Interpreting the Rule
Ms. Mitchell and Mr. Wallach first note that Twombly and Iqbal do not change the text of Rule 8(a)(2) but offer an interpretation of it. I agree, of course. I did not intend to imply that Twobly/Iqbal created a formal amendment to the text of the rule itself. But, as they surely agree, it is a substantial reinterpretation, such that the standard employed in district courts now is very different than what was applied 2 years ago. Lest we would not be typing here today. My point regarding amendments, was not that the Court amended the text of Rule 8. Rather, my point is: If we are concerned about pleading rules because discovery in certain types of cases is too expensive, then amendment is a better course conduct. Of course, the Court can interpret Rule 8 however it wants. But should it do so in the context of a case in which all the relevant factual issues we have been talking about are not part of the record of the case at issue? That is my question. I think it should not. Finally, amending the rules would not be litigation creating. There is not a tidal wave of litigation over what fraud means in the context of Rule 9(b). Similarly, I would doubt there would be litigation over what a claim under the Sherman Act means.
I agree that discovery costs hit defendants in this context more than plaintiffs. But my point was only that these costs are not a one-way street and that if discovery is to cost $7 million dollars, even sharing 1/7 of that cost is significant, especially given the payment structure for plaintiffs’ attorneys. This remains a financial disincentive for plaintiffs to engage in discovery in a meritless case.
Ms. Mitchell and Mr. Wallach argue that Conley in essence read “showing that the pleader is entitled to relief” out of Rule 8(a)(2). I think that position in error. Any number of 12(b)(6) motions can be, and are with great frequency, under the Conley interpretation of Rule 8, arguing that the complaint fails as a matter of law. For example, defendant can move under 12(b)(6) because the statute sued upon does not create a cause of action for plaintiff, Pegram v. Herdrich, 530 U.S. 211, 217 (2000) (affirming 12(b)(6) dismissal of ERISA claim because a breach of fiduciary duty cause of action did not arise against defendant under the statute) , or based upon the facts as stated in the complaint defendant necessarily prevails upon an affirmative defense, Jones v. Bock 549 U.S. 199, 215 (2007) (“A complaint is subject to dismissal for failure to state a claim if the allegations, taken as true, show the plaintiff is not entitled to relief. If the allegations, for example, show that relief is barred by the applicable statute of limitations, the complaint is subject to dismissal for failure to state a claim.”). Unfortunately, the Administrative Office of the United States Court does not provide a more detailed breakdown of case terminations (see here) so we cannot know how many claims were dismissed on 12(b)(6) pre-Trombly, but the numbers of dismissals before the pre-trial stage exceeds 50%. Conley, then, did not commit the interpretation sin of rendering a portion of Rule 8(a)(2) a nullity, as Ms. Mitchell and Mr. Wallach suggest. See Mountain States Tel. & Tel. Co. v. Pueblo of Santa Ana, 472 U.S. 237, 249 (1985) (“the elementary canon of construction that a statute should be interpreted so as not to render one part inoperative”). Rather Conley (properly in my view) limited the “entitled to relief” language to legal challenges against the complaint that do not address the veracity of the allegations. In fact, if one adopts Ms. Mitchell and Mr. Wallach’s interpretation of Rule 8(a), then Rule 9(b) is rendered a nullity—as there is nothing more to add in such claims that is not already required under their interpretation of Rule 8(a). See Ricci v. DeStefano ,129 S.Ct. 2658, 2674 (2009) (“We must interpret the statute to give effect to both provisions where possible.”). I think their reading of Rule 8(a)(2), not only contrary to 50 years of practice, but a strained interpretation of the Rules read as a whole.



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