Amicus Curiae Brief — Bell Atlantic Corp. v. Twombly

8A No. 2 FILED

IN THE OCT 13 2006

Supreme Court of the Anited OF THE CLERK

| SUPREME COURT, U.S.

BELL ATLANTIC CORPORATION, ef ai.,

Petitioners,

Vv.

WILLIAM TWOMBLY, ef a/., Individually and on

Behalf of all others similarly situated,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF OF AMICI CURIAE LEGAL SCHOLARS DEBRA

LYN BASSETT, JOSEPH P. BAUER, JOHN S.

BECKERMAN, KEVIN M. CLERMONT, WILLIAM V.

DORSANEO III, CHRISTOPHER M. FAIRMAN, JACKIE

GARDINA, SUSAN HARTHILL, ALLAN IDES, DANNE L.

JOHNSON, DAVID LEVINE, TYLER T. OCHOA, STEPHEN

A. SALTZBURG, GREGORY C. SISK, JOAN E. STEINMAN,

JEFFREY W. STEMPEL, BETH STEPHENS AND

ELIZABETH G. THORNBURG, AND OF CERTAIN

PURCHASERS OF ELEVATORS AND ELEVATOR

MAINTENANCE SERVICES, INCLUDING TRANSHORN

LTD., ET AL. IN SUPPORT OF RESPONDENTS

MARY JANE FAIT . Eric ALAN ISAACSON *

WOLF HALDENSTEIN ADLER MARK SOLOMON

FREEMAN & HERZ, LLP CHRISTOPHER M. BURKI

55 West Monroe Street, Suite 1111 TAM! FALKENSTEIN HENNICK

Chicago, IL 60603 LERACH COUGHLIN STOIA GELLER

(312) 984-0000 . i RUDMAN & ROBBINS LLP

655 West Broadway, Suite 1900

‘ San Diego, CA 92101

* Counse! of Record . (619) 231-1058

Counsel for Amici Curiae Legal Scholars Debra Lyn Bassett, Joseph P. Bauer,

John S. Beckerman, Kevin M. Clermom, William V. Dorsaneo II].

Christopher M. Fairman, Jackie Gardina, Susan Harthill, Allan Ides,

Danne L. Johnson, David Levine, Tyler 1. Ochoa, Stephen A. Saltzburg.

Gregory C. Sisk, Joan E. Steinman, Jeffrey W. Stempel, Beth Stephens and

Elizabeth G. Thornburg, and for Certain Purchasers of Elevators and

Elevator Maintenance Services, Including Transhorn Ltd, et al

WILSON-EPES PRINTING CO. , INC. = (202) 789-0096 -— WASHINGTON, D.C. 20001

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PETITIONERS’ QUESTION PRESENTED

Whether a complaint states a claim under Section | of the

Sherman Act, 15 U.S.C. §1, if it alleges that the defendants

engaged in parallel conduct and adds a bald assertion that the

defendants were participants in a “conspiracy,” without any

allegations that, if later proved true, would establish the

existence of a conspiracy under the applicable legal standard.

TABLE OF CONTENTS

Page

USES 0 UNIT Orie ssccecedecenscsicierechpicdeimeesocrens i

py) Fas Sy): hy: See emnrER oe iil

ENTERED s OF ARC CURIA .0.cccesvecesoveccsesescovseseeners |

I <iciitticiienisnnphsinhsniibinsichiaahciiciinnieibeaiiinmiiamintini 4

I. NOTICE-PLEADING PRINCIPLES RELIEVE .

PLAINTIFFS OF PLEADING FACTS TO

DEMONSTRATE THEIR CLAIMS. ............:00065 4

A. This Court Holds That Plaintiffs Are Not

B. Notice-Pleading Presumptions Apply With

Particular Force To Antitrust Cases............. 13

C. Notice Pleading Revisited: When Lower

Courts Ignore This Court’s Precedents........ 16

D. Dura Pharmaceuticals Works No Revolu-

tion In Pleading Standards... 21

ll. UNDER FEDERAL RULE OF CIVIL

PROCEDURE 9%b), CONSPIRATORIAL

STATE OF MIND MAY BE AVERRED

GENERALLY WITHOUT SETTING FORTH

ANY FACTS FROM WHICH IT MIGHT BE

STIs hivciintindsiatindanestinllaliintiiininabihactdibeigndisiesiiuha 21

TTY iiiiiichinhiniubishciteechieisilliasappiietesinintintii 26

(ill)

iv

TABLE OF AUTHORITIES

CASES Page

Andrx Pharms., Inc. v. Elan Corp., PLC,

421 F.3d 1227 (11th Cir. 2005) ............ccceeeeeees 20

Associated Gen. Contractors v. Cal. State

Council of Carpenters,

es Ne ED ntchieasidisenecrtinsilttnthinincnabilatnsinn 15

Boston & Maine Corp. v. Town of Hampton,

FOF FB SBo CIRC, Ta pv ceccscsciccctnnsscctssvenice 16

Branch v. Tunnell,

FO Fe SE ee TP evcecsccstniersncesensencneces 19

Breininger v. Sheet Metal Workers

Int'l Ass'n Local Union No. 6,

he Se ee eS 10

Brownlee v. Conine,

Fae Ck See COs CUED cteristactatelacctscinietes ®

Broxmeyer v. Polikoff,

39 Pa. D. & C. 224

(C.P. Phila. County 1940)..............ccccssccesssereeees 23

C.E. Stevens Co. v. Foster & Kleiser Co.,

teh Gf, a ee eee ee 13

Cash Energy, Inc. v. Weiner,

768 F. Supp. 892 (D. Mass. 1991)............ceeee 16

Celotex Corp. v. Catrett,

GFE AEs. BaF ED canibbisinarientceqeniscindeapiennipaitinia 15

Commerzanstalt v. Telewide Sys.,

880 F.2d 642 (2d Cir. 1989) .........ccssserccesscssenees 6

Conley v. Gibson,

Fae Bas G8 COPED ccsehiinttistimininistatnichimiéel passim

Daves v. Hawaiian Dredging Co.,

114 F. Supp. 643 (D. Haw. 1953)... ccc 17

Dickson v. Microsoft Corp.,

309 F.3d 193 (4th Cir. 2002) ..............esccsesseseeees 20

Doe v. Hillsboro Indep. Sch. Dist.,

JR £k tLe | ee 16

Vv

TABLE OF AUTHORITIES—Continued

Page

Dura Pharms., Inc. v. Broudo,

I aioe 21

Elliott v. Perez,

751 F.2d 1472 (Sth Cir. 1985) ........0..ccccceceeeeeeee 16, 17

Estate Constr. Co. v. Miller & Smith

Holding Co.,

fanaa 20

Gladstone, Realtors v. Village of Bellwood,

LS ES 12

H. J. Inc. v. Nw. Bell Tel. Co.,

EES aaa ee eee 10

Hammes v. AAMCO Transmissions,

Rp Ly 19

Harris v. Nelson,

EE EL CEE 5

Hishon v. King & Spalding,

EK Ne 10, 11, 13

Hodgson v. Virginia Baptist Hosp.,

482 F.2d $21 (4th Cir. 1977) ..........ccccecsecsseveceses 7

Hoskins v. Poelstra,

320 F.3d 761 (7th Cir. 2003) ..........cccccccccecceceeees &

Hosp. Bldg. Co. v. Trs. of Rex Hosp.,

I 14, 17

Hutchinson ex rel. Baker v. Spink,

126 F.3d 895 (7th Cir. 1997)............ccccccccesseeeeees 8

In re Enron Corp. Sec., Derivative

& ERISA Litig.,

439 F. Supp. 2d 692 (S.D. Tex. 2006)............... 21

In re GlenFed, Inc. Sec. Litig.,

42 F.3d 1541 (9th Cit. 1994) ooo. ccccccccceeseseseeees 24

In re Tower Air, Inc.,

416 F.3d 229 (3d Cir. 2005) 0... ccceccecceeseeeeee 8, 13

In re Urethane Antitrust Litig.,

409 F. Supp. 2d 1275 (D. Kan. 2005)................ 20

vi

TABLE OF AUTHORITIES—Continued

Page

Ingalls v. Raklios,

21 N.E. 2d 856 (Ill. Ct. App. 1939),

rev'd, 26 N.E. 2d 468 (Ill. Sup. Ct. 1940)......... 23

Karim-Panahi v. Los Angeles Police Dept.,

S59 F.26 621 COGs Cie. 19GB) ..ccccccccccccccsccoscseceses 18

Kimberlin v. Quinlan,

6 F.3d 789 (D.C. Cir. 1993)............ccc.cccccsssserseees 19

Kolupa.v. Roselle Park Dist.,

438 F.3d 713 (7th Cir. 2006) ...0......0..c cece 8

Leatherman v. Tarrant County Narcotics

Intelligence & Coordination Unit,

954 F.2d 1054 (Sth Cir. 1992)... ee eeeeeeeeeee 17

Leatherman v. Tarrant County Narcotics

Intelligence & Coordination Unit,

of Sf A eee passim

Love v. Commercial Cas. Ins. Co.,

26 F. Supp. 481 (S.D. Miss. 1939)... 23

Lujan v. Defenders of Wildlife,

Se Gs ED bitintncerqnavtidtprcinccicagmeeniin 11,12, 13

Lujan v. Nat'l Wildlife Fed’n,

ee en ID sachcasdsterntidintncnsitunneiuiniciediiieediin 11,12

Lum v. Bank of Am.,

361 F.3d 217 (3d Cir. 2004) ..........ccccrecescesesseeee 20

MCM Partners v. Andrews-Bartlett & Assocs.,

fk. gf) kg | 19, 20

McLain v. Real Estate Bd.,

Or II tiersiiectesinstctnediasesctiniansitansttnepitd 14

NOW vy. Scheidler,

Se ED eitvintininenagintvsnntnbinpapertans 10, 11, 13

Neitzke v. Williams,

ee BT cirniscecsenittedaninidecimaptanensatneide 10

O'Brien v. Nat'l Prop. Analysts Partners,

936 F.2d 674 (2d Cir. 1991) ...........ccccsececeeseeneees 24

vil

TABLE OF AUTHORITIES—Continued

Page

Palmer v. Board of Education,

46 F.3d 682 (7th Cir. 1995)... ccceeceeeeneeeees 7, 8,27

Poindexter v. Nat'l Mortgage Co.,

No. 94 C 5814, 1995 U.S. Dist. LEXIS 5396

OS Oe 19

Poller v. CBS,

Lk ee ee 14

Ross v. A. H. Robins Co.,

607 F.2d 545 (2d Cir. 1979) ............ccccesccerseneeee 24

Sanjuan v Am. Bd. of Psychiatry &

Neurology, Inc.,

40 F.3d 247 (7th Cir 1994) 00. cccceeeeeeeeeeeeees 7,11

Sargeaunt v. Cardiff Junction Dry Dock Co.,

ee le niche diicisnctintnsieesigiininatvinipiaigcimcutis 23

Scheuer v. Rhodes,

Ss ee itenccenctngcteriemmins 10, 11, 16

Shah v. County of Los Angeles,

797 F.2d 743 (9th Cir. 1986) ........cccceeeceeeeeeee 18

Sparks v. England,

113 F.2d 579 (8th Cir. 1940) 22.00... eeceeeeeeseeeee 9

Sutliff, Inc. v. Donovan Cos., é;

727 F.2d 648 (7th Cir. 1984)... 16, 17, 19, 20

Swierkiewicz v. Sorema N.A.,

ee ele Se etietiiticctdecpetecenennntennacondenecis passim

Syncsort v. Sequential Software, Inc..,

50 F. Supp. 2d 318 (D.N.J. 1999)... ccceccceeeees passim

Thomson v. Washington,

362 F.3d 969 (7th Cir. 2004) ..........cccccecceeseeseees 7

United States v. LSL Biotechnologies,

379 F.3d 672 (9th Cir. 2004) ............cccccsesesseeee 20

Whalen v. Ford Motor Credit Co.,

684 F.2d 272 (4th Cir. 1982) ............-ccccesccseseeees 6

vill

TABLE OF AUTHORITIES—Continued

Page

Zahn v. Int'l Paper Co.,

oe eee 6

STATUTES, RULES AND REGULATIONS

15 U.S.C.

STII tiie ieiciitedhcalindsshtgulindighaisiiuaninbetineltinniatids 25

ne cisdiliiciceadineaeihiisaniiiniea calaidisitlimecansisdmabiontaiaidelie 25

SIU ivicitncemnnieiesttptiasemalilienitasinindnisitentntditiiédin 25

IIIT cide lesbiniishctletacsthasitacacbiitaantiisediietcatainliipeapesiiciiesi 25

18 U.S.C.

SESE ae ee Rear wee veteres wae n Seam 12

SETI irennsociucentipndietipamnancanidblatunteenciintiaiiitndteie 12

42 USC.

TIT iansiicniinstininhiseasnitaipabiclacittechtihideeestilisiatmcentenilalan 17

Federal Rules of Civil Procedure

er MOOR man wae aed Sa NO ade 2

| REI RE E 2 SE IONS Beene NS “SO 4, 20, 22

EERE RRs. SOAP SSS See Mere 5, 7, 20

| RET ee ON ee passim

TES I RENNES eT aE =D 26

I CID ichilititdiniticesbicasieenmitadningdttaaalaitemncliclabiantiin 26

SI dilndessieaesideineninibtnepiineesiieadoitaliptetnenniebisendiniintnnes 11

UNI SII iiidsscichicstemsegtinisnnittieiaishaiinieandtpaieediitiiuni 12

Rules of the Supreme Court of the United States

NE IEC II iii cil dares isecdeeteeiieiicianiinnghintidaniieenigiin 4

SECONDARY AUTHORIZIES | ef

John Avery, Securities Litigation Reform: The

Long and Winding Road to the Private Secur-

ities Litigation Reform Act of 1995,

ix

TABLE OF AUTHORITIES—Continued

Page

Paul D. Carrington, Virtual Civil Litigation: A

Visit to John Bunyan’s Celestial City,

98 Colum., L. Rev. 1516 (1998)..........cccceseescees 6

Charles E. Clark, Simplified Pleading,

CP Ee 5,6, 7,8

Charles E. Clark, Handbook of the Law of Code

Pleading,

Eero ene passim

Charles E. Clark, The New Federal Rules of

Civil Procedure: The Last Phase—Underlying .

Philosophy Embodied in Some of the Basic

Provisions of the New Procedure,

ye eS 8g: ee 6

Charles E. Clark, The Proposed Federal Rules of

Civil Procedure,

Be Fey tic PD i cntnntsecechetnicnieneitiiteesaninne 6.

Charles E. Clark, The Handmaid of Justice,

SS Wass. U.L.G. 297 (19SB) ..ccccesocscesccccsscosenee: 6

The Complaint Under the Federal Rules of Civil

Procedure,

10 Fordham L. Rev. 252 (1941) ..........ccccccceeeeeee 9

Palmer D. Edmunds, The New Federal Rules of

Civil Procedure,

4 John Marshall L.Q. 291 (1938) ............0..0.00. 7

Christopher M. Fairman, An Invitation to the

Rulemakers —Strike Rule 9(b),

38 U.C. Davis L. Rev. 281 (2004)........000..0000... 22

Cfristopher M. Fairman, Heightened Pleadingy -

81 Tex. L. Rev. 551 (2002) ....cs.c.cssssssssssssceseess 7, 16, 19

Christopher M. Fairman, The Myth of Notice

Pleading, |

45 Ariz. L. Rev. 987 (2003)..........:cccceeees 15, 16, 19, 20

x

TABLE OF AUTHORITIES—Continued

William S. Lerach & Eric Alan Isaacson, Plead-

ing Scienter Under Section 21D(b)(2) of the

Securities Exchange Act of 1934: Motive,

Opportunity, Recklessness, and the Private

Securities Litigation Reform Act of 1995,

33 San Diego L. Rev. 893 (1996)............:ccceee 24, 25

Richard L. Marcus, The Puzzling Persistence of

Pleading Practice,

76 Tex. L. Rev. 1749 (1996) .....cerscosssvcsesceseceses 19, 24

Richard L. Marcus, The Revival of Fact Pleading

Under the Federal Rules of Civil Procedure,

86 Colum. L. Rev. 433 (1986)... 6, 24

Minutes of the Advisory Committee on Federal

Rules of Civil Procedure,

1993 WL 761148 (Oct. 21, 1993)......ccccccceseeees 18

Rules of Civil Procedure, ;

PR Re eas 22, 23

Hillary Sale, Heightened Pleading and Discovery

Stays: An Analysis of the Affect of the PSLRA's

Internal Information Standard on '33 and 34

Act Claims,

2, 2% %.),. Sie 25-26

Michael E. Smith, Judge Charles E. Clark and

the Federal Rules of Civil Procedure,

8 eS eee 6

5 Charles Alan Wright & Arthur R. Miller,

Federal Practice & Procedure: Civil 3d

§1202 91 Gd — Se seaman 5, 20

IN THE

Supreme Court of the United States

BELL ATLANTIC CORPORATION, ef al.,

Petitioners,

v.

WILLIAM TWOMBLY, e? al., Individually and on

Behalf of all others similarly situated,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF OF AMICI CURIAE LEGAL SCHOLARS DEBRA

LYN BASSETT, JOSEPH P. BAUER, JOHN S.

BECKERMAN, KEVIN M. CLERMONT, WILLIAM V.

DORSANEO III, CHRISTOPHER M. FAIRMAN, JACKIE

GARDINA, SUSAN HARTHILL, ALLAN IDES, DANNE L.

JOHNSON, DAVID LEVINE, TYLER T. OCHOA, STEPHEN

A. SALTZBURG, GREGORY C. SISK, JOAN E. STEINMAN,

JEFFREY W. STEMPEL, BETH STEPHENS AND

ELIZABETH G. THORNBURG, AND FOR CERTAIN

PURCHASERS OF ELEVATORS AND ELEVATOR

MAINTENANCE SERVICES, INCLUDING TRANSHORN

LTD., ET AL. INSUPPORT OF RESPONDENTS

INTEREST OF AMICI CURIAE '

Amici filing this brief comprise two distinct groups: (1) legal

scholars and law professors with an academic interest in

‘No counsel for any party before the Court in this proceeding has

authored this brief or any portion of it. As noted in text, counsel of record

represent several of the amici as plaintiffs-appellants in a case currently

pending before the United States Court of Appeals for the Second Circuit.

See In re Elevator Antitrust Litig., No. 06-3128-cv (2d Cir.), on appeal

from In re Elevator Antitrust Litig., No. 04-cv-01178 (TPG) (S.D.N.Y.).

They may ultimately seek compensation in that case for the work and

expenses incurred in preparing this brief.

2

sound development of procedural law having no financial

interest in the outcome of this case, and (2) purchasers of —

elevators and elevator maintenance services who are currently

litigating antitrust claims in the Second Circuit.

The amici who are legal scholars teach, write about, or

have an interest in Federal Civil Procedure. They care deeply

about the fundamental principles underlying the pursuit of

justice in the American legal system, and are committed to

ensuring that procedural law continues to develop in

accordance with those principles. They have a strong interest

in assisting this Court to interpret the law in a way that is

consistent with both the Federal Rules of Civil Procedure’s

text and their underlying purpose—‘to secure the just,

speedy, and inexpensive determination of every action.” Fed.

R. Civ. P. 1. They have no interest in the outcome of this

litigation except as it pertains to these cor cerns.

The academic amici are:

Debra Lyn Bassett, Loula Fuller and Dan Myers Professor

of Law, Florida State University College of Law;

Joseph P. Bauer, Professor of Law, Notre Dame Law

School;

John S. Beckerman, Associate Dean for Academic Affairs,

Rutgers School of Law-Camden;

Kevin M. Clermont, James and Mark Flanagan Pistheoen

of Law, Cornell Law School;

William V. Dorsaneo III, Chief Justice John and Lena.

Hickman Distinguished Faculty Fellow and Professor of Law,

Southern Methodist University Dedman School of Law;

Christopher M. Fairman, Visiting Professor of Law, Emory

University School of Law, Associate Professor of Law, The

Ohio State University Moritz College of Law;

Jackie Gardina, Associate Professor of Law, Vermont Law

School;

.

Susan Harthill, Assistant Professor of Law, Florida Coastal

School of Law;

Allan Ides, Professor of Law and William M. Rains

Fellow, Loyola Law School (Los Angeles);

Danne L. Johnson, Assistant Professor of Law, Oklahoma

City University School of Law;

David Levine, Professor of en Senay of California

Hastings College of the Law;

Tyler T. Ochoa, Professor of Law, Santa Clara University

School of Law;

Stephen A. Saltzburg, Wallace and Beverly Woodbury

‘University Professor of Law, The George Washington

University Law School;

Gregory C. Sisk, Professor of Law, University of St.

Thomas School of Law;

Joan E. Steinman, Distinguished Professor of Law, Chicago-

Kent College of Law, Illinois Institute of Technology;

Jeffrey W. Stempel, Doris S. & Theodore B. Lee Professor

of Law, University of Nevada, Las is oc William S: Boyd

School of Law;

Beth Stephens, Professor of Law, Rutgers School of Law-

Camden; and

Elizabeth G. Thornburg, Professor of Law, Southern

Methodist University Dedman School of Law.

Finally, the following amici are purchasers of elevators and

elevator maintenance services, who are serving as repre-

sentative plaintiffs in an antitrust action currently pending

before the United States Court of Appeals as /n re Elevator

Antitrust Litigation, No. 06-3128-cv (2d Cir.), a case in which

briefing is likely to be completed after the scheduled oral

argument in this matter: Transhorn, Ltd.; 1775 Housing

Associates; Triangle Housing Associates L.P.; Rochdale

4

Village, Inc.; Birmingham Building Trades Towers, Inc.;

Riverbay Corp.; D.F. Chase, Inc.; Towers of Coral Springs

Ltd.; 181 Maple Avenue Associates; Lenox Road Associates;

Olen Commercial Realty Corp.; Bay Crest Condominium

Ass’n; Joseph M. Bennardi d/b/a Nedmac Associates, [nc.;

and Joseph M. Bennardi d/b/a Building Supers of Camden,

Inc. These amici have an interest in the outcome of this case

because it may constitute a controlling precedent for the

pleading standards in their own antitrust case.

On August 18, 2006, the parties filed written consent with

this Court to the filing of amicus curiae briefs, including this

brief. See S. Ct. Rule37.3(a).

ARGUMENT

I. NOTICE-PLEADING PRINCIPLES RELIEVE

PLAINTIFFS OF PLEADING FACTS TO

DEMONSTRATE THEIR CLAIMS

Petitioners’ Brief presents the case as one that turns upon

general pleading rules—which they contend require detailed

fact pleading. Their Argument opens: :

This Court’s decisions establish two fundamental

pleading rules that bear decisively on this case. First, a

complaint must allege facts, not merely conclusions, that

show the plaintiff is entitled to relief under the gov-

erning substantive law. Second, it is the facts alleged,

not alleged facts that the plaintiff might later prove, that

must support the claim to relief.

Petitioners’ Brief at 16. Petitioners’ central contention is

stated bluntly in their Argument’s subheading I.A.: “Rule 8

Requires Pleading of Facts, Not Mere Conclusory Assertions,

To Support a Plaintiff's Claim.” /d.

Petitioners’ argument runs counter to this Court’s long-

standing notice-pleading decisions, which all hold that plain-

tiffs need only provide the short statement required by

5

Federal Rule of Civil Procedure 8(a) to place defendants on

notice of the nature of the claims against them—without

providing the facts and evidence that might ultimately be

used to prove those claims. Petitioners’ argument also runs

counter to the very purpose of the Federal Rules of Civil

Procedure which were designed to replace both the techni-

calities of common law pleadings and the detail of “code” or

“fact-pleading” with a new regime of simplified notice plead-

ing. See generally Charles E. Clark, Simplified Pleading, 2

F.R.D. 456, 456-67 (1943); Charles E. Clark, Handbook of

the Law of Code Pleadings §38, at 241-43 (2d ed., 1947).

“Under the codes the emphasis was placed on developing

the facts through the pleadings.”” The Federal Rules’ framers

rejected that approach for one that requires a pleading only to

give “the opposing party fair notice of the nature and basis or

grounds of the pleader’s claim and a general indication of the.

type of litigation that is involved.”?

It was the design-of the rulemakers that the discovery

procedures should give the parties an opportunity for

securing an elaboration of the allegations and that

process and not the pleadings bears the burden of filling

in the details of the dispute for the parties and the court.

In federal practice, the test of a complaint’s sufficiency

simply is whether the document’s allegations are de-

tailed and informative enough to enable the defendant to

respond.‘

Judge Charles E. Clark, who as Dean of the Yale Law

School “served as Reporter of the Advisory Committee on the

Federal Rules,” is widely recognized as the Rules’ “principal

?'§ Charles Alan Wright & Arthur R. Miller, Federal Practice & Pro-

cedure: Civil 3d §1202, at 91 (3d ed. 2004).

* Id., §1215, at 172-73.

* Id., §1215, at 174-93.

* Harris v. Nelson, 394 U.S. 286, 290 n.1 (1969).

6

architect,”° and has even been called their “father.”’ He

explained that the goal for pleadings is to “emphasize only

the setting forth of the factual situation as a whole,” and not

“all the fine details” or evidentiary facts that may be needed

to prove the claim.* The Rules’ framers understood that even

‘in the simplest negligence case, where percipient witnesses

viewed an automobile accident,

the testimony of even honest eyewitnesses may vary or

conflict, and a slight difference in the timing of events,

such as when a pedestrian stepped into the street in front

® Zahn v. Int'l Paper Co., 414 U.S. 291, 296-97 (1973) (Clark “a prin-

cipal architect”).

” Commerzanstalt v. Telewide Sys., 880 F.2d 642, 646 (2d Cir. 1989)

(quoting M. Schick, Learned Hand's Court 30-31 & n.81 (1970)); see

Richard L. Marcus, The Revival of Fact Pleading Under the Federal

Rules of Civil Procedure, 86 Colum. L. Rev. 433, 433 (1986) (“As Dean

of Yale Law School and reporter of the committee that drafted the Federal

Rules of Civil Procedure, Charles Clark was the principal architect of the

Rules and leading proponent of the liberal ethos that underlies them.”);

Michael E. Smith, Judge Charles E. Clark and The Federal Rules of Civil

Procedure, 85 Yale L. J. 914, 915 (1976) (“he was principally responsible

for the drafting of the Federal Rules, which became law in 1938.”); Paul

D Carrington, Virtual Civil Litigation: A Visit to John Bunyan’s Celestial

City, 98 Colum. L. Rev. 1516, 1518 & n.10 (1998) (noting that the

movement to reform the Federal Rules “was led by Charles Clark and his

associates, who drafted the Federal Rules of Civil Procedure promulgated

in 1938”); Whalen v. Ford Motor Credit Co., 684 F.2d 272, 277 (4th Cir.

1982) (“Clark, as reporter [was] necessarily the member most familiar

with the rules.”).

* Clark, Simplified Pleading, 2 F.R.D. at 457; see also Charles E.

Clark, The New Federal Rules of Civil Procedure: The Last Phase—

Underlying Philosophy Embodied in Some of the Basic Provisions of the

New Procedure, 23 A.B.A. J. 976, 977 (1937) (Moreover, through the

weapons of discovery and summary judgment we have developed new

devices, with more appropriate penalties to aid in matters of proof, and do

not need to force the pleadings to their less appropriate function.”);

Charles E. Clark, The Proposed Federal Rules of Civil Procedure, 22

A.B.A. J. 447, 449-50 (1936); Charles E. Clark, The Handmaid of Justice,

23 Wash. U.L.Q. 297, 316 (1938). _

7

of an approaching car, may be absolutely decisive. A

lawyer, therefore, cannot safely or wisely restrict the

case he offers to prove before he knows what the

testimony will actually show.

Clark, Simplified Pleading, 2 F.R.D. at 457.

Even in the simplest of cases, a lawyer cannot, in fine,

plead all the facts that ultimately will be needed to prove a

case. /d. Much less can he do so when the case turns on a

- complex conspiracy, rather than a simple tort.” Summarizing

the then-new “notice pleading” in 1938, Commissioner

Palmer D. Edmunds wrote: “The idea is that you are not to

be compelled to state a cause of action giving all of the

elements which we now think necessary to a case. All that

should be needed is an informal statement of what you are

suing about.” Palmer D. Edmunds, The New Federal Rules of

Civil Procedure, 4 John Marshall L.Q. 291, 298 (1938). -

Petitioners ask this Court to require much more—the

pleading of facts to support a claim. But that is a requirement

that the Federal Rules’ framers deliberately eliminated to

‘mark a clear departure from past pleading practice. In Rule

‘8(a), “the drafters of the Federal Rules substituted the word

‘claim’ for ‘cause of action,’ dropped the requirement that the

complaint allege ‘facts,’ and expanded discovery proce-

dures,” to ensure that a claim may be simply stated with the

critical facts to be developed in discovery. Hodgson v.

Virginia Baptist Hosp., 482 F.2d 821, 823 (4th Cir. 1977).

“Any need to plead facts that, if true, establish each element

of a ‘cause of action’ was abolished by the Rules of Civil

Procedure in 1938.” Sanjuan v Am. Bd. of Psychiatry &

Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994) (Easter-

brook, J.). Simply put: “The federal rules replaced fact

pleading with notice pleading.” Thomson v. Washington,

362 F.3d 969, 970 (7th Cir. 2004) (Posner, J.); see also

* See, e.g., Palmer v. Bd. of Educ., 46 F.3d 682, 688 (7th Cir. 1995).

—_.

8

Christopher M. Fairman, Heightened Pleading, 81 Tex. L. R.

551, 556 (2002).

The Rules’ chief architect explained: “By omitting any

reference to ‘facts’ the Federal Rules have avoided one of the

most controversial points in code pleading.” Clark, Hand-

book of the Law of Code Pleading §38 at 242. “This

departure from the traditional code-pleading requirement has

been liberally applied by the courts and lauded by the legal

writers,” Judge Clark noted in 1947. Jd. at 242-43. Sound

decisions follow it still: “Complaints need not plead facts . . . .

It is enough if the complaint puts the defendants on notice of

the claim and that some set of facts could be presented that

would give rise to a right ‘9 relief.” Hutchinson ex rel. Baker

v. Spink, 126 F.3d 895, 900 (7th Cir. 1997)."°

Demanding particularized facts, the Rules’ framers under-

stood, “leads to a waste of time while counsel and court

attempt to pursue the will-o’-the wisp of pleading certainty,”

and it far too “often leads to a denial of justice,” when

meritorious claims are dismissed on the pleadings. Clark,

Simplified Pleading, 2 F.R.D. at 457-458. That is why this

Court’s precedents allow a plaintiff to proceed who may be

able to prove any set of facts to support the claim asserted.

' Accord, e.g., Kolupa v. Roselle Park Dist., 438 F.3d 713, 715 (7th

Cir. 2006) (“complaints need not plead facts and need not narrate events

that correspond to each aspect of the applicable legal rule” to survive a

motion to dismiss); /n re Tower Air, Inc., 416 F.3d 229, 237 (3d Cir.

2005) (“By requiring [a plaintiff] to allege specific facts, the District

Court erroneously preempted discovery on certain claims by imposing a

heightened pleading standard not required by Federal Rule of Civil

Procedure 8.”); Hoskins v. Poelstra, 320 F.3d 761, 764 (7th Cir. 2003)

(“Rule 8 does not require—or permit district judges to require—fact

pleading.”); Palmer, 46 F.3d at 688 (“[c]omplaints need not plead facts”);

Brownlee v. Conine, 957 F.2d 353, 354 (7th Cir. 1992) (“The Federal

Rules of Civil Procedure establish a system of notice pleading rather than

of fact pleading, so the happenstance that a complaint is ‘conclusory,’

whatever exactly that overused lawyers’ cliche-means, does not automati-

cally condemn it.” (citation omitted)). ;

9

A. This Court. Holds That Plaintiffs Are Not

Required To Plead Facts Establishing Their

Claims

Since the Federal Rules of Civil Procedure took effect in

1938, replacing both common-law pleading and code or “fact

pleading” with the new rule of notice pleading, this Court has

had many occasions to reiterate that plaintiffs are entitled to

plead a case without detailing the facts that ultimately may be

used to prove it. Rather, a claim is sufficient if a plaintiff

might prove any set of facts that would entitle it to relief.

In Conley v. Gibson, 355 U.S. 41, 45-46 (1957), this Court

held that “[{i]n appraising the sufficiency of the complaint, we

follow, of course, the accepted rule that a complaint should

not be dismissed for failure to state a claim unless it appears

beyond doubt that the plaintiff can prove no set of facts in

support of his claim which would entitle him to relief.”"'

Thus, there must be enough factual detail for the defendants

to understand the nature of the case against them, and for the

Court to hypothesize that some set of facts might be proved to

warrant relief. But that is all. The respondents in Conley had

argued “that the complaint failed to set forth specific facts to

support its general allegations of discrimination and that its

dismissal [was] therefore proper.” Conley, 355 U.S. at 47.

“The decisive answer to this,” this Court bluntly held, “is that

the Federal Rules of Civil Procedure do not require a

'' Id. at 45-46 (emphasis added). This was, as Conley noted, clearly

“the accepted rule.” /d. Early decisions were emphatic: “The Rules of

Civil Procedure do not require that a plaintiff shall plead every fact

essential to his right to recover the amount of which he claims . . . . If it is

conceivable that, under the allegations of his complaint, a plaintiff can,

upon trial, establish a case which would entitle him to the relief prayed

for, a motion to dismiss for insufficiency of statement ought not to be

granted.” Sparks v. England, 113 F.2d 579, 581-82 (8th Cir. 1940); see

The Complaint Under the Federal Rules of Civil Procedure, \0 Fordham

L. Rev. 252, 258-59 (1941) (quoting Sparks), Clark, Handbook of the Law

of Code Pleading, § 38 at 242-43 & nn.104-105.

10

claimant to set out in detail the facts upon which he bases his

claim.” Id. (emphasis added). This Court found a claim

under the Railway Labor Act sufficiently stated by employing

conclusory or “general” allegations of discrimination. /d.

Whether facts existed to flesh out and sustain those claims

would have to be left to discovery. See id.

Nearly. two decades later, in Scheuer v. Rhodes, 416 U.S.

232, 236 (1974), this Court held again that a complaint cannot

be dismissed because the plaintiff fails to plead facts showing

that he or she will likely prevail. “Indeed it may appear on

the face of the pleadings that a recovery is very remote and

unlikely but that is not the test,” the Court concluded,

reiterating Conley’s rule that “‘a complaint should not be

dismissed for failure to state a claim unless it appears beyond

doubt that the plaintiff can prove no set of facts in support of

his claim which would entitle him to relief.” Jd at 236

(quoting Conley, 355 U.S. at 45-46).

_In Hishon v. King & Spalding, 467 U.S. 69 (1984), this

Court reiterated once more: “A court may dismiss a com-

plaint only if it is clear that no relief could be granted under

any set of facts that could be proved consistent with the

allegations.” /d. at 73 (citing Conley, 355 U.S. at 45-46)

(emphasis added). And this is the standard that it has consis-

tently applied—that a complaint cannot be dismissed if relief

could be granted “under any set of facts” that the plaintiff

might prove. See, e.g., Swierkiewicz v. Sorema N.A., 534

U.S. 506, 514 (2002) (quoting Hishon); NOW v. Scheidler,

510 U.S. 249, 256 (1994); H. J, Inc. v. Nw. Bell Tel. Co., 492

U.S. 229, 249-50 (1989) (quoting Hishon); Neitzke v. Williams,

490 U.S. 319, 327 (1989) (quoting Hishon); see also Brein-

inger v. Sheet Metal Workers Int'l Ass'n Local Union No. 6,

493 U.S. 67, 98-99 (1989) (Stevens, J., joined by Scalia, J.,

concurring and dissenting in part) (quoting Hishon).

These decisions, allowing plaintiffs to proceed if “any set

of facts” might be proved entitling them to relief, surely

11

foreclose Petitioners’ argument that “it is the facts alleged,

not unalleged facts that the plaintiff might later prove, that

must support the claim to relief.” Petitioners’ Brief at 16. If

a plaintiff might later prove “any of set facts” supporting the

claim presented, then the complaint must not be dismissed.

Hishon, 467 U.S. at 73; accord Scheuer, 416 U.S. at 236;

Conley, 355 U.S. at 45-46. “At this stage the plaintiff

receives the benefit of imagination, so long as the hypotheses

are consistent with the complaint,” as Judge Frank Easter-

brook has aptly observed. Sanjuan, 40 F.3d at 251 (Easter-

brook, J., citing Conley). “Matching facts against legal

elements comes later.” /d. |

This Court restated this notice-pleading rule in Lujan v.

National Wildlife Federation, 497 U.S. 871, 889 (1990), in

Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992), and

in NOW, 510 U.S. at 256. All three decisions reaffirmed

“that ‘at the pleading stage, general factual allegations of

injury resulting from the defendant’s conduct may suffice, for

on a motion to dismiss we presume that general allegations

embrace those specific facts that are necessary to support the

claim."” NOW, 510 U.S. at 256 (quoting and following

Defenders of Wildlife, 504 U.S. at 561 (quoting and following

National Wildlife Federation, 497 U.S. at 889)).

The Court’s decisions draw a sharp distinction between

pleading a claim, when general or conclusory allegations

suffice, and proving it—when facts are required. National

Wildlife Federation and Defenders of Wildlife both held that

to survive a Rule 56 motion for summary judgment the plain-

tiff must present specific facts supporting its claim. This, the

Court emphasized, was in direct contrast to the requirements

of 12(b)(6), that general allegations suffice, with any specific

' facts that might be needed to support the claim presumed.

See Nat'l Wildlife Fed'n, 497 U.S. at 889 (citing Conley, 355

U.S. at 45-46). In Defenders of Wildlife this Court explained:

12

At the pleading stage, general factual allegations of

injury resulting from the defendant’s conduct may

suffice, for on a motion to dismiss we “presume that

general allegations embrace those specific facts that are

necessary to support the claim.” National Wildlife

Federation, supra, [497 U.S.] at 889. In response to a

summary judgment motion, however, the plaintiff can no

longer rest on such “mere allegations,” but must “set

forth” by affidavit or other evidence “specific facts,”

Fed. Rule Civ. Proc. 56(e), which for purposes of the

summary judgment motion will be taken to be true. And

at the final stage, those facts (if controverted) must be

“supported adequately by the evidence adduced at trial.”

[Gladstone, Realtors v. Village of Bellwood, 441 U.S.

91, 115 n. 31 (1979)}.

Defenders of Wildlife, 504 U.S. at 561. Clearly, a plaintiff is

not required to plead the facts that will later be required either

to survive a summary judgment motion, or to prevail at trial.

Indeed, in NOW, the Court applied these principles to a

motion to dismiss. Women’s health clinics alleged that anti-

abortion activists had “conspired to use force to induce clinic

staff and patients to stop working and obtain medical services

elsewhere.” NOW, 510 U.S. at 256. Tracking RICO’s

statutory text, and in rather conclusory fashion, the “[p]eti-

tioners claimed that this conspiracy ‘has injured the business

and/or property interests of the [petitioners]."” Jd. at 256

(quoting complaint); compare 18 U.S.C. §1964(c) (“Any

person injured in his business or property by reason of a

violation of section 1962 of this chapter may sue there-

Diwace

Although the lower courts had dismissed the case, this

Court reversed, explaining:

We have held that “at the pleading stage, general

factual allegations of injury resulting from the defen-

dant’s conduct may suffice, for on a motion to dismiss

we presume that general allegations embrace those

13

specific facts that are necessary to support the claim.”

[Defenders of Wildlife, 504 U.S. at 561] (citations

omitted). The District Court dismissed petitioners’

claim that the pleading stage pursuant to Federal Rule of

Civil Procedure 12(b)(6), so their complaint must be

sustained if relief could be granted “under any set of

facts that could be proved consistent with the

allegations.” [Hishon, 467 U.S. at 73].

NOW, 510 U.S. at 256 (emphasis added).

Thus, where a complaint states a potentially valid claim,

the question is not whether facts necessary to support that

claim have been pleaded, but whether “any set of facts”—

whether or not specifically pleaded—might ultimately be

proved that would entitle the plaintiff to relief. The plaintiff

need not allege a specific fact for each element of the

claim. Jn re Tower Air, 416 F.3d at 237.

B. Notice-Pleading Presumptions Apply With Par-

ticular Force To Antitrust Cases

Petitioners’ contention that antitrust claims must meet .a

heightened standard are flatly at odds with this Court’s

controlling precedents. For this Court has repeatedly em-

phasized that notice-pleading principles apply with particular

force to antitrust cases.

This Court’s first opinion reviewing the sufficiency of a

complaint following the adoption of the Federal Rules upheld

general allegations of a conspiracy to drive billposting

companies out of business in violation of the Sherman Act.

The plaintiff charged that it “‘has been damaged in that its

business was rendered unprofitable, and the profits of its said

trade and commerce have diminished, and the plaintiff

company has suffered loss and been damaged thereby.”” C.E.

Stevens Co. v. Foster & Kleiser Co., 311 U.S. 255, 261

(1940). “While these allegations are general,” this Court

held, “we cannot say that they are inadequate,” excusing

14

antitrust claimants from any requirement of pleading partic-

ularized facts. /d.

In Hospital Building Co. v. Trustees of Rex Hospital, 425

U.S. 738, 746 (1976), this Court held that dismissal at the

pleading stage should be granted “very sparingly” in antitrust

cases because “the proof is largely in the hands of the

alleged conspirators’” (quoting Poller v. CBS, 368°U.S. 464,

473 (1962)). The Court explained:

We have held that “a complaint should not be dis-

missed for failure to state a claim unless it appears

beyond doubt that the plaintiff can prove no set of facts

in support of his claim which would entitle him to

relief.”. [Conley, 355 U.S. at 45-46] (footnote omitted).

And in antitrust cases, where “the proof is largely in

the hands of the alleged conspirators,” [Poller, 368

U.S. at 473], dismissals prior to giving the plaintiff

ample opportunity for discovery should be granted very

sparingly.

Hospital Bldg. Co., 425 U.S. at 746.

In McLain v. Real Estate Board, 444 U.S. 232 (1980), this

Court deemed it “axiomatic that a complaint should not be

dismissed unless ‘it appears beyond doubt that the plaintiff

can prove no set of facts in support of his claim which would

entitle him to relief,” holding once again that this rule of

notice pleading applies “with no less force to a Sherman Act

claim.” /d at 246 (quoting Conley, 355 U.S. at 45-46).

Petitioners’ contenticn that plaintiffs must meet a heightened

standard for antitrust claims is flatly inconsistent with this

Court’s precedents.

Petitioners make much of a footnote of dictum from Asso-

ciated General Contractors v. California State Council of

Carpenters, 459 U.S. 519, 528 n.17 (1983), which dealt with

claims of a construction workers’ union that the antitrust laws

were violated when members of a multi-employer association

allegedly coerced their own customers and competitors to

15

give business to nonunion firms. See id. at 528 n.17;

Christopher M. Fairman, The Myth of Notice Pleading, 45

Ariz. L. Rev. 987, 1013 (2003). This Court held that “the

Court of Appeals properly assumed that such coercion might

violate the antitrust laws,” but that the union, which was not

directly injured by the alleged conspiracy, was not the proper ©

plaintiff. Associated Gen. Contractors, 459 U.S. at 528, 544-

46. Obviously skeptical that the union could prove the

conspiracy it alleged, this Court added in a footnote that had

the district court employed its power—presumably under

Rule 12(e}—to demand a more definite statement and “re- |

quired. the Union to describe the nature of the alleged

coercion with particularity before ruling on the motion to

dismiss, it might well have been evident that no violation of

law had been alleged.” Associated Gen. Contractors, 459

U.S. at 528 n.17. “In making the contrary assumption for

purposes of our decision,” the Court wrote in dictum, “we are

perhaps stretching the rule of [Conley, 355 U.S. at 47-48}, too

far.” Jd. It applied Conley nonetheless.

In. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986),

moreover, this Court formulated summary judgment stan-

dards against the background provided by notice-pleading.

rules that preclude termination of an antitrust case on a

motion to dismiss:

Before the shift to ‘notice pleading’ accomplished by the

Federal Rules, motions to dismiss a complaint or to

strike a defense were the principal tools by which

factually insufficient claims or defenses could be iso-

lated and prevented from going to trial with the attendant

unwarranted consumption of public and private re-

sources. But with the advent of ‘notice pleading,’ the

motion to dismiss seldom fulfills this function any more,

and its place has been taken by the motion for summary

judgment.

Celotex, 477 U.S. at 327.

16

The time for plaintiffs to produce facts supporting their

claims is in response to a motion for summary judgment—

after a reasonable opportunity for discovery. An antitrust

case cannot be dismissed merely because plaintiffs do not

plead facts proving their claims.

C. Notice Pleading Revisited: When Lower Courts

Ignore This Court’s Precedents

- The significance of this Court’s many notice-pleading

precedents should have been clear. Yet lower courts have

nonetheless from time to time fashioned heightened pleading

standards that they thought were good policy.'? Some courts

decided that civil-rights claims against governmental offi-

cials, or against municipalities, should be subject to height-

ened pleading standards, for example, with the Fifth Circuit

requiring plaintiffs to “state with factual detail and particular-

ity the basis for the claim.” Elliott v. Perez, 751 F.2d 1472,

1473 (Sth Cir. 1985); see also Boston & Maine, 987 F.2d at

866; Fairman, Heightened Pleading, 8\ Tex. L. Rev. at 575-

82. Others demanded specific facts for antitrust claims—as

in Sutliff, Inc. v. Donovan Cos., 727 F.2d 648, 654 (7th Cir.

1984), when the Seventh Circuit brushed aside this Court’s

notice-pleading precedents on the ground that they cannot

mean what they very clearly say. :

With Sutliff, the Seventh Circuit expressly rejected the

standard of Conley and Scheuer, that a complaint cannot be

dismissed if the plaintiff might prove any set of facts

supporting its claim, on the ground that this Court’s oft-

repeated formulation “has never been taken literally.” Su¢liff,

727 F.2d at 654. After denigrating this Court’s standard, the

2 See Boston & Maine Corp. v. Town of Hampton, 987 F.2d 855, 863-

64 (Ist Cir. 1993) (surveying cases); Cash Energy, Inc. v. Weiner, 768

F. Supp. 892, 897 (D. Mass. 1991) (surveying cases); see generally,

Fairman, Heightened Pleading, 8\ Tex. L. Rev. at 575-96; Fairman, The

Myth of Notice Pleading, 45 Ariz. L. Rev. at 1011-62.

17

Seventh Circuit took as more “authoritative the statement in

an earlier [district court] case that the pleader must ‘set out

sufficient factual matter to outline the elements of his cause

of action or claim, proof of which is essential to his

recovery.”” Jd. (quoting Daves v. Hawaiian Dredging Co.,

114.F. Supp. 643, 645 (D. Haw. 1953)). Although this Coust

had held in Hospital Building Co., 425 U.S. at 746, that

antitrust cases should seldom be dismissed before discovery,

the Seventh Circuit disagreed, citing “heavy costs of modern

* federal litigation, especially antitrust litigation.” Sutliff, 727

F.2d at 654. If one “claims an antitrust violation, but the facts

he narrates do not at least outline or adumbrate such a

violation, he will get nowhere merely by dressing them up in

the language of antitrust.” /d.

This position—that plaintiff may be required to plead facts

demonstrating a violation—was put to rest by this Court’s

decisions in Leatherman v. Tarrant County Narcotics Intel-

ligence & Coordination Unit, 507 U.S. 163 (1993), and

Swierkiewicz, 534 U.S. 506.

In Leatherman, this Court unanimously reversed the Fifth

Circuit for requiring a plaintiff pursuing civil rights claims to

plead “all material facts establishing a plaintiff's right of re- -

covery.” Leatherman v. Tarrant County Narcotics Intelli-

gence & Coordination Unit, 954 F.2d 1054, 1055 (Sth Cir.

1992), rev'd, 507 U.S. at 167-69. This Court noted the Fifth

Circuit’s practice of requiring litigants pursuing civil rights

claims against government officials to “‘state with factual

detail and particularity the basis for the claim.’” Leatherman,

507 U.S. at 167 (quoting Elliott, 751 F.2d at 1473). “In later

cases, the Fifth Circuit extended this rule to complaints

against municipal corporations asserting liability under

§ 1983.” Leatherman, 507 U.S. at 167 (citing Palmer v. San

Antonio, $10 F.2d 514 (Sth Cir. 1987)). The Ninth Circuit, in

stark contrast, had held that a “*“claim of municipal liability

under [42 U.S.C.] section 1983 is sufficient to withstand

a motion to dismiss even if the claim is based on nothing

18

more than a bare allegation that the individual officers’

conduct conformed to official policy, custom, or practice.”””

Leatherman, 507 U.S. at 165 (quoting Karim-Panahi v. Los

Angeles Police Dept., 839 F.2d 621, 624 (9th Cir. 1988)

(quoting Shah v. County of Los Angeles, 797 F.2d 743, 747

(9th Cir. 1986))).

This Court opted for the Ninth Circuit’s rule, flatly re-

jecting the Fifth Circuit’s as contrary to notice-pleading,

reaffirming once more that the Federal Rules “‘do not require

a claimant to set out in detail the facts upon which he bases

his claim.’” Leatherman, 507 U.S. at 168 (quoting Conley,

355 U.S. at 45-46. Only for averments of fraud or mistake

does Rule 9(b) require a “greater particularity in pleading.”).

That Rule 9(b) specifies heightened pleading standards only

for averments of fraud or mistake was dispositive: “Expressio

unius est exclusio alterius.” Leatherman, 507 U.S. at 168.

The Court concluded that heightening pleading requirements

for any other allegations or claims—-whether for civil rights

or antitrust violations—“must be obtained by the process of

amending the Federal Rules, and not by judicial inter-

pretation.” Jd.

Following this Court’s decision in Leatherman, “the

Advisory Committee on the Federal Rules of Civil Procedure,

... father pointedly, on October 21, 1993, rejected the idea of

adding antitrust claims to the category of claims one must

plead with particularity.”'? The Committee noted that “many

courts have exacted heightened pleading requirements in

specific types of litigation,” including antitrust cases, often

“without any explicit articulation or justification.” Minutes of

the Advisory Committee on Federal Rules of Civil Procedure,

1993 WL 761148, at *4. After discussing the values of notice

pleading, the Committee suggested that “all that is needed is

'’ In re Hydrogen Peroxide Antitrust Litig., 401 F. Supp. 2d 451, 458

(E.D. Pa. 2005) (citing Minutes of the Advisory Committee on the Federal

Rules of Civil Procedure, 1993 WL 761148, at *6-*7 (Oct. 21, 1993)).

‘ 19

some means of encouraging greater use of tools already in the

Rules,” concluding that to “encourage more pleading motions

may be less satisfactory.” /d., at *5. Indeed, “increasing the

Rule 9 categories of claims that must be pleaded with

particularity seemed undesirable to virtually all committee

members who spoke to the question.” /d., at *6.

The Seventh Circuit, at least, got Leatherman's message,

and reversed its previous course—holding “that judicial

attempts to apply a heightened pleading standard in antitrust

cases had been ‘scotched’ by the Supreme Court’s decision in

Leatherman,” and “that after Leatherman, an antitrust plain-

tiff need not include ‘the particulars of his claim’ to survive a

motion to dismiss. It is instead sufficient for the plaintiff to

include in its complaint only ‘a short and plain statement of

the claim’ showing an-entitlement to relief.”'*

Yet some courts continued to require plaintiffs to ailege the

proof for some claims by pleading facts.'* Some lower courts

still applied heightened pleading standard to many civil rights

claims.'® Others did so in antitrust cases. '”

'* MCM Partners v. Andrews-Bartlett & Assocs., 62 F.3d 967, 976 (7th

Cir. 1995) (citing Hammes v. AAMCO Transmissions, 33 F.3d 774, 778,

782 (7th Cir. 1994) (noting that Sué/iff “cannot be considered aut!.oritative

after Leatherman’’)), see also Poindexter v. Nat'l Mortgage Co., No. 94 C

5814, 1995 U.S. Dist. LEXIS 5396, at *5-*6 (N.D. Ill. Apr. 18, 1995)

(“[t}]he Seventh Circuit’s flirtation with heightened pleading requirements

ended. with the Supreme Court’s reaffirmation of liberal pleading

standards in Leatherman”).

'S See Fairman, Heightened Pleading, 8\ Tex. L. Rev. at 583-90 (not-

ing post-Leatherman circuit split); Fairman, The Myth of Notice Pleading,

45 Ariz. L. Rev. at 1018-20 (antitrust), 1029-30 (civil rights), 1035-36

(conspiracy); Richard L. Marcus, The Puzzling Persistence of Pleading

Practice, 76 Tex. L. Rev. 1749, 1763 & n.106 (1998) (listing cases). .

'® See, e.g., Doe v. Hillsboro Indep. Sch. Dist., 81 F.3d 1395, 1402 &

n.23 (Sth Cir. 1996); Branch v. Tunnell, 14 F.3d 449, 455-57 (9th Cir.

1994); Kimberlin v. Quinlan, 6 F.3d 789, 794 n.9 (D.C. Cir. 1993), cert.

granted, 513 U.S. 1123.

20

In Swierkiewicz, 534 U.S. at 511, this Court had to

intervene once again, unanimously reversing Second Circuit

precedent requiring employment discrimination plaintiffs to

allege facts supporting a claim. Once more this Court had to

say that “under a notice pleading system, it is not appropriate

to require a plaintiff to plead facts establishing a prima

facie case.” Id. (emphasis added). Rule 8’s “simplified

notice pleading standard relies on liberal discovery rules and

summary judgment motions to define disputed facts and

issues and to dispose of unmeritorious claims.” Jd. at 512.

Through those provisions, any “attempted surprise in federal

practice is aborted very easily, synthetic issues detected, and

the gravamen of the dispute brought frankly into the open for

the inspection of the court.” /d. at 513 (quoting 5 Wright &

Miller, supra, §1202, at 76).

It should be clear, then, that antitrust complaints need

contain no evidentiary facts. “While courts had previously

applied a heightened pleading requirement in antitrust cases,

this view has subsequently been rejected in favor of applying

Rule 8(a)’s notice pleading standard.”"*

'’ Fairman, The Myth of Notice Pleading, 45 Ariz. L. Rev. at 1018-20

& n.207 (citing e.g., Dickson v. Microsoft Corp., 309 F.3d 193, 212-13

(4th Cir. 2002); Estate Constr. Co. v. Miller & Smith Holding Co., 14

F.3d 213, 220-22 (4th Cir. 1994); and Syncsort Inc. v. Sequential Soft-

ware, Inc., 50 F. Supp. 2d 318, 328 (D.N.J. 1999)).

'§ Andrx Pharms., Inc. v. Elan Corp., PLC, 42\ F.3d 1227, 1234-1235

(11th Cir. 2005); accord, e.g., Lum v. Bank of Am., 361 F.3d 217, 220 (3d

Cir. 2004) (antitrust claims “generally are not subject to the heightened

pleading requirement of Rule 9(b)”); MCM Partners, 62 F.3d at 976

(Le .erman “scotched” Sutliff), In re Urethane Antitrust Litig., 409 F.

Supp. 2d 1275, 1282 (D. Kan. 2005) (“heightened pleading standards do

not apply to antitrust claims, particularly in light of the Supreme Court's

reasoning in Leatherman and Swierkiewicz”), see also United States v.

LSL Biotechnologies, 379 F.3d 672, 698-99 (9th Cir. 2004) (Aldisert, J.

dissenting).

21

D. Dura Pharmaceuticals Works No Revolution In

Pleading Standards

The Petitioners insist that Dura Pharmaceuticals, Inc. v.

Broudo, 544 U.S. 336 (2005), which dealt with requirements

- for proving and pleading loss in connection with a securities

fraud claim, requires pleading of the facts that ultimately will

be needed to support the plaintiff's claims, so that in antitrust

cases, any “pleading of conspiracy requires factual allega-

tions that directly support the existence of an agreement or,

- failing that, facts that support an inference that defendants

conspired.” Petitioners’ Brief at 21 (emphasis added). But

_ Dura merely holds that one who purchases a security at an

inflated price thereby suffers no injury—for she might sell it

at a similarly inflated price and suffer no loss. 544 US. at

342. Thus, a complaint asserting that investors purchased a

security at an inflated price fails to plead a claim even under

Conley’s liberal notice-pleading rules. Dura Pharms., 544

U.S. at 346-47. This Court emphasized that it “should not

prove burdensome for a plaintiff who had suffered an eco-

nomic loss to provide a defendant with some indication of the

loss and the causal connection that the plaintiff has in mind.”

Id. at 347 (emphasis added); see also In re Enron Corp. Sec.

Derivative & ERISA Litig., 439 F. Supp. 2d 692, 700-01 &

nn.9-10 (S.D. Tex. 2006).

Il. UNDER FEDERAL RULE OF CIVIL PRO-

CEDURE 9%(b), CONSPIRATORIAL STATE OF

MIND MAY. BE AVERRED GENERALLY

WITHOUT SETTING FORTH ANY FACTS

FROM WHICH IT MIGHT BE INFERRED

Petitioners say that any “pleading of conspiracy requires

factual allegations that directly support the existence of an

agreement or, failing that, facts that support an inference that

defendants conspired.” Petitioners’ Brief at 21 (emphasis

added). This notion that plaintiffs must plead facts demon-

strating a conspiratorial state of mind runs afoul not only of

-~

22

this Court’s notice-pleading precedents under Rule 8, see

supra, it also conflicts with Rule 9(b)’s proviso that, when-

ever relevant, the “condition of mind of a person may be

averred generally”—that is to say, without setting forth any

evidentiary facts from which it might be inferred. Fed. R.

Civ. P. 9(b).

Rule 9(b)’s Advisory Committee Notes direct those who

wish to understand this provision to “[s]lee English Rules

Under the Judicature Act (The Annual Practice, 1937) O. 19,

r. 22,” on which Rule 9(b) is based. And Order 19, Rule 22,

states the underlying rule quite clearly: “Wherever it is

material to allege malice, fraudulent intention, knowledge, or

other condition of the mind of any person, it shall be

sufficient to allege the same as a fact without setting out the

circumstances from which the same is to be inferred.” The

Annual Practice, Order 19, Rule 22 (1937) (emphasis added);

see generally, Christopher M. Fairman, An Invitation to the

Rulemakers—Strike Rule 9(b), 38 U.C. Davis L. Rev. 281,

286-87 (2004).

From the beginning, leading treatises identified Rule 9(b)’s

lineage and acknowledged its meaning. See, e.g., | Palmer D.

Edmunds, Federal Rules of Civil Procedure, Comment 49 at

432 (1938) (quoting Order 19, Rule 22 as Rule 9(b)’s source).

Rule 9(b)’s principal drafter, the Reporter for the Federal

Rules himself, the Honorable Charles E. Clark, confirmed in

his Handbook of the Law of Code Pleading, §48 at 313

'n.87, that Rule 9(b) was based on Order 19, Rule 22—and its

proviso that facts indicating state of mind need not be

pleaded."

'? Judge Clark also cited model Rules of Civil Procedure in the Ameri-

can Judicature Society Bulletin 14, 1919, art. 15 §18, which similarly

provided:

In all cases in which the party pleading relies on any misrep-

resentation, fraud, breach of trust, wilful default, or undue influence,

23

From the outset, decisional law similarly recognized the

obvious, applying Rule 9(b) to reject contentions that any

facts must be alleged to show state of mind. In Love v.

Commercial Casualty Insurance, 26 F. Supp. 481, 481-82

(S.D. Miss. 1939), for example, the plaintiff conclusorily

asserted that a letter had been written with malice. The

defendants insisted “that facts must be alleged in the com-

plaint from which it can be inferred that the letter was written

in fact with malice, and to aver generally that it was

maliciously written is not sufficient as being a conclusion of

the pleader.” /d at 481-82. The district court rejected such

contentions, noting that Rule 9(b) “is very clear and is not

open to any such construction as contended for by the

defendants.” Jd at 482. “This rule very probably was

adopted from the rules of the Supreme Court of England,

Order XIX, Rule 22, which provides that whenever it is

material to allege malice, etc., it shall be sufficient to allege

[the] same as fact without setting out the circumstances from

which it is to be inferred.” /d. at 482 (citing Sargeaunt v.

Cardiff Junction Dry Dock Co., (1926) W.N. 263).

the facts must be stated with full particularity, but whenever it is

material to allege malice, fraudulent intention, knowledge, or other

condition of the mind of any person, it shall be sufficient to allege

the same as a fact, without setting out the circumstances from which

the same is to be inferred.

Clark, Handbook of the Law of Code Pleading, § 48 at 313 n.87 (quoting -

Rules of Civil Procedure, Am. Jud. Soc. Bull. 14, 1919, art. 15 §18). The

model was embraced by several states. See, e.g., Ingalls v. Raklios, 21

N.E. 2d 856, 857 (Ill. Ct. App. 1939) (quoting Ill. Mun. Ct. Rule 72:

“Whenever it is material to allege malice, fraudulent intention, knowledge

or other condition of mind, it shall be sufficient to allege the same as a

fact without setting out the circumstances from which the same is to be

inferred.”), rev'd, 26 N.E. 2d 468 (ill. Sup. Ct. 1940); Broxmeyer v.

Polikoff, 39 Pa. D. & C. 224, 231 (C.P. Phila. County 1940) (quoting

Common Pleas Rule 50: “Whenever it is material to allege . . . intent,

knowledge or other condition of mind of any person, it shall be sufficient

to allege the same as fact without setting out the circumstances from

which the same is to be inferred.”’).

24

Some Second Circuit decisions, in derogation of Rule

9(b)’s command, began to require plaintiffs alleging securi-

ties fraud to plead iacts raising “a strong inference of

scienter.”””

In Jn re GlenFed, Inc. Securities Litigation, 42 F.3d 1541,

1545 (9th Cir. 1994) (en banc) the Ninth Circuit convened en

banc to construe Rule 9(b) in light of it: history and the

drafters’ intent. The Court acknowledged Order 19, Rule 22

as “[t]he model for Rule 9(b),” and observed that the “Second

Circuit's test is . . . irreconcilable with the second sentence of

Rule 9(b),” which permits state of mind in all cases to be

“averred generally.” GlenFed, 42 F.3d at 1545. Requiring

plaintiffs to plead facts raising any inference of scienter

“conflicts both with the English rule which was the model for

Rule 9(b) and with the second sentence of Rule 9(b) itself,

which declares unequivocally that state of mind may be

averred generally and says absolutely nothing about required

inferences.” /d. at 1546.

Whether the Second Circuit’s more-demanding pleading

standard might be good policy was “beside the point,” in light

of this Court’s holding in Leatherman that such a result

““must be obtained by the process of amending the Federal

Rules, and not by judicial interpretation.” /d. (quoting

Leatherman, 507 U.S. at 168). “We are not permitted to add

® See, e.g., O'Brien v. Nat'l Prop. Analysts Partners, 936 F.2d 674,

676 (2d Cir. 1991); Ross v. A. H. Robins Co., 607 F.2d 545, 588 (2d Cir.

1979); see also Marcus, The Puzzling Persistence of Pleading Practice,

76 Tex. L. Rev. at 1760 (“Not only did it contradict the rule, the Second

Circuit's approach also thrust upon the courts the difficult problem of

defining a ‘strong inference’ of scienter.”); Marcus, The Revival of Fact

Pleading Under the Federal Rules of Civil Procedure, 86 Colum. L. Rev.

at 447-48, 485 (an “ironic result”); William S. Lerach & Eric Alan

Isaacson, Pleading Scienter Under Section 21D(b)(2) of the Securities

Exchange Act of 1934: Motive, Opportunity, Recklessness, and the

Private Securities Litigation Reform Act of 1995, 33 San Diego L. Rev.

893, 906 & n.77 (1996).

25

new requirements to Rule 9(b) simply because we like the

effects of doing so,” wrote the en banc court, in an exercise of

judicial restraint. /d. “This is a job for Congress, or for the

various legislative, judicial and advisory bodies involved in

the process of amending the Federal Rules.” /d.

Congress, of course, acted in 1995, enacting the Private

Securities Litigation Reform Act to require that in private

actions under the Securities Exchange Act of 1934, plaintiffs

shall be required to plead facts raising a strong inference of

scienter: “In any private action arising under this title in

which the plaintiff may recover money damages only on

proof that the defendant acted with a particular state of mind,

the complaint shall . . . state with particularity facts giving

rise to a strong inference that the defendant acted with the

required state of mind.” 15 U.S.C. §78u-4(b).”" |

Notably, Congress chose to alter pleading standards only

for securities fraud claims arising under the 1934 Act but not

for any other claims—not even for ones arising under the

Securities Act of 1933. The PSLRA enacted other reforms—

to class-action procedures—adding parallel provisions to both

the 1933 and 1934 Acts. See Private Securities Litigation

Reform Act of 1995 (“PSLRA”), Pub. L. No. 104-67, §101,

109 Stat. 737-49 (1995); compare 15 U.S.C.-§77z-| with 15

U.S.C. §78u-4. It also enacted parallel provisions concerning

liability for forward-looking statements in both the 1933 and

1934 Acts. Compare 15 U.S.C. §77z-2 with 15 U.S.C. §78u-S.

But only 1934 Act claims are subject to heightened pleading

standards of any kind. See 15 U.S.C. §78u-4(b); see gen-

erally Hillary A. Sale, Heightened Pleading and Discovery

Stays: An Analysis of the Effect of the PSLRA’s Internal

** See generally John Avery, Securities Litigation Reform: The Long

and Winding Road to the Private Securities Litigation Reform Act of

1995, 51 Bus. Law. 335, 345-47, 357-58 (1996); Lerach & Isaacson,

supra, 33 San Diego L. Rev. at 893, 906-07.

26

Information Standard on ‘33 and 34 Act Claims, 76 Wash. U.

L.Q. 537, 583-90 (1998).

That Congress chose to adopt a narrowly limited heightened

pleading requirement—overriding Rule 9(b)’s proviso that state

of mind may be generally averred—only for securities fraud

cases under the 1934 Act should be dispositive: “‘Expressio

unius est exclusio alterius.” Swierkiewicz, 534 U.S. at 513

(quoting Leatherman, 507 U.S. at 168). Petitioners can point to

‘no similar legislative action authorizing heightened pleading

standards for antitrust claims. Accordingly, conspiratorial state

of mind may be “generally averred” under Rule 9(b), without

setting forth any facts from which it might be inferred.

CONCLUSION

This is no time to abandon the notice-pleading principle

adopted in the Federal Rules in 1938, and restated so many

times by this Court’s rulings—that plaintiffs need not plead the

facts necessary to prove their case. Requiring fact pleading is —

particularly inappropriate in cases that deal with complex

conspiracies stretching over months or years. In a civil rights

case, Judge Easterbrook explained for the Seventh Circuit: _

The district court dismissed the complaint to the extent it

sought relief from the nine individual defendants,

observing that “the complaint does not . . . say of any

defendant, as an individual, that he or she has done

something.” Nor did it need to. Complaints need not

plead facts ....It is enough to specify the wrong done

and leave details to later steps, such as motions for more

definite statement, Fed. R. Civ. P. 12(e), and affidavits

concerning summary judgment. When a collective body

such as a school district takes a complex series of actions

over a span of years, it may be difficult to pin down

individual responsibility without discovery. If the com-

plaint cannot survive a motion under Rule 12(b)(6) until

each person’s role is known, however, it may be

impossible as a practical matter to obtain complete

27

relief. The school desegregation claim should proceed -

against all of the original defendants.

Palmer, 46 F.3d at 688 (citations omitted).

Antitrust conspiracies are apt to be all the more complex—

and surreptitious. Plaintiffs should not be required to plead

particularized facts prior to discovery.

Respectfully submitted,

MARY JANE FAIT _ ERIC ALAN ISAACSON *

_ WOLF HALDENSTEIN ADLER MARK SOLOMON

FREEMAN & HERZ, LLP CHRISTOPHER M. BURKE

55 West Monroe Street, Suite 1111 TAM! FALKENSTEIN HENNICK

Chicago, IL 60603 LERACH COUGHLIN STOIA

(312) 984-0000 GELLER RUDMAN &

ROBBINS LLP

655 West Broadway, Suite 1900

San Diego, CA 92101

* Counsel of Record (619) 231-1058

Counsel for Amici Curiae Legal Scholars Debra Lyn Bassett,

_. Joseph P. Bauer, John S. Beckerman, Kevin M. Clermont,

William V. Dorsaneo III, Christopher M. Fairman, Jackie Gardina,

Susan Harthill, Allan Ides, Danne L. Johnson, David Levine,

Tyler T. Ochoa, Stephen A. Saltzburg, Gregory C. Sisk, Joan E.

Steinman, Jeffrey W. Stempel, Beth Stephens and Elizabeth G.

Thornburg, and for Certain Purchasers of Elevators and

Elevator Maintenance Services, Including Transhorn Ltd., et al.

October 13, 2006

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