Tuesday, September 8, 2009

Iqbal Keeps Spreading

I previously discussed how the Supreme Court’s Iqbal decision is going to have a big impact on federal civil litigation. Jaya Ramji-Nogales suggested that maybe it won’t have such a big impact after all. It’s still too early to say definitively who’s right, but take a look at this – Iqbal applied to a slip-and-fall case!

For those just tuning in, the Supreme Court’s decision last term in Ashcroft v. Iqbal upended some long-standing rules of pleading in civil procedure. The previous understanding was that a civil complaint — the document that by which the plaintiff starts a civil case — just had to give the defendant a general notice of what the case was about. It didn’t have to go into specifics or detail. If the plaintiff says, “I worked for the defendant and the defendant fired me because of my race or religion,” that states a sufficient claim. The plaintiff doesn’t have to say how she knows what the defendant’s motives were. Sure, the defendant is eventually entitled to that information, but it doesn’t have to be in the complaint. That’s what discovery is for.

Iqbal throws the rules into confusion. Under Iqbal, the trial court gets to disregard allegations it regards as conclusory (a term the Supreme Court didn’t clearly define) and make some judgment about whether the complaint is sufficiently plausible to require a response. Under this new regime, it’s far less clear that a one-sentence allegation about why the plaintiff got fired would be sufficient without some further allegations that show some evidentiary support. Courts have been dismissing all kinds of cases on the basis of insufficient allegations, such as this dismissal of a case in which plaintiff alleged that she took the defendant’s drug and suffered a terrible injury as a result, which got dismissed because, in the court’s opinion, the plaintiff didn’t sufficiently allege how she knew the drug caused her injury.

Now we have the ultimate in Iqbal dismissals — a dismissal in a slip and fall case! Plaintiff alleged that she slipped and fell on liquid on the floor of defendant’s store. Insufficient! says the district court. Plaintiff has to allege either that the store owner caused the liquid to be on the floor or that the owner had actual or constructive notice that the liquid was on the floor and failed to remove it within a reasonable time or warn the plaintiff of it. And how exactly is the plaintiff supposed to make these allegations without discovery?

This is what’s wrong with Iqbal. Of course if the plaintiff can’t prove all the elements of her claim under the applicable substantive law, she will ultimately lose. But what does it matter if every last point is in the complaint? The defendant knows perfectly well what the case is about — plaintiff slipped and fell in defendant’s store and claims that defendant is responsible. We don’t need any more to get started. There are other mechanisms to thrash out questions such as the questions raised by this case — specifically, discovery and motions for summary judgment.

As this case shows, Iqbal is going to send us back to the era of endless wrangling about exactly what has to be in the complaint. We’re going to waste a lot of time polishing the pleadings. And apart from everything else, it’s going to cause years of confusion. Before Iqbal I could at least give a confident judgment about whether a complaint was sufficient. Now I have no idea. If people can’t even get a slip-and-fall case into court, we’re in trouble.

1 comment:

Anonymous said...

Looking at the decision in the slip and fall case, it doesn't seem as troubling as you suggest. Without reading the complaint itself, it looks like the plaintiff really did leave essential facts out of the complaint regarding some essential elements. And, even if the plaintiff couldn't have "known" certain things - for example whether the manager knew of the liquid - she could have alleged sufficient facts "on information and belief" to demonstrate a right to recover if she could later prove them.

It seems like overall, the movement toward a higher pleading requirement is probably a good thing if it can keep out some cases that are frivolous. The cost for a company to litigate just about any case these days is rather astounding given the costs of things like e-discovery which are entirely unavoidable. While this problem is compounded in antitrust, for example, because the prospect of treble damages and attorneys' fees attracts more plaintiffs (and plaintiffs' attorneys), the spillover into other areas of law may be justified if it addresses similar concerns.

At the end of the day, one way to look at it is to balance the perceived costs against perceived benefits. If we're avoiding substantial discovery costs in frivolous cases and the cost is that some plaintiffs who might be entitled to relief but for some reason cannot make adequate factual allegations have their injuries go unrecompensed, we may still be increasing overall welfare.