Substance Over Form with Federal Rule of Civil Procedure 8
January 17th, 2020
Federal Rule of Civil Procedure 8(a) requires that a pleading contain “(1) a short and plain statement of the grounds for the court’s jurisdiction, unless the court already has jurisdiction and the claim needs no new jurisdictional support; (2) a short and plain statement of the claim showing that the pleader is entitled to relief; and (3) a demand for the relief sought, which may include relief in the alternative or different types of relief.”
This rule usually applies to documents we call complaints, a type of pleading that instigates an actual lawsuit. No lawsuit can proceed without one and the entire proceeding will revolve, one way or another, around that pleading.
So, how courts interpret the rule is particularly important for plaintiffs in all kinds of litigation. The level of detail required for the complaint will make or break whether the lawsuit is thrown out. Yet, at this stage, the plaintiff will not have access to facts or evidence controlled by the defendant. So, if the rule is interpreted to require extensive detail, a plaintiff faces a catch-22: a lawsuit and the discovery process is needed to support the claim, yet the complaint will be dismissed if the claim is not sufficiently supported.
The United States Supreme Court has appeared to demand more of plaintiffs under Rule 8 over time. Luckily, however, in practice judges care much more about substance and equity than they do the form of the rule.
Conley v. Gibson (1957) — A complaint is sufficient unless the plaintiff "can prove no set of facts in support of his claim which would entitle him to relief."
In 1957, the United States Supreme Court delivered the opinion in Conley v. Gibson, 355 U.S. 41 (1957). The case involved black members of a union suing that union for discrimination. The union moved to dismiss the complaint at the trial court level and that motion was granted. Eventually, Justice Black, writing for the Supreme Court, said the following:
In appraising the sufficiency of the complaint we follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.
According to this opinion, if Fed. R. Civ. P. 8 raises a bar to pleadings at all, the bar is very low indeed. The case operated to, in other words, to give every plaintiff her or his day in court and was interpreted that way by federal courts for decades thereafter.
Bell Atlantic v. Twombly (2007) — "Factual allegations must be enough to raise a right to relief above the speculative level."
50 years later, Justice Souter attacked the “no set of facts” language from Conley in Bell Atlantic v. Twombly, 550 U.S. 544 (2007). He declared that the language had been “questioned, criticized, and explained away long enough,” contending that “after puzzling the profession for 50 years, this famous observation has earned its retirement.” In its place, the Twombly majority held the following:
While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations… a plaintiff’s obligation to provide the grounds of his ‘entitlement to relief’ require more than labels and conclusions, and a formulaic recitation of the elements of a case of action will not do…. Factual allegations must be enough to raise a right to relief above the speculative level.
This battle may seem to illustrate a very profound distinction with no actual difference. But to practitioners, there is a difference. On its face, here is what Conley and Twombly purport to do. Let's say the Securities and Exchange Commission decides to file an action against an individual for securities fraud under federal regulation 17 CFR § 240.10b-5. That law states:
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, (a) To employ any device, scheme, or artifice to defraud, (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.
Under the Conley standard, its greatest defenders would claim that all the SEC has to do is to claim that an individual did one of the acts prescribed by the law—effectively by simply pasting the text of the law inside the complaint—and the SEC has a valid complaint through which it can proceed in a case against that individual. However, Justice Souter and the Twombly majority argue it is insufficient. What they are looking for is some additional fact, something beyond a mere recital of the law itself, that shows the SEC is entitled to the relief it wants in its complaint. So, the SEC may paste the law, but it needs to add additional facts that show those things actually occurred as examples of the law in its application. One can immediately see that a lazy lawyer might have an easier time under the Conley standard than the Twombly standard.
Ashcroft v. Iqbal (2009) — 1) No mere legal conclusions. 2) The claim for relief must be "plausible."
Two years after Twombly, the Supreme Court clarified just how this would work in Ashcroft v. Iqbal, 556 U.S. 662 (2009). Justice Kennedy, writing for the majority, held that whether or not a pleading is sufficient under Rule 8 involves a two-step process. First, a court need not accept any allegations contained in the complaint that are merely legal conclusions. Second, sufficient complaints must state a “plausible” claim for relief.
The “plausibility” standard has given people a lot of heartburn. Asking courts, or even permitting them, to determine whether allegations are plausible seems to invite a type of gatekeeping discretion at the very first stage of the case that could bar some plaintiffs from getting access to court. After all, how many judges, even federal ones, may have looked with disfavor upon civil rights claims as being implausible for decades, if not centuries? How many might yet still today?
The requirements of Fed. R. Civ. P. 8 today: substance and equity prevail.
It has been over 10 years since Iqbal: have the concerns been vindicated by the evidence?
The excellent paper “Keep Calm and Plead On: Why New Empirical Evidence Should Temper Fears About Pleading Plausibility” (2014) shows that from about 2007 to 2014, the picture began resolving clearly. It cites several sources for its claim that, actually, the Iqbal / Twombly shift has been almost all more bark than bite.
First, the author assesses reports from the Advisory Committee on Civil Rules. The rate of motions to dismiss being granted by 2009 had not changed, but, thinking it might be too early to tell for sure, the Committee continued to watch. By May 2010, its opinion had not changed. Second, the author cites the Federal Judicial Center Report, which analyzed cases disposed by procedural dispositions from 2006 to 2010. “The Report’s findings are significant.” From 2006 to 2010, the Report found an increase in the rate of motions to dismiss for failure to state a claim being filed, but no increase in those motions being granted.
At the end of the day, the takeaway is that for all the moaning and groaning over the application of Rule 8, as elaborated by the Roberts Court, the practice has not changed very much. Judges care much more about substance and equity than they do the form of the rule—even federal judges who are notoriously devoted to rules.
Categories: Civil Litigation