Get these flashcards, study & pass exams. For free! Even on iPhone/Android!

U.S. filed claim against two oil refiners for dumping into Delaware River between such and such date.  Refiners motioned for more detail.

H - Only appropriate if complaint suffers from unintelligibility rather than want of detail; no fishing expeditions.  Denied.

Rule 12(e) motion for more definite statement

Investors brought a securities fraud class action against a corp. and its CEO, who published info that their flagship product was still selling strong when not, did channel stuffing, other bad acts.  Ct dismissed - failed to establish CEO's scienter (had to say w/particularity some facts that give rise to a strong inference of scienter.)  Shareholders amended to add 27 statements of others to CEO's state of mind, ct dismissed again.  Appeal granted, reasonable person standard.  Certiorari granted.

H - Ginsburg: reasonable person not appropriate, b/c fails to take into account competing inferences.  Must plead facts to show scienter is at least as likely as not.
Scalia's concurrence is that inference of scienter should be more plausible than the inference of innocence.
Stevens's dissent says we don't need to look at competing inference, just is this probable?

Notes:

In alleging fraud or mistake, must be specific about circumstances constituting fraud or mistake, but can infer scienter.  Must be a "strong inference."  This is to prevent allegations of fraud by hindsight - i.e., every time your stock drops.

Private Securities Litigation Reform Act was enacted in 1995 to put a higher standard on the specificity required in the pleadings under the SEC Act, to protect companies from the costs of discovery etc, when they are Ds.

Sw. claimed he lost his job due to age and race.  Dismissed b/c he didn't follow evidentiary standard of McDonnell Douglas.  Ct says didn't adequately allege circumstances that support inference of discrimination.

H - Reversed - emp. discrimination cases only need short and plain statement showing P is entitled to relief.  McDonnell Douglas is an evidentiary standard, not a pleading standard.  Rule 9(b) does not apply to empment discr. cases.

McDonnell Douglas:
1. protected group
2. qualification for job
3. adverse empment action
4. circumstances to support inference of discr.

Don't want to lose notice pleading!

Co. marketed Dalkon Shield for contraception, which was dangerous.  Ps asserted that the Ds knew it was dangerous and didn't withdraw it, thus exposing itself to tort claims and their investment to decline.  Plaintiffs did not plead specifically any facts that gave rise to this assertion of Ds knowledge, and their claim was dismissed.

Baby Bells, allegedly agreed not to let competitors use their networks and not to compete w/one another, CEO said competing w/other Baby Bells might make money, but wouldn't be right.  Customers alleged conspiracy in restraint of commerce due to parallel activity and CEO's comment.  Sherman Anti-Trust Act.

H - Souter - Proper standard for pleading antitrust is "plausibility to infer an agreement."  "Does not impose probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement."   Parallel legal activity is not enough to cross the line from conceivable to plausible.

Notes:
Wants to protect companies from expensive discovery. 

This is a heightened pleading standard, though they say otherwise.

Dissent says it too quickly dispenses with Conley.

Since Twombly, some people think it is the apocalyptic end of notice pleading, others don't find it so different.

Cited in Twombly dissent - another conspiracy for restraint of trade case.  Japanese manufacturers fixed high prices for tvs in Japan, and low ones in America.  After years of discovery, Ds got summary judgment.

H - Raising a mere "metaphysical doubt" as to the legality of the Ds conduct is not sufficient.  However, note that this got past pleading and was decided on SJ.  Twombly dissent agreed that facts pleaded would not be sufficient to survive SJ, but that the Ds should have at least had to answer.

P sued county and 2 municipal corporations saying K'stal rights were violated.  Lower ct dismissed under heightened pleading standard, saying he hadn't plead that these rights were violated due to official policy, custom, or practice.

H - no heightened pleading standard applies here.

Securities fraud action, co. inflated value of stock due to misrepresentations.  Stock lost value after co. announced earnings were lower than expected.  Shareholders claim dismissed.

H - They didn't show cause - that the misrepresentations caused their loss in value.  Not a heightened pleading requirement, but a simple 8(a)(2) deficiency - no relief can be granted if no cause.

Helps to clarify plausibility rules.  Nobody knew whether to only apply Twombly to anti trust cases or others?  Iqbal was an Arab Muslim arrested and detained cruelly after 9/11.  Then released for no evidence.  Sued Ashcroft, saying he was treated solely due to his race and religion, but no direct evidence of this.

H - Apply plausibility across the board, not just antitrust.  It was not plausible that Iqbal was held due solely to his race and religion, b/c it was equally likely that the reasons for detention were not discriminatory.  STRONG DISSENT, who said all the govt knew about him was his race and religion, so how could they have held him for any other reason?

Padilla imprisoned, Yoo was a lawyer who said harsh interrogation techniques were legal.  Not dismissed, due to Padilla showing Yoo had purposefully misconstrued the Geneva Convention (Yoo had said such things publicly.)  So, ergo, plausible, and pleading survived.

Tellabs
Twombly
Ross
Dura Pharma
Leatherman
Matsushita
Swierkiewicz
Acuna
Iqbal
Padilla
Board of Harbor Comm.