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Supreme Court Ruling Refines The Pleading Standard

On May 19, 2009, the Supreme Court decided Ashcroft v. Iqbal, holding that Javaid Iqbal, a Pakistani Muslim who was detained after the 9/11 attacks, failed to plead facts that plausibly showed that senior government officials subjected him to harsh conditions of confinement for discriminatory reasons.  The ruling is of interest to civil litigators because it refines (and arguably modifies) the pleading standard established only two years ago by the Court in Bell Atlantic Corp. v. Twombly.

Background

In November 2001, Iqbal was arrested on immigration charges and was regarded as a person “of high interest” so he was confined to a maximum-security prison.  After he was convicted of the charges, served a term of imprisonment, and was then deported to Pakistan, he filed suit against more than fifty federal officials complaining about the conditions of his imprisonment.  He also alleged that he was designated as being “of high interest” solely on account of his race, religion, or national origin.  Among others, he named John Ashcroft, the former Attorney General of the United States who allegedly designed the policy (i.e., of detaining Arab Muslims in harsh conditions) under which Iqbal was confined, and Robert Mueller, the Director of the Federal Bureau of Investigation, who allegedly played a principal role in adopting and executing that policy, as defendants in the suit.

Ashcroft and Mueller filed a motion to dismiss the claims against them arguing that Iqbal had not alleged that they were involved in clearly unconstitutional conduct.  The district court denied the motion, finding that a “set of facts” could exist on which Iqbal was entitled to relief.  The Second Circuit, applying Twombly (which formally rejected the “no set of facts” standard), found that Iqbal’s pleadings were adequate and affirmed that his claims against Ashcroft and Mueller could proceed.

The Decision

Five Justices held that Iqbal’s allegations against Ashcroft and Mueller were conclusory, failing to satisfy Twombly.  After finding that the Second Circuit had subject-matter jurisdiction over the case, and discussing the elements of a claim of unconstitutional discrimination against government officials protected by qualified immunity, the Court turned to the central issue of the case.

In Twombly, the Court held that, to survive a motion to dismiss, a complaint must state a “plausible” claim to relief.  To do so, the plaintiff does not have to make “detailed factual allegations,” but “a formulaic recitation of the elements of a cause of action” is insufficient.  In fact, a court does not have to accept conclusory statements as true.  As the Ashcroft Court observed, “Rule 8 . . . does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.”

In addition, while it is not necessary to show that the plaintiff’s claims probably will succeed, Rule 8 requires more than allegations that are merely consistent with the defendant’s liability.  Thus, in Twombly the Court found that allegations of a “parallel course of conduct” by telecommunications providers were consistent with the claim that they were engaging in anti-competitive conduct, but that such a claim was not plausible because the defendant’s conduct was more likely the result of lawful behavior.  Extending that principle, the Ashcroft Court found that whether a claim is plausible is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”

Applying those two principles, the Court concluded that Iqbal’s pleadings were deficient.  The Court found that certain key allegations – e.g., that Ashcroft designed the policy of discriminatory confinement – were conclusory.  Emphasizing that the allegations were not rejected because they were fanciful, the Court found that they were not entitled to the “assumption of truth” because they were conclusory. 

The Court then found that Iqbal’s well-pled allegations, regarded as true, did not plausibly show that he was confined in harsh conditions for discriminatory reasons.  Focusing on the fact that the 9/11 attacks were perpetrated primarily by Arab Muslims, the Court observed that – given the nature of the threat – it was likely that the government would target Arab Muslims.  In light of that “obvious alternative explanation” for Iqbal’s treatment, the fact that the government’s investigation disparately impacted Arab Muslims did not imply that they were the target of purposeful discrimination.  Moreover, the Court noted, Iqbal failed to plead that he was designated as being “of high interest” (and, therefore, confined in a maximum-security prison) as the result of discriminatory animus.  Given the need to keep suspected terrorists in “the most secure conditions available” until the charges against them had been resolved, Iqbal’s claims against Ashcroft and
Mueller were at most conceivable – not plausible.

The Court also rejected several specific arguments made by Iqbal, ruling as follows:

  • Twombly interpreted the pleading standard for “all civil actions,” not only antitrust claims.
  • Rule 8’s pleading standard is not affected by controls placed on discovery.  (The Second Circuit had ordered discovery to be limited to preserve the petitioners’ defense of qualified immunity.)  Although the Court focused on the purpose of the qualified-immunity defense, noting that government officials protected by that doctrine should not be required to participate in litigation, the Court rejected in passing the idea that “careful case management” could identify insufficient claims via the discovery process – a ruling likely to have broader application.
  • While Rule 9 permits the “general[]” allegation of conditions of mind (e.g., intent), which is lower than the pleading standard for fraud, Rule 9 does not relax the general pleading standard established by Rule 8.

On this basis, the Court concluded that Iqbal had failed to plead facts showing that Ashcroft and Mueller unlawfully discriminated against him.  The Court did not evaluate the sufficiency of Iqbal’s allegations against prison guards and other defendants, however, noting that he had “allege[d] serious official misconduct.”  The case was remanded for consideration of whether Iqbal should be allowed to amend his complaint.

Analysis

Ashcroft could signal at least two changes in the way that Rule 8 is applied.  First, the Ashcroft Court broadly applied the principle that conclusory allegations do not have to be regarded as true.  Whereas “Defendants agreed to prevent competition,” an allegation at issue in Twombly, states a legal conclusion, Iqbal’s assertion that Ashcroft designed a policy of discriminatory confinement contains significant factual content.  Setting aside the question of whether the policy was discriminatory, the allegation that Ashcroft designed the policy arguably should have been regarded as factual, and thus as true in this context.  Given the Court’s treatment of that allegation, courts evaluating motions to dismiss may begin to reject allegations as conclusory that previously would have been accepted as true – in effect, deciding the adequacy of a complaint based on only a portion of the pleadings.  Depending on the way that this ruling in Ashcroft is applied, it could mark a significant departure from Twombly.

As Justice Souter observed in his dissent, joined by three other Justices, the Court’s decision can be explained by the fact that it rejected the majority of Iqbal’s allegations about Ashcroft and Mueller as conclusory, leaving only two allegations to carry the burden of stating a plausible claim.  Whereas the Court’s application of “common sense” – as discussed below – may be more striking, the impact of aggressively rejecting conclusory statements may prove equally great.

Second, the Court’s declaration that “common sense” may inform a court’s determination of whether a claim is plausible reinforces the departure from the “conceivability” pleading standard that Twombly began.  In fact, the Court’s analysis suggests that plaintiffs may need to address – and even refute – “obvious alternative explanations” for the conclusions that they wish to draw.  Especially when establishing a defendant’s purpose or intent (e.g., in cases of discrimination or conspiracy) is key, it may no longer be sufficient to allege facts that support the plaintiff’s theory of liability, without also demonstrating that a different explanation captures the facts equally well or better.

Additionally, by emphasizing considerations that were completely independent of Iqbal’s pleadings, Ashcroft could significantly change the way that courts evaluate motions to dismiss.  Notably, the dissenting justices in Ashcroft objected to that method, insisting that Twombly does not require (or permit) courts to evaluate the probability that allegations are true.  Justice Souter expressed this idea in a passage that will probably be cited in countless briefs, writing that except in the face of “allegations that are sufficiently fantastic to defy reality as we know it: claims about little green men, or the plaintiff’s recent trip to Pluto, or experiences in time travel,” judicial skepticism does not justify dismissal.  Instead of relying on “common sense,” the dissenters focused on the relationship among the allegations in Iqbal’s complaint.  They argued that the allegations regarded as conclusory by the Court provided fair notice of the claim and its grounds, when those allegations were “[v]iewed in light of [certain] subsidiary allegations.”

However, the Ashcroft Court’s application of Twombly may reflect concerns raised by a judge concurring with the Second Circuit’s opinion.  He questioned the wisdom of requiring senior government officials attempting to cope with a “security emergency” unprecedented in our nation’s history – who were entitled to assert the defense of qualified immunity, moreover – to respond to discovery on the basis of “nonspecific” allegations brought by Iqbal.  Whether Ashcroft represents the application of Twombly to extraordinary circumstances, or a modification of Twombly’s core holding itself, will become clearer as courts apply Ashcroft in run-of-the-mill civil litigation.