On May 18, the U.S. Supreme Court gave corporate defendants a gift that keeps on giving: the Iqbal decision, which has made it easier than ever for defendants to shut down lawsuits before they get to the costly discovery stage.
Now, four months later, civil rights and consumer groups and trial lawyers are beginning to push back. They met on Sept. 14 in Washington, D.C., to lay plans for a two-pronged battle to undo what they see as a devastating blow to their lifeblood litigation. The campaign will be aimed at Congress as well as the rulemaking process for federal courts. Hearings are being planned for October in the House and the Senate.
"This ruling has threatened to upend the way we have been doing things for a very long time," said John Payton of the NAACP Legal Defense and Educational Fund, which is part of the growing coalition. "The alarm is quite real."
In Ashcroft v. Iqbal (pdf), which built on the 2007 Bell Atlantic Corp. v. Twombly (pdf) decision, the Court said plaintiffs must include in their initial pleadings substantial, not "threadbare," factual assertions that give "facial plausibility" to their claims -- a major shift from the tradition of "notice pleading," which required only a simple statement of the case against the defendant.
With remarkable speed and success, "Iqbal motions" to dismiss because of insufficient pleadings have become commonplace in federal courts, already producing more than 1,500 district court and 100 appellate court decisions according to a Westlaw search. Many more are pending.
WEEDING OUT THE WEAK?
Business advocates say that Iqbal weeds out weak or frivolous lawsuits and is a much-needed standard that will reduce federal court caseloads.
"Having a factual basis before you go forward, that's a good thing, whether you are a plaintiff or a defendant," said Marc Williams, president of the Defense Resources Institute, which bills itself as the voice of the defense bar. He added, "The good lawyers do the work in advance."
That's nonsense, say civil rights advocates. Most plaintiffs in employment and other discrimination cases have no access to the facts that could prove discrimination -- such as personnel files and company documents -- at the pleading stage, they say.
Under Iqbal, "the person filing the suit has to get inside the head of the employer" before being given access to any documents -- a Catch-22 that will thwart valid suits, said Lisa Bornstein, senior counsel at the Leadership Conference on Civil Rights. "It's really a padlock on the courthouse door."
John Vail, vice president of the Center for Constitutional Litigation, thinks Iqbal caps a trend that verges on the unconstitutional, violating the Seventh Amendment's guarantee of a jury trial in civil cases. "It heralds a return to the kind of legal practice Dickens condemned in Bleak House," said Vail.
The Sept. 14 meeting of groups mounting a challenge to Iqbal took place at the offices of Vail's client, the American Association for Justice. In addition to the trial lawyers' group, the Legal Defense Fund and the Leadership Conference, represented at the meeting were Public Citizen, the Sierra Club, the National Employment Lawyers Association and the Committee to Support the Antitrust Laws.
A wide range of cases have already been affected by Iqbal. A major lawsuit against the makers of Seroquel, an anti-psychotic drug, was dismissed on Iqbal grounds in the Middle District of Florida in July. Last month, a California federal judge, citing Iqbal, dismissed a case challenging the government's no-fly list, brought by a Muslim woman who claimed she was a victim of profiling. In a case at the 11th U.S. Circuit Court of Appeals, also last month, an Alien Tort Claims Act suit against Coca-Cola bottlers in Colombia was dismissed on Iqbal grounds.