Monday, May 21, 2007

How Do You Plead?

Quite a decision from the Supreme Court today in Bell Atlantic Corp. v. Twombly. The case potentially undoes about 70 years of progress in pleading rules.

In the old days -- and I mean the old, old days, before about 1850 -- pleading one's case in court was impossibly complicated. The pleading rules (that is, the rules governing the papers you had to file to initiate a civil case) were wonders of technicality and artfulness. Even accomplished lawyers were easily tripped up; cases could be spoiled by the slightest pleading mistake.

1850 saw the first great wave of procedural reform. Much technicality was discarded and pleaders were (typically) required to state only "facts constituting a cause of action."

But even that proved too complex and technical. In 1938, the Federal Rules of Civil Procedure took over and required pleaders only to provide "a short and plain statement of the claim showing that the pleader is entitled to relief." The famous "Form 9" demonstrated how easy this was meant to be: it was enough if the plaintiff said, "On June 1, 1936, in a public highway called Boylston Street in Boston, Massachusetts, defendant negligently drove a motor vehicle against plaintiff who was then crossing said highway." Notice how simple the allegation is -- the plaintiff doesn't even need to say what the defendant did that was negligent (whether the defendant drove too fast, or went through a red light, or whatever). Just pleading that the was negligent is enough. Exactly how the defendant was negligent will emerge later in the trial process -- through discovery, for example.

But today's decision threatens to undo all that. The plaintiffs pleaded that the defendants violated the antitrust laws. The plaintiff specifically pleaded that the defendants "entered into a contract, combination or conspiracy to prevent competitive entry in their . . . markets and have agreed not to compete with one another." But that wasn't enough for the Supreme Court. The Court approved dismissal of their case on the ground that the plaintiffs didn't sufficiently plead how they knew that the defendants had done this. The plaintiffs' pleading, the Court said, just alleged a lot of conduct that was not, by itself, illegal (e.g., that the defendants had engaged in certain "parallel" conduct, which would be perfectly legal if they all happened to do it independently). But just as the negligence plaintiff isn't required to say what the defendant did that was negligent, plaintiffs who plead that the defendants entered into an illegal anticompetitive conspiracy shouldn't have to say how they know that that's true. Of course, the plaintiffs are required to come forward with their evidence at some point, but the filing of the complaint isn't that point.

It may not sound like a big deal, but it is. The whole point of the pleading system under the Federal Rules is that pleadings aren't supposed to be technical and they aren't supposed to be the filter to get rid of cases on the facts. Factual issues are supposed to be developed later. Plaintiffs aren't required to know, at the pleading stage, everything about what the defendants did. All that is required is a general notice of what the case is about. Everything else is taken care of in discovery, summary judgment, and trial.

The Court rightly pointed out that these other mechanisms are expensive and that it would be nice to get rid of unworthy cases cheaply. But that's not what the rules now provide. Maybe the rules should be changed, but as long as they are what they are, it's wrong to try to dump cases like this one on the pleadings.

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