TELL ME A GOOD STORY: EMPLOYMENT DISCRIMINATION COMPLAINTS AFTER TWOMBLY & IQBAL

Transcription

1 TELL ME A GOOD STORY: EMPLOYMENT DISCRIMINATION COMPLAINTS AFTER TWOMBLY & IQBAL By Michael C. Subit The U.S. Supreme Court announced its rewrite of the standard for granting a motion to dismiss a complaint under Fed. R. Civ. P. 12(b)(6) for failure to state a claim in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Some saw Twombly as a portent of a sea-change in how judges would rule on motions to dismiss in the employment context. Others thought a ruling in a complex antitrust case would have little application to the more run-of-the-mill factual contentions that arise in workplace litigation. Ashcroft v. Iqbal, 129 S. Ct (2009), a federal civil rights action, put Twombly on everyone's radar. Iqbal left no doubt that the Court's new pleadings jurisprudence applied to discrimination cases. Twombly and Iqbal have all but eliminated notice pleading of the kind intended by the drafters ofthe Federal Rules. See Fed. R. Civ. P. 84 ("The forms in the Appendix suffice under these rules and illustrate the simplicity and brevity that these rules contemplate."). The Supreme Court now requires plaintiffs to write complaints that convince federal judges that their claims are "plausible." Some courts and commentators have suggested that Iqbal overrules previous Supreme Court employment law precedents. Twombly and Iqbal can, however, easily be reconciled with McDonnell Douglas-Burdine and the holding of Swierkiewicz v. Sorema, NA., 534 U.S. 506 (2002). The more significant question is whether district and circuit court judges will construe Iqbal as a license to purge the federal courts of what they deem are "weak" employment cases without giving plaintiffs the opportunity to substantiate their allegations through discovery. Eighteenmonths after Iqbal, thejury is still out onthat. 1

2 More than 20 years ago, my Civil Procedure professor taught us pleadings from the perspective of literary theory. A lot of what he said wasn't practical, but he did impress upon me the connection between drafting a complaint and telling a good story. The Supreme Court's recent pleadings jurisprudence doesn't lend itself to easy understanding, but the message I (and several courts) take from it is that a complaint must tell "a good legal story" for its allegations to be deemed "plausible." Employment cases are often about which side has the more compelling story. So while Twomby/lqbal raise the bar for all civil complaints, most employment practitioners should be able to clear it, provided their client has a story worth telling. I. THE SUPREME COURT'S MAJOR PLEADING PROUNCEMENTS A. Conley Federal Rule of Civil Procedure 8(a) requires a complaint to contain just three elements: (1) "a short and plain statement ofthe grounds for the court's jurisdiction... ;" (2) "a short and plain statement ofthe claim showing that the pleader is entitled to relief;" and (3) "a demand for the relief sought." Federal Rule of Civil Procedure 12(b)(6) provides that a defendant, instead of answering a complaint, may move to dismiss it for failure to state a claim upon which relief can be granted. Rule 12(b)(6) "is substantially the same as the old demurrer for failure of a pleading to state a cause of action." Fed. R. Civ. P. 12(b)(6) Advisory Committee Notes (1946). A demurrer admitted all of the factual allegations of the complaint but claimed that it didn't matter because, even assuming everything the plaintiff claimed was true, the law did not furnish a remedy for what the 4efendant did (or didn't do). A motion to dismiss for failure to state a claim was intended to present the court with a pure issue of law. As such, there was no conflict 2

3 between it and the Seventh Amendment right to trial by jury in civil cases. There is no reason to have a trial (or allow discovery) in a case where, assuming the jury believes everything plaintiffclaims, the defendant still has no legal liability ~ In 1950 the U.S. Supreme Court adopted what would be the definitive interpretation ofrule 12(b)(6) for a half century. Conley v. Gibson, 355 U.S. 41 (1957), was a class action brought by African-American railroad employees alleging that their union had refused to represent them on equal footing with their White brethren. The lower courts dismissed the case on the grounds that the National Railroad Adjustment Board had exclusive jurisdiction. The Supreme Court unanimously reversed in an opinion by Justice Black. The Justices also rejected the union's alternative argument for dismissal under Fed. R. Civ. P. 12(b)(6): 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. Here, the complaint alleged, in part, that the petitioners were discharged wrongfully by the Railroad and that the Union, acting according to plan, refused to protect their jobs as it did those of white employees or help them with their grievances because they were Negroes. If these allegations are proven there has been a manifest breach of the Union's statutory duty to represent fairly and without hostile discrimination all ofthe employees in the bargaining unit. Id. at (emphasis added; footnote omitted). The Supreme Court then rejected the union's contention "that the complaint failed to set forth specific facts to support its general allegations of discrimination and its dismissal is therefore proper." Id. at 47. The decisive answer to this is that the Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts on which he bases his claim. To the contrary, all the Rules require is a "short and plain statement ofthe claim" that will give the defendant fair notice of what the 3

4 plaintiffs claim is and the grounds upon which it rests. The illustrative forms appended to the Rules plainly demonstrate this. Such simplified "notice pleading" is made possible by the liberal opportunity for discovery and the other pretrial procedures established by the Rules... Id. at (footnote deleted). The Court concluded thus: "The Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits." Id. at 48. B. Swierkiewicz Swierkiewicz v. Sorema, NA., 534 U.S. 506 (2002), asked whether a complaint in an employment discrimination lawsuit must contain specific facts establishing a prima facie case of discrimination under McDonnell Douglas-Burdine. The majority of the circuits had said "no," but the Second and Sixth Circuits had said "yes." Per Justice Thomas, the Supreme Court unanimously said "no." Justice Thomas held that the prima facie case is "an evidentiary standard, not a pleading requirement." 534 U.S. at 510. The Court rej ected the notion that there is a heightened pleading requirement in employment discrimination cases. "[T]he ordinary rules for assessing the sufficiency of a complaint apply." Id. at 511. In Swierkiewicz the Court described Rule 8(a)(2) as a "simplified notice standard [that] relies on liberal discovery rules and summary judgment motions to define disputed facts and to dispose ofunmeritorious claims." Id. at 512. The Court pointed to the forms attached to the Federal Rule of Civil Procedure as exemplifying the "'simplicity and brevity of statement which the rules contemplate.'" Id. at 513 n. 4 (quoting Fed. R. Civ. P. 84). Justice Thomas specifically noted the minimalism of the form complaint for negligence. Id. The Court held that under Fed. R. Civ. P. 12(b)(6) a "court may dismiss 4

5 a complaint only if it is clear that no relief could be granted under any set of facts consistent with the allegations." Id. at 514 (citing Hishon v. King & Spaulding, 467 U.S. 69, 73 (1984)). The opinion quoted Conley several times (although not the "no facts" language.) The Swierkiewicz Court rejected the argument that allowing lawsuits based on conclusory allegations of discrimination to go forward will "burden the courts and encourage disgruntled employees to bring unsubstantiated suits. Whatever the practical merits ofthis argument, the Federal Rules do not contain a heightened pleading standard for employment discrimination suits." Id. at C. Twombly Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), required the Court to decide whether a complaint alleging restraint of trade in violation of section 1 of the Sherman Antitrust Act "can survive a motion to dismiss when it alleges that maj or telecommunication providers engaged in certain parallel conduct unfavorable to competition, absent some factual context suggesting agreement, as distinct from identical, independent action." 550 U.S. at By a 7-2 margin, the Court said "no." The Court explicitly stated that it had "granted certiorari to address the proper standard for pleading an antitrust conspiracy through allegations of parallel conduct." Id. at 553. Writing for the majority, Justice Souter recounted the development ofthe law regarding Rule 12(b)(6) motions in the 50 years since Conley. The Court reiterated that a complaint does not need "detailed factual allegations" but said that it must have "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. Moreover, courts "are not bound to accept as true a legal conclusion couched as a factual allegation." Id. (internal quotation omitted). 5

6 The Court went on to make some potentially conflicting pronouncements. On the one hand, it said that "[fjactual allegations must be enough to raise a right to relief above the speculative level." Id. On the other hand, the Court stated that "a well-pleaded complaint may proceed even if it appears that a recovery is very remote and unlikely." Id. at 556 (internal quotations omitted). Later on the majority reiterated that "a complaint must allege facts suggestive of illegal conduct," but also repeated that when "a complaint adequately states a claim, it may not be dismissed based on a district court's assessment that the plaintiff will fail to find evidentiary support for his allegations or prove his claim to the satisfaction ofthe factfinder." Id. at 563 n. 8. The majority recognized that its "plausibility" requirement conflicted with Conley's "no set of facts" standard. Id. at Justice Souter noted that under a literal application of the Conley rule "a wholly conclusory statement of claim would survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some set of undisclosed facts to support recovery." Id. at 561 (internal quotations omitted). The majority decided that Id. at Conley's "no set of facts" language has been questioned, criticized, and explained away long enough.... [T]his famous observation has earned its retirement. The phrase is best forgotten as an incomplete negative, gloss on an accepted pleading standard: once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations ofthe complaint. The majority held that antitrust law required a complaint to contain enough factual matter (taken as true) so as to plausibly suggest that an agreement in restraint of trade was made. It held that an allegation of parallel conduct and a bare assertion of a conspiracy will not suffice. Id. at Such a complaint does not "without further 6

7 factual enhancement" cross the line between the "possibility" and "plausibility" of entitlement to relief. Id. at 557. The Court spent considerable time recounting the expense of antitrust discovery. See 550 U.S. at Justice Souter then said: It is no answer to say that a claim just shy of a plausible entitlement to relief can, if groundless, be weeded out early in the discovery process through "careful case management," given the common lament that the success of judicial supervision in checking discovery abuse has been on the modest side.... And it is self-evident that the problem of discovery abuse cannot be solved by "careful scrutiny of evidence at the summary judgment stage," much less lucid instructions to juries; the threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching those proceedings. Id. at (internal citations omitted). The Court quoted extensively from a 1989 law review article by Seventh Circuit Judge Easterbrook (described as a "judge with a background in antitrust law") entitled "Discovery as Abuse." Id. The Court therefore held that the only solution in antitrust cases was to insist on factual allegations "thatreach the level suggesting conspiracy" so as to weed out "cases with no reasonably founded hope that the discovery process will reveal relevant evidence to support a 1 claim." Id. at 559 (internal quotations and citations omitted). The majority held that because "the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." Id. at 570. Justices Stevens dissented, joined by Justice Ginsburg in most respects. Justice Stevens began rej ecting the notion a judicial opinion that the plaintiff's ultimate factual allegation is not "plausible" is a legally acceptable basis to dismiss a complaint. Id. at 571. He argued that "legal sufficiency" was the only proper standard. Id. at 573. Justice Stevens noted that it is nearly impossible to distinguish among ultimate facts, evidence, and conclusions of law. He pointed out that the forms in the appendix to the Rules of 7

8 Civil Procedure specifically allow a negligence claim to be stated by asserting simply that a defendant "drove negligently." Id. at 576. He advised against "rewrit[ing] the Nation's civil procedure textbooks and call[ing] into doubt the pleading rules ofmost ofits States without far more informed deliberation as to the costs ofdoing so." Id. at 579. Justice Stevens argued that the Federal Rules of Civil Procedure do "not require, or even invite, the pleading of facts." Id. at 580. He viewed the Conley formulation to allow dismissal only when proceeding to discovery or beyond would be futile. Id. at 577. He asserted that the "plausibility" standard was irreconcilable with Fed. R. Civ. P. 8 and Supreme Court precedent. Id. at 586. He chastised the majority for dismissing the complaint's assertion of an "agreement" between the defendant as a legal conclusion rather than a factual allegation. Id. at The dissent would have allowed the complaint to go forward because its allegations of an agreement were "within the realm of possibility." Id. at 593. Justice Stevens made clear, however, he would not have allowed the plaintiffs to engage in massive discovery based on what was in the complaint. Id. He disagreed that trial judges lacked sufficient power to protect defendants from unwarranted discovery. Id. at 594 n. 13. He accused the majority of overstepping its judicial role due to a "transparent policy concern... in protecting antitrust defendants-who in this case are some of the wealthiest corporations in our economy-from the burdens ofpretrial discovery." Id. at 596. D. Erickson In Erickson v. Pardus, 551 U.S. 89 (2007) (per curiam), seven members of the Supreme Court reversed the dismissal of a pro se prisoner complaint on the grounds that the prisoner had made only "conc1usory allegations" ofharm. Citing Twombly, the Court 8

9 reiterated that Fed. R. Civ. P. 8(a)(2) requires only a "short plain statement ofthe claim" and that "[s]pecific facts are not necessary." Id. at 93. The majority held the plaintiffs allegation that a prison doctor's decision to remove his hepatitis C medication was endangering his life and that prison officials were refusing to provide necessary medical treatment "alone was enough to satisfy Rule 8(a)(2)," and state a claim for deliberate indifference in violation of the Eighth Amendment. Id. at 94. The Supreme Court granted certiorari because the court of appeals' rejection of the complaint's allegations "departs in so stark a manner from the pleading standard mandated by the Federal Rules of Civil Procedure." Id. at 90. The Court stated that the lower courts' error was even more pronounced given the plaintiff was pro se. Id. at 94. The Court reaffirmed that even after Twombly a pro se complaint is held to a lower standard. Id. E. Iqbal Ashcroft v. Iqbal, 129 S. Ct (2009), involved the claim ofa Pakistani citizen who was arrested in the wake of 9/11 on an immigration fraud charge. He was "designated a person of high interest" to the FBI's 9/11 terrorism investigation. For that reason, he was kept in lockdown 23 hours a day, spending the remaining hour outside his cell in handcuffs and leg-irons. He also claimed his jailors kicked and punched him repeatedly. Id. at Iqbal pled guilty to the criminal charge, served a term of imprisonment, and was deported to Pakistan. Id. at He then brought Bivens claims against numerous federal officials, including former Attorney General John Ashcroft and FBI Director John Mueller, asserting they had adopted a discriminatory policy subjecting him to unconstitutional conditions of confinement due to his race, religion, or national ongin Id. He asserted that both Ashcroft and Mueller had approved the policy of 9

10 holding Arab Muslim men in restrictive conditions of confinement, and claimed Ashcroft was the principal architect ofthis policy. Id. at Ashcroft and Mueller moved to dismiss the complaint for failure to state a claim of personally unconstitutional conduct. The district court denied the motion relying on the Conley "no facts" standard. The Supreme Court decided Twombly while the defendants' appeal was pending. The Second Circuit held that the plaintiffs claims were not among those where Twombly required additional factual amplification in orqer to make the claim "plausible." The Supreme Court reversed 5-4. Much of Justice Kennedy's opinion for the Court deals with issues other than pleading standards. The majority held that plaintiffs cannot state a Bivens claim for invidious discrimination against a supervisory defendant merely by alleging that official knowingly acquiesced to his or her subordinates' use of discriminatory criteria. Proof of a supervisor's "knowledge" of discrimination is insufficient to show his or her discriminatory "purpose." Id. at The plaintiff must show the supervisor acted "because of' rather than "in spite of' the adverse effect of a policy on an identifiable group. Id. at Justice Kennedy then turned to whether the complaint stated a claim for relief The majority held that two "working principles" underlay Twombly: "First, the tenet that a court must accept as true all of the allegations in a complaint does not apply to legal conclusions. " Id. at "Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Determining whether a complaint states a plausible claim for relief will... be a context specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do 10

11 not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'shown'-'that the pleader is entitled to relief.,,, Id. at 1950 (quoting Fed R. Civ. P. 8(a)(2)). The majority ignored Iqbal's allegations that (1) Ashcroft and Mueller "knew of, condoned, and willfully and maliciously agreed" to subject him to discriminatory conditions of confinement and (2) that Ashcroft was the principal architect of this policy (with Mueller as his instrument) because it deemed them "conclusory." Id. at The Court specifically held that the allegations were neither unrealistic nor nonsensical. Id. The majority then examined the remaining allegations and held that they did not plausibly suggest an entitlement to relief. The majority postulated that there were "more likely explanations" than intentional discrimination for the detainment of thousands of Arab, Muslim men after the 9/11 attacks as persons of "high interest." Id. at The majority held that the plaintiffs' allegations were consistent with a decision by the nation's top lawmakers to keep suspected terrorists in the most secure conditions available. Such a motivation would not be unlawful. Therefore, the complaint failed to state a plausible claim for relief. Id. Justice Kennedy specifically rejected Iqbal's argument that Twombly applied only to antitrust cases: "Our decision in Twombly expounded the pleading standard for 'all civil actions,' and it applies to antitrust and discrimination suits alike." Id. at The majority held the same pleading standard applied whether the district court ordered full or limited discovery. "Because respondent's complaint is deficient under Rule 8, he is not entitled to discovery, cabined or otherwise." Id. at The majority also disagreed with Iqbal's claim that Ashcroft and Mueller "discriminated against him on account of 11

12 his religion, race, and/or national origin and for no legitimate penological interest" was sufficient to survive a motion to dismiss because Fed. R. Civ. P. 9 allows discrimination to be alleged generally. "Rule 9 merely excuses a party from pleading discriminatory intent under an elevated pleading standard. It does not give him license to evade the less rigid-though still operative-strictures ofrule 8." Id. Justice Souter, the author of Twombly, wrote a four-justice dissent. He accused the majority of abolishing supervisory liability under Bivens and misapplying Twombly. He noted that Ashcroft and Mueller had conceded that a supervisor's actual knowledge of discriminatory actions by his subordinates was sufficient to make out a claim for liability based on deliberate indifference. Id. at The majority had addressed the Bivens issue sua sponte, without briefing or argument. Id. at The dissent disputed the Court's conclusion that Iqbal's claims were implausible under Twombly. The dissent agreed the allegations that the majority accepted as "factual" were insufficient by themselves to state a plausible claim. Id. at But the dissent disagreed with the majority's refusal to consider Iqbal's allegations about the personal conduct ofashcroft and Mueller. Justice Souter believed that these allegations were "neither confined to naked legal conclusions nor consistent with legal conduct." Id. at The dissent reasoned that the allegations about Ashcroft and Mueller were linked to specific acts and policies of discrimination identified elsewhere in the complaint, and therefore were well-pleaded facts rather than conclusions. Id. at The dissent would have held the complaint as a whole satisfied Rule 8 because it gave Ashcroft and Mueller "fair notice of what the claim is and the grounds upon which it rests." Id. at 1961 (citing Twombly (quoting Conley)). 12

13 II. Whither Swierkiewicz after TwomblylIqbal? A. What the Supreme Court Said. Strictly speaking, there is no conflict between Swierkiewicz and Twombly/Iqbal. Swierkiewicz rejected a heightened pleading standard for employment cases. Twombly/Iqbal raised the bar for complaints across the board. Twombly cites Swierkiewicz several times. 550 U.S. at The Twombly Court characterized the Second Circuit's error in Swierkiewicz as requiring the allegation of '"specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." Id. at 570. Justice Souter specifically denied any intent to overrule Swierkiewicz. Id. However, Justices Stevens and Ginsburg noted the conflict between Swierkiewicz}s liberal spirit and Twombly}s plausibility requirement. Id. at 585. Swierkiewicz had recommended a motion for a more definite statement as the cure for an insufficient complaint, and summary judgment as the procedure for disposing of "claims lacking merit." 534 U.S. at 514. Twombly ministers the strong medicine of dismissal at the pleading stage, apparently without leave to amend. The Twombly dissent didn't mention that Swierkiewicz had described the standard for dismissal under Rule 12(b)(6) in terms similar (but not identical) to the Conley "no set of facts" formulation. See 534 U.S. at 514. To hide the resemblance, the Twombly majority significantly rephrased what the Court had said in Swierkiewicz about dismissal under 12(b)(6). See 550 U.S. at 563. B. Swierkiewicz in the Appellate Courts Post-Iqbal 1. Swierkiewicz is Dead; Long Live Swierkiewicz! Three months to the day after Iqbal, the Third Circuit announced "the demise of Swierkiewicz" "at least insofar as it concerns pleading requirements and relies on 13

14 Conley." Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3 d Cir. 2009). In fact, Twombly repudiated only one sentence of Conley. Justice Souter cited other parts of Conley with continued approval. See 550 U.S. at 555 & n.3. The Supreme Court favorably cited Conley again in Erickson. 551 U.S. at 93. Despite the Third Circuit's premature burial ofswierkiewicz, 1 the Fowler court reversed the district court's dismissal of the plaintiffs disability discrimination complaint. The court found the complaint sufficient because the plaintiff alleged "how, when, and where" the defendant discriminated against her. 578 F.3d at 212. Critically, the Third Circuit considered the assertion that the plaintiff was "terminated because she was disabled" to be a factual allegation, not a legal conclusion. Id. But the gravamen of Fowler is that the complaint was sufficient because it told a plausible story ofdiscrimination. A month later, the Third Circuit held that the plaintiffs discrimination complaint was insufficient to pass muster under Twombly/Iqbal. Guirguis v. Movers Specialty Services, Inc., 346 Fed. Appx. 774 (3 d Cir. 2009). The panel cited Fowler for the proposition that the Supreme Court had repudiated Swierkiewicz. Id. at 776 n. 7. But the court held that Swierkiewicz was instructive because there the plaintiff had detailed the relevant events leading to his termination, while Mr. Guirguis had not. Id. The court ruled that the allegation: "On February 14, 2006, plaintiff was terminated by the defendant in violation of his rights due the fact he is Arab, due to his native origin, having been born in Egypt" was "precisely the type of factually unsupported legal conclusion that is inadequate to surmount a Rule 12(b)(6) challenge." Id. at 776. "The remaining averments contain no facts supporting an inference that Movers terminated 1 In August 2010, another panel ofthe Third Circuit dismissed this part offowler as "dicta" and disagreed that Twombly and Iqbal had "repudiated" Swierkiewicz. In re Insurance Brokerage Antitrust Litigation, -- F.3d WL n.17 (3d Cir. Aug. 16,2010). 14

15 Guirguis on the basis ofhis national origin. Indeed, the complaint never intimates in any way why Guirguis believes that national origin motivated Movers' actions." Id. Nothing in Iqbal requires a plaintiff to provide evidence in his complaint of why he thinks the defendant discriminated against him on the basis ofhis national origin. The model complaint for negligence in the Federal Rules does not explain why the plaintiff believes the defendant was negligent. See Form 11. The allegation of "negligence" consists entirely of "on date, at place, the defendant negligently drove a motor vehicle against the plaintiff." An allegation that "the defendant negligently drove a vehicle" is a legal conclusion. A allegation that "the defendant terminated plaintiff because of his national origin" is not. But in a post-iqbal world, a plaintiff who alleges only the ultimate fact of discrimination runs the risk of having a court label it as a "conclusion of law." Guirguis and Fowler teach plaintiffs to take Swierkiewicz as their model, and allege the "who, what, when, where, and how" ofthe discriminatory acts against them. The Fourth Circuit has held that Twombly "explicitly overruled" the part of Swierkiewicz stating that a motion to dismiss should be denied unless "it is clear that no relief could be granted under any set of facts that could be proved consistent with the [well-pleaded] allegations in the complaint." Francis v. Giacomelli, 588 F.3d 186, 192 n.1. (4 th Cir. 2009). It claimed the Swierkiewicz standard was the same as the Conley "no set of facts" formulation that the Court retired in Twombly, a proposition the Supreme Court itself had already rejected. The Francis court also disagreed with the Supreme Court that the Federal Rules of Civil Procedure "simply created a 'notice pleading' scheme." 588 F.3d at 192. The panel reasoned that this perception gave too much weight to the "short plain statement ofthe claim" language in Fed. R. Civ. P. 8(a)(2) and 15

16 the title and language of 8(d)(l) ("Pleadings to be Concise and Direct"; "No technical form [ofpleading] is required). Id. The panel took no note for Fed. R. Civ. P. 84. The Francis court held that a terminated Black police commissioner's allegations that police officers, under the direction ofthe White mayor and White city attorney, had stormed into his office and physically removed him and his Black deputy because oftheir race failed to state a plausible claim for relief under The court rejected the plaintiffs' factual allegation that similar actions had never been taken against white police officers as "conclusory and insufficient to state a 1981 claim, [and] patently untrue." Id. at 195. In support of this last ground, the court pointed to an assertion in the defendant's motion to dismiss that the third plaintiff in the case (who did not bring a 1981 claim) was White but was treated similarly to the other plaintiffs. The appellate court accepted this un-pled and unsworn "fact" as true--in violation of the explicit command of Fed. R. Civ. P. 12(b)--because the plaintiffs did not dispute it in their brief opposing the motion to dismiss. Id. at 195 n.3. The panel then held the complaint "does not on its face state a plausible claim for relief' under Id. at 196 (emphasis supplied). While few plaintiffs' lawyers would make a claim of race discrimination under the facts of Francis, one cannot square the case with the Twombly's admonition that "Rule 12(b)(6) does not countenance dismissals based on a judge's disbelief of a complaint's factual allegations." 550 U.S. at 556 (quoting Neitzke v. Williams, 490 U.S. 319, 327 (1989)). Another panel of the Fourth Circuit reversed the district court for relying on "facts" outside of the plaintiff's pro se complaint in considering a motion to dismiss under Fed. R. Civ. P. 12(b)(6). Dolgaleva v. Virginia Beach City, 364 Fed. Appx. 820, 16

17 (4 th Cir. 2010). The court held that on a 12(b)(6) motion, a court cannot consider the defendant's alleged legitimate non-discriminatory reasons for its actions in deciding whether the complaint states a plausible claim. The panel repeatedly cited Swierkiewicz along with Twombly, Erickson, and Iqbal as providing the governing law for assessing the sufficiency of an employment discrimination complaint. Id. at Both that panel and another recent panel of the Fourth Circuit recognized that Swierkiewicz's holding that a plaintiff need not plead the McDonnell Douglas framework was still good law. Id. at 827 n.6; Harman v. Unisys Corp., 356 Fed. Appx. 638 (4 th Cir. 2009). The Second Circuit has continued to rely on Swierkiewicz after Iqbal. See, e.g., Arista Records LLC v. Doe 3, 604 F.3d 110, (2 d Cir. 2010); DiPetto v. USPS, 2010 WL (2 d. Cir. July 12,2010); Samuel v. Bellevue Hosp. Ctr., 366 Fed Appx. 206 (2 d Cir. 2010) (dismissing case due to "fantastic and delusional nature ofthe majority of [plaintiffs] complaint"). The Arista Records court reasoned that Twombly and Swierkiewicz were "consistent" in that neither required a "heightened pleading" standard. 604 F.3d at Arista Records defined a "heightenedpleading standard" as one that requires "the pleading of specific evidence or extra facts beyond what is needed to make the claim plausible." Id. These statements are literally true. But Twombly and Iqbal obviously raised the bar beyond what Swierkiewicz had set by introducing the requirement of "plausibility" into the mix. The $10,000 question is what facts are needed to make a claim plausible. Notably, the Second Circuit reaffirmed that, even after Twombly and Iqbal, a plaintiff may aver facts "upon information and belief," where the facts are peculiarly within the possession and control ofthe defendant, and the court may considerthose in assessing the 17

18 complaint's plausibility. 604 F.3d at The court rejected the claim the complaint was conclusory because an incorporated exhibit gave "ample detail" to the factual allegations made on information and belief. Id. at The Judge Wood- Judge Posner Colloquy Swanson v. Citibank NA., --- F.3d ---, 2010 WL (i h Cir. July 20, 2010), contains the most thoughtful post-iqbal discussion so far among appellate judges about the Supreme Court's new pleading jurisprudence. The case involved an African- American woman's pro se claim that she had been denied a home-equity loan because of her race. She claimed that the defendants deliberately appraised the value of her home below fair market value so that they would have an excuse to deny her a loan. The district court dismissed her claims under Fed. R. Civ. P. 12(b)(6), but the Seventh Circuit reversed 2-1. Judge Diana Wood wrote for the majority, joined by Judge Easterbrook (of all people). Judge Posner dissented. Judge Wood framed the issue thus: The question with which the courts are still struggling is how much higher the Supreme Court meant to set the bar, when it decided not only Twombly but also Erickson and Iqbal. This is not an easy question to answer, as the thoughtful dissent from this opinion demonstrates. On the one hand, the Supreme Court has adopted a "plausibility" standard, but on the other hand, it has insisted that it is not requiring fact pleading, nor is it adopting a single pleading standard to replace Rule 8, Rule 9, and specialized regimes... Swanson, *2. Judges Wood and Easterbrook reasoned that '" [p]lausibility, in this context does not imply that a district court should decide whose version to believe, or which version is more likely than not.... As we understand it, the Court is saying instead the that plaintiff must give enough details about the subject-matter of the case to present a 18

19 story that holds together." Id. at *3. Judge Wood cited the Supreme Court's reaffirmation ofswierkiewicz in Twombly as evidence that in many straightforward cases, it will not be any more difficult today for a plaintiff to meet that burden than it was before the Court's recent decisions. A plaintiff who believes that she has been passed over for a promotion because of her sex will be able to plead that she was employed by Company X, that a promotion was offered, that she applied and was qualified for it, and that the job went to someone else. That is an entirely plausible scenario... Id. This, however, sounds like the elements of the prima facie case that Swierkiewicz holds are unnecessary to plead. The Swanson court went onto say that a "more complex case... will require more detail, both to give the opposing party notice of what the case is all about and to show how, in the plaintiffs mind at least, the dots should be connected. JJ Id. In any case, "abstract recitations ofthe elements of a cause ofaction or conclusory legal statements... do not add to the notice that Rule 8 demands." Id. (internal quotation omitted). The Swanson majority recognized that "one powerful reason that lies behind the Supreme Court's concern about pleading standards is the cost of the discovery that will follow in any case that survives a motion to dismiss on the pleadings." Id. Judge Wood reasoned that the Supreme Court's jettisoning of the Conley "no facts" standard struck the appropriate balance between giving the plaintiff the right to engage in discovery and shielding the defendant from inappropriate discovery costs. Prior to Twombly, "[t]oo much chaff was moving ahead with the wheat." Id. But Ms. Swanson had specifically pleaded the type of discrimination she thought had occurred, by whom, and when. She alleged that the defendants knew her race and she described the specific business transaction that she believed was discriminatory. Id. at *4-5. In the view of the majority, 19

20 that was enough detail to state a plausible cause ofaction for race discrimination. 2 Judge Wood noted that the plaintiff had alleged numerous extraneous facts but concluded that she had not "pleaded herself out of court by mentioning" them. Id. at *4. The majority informed Ms. Swanson that she would need more evidence in order to prove her case, but held that she was entitled to discovery onher claims. Id. at *5. Judge Posner asserted that the majority's decision could not be squared with Iqbal. Id. He noted that Iqbal was not a particularly complex case. Id. at *6. He would have held that discrimination was not a "plausible" explanationfor the defendants' denial of Ms. Swanson's home equity loan. He claimed the numerous allegations in the plaintiffs complaint undermined that contention. Judge Posner would have had the court assume that the lowered appraisal of her home was a mistake because that was a more "plausible inference" than intentional discrimination. Judge Posner distinguished Erickson on the basis that it involved alleged conduct for which it was difficult to posit an alternative, lawful explanation. Id. at *8. (Judge Posner erroneously claimed, however, that Erickson did not cite Twombly). Judge Posner agreed that Swierkiewicz}s "no heightened pleading requirement for employment cases" holding remains good law after Twombly and Iqbal, but it didn't matter since Iqbal's plausibility requirement applied across the board. Id. at *"9. Judge Posner recognized that the Supreme Court had articulated the plausibility standard in "opaque language." He suggested "plausibility" invited a merits-based determination by the district judge of plaintiffs likelihood of success at trial, but that the standard the plaintiff had to meet was not a 50% probability. Id. 2 The court unanimously upheld the dismissal ofthe plaintiff's fraud claim for failure to meet Rule 9's heightened pleading requirement. 20

21 Judge Posner argued Twombly and Iqbal were about the "asymmetric discovery burdens and the potential for extortionate litigation (similar to that created by class actions)." Id. He bemoaned the astronomical costs of discovery (particularly electronic discovery) to defendants. He claimed that Twombly/Iqbal require "the plaintiff to conduct more precomplaint discovery than used to be required and so create[] a greater symmetry between the plaintiffs and defendant's litigation costs." Id. at *10. He suggested that if "the plaintiff shows he can't conduct an even minimally adequate investigation without limited discovery, the judge presumably can allow that discovery, meanwhile deferring ruling on the defendant's motion to dismiss." Id. But in Ms. Swanson's case Judge Posner would not have allowed discovery because he believed "the plaintiff has an implausible claim of discrimination," and the imposition of discovery would induce the defendants to consider settlement even ifthe suit has no merit at all. Id. at *11. He asserted this was "the pattern that the Supreme Court's recent decisions are aimed at disrupting." Id. As the Swanson majority noted, however, the Supreme Court's recent pleading decisions are not as clear-cut as Judge Posner would have them. Swierkiewicz and Erickson point in one direction; Twombly and Iqbal point in another. The Supreme Court has for a long time displayed special solicitude for both pro se litigants and high-level governmental defendants. It is unclear that a majority ofthe Supreme Court believes that the costs ofdiscovery are out of control in employment actions. Swierkiewicz suggested that this was not the case, but Justices Roberts and Alito have since replaced Justices Rehnquist and O'Connor. However, both ofthese Bush appointees joined the Erickson majority. As Judges Wood and Easterbrook suggested in Swanson, "plausibility" may 21

22 end up having one meaning in antitrust and other complex civil actions and a different meaning in single plaintiff federal employment discrimination cases. III. CONCLUSION Judge Wood is surely onto something when she focuses on good storytelling as the secret to a "plausible" complaint. An employment discrimination complaint that explains "who, what, when, where, and how," should pass muster under Twombly/Iqbal. Given the proclivities of some federal judges to dismiss what they think are "weak cases," telling a good (but short) story in the complaint is the only way to be sure to get the discovery the plaintiffneeds to prove the all important question of"why?" 22