House Judiciary Panel Weighs High Court's Iqbal Ruling

By Erin Fuchs

Law360, New York (October 27, 2009) -- While other legal experts spoke out against the U.S. Supreme Court's ruling in Ashcroft v. Iqbal at a congressional hearing Tuesday, Jones Day partner Gregory G. Katsas testified that overruling the decision would lead to costly discovery on implausible claims.

The U.S. House of Representatives Judiciary Committee's subcommittee on the constitution, civil Rights and civil liberties received testimony from four witnesses on Ashcroft v. Iqbal, three of whom decried the decision's heightened pleading standard.

Iqbal's detractors argued in prepared testimony that the high court's May ruling departed from legal precedent and would block legitimate lawsuits.

But Katsas, who will return to Jones Day as a partner in November, argued in his testimony that the plausibility pleading standard ushered in by Iqbal was consistent with precedent and correctly interpreted the Federal Rules of Civil Procedure.

Specifically, he pointed to the Supreme Court's 1986 decision in the civil rights suit Papasan v. Allain, when it found that it wasn't “bound to accept as true a legal conclusion couched as a factual allegation.”

Moreover, the Federal Rules of Civil Procedure require plaintiffs to plead “a short and plain statement of the claim showing that the pleader is entitled to relief,” Katsas said.

“As the Supreme Court explained, neither a bare-bones allegation that merely parrots the legal elements of a claim, nor a more detailed pleading in which the facts alleged do not plausibly support the claim, can be fairly described as 'showing' that the pleader is entitled to relief,” he added.

Katsas, formerly assistant attorney general at the Civil Division of the U.S. Department of Justice, said that overruling the decision would “open the floodgates for what lawyers call 'fishing expeditions' — intrusive and expensive discovery into implausible and insubstantial claims.”

But John Vail, vice president and senior litigation counsel at the Center for Constitutional Litigation PC, warned that the plausibility standard relied too heavily on a judge's discretion.

“The First Amendment's petition clause grants persons the right to have courts resolve their disputes, and the Seventh Amendment requires that juries, not judges, weigh facts and make inferences about what is 'plausible,'” Vail said.

In Iqbal, the high court took a step beyond what it did in 2007 in the blockbuster antitrust case Bell Atlantic Corp. v. Twombly.

The Supreme Court said in Twombly that a complaint must contain specific facts that would entitle a plaintiff to relief, rather than merely conclusory statements, to comply with Rule 8 of the Federal Rules of Civil Procedure.

Attorneys for Iqbal argued, among other things, that the Twombly standard didn't apply to the case because it wasn't about competition. But the majority of the Supreme Court rejected that argument, saying the rule governs the pleading standard in all civil actions and proceedings in U.S. district courts.

Judges now must assess all civil cases by the plausibility pleading standard.

Congress began to take a hard look at Iqbal before Tuesday's hearing.

In July, Sen. Arlen Specter, D-Pa., introduced the Notice Pleading Restoration Act, which would restore the notice-pleading language to what was established in the Supreme Court's 1957 opinion in Conley v. Gibson.

In that case, the high court ruled that complaints cannot be dismissed without strong evidence that the claims they contain are unsustainable.

--Additional reporting by Shannon Henson