In 2009, when the U.S. Supreme Court published Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), very little thought was given to the possibility that the Court’s discussion of Federal Rule 8 would apply outside the confines of that decision. However, less than two years later, when the Supreme Court published Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009), attorneys took notice of the fact that bare-notice pleading — theretofore considered as a mainstay under Federal Rule 8 — would be a thing of the past.
The essence of these two rulings recharacterized the requirements mandated by the Supreme Court for the sufficiency in detail of the allegations in a complaint (as well as a counterclaim or cross-claim) in order to state a cause of action. For generations, attorneys filing actions in federal courts needed only to supply “bare-bones” facts in order to state a cause of action and withstand a motion to dismiss. While these cases did not involve avoidance claims under §§ 547 and 548 of the Bankruptcy Code, federal courts, and practitioners alike, anticipated these decisions would have far-reaching impact on all subsequently filed federal actions. That prophecy came true when, in 2009, a North Carolina bankruptcy court published In re Caremerica, 409 B.R. 737 (Bankr. E.D.N.C. 2009), clearly making the Iqbal requirements applicable to bankruptcy adversary proceedings.
