Anti-Iqbal Bills Appear to Gain Ground at Senate Hearing
On Wednesday the U.S. Senate's Judiciary Committee held a hearing to examine the effects of the U.S. Supreme Court's decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 244 (2007) and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) on litigants' access to federal courts. From all of the reports that I have read, most of the Committee members themselves -- other than Alabama Senator Jeff Sessions -- seem highly critical of the decisions and committed to changing the pleading standards to one in which a federal court cannot dismiss a case if it can conceive of any possible set of facts under which plaintiffs could state a claim. That, of course, is a far cry from true notice pleading, in which a litigant with a Rule 11 obligation to have investigated his claim before filing it is required to plead the basic facts underlying his legal claim.
My colleague, John Beisner, recently circulated an update that explains three fundamental problems with the bills currently under consideration in the House and Senate. First, although the bills' proponents talk wistfully of "returning" to Conley v. Gibson, 355 U.S. 41 (1957), courts never actually followed Conley's standard literally. Second, the bills as drafted would override the heightened pleading standards previously imposed by Congress in statutes such as the Private Securities Litigation Reform Act. Third, the bills also would nullify the particularity requirement that Federal Rule of Civil Procedure 9(b) has imposed on fraud claims since 1937.
The prepared remarks of the three witnesses from Wednesday's hearing are worth a read. Professor Stephen Burbank of the University of Pennsylvania, an Iqbal critic, testified that legislation to "restore the status quo" is necessary now, followed by subsequent study regarding what the appropriate pleading standard should be. Interestingly, Professor Burbank is of the opinion that it should be Congress -- and not the Supreme Court -- that makes this later decision:
Once legislation restoring the status quo is in place, it will be time to consider change after a thoughtful and deliberate study within more democratic processes. The Supreme Court, acting as such (that is, rather than as Congress’s delegate under the Enabling Act), is incapable of conducting or acting on such a study, because it lacks the information, experience and political legitimacy to make an informed judgment about either the procedural or the broader social costs and benefits of changing pleading law.
Testimony at 20.
Another Iqbal critic -- John Payton, President and Director-Counsel of the NAACP Legal Defense and Educational Fund -- reminded the Committee in his remarks that Conley was a civil rights case, and posited that if Iqbal had been the standard employed in 1957, the plaintiffs might not have prevailed. He opined that in civil rights cases, the facts are mostly in the defendants' possession, and thus bare pleadings must be allowed in order to get access to the discovery necessary to substantiate the claim.
One witness, however, supported the Iqbal/Twombly standard: Gregory G. Garre, the former U.S. Solicitor General who had argued the Iqbal case on behalf of the government. In his testimony, General Garre explained that Iqbal and Twombly are in line with decades of Supreme Court and Court of Appeals decisions that have required litigants to plead basic facts about their claims. He also explained the enormous costs of allowing conclusory and implausible claims to proceed past the pleading stage to discovery. In addition, he devoted considerable attention to explaining that the effect of Iqbal and Twombly to date has not been the wholesale dismissal of claims, citing to cases and the Advisory Committee on Civil Rules' report finding no evidence of a "drastic change" in dismissal rates.
General Garre concluded that for Congress to revise the pleading standards at this time would only lead to more uncertainty and litigation. Instead, he recommended allowing the Judicial Conference of the United States to do its job, studying the issue and recommending any necessary changes through the ordinary process for amending the civil rules.
To date, few Senators and Representatives have advocated this cautious and common-sense approach as eloquently as Gregory Garre. But if we are to avoid reactionary legislation that muddies the water and results in uncertainty and an increase in frivolous and wasteful litigation, cooler heads on both sides of the aisle must stand up and quickly find their voice.
