The Federal Courts Require Complaints To State A Factually "Plausible" Claim, DD, 3/08

Defense Digest

Federal - Trial Practice

The Federal Courts Require Complaints To State A Factually "Plausible" Claim, And Factually "Conceivable" (Speculative) Claims May Be Dismissed In The Pleadings Stage
By Gregory J. Kelley, Esq.*

In May 2007, in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), The United States Supreme Court addressed the question of what constitutes sufficient factual specificity in a Complaint to survive a motion to dismiss for failure to state a claim upon which relief could be granted. The Court held that a Complaint must contain sufficient facts in support of the claim stated so as to "nudge the claims across the line from conceivable to plausible." This decision rendered by the Supreme Court so modified the pleading standard in federal court with regard to motions to dismiss in the pleadings stage that in just seven months, the Twombly case has been cited by the Circuit and District Courts more than 2,680 times.

Before Twombly, the longstanding rule governing motions to dismiss in the pleadings stage was that a Complaint should not be dismissed for failure to state a claim unless it appeared beyond doubt that the plaintiff could not prove a set of facts in support of his claim which would entitle him to relief. Federal Rule of Civil Procedure 8 only requires a Complaint to contain a short and plain statement of the basis for federal court jurisdiction and the claim that is sufficient to show that the pleader is entitled to relief. This is known as "Notice pleading," which means that the Complaint need not set down in detail all particularities of a plaintiff's claim against the defendant, but rather, the plaintiff only has to give the defendant fair notice of what the claim is and the grounds upon which it rests. Notice pleading is also the standard in some state courts, such as New Jersey, whereas other state courts, such as Pennsylvania, require "Fact pleading," which is a heightened standard for averring supporting facts in the Complaint.

Twombly held that for a Complaint to survive a Rule 12(b)(6) Motion to Dismiss, the facts stated in the Complaint must be sufficient to "nudge the claims across the line from conceivable to plausible." A claim that is factually "conceivable," but yet speculative, is subject to dismissal in the pleadings stage, whereas a claim that is factually plausible is proper and survives a motion to dismiss. A "conceivable" claim is one in which the facts that would support the claim are not pled in the Complaint and discovery is needed to uncover the necessary supporting facts such that the claim is speculative until the facts are presented. To "cross the line to plausible," the Complaint must state facts which, if accepted as true, would establish the right to the relief sought, i.e. the facts supporting the claim are averred in the Complaint.

This modified standard in Twombly was clarified by the Supreme Court in Erickson v. Pardus, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007), wherein the Court stated that Rule 8 requires that a Complaint provide notice of the claim and the grounds on which it rests, and that it also contain sufficient allegations based on more than speculation to state a claim for relief that is plausible on its face. The Twombly decision also provided guidance to the lower courts when evaluating a Complaint in deciding a motion to dismiss. The decision stated in part: "... 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' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do ... on a motion to dismiss, courts are not bound to accept as true a legal conclusion couched as a factual allegation ... Factual allegations must be enough to raise a right to relief above the speculative level ... The pleading must contain something more ... than ... a statement of facts that merely creates a suspicion [of] a legally cognizable right of action, on the assumption that all the allegations in the complaint are true (even if doubtful in fact) ... "; thus, the Court stated that a complaint cannot simply "leave open the possibility that a plaintiff might later establish some 'set of undisclosed facts' to support recovery," Twombly, 127 S.Ct. at 1968, 167 L.Ed.2d at 944, but rather, the facts must be stated in the complaint so as to be sufficient to "nudge the claims across the line from conceivable to plausible." Twombly, 127 S.Ct. at 1974, 167 L.Ed.2d at 949.

The Third Circuit and District Courts within it have cited these pertinent points in Twombly with regard to motions to dismiss: "The plaintiff must allege facts sufficient to raise a right to relief above the speculative level." Broadcom Corp. v. Qualcomm, Inc., 501 F.3d 297 (3rd Cir. 2007); "The complaint must include enough facts to state a claim to relief that is plausible on its face. This requires either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Haspel v. State Farm Mut. Auto Ins. Co., 2007 U.S.App. LEXIS 17074 (3rd Cir. 2007); "A plaintiff's factual allegations must be enough to raise a right to relief above the speculative level - i.e., plaintiff must provide actual 'grounds' for his 'entitlement to relief,' not just mere 'labels and conclusions'." Assadzadeh v. Mueller, 2007 U.S. Dist. LEXIS 80915 *23-24 (E.D.Pa. Oct. 31, 2007).

The lesson in Twombly is that a Complaint in the federal court must sufficiently state a factual predicate that shows that the plaintiff is entitled to recover. If the facts pled, when accepted as true, do not demonstrate a right to the relief claimed, then the Complaint is subject to dismissal, and a motion to dismiss should be considered before the answer is filed. Moreover, this rule applies to each claim for relief, not just the entire Complaint. Each claim in the Complaint must be supported by factual averments that show entitlement to relief on that claim. For example, in a products liability Complaint that asserts negligence, strict liability, breach of warranty, and a request for punitive damages, the Complaint must contain a sufficient statement of facts that would support recovery on each theory of liability. Otherwise, the individual cause of action is susceptible to dismissal. Thus, where the Complaint does not contain facts that support the cause of action, a motion to dismiss should be considered before the answer to the Complaint is filed. It is the claims in the pleadings that must be proven at trial, and it is usually better to try to dismiss a claim in the pleadings stage if there are insufficient facts to support it rather than allow discovery to be taken in search of facts that would nudge the claim from the realm of the conceivable to the plausible.

*Greg is in our Professional Liability Practice Group. He can be reached in King of Prussia, Pennsylvania, at (610) 354-8273; in Cherry Hill, NJ at (856) 414-6413; or email at gjkelley@mdwcg.com