Client Alert

Ashcroft v. Iqbal: the Supreme Court Reinforces Twomblys Bite in Altering Federal Pleading Standards

June 16, 2009

Barry G. Sher, Kevin C. Logue and Robin A. Arzón

On May 18, 2009, the United States Supreme Court issued a decision in Ashcroft v. Iqbal, expanding upon the Courts decision in Bell Atlantic Corp. v. Twombly, and clarifying the applicable pleading standards for all federal civil actions. The Court reversed the judgment of the Court of Appeals for the Second Circuit, and held in a 5-4 decision that respondent Iqbals complaint failed to state a claim under Federal Rule of Civil Procedure 8. It held that Rule 8 does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions, and to survive a motion to dismiss, all civil complaints must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.

In so ruling, the Court also clarified that the facial plausibility pleading standard delineated in Twombly, an antitrust case, applies to all federal civil actions. Further, the Court established a two-step inquiry, discussed below, for adjudicating federal motions to dismiss under this standard. The decision also elucidates that the Twombly plausibility standard and the Rule 8 pleading requirements cannot be circumvented by a careful-case-management approach that limits or cabins discovery, or by mere conclusory allegations as to state of mind or intent.

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