Twombly, pleading rules, and the regulation of court access.

ABSTRACT: In Bell Atlantic Corp. v. Twombly, the Supreme Court reconsidered Conley v. Gibson's very liberal notice pleading standard and held that the plaintiff must allege enough to support a plausibility of wrongdoing. This Article considers the Twombly decision within the broader framework of court access regulation and sketches a normative roadmap for designing optimal pleading and merits-based case-screening rules. The Article begins with an analysis of Twombly itself. It argues, contrary to much criticism of the decision, that the Court's plausibility standard represents only a modest departure from traditional notice pleading and that its interpretation of Rule 8(a)(2) is consistent with the text and history of the Rule and in line with the pragmatic vision of the original Federal Rule drafters. The Article then addresses the broader normative issues involved in regulating court access through stricter pleading and other case-screening devices. It argues that a pleading requirement along the lines of Twombly's thin plausibility standard might be justified by a process-based theory of fairness as reason-giving, but that anything stronger must be evaluated on outcome-based grounds. Applying utilitarian and rights-based metrics of outcome quality, the Article then explores various methods of screening meritless suits. It highlights several issues that are often ignored or misunderstood, including the importance of carefully defining the undesirable lawsuits to be screened, correctly identifying the causes of the problem, and proceeding cautiously in the absence of empirical information by designing regulatory responses to fit the most probable causes. It argues that information asymmetry is likely to be a more important cause of meritless litigation than the commonly assumed cost asymmetry, and it outlines a hybrid approach to handle the information asymmetry cases. The Article concludes by emphasizing the importance of using formal rulemaking or the legislative process to design case-screening rules and making those rules substance-specific rather than transsubstantive.

 
  I. INTRODUCTION 
 
 II. TWOMBLY AND NOTICE PLEADING 
     A. THE TWOMBLY DECISION 
     B. TWOMBLY'S IMPACT 
 
III. TWOMBLY IN HISTORICAL CONTEXT 
     A. RULE 8(a)(2), CODE PLEADING, AND 1938 ADVISORY COMMITTEE 
        INTENT 
     B. THE VISION OF THE FEDERAL RULE DRAFTERS 
 
 IV. OPTIMAL PLEADING AND CASE-SCREENING RULES: A NORMATIVE 
     ANALYSIS 
     A. TWOMBLY'S PLAUSIBILITY STANDARD FROM A PROCESS-BASED 
        PERSPECTIVE 
        1. Fairness to Defendants 
        2. Fairness to Plaintiffs 
     B. STRICTER PLEADING AND CASE SCREENING FROM AN OUTCOME-BASED 
        PERSPECTIVE 
        1. Choosing an Outcome-Based Metric 
           a. Utilitarian 
           b. Rights-Based 
        2. Defining the "Undesirable" Suit 
        3. Analyzing the Regulatory Options 
           a. Targeting Causes 
           b. Targeting Symptoms 
              1. Gatekeeping Rules 
              2. Incentive-Shaping Rules 
     C. TOWARD AN OPTIMAL APPROACH 
 
  V. CONCLUSION 

I. INTRODUCTION

Pleading rules are once again a hot topic in civil procedure circles. At the end of its 2007 Term, the Supreme Court decided three pleading cases, (1) and in June 2008, the Court granted certiorari in another case that raises pleading issues. (2) In what is surely the most controversial of these decisions, Bell Atlantic Corp. v. Twombly, the Court held that to survive a motion to dismiss, antitrust class action plaintiffs must state facts in their complaint sufficient to support a "plausible" inference of conspiracy. (3) Many judges and academic commentators read the decision as overturning fifty years of generous notice pleading practice, and critics attack it as a sharp departure from the "liberal ethos" of the Federal Rules, favoring decisions "on the merits, by jury trial, after full disclosure through discovery." (4)

This reaction is not surprising. In a society that relies heavily on the courts for rights vindication and social reform, the distribution of litigating power is vital to the distribution of social and political power. (5) As a result, rules that regulate court access often trigger intense controversy, especially when they make it more difficult for plaintiffs to sue. (6) In civil procedure, for example, debates in the nineteenth century focused on the technical obstacles created by common law pleading, and in the early twentieth century on similar problems with code pleading. (7) More recently, Rule 11 penalties and heightened pleading requirements have been the major targets of concern. (8)

This Article situates the Supreme Court's Twombly decision in this broader framework. It views Twombly not so much as a pleading decision but rather as a court access decision, one that addresses a general problem of institutional design: how best to prevent undesirable lawsuits from entering the court system. From this broader perspective, screening more aggressively at the front door by demanding more from the complaint is just one approach, with its own costs and benefits, and should be evaluated relative to other alternatives. It makes no sense, for example, to strengthen pleading requirements if the same result can be achieved much better by bolstering Rule 11 sanctions, placing stricter limits on discovery in complex cases, shifting fees, or allowing truncated summary judgment determinations based on targeted and phased discovery.

The Supreme Court is in a poor position to make these choices in individual cases. Even conceding broad latitude for interpretation, the Justices cannot, for example, put teeth into Rule 11 at odds with its clear language or substantially alter the discovery rules. If these options are desirable, they must be implemented through the established process for making and amending the Federal Rules of Civil Procedure. (9) Moreover, some alternatives, such as fee-shifting, might require congressional action because of the Rules Enabling Act's prohibition on Federal Rules that "abridge, enlarge or modify any substantive right." (10)