Wednesday, November 30, 2011

The Misuse of Motions to Dismiss in Federal Court Following Twombly and Iqbal

United States Supreme Court
Today the Indiana law blog picks up an interesting article from Alison Frankel's legal column "On the Case."  It is actually on a favorite topic of mine, i.e. the misuse of Rule 12(b)(6) Motions to Dismiss in federal court.  The article starts out like this:
Two of the most controversial U.S. Supreme Court rulings of the last decade are 2007's Bell Atlantic v. Twombly and its 2009 follow-on Ashcroft v. Iqbal. In Twombly, an antitrust case, the Court set a new, higher standard for what plaintiffs must allege in their complaints in order to survive a defense motion to dismiss; in Iqbal, it extended the higher pleading standard to cases outside of the antitrust realm. Ever since, law professors, practitioners, judges, and politicians have debated the impact of the two rulings. As you might expect, plaintiffs' lawyers and their supporters argue that good cases are being dismissed. Defendants counter that Twombly and Iqbal haven't affected meritorious cases. (Here's a sampling of perspectives from a December 2009 Senate Judiciary Committee hearing on the two opinions.)
In March, the Federal Judicial Center put out a 52-page report that seemed to minimize the effects of Twombly and Iqbal. The study of motions activity in 23 federal districts, undertaken at the behest of the Judicial Conference's advisory committee on civil rules, found that there was an increase in the rate of motion-to-dismiss filings in the wake of the two rulings, but also found no general increase in the rate at which federal judges granted motions to dismiss with prejudice. "There was no increase from 2006 to 2010 in the rate at which a grant of a motion to dismiss terminated the case," the report said.
Actually Frankel is very incorrect that Twombly and Iqbal created heightened pleading standards in federal court.  If attorneys read Twombly and Iqbal closely it is apparent the Supreme Court intended those decisions to be interpreted narrowly. Both the Seventh Circuit and the United States Supreme Court have since clarified that Twombly and Iqbal did not change notice pleading, did not create a heightened pleading standard, and did not change the standard for granting a motion to dismiss. 

The Federal Judicial Center suggests the two cases haven't had much of an impact, focusing on the fact that more motions to dismiss are not being granted in federal court.  As the Frankel article points out that is an oversimplified analysis and that the increased filings of Motions to Dismiss have an impact even if the motions are not ultimately granted.

That is something I know all too well.  I have had a number of cases in the Southern District of Indiana in which attorneys, often City Legal, have filed canned Motions to Dismiss challenging virtually every allegation in a complaint as not being sufficiently pled.  Many of these motions are 30 pages or more.  Almost always the attorneys cite to summary judgment cases, not ones dealing with a motion to dismiss, in support of their claim that the Plaintiffs have not met the supposedly new Twombly and Iqbal pleading standards.

The practical effect of the federal courts entertaining these motions to dismiss is to delay and drive up the cost and time involved in litigating a case. That plays right into the hands of deep pocket defendants and against plaintiffs.  When the Defendant files a 30 page motion to dismiss, that means the Plaintiff's counsel is going to have to spend approximately 20-25 hours crafting a response.  It used to be that summary judgment was the hurdle in federal court.  Now, since the federal courts have allowed defendants to misuse Twombly and Iqbal to litigate lengthy and bogus Motions to Dismiss, there is another hurdle plaintiffs have to clear. 

Federal judges need to do more in terms of cracking down on these frivolous motions to dismiss.  Attorneys who cite a litany of summary judgment (post-evidentiary) cases in support for their Motion to Dismiss argument that a plaintiff has not pled sufficiently, need to be sanctioned.  Our federal courts need to understand that allowing Defendants to abuse Rule 12(b)(6) Motions to Dismiss is to allow an unlevel and unfair judicial playing field.


Nicolas Martin said...

Given that the federal courts are reluctant to allow the sanctioning of prosecutors whose misconduct leads to the convictions of innocent people, I wouldn't hold my breath for a purification of improper motions to dismiss.

Paul K. Ogden said...

NM, I won't hold my breath.

The fact is litigants who want to abuse the legal process via delaying things or filing frivolous motions find that their antics are much more tolerated in federal court than state courts.

Reform Believer said...

The Motion most commonly misused in Indiana, particularly in Marion County, is the Motion for Summary Judgment.