by Raymond H. Brescia
Ray Brescia is an Assistant
Professor of Law at Albany Law School, presently on leave and visiting at Yale
Law School. His scholarship focuses on the present financial crisis,
civil procedure and legal ethics.
In this essay, an abstract of his forthcoming article in the Kentucky Law Journal, Ray
Brescia tests the impact of the new pleading standards announced by the Supreme
Court in two cases: Bell Atlantic v. Twombly and Ashcroft v. Iqbal. He shows
that, as applied to employment and housing discrimination cases, the Iqbal decision has had a greater effect, meaning a greater rate of
dismissals in these classes of cases.
In May 2009, the Supreme
Court issued its decision in Ashcroft v. Iqbal, a case brought by an immigrant
of Pakistani descent caught up in the worldwide investigation that followed the
horrific attacks of September 11, 2001. In that decision, the Court extended
the “plausibility test” first introduced two years earlier, in Bell Atlantic v.
Twombly, to all civil pleadings in federal court. That test requires that, in
order to satisfy federal pleading requirements, a complaint must allege a
plausible set of facts. But what is plausible in a given case may be in the eye
of the beholder.
In the two years since the Court reached its decision in Iqbal, that opinion has been cited roughly 25,000 times. The empirical analysis contained in my study attempts to gauge the impact of Iqbal on civil rights cases, specifically cases involving allegations of employment and/or housing discrimination. While several other studies have attempted to answer similar questions, to date, no study has analyzed this impact with reference solely to motions based on the specificity of the pleadings — the central issue in Twombly and Iqbal. In addition, other studies looked exclusively at quantitative results, with no assessment of the manner in which the plausibility standard was being applied by the lower courts. My empirical study attempts to fill that gap in the empirical research.
The study identified over 1850 reported decisions on motions to dismiss in employment and housing discrimination cases filed in federal district court covering the years prior to and after the Court’s decision in Twombly. From this group of cases, a smaller sub-set, totaling 634 cases, was identified by excluding those decisions — included in previous studies — that bore no relation to the issue of the specificity of the pleadings. Furthermore, despite this winnowing process, the sample size for the study was still considerably larger than those analyzed in previous studies.
This detailed study yielded the following results:
In the two years since the Court reached its decision in Iqbal, that opinion has been cited roughly 25,000 times. The empirical analysis contained in my study attempts to gauge the impact of Iqbal on civil rights cases, specifically cases involving allegations of employment and/or housing discrimination. While several other studies have attempted to answer similar questions, to date, no study has analyzed this impact with reference solely to motions based on the specificity of the pleadings — the central issue in Twombly and Iqbal. In addition, other studies looked exclusively at quantitative results, with no assessment of the manner in which the plausibility standard was being applied by the lower courts. My empirical study attempts to fill that gap in the empirical research.
The study identified over 1850 reported decisions on motions to dismiss in employment and housing discrimination cases filed in federal district court covering the years prior to and after the Court’s decision in Twombly. From this group of cases, a smaller sub-set, totaling 634 cases, was identified by excluding those decisions — included in previous studies — that bore no relation to the issue of the specificity of the pleadings. Furthermore, despite this winnowing process, the sample size for the study was still considerably larger than those analyzed in previous studies.
This detailed study yielded the following results:
Surprisingly, the dismissal rate in this class of cases during a set
time-period immediately prior to the Twombly decision was actually slightly
higher than the dismissal rate of decisions issued in the time period between
issuance of the Twombly and Iqbal decisions. But the rate then increases
considerably after Iqbal. The dismissal rates for all cases pre-Twombly was
61%; between Twombly and Iqbal, it was 56%; but then after Iqbal, it was 72%. That represents an 18% increase from the pre-Twombly period analyzed.
In addition, even more troubling, plaintiffs were far more likely after Iqbal than either before Twombly or immediately thereafter to face a motion to dismiss challenging the sufficiency of the pleadings in the cases analyzed. Indeed, decisions on such motions were generated only 12 times in the first quarter of 2004 (the first quarter analyzed in this study), but then 61 times in the third quarter of 2010 (the last full quarter analyzed): a greater than 500% increase.
Moreover, when it comes to the substance of these decisions, something else appears to be happening. Despite the increased dismissal rate following Iqbal, oddly, in a class of cases analyzed for this study, courts rarely invoked the plausibility standard in the same manner it was utilized by the Court in Twombly and Iqbal. That is, courts rarely found that dismissal was warranted if there was an arguably more plausible, and entirely legal, basis for the challenged conduct. Finally, and similarly, judges rarely, if ever, appear to invoke their own “experience and common sense,” as urged to do so by the Court, when ruling on motions to dismiss in these cases.
These outcomes yield three conclusions:
First, district courts are using the Iqbal precedent, though not necessarily Twombly, to dismiss employment and housing discrimination cases at an accelerated rate.
Second, although courts may be invoking the Twombly/Iqbal plausibility standard in assessing the sufficiency of the pleadings in employment and housing discrimination cases, they are certainly not relying on or utilizing the plausibility standard as articulated in these two precedents. This suggests that the subjective elements of the plausibility standard may be infecting these outcomes. That is, if district court judges are dismissing cases at a higher rate post-Iqbal, yet are not relying on the guidance the Court has given such lower courts in how to deploy the plausibility standard, it would seem that such courts may feel emboldened to dismiss cases that might have survived such a motion had that motion been decided pre-Iqbal.
Finally, regardless of whether there is a dramatic Twombly or Iqbal effect on outcomes, motions to dismiss, challenging the sufficiency of the pleadings, are much more common since Iqbal, which means that even if some plaintiffs are defeating such motions, it still comes at a price. It increases transaction costs in these cases, and may, as a result, have a chilling effect on lawyers contemplating bringing them in the first place.
Professor Brescia's full study is available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1941294.
In addition, even more troubling, plaintiffs were far more likely after Iqbal than either before Twombly or immediately thereafter to face a motion to dismiss challenging the sufficiency of the pleadings in the cases analyzed. Indeed, decisions on such motions were generated only 12 times in the first quarter of 2004 (the first quarter analyzed in this study), but then 61 times in the third quarter of 2010 (the last full quarter analyzed): a greater than 500% increase.
Moreover, when it comes to the substance of these decisions, something else appears to be happening. Despite the increased dismissal rate following Iqbal, oddly, in a class of cases analyzed for this study, courts rarely invoked the plausibility standard in the same manner it was utilized by the Court in Twombly and Iqbal. That is, courts rarely found that dismissal was warranted if there was an arguably more plausible, and entirely legal, basis for the challenged conduct. Finally, and similarly, judges rarely, if ever, appear to invoke their own “experience and common sense,” as urged to do so by the Court, when ruling on motions to dismiss in these cases.
These outcomes yield three conclusions:
First, district courts are using the Iqbal precedent, though not necessarily Twombly, to dismiss employment and housing discrimination cases at an accelerated rate.
Second, although courts may be invoking the Twombly/Iqbal plausibility standard in assessing the sufficiency of the pleadings in employment and housing discrimination cases, they are certainly not relying on or utilizing the plausibility standard as articulated in these two precedents. This suggests that the subjective elements of the plausibility standard may be infecting these outcomes. That is, if district court judges are dismissing cases at a higher rate post-Iqbal, yet are not relying on the guidance the Court has given such lower courts in how to deploy the plausibility standard, it would seem that such courts may feel emboldened to dismiss cases that might have survived such a motion had that motion been decided pre-Iqbal.
Finally, regardless of whether there is a dramatic Twombly or Iqbal effect on outcomes, motions to dismiss, challenging the sufficiency of the pleadings, are much more common since Iqbal, which means that even if some plaintiffs are defeating such motions, it still comes at a price. It increases transaction costs in these cases, and may, as a result, have a chilling effect on lawyers contemplating bringing them in the first place.
Professor Brescia's full study is available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1941294.
