In the 2007 antitrust conspiracy case Bell Atlantic v. Twombly,¹ the U.S. Supreme Court held that a complaint failed to state a claim, and therefore could be
dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure, if it failed to set forth factual allegations sufficient to raise a “plausible” inference that the defendants are liable for the claim.² The Court, stressing that the plaintiff’s alleged facts must “nudge[] their claims across the line from conceivable to plausible,”³ rejected the view enunciated in the 1957 decision Conley v. Gibson,⁴ which had permitted dismissal only if “it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief.”⁵ The Twombly Court held that the Conley “no set of facts standard” “has earned its retirement” because it is “best forgotten as an incomplete, negative gloss on an accepted pleading standard.”⁶ Two years later, in Ashcroft v. Iqbal,⁷ the Court reaffirmed the Twombly plausibility standard and confirmed that it applied to cases outside of the antitrust context.⁸

As district courts grapple with how to apply Twombly’s plausibility standard, some in Congress seek to overturn it and to return to the pre-Twombly framework. In July 2009, Senator Arlen Specter (D-PA) introduced Senate Bill 1504, the Notice Pleading Restoration Act of 2009, which provides that a federal court “shall not dismiss a complaint under rule 12(b)(6) or (e) of the Federal Rules of Civil Procedure, except under the standards set forth by the Supreme Court of the United States in Conley v. Gibson, 355 U.S. 41 (1957).”⁹ When he introduced the bill, Senator Specter argued that in deciding Twombly, the Court circumvented the Rules Enabling Act and effectively amended Rule 8 of the Federal Rules of Civil Procedure without proposing a formal rule change to Congress for approval.¹⁰ Specter urged passage of the bill, noting that “to deny many plaintiffs with meritorious claims access to the Federal courts” is “an especially unwelcome development” when smaller litigation budgets in the executive branch will mean that “enforcement of federal antitrust, consumer protection, civil rights and other laws that benefit the public will fall increasingly to private litigants.”¹¹

A similar effort in the House of Representatives was introduced by Representative Jerry Nadler (D-NY) and other co-sponsors on November 19, 2009. House Bill 4115, the Open Access to Courts Act of 2009, prohibits dismissal of a complaint “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief.”¹² The bill specifically provides that “[a] court shall not dismiss a complaint under one of those subdivisions on the basis of a determination by the judge that the factual contents of the complaint do not show the plaintiff’s claim to be plausible or are insufficient to warrant a reasonable inference that the defendant is liable for the misconduct alleged.”¹³

Proponents of the legislation argue that the Twombly standard makes it too difficult for plaintiffs to proceed to discovery on valid claims and that, often, the factual details needed to meet the Twombly pleading standard are solely within the defendants’ knowledge and possession.¹⁴ Opponents argue that the Twombly standard is supported by precedent, safeguards against speculative claims, and that without it, defendants may be subjected to expensive and protracted discovery based on the mere possibility that wrongdoing occurred.¹⁵

At present, the Specter bill has been referred to the Senate Judiciary Committee, while the Nadler bill has been referred to House Judiciary Committee’s Courts and Competition Policy Subcommittee.

For more information, please contact Vinson & Elkins lawyer Kathleen Spangler. Visit our website to learn more about V&E's Antitrust practice. Get a .pdf of this issue of Antitrust News & Notes e-newsletter here.