There’s been a wave of antitrust class actions predicated on patent misuse by pharmaceutical companies of the past decade. The troublesome Illinois Brick decision prevents “indirect purchasers” — which means you, me, and our health insurance plans — from bringing federal antitrust claims, so plaintiffs’ lawyers have had to get creative in use of state
Fairfax County detective, David Baucum, overheard [Culosi] and some friends wagering on a college football game at a bar. “To Sal, betting a few bills on the Redskins was a stress reliever, done among friends,” a
If you’re a reader of this blog, you’re undoubtedly familiar with Bell Atlantic v. Twombly and Ashcroft v. Iqbal, a pair of Supreme Court cases which altered the pleading standards applicable to civil cases filed in federal court.
Defense lawyers have jumped all over those two opinions in an attempt to dismiss lawsuits — particularly complex commercial class actions, like antitrust cases — before any discovery can be taken. Every lawsuit, they claim, no matter how detailed and compelling, is "implausible" under Twombly and Iqbal. I taught CLEs to help other trial lawyers defeat those arguments.
Back when the Iqbal opinion first came out, I wasn’t impressed. Sure, the Supreme Court added the word "plausible" to the Rule 8 standard, but frankly I didn’t think Twombly or Iqbal would make Rule 8 and Rule 12(b)(6) any more dispositive than they already were. Before either of those cases were decided, if a judge read a plaintiff’s complaint and thought that the claim was "implausible," they would dismiss it under Fed.R.Civ.P. 12(b)(6) for failing to state a claim upon which relief could be granted. Twombly and Iqbal simply codified a practice that was already widespread in the federal judiciary.
That’s not to say I think the opinions do nothing — by way of their vague, ambiguous and amorphous language, they confuse a lot of judges into arbitrarily deeming certain allegations to be "conclusions" instead of "facts" (and even Judge Posner can’t figure out the "plausibility v. probability" distinction) — but the underlying legal principles are the same.
I said as much at the time. Time has proven me correct.
Almost exactly a year ago I posted Second Circuit Revives Digital Music Price-Fixing Case, Takes A Bite Out Of Twombly, noting a Second Circuit opinion which held:
Although the Twombly court acknowledged that for purposes of summary judgment a plaintiff must present evidence that tends to exclude the possibility of independent action, 550 U.S. at 554, and that the district court below had held that plaintiffs must allege additional facts that tended to exclude independent self-interested conduct, id. at 552, it specifically held that, to survive a motion to dismiss, plaintiffs need only “enough factual matter (taken as true) to suggest that an agreement was made,” id. at 556; see also 2 Areeda & Hovenkamp § 307d1 (3d ed. 2007) (“[T]he Supreme Court did not hold that the same standard applies to a complaint and a discovery record . . . . The ‘plausibly suggesting’ threshold for a conspiracy complaint remains considerably less than the ‘tends to rule out the possibility’ standard for summary judgment.”).
Defendants next argue that Twombly requires that a plaintiff identify the specific time, place, or person related to each conspiracy allegation. This is also incorrect. The Twombly court noted, in dicta, that had the claim of agreement in that case not rested on the parallel conduct described in the complaint, “we doubt that the . . . references to an agreement among the [Baby Bells] would have given the notice required by Rule 8 . . [because] the pleadings mentioned no specific time, place, or person involved in the alleged conspiracies.” 550 at 565 n.10. In this case, as in Twombly, the claim of agreement rests on the parallel conduct described in the complaint. Therefore, plaintiffs were not required to mention a specific time, place or person involved in each conspiracy allegation.
The Second Circuit’s opinion was significant. The case was right up Twombly‘s alley — an allegation of an illegal agreement in violation of antitrust laws, the details of which were still known only to the defendants — and so the Second Circuit’s reinstatement of the case dealt a powerful blow to the defense lawyers who had been arguing that Twombly and Iqbal had slammed the courthouse shut on plaintiffs who couldn’t prove their whole case before even filing it.
The record companies in that case weren’t inclined to throw in the towel, so they filed a petition for certiorari to the Supreme Court arguing, as you would imagine, that the Second Circuit failed to follow Twombly and Iqbal.
A funny thing happened yesterday. Tucked in among pages and pages of summary orders at the Supreme Court was this:
SONY MUSIC ENTERTAINMENT, ET AL. V. STARR, KEVIN, ET AL.
The petition for a writ of certiorari is denied. The Chief Justice and Justice Sotomayor took no part in the consideration or decision of this petition.
The Second Circuit’s opinion thus stands firm. Even after Twombly and Iqbal, all a plaintiff needs to allege, even in a complex antitrust case, is “enough factual matter (taken as true) to suggest" the elements of the claim.
That’s the same as the Third Circuit recently held in In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 314 (3d Cir. 2010) and later applied to all cases, including complex cases, in W. Penn Allegheny Health Sys. v. UPMC, No. 09-4468, (3d Cir. November 29, 2010)(precedential).
In short, the Circuit Courts have taken a hard look at Twombly and Iqbal and have rejected the numerous attempts by big corporations to slam the courthouse doors shut on meritorious cases, and the Supreme Court hasn’t stopped those Courts from setting the record straight.
In celebration, below the fold are some plaintiff-friendly precedential opinions over the last year in various Courts of Appeals (in addition to the Second Circuit and Third Circuit opinions above).
Bormes v. U.S., 2009-1546 (Fed. Cir. November 16, 2010), isn’t the type of suit you see every day:
On August 9, 2008, Bormes, an attorney, filed a law-suit on behalf of one of his clients in the U.S. District Court for the Northern District of Illinois using its online document filing system. Bormes
[UPDATE: the District Court dismissed the charges mid-trial, as explained by the Compliance and Enforcement Register, which has a copy of the order. Subsequent reporting indicates there was considerable doubt within the US Attorney’s office over prosecuting the case.]
One of the benefits of being a contingent-fee plaintiffs’ lawyer is that I …
It’s no secret that oil companies like Chevron play hard ball; just a few years ago, Chevron paid $30 million to settle allegations that it had bribed Saddam Hussein’s regime in Iraq to participate in the UN’s oil-for-food program.
As most readers know, down in Ecuador Chevron is defending a civil case over alleged contamination …
[UPDATE: In related news, a federal judge in San Francisco recently ignored a forum selection bylaw that tried to force derivative suits to be filed in the Delaware Chancery Court. “A bylaw unilaterally adopted by directors…stands on a different footing [from contractual forum agreements],” Judge Seeborg wrote. “Particularly where, as here, the bylaw…
A federal judge in Manhattan has taken the extraordinary step of granting Chevron’s motion to depose a counsel for its adversaries in the massive toxic tort litigation over oil contamination in Lago Agrio, Ecuador.
Kaplan based his ruling on evidence Chevron produced from outtakes of the documentary "Crude," which
More than a year ago, I blogged in Legal Malpractice Case Sends Dismissed Appeal Back To Appellate Court To Say What It Would Have Done about the malpractice case which came about in the wake of Kanter v. Epstein.
The whole thing was, in a word, ugly. Kanter v. Epstein was a bare-knuckled affair…