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Campbell on Twombly & Iqbal

By Lawrence Solum

Ray Worthy Campbell (Peking University School of Transnational Law) has posted Getting a Clue: Two Stage Complaint Pleading as a Solution to the Conley-Iqbal Dilemma (Forthcoming, Penn State Law Review) on SSRN. Here is the abstract:

Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal have brought to the forefront of legal scholarship the standards for assessing whether a complaint under Rule 8 of the Federal Rules of Civil Procedure properly states a claim. This article examines whether too much is asked of the single Rule 8 complaint. At present a single document is asked to serve two very different roles ? to provide notice of a dispute so discovery and motion practice can commence, but also to provide a basis for assessing the sufficiency and ?plausibility? of the alleged facts underlying the claim, so that litigation can be defined and meritless cases dismissed.

These roles are in conflict. Looking to both game theory and real options analyses, this article concludes that an approach that gives greater weight to the notice function of a complaint will inevitably allow meritless cases to proceed into often expensive discovery, while an approach that favors the gating and assessment function will, due to information asymmetries, cause potentially worthwhile claims to be dismissed prematurely. The article looks to the various approaches that have been suggested in the wake of Twombly and Iqbal, and finds them wanting. Pre-filing discovery, for example, will in the limited jurisdiction courts of the federal system raise questions related to justiciability and jurisdiction. Approaches based on judicial management inevitably reduce ex ante predictability and could make obtaining justice more dependent on the judicial officer selected than on the rule of law.

The contribution of this article is to recognize that pleading need not occur in one stage. It proposes a compromise approach: optional two stage complaint pleading sandwiched around a limited, express discovery phase. By splitting pleading into two phases, it allows different pleading phases to serve different roles, thereby providing a means of case control now lacking. The first pleading, consistent with the federal rules, provides notice as to the nature of the case. The second phase, consistent with the role served by common law pleading and fact pleading, helps to narrow and define the litigation so the full discovery phase can proceed in a more controlled and economical fashion.

The proposal in this article will not lead to a perfect solution, but to one less imperfect solution than now exists. Plaintiffs can get just enough discovery to allow them to plead a valid complaint against the obvious parties, while blameless defendants can avoid a journey through the long and dreary valley of full discovery.

Full post as published by Legal Theory Blog on August 06, 2010 (boomark / email).