Bell Atlantic Corp. v. Twombly

Bell Atlantic Corp. v. Twombly

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Bell Atlantic Corp. v. Twombly, , was a decision of the Supreme Court of the United States
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...

 involving anti-trust law and civil procedure. Authored by Justice David Souter, it established that parallel conduct, absent evidence of agreement, is insufficient to sustain an anti-trust action under § 1 of the Sherman Act. It also heightened the pleading requirement for Federal civil cases, requiring that plaintiffs include enough facts in their complaint to make it plausible — not merely possible or conceivable — that they will be able to prove facts to support their claims. This latter change in the law has been met with a great deal of controversy in legal circles, evidenced by the dissenting opinion from Justice Stevens.

Background


Twombly and Marcus brought a class-action lawsuit alleging that Bell Atlantic and a number of other large telephone companies had engaged in anti-competitive behavior in violation of § 1 of the Sherman Act. Specifically, the plaintiffs alleged that these large telephone companies had acted in order to disadvantage smaller telephone companies and charge consumers more by, for example, refraining from entering markets where another large company was dominant (thereby preventing a price war).

Their complaint was dismissed by Judge Gerard E. Lynch
Gerard E. Lynch
Gerard Edmund Lynch is a United States federal judge on the United States Court of Appeals for the Second Circuit. He was confirmed to that seat on September 17, 2009 after previously having been appointed in 2000 by President Bill Clinton to serve on the United States District Court for the...

 of the U.S. District Court for the Southern District of New York, as failing to allege sufficient facts to state a claim for a violation of the Sherman Act. This decision was reversed by the Second Circuit Court of Appeals, and the Supreme Court agreed to hear the case in 2006.

Holding


The Supreme Court reversed the decision of the Second Circuit, which had reversed the decision of the District Court (Lynch D.J.) dismissing the complaint for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure.

As an initial matter, the Supreme Court clarified the requirements of proving a claim of anti-competitive behavior under Section 1 of the Sherman Act. The Sherman Act prohibits entering into a "contract, combination, or conspiracy" to restrain trade. The Court held that while parallel conduct — actions by competing companies that might be seen as implying some agreement to work together — is "admissible circumstantial evidence" from which an agreement to engage in anti-competitive behavior may be inferred, parallel conduct alone is insufficient to prove a Sherman Act claim.

The Court then upheld the District Court's dismissal of the plaintiff's complaint, holding that the mere allegations contained in the complaint that the competitors had agreed not to compete were insufficient to state a claim of conspiracy under the Sherman Act. The Court found that Twombly's complaint had not provided enough facts for the court to find it plausible that the companies had engaged in a conspiracy; instead, the complaint provided factual bases for parallel conduct — not enough under the Court's new interpretation of the Sherman Act — and merely stated that an agreement had taken place, with no details to support that allegation. The Court held that the dismissal of the complaint was therefore proper.

The Court's opinion changed the existing interpretation of the notice pleading requirements of Federal Rule of Civil Procedure 8(a)(2) (and the standards for dismissal under Federal Rule of Civil Procedure 12(b)(6)), creating a new, stricter standard of a pleading's required specificity. Previously, under the standard the Court set forth in Conley v. Gibson
Conley v. Gibson
Conley v. Gibson, 355 U.S. 41 , was a case decided by the Supreme Court of the United States that provided a basis for a broad reading of the "short plain statement" requirement for pleading under Rule 8 of the Federal Rules of Civil Procedure....

, a complaint need only state a "conceivable" set of facts to support its legal claims — that is, that a court could only dismiss a claim if it appeared, beyond a doubt, that the plaintiff would be able to prove no set of facts in support of her claim that would entitle her to relief. In Twombly, the court adopted a more strict, "plausibility" standard, requiring in this case "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of illegal agreement".

The general applicability of this heightened standard of pleading outside of antitrust cases was established in Ashcroft v. Iqbal
Ashcroft v. Iqbal
Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 , was a case in which the United States Supreme Court held that top government officials were not liable for the actions of their subordinates absent evidence that they ordered the allegedly discriminatory activity...

.

Attorneys Michael Kellogg and Thomas Barnett argued the case successfully for the petitioners.

Legislative reaction


On July 22, 2009, Senator Arlen Specter
Arlen Specter
Arlen Specter is a former United States Senator from Pennsylvania. Specter is a Democrat, but was a Republican from 1965 until switching to the Democratic Party in 2009...

 introduced the "Notice Pleading Restoration Act of 2009", which provides:


Except as otherwise expressly provided by an Act of Congress or by an amendment to the Federal Rules of Civil Procedure which takes effect after the date of enactment of this Act, 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
Conley v. Gibson
Conley v. Gibson, 355 U.S. 41 , was a case decided by the Supreme Court of the United States that provided a basis for a broad reading of the "short plain statement" requirement for pleading under Rule 8 of the Federal Rules of Civil Procedure....

, 355 U.S. 41 (1957).4


A similar bill was introduced in the House of Representatives shortly thereafter entitled the "Open Access to Courts Act of 2009", which provides:


A court shall not dismiss a complaint under subdivision (b)(6), (c) or (e) of Rule 12 of the Federal Rules of Civil Procedure 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. 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.

Neither bill became law.

See also