Iqbal Six Years Later | Practical Law

Iqbal Six Years Later | Practical Law

In 2009 the Supreme Court dramatically altered federal pleading standards by requiring plaintiffs in all federal civil actions to allege enough facts to "plausibly" state a claim for relief (Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)). In the six years since it was decided, Iqbal has been cited in more than 90,000 court decisions, more than 1,400 law review articles, and countless court filings. Although no consensus exists as to the impact of plausibility pleading, a recent study suggests that dismissal rates have increased post-Iqbal, underscoring the importance of strategic and effective motion practice at the pleadings stage.

Iqbal Six Years Later

Practical Law Legal Update w-000-3880 (Approx. 5 pages)

Iqbal Six Years Later

by Practical Law Litigation
Published on 16 Jun 2015 • USA (National/Federal)
In 2009 the Supreme Court dramatically altered federal pleading standards by requiring plaintiffs in all federal civil actions to allege enough facts to "plausibly" state a claim for relief (Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)). In the six years since it was decided, Iqbal has been cited in more than 90,000 court decisions, more than 1,400 law review articles, and countless court filings. Although no consensus exists as to the impact of plausibility pleading, a recent study suggests that dismissal rates have increased post-Iqbal, underscoring the importance of strategic and effective motion practice at the pleadings stage.
The pre-answer motion to dismiss remains a powerful weapon for parties defending against claims in federal court, particularly in those cases where plaintiffs attempt to advance novel theories of liability. If successful, a motion to dismiss can dispose of a case entirely at the outset and avoid the unnecessary costs of discovery and trial.

Iqbal and Plausibility

Defendants often seek dismissal of claims on the ground that the plaintiff's complaint fails to state a legal claim for which relief may be granted (Federal Rule of Civil Procedure (FRCP) 12(b)(6)). For more than 50 years, the pleading standards governing these motions remained largely unchanged. Federal courts would dismiss complaints for failure to state a claim only where it appeared "beyond doubt" that the plaintiff could prove no set of facts (however implausible) that would entitle it to relief (see Conley v. Gibson, 355 U.S. 41 (1957)).
In 2007, the Supreme Court rejected this "notice pleading" approach, holding that antitrust plaintiffs cannot merely argue that there are "some facts" that arguably could support their claims. Instead, plaintiffs must show that their allegations are "plausible," meaning based on more than mere speculation or suspicion. (Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)).
Two years later, the Court clarified that this standard applies to all federal civil actions, not just antitrust claims (Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)). Now, when ruling on a motion to dismiss for failure to state a claim, federal district courts must:
  • Review all allegations in a complaint.
  • Discard any allegations that are merely legal conclusions.
  • Treat any well-pleaded factual allegations as true and determine if they plausibly state a claim for relief.
(Iqbal, 556 U.S. at 679.)

Assessing Iqbal's Impact Six Years Later

In Iqbal's wake, much has been written on the impact of plausibility pleading. Yet there is no consensus on whether dismissal rates have increased post-Iqbal. Some studies have suggested that Iqbal's overall impact on dismissal rates is minimal. In 2011, for example, the Federal Judicial Center found a statistically significant increase in dismissals only in cases challenging financial instruments. The center attributed this increase largely to an increased number of weak cases arising from the mortgage crisis. (See Motions to Dismiss for Failure to State a Claim after Iqbal, Report to the Judicial Conference Advisory Committee on Civil Rules, Federal Judicial Center (March 2011).)
A more recent study, however, concluded that Iqbal significantly impacted the resolution of motions to dismiss under FRCP 12(b)(6) (see Alex Reinert, Measuring the Impact of Plausibility Pleading, __ Va. L. Rev. __ (2015 Forthcoming)). Based on a review of 4,200 published and unpublished decisions and orders from 15 judicial districts, the study concluded that:
  • Dismissal rates have increased significantly post-Iqbal, particularly in employment discrimination and civil rights cases.
  • Individual plaintiffs generally face a higher likelihood of dismissal post-Iqbal, while corporate and governmental plaintiffs do not.
Regardless of Iqbal's precise quantitative impact on dismissal rates, these conclusions underscore the importance of a focused and effective defense strategy at the very outset of litigation. Practical Law has numerous resources to help counsel effectively defend against claims at the pleadings stage, including: