA. See Private Securities Litigation Reform Act (PSLRA) published and unpublished opinions, 92–99 qualified immunity defense, 36, 40, 64–65, 162–63, 176 Ragland, George, 17 Railway Labor Act (RLA) of 1926, 26–27 REA. See Rules Enabling Act (REA) Redish, Marty, 127–28 Reinert, Alex, 101–2, 105, 107, 112 represented claims, 86, 93, 96–100, 102, 115 restoration of Old Pleading. See Old Pleading reverse-Erie doctrine (principles of preemption), 188 RICO cases, 85, 93, 103–4, 157–58 Rosenthal, Lee, 152–53 Rules Enabling Act (REA), 16, 78, 207 Schwab, Stewart, 105 SCOTUSblog, 4 screening, effects on dismissal rate, 81–83 dismissal standard change, 82 explaining effects on meritorious cases, 107–8 factual and legal insufficiency dismissal rates, 106 filings stage, 102–6 increased dismissal rates, 83

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information asymmetry, 105 initial filings, 82, 102 meritorious cases, explanation of effect, 107–8 new filings statistics, annually civil-rights filings, 2005–2010, 104 federal civil filings, 2002–2010, 103–4 federal civil-filings in SEC, antitrust, and RICO cases, 2005–2010, 104 normative effects of New Pleading, 120–24 screening data, 106–7 SEC filings, 104 Securities Litigation Uniform Standards Act (SLUSA), 187 Sherman Act, 48–50, 52, 57, 68 Sherwin, Emily, 29 Singapore, 219, 223, 224 single-set study of post-Iqbal dismissals (Janssen), 89, 102, 105, 108 Skinner v. Switzer, 166 Souter, Justice David, 69 South Cherry St., LLC v. Hennessee Group LLC, 173, 178 South Dakota, 189 Specter, Senator Arlen, 167, 168 Spencer, Ben, 30, 60, 69, 77, 172 Steele v. Louisville & Nashville R.R., 26, 27 Stein, Sidney, 80 Steinman, Adam, 69, 74, 135 Stevens, Justice John Paul, 38, 40, 54, 59, 175 Struve, Cathie, 171 Subrin, Steve, 16, 68, 158 Sullivan, Charles, 74 Sullivan, Diane, 151 Sunderland, Edson R., 17–18, 19, 20, 180 Swierkiewicz v. Sorema N.A., 22, 30, 37, 44–45, 74, 136, 166 Swift, Jonathan, 8

242

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Telecommunications Act, 47 Tennessee, 189 Texas, 181–82, 199, 204, 226–27 Title VII-link to employment, 1, 29–30, 37, 67–68, 85, 90, 92, 134, 136, 143 tolling, 22, 187, 206–7 transsubstantivity, 3, 62, 65, 74, 155, 156, 157 Twiqbal, 79–81, 89, 96, 102, 106, 117–18, 176, 185–86, 192–96 Twombly abuse of discovery, 58 allegations, 50–52 background, 47–52 citation rates, effect of New Pleading, 80 Conley v. Gibson, 49, 52, 54, 56–57, 60 demurrer practice, 56 Dodson dismissal rate study, 89–91, 94–100 factual-sufficiency standard (plausibility standard), 55–60 Form 11, 54 increased costs of New Pleading, 113–14, 116–18 information asymmetry, 111 “no set of facts” language, Conley, 27–30, 39, 57, 60, 84, 133–36, 167, 189 Old Pleading, 160–62, 163–66, 170 plausibility standard, 55–60 procedural reform options for working with New Pleadings, 172–79, 181, 185–86, 190 Rule 8 requirements, 49, 54 screening, effect on filings, 103, 105, 106 Sherman Act, 48–50, 52, 57 Stevens, Justice John Paul, 54, 59 Supreme Court opinion, 52–60 Telecommunications Act, 47 transsubstantive pleading rule, 62

unpublished and published opinions, 92–99 U.S. federal pleading history, pre-2007, 6–46 American common law, 9–10 common law pleadings, 6–7 American common law, 9–10 English common law pleadings, 7–9 Conley v. Gibson (See Conley v. Gibson) development of law, societal concern, 30 discovery connection to pleadings, 7 English common law pleadings, 9 evolution under Federal Rules, 7 Federal Rules system, 19 liberalization of procedure, 17–18 English common law pleadings, 7–9, 10 equity tradition of pleadings, 6 Federal Rules (See Federal Rules system) Federal Rules of Civil Procedure, pleadings under, 7 law and equity traditions, distinctions, 6–7 law tradition, 6 litigation pleading and litigation in the 2000s, 45–46 rise of litigation and the counterrevolution, 30–35 abusive litigation tactics, 33–34 billable hour standard, 30–31 counterrevolution, 32–35 culture of the legal profession, 31–32 1983 amendment of Federal Rules, 33–35 overcompensation of plaintiffs, 32

Index Supreme Court, 33–34 origins of pleading, 6–7 overview, 6–7 Valley v. Maule, 35–36 Verizon Commc’n, Inc. v. Law Offices of Curtis V. Trinko, 48 Vermont, 181, 184, 185, 189 Vinson, Roger, 75 Wales, 212, 219–21, 229 Wareham, James, 114 Warth v. Seldin, 41–43, 56 Washington (state), 189 Westlaw citation rate, statistics, 80

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dismissal rate study Dodson, 90–92, 96–97 Hatamyar, 84–86 single-set post-Iqbal study (Janssen), 89 West Virginia, 189 Woolf, Right Honorable Lord, 219–22 Woolf Reforms (U.K.), 200, 220, 222 Wunderlich, Joan, 109 Y2K Act, 157, 218 Yeazell, Stephen, 75, 122 Zuckerman, Adrian, 220–21