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Monday, December 12, 2016

Most important legal story of past 10 years -- summed up by the words "Iqbal" and "Twombly" -- involves denying court access for millions of Americans


Iqbal and Twombly lead to dismissal of valid cases.
(From orrick.com)
The most important legal story of the past 10 years probably has flown beneath the radar of almost every American who is not working in the legal industry. If I were to poll 10,000 random Americans and ask them what "Iqbal" and "Twombly" mean, they probably would look at me as if I were crazed.

But those words apply to two U.S. Supreme Court (SCOTUS) cases that have denied access to courts for hundreds of thousands (maybe millions) of everyday Americans -- black, white, brown, yellow, middle class, lower class. The cases attack the rights of plaintiffs only, while providing an escape hatch for elites connected to corporations, institutions, the moneyed, and the powerful.

"Iqbal" and "Twombly" come to mind because my wife, Carol, and I are dealing with their implications right now -- in a federal lawsuit connected to the wrongful foreclosure on our home of  25 years in Birmingham. We call it "The House Case," to distinguish it from "The Jail Case," a second federal lawsuit we've filed regarding my unlawful five-month incarceration in Shelby County.

But we are focusing only on "The House Case" for now because that is where "Iqbal" and "Twombly" are raising their ugly heads. If you ever are wronged in a federal matter -- employment discrimination, civil rights, police misconduct, diversity litigation (involving entities in multiple states), and so on -- you probably will hear those two words early and often. You should know, right up front, that corporate elites and right-wing judges foisted them upon us in order to greatly decrease your chances of achieving justice.

How does it work? We start with a little background and a brief history lesson. A Motion to Dismiss, filed by defendants, attempts to end a lawsuit before it starts. Such a motion essentially says, "The complaint is so deficient on its face that it must be tossed out immediately, so that we defendants will not be forced to endure discovery, summary judgment, and certainly not a trial on the merits." The two words highlighted in yellow are the key to a Motion to Dismiss. Defendants, especially those who actually are liable for wrongdoing, want to avoid discovery (interrogatories, depositions, production of documents, etc.) at all costs.

For roughly 70 years, Rule 8 of the Federal Rules of Civil Procedure (FRCP) made that a long shot for defendants. The rule required only that a plaintiff produce "a short and plain statement of the claim showing that the pleader is entitled to relief." That's a pretty low bar that, if cleared, allows a plaintiff to prove his case via discovery, with an eye toward clearing a second hurdle, summary judgment. If that is cleared, you are looking at hurdle No. 3 -- a trial on the merits.

The bar for plaintiffs remained relatively low when the U.S. Supreme Court issued a case styled Conley v. Gibson in 1957. It held that "a court cannot dismiss a complaint unless it is apparent that the plaintiff could prove 'no set of facts' that would entitle him to relief."

Was this fair? Absolutely. To launch a federal case never has been easy or inexpensive. These days, a plaintiff must pay a filing fee of around $500. To hire an attorney often requires an up-front fee, or retainer, of $5,000 or more. Those are factors that already discourage plaintiffs from filing frivolous lawsuits. Aside from that, the system long has included built-in rules that discourage the filing of baseless claims. If the complaint is short on specifics, defendants can file a Motion for a More Definitive Statement. If the plaintiff fails to deliver, his case can be dismissed. Rule 11 FRCP holds that a plaintiff's lawyer (and his client) can be hit with sanctions for failing to investigate a claim before filing a lawsuit that proves to be baseless.

Despite all of these safeguards, someone got the notion in the mid 2000s that federal courts were being flooded with frivolous lawsuits. I've been in federal courthouses dozens of times and seen no signs that they are being flooded with anything. About 90 percent of U.S. lawsuits are filed in state courts, and they can be crowded, loud, dingy places. By comparison, federal courthouses are like well-scrubbed monasteries.

The bogus concerns about bogus lawsuits led SCOTUS in 2007 to issue Bell Atlantic v. Twombly. It overturned Conley v. Gibson and ushered in an era of "heightened pleading standards." Unfortunately, Twombly presents a slight problem: No one seems to have a clue what it means. Here is the gist of the holding:


We do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed.

So now, a plaintiff did not have to plead a heightened level of specifics, but he did have to plead enough facts to make his claim "plausible," as opposed to "conceivable." Anyone have a clue what that means? What's the difference between "conceivable" and "plausible"?

In 2010, SCOTUS issued Ashcroft v. Iqbal, which added two components to Twombly: (1) The heightened pleading standards of Twombly apply to all federal lawsuits, not jut antitrust cases such as Twombly; (2) A court must accept factual allegations in a complaint as true, but that does not apply to legal conclusions.

No wonder the ABA Journal published a 2011 piece titled "For Federal Plaintiffs, Twombly and Iqbal Still Present a Catch-22." From the article:

Twombly and Iqbal are widely cited by defense lawyers as a means of getting frivolous complaints dismissed before the costly factual discovery stage. But plaintiffs say judges are using the standard as a docket-management tool, precluding legitimate claims from being heard. . . .

For plaintiffs, Twombly and Iqbal create an unfair burden. If they are expected to present detailed facts from the outset, rather than acquiring them through pretrial discovery, they may have to foot the bill to investigate on their own. That, they say, creates at best an unfair burden just to have a case heard on the merits, and at worst a complete barrier to the courthouse.

Where intent or discriminatory purpose is at issue, the cases present the circular logic of catch-22. In civil rights claims or motive-based torts—or in claims where the defendant’s conduct is by nature concealed, like fraud or antitrust—evidence is in the hands of the defense. Discovery remains the only opportunity to gather this kind of evidence. Yet if a meritorious claim can never get past the pleading stage, discovery—many claimants’ primary chance to uncover facts—is not even an option.

Prior to 2007, many defense lawyers would not file a Motion to Dismiss (MTD) because they knew it was unlikely to succeed. Now, almost any federal lawsuit will draw an MTD (multiple ones if more than one defendant is involved) because Iqbal and Twombly have made it a worthwhile proposition -- made it possible to deny plaintiffs even the hope of having a case heard.

How is all of this hitting home for Carol and me? "The House Case" includes 29 defendants, and if my counting is correct, each one has filed an MTD. Under the law, there is no way in hell any of these motions can be granted. (More on that in an upcoming post.) But we still have to face the possibility that some, even all, of our claims could be dismissed by U.S. District Judge R. David Proctor, who already has shown a tendency to cheat us.

This much we've seen for sure: When you have that many MTDs filed in one case, you are likely to see outrageous misstatements of fact and law. We have answered every nutty claim that has come our way, and in a series of upcoming posts, we will show what it's like to fight back against defendants who have been emboldened by Iqbal and Twombly.


(To be continued)

15 comments:

Anonymous said...

Thanks for educating me. I had no idea about Iqbal and Twombly, and I like to think I'm fairly well informed.

legalschnauzer said...

You're welcome, @10:12. This is a classic case of judicial overreach and incompetence that needs to be overturned by Congress.

Anonymous said...

Sounds like these decisions are designed to force plaintiffs to prove their cases before they even file.

legalschnauzer said...

You nailed it, @12:08, and that's a huge departure from the law that has governed pleadings for roughly 70 years.

Anonymous said...

I don't see what's wrong with Iqbal and Twombly. They sound reasonable to me.

legalschnauzer said...

@12:22 -- One thing that is wrong is that the burden of proof already is on the plaintiff. These two rulings, in many cases, are now making it where plaintiffs don't get a chance to meet that burden.

Also, the language in the two cases is nutty. How do you decide what is "plausible" and what is "conceivable"; what is "possible" and what is "plausible"? Nobody knows.

Finally, a number of cases related to Iqbal and Twombly state that plaintiffs must state enough "factual allegations" to make their case "plausible." How dumb is that? My understanding of the English language is that you can have "facts" and "allegations," but not necessarily both. If something is an allegation that means, by definition, it hasn't been proven as fact.

I could go on, but that's just a few things that are wrong with these new standards that now have been in place for roughly 10 years. I should mention this: Even courts have stated, in so many words, that they don't know what Iqbal and Twombly mean. I will have a post coming on that soon.

Anonymous said...

Okay, I still don't get what is wrong with Iqbal and Twombly. Sound like rules that should exist.

Clifton Walker said...

Too bad nobody could have predicted this weeks ago

Anonymous said...

This is what you get with a majority of right-wing hatchet men on SCOTUS.

Anonymous said...

What you get with Iqbal and Twombly are a lot of cases that are decided on procedural grounds and not on the facts and the law.

You lose me with some of your posts, Mr. Schnauzer, but you are on target here. Two terrible rulings.

Anonymous said...

Iqbal and Twombly make it much more likely that cases will be decided with no discovery, with no facts laid on the table. That's the big story here.

legalschnauzer said...

Predicted what, Clifton, oh prescient one?

legalschnauzer said...

12:45 -- What specifically do you like about Iqbal and Twombly. Give us 2-3 reasons why you support them. That would help clarify things a lot.

Anonymous said...

I don't understand your confusion at the distinction between conceivable and plausible.


"Conceivable" means you can think of it. "Plausible" would be a reasonable person deciding "that really could have happened" vs. circular logic of "bad things happened to me, and this person was involved with this bad thing and that person was involved with that bad thing, therefore they were in cahoots.

Or, even that "this one thing happened before the other thing, so they are related events with a chain of causation. Sometimes that causal relation is plausible (my cars waterpump leaks after you hit my car with yours!) and some are simply conceivable (my car was stolen after you hit my car.) It's conceivable that the guy who hit your car stole it to avoid paying for your water pump. But the fact of your stolen car is not enough to make any such allegation plausible.

Having enough factual allegations to get to the very very very low burden of "plausible" means two things. First, you can't just have a bare-bones set of allegations. You have to have some factual basis for those allegation that are more than just vague generalities or conditions.

To get to court on the "my car was hit, my waterpump was damaged, my car was stolen after he hit my car, I allege he stole my car to avoid paying for my water pump" you would have to supply details - facts - to make the latter plausible.

You could have seen a guy who looks like him approach you car. You could have an affidavit from a neighbor who heard him go out and come home with a strange car resembling yours the night of the crime. You could have a note from him on reddit that says "I showed that guy, I took his car where it will never see a mechanic again" or perhaps you have pictures of a license plate tied to the guys wife. Or some other detail to support the idea he stole your car.

legalschnauzer said...

@3:41 -- Your comment proves my point. You can't explain the difference in the two terms worth a crap, and neither can most other people.

Rule 8 has governed these matters for 70 years, and it still exists. That's another reason Iqbal and Twombly are such bad rulings. They conflict with the FRCP, which isn't going anywhere.

If you don't understand the confusion, I suggest you Google "Iqbal and Twombly" and read what lawyers and scholars have to say about it.