Study shows Supreme Court’s 2009 decision on pleading standards has significant impact

In 2009, the U.S. Supreme Court decided a case called Ashcroft v. Iqbal. The issue before the Court was the adequacy of the complaint filed in the case, and the Court held that the case should be dismissed, prior to discovery, because the allegations in the complaint were too conclusory and not plausible. Although the Court purported to be alloying the traditional pleading standard of Federal Rule of Civil Procedure 8, many lawyers viewed the case, as well as the 2007 decision in Bell Atlantic v. Twombly, as setting a new and higher bar for plaintiffs.

A study to be published in a forthcoming edition of the Virginia Law Review examines the effect of the Court’s Iqbal and Twombly decisions and concludes that its effect has been significant. The article's abstract summarizes its findings:

First, this Article provides data showing that dismissals of employment discrimination and civil rights cases have risen significantly in the wake of Iqbal. These results remained significant even after controlling for potential confounding factors. Second, the data also suggest that certain factors interact with the plausibility standard to influence the resolution of a motion to dismiss, including perhaps most importantly the institutional status of the plaintiff and defendant. Individuals have fared poorly under the plausibility regime, at least when compared to corporate and governmental agents and entities. These effects remained significant even after controlling for several potentially confounding variables. Finally, by analyzing data on the progress of cases after a motion to dismiss has been adjudicated, this Article shows that the advent of heightened pleading has not resulted in higher quality claims.

The study found that cases brought by individuals represented by lawyers were dismissed 42 percent of the time before Iqbal and 59 percent after. For corporate plaintiffs, the dismissal rate was almost unchanged, moving from 37 up to 38 percent.

Further, the data show that dismissals of employment discrimination and civil rights cases have risen significantly in the wake of Iqbal.

The upcoming article, Measuring the Impact of Plausibility Pleading, by Professor Alex Reinert, is available here.

For a short summary and background, the New York Times has an article here.

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