Dissatisfied Investors, Employees Stymied by Twombly, Iqbal
Two Supreme Court rulings are helping companies fend off lawsuits by dissatisfied investors, injured plaintiffs and former employees.
The two high court rulings, issued in 2007 and 2009, raised pleading requirements, making it more difficult to get cases to the discovery stage in federal court, Bloomberg reports. Both were cited by judges dismissing suits against Citigroup and Merrill Lynch over the sale of auction rate securities, the story says.
Bloomberg cites two other cases in which judges tossed complaints because they didn’t contain sufficient facts. In one, a federal judge in Kansas dismissed an age bias case against a waste management company because the facts didn’t cross the line from “conceivable to plausible,” the story says. In another, a federal judge in Virginia dismissed a suit brought by a woman who claimed she was injured after slipping on a liquid at a Dollar General Store. The woman didn’t allege how the liquid spilled, or whether store employees were aware it was on the floor.
The two Supreme Court rulings being cited are Bell Atlantic Corp. v. Twombly (2007) and Ashcroft v. Iqbal (2009). Twombly tossed out an antitrust suit because the plaintiffs had not alleged “enough factual matter” to suggest that wrongdoing occurred. Plaintiffs must show that misconduct was plausible, not just conceivable, the court said.
In Iqbal, the Supreme Court dismissed a lawsuit by a Pakistani claiming he was beaten after the Sept. 11 attacks. The court said the allegations were of a “conclusory nature” and failed to cite evidence of the defendants’ “discriminatory state of mind.” The ABA Journal covered both cases, saying they would make it more difficult to survive the pleading stage.
