Monday, June 21, 2010

Assessing the Changing World of Civil Procedure Post-'Twombly,' 'Iqbal'

Jeff Jeffrey
The National Law Journal
June 21, 2010

The impact of two landmark Supreme Court rulings that changed the standards civil lawsuits must meet to proceed is still unclear, a panel of lawyers said Friday during a discussion at the American Constitution Society's annual conference.

The panel, titled "Access to Federal Courts after Iqbal and Twombly," was billed as a freewheeling "bull session" by moderator Arthur Miller, a law professor at NYU Law School.

Miller opened with a brief explanation of Bell Atlantic Corp. v. Twombly, an antitrust case that established the requirement that civil complaints be demonstrably "plausible," and 2009's Ashcroft v. Iqbal, which expanded that requirement to all federal civil complaints.

Plaintiffs lawyer Elizabeth Cabraser, a partner at San Francisco's Lieff Cabraser Heimann & Bernstein, said the plausibility requirement has forced her to reject some cases that she might have taken on prior to the two decisions because "often the truth is implausible on its face." She said that the cases that are never brought can be the cases that would be most important.

Suzette Malveaux, a law professor at Catholic University's Columbus College of Law, described what Miller called a "catch-22" created by Twombly and Iqbal. "Often in discrimination cases, the plaintiff doesn't have access to the information that would push a case from possible to plausible. But because you have to have plausibility before a complaint can move forward, getting access to that information becomes impossible," Malveaux said.

But John Freedman, a litigation partner at Arnold & Porter, said his clients are filing motions to dismiss more often because of the new standards, but added that statistics compiled by the Administrative Office of the U.S. Courts show that the number of cases that are actually dismissed hasn't changed much since the two rulings.

After agreeing with Freedman, Andrew Pincus, an appellate partner at Mayer Brown, said that the issue at the heart of both Twombly and Iqbal is the cost defendants have to pay to provide the type of discovery required in civil disputes. "For even a small or middle sized case, the cost of discovery can be between $2 million and $3 million."

Besides, Pincus said, "If you look at what's been going on in the lower courts, this is less a sea change as it is a recognition of what was already going out there in the trenches."

That may be, said Judge W. Louis Sands of the U.S. District Court for the Middle District of Georgia, but those cases do make it more challenging for pro se plaintiffs to get their complaints past the initial stages of pleadings before being dismissed. Additionally, Sands said, until a body of case law can be developed, there's little to guide the trial court on which cases should be dismissed."

Judge Diane Sykes of the 7th U.S. Circuit Court of Appeals said she could understand the "alarm" of plaintiffs attorneys who may feel their clients face a higher threshold before they can file a complaint. But she went on to say that "eventually a body of case law will be developed to tell courts how heavy handed this standard needs to be." In the meantime she said, "I expect most judges to be cautious in applying these standards."

Malveaux posited a way to fix the allegedly shifting standard for filing a civil complaint. She said that judges could weigh in on a case sooner and allow for limited discovery on a few key points that might "push the case over the line from possible to plausible." Freedman noted that he has seen that approach already being used in some of the cases he has handled for clients.

Pincus said that the approach described by Malveaux and Freedman could be a good way to get to a "rough cut" version of the case and limit lawsuits to the "real questions." "What we have is a legal system that seeks to answer every question and introduce every piece of evidence," Pincus said. "But if we could be satisfied with 'most' instead of 'all' it would be a major improvement."