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In 1957, the U.S. Supreme Court ruled that under the Federal Rules of Civil Procedure, “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.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957). On May 21, the Supreme Court decided that “this famous observation has earned its retirement.” Bell Atlantic Corp. v. Twombly, 2007 U.S. Lexis 5901 (May 21, 2007). In the process, the court revolutionized pleading rules, introducing twin requirements of fact-based pleading and plausibility. Bell Atlantic was a complicated antitrust conspiracy action, but the Supreme Court used sweeping language to impose a duty to plead facts pursuant to Rule 8(a)(2) � a duty that it did not confine to the antitrust field. It held that “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do…Factual allegations must be enough to raise a right to relief above the speculative level…on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” ‘Bell Atlantic”s Rule 8 entitlement requirement Under Bell Atlantic, the duty is to furnish factual “allegations plausibly suggesting (not merely consistent with)” an “entitlement to relief.” Bell Atlantic calls this the “Rule 8 entitlement requirement” � the “threshold requirement of Rule 8(a)(2) that the ‘plain statement’ possess enough heft to ‘show that the pleader is entitled to relief.’” A mere-possibility standard does not satisfy the Rule 8 entitlement requirement because a possibility of relief is something less than a plausibility of relief. The context of the Supreme Court’s opinion is important. Bell Atlantic was a complex antitrust class action � a very expensive case to litigate. The Supreme Court cited Dura Pharm. Inc. v. Broudo, 544 U.S. 336, 347 (2005) � its decision in a similarly expensive securities class action � to illuminate the “practical significance of the Rule 8 entitlement requirement.” Bell Atlantic stressed that “a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed.” Bell Atlantic raises a variety of interesting issues. •Information-and-Belief Pleading. Information-and-belief pleading is not the same after Bell Atlantic. The complaint before the Supreme Court contained the allegation that: “Plaintiffs allege upon information and belief that [the defendants] have entered into a contract, combination or conspiracy to prevent competitive entry in their respective local telephone and/or high speed internet services markets and have agreed not to compete with one another and otherwise allocated customers and markets to one another.” This was rejected by the Supreme Court as inadequate because it did not satisfy the fact-based pleading and Rule 8 entitlement requirements. Therefore, invocation of the phrase “information and belief,” without more, does not satisfy the fact-based pleading and Rule 8 entitlement requirements of Bell Atlantic. In reconciling the tension between information-and-belief pleading and the Rule 8 entitlement requirement, it may be useful to look at the way information-and-belief pleading is addressed in another context in which fact-based pleading is required � namely, decisions under Rule 9(b). In this setting, it is commonly held that if allegations of fraud are based only on information and belief, the complaint must set forth the source of the information and the reasons for the belief. See, e.g., Romani v. Shearson Lehman Hutton, 929 F.2d 875, 878 (1st Cir. 1991). This case law developed to test whether the allegations furnishing the mandatory “particularity” had a basis in fact. That goal is not dissimilar to that facing a court now obligated to test whether the newly mandated “plausible entitlement” standard Bell Atlantic has been satisfied. It presents an approach toward determining whether mandatory allegations (be they “particularity” or “plausibility”) are sufficiently rooted in fact. This suggestion highlights the fact that Bell Atlantic can fairly be read as moving 8(a) jurisprudence closer to that of Rule 9(b). After Bell Atlantic, it is no longer accurate to say � as it was before � that “[s]uch supporting allegations seem to be unnecessary and inconsistent with the philosophy of the federal pleading rules” (5 Wright & Miller, Federal Practice & Procedure � 1224 (Supp. 2007)). Arguably, Bell Atlantic is more stringent in its requirements than preexisting 9(b) case law, which relaxed the particularity rule when factual information is peculiarly within the defendant’s knowledge or control (see, e.g., Weiner v. Quaker Oats Co., 129 F.3d 310, 319 (3d Cir. 1997)), even though the pleading standard stated in Rule 9(b) is more stringent than that stated in Rule 8(a). Case law will have to sort through the extent to which this eminently practical doctrine survives. • Conspiracy. The issue in Bell Atlantic was conspiracy, and the court ordered dismissal because “nothing contained in the complaint invests either the action or inaction [of the defendants] with a plausible suggestion of conspiracy.” Therefore, it is safe to conclude that any action alleging conspiracy � e.g., Racketeer Influenced and Corrupt Organizations Act, civil rights, civil conspiracy � requires allegations of fact sufficient to satisfy this standard. What would suffice? District Judge Gerard E. Lynch’s underlying opinion in Bell Atlantic, 313 F. Supp. 2d 174 (S.D.N.Y. 2003), dismissed the complaint because plaintiffs failed to plead a “plus factor” that tended to exclude independent self-interested conduct as an explanation for the defendants’ behavior � for example, “that the parallel behavior would have been against individual defendants’ economic interests absent an agreement, or that defendants possessed a strong common motive to conspire.” Id. at 179. This is as good a starting point as any for alleging a viable conspiracy claim. • Extent of Required Allegations of Fact. The Bell Atlantic court focused on the expense of litigating a massive antitrust class action; relied on its Dura decision, which focused on the expense of litigating a massive securities class action; and emphasized the inadequacy of judicial oversight of discovery to rein in discovery costs. Less complicated cases, like the auto accident discussed above, do not present the same issues in terms of complexity, expense or the perceived inadequacy of managerial judging. There is little to be gained by requiring the auto accident plaintiff to plead � instead of that “the defendant negligently drove a motor vehicle against the plaintiff” � that “the defendant was speeding and across the center line when he drove a motor vehicle against the plaintiff.” The former is as plausible as the latter � discovery will determine who was at fault. Given the new Bell Atlantic test, however, and notwithstanding Rule 84, erring on the side of including more rather than fewer facts is the safer course. •Erickson v. Pardus. Just how extensively does Bell Atlantic change the law of notice pleading? In a second pleading opinion issued per curiam in a pro se prisoner case, Erickson v. Pardus, 2007 WL 1582936 (June 4, 2007), the Supreme Court sounded a permissive chord. In his complaint, the prisoner plaintiff alleged that the physician provided by the prison had “removed [him] from [his] hepatitis C treatment” in violation of Corrections Department protocol, “thus endangering [his] life.” He attached to the complaint grievance forms in which he claimed he suffered from “continued damage to [his] liver” as a result of the failure to treat. The complaint sought damages and an injunction requiring the department to treat him for hepatitis C “under the standards of the treatment [protocol] established by [the department].” The Supreme Court vacated the 10th Circuit decision rejecting this allegation. It held 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.’ “ Three differences between ‘Bell Atlantic’ and ‘Erickson’ There appear to be three primary differences between Bell Atlantic and Erickson. First, the Supreme Court stressed the pro se status of the plaintiff in Erickson � a far cry from the highly sophisticated antitrust counsel in Bell Atlantic. Second, the pleading issue in Erickson was harm, not liability. Under Rule 8(a)(2), only “a short and plain statement of the claim showing that the pleader is entitled to relief” is required. Third, Erickson was a simple case, Bell Atlantic a complicated antitrust action. What more did the defendants in Erickson really need to know? Not much. • Conclusion. One could read Twombly‘s plausibility-in-pleading standard as requiring that the inference alleged in the complaint be more persuasive than alternate inferences (see, e.g., 2007 U.S. Lexis 5901, at *24 [allegation insufficient where it "could just as well" give rise to inference of nonviolative conduct], and at *42-*43 [allegation insufficient where "we have an obvious alternative explanation"]). But whatever Rule 8(a)(2) means, it cannot by any means require more than the strict scienter pleading requirement of the Private Securities Litigation Reform Act, and Tellabs Inc. v. Makor Issues & Rights, Ltd., 2007 U.S. Lexis 8270 (June 21, 2007) says the PSLRA is satisfied by an inference of equal plausibility. Consider a securities case alleging Section 11, 10b-5 and common law fraud claims (thus, not a class action). The Section 11 claim is governed by Rule 8(a)(2) because it doesn’t require fraudulent intent, the 10b-5 claim is governed by the strict statutory scienter requirement of the PSLRA and the common law fraud claim is governed by Rule 9(b). What is the difference in the pleading standards among the three of them? It is not possible to articulate those differences with any assurance. Gregory P. Joseph of Gregory P. Joseph Law Offices LLC in New York, is a fellow of the American College of Trial Lawyers and former Chair of the Litigation Section of the American Bar Association. He may be reached at [email protected].

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