Civil Procedure Jan. 14

1. Civil Procedure Jan. 14 • Pleadings continued (Bell Atlantic and Rule 8(e)) • Note: The Bell Atlantic Slides were adapted from slides originally designed by Professor Gregory Sisk

2. Review: Modern/Federal Pleading – Rule 8 “A Short and Plain Statement of the Claim” • No References to “Facts” or “Cause of Action” • Question is Adequacy of Notice

3. Limit to Pleading – Rule 11 • Warrant that after reasonable investigation under the circumstances, complaint is: • 1. supported by existing law or nonfrivolous argu to modify/change the law; • 2. factual allegations have evidentiary support, or if specifically identified, are likely to have evidentiary support after a reasonable oppor for further investigation or discovery

4. Test legal sufficiency of complaint – Rule 12b6 • All allegations taken as true and construed in light most favorable to plaintiff • Dismissal only appropriate if: • legal theory not cognizable • complaint does not allege suffic facts to support a cognizable claim

5. Conley v. Gibson, 355 U.S. 41 (1957) • “A complaint should not be dismissed for failure to state a claim unless in appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief” • Just when you think the law is settled . . . .

6. Bell Atlantic v. Twombly 127 S. Ct. 1995 (2007) • A big shift or a small change? • WHAT ARE THE FACTS (What is this lawsuit about?)

7. Bell Atlantic Corp. v. Twombly What is the Lawsuit About? • Suit by Class of Subscribers of Local Telephone and High-Speed Internet Service • Alleges That Major Telecommunications Providers Engaged in Parallel Conduct Unfavorable to Competition (conspiracy to restrain trade by suppressing competition – as evidenced by parallel conduct) • Cause of Action: Conspiracy to Restrain Trade (Antitrust)

8. What are the legal requirements to prevail in this kind of claim? Does conscious parallel conduct violate federal anti-trust law? If not, what does?

9. Parallel Conduct in Anti Trust cases • Parallel Conduct Alone is Insufficient • Conscious Parallel Behavior That is Self-Interested Rational and Competitive Business Behavior Unilaterally Prompted by Common Perceptions of the Market is Not Unlawful

10. Bell Atlantic cont’d The Complaint: “In the absence of any meaningful competition between the [ILECs] in one another’s markets, and in light of the parallel course of conduct that each engaged in to prevent competition * * * within their respective local telephone and/or high speed internet services markets and the other facts and market circumstances alleged above, Plaintiffs allege upon information and belief that [the ILECs] have entered into a contract, combination or conspiracy to prevent competitive entry in their respective local telephone and/or high speed internet services markets and have agreed not to compete with one another and otherwise allocated customers and markets to one another.”

11. The lower courts said . . . • What did the district court and the circuit court say about whether the allegations were sufficient or whether the case should be dismissed under Rule 12(b)(6)

12. Bell Atlantic cont’d District Court: • Complaint Must Allege Additional Facts Suggesting Conspiracy Court of Appeals: • While Facts Establishing Conspiracy Must be Proven at Trial, Allegation of Additional Facts are Not Necessary at Pleading Stage

13. Supreme Court Opinion • Holds the complaint is inadequate and should be dismissed. Why? • What standard does the Court articulate for judging whether a complaint alleges suffic facts?

14. Bell Atlantic cont’d Supreme Court: Requirements for a Complaint • Factual Allegations Must be Enough to Raise Above “Speculative Level” • Needs More Than “Labels and Conclusions” • “Formulaic Recitation of the Elements of a Cause of Action Will Not Do” • Detailed Factual Allegations Not Required (No Heightened Pleading) • “Fair Notice” and “Grounds” on Which Claim Rests Requires Some Factual Allegations

15. Applying the standard • How does the Court apply the standard it articulated to the facts of this case?

16. Bell Atlantic cont’d Supreme Court: Application of Rule to Pleading • Factual Matter Alleged Must Suggest an Agreement Was Made (Conspiracy) • Facts Alleged Need Not Show Probability of Conspiracy, But Rather Show “Plausible Grounds” to Infer an Agreement • Test is Whether Facts Alleged Raise a Reasonable Expectation That Discovery Will Reveal Evidence of Illegal Agreement • Bare Assertion of Conspiracy is Insufficient

17. Query? • Why weren’t allegations of “parallel business conduct” allegations enough – is it an issue of not giving defendants adequate notice? • What is the underlying issue here in terms of politics/economics?

18. Dissent • In what way did the dissent disagree with the majority opinion? • Who do you think “got it right”?

19. query • Who had the relevant information here? • How can the plaintiff get that info without discovery? • Is there any way plaintiff could have kept this case in court? (See R. 11 – reasonable basis to believe they would be likely to have evidentiary support?) • What impact does this case have on future anti-trust cases? On other civil cases?

20. Bell Atlantic cont’d Conley v. Gibson (1957): • Complaint Should Not Be Dismissed “Unless It Appears Beyond Doubt That the Plaintiff Can Prove No Set of Facts in Support of His Claim That Would Entitle Him to Relief” Majority in Bell Atlantic: • Conley Phrase is “Best Forgotten as an Incomplete, Negative Gloss on an Accepted Pleading Requirement” Dissent in Bell Atlantic: • Majority Departs from Notice-Pleading Standard Under Which Proof of Allegations Comes Later After Discovery

21. What Now? What Does this Mean? (Uncertainty in the Courts and Among Scholars) • Is Bell Atlantic Just an Antitrust Case (Majority Worried About Ease of Alleging Conspiracy)? • What Will “Plausibility” of Factual Allegations Mean in Practice? Has “notice” pleading undergone a big change? • Stay tuned . . . • In the meantime, to protect your client, what should you do?

22. McCormick v. Kaupman • Preliminary questions: • What is a Dram Shop Act? • What does it mean if contributory negligence is a complete bar to recovery?

23. McCormick v. Kaupman • Who are the defendants? Bar owner; Kapuman (other driver) • What are the allegations against each defendant? • Bar owner – viol dram shop; driver – crossed center line • Do the defendants have adequate notice of what they allegedly did wrong? • What is Kaupman’s argument as to why the claim against him should be dismissed?

24. McCormick • Why are the two theories inconsistent? • Are inconsistent theories o.k. when pleading? (Why shouldn’t the allegations in Count IV be counted as judicial admissions defeating the claim against Kaupman?) • Why – what is the policy underlying Rule 8(e)

25. Query? • What if plaintiff had been with her husband at and had seen that he had too much to drink - could she have pled in the alternative?

26. Query • Assume Kaupman was working for ABC corporation and the plaintiffs sued ABC under respondeat superior. Could ABChave defended by saying: 1. Kaupman was not negligent; alternatively, even if Kaupman was negligent, he was not driving our truck in the course/scope of employment, he was on a personal errand?

27. Query • What if in Count I – the claim against Kaupman, plaintiff alleged both that Kaupman was negligent and that the plaintiff’s decedent had too much to drink – what would happen?

28. Quick review • What if Dram Shop Act had been repealed shortly before this accident i.e. - no statutory liability existed for selling alcoholic beverages to a driver who then got into an accident. What would be the proper procedural move? • A. Which defendant would be moving to dismiss? • B. If that claim was dismissed, is the entire lawsuit thrown out? (look at Rule 8(e))

29. Review cont’d • What if defendant bar owner’s defense was: we’re not at fault - we could not have served him too much to drink b/c we weren’t even open for business that day - can they move to dismiss plaintiff’s complaint under Rule 12b6 b/c the complaint fails to state a claim?

30. Complaint in Anderson v. Grace • www.lawfsu.edu/library/courseresources/beatrice/index.html • Does complaint comply w/Rule 8? • Is something missing?

31. Statement of the Case • For many years until May, 1`979, the groundwater used by plaintiffs and plaintiffs’ decedents for drinking and household purposes was contaminated with toxic chemicals disposed of by defendants. Plaintiffs and plaintiffs’ decedents have either contracted fatal illnesses, been exposed to a significant risk of contracting fatal or otherwise serious illnesses and/or suffered significant mental anguish as a result of the contamination of their drinking water. Plaintiffs seek compensatory and punitive damages and an injunction.

32. Strategy decisions • Would the first paragraph of the complaint - standing alone – have given defendants sufficient notice under Conley v. Gibson (the applicable standard at the time the complaint was drafted). How about under Bell Atlantic ? • Would the complaint have survived a motion to dismiss if all that the plaintiffs had done in their complaint was paragraph 1? Why/why not?

33. Know your audience • Who is the audience for this complaint? How did the complaint address those different audiences?

34. Drafting is not as easy as it looks  • Note that in drafting the complaint, the plaintiffs had a lot to do - they had to tell a story in a coherent manner; they had to take a lot of info and organize it logically so that someone who had never heard of this case could begin to understand it - and - they had to figure out their legal theories for recovery (these are their claims for relief)

35. Query • How many legal theories did the plaintiffs assert? Why assert multiple theories?

36. Your thoughts • Was the complaint effective? Why/why not?