Client Alert

Bell Atlantic Corp. v. Twombly – The Supreme Court Tightens Pleading Standards for Antitrust Conspiracy and Beyond

May 24, 2007

Barry G. Sher, Kevin C. Logue and Asa R. Dane

On May 21, 2007, the United States Supreme Court issued an important decision pertaining to the pleading standards in an antitrust action under Section 1 of the Sherman Act. In Bell Atlantic Corp. v. Twombly, the Supreme Court reversed the judgment of the Court of Appeals for the Second Circuit and held in a 7-2 decision that to satisfy the pleading requirements of Rule 8 of the Federal Rules of Civil Procedure, and survive a motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which relief may be granted in a § 1 case, an allegation of parallel conduct and a bare assertion of an agreement will not suffice. The Court required “plausible grounds to infer an agreement” in violation of Section 1, and determined that stating such “plausible grounds” requires “enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement.” The decision is likely to have an impact well beyond the antitrust context. The Court took head on what has for decades been the primary formulation of the pleading standard on a motion to dismiss in federal and many state courts.

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