By Jonah Gelbach, a senior research fellow at the Yale Department of Economics Program in Applied Economics and Policy and a Yale Law School student.
The Supreme Court’s 2007 and 2009 opinions in Bell Atlantic v. Twombly and Ashcroft v. Iqbal upended Conley v. Gibson’s famous rule that a complaint attacked by a Rule 12(b)(6) motion to dismiss for failure to state a claim should be dismissed only if there is no set of facts under which the complaint’s claims could entitle the plaintiff to relief. Instead, Twombly and Iqbal require a plaintiff’s complaint to include allegations making entitlement to relief not just logically possible, but plausible.
Critics have attacked Twombly and Iqbal for both raising pleading standards and injecting subjectivity into Rule 12(b)(6) adjudication. Kevin Clermont and Stephen Yeazell characterize the post-Iqbal situation as “Pleading Left Bleeding.” Civil rights and employment discrimination cases have raised special concern. Their plaintiffs might be especially unable to meet elevated pleading standards without discovery, setting up a need-discovery-to-get-to-discovery Catch-22. Joshua Civin & Debo P. Adegbile wrote in an ACS issue brief that Twombly and Iqbal might “create an undesirable safe harbor that effectively places some defendants beyond the reach of civil rights laws.”
Not everyone is disappointed, to be sure. For example, attorneys Mark Herrmann and James Beck have written that “out-of-control litigation prompted the Supreme Court in Twombly to adjust the threshold pleading requirements for unleashing the legal process.”
Normative questions aside, some observers cite a report the Federal Judicial Center (FJC) issued in March 2011 for the proposition that Twombly and Iqbal haven’t actually affected much. The report found that “there was no increase in the rate of grants of motions to dismiss without leave to amend,” including among civil rights and employment discrimination cases.
But the FJC report also found that the share of filed lawsuits that face a Rule 12(b)(6) motion to dismiss increased substantially after Twombly and Iqbal — more than 50 percent -- depending on the type of lawsuit involved. In my paper, “Locking the Doors to Discovery?,” forthcoming as a student Note in volume 121 of the Yale Law Journal, I argue that the increase in the proportion of Rule 12(b)(6) filings is evidence of a “defendant selection effect.” Defendants who are more confident of victory at the 12(b)(6) stage will file motions to dismiss against cases that are more strongly pleaded and that the defendants would have answered before Twombly/Iqbal. Clermont and Yeazell express this point colorfully, writing that a defense attorney “commits legal malpractice if he or she fails to move to dismiss with liberal citations to Twombly and Iqbal.”
Thus, defendant selection should increase the average quality of complaints that face Rule 12(b)(6) motions to dismiss after Twombly/Iqbal. Given that there was little change in the rate at which these motions to dismiss were granted, the result is that the FJC report is actually powerful evidence in favor of the contention that Twombly and Iqbal have had a substantial impact. If defendants file motions to dismiss against a stronger set of complaints but win just as often, then judges must be dismissing complaints that they would not have dismissed before. The end result is that more cases fail to reach discovery than would have before Twombly and Iqbal.
In my paper, I use an economic model to try to quantify the impact that Twombly and Iqbal have had in preventing claims from reaching discovery. Using data from the March FJC report and an updated report the FJC released in November 2011, I calculate that at least 14-16 percent of cases facing Rule 12(b)(6) motions in the FJC reports’ post-Iqbal period ultimately failed to reach discovery on at least some claims as a causal result of Twombly/Iqbal. To put this finding in perspective, this means that between one-fourth and one-third of the cases that miss discovery do so as a causal result of Rule 12(b)(6) motions.
Contrary to some critics’ fears, though, the discovery-preventing effect of Twombly/Iqbal was not larger among civil rights and employment discrimination cases than among other types of cases. A possible explanation for this finding is that even before Twombly and Iqbal, civil rights and employment discrimination cases were considerably more likely to face Rule 12(b)(6) motions. Thus, there may have been less room for defendant selection effects to operate in the former case categories.
Like those in any non-experimental empirical study, my results hold only under appropriate assumptions. I encourage interested observers to read my paper to decide for themselves whether they find my analysis convincing or even — wait for it — plausible. I should note for the record that Joe Cecil of the FJC, who has been generous in providing me supplemental data, contends that the FJC’s data on motion to dismiss filings and grants should not be combined in the way that I use them. After substantial discussion with Cecil, however, I remain unconvinced that the FJC has identified any real reason for concern, and I believe that their data are the best available empirical resource for my purposes.
In sum, my results indicate that Twombly and Iqbalhave had a substantial impact in reducing the share of cases that reach discovery. Some of this impact may flow from changes in pleading standards judges apply to cases, while some is surely due to increases in defendants’ willingness to roll the 12(b)(6) dice. An important question for future research concerns the quality of cases that Twombly and Iqbal are preventing from reaching discovery. Since researchers cannot observe case quality directly, this critical question is difficult to answer. But for reasons I explain in my paper, I believe data on adjudication of defense summary judgment motions can be used to make progress on the quality question. I am in the process of collecting such data now. Hopefully, concrete empirical evidence will play a part in future pleading policy making, whether it occurs doctrinally or through the Rules Enabling Act process.
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