When the U.S. Supreme Court scrapped Conley v. Gibson’s “no set of facts” federal pleading standard in Twombly (2007) and Iqbal (2009), courts initially struggled to apply the inherently ambiguous “plausibility” standard. In the immediate aftermath, some courts frankly misconstrued Twombly and Iqbal to invite a Daubert-style “gate keeper” appraisal of complaints in which judges could (and should) prune claims that, based on their own personal experience with the subject matter at issue, appeared dubious. One potential source of this confusion is a single sentence in the Supreme Court’s Iqbal opinion: “Determining whether a complaint states a plausible claim for relief will … be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” While the U.S. Court of Appeals for the Third Circuit has largely rectified this misconception, courts occasionally toss daunting complex claims based on skepticism and a concern about costly and burdensome discovery rather than a correct application of the plausibility standard. A recent antitrust decision by U.S. District Judge Mark A. Kearney of the Eastern District of Pennsylvania provides a model framework for analyzing plausibility.

  • Roxul USA v. Armstrong World Industries

In Roxul USA v. Armstrong World Industries, a manufacturer of ceiling tiles, Roxul, sued one of its competitors, Armstrong, for monopolization and attempted monopolization under Section 2 of the Sherman Act. Armstrong allegedly controlled 55 percent of the ceiling tile market and used its purported monopoly power to foreclose Roxul’s access to national distributors. Specifically, Roxul claimed that Armstrong signed exclusive-dealing agreements with its distributors, preventing them from selling the ceiling tiles to Armstrong’s competitors (Roxul included). Those agreements contained liquidated damages provisions that penalized distributors for violating the exclusivity clause. When distributors proved intransigent, Armstrong threatened to raise its prices or cut off the supply of ceiling tiles entirely. These agreements supposedly prevented Roxul from competing effectively in the same market with Armstrong. Roxul sought treble damages as well as injunctive relief.