Civil Procedure Notes Page 4

LAW 5301 (4 credits)
Professor Pedro A. Malavet

Civil Procedure Notes: Part Four

III. Pleading (Continued)

5. Heightened Requirement of Specificity

a. [Session 13-] Ross v. AH Robbins, FRCP 9(b)[1] & [2], 8(a), 8(a)(2), 150-57

FRCP 9(b) [1] and [2]; FRCP 8(a), especially 8(a)(2).

a. ROSS v. A. H. ROBINS COMPANY, CB-150

[Defendants] prepared, issued and disseminated statements to the investing public highlighting developments with regard to the Dalkon Shield and publicizing its significant impact upon the business affairs of Robins. Said statements also stressed the safety, reliability and efficiency of the Dalkon Shield, particularly with regard to Robins' testing procedures and practices. [Parr. 14, CB-151]

[WHEN]. . .

[d]uring the class period, Robins and the individual defendants knew or recklessly disregarded the fact that there were serious questions as to the safety and efficiency of the Dalkon Shield.... [Parr. 18, CB-151].

[Specifically, they knew that]: pregnancy rate from use of the shield "was significantly higher than the low pregnancy rate Robins had indicated in [its] 1970 Annual Report ...," and that "the rate of medical removals of the shield required by manifestations of pain, bleeding and infection was significantly higher than ... indicated in the 1970 Annual Report...." These facts were evidenced by data "found in an updated April 1972 unpublished study on the Shield by Mary Gabrielson...."

[As a result] ... The value of its common stock "dropped from approximately $19 to $13 per share on the New York Stock Exchange."

Rule 9(b) ]"is a special pleading requirement and contrary to the general approach of simplified pleading adopted by the federal rules," [Rule 8] 5 Wright & Miller, Federal Practice and Procedure: Civil Sec. 1297 at 405, [which] generally serves two important purposes. [1] First, it assures the defendant of " 'fair notice of what the plaintiff's claim is and the grounds upon which it rests.' " Denny v. Barber, 576 F.2d 465, 469 (2d Cir.1978). [2] Secondly, the specificity requirement grows out of "the desire to protect defendants from the harm that comes to their reputations or to their goodwill when they are charged with serious wrongdoing...." Segal v. Gordon, 467 F.2d 602, 607 (2d Cir.1972). [3] In the context of securities litigation Rule 9(b) serves an additional important purpose. It operates to diminish the possibility that " 'a plaintiff with a largely groundless claim [will be able] to simply take up the time of a number of other people [by extensive discovery], with the right to do so representing an in terrorem increment of the settlement value, rather than a reasonably founded hope that the process will reveal relevant evidence....' "

It will not do merely to track the language of Rule 10b-5 and rely on such meaningless phrases as "scheme and conspiracy" or "plan and scheme and course of conduct to deceive." CB-153.

However, at this stage of the litigation, [RULE 9 APPLICATION] we cannot realistically expect plaintiffs to be able to plead defendants' actual knowledge. On the other hand, plaintiffs can be required to supply a factual basis for their conclusory allegations regarding that knowledge. It is reasonable to require that the plaintiffs specifically plead those events which they assert give rise to a strong inference that the defendants had knowledge of the facts contained in paragraph 18 of the complaint or recklessly disregarded their existence. And, of course, plaintiffs must fix the time when these particular events occurred. CB-154

Finally, the complaint is deficient in that it fails to specify the time period during which Robins' stock allegedly fell from $19 a share to $13 a share. CB-154.

[But the court remanded with leave to amend. Did we waste our time?]

5. Heightened Requirement of Specificity: Old Cases

b.Cash Energy v. Weiner, Leatherman v. Tarrant, 157-70

CASH ENERGY, INC. v. WEINER, CB-157

alleging in a single paragraph of the complaint that "at all relevant times" these four "actually participated in and exercised control over the affairs of one or more" of the corporate defendants. The individual defendants moved to dismiss for failure to state a claim [12(b)(6)]. CB-158.

in order to prevail against the individual defendants plaintiffs must show "not simply active participation in the 'affairs' of the corporations, but

[1] that each [individual defendant] participated in the relevant tortious affair [release of toxic material], and [2] that the conduct of each constituted a 'legal cause' of the harm of which plaintiffs are complaining."] CB-158.

"bald assertion." [The Ghost of Gillespie and Code Pleading] Plaintiffs fail utterly to state or outline the facts beneath their allegations that individual defendants participated in and exerted control over the contamination of the North Andover site.

[1]The "short and plain statement of facts" prescribed in Rule 8(a) has been interpreted to require only "that the plaintiffs give the defendant[s] fair notice of what the plaintiff[s'] claim is and the grounds upon which it rests." Conley v. Gibson,). And the [2] generous policy of amendment mandated by Rule 15 further promotes the aim that disputes be decided on the merits. CB-158.

First, Rule 9(b) explicitly recognizes an exception for allegations of fraud and mistake, where a higher standard of particularity is required. Second, Rule 8(f), stating that all pleadings shall be construed so as to do "substantial justice," may be read as requiring judges to exercise some degree of discretion rather than invariably applying the general rule of notice pleading. Third, the Rules provide for a "motion for more definite statement" as a formal method of challenging a pleading that is "so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading." Fed.R.Civ.P. 12(e).

Beneath the higher particularity requirement, here as elsewhere, rests a concern about abusive use of legal processes. The rule "operates to diminish the possibility that 'a plaintiff with a largely groundless claim [will be able] to simply take up the time of a number of other people [by extensive discovery], with the right to do so representing an in terrorem increment of the settlement value, rather than a reasonably founded hope that the process will reveal relevant evidence....' "

As claims under 42 U.S.C. Sec. 1983 began to be presented in significant volume, increasingly distinctive requirements of specificity of pleading appeared in circuit court opinions [based on Rule 9(b)].

First, the rising cost of litigation has made threats of false claims on the one hand, and false defenses on the other, more powerful weapons of intimidation. ... Second, given the worsening caseload crisis in the federal courts, every additional frivolous claim or defense impairs the quality of justice in the system as a whole.

In several areas that do not involve fraud, or even analogies to fraud by any stretch of the imagination, courts have nonetheless developed higher standards of particularity in pleading. In each of these areas, increased specificity may be seen to promote "substantial justice."

[Conley is dead:] In summary, by the fiftieth anniversary of the Federal Rules of Civil Procedure in 1988, the rules of pleading had become less generous [Because]

I conclude that it is a reasonable prediction that higher courts, including the First Circuit, will extend specificity of pleading requirements to CERCLA cases * * *. Unless and until guidance to the contrary appears in legislation or precedent, I will so rule.

LEATHERMAN v. TARRANT COUNTY NARCOTICS INTELLIGENCE AND COORDINATION UNIT, CB-161

We granted certiorari to decide whether a federal court may apply a "heightened pleading standard"--more stringent than the usual pleading requirements of Rule 8(a) of the Federal Rules of Civil Procedure--in civil rights cases alleging municipal liability under Rev.Stat. Sec. 1979, 42 U.S.C. Sec. 1983. We hold it may not.

The United States District Court for the Northern District of Texas ordered the complaints dismissed, because they failed to meet the "heightened pleading standard" required by the decisional law of the Court of Appeals for the Fifth Circuit.

[U]nlike various government officials, municipalities do not enjoy immunity from suit--either absolute or qualified--under Sec. 1983. In short, a municipality can be sued under Sec. 1983, but it cannot be held liable unless a municipal policy or custom caused the constitutional injury. CB-162.

Second, respondents contend that the Fifth Circuit's heightened pleading standard is not really that at all. According to respondents, the degree of factual specificity required of a complaint by the Federal Rules of Civil Procedure varies according to the complexity of the underlying substantive law.

We think that it is impossible to square the "heightened pleading standard" applied by the Fifth Circuit in this case with the liberal system of "notice pleading" set up by the Federal Rules. Rule 8(a)(2) requires that a complaint include only "a short and plain statement of the claim showing that the pleader is entitled to relief." Cb-163.

In Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), we said in effect that the Rule meant what it said: "[T]he Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is 'a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests."

Rule 9(b) does impose a particularity requirement in two specific instances.

claims against municipalities under Sec. 1983 might be subjected to the added specificity requirement of Rule 9(b). But that is a result which must be obtained by the process of amending the Federal Rules, and not by judicial interpretation. CB-163.

SUMMARIES:

CERCLA a.k.a. SUPERFUND

• Retroactive liability
• Strict Liability
• EPA can chose to
  • clean-up and sue for damages or
  • sue for clean-up compliance
• Penalties of up to $25,000.00/day

PERSONS LIABLE:

1. Current Owners or Operators
2. Past Owners or Operators
3. Persons who arranged to dispose of waste at the site
4. Persons who transported waste to the site

—The Overruling of Conley? Handout replaces pp. 173-189.
Updated Notes posted on April 15, 2008

Swierkiewicz v. Sorema, NA

[Pleading Supp.—Page 6]
The Pleading/Dismissal Scheme
Other provisions of the Federal Rules of Civil Procedure are inextricably linked to Rule 8(a)'s simplified notice pleading standard. Rule 8(e)(1) [now 8(d)(2)] states that "[n]o technical forms of pleading or motions are required," and Rule 8(e)(1) provides that "[a]ll pleadings shall be so construed as to do substantial justice." Given the Federal Rules' simplified standard for pleading, "[a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." If a pleading fails to specify the allegations in a manner that provides sufficient notice, a defendant can move for a more definite statement under Rule 12(e) before responding. Moreover, claims lacking merit may be dealt with through summary judgment under Rule 56. The liberal notice pleading of Rule 8(a) is the starting point of a simplified pleading system, which was adopted to focus litigation on the merits of a claim.
Applying the relevant standard, petitioner's complaint easily satisfies the requirements of Rule 8(a) because it gives respondent fair notice of the basis for petitioner's claims. Petitioner alleged that he had been [181] terminated on account of his national origin in violation of Title VII and on account of his age in violation of the ADEA. His complaint detailed the events leading to his termination, provided relevant dates, and included the ages and nationalities of at least some of the relevant persons involved with his termination. These allegations give respondent fair notice of what petitioner's claims are and the grounds upon which they rest. In addition, they state claims upon which relief could be granted under Title VII and the ADEA.

Bell Atlantic v. Twombly

[Supp. p. 8] Liability under § 1 of the Sherman Act, 15 U.S.C. § 1, requires a “contract, combination ..., or conspiracy, in restraint of trade or commerce.” The question in this putative class action is whether a § 1 complaint can survive a motion to dismiss when it alleges that major telecommunications providers engaged in certain parallel conduct unfavorable to competition, absent some factual context suggesting agreement, as distinct from identical, independent action. We hold that such a complaint should be dismissed.

[10] The Court of Appeals for the Second Circuit reversed, holding that the District Court tested the complaint by the wrong standard. It held that “plus factors are not required to be pleaded to permit an antitrust claim based on parallel conduct to survive dismissal.” Although the Court of Appeals took the view that plaintiffs must plead facts that “include conspiracy among the realm of 'plausible' possibilities in order to survive a motion to dismiss,” it then said that “to rule that allegations of parallel anticompetitive conduct fail to support a plausible conspiracy claim, a court would have to conclude that there is no set of facts that would permit a plaintiff to demonstrate that the particular parallelism asserted was the product of collusion rather than coincidence.”

We granted certiorari to address the proper standard for pleading an antitrust conspiracy through allegations of parallel conduct, and now reverse.

[Pleading Supp.—Page 11]
This case presents the antecedent question of what a plaintiff must plead in order to state a claim under § 1 of the Sherman Act. Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of what the ... claim is and the grounds upon which it rests,” Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do, see Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) (on a motion to dismiss, courts “are not bound to accept as true a legal conclusion couched as a factual allegation”). Factual allegations must be enough to raise a right to relief above the speculative level, see 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed.2004) (hereinafter Wright & Miller) (“[T]he pleading must contain something more ... than ... a statement of facts that merely creates a suspicion [of] a legally cognizable right of action”),3 on the assumption that all the allegations in the complaint are true (even if doubtful in fact), see, e.g., Swierkiewicz v. Sorema N. A., 534 U.S. 506, 508, n. 1, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002); Neitzke v. Williams, 490 U.S. 319, 327, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989) (“ Rule 12(b)(6) does not countenance ... dismissals based on a judge's disbelief of a complaint's factual allegations”); Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) (a well-pleaded complaint may proceed even if it appears “that a recovery is very remote and unlikely”).

[Pleading Supp.—Page 12]
Factual specificity
In applying these general standards to a § 1 claim, we hold that stating such a claim requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made. Asking for plausible grounds to infer an agreement does not impose a 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.4 And, of course, a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and “that a recovery is very remote and unlikely.”

We alluded to the practical significance of the Rule 8 entitlement requirement in Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005), when we explained that something beyond the mere possibility of loss causation must be alleged, lest a plaintiff with “ 'a largely groundless claim' ” be allowed to “ 'take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value.' ”
[Pleading Supp.—Page 13]

Id., at 347, 125 S.Ct. 1627 (quoting Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 741, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975)). So, when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, “ 'this basic deficiency should ... be exposed at the point of minimum expenditure of time and money by the parties and the court.'"

What about opportunity to conduct discovery?
Thus, it is one thing to be cautious before dismissing an antitrust complaint in advance of discovery, but quite another to forget that proceeding to antitrust discovery can be expensive. As we indicated over 20 years ago in Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U.S. 519, 528, n. 17, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983), “a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed.” That potential expense is obvious enough in the present case: plaintiffs represent a putative class of at least 90 percent of all subscribers to local telephone or high-speed Internet service in the continental United States, in an action against America's largest telecommunications firms (with many thousands of employees generating reams and gigabytes of business records) for unspecified (if any) instances of antitrust violations that allegedly occurred over a period of seven years.

Discovery Abuse? Cost? Oversight? [FRCP 8] [FRCP 26(b)]
It is no answer to say that a claim just shy of a plausible entitlement to relief can, if groundless, be weeded out early in the discovery process through “careful case management,” given the common lament that the success of judicial supervision in checking discovery abuse has been on the modest side. And it is self-evident that the problem of discovery abuse cannot be solved by “careful scrutiny of evidence at the summary judgment stage,” much less “lucid instructions to juries;” the threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching those proceedings.

[14] This “no set of facts” language can be read in isolation as saying that any statement revealing the theory of the claim will suffice unless its factual impossibility may be shown from the face of the pleadings; and the Court of Appeals appears to have read Conley in some such way when formulating its understanding of the proper pleading standard.

On such a focused and literal reading of Conley's “no set of facts,” a wholly conclusory statement of claim would survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some “set of [undisclosed] facts” to support recovery. So here, the Court of Appeals specifically found the prospect of unearthing direct evidence of conspiracy sufficient to preclude dismissal, even though the complaint does not set forth a single fact in a context that suggests an agreement. It seems fair to say that this approach to pleading would dispense with any showing of a “ 'reasonably founded hope' ” that a plaintiff would be able to make a case; Mr. Micawber's optimism would be enough.

Ruling [x] [Pleading Graphic] [Questions][Notice Pleading] [Conley]
We could go on, but there is no need to pile up further citations to show that Conley's “no set of facts” language has been questioned, criticized, and explained away long enough. To be fair to the Conley Court, the passage should be understood in light of the opinion's preceding summary of the complaint's concrete allegations, which the Court quite reasonably understood as amply stating a claim for relief. But the passage so often quoted fails to mention this understanding on the part of the Court, and after puzzling the profession for 50 years, this famous observation has earned its retirement. The phrase is best forgotten as an incomplete, negative gloss on an accepted pleading standard: once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint. Conley, then, described the breadth of opportunity to prove what an adequate complaint claims, not the minimum standard of adequate pleading to govern a complaint's survival.

III

When we look for plausibility in this complaint, we agree with the District Court that plaintiffs' claim of conspiracy in restraint of trade comes up short. To begin with, the complaint leaves no doubt that plaintiffs rest their § 1 claim on descriptions of parallel conduct and not on any independent allegation of actual agreement among the

Plaintiffs say that our analysis runs counter to Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). * * * As the District Court correctly understood, however, “Swierkiewicz did not change the law of pleading, but simply re-emphasized ... that the Second Circuit's use of a heightened pleading standard for Title VII cases was contrary to the Federal Rules' structure of liberal pleading requirements.” ***.
[Pleading Supp.—Page 18]
Here, in contrast, we do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed.

Dissent: Balancing in terrorem effect of expense vs. opportunity to discover
Two practical concerns presumably explain the Court's dramatic departure from settled procedural law. Private antitrust litigation can be enormously expensive, and there is a risk that jurors may mistakenly conclude that evidence of parallel conduct has proved that the parties acted pursuant to an agreement when they in fact merely made similar independent decisions. Those concerns merit careful case
[Pleading Supp.—Page 20]

management, including strict control of discovery, careful scrutiny of evidence at the summary judgment stage, and lucid instructions to juries; they do not, however, justify the dismissal of an adequately pleaded complaint without even requiring the defendants to file answers denying a charge that they in fact engaged in collective decisionmaking. More importantly, they do not justify an interpretation of Federal Rule of Civil Procedure 12(b)(6) that seems to be driven by the majority's appraisal of the plausibility of the ultimate factual allegation rather than its legal sufficiency.

[Pleading Supp.—Page 21]
Consistent with the design of the Federal Rules, Conley's “no set of facts” formulation permits outright dismissal only when proceeding to discovery or beyond would be futile. Once it is clear that a plaintiff has stated a claim that, if true, would entitle him to relief, matters of proof are appropriately relegated to other stages of the trial process. Today, however, in its explanation of a decision to dismiss a complaint that it regards as a fishing expedition, the Court scraps Conley's “no set of facts” language. Concluding that the phrase has been “questioned, criticized, and explained away long enough,” the Court dismisses it as careless composition.

[22] Most recently, in Swierkiewicz, 534 U.S. 506, 122 S.Ct. 992, 152 L.Ed.2d 1, we were faced with a case more similar to the present one than the majority will allow. In discrimination cases, our precedents require a plaintiff at the summary judgment stage to produce either direct evidence of discrimination or, if the claim is based primarily on circumstantial evidence, to meet the shifting evidentiary burdens imposed under the framework articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). Swierkiewicz alleged that he had been terminated on account of national origin in violation of Title VII of the Civil Rights Act of 1964. The Second Circuit dismissed the suit on the pleadings because he had not pleaded a prima facie case of discrimination under the McDonnell Douglas standard.

[23] Everything today's majority says would therefore make perfect sense if it were ruling on a Rule 56 motion for summary judgment and the evidence included nothing more than the Court has described. But it should go without saying in the wake of Swierkiewicz that a heightened production burden at the summary judgment stage does not translate into a heightened pleading burden at the complaint stage. * * *

III
* * *
Even if I were inclined to accept the Court's anachronistic dichotomy [between "factual allegations" and "legal conclusions"] and ignore the complaint's actual allegations, I would dispute the Court's suggestion that any inference of agreement from petitioners' parallel conduct is “implausible.”

IV [SO WHAT?]

* * * Whether the Court's actions will benefit only defendants in
[Pleading Supp.—Page 25]

antitrust treble-damages cases, or whether its test for the sufficiency of a complaint will inure to the benefit of all civil defendants, is a question that the future will answer. But that the Court has announced a significant new rule that does not even purport to respond to any congressional command is glaringly obvious. [Compare Leatherman and Erickson]

NOTES

[Pleading Supp.—Page 26]
"Perhaps if Rules 8 and 9 were rewritten today, claims against municipalities under § 1983 might be subjected to the added specificity requirement of Rule 9(b). But that is a result which must be obtained by the process of amending the Federal Rules, and not by judicial interpretation. In the absence of such an amendment, federal courts and litigants must rely on summary judgment and control of discovery to weed out unmeritorious claims sooner rather than later."

[26] In Dura Pharmaceuticals, Inc. v. Broudno, 125 S.Ct. 1627 (2005), the Court seemed to embrace a more demanding attitude toward pleading requirements, albeit for purposes of notice. Plaintiffs in this securities fraud action claimed that when they bought defendant's stock in 1997-98 its value was inflated due to misrepresentations about the company's financial condition and prospects. As plaintiffs' "detailed amended (181 paragraph) complaint" alleged, the company later announced that its earnings would be lower than expected, and on the following day its shares lost almost half their value, falling from $39 per share to $21 per share.

SO WHAT? Perhaps: Erickson v. Pardus, handout at pages 27-28

"substantial harm," and the Court of Appeals affirmed. The Supreme Court criticized the Court of Appeals' "departure from the liberal pleading standards set forth in Rule 8(a)(2)," explaining:

Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Specific facts are not necessary: the statement need only "'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. ___, ___ (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957). In addition, when ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations in the complaint. Bell Atlantic Corp., supra, at ___.

2. In Bell Atlantic, the Court seems to disavow the "no set of facts" language in Conley v. Gibson, quoting a commentator's view that this approach had "turned Rule 8 on its head." Professor Sherwin's recent study of Conley concludes that this language in the decision became "precedent by accident" because the case really focused on labor law issues and "[t]he influential discussion of Rule 8 in Conley was lifted from a much-used text and added to the opinion by a Justice who was impatient with both the defendants' intransigence and with their lawyer's strategy in arguing a losing case." Sherwin, The Story of Conley: Precedent by Accident, in Civil Procedure Stories, at 281, 302 (2002). As Justice Stevens pointed out, however, that the Court itself had repeatedly invoked this language itself since Conley was decided. Should the Conley standard continue to control?

6. Pre-Answer Motions, Rule 12 Exercises, FRCP 7(a), 12(a), 12(b), 12(g), 12(h), 15(a), 170-72

RULE 12 & WAIVER

FRCP12(b) FRCP12(g) FRCP12(h)(1) FRCP15(a) FRCP7(a) FRCP12(h)(2) FRCP12(h)(3)

Keep in mind that 12(g) is the trigger, and 12(h) *can* be the bullit, or less colorfully, that 12(g) is the requirement of consolidation, and 12(h) the actual provision of waiver, or the exception to waiver.

DISFAVORED DEFENSES

FRCP 12(b)(2), (3), (4), (5)

1. Lack of Personal Jurisdiction
2. Improper Venue
3. Insufficiency of Process
4. Insufficiency of Service of Process

Disfavored Defenses must be raised EITHER by Motion OR in the ANSWER. FRCP 12(h)(1)(A) &(B)

1) If a motion was filed, ONLY 12(g) and 12(h)(1)(A) apply. Cannot be raised in the answer or by new motion. "[Not] then available" is highly unlikely.

2) If a motion was NOT filed, then 12(h)(1)(B) AND 15(a) and 7(a) apply to their being raised in the answer or an amendment thereto. Note the last part of 12(h)(1)(B) which allows for amendment as a matter of course ONLY, i.e., NOT by leave of court.

FAVORED DEFENSES

• FRCP 12(b)(6), (7), 12(h)(2)
• failure to state a claim upon which relief can be granted,
• failure to join an indispensable party, and
• failure to state a legal defense to a claim.

FAVORED DEFENSES PRACTICE

• FRCP 12(h)(2)
• Initial Motion
• Answer or amendment thereto, FRCP 15(a) and 7(a)
• Motion for Judgment on the Pleadings. FRCP 12(c)
• At trial.

The important thing to keep in mind here is that favored defenses are not waived, but the form in which they are brought to the attention of the court does change.

MOST FAVORED DEFENSE

• FRCP 12(b)(1), 12(h)(3)
• Lack of Subject-Matter Jurisdiction

CAN BE RAISED AT ANY TIME IN ANY WAY, BY ANY ONE.

RULE 12 EXERCISES

A student has answered the RULE 12 questions in the casebook. I am forwarding those answers, and my comments. The answers are very well done, however, I need to emphasize the limitation in Rule 12(h)(1)(B), which allows disfavored defenses to be raised for the first time in an amended answer only IF: (1) NO motion was filed and (2) amendment would be allowed by Rule 15(a) AS A MATTER OF COURSE. This final language means that only one of the three methods of amendment available under Rule 15(a) may be used to raise a disfavored defense.

--Prof. Malavet

Question 3(a): [ON FEBRUARY 15, 2009, I added notes on all the subparts of Question 3 at page 191]

Within 20 days after service of a complaint and summons, the defendant files a pre- answer motion alleging 12(b)(5), a 12(h)(1) defense. Fifteen days later, the court has not yet ruled on the motion, and defendant realizes that 12(b)(3) (a 12(h)(1) defense) and 12(b)(7) (a 12(h)(2) defense) also could have been raised. Can they be filed in a separate pre-answer motion?

The 12(b)(3) defense cannot be raised. Under 12(g), the general rule is that all available defenses must be consolidated into a single pre-answer motion. Under 12(h)(1)(A), a disfavored defense (12(h)(1) defense) is waived if it is not mentioned in the original pre-answer motion. This makes sense since the 12(h)(1) defenses (lack of jurisdiction over the person, improper venue, insufficiency of process, and insufficiency of service of process) ought to be readily apparent upon a cursory investigation, and certain upon investigation by careful counsel necessary to meet 11(b) obligations. The consolidation rule does not apply to defenses unavailable to the party at the time of the pre-answer motion, so newly available 12(h)(1) defenses can be raised a a later time.

The 12(b)(7) defense can be raised. Rule 12(h)(2) is an exception from the general 12(g) consolidation rule, and allows that 12(h)(2) defenses can "be made in any pleading permitted or ordered under 7(a), or by motion for judgment on the pleadings, or at trial on the merits". Rule 7(a) describes the pleadings available to the parties. Rule 12(c) describes a motion for judgment on the pleadings. The 12(b)(7) defense would not be raised in a new pre-answer motion, but rather in a 7(a) pleading, a 12(c) motion, or at trial on the merits.

[Note the lack of waiver, but the express FORM requirement].

The question also seems to be designed to allow for a variation on the facts: What if the party filed no pre-answer motion but rather filed an answer within 20 days of the complaint and summons? Amendments to pleadings are covered in 15(a), which allows a party to amend a pleading "once as a matter of course" (A) at any time before a responsive pleading is served or (B) within 20 days if no responsive pleading is allowed and the matter has not been put on the trial calender. Rule 15(a) also allows for amendment by leave of the court or consent of the adverse party and states that "leave shall be freely given when justice so requires". So if the party had filed an answer and no pre-answer motion, the party could have amended the answer and included both the 12(b)(3) and the 12(b)(7) defense.

[The defenses could indeed have been raised by way of an amended answer as a matter of course. Please note that Rule 15(a) contemplates three methods of amendment and only one is available in this situtation and only if the answer was the first response to the complaint, thus using the language of Rule 12(h)(1)(B)(ii).

The time period to amend the answer as a matter of course will almost always be the 20 days of 15(a)(1)(B).

PRIOR TO REDACTION OF THE RULES, rule 7(a) established that the answer was a pleading to which no response is permitted unless the court orders a reply, since the existence of the reply is not recognized until the court actually orders one (see some case examples of this below). Prior to redaction, the language of Rule 15(a) likewise referred to a "pleading to which no responsive pleading is permitted", but Rule 15(a)(1)(B) has been changed to "if a responsive pleading is not allowed and the matter has not been placed on the trial calendar."

OLD RULE 7(a) had a final sentence that read: "No other pleading shall be allowed, except that the court may order a reply to an answer or a third-party complaint." This is the language that made the answer a pleading to which no response is permitted in the language of old Rule 15(a).

THE REDACTED RULE replaces that with "(7) if the court orders one, a reply to an answer." This language now fits with the redacted language of Rule 15(a)(1)(B) which also refers to "if a responsive pleading is not allowed."]

I must emphasize that the intent of the redaction is simply to create consistency in allowing the court to have the discretion to order a reply to any type of answer, including the answer to a counterclaim, which had not been included in the old language at the end of Rule 7 (this is explained in the advisory committee note). However, the deletion of "No other pleading shall be allowed," together with the inclusion of the reply with all other pleadings, seems to upgrade the treatment of the reply as a more recognized pleading as well. This could have been a problem, which would have screwed up some of my mulitple choice questions, had they not also changed the language of 15(a)(1)(B), although the "if" now requires that facts deal with the reply expressly, which I would not have felt compelled to do before in drafting a question. This was the first time that I looked at the redaction and thought "Gee, that might change more than they intended."

(b) Defendant filed a pre-answer motion alleging the defense of improper venue and, when it was denied, filed an answer responding on the merits. Six months later, defendant’s counsel realizes that there is a defense of lack of jurisdiction over the subject matter.
Can this defense be raised as the basis for a motion to dismiss?

ANSWER: The defense can be raised as the basis of a motion the effect of which would be dismissal.
Given that 12(h)(3) allows lack of subject matter jurisdiction to be brought to the court's attention in any manner, what you call the motion is not important. This is not an area in which the court will be strict about form (unlike 12(h)(2) as to which the courts strictly enforce the form requirements).

Nevertheless, let’s be technical. There is some question as to whether this is “in a [Rule 12(b)] motion to dismiss” since technically, after the answer is filed it is a motion for judgment on the pleadings under Rule 12(c), because the pleadings will have closed. The party is accurately described as “moving to dismiss for lack of subject matter jurisdiction,” but the title of the motion should be Motion for Judgment on the Pleadings. In practice, however, as I indicated above, what you call it is remarkably unimportant. For example, “Notices of Defect in Jurisdiction” are sometimes filed pursuant to Rule 12(h)(3) itself and the court must consider the matter. (See, e.g., Garcia v. Copenhaver, 104 F.3d 1256 (11th Cir. 1997)).

Can it be raised for the first time on appeal after judgment for the plaintiff?

ANSWER: Yes. Even the court can raise it on its own motion. If a court without subject-matter jurisdiction rules, its judgment may become final, however, if not appealed.
FRCP 12(h)(3) PR Management, CB-843 Sec. 1331 Sec. 1332

(c) Defendant did not file a pre-answer motion, but timely filed an answer responding on the merits to the allegations of the complaint. Four weeks after filing the answer [Rule 12(h)(1)(B), Rule15(a) Rule6(a)], he realizes that there is a defense
of insufficiency of service of process [12(b)(5) 12(h)(1)] and
of failure to state a claim upon which relief can be granted [12(b)(6) 12(h)(2)].
Can he raise these defenses?

MALAVET: What if defendant realized the error two weeks later? AND the matter has not been set on the trial calendar? [12(b)(5) 12(h)(1)]

ANSWER: Service only if it was not then available. Otherwise, it has been waived.

Note that amendment of the answer as a matter of course was available, even after waiver, (Rule 12(h)(1)(B)), but only for 20 calendar days. (Rule 6(a)Time).

Note further that raising a disfavored defense in an amended answer is only available if you did NOT file a motion to dismiss prior to filing the answer, because it would be absurd to allow you to raise in an amended answer what you could not have raised in the answer. (FRCP 12(h)(1)(A) & (B)).

Failure to state a claim can be raised.

If so, in what manner?
12(h)(1) 15(a) 6(a)Time 12(h)(2) 12(c)
ANSWER: The only surviving defense is 12(b)(6) which is saved by rule 12(h)(2). I have found reported cases in which the courts have strictly enforced the form requirements of Rule 12(h)(2). Therefore:
Since the answer has been filed, the failure to state a claim defense likely will be raised in a motion for judgment on the pleadings or in a Summary Judgment motion.
Additionally, as to 12(h)(2) and 12(h)(3) defenses, all the Amended Answer methods allowed by Rule 15(a) would be available. Although amendment with leave of court would be the only one realistically available, since the term for amendment as a matter of course is past and the opposing party is unlikely to agree to amendments that get their case dismissed.

[Cases deleted from Updated Edition] 4. Rule 12(h)(1) might not be literally applied under some circumstances. In Jackson v. United States, 138 F.R.D. 83 (S.D. Tex. 1991), an environmental activist was injured when federal officers chopped down a tree he had climbed in protest of clear cutting. Some 25 days after they were served, defendants (the U.S. and three federal officers) filed a pre-answer Motion for a 60 Day Response Date, asserting that they were entitled to 60 days to answer and stating that they were reserving the defenses of insufficiency of process and service of process. They then filed an answer within the 60-day time period without raising these defenses, but they later moved to dismiss pursuant to Rules 12(b)(4) and (5), relying on these defenses. Under the literal language of Rule 12(h)(1), these two disfavored defenses were waived, but the court ruled that defendants’ “reservation” of the defenses in their pre-answer motion was sufficient to provide fair notice and therefore avoided a waiver of the defenses.
MALAVET: Do not expect mere mortals to be treated this nicely. Keep in mind that this case involved the government as a party, and they often get better treatment by express requirement of the rules.

These are cases interpreting various aspects of 12(g) and 12(h) that will help with your understanding of the rule.

Engle v. CBS Inc., 886 F Supp. 728 (1995 Central District of California).

Venue objection not waived because it was not available when the case was filed, in 1985. This strange case resulted from amendments to the venue statutes in 1990 and 1992, which created a venue defect. The court held that the statutes applied retroactively, requiring a change of venue, and that the defense had not been waived, because it was not available when the answer was filed.

Goodstein v. Bombardier, 167 FRD 662 (Dist. Vermont 1996). No waiver where a party who had NOT been served joined in a motion to dismiss filed by a served party. After the 120-day period for service passed, they filed a second motion to dismiss, this time raising the failure to serve with process.

Examples of FORM requirement for raising 12(h)(2) Defenses.

Stwart v. Pitcher, 1993 US Apps. LEXIS 26632 (6th Circuit): While qualified immunity defense had not been waived and could be raised in an answer, motion for judgment on the pleadings, summary judgment motion or at trial, it was improper to raise it in a second pre-answer motion, thus the court was correct in denying that motion.

A rule 19 defense has to be brought to the attention of the court in the proper form. Wegwart v. Eagle Movers, Inc,. 441 F Supp. 872 (1977)

Note that 12(g) says any motion under this rule, not just 12(b). Therefore, courts have found that filing a 12(e) motion triggers the consolidation, but only as to what was then available. Clark v. Associates Commercial, 149 FRD 629 (Dist. Kansas 1993). 

Objectivity of Standard. Counsel’s mistake is not an excuse. Carter v. American Bus Lines, Inc.,  22 FRD 323 (1958).

Answer and Counterclaim.

The answer and counterclaim are usually a single document or pleading, but they are treated differently under certain circumstances.

For amendments that attempt to raise 12(b) defenses, the pleading will be treated as an answer, thus falling under the 20-day amendment as a matter of course language of Rule 15(a)(1)(B), rather than the language of "at any time before a responsive is filed" found in Rule 15(a)(1)(A). See Williams v. Jones, 11 F3d 247 (1st Cir. 1993), n. 4.   Chase v. Pan Pacific Broadcasting, 750 F.2d 131, 133 (DC Cir. 1984) (case in which defendant filed an answer including a counterclaim; sixteen months after that, defendant sought to file a motion to dismiss for lack of personal jurisdiction. This, the court held, violated Rule 12(h)(1), amendment to the answer-counterclaim to raise 12(h)(1) defense had to be filed within 20-days of the filing of the original answer-counterclaim.

7. Failure to Answer: Default, Shepard Claims v. William Darrah & Associates, FRCP 4(e), 12(a)(1)(A), 55, 173-80

SHEPARD CLAIMS SERVICE, INC. v. WILLIAM DARRAH & ASSOCIATES United States Court of Appeals, Sixth Circuit, 1986. CB-173

extension to run 45 days in addition to the normal period of 30 days under Rule 4(e). CB-173. [No one is really sure where the 30 day period comes from. However, it COULD be that the reference is to the adoption of state rules by Rule 4(1)(1), and, presumably, that the state Rule allowed for 30 days to respond rather than the 20-day period of FRCP 12(a)(1)(A).]

the district court found that defendant's attorney engaged in culpable conduct when he permitted his secretary to make arrangements for the extension and then failed to review the secretary's letter upon returning from vacation. CB-174.

. . . we concluded that three factors determine the outcome of [a Rule 55] motion:

1. Whether the plaintiff will be prejudiced;

2. Whether the defendant has a meritorious defense; and 3. Whether culpable conduct of the defendant led to the default. CB-174

The present case differs from United Coin in at least one material respect. In United Coin, a default judgment was entered, whereas this interlocutory appeal was taken before entry of judgment. If the only issue relates to entry of default, Rule 55(c), Fed.R.Civ.P., provides the standard--"good cause shown." After entry of a default judgment, the court may set the judgment aside "in accordance with Rule 60(b)," which lists several grounds for relief from judgment. CB-174-75.

The sole reference to negligence in the United Coin opinion is contained in a discussion of the standards applicable to a Rule 60(b) motion, under which "excusable neglect" is a ground for relief. CB-175

Rule 55(c) leaves to the discretion of the trial judge the decision whether to set aside an entry of default. However, a strong preference for trials on the merits in federal courts has led to the adoption of a somewhat modified standard of review where defaults are involved.

In practice a somewhat more lenient standard is applied to Rule 55(c) motions where there has only been an entry of default than to Rule 60(b) motions where judgment has been entered.

However, we must consider the fact that the plaintiff suffered no [unfair] prejudice by reason of the tardy pleadings and the defendant did present a meritorious defense in its answer. These findings of the district court are clearly supported by the record. CB-175-76.

The conduct of Darrah's counsel, Mark Shreve, was careless and inexcusable. Nevertheless, it is not necessary that conduct be excusable to qualify for relief under the "good cause" standard of Rule 55(c). CB-176.

To be treated as culpable, the conduct of a defendant must display either an intent to thwart judicial proceedings or a reckless disregard for the effect of its conduct on those proceedings.

A default judgment deprives the client of his day in court, and should not be used as a vehicle for disciplining attorneys.

Our disposition of the case does not preclude the district court from assessing or determining some appropriate penalty or sanction against the defendant or his counsel for the delay occasioned by the careless and inexcusable conduct of defendant's counsel herein discussed. CB-177.

NOTES:

See the excellent example of what "impertinent or scandalous" matter might be that is cited in Note 3.

Pay particular attention to Note 4. When equitable relief is sought, you have to prove all the necessary elements. Remember the listing at page 85 of the casebook.