Ashcroft v. Iqbal -- Supreme Court Affirms and Clarifies the Pleading Requirements and Motion to Dismiss Standard Articulated in Bell Atlantic v. Twombly

In Ashcroft v. Iqbal, No. 07-1015, the United States Supreme Court removed any doubt that Bell Atlantic Corp. v. Twombly, 550 U.S. 544, its 2007 decision about pleading standards, applies to all complaints filed in federal court, including claims of intentional discrimination. The Court also clarified how federal courts should read complaints when deciding motions to dismiss in all types of federal cases, and it has added to a plaintiff’s burden when pleading a defendant’s intent.

Prior to Twombly, federal courts often allowed claims supported by conclusory allegations — that plaintiff suffered injury and that defendant was responsible — to survive dismissal motions filed under Rule 12(b)(6). Relying on Conley v. Gibson, a 1957 Supreme Court decision, those courts held that Rule 8(a) required courts to deny a motion to dismiss so long as some “set of facts” could be proved to support a plaintiff’s claims. In Twombly, the Court retired Conley’s dictum, replacing its possibility standard with a plausibility standard; courts thus should dismiss claims not supported by factual allegations sufficient to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570.

The Court Clarifies and Extends its Holding in Twombly

Some resisted a broad reading of Twombly, arguing that it applied only in antitrust cases or that its pleading requirements could be overcome with a mere assertion of the defendant’s responsibility. Iqbal makes clear that Twombly is not so limited, and it showed that the Twombly plausibility standard has teeth. Quoting Twombly, the Court held that Rule 8(a) requires “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Furthermore, “[a] claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal set forth a two-step analysis for adjudicating a motion to dismiss.

• First, a court should identify and reject legal conclusions unsupported by factual allegations, because conclusions masquerading as allegations “are not entitled to the assumption of truth.” Insufficient are “threadbare recitals of a cause of action’s elements, supported by mere conclusory statements”; “labels and conclusions”; and “‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Facts that are “merely consistent with” a defendant’s liability “stop[] short of the line between possibility and plausibility of ‘entitlement to relief.’” In sum, a complaint that alleges that a defendant caused a plaintiff’s injury, without explaining how, does not meet the requirements of Rule 8(a) and therefore cannot survive a Rule 12(b)(6) motion.
• Second, a court should assume the veracity of “well-pleaded factual allegations” and should conduct a “context-specific” analysis that “draw[s] on [the court’s] judicial experience and common sense” to determine whether the allegations “plausibly give rise to an entitlement to relief.” Well-pleaded facts that “do not permit the court to infer more than the mere possibility of misconduct” are insufficient to show that plaintiff is entitled to relief. To survive a motion to dismiss, the complaint must present a story “plausible” enough to convince a judge that the plaintiff actually stands a reasonable chance of proving the claims asserted in the complaint.

Iqbal is especially significant for causes of action based on a defendant’s intent, like discrimination cases, where the lawfulness of a person’s conduct depends on his state of mind. The Supreme Court refused to read Rule 9(b), which only requires that intent and state of mind be pleaded “generally,” as permitting a plaintiff simply to recite that a defendant had the requisite intent at the time of the challenged conduct. Instead, the Court interpreted Rule 9(b) to require that intent be pleaded in accordance with Rule 8(a)’s plausibility standard.

Import for Future Cases

For defendants in federal civil cases, Iqbal is uniformly favorable. It provides the dismissal-friendly framework for cases of all subject matters filed in federal court. (In fact, the Iqbal framework is potentially available to defendants in state courts, too, where a state has rules of procedure modeled on the federal rules.) Since courts are required to give no weight to conclusory allegations that merely repeat the elements of a particular cause of action, the two-step analysis of complaints will helpfully focus the court’s attention on the actual factual allegations, which must plausibly support a plaintiff’s claims. As a practical matter, plaintiffs with claims based on a defendant's intent will be particularly vulnerable to dismissal pursuant to the Iqbal two-step framework. At the first step, a court will give no weight to mere assertions of a defendant's intent because such conclusory allegations are not entitled to the presumption of truth. At the second step, the specific conduct alleged may not create a plausible inference of discriminatory intent if a nondiscriminatory motive provides at least as plausible an explanation of the conduct.