Tuesday, August 4, 2009

Iqbal's Children

It didn't take long for the lower courts to start realizing the far-reaching implications of the Supreme Court's decision in Ashcroft v. Iqbal. The case didn't grab a lot of public attention -- it's about rules of pleading, which hardly make headlines -- although Adam Liptak had a good piece about it in the Times a couple of weeks ago. Yet this case is going to reverberate throughout the federal system and cause real change in litigation.

As I previously explained, the Iqbal decision reverses the longstanding principle that a plaintiff in a federal civil case need only provide a general notice of what the case is about in the complaint. Now, under Iqbal, the plaintiff is obliged to plead sufficient facts to convince the trial judge that the plaintiff's claim is "plausible." This fuzzy standard gives considerable discretion to trial judges to throw out cases they don't like. It also means that we're going to back to the old days when no one really knew what had to be in the complaint. Prior to Iqbal, I felt pretty confident that I could tell you whether a complaint was sufficient or not. Now I have no idea. We could easily spend the next 10 or 20 years figuring it out, which will mean endless amounts of time wasted on pleading battles.

This recent decision from an Ohio district court seems like a fair representation of the likely future. The plaintiff took an anti-convulsant drug called Trileptal manufactured by Novartis and subsequently suffered multiple complications including "multi-organ hypersensitivity." She sued Novartis. In her complaint, she alleged that the defendant's product was defective in design and that it caused her injuries. Those allegations would have been plainly sufficient under the old standards. But the judge dismissed the claim on the ground that the plaintiff had not pleaded enough facts to make the claim plausible. Instead, the court said, the plaintiff had "done nothing more than provide a formulaic recitation of the elements of a claim under the statute."

Sheesh. Under the old rules, a formulaic recitation of the elements of a claim was often the best way to plead something. You made a defective drug, I took it, it injured me. What more should you have to say to start a case? Do you need to know exactly how the drug was defective? Do you need to know the exact causal mechanism of the injury? And how exactly are you supposed to get this information? You can't just politely ask the defendant to open up its factory. That's why we have discovery -- to allow parties to get information out of their opponents that wont' be given up voluntarily.

Under the new regime, it seems like you have to have a whole lot of information that you can't realistically be expected to have before you start your case. If I take a drug and my liver fails the next day, I should at least have some mechanism available to get at the information that would allow me to determine whether the two events are related. If I can't sue, I can't employ discovery, and the drug manufacturer isn't going to be opening up its files just for the asking, that's for sure.

It looks like Iqbal is going to have a big impact. I can't actually guarantee that it won't be a good impact on balance -- that's an empirical question, and it's theoretically possible that the benefits (fewer settlements coerced by unworthy litigation, for example) will outweigh the costs. But I doubt it. We need better litigation procedures, but locking the courthouse doors based on information asymmetries doesn't seem like a good place to start.


The Pedant said...

As a plaintiffs' attorney, my feeling is that the best way to stave off an Iqbal/Twombly challenge might be to plead the "best guess" facts - bearing in mind that I'd have to have a good faith basis for anything - and then amend to conform to discovery later.

Anonymous said...

Professor Siegel,

You may be interested in a Seventh Circuit opinion authored by Judge Posner that suggests, in dita, that Iqbal's applicability may be limited by subject matter, as Twombly's was initially perceived to be:

Chris Sharp

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