Tues., Sept. 2

three themes

Balance: 1) upholding the substantive rule of law 2) other interests (e.g. party autonomy and privacy) and 3) efficiency

structure of American legal system

statutory interpretation

drafting a complaint

what purposes does a complaint serve?

Three things that can be wrong with (the factual allegations in) a complaint: 1) legal sufficiency of factual allegations 2) level of specificity in factual allegations 3) evidentiary support for factual allegations

Sierocinski v. E.I. Du Pont De Nemours & Co. 3d Cir. 1939

Did Sierocinski’s complaint state a claim?

Did Sierocinski’s complaint satisfy R 8(a)(2)?

-Rule 8. General Rules of Pleading (a) Claim for Relief. A pleading that states a claim for relief must contain:...(2) a short and plain statement of the claim showing that the pleader is entitled to relief...

Do subsequent events show that the 3d Circuit’s decision was wrong? Even after discovery no evidentiary support for negligence was found.

Did Raymond White violate R. 11?

Bell Atlantic Corp. v. Twombly (U.S. 2007)

What decision by the trial court was appealed?

Did the plaintiffs state a claim? what was the element that was left out?

Paragraph 51 “In the absence of any meaningful competition between the [baby bells] in one another’s markets, and in light of the parallel course of conduct that each engaged in to prevent competition from [locals] within their respective local telephone and/or high speed internet services markets and the other facts and market circumstances alleged above, Plaintiffs allege upon information and belief that Defendants have entered into a contract, combination or conspiracy to prevent entry in their respective local telephone and/or high speed internet service markets and have agreed not to compete with one another and otherwise allocated customers and markets to one another.”

Stevens: But the plaintiffs allege in three places in their complaint, ¶¶ 4, 51, 64, App. 11, 27, 30, that the [baby bells] did in fact agree both to prevent competitors from entering into their local markets and to forgo competition with each other. And as the Court recognizes, at the motion to dismiss stage, a judge assumes “that all the allegations in the complaint are true (even if doubtful in fact).”

The majority circumvents this obvious obstacle to dismissal by pretending that it does not exist. The Court admits that “in form a few stray statements in the complaint speak directly of agreement,” but disregards those allegations by saying that “on fair reading these are merely legal conclusions resting on the prior allegations” of parallel conduct. Ante, at The Court's dichotomy between factual allegations and “legal conclusions” is the stuff of a bygone era, supra, at

Is the problem that the plaintiffs alleged that the parallel behavior was the agreement?

What would be the analogue in Sierocinski of alleging that the parallel behavior was the agreement?

What 8(a)(2) violated then? Were the defendants not put on notice about the nature of the alleged agreement?

How can an agreement in restraint of trade arise? Must there always be a “handshake”?

Assuming the plaintiffs are alleging an implicit agreement, are the defendants put on notice?

So what is the problem with the complaint then?

Imagine that there was a trial and all that the Ps offered for evidence of an agreement was parallel behavior? What result?

Is there enough evidence at the pleading stage to justify the burden of discovery on the defendant?

If R. 11 is doing its job, do we need Twombly?

Souter: Asking for plausible grounds to infer an agreement does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement.

Assume that the complaint had alleged a handshake agreement among the CEOs of the baby bells at a particular meeting and named the date. No evidence is offered at all. Is Twombly satisfied?

If the problem driving Twombly is the cost of discovery, is there any way to limit this cost?

Did Sierocinski’s complaint satisfy Twombly?

Has R 8(a)(2) effectively been amended?

28 U.S.C. § Rules of procedure and evidence; power to prescribe (a) The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts (including proceedings before magistrate judges thereof) and courts of appeals....

Even if the Twombly decision effectively amended R 8(a)(2), is it permissible, given the S Ct is the author of the FRCP?

28 U.S.C. § 2074(a) The Supreme Court shall transmit to the Congress not later than May 1 of the year in which a rule prescribed under section 2072 is to become effective a copy of the proposed rule. Such rule shall take effect no earlier than December 1 of the year in which such rule is so transmitted unless otherwise provided by law. The Supreme Court may fix the extent such rule shall apply to proceedings then pending, except that the Supreme Court shall not require the application of such rule to further proceedings then pending to the extent that, in the opinion of the court in which such proceedings are pending, the application of such rule in such proceedings would not be feasible or would work injustice, in which event the former rule applies. 2072

Six months after the dismissal in Twombly, the plaintiffs’ lawyers find in the trash outside various baby bells’ offices memos indicating that the baby bells were intentionally coordinating their behavior in just the manner that the Twombly complaint suggested. They file a new complaint in federal court with this evidence described. What result?

Aschcroft v. Iqbal (U.S. 2009)

What are the alleged facts that the plaintiff claims entitle him to relief?

Does Iqbal state a claim?

- P sues D for negligence in federal court - In his answer, D adds a counterclaim asking for the damages that D sustained due to P’s negligence in the same accident - Do the standards in Twiqbal apply to the allegations of P’s negligence in the counterclaim?

- P sues D for negligence in federal court - In his answer, D introduces the defense of contributory negligence - Do the standards in Twiqbal apply to the allegations of P’s negligence in the affirmative defense?

pleading special matters (fraud)

Rule 9. Pleading Special Matters... (b) Fraud or Mistake; Conditions of Mind. In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.

Does R 9(b) apply to affirmative defenses?

fraud - statement (omission if duty to speak) - of material fact - that is false (or misleading) - with knowledge of falsity often intent that plaintiff rely - reasonable reliance on statement by plaintiff - causation of damages

Why the heightened pleading standards for fraud?

Why the exception in 9(b) for scienter?