In this section of the course we look at pleading – the process through which claims and responses are set out in writing. 

     The federal rules are a system, and as in any system choices made with one part will affect other parts. That is true with respect to pleading. Pleading serves many purposes, and the designers of a procedural system have decide which aspects of pleading are given preference. This, in turn, will affect how other aspects of the procedural system function.

     Some of the things pleading might try to achieve include:

• Start the litigation

• Provide Notice

• Set out the facts underlying claims and defenses

• Identify causes of action and defenses

• Screen or filter out bad cases (e.g., cases that invoke no accepted legal theory)

• Simplify case for resolution

• Help to define what case was about for purposes of using the judgment to preclude or assist future claims

     In looking at balancing between the functions of pleading, choices arise. These include:

• Should pleading be used to resolve the case, or just to set the stage?

• How much factual detail should be required - or permitted?

•  Once a party has set out its position in pleadings, should it be allowed to amend its pleadings and so change the positions it has taken?

• Do we apply the same pleading rules to all kinds of cases?

• Should we allow a party to assert multiple - and perhaps even inconsistent - legal and factual theories in pleadings and responses?

• Once a pleading has been entered, do statutes of limitations affect changes to that pleading?

     Think back to our case involving the student disappearance of a remarkable pig from a farmer's pig pen. As you read through the following short history of pleading, think about how different pleading systems would approach a lawsuit based on that disappearance. Think also about how the roles assigned to the pleading stage have an effect on what need not or must be handled at other stages of the case.

The History and Purposes of Pleadings

     Much has been asked of pleadings. At times, such as under the common law, the pleading process served to define and narrow the case. Under Code pleading, the pleadings set forth the essential facts and defined the contours of the case. The complaint was required to set forth the facts supporting the cause of action, with those same facts acting as boundaries beyond which no proof could be introduced. Under the Federal Rules of Civil Procedure, which shifted more of the burden of defining and shaping litigation to discovery, pleadings were asked first and foremost to provide notice.

     As Charles Clark summarized the shifting function of pleadings more than a decade before the adoption of the Federal Rules:

[T]he purpose especially emphasized has varied from time to time. Thus in common law pleading especial emphasis was placed upon the issue-formulating function of pleading; under the earlier code pleading like emphasis was placed upon stating the material, ultimate facts in the pleadings: while at the present time the emphasis seems to have shifted to the notice function of pleading.

     Even under the Federal Rules of Civil Procedure, the humble complaint must play multiple roles. Its filing supplies a start date for the litigation process. It provides notice of the nature of the claims being asserted. It identifies at least some of the relevant facts and sets the boundaries within which further facts may be developed during discovery. In conjunction with the answer and any later amended complaints, it defines and narrows the issues that must be resolved at trial. It provides a means for testing, and when appropriate dismissing, claims without a legal basis or for which jurisdiction does not lie. When litigation has ended, the complaint helps identify, for purposes of issue and claim preclusion, which issues were and might have been litigated.

     A pleading standard that works brilliantly for one of these tasks – say, narrowing the issues for trial – might prove cumbersome for another, such as notice.  In thinking about pleadings, it must be asked whether (and how much) pleadings should be used to resolve the litigation, and how much it should be used just to set the stage for other modes of resolution.

A.  The Common Law and Code Eras: Narrowing and Defining the Case

     At one time, pleadings played a much more central role in developing litigation than they do today. In both the common law and code eras pleadings were used to narrow and define the case. Under equity, pleadings took on the additional role of providing evidence to the court, substituting in large part for the trial. While these pleading regimes carried a cost – particularly in creating technical traps for the unwary and sometimes expanding the cost of the overall litigation – they did have the advantage of sometimes properly eliminating meritless cases and of simplifying and narrowing trial.

1.     Common Law Pleading

     In the Common Law era, pleading practice focused on narrowing and defining the case. It did not rely on the opening document to achieve that function, but achieved case definition through an extensive exchange of pleadings. The initial writ provided notice, some statement of the facts underlying the claim, and indication of the legal theory. Then commenced a complex dance of response and counter-response. The defendant denied or admitted the facts alleged, challenged the legal sufficiency of the allegations through demurrers, or presented defenses that would defeat the claim even given the truth of plaintiff’s allegations. The exchange of pleadings could proceed through several iterations, with each new round providing traps for the unwary.

     Common law pleading practice possessed one cardinal virtue – it simplified trial. The goal of the complex exchange of pleadings was to narrow the case to a single issue of fact or law that could be decided at trial. Compared to modern trials, the common law trial was a straightforward affair. Disputes could be tried in days, if not hours, and typically presented non-technical issues that a jury of common folk could readily comprehend.

     The path to the trial, however, imposed substantial costs. Much depended on technicalities. Perhaps the most fundamental of these, until abolished, were the ancient forms of action. In part procedural, in part substantive, the forms provided for a certain kind of remedy for a certain kind of harm.

Let it be granted that one man has been wronged by another; the first thing that he or his advisers have to consider is what form of action he shall bring. It is not enough that in some way or another he should compel his adversary to appear in court and should then state in the words that naturally occur to him the facts on which he relies and the remedy to which he thinks himself entitled. No, English law knows a certain number of forms of action, each with its own uncouth name, a writ of right, an assize of novel disseisin or of mort d'ancestor, a writ of entry sur disseisin in the per and cui, a writ of besaiel, of quare impedit, an action of covenant, debt, detinue, replevin, trespass, assumpsit, ejectment, case. This choice is not merely a choice between a number of queer technical terms, it is a choice between methods of procedure adapted to cases of different kinds.

     F. W. Maitland, The Forms of Action at Common Law 1, (A.H. Chaytor and W.J. Whittaker ed.) (1909)

     At the outset of the lawsuit, the plaintiff faced irrevocable and consequential choices. Each form of action carried with it procedural anomalies – such as how jurisdiction over the defendant might be obtained, and which remedies would be available. Each also corresponded to certain kinds of facts, but not, however closely related, to others. Choosing a not-quite-right form of action meant dismissal. “The plaintiff must sue either in case or in trespass, and upon the accuracy of his claim depended the success of his action.”

     Choosing the right form of action was only the first of many pleading choices fraught with danger. For example, a defendant could not deny the legal basis for the claim while challenging the facts; a choice had to made between a demurrer and a denial. Once a choice was made, there was no going back for a do-over.

     As time went on, the defects of common law pleading became increasingly clear. The pleading phase of the case could take a long time and cost a lot of money, pushing off the resolution of the case on the merits and pricing some litigants out of court. Worse than that, the pitfalls of pleading meant that some cases could be resolved on grounds that had nothing to do with the merits.

2.     Equity Pleading

     Pleading in equity followed its own distinct course, but also served to narrow and define the case. A suit in equity was commenced by filing a bill of complaint. The bill of complaint set forth the facts of the case along with a prayer for relief. The bill of equity included interrogatories to the opposing party, and as pleadings were exchanged much of the proof in the case was submitted through the pleadings themselves.

     Fact pleading also was the rule in equity. The bill, which was used to initiate proceedings in Chancery, required as an essential element a listing of the facts which the plaintiff expected to prove, to which the defendant was required to respond with either admissions or denials under oath. While much of practice under the modern rules – such as joinder of parties and claims – derives from equity practice, modern notice pleading does not.                          

3.     Code Pleading

     With the industrial revolution well under way, the arcane and treacherous intricacies of common law pleading must have seemed as out of date as a torch lit medieval workshop. In an era that broke new ground in industrial efficiency and productivity, it was only natural that reformers wished the same for legal processes. The sometimes absurd technicalities of the common law looked ripe for replacement by a rationally engineered replacement.

     The most influential of the U.S. reform efforts, the Field Code, sought to remedy the flaws of common law pleading by substituting “fact” pleading that diminished the importance of the causes of action. The complaint in code pleading dispensed with naming the cause of action in favor of a document setting forth the facts of the case. The goal was in part to simplify the process, and in part to reduce the ability of judges to act capriciously.

     This new approach soon revealed problems of its own. Two merit mentioning. First, distinctions between “facts” and “ultimate facts” proved not so simple in application.   Second, in order to avoid surprise and discipline the pleading process, the proof offered at trial could not go beyond the allegations of the complaint. The disputes over what constituted proper pleading of facts enabled expensive wrangling over the pleadings, while the limitation on proof beyond the pleadings, coupled with restrictions on amending the complaint, sometimes made difficult adapting the case to factual developments..

B.  20th Century American Innovation: Notice Pleading

     By the early 20th century it had become clear that neither code pleading nor common law pleading was the ideal solution to launching a lawsuit. Perhaps because lawyers of the era were so thoroughly steeped in common law traditions, technicalities proved resilient in legal practice. A new reform movement arose, this time directed at resolving cases on the merits rather than on technicalities. To achieve this, it seemed clear to some that the role of pleadings should be diminished.

     An early advocate for reform was Roscoe Pound, then dean of the law school at the University of Nebraska. In a famous 1906 address to the American Bar Association, he decried what he saw as the “sporting theory of justice” where lawyerly skill mattered more than the merits and pushed for a new approach. For Pound, "the sole office of pleadings should be to give notice to the respective parties of the claims, defenses and cross-demands asserted by their adversaries."

     Notice pleading quickly attracted adherents. In the 30 years following Pound’s speech, a theory of notice pleading developed. This theory would diminish the role pleading might play in narrowing and resolving the case; at the same time, litigants would no longer need to fear pleading as a trap. So long as the function of notice was served, the litigation could proceed to resolution on the merits, with the expectation that merits resolution would yield more accurate and more respected results.

C.  Pleading Under The Federal Rules

     In the latter part of the 1930s, a confluence of events enabled a dramatic change in American federal court procedure. The passage of the Rules Enabling Act created two possibilities:  merging equity and common law in the federal courts and the codification of federal procedure. This moved notice pleading from an academic concept to reality.

     Charles Clark, a pleading expert and the principal draftsman of the Federal Rules of Civil Procedure, was a believer in simplified notice pleading. Largely as a result of Clark’s influence, notice pleading was incorporated in the new Federal Rules of Civil Procedure adopted in 1938. Under this approach, the plaintiff was required only to provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Pleading formalities, whether of facts or causes of action, were out; getting to the facts through discovery and resolving the claims on the merits was in.

     The adoption of such minimal notice pleading was an American innovation. No modern pleading regime had required so little. Even today, pleading systems worldwide typically require fact pleading – often at a level far beyond what Americans think of as fact pleading.

1.     Liberal Pleading In The Context Of Other FRCP Innovations

     Notice pleading was far from the only innovation in the new federal rules. For our purposes, two stand out – liberal joinder and expansive discovery. Along with notice pleading, these innovations changed the nature of what constituted a lawsuit.

     Liberal joinder of claims and parties, an approach modeled on equity procedure, expanded the scope of lawsuits. Under the common law, a writ by its nature stated a single cause of action. A case arose from and was linked conceptually to the specific legal right asserted. Under fact pleading, the facts laid out in the complaint circumscribed the litigation, and the plaintiff could not easily develop a case different from the alleged facts.

     That changed under the federal rules. Under the federal rules, the contours of a case or controversy are no longer linked to the legal right asserted. Rather, the federal rules model looks to the “transaction or occurrence” from which the dispute arose. Multiple and inconsistent causes of action can be asserted based on the common transaction or occurrence; claims and counterclaims that are part of the transaction and occurrence complained of will be barred in future litigation the same as if they had been tried and lost. The goal was efficient and equitable handling of the underlying dispute without undue regard to technicalities.

     This change allowed multiple defendants to be joined in a single action, so that complete justice could be done in one trial. It also allowed the assertion of multiple legal theories, so that plaintiffs need not fear losing a meritorious case because the wrong legal theory was asserted. This inclusive approach drew upon equitable tradition, and deferred until later in the case the task of narrowing the parties and issues involved.

     The new rules also allowed an unprecedented amount of pretrial discovery. While pretrial discovery was known, to a limited degree, in code pleading and to a greater degree in equity practice, the new rules provided for a range of discovery tools that exceeded in scope anything that had previously existed in any one system.

     That the federal rules marked a bold new step in legal procedure was clear at the time. What was perhaps less clear was exactly how the process of litigation would change as lawyers became familiar with the new tools provided. As this article will show, the combination of liberal joinder, expansive discovery and scant pleading opened the way to a new kind of litigation centered less on either pleadings or trial than had been the case in the past.

2.     Conley: Notice Pleading Confirmed

     While the Federal Rules clearly marked a change in direction, the rules left room for interpretation. In particular, the exact nature of what constituted adequate pleading was inherently a bit hazy under Rule 8, given the rule’s careful avoidance of either of the words “fact” or “notice.” While Clark clearly favored a liberal notice pleading regime requiring little in the way of fact pleading, other scholars, as well as some judges and attorneys, preferred a more restrictive pleading regime. For nearly 20 years after the adoption of the rules, uncertainty remained about just how much factual detail was required under Rule 8’s “sort and plain statement” of the case.

     The haziness was cleared in the landmark case of Conley v. Gibson.

(a) Pleadings. Only these pleadings are allowed:

     (1) a complaint;

     (2) an answer to a complaint;

     (3) an answer to a counterclaim designated as a counterclaim;

     (4) an answer to a crossclaim;

     (5) a third-party complaint;

     (6) an answer to a third-party complaint; and

      (7) if the court orders one, a reply to an answer.

(b) Motions and Other Papers.

      (1) In General. A request for a court order must be made by motion. The motion must:

          (A) be in writing unless made during a hearing or trial;

          (B) state with particularity the grounds for seeking the order; and

          (C) state the relief sought.

     (2) Form. The rules governing captions and other matters of form in pleadings apply to motions and other papers.

(a) Claim for Relief. A pleading that states a claim for relief must contain:

           (1) a short and plain statement of the grounds for the court's jurisdiction, unless the court already has jurisdiction and the claim needs no new jurisdictional support;

            (2) a short and plain statement of the claim showing that the pleader is entitled to relief; and

            (3) a demand for the relief sought, which may include relief in the alternative or different types of relief.

(b) Defenses; Admissions and Denials.

             (1) In General. In responding to a pleading, a party must:

                 (A) state in short and plain terms its defenses to each claim asserted against it; and

                 (B) admit or deny the allegations asserted against it by an opposing party.

            (2) Denials—Responding to the Substance. A denial must fairly respond to the substance of the allegation.

           (3) General and Specific Denials. A party that intends in good faith to deny all the allegations of a pleading—including the jurisdictional grounds—may do so by a general denial. A party that does not intend to deny all the allegations must either specifically deny designated allegations or generally deny all except those specifically admitted.

           (4) Denying Part of an Allegation. A party that intends in good faith to deny only part of an allegation must admit the part that is true and deny the rest.

           (5) Lacking Knowledge or Information. A party that lacks knowledge or information sufficient to form a belief about the truth of an allegation must so state, and the statement has the effect of a denial.

           (6) Effect of Failing to Deny. An allegation—other than one relating to the amount of damages—is admitted if a responsive pleading is required and the allegation is not denied. If a responsive pleading is not required, an allegation is considered denied or avoided.

(c) Affirmative Defenses.

           (1) In General. In responding to a pleading, a party must affirmatively state any avoidance or affirmative defense, including:

• accord and satisfaction;

• arbitration and award;

• assumption of risk;

• contributory negligence;

• duress;

• estoppel;

• failure of consideration;

• fraud;

• illegality;

• injury by fellow servant;

• laches;

• license;

• payment;

• release;

• res judicata;

• statute of frauds;

• statute of limitations; and

• waiver.

           (2) Mistaken Designation. If a party mistakenly designates a defense as a counterclaim, or a counterclaim as a defense, the court must, if justice requires, treat the pleading as though it were correctly designated, and may impose terms for doing so.

(d) Pleading to Be Concise and Direct; Alternative Statements; Inconsistency.

            (1) In General. Each allegation must be simple, concise, and direct. No technical form is required.

            (2) Alternative Statements of a Claim or Defense. A party may set out 2 or more statements of a claim or defense alternatively or hypothetically, either in a single count or defense or in separate ones. If a party makes alternative statements, the pleading is sufficient if any one of them is sufficient.

           (3) Inconsistent Claims or Defenses. A party may state as many separate claims or defenses as it has, regardless of consistency.

(e) Construing Pleadings. Pleadings must be construed so as to do justice.

     While the Federal Rules clearly marked a change in direction, the rules left room for interpretation. In particular, the exact nature of what constituted adequate pleading was inherently a bit hazy under Rule 8, given the rule’s careful avoidance of either of the words “fact” or “notice.” While Clark clearly favored a liberal notice pleading regime requiring little in the way of fact pleading, other scholars, as well as some judges and attorneys, preferred a more restrictive pleading regime. For nearly 20 years after the adoption of the rules, uncertainty remained about just how much factual detail was required under Rule 8’s “sort and plain statement” of the case.

     The haziness was cleared in the landmark case of Conley v. Gibson. In this case, African American railroad workers brought a pro se claim that they had not been represented fairly by their union. The claim was dismissed by the lower courts for failure to state a claim, but the Supreme Court reversed. In language that opened the doors of the courthouse wide, the Court held that a complaint was sufficient “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief.” The Court further held that so long as the defendant was on notice of the nature of the claim, specific facts need not be pleaded.

     Conley was not briefed as a sufficiency of the pleadings case, and its sweeping language can be read as speaking to a demurrer type issue (do plaintiffs have a legal right?) as opposed to the sufficiency of the facts. Nonetheless, for a generation, Conley was understood to mean that the federal rules required far less than fact pleading.

     Conley made hurdling the pleading barrier extraordinarily easy. Neoplatonic disputes about facts versus ultimate facts went away; technical failures in setting forth the claim rarely proved fatal. Within broad limits, plaintiffs got their day in court.

1.     The Evolution of Litigation Under The Federal Rules

     Taken in conjunction with the changes in joinder and discovery, notice pleading, as affirmed in Conley, ushered in a new era in how law suits were handled. Notice pleading made it easier for plaintiffs to launch the litigation process. The other reforms embodied in the Rules expanded the scope of that same litigation process. Unlike in times gone by, joinder allowed the inclusion of multiple defendants and multiple claims. Discovery became a new phase of litigation that absorbed massive amounts of lawyer time and client funds.

     Pleading no longer served to define or control this process. Common law pleading had limited the subsequent litigation process to the precise legal issue identified at the outset; fact pleading set bounds on the facts that could be developed or proved. Notice pleading did not set comparable limits on the litigation process; indeed, the spirit of the Rules was to remove such constraints in order to allow parties to proceed into discovery and on to merits resolution.

     In reducing the role of pleading, Clark seems to have expected that the path to the merits would prove short and efficient. Contrary to expectations, the path to merits resolution often proved long and expensive. The invention of photocopy machines and computers vastly expanded the scope of documents accessible to discovery requests. At first, the number and scope of interrogatories were limited only by the imagination of the litigating attorneys or the active intervention of judges, with no limits set by the rules themselves. Depositions similarly were unconstrained, subject to a judge choosing to intervene.

     Over time, rather than being preparation to litigation, the discovery phase became the litigation. Trials became the exception, rather than the norm. Attorneys could spend their entire careers as “litigators” handling matters in federal court yet rarely, if ever, trying a case.

     As it happened, lawyers did not abandon the “sporting theory” of litigation and were quick to take advantage of the new playing field created by the extended discovery phase. The temptation to engage in “sporting” litigation was only increased because this contest, unlike pleadings or trial itself, largely took place away from the supervision or even active awareness of the supervising judge.

     Defendants joined in a proceeding were locked into a discovery process that often proved long and expensive, even when the defendant’s connection to the dispute was tangential. Discovery in a typical case includes interrogatories, document production and review, depositions and expert discovery. In multi-defendant cases, this pattern repeats across all defendants, and typically each defendant must not only engage in discovery related to itself and the plaintiff, but devote additional resources to monitor the discovery directed at its codefendants. Even if a tangential defendant is only along for the ride and can expect to win on the merits, it can be a high priced ticket.

     To a significant extent, the evolution of federal practice since the 1970s has involved attempts to rein in this expansive discovery process. The “abuse” of discovery has been condemned. Judges have been encouraged to take a more active role in case management, with case conferences and discovery plans made the norm. Summary judgment, largely an innovative procedure at the times the Rules were established, took on greater prominence following the Trilogy cases. Default limits on the amount of discovery were imposed, both in limiting the default number of interrogatories and depositions, and in dialing back the scope of what was discoverable. All of this has happened, it should be noted, without any significant non-anecdotal evidence that the parties were engaging in disproportionately high levels of discovery.

     Even so, the process can remain long and costly. For defendants, the first option for court-ordered exit in a well-pleaded case comes at summary judgment. Summary judgment presents, at best, a partial solution. The summary judgment stage typically is reached after the long and winding road of fact and expert discovery has been concluded, an expensive process (for cases that get into discovery, one study cited by the Twombly court shows that 90 percent of litigation costs were spent in the discovery process).

     Reviewing an extensive record and preparing a summary judgment motion can also involve substantial expense. Since the judge cannot weigh the evidence in the place of the jury, even unpersuasive or conflicting evidence could suffice to keep a defendant in the case, and in complex cases confused witnesses or stray documents can create the kind of free floating factoids that might suffice to meet the summary judgment burden. Because denial of summary judgment is usually non-reviewable, some judges are reluctant to grant even meritorious summary judgment motions, preferring to let the parties make the case go away in settlement rather than risk reversal.

     Of course, court ordered resolutions are not the only ways a defendant can be removed from a lawsuit. If discovery shows a defendant has no culpability, a plaintiff can voluntarily dismiss that defendant.  On occasion, this happens. A plaintiff might prefer not to muddy its narrative by including excess defendants, or might wish to preserve credibility before a tribunal by releasing those clearly not liable. To the extent retaining a defendant in a lawsuit imposes financial costs, the plaintiff might wish to terminate those costs.

     The most common way for lawsuits to be resolved, however, is not through voluntary dismissal but through settlement, in which some payment is made to the plaintiff in connection with securing a dismissal. Plaintiffs can seek to extract settlement payments from defendants who have been wrongly joined. Plaintiffs and defendants in multi-defendant litigation have a marked asymmetry of costs. For the plaintiff, marginal costs may not increase proportionally with the number of defendants. The plaintiff can amortize its investment across multiple defendants; a defendant must bear the cost of full litigation. At depositions, for example, the plaintiff only needs to send one attorney. By contrast, for any important deposition, each defendant might send an attorney, even if it is not their witness and even if they plan to ask no questions. In some multi-defendant cases, each deposition might involve a dozen attorneys, with only one representing the plaintiff, and the rest representing various defendants.

2.     The 90’s And Beyond

     Either side of the turn of the century saw extensive criticism, from academics, judges, legislators and practicing lawyers, of the litigation system spawned by the rules. The 1980s saw many federal judges imposing heightened pleading standards on selected cases. Spurred on by media coverage of a perhaps mythical litigation crisis, significant changes were made in the Rules to control discovery, and Congress imposed special heightened pleading requirements in securities cases. Almost beneath the radar, lower federal courts developed doctrines that had the effect of imposing heightened pleading requirements on certain types of cases.

B.  Supreme Court Response To the Problems of Conley

     In general, the Supreme Court remained a bulwark against changing pleading standards and on occasion reversed lower court rulings that sought to impose greater pleading requirements. In Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163 (1993), the Court, speaking through Chief Justice Rehnquist, declined to impose higher pleading standards for suits against municipalities in § 1983 cases. In Swierkiewicz v. Sorema, 534 U.S. 506 (2002), the Court, speaking through Justice Thomas, rebuffed an attempt to create a higher pleading standard in employment discrimination cases. Perhaps ironically, in light of later events, the Court stressed in these opinions that changes in pleading standards should come through the rulemaking process, and not through judge-made common law.

     Then came the case of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).  Twombly was an antitrust claim seeking class action status, and hoped to join as class members virtually all users of landline telephone services (at the time, virtually all U.S. households).

     The factual history of the case is a bit complicated. At one time, “Ma Bell,” the American Telephone and Telegraph Co. (AT&T), had a near monopoly on US telephone services, both local and long distance (at the time, mobile phones were still, so far as the market was concerned, in their infancy). In 1982, AT&T agreed to divest itself of local landline services, splitting the local telephone services into seven regional “Baby Bell” companies, each of which effectively inherited the AT&T local monopoly in their service area.

     Some ancient history may be in order for law students of today. At the time all this was happening, virtually all U.S. homes had a landline telephone. A copper wire ran to the consumer’s home or business, and calls were placed from and received on a telephone connected by a physical wire to the telephone network. Creating the network to reach every home was very expensive, but regulation and universal use guaranteed profits. At the time, while some special use situations employed mobile telephony – such as media outlets and some law enforcement – virtually no private consumers had access to mobile telephones. If they did, they were usually bulky and prone to technical problems. Also at this time long-distance calls were quite expensive (often several US dollars per minute) and thus highly profitable. After the 1982 split between local and long distance services, AT&T could offer long-distance services, which it dominated, but the Baby Bells could not.

     In 1996, the Telecommunications Act of 1996 became law. An important goal of this legislation was to encourage competition for local services among the Baby Bells. The existing local monopolists were termed Incumbent Local Exchange Carriers (ILECs) under the bill; other companies that sought to compete with them were termed Competitive Local Exchange Carriers (CLECs). In order to make competition feasible, ILECs were required to share their lines at regulated rates with the CLECs, giving the CLECs time to build out their own wired systems. ILECS who cooperated by opening their markets to CLECs were given other benefits, such as the right to compete in the formerly closed-to-them long-distance market (which at the time was highly profitable). It was expected that the Baby Bells, ILECs in their own territories, would seek to become CLECs in neighboring and perhaps distant territories.

     It didn’t happen. The ILECs stood pat in their own territories and made no effort to compete as CLECs with their fellow Baby Bells.

     Sensing that a fix was in, the plaintiffs in Twombly filed a class action antitrust suit. The allegation was that the ILECs were conspiring to divide the markets, which would be a violation of the antitrust law, and had entered into an agreement to not compete as CLECs.

     There was, however, no public evidence that this had, in fact, happened. What’s more, under existing antitrust law, if the case went to trial and there was no actual evidence of a conspiracy – as opposed to suspiciously parallel conduct – dismissal of the case was required.

      Aside from the possibility that the defendants had entered into a conspiracy, there were possible reasons for not competing that might explain why not a single ILEC chose to become a CLEC. First, they may have just hoped that if they themselves did not start with price-cutting competition for local service, no one else would either. While this would involve an earnest hope that they would continue to enjoy monopoly standing in their home areas, it would not violate the antitrust laws as the essential element of an agreement would be missing. Another possibility would be that each of the ILECs looked at becoming a CLEC and decided that it would be a bad use of investment capital. In each new region, they would most likely be fighting for at best a respectable second place in the market while bearing costs as high as the market leaders. They might well conclude that there were higher profit businesses they could enter. Beyond that, it’s even possible that the ILEC executives, even if they didn’t fully appreciate the huge changes about to hit the telecommunications market, at least understood that with the birth of mobile telephones and the internet, that enough change was inevitable that making big bets on legacy technologies might not be a wise move.

     Against this background the Twombly case reached the Supreme Court. At the time, the Conley rule that a complaint was sufficient “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief” was in effect. While there was no smoking gun sufficient to prove a conspiracy alleged in the complaint, if one took the Conley language literally it certainly seemed possible that after enough discovery a set of facts might be unearthed that would entitle the plaintiffs to relief. A majority opinion by Justice Souter took a different approach:

“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. Factual allegations must be enough to raise a right to relief above the speculative level.

“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. 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.”  In identifying facts that are suggestive enough to render a § 1 conspiracy plausible, we have the benefit of the prior rulings and considered views of leading commentators, already quoted, that lawful parallel conduct fails to bespeak unlawful agreement. It makes sense to say, therefore, that an allegation of parallel conduct and a bare assertion of conspiracy will not suffice. Without more, parallel conduct does not suggest conspiracy, and a conclusory allegation of agreement at some unidentified point does not supply facts adequate to show illegality. Hence, when allegations of parallel conduct are set out in order to make a § 1 claim, they must be placed in a context that raises a suggestion of a preceding agreement, not merely parallel conduct that could just as well be independent action.

“The need at the pleading stage for allegations plausibly suggesting (not merely consistent with) agreement reflects the threshold requirement of Rule 8(a)(2) that the “plain statement” possess enough heft to “sho[w] that the pleader is entitled to relief.” A statement of parallel conduct, even conduct consciously undertaken, needs some setting suggesting the agreement necessary to make out a § 1 claim; without that further circumstance pointing toward a meeting of the minds, an account of a defendant's commercial efforts stays in neutral territory. An allegation of parallel conduct is thus much like a naked assertion of conspiracy in a § 1 complaint: it gets the complaint close to stating a claim, but without some further factual enhancement it stops short of the line between possibility and plausibility of “entitle[ment] to relief.”

          *     *     *

“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.

“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. Probably, then, it is only by taking care to require allegations that reach the level suggesting conspiracy that we can hope to avoid the potentially enormous expense of discovery in cases with no “ ‘reasonably founded hope that the [discovery] process will reveal relevant evidence’ ” to support a § 1 claim.

“[Plaintiffs’] main argument against the plausibility standard at the pleading stage is its ostensible conflict with an early statement of ours construing Rule 8. Justice Black's opinion for the Court in Conley v. Gibson spoke not only of the need for fair notice of the grounds for entitlement to relief but of “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.” 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, see Dura, 544 U.S., at 347, 125 S.Ct. 1627 (quoting Blue Chip Stamps, 421 U.S., at 741, 95 S.Ct. 1917); Mr. Micawber's optimism would be enough.

“Seeing this, a good many judges and commentators have balked at taking the literal terms of the Conley passage as a pleading standard. See, e.g., Car Carriers, 745 F.2d, at 1106 (“Conley has never been interpreted literally” and, “[i]n practice, a complaint ... must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory” (internal quotation marks omitted; emphasis and omission in original)); Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1155 (C.A.9 1989) (tension between Conley's “no set of facts” language and its acknowledgment that a plaintiff must provide the “grounds” on which his claim rests); O'Brien v. DiGrazia, 544 F.2d 543, 546, n. 3 (C.A.1 1976) (“[W]hen a plaintiff ... supplies facts to support his claim, we do not think that Conley imposes a duty on the courts to conjure up unpleaded facts that might turn a frivolous claim of unconstitutional ... action into a substantial one”); McGregor v. Industrial Excess Landfill, Inc., 856 F.2d 39, 42–43 (C.A.6 1988) (quoting O'Brien's analysis); Hazard, From Whom No Secrets Are Hid, 76 Tex. L. Rev. 1665, 1685 (1998) (describing Conley as having “turned Rule 8 on its head”); Marcus, The Revival of Fact Pleading Under the Federal Rules of Civil Procedure, 86 Colum. L. Rev. 433, 463–465 (1986) (noting tension between Conley and subsequent understandings of Rule 8).

“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.”

     A spirited defense by Justice Stevens attacked the approach of the majority, and questioned whether the rule announced applied only to large antitrust cases or to all cases filed in federal court.

     The Twombly decision left many readers unclear as to what the opinion ultimately meant. Was it, as the dissent suggested, perhaps limited only to its own setting of massive antitrust cases? More fundamentally, what exactly does ‘plausible’ mean? Others struggled to reconcile the decision with the language and history of Rule 8(a)(2), since Twombly seemed in many ways to depart from both the language and previously understood spirit of the rule.

     The level of confusion only increased when, only two weeks after Twombly, the Court cited Conley and its test favorably in Erickson v. Pardus, 551 U.S. 89 (2007). The Court disavowed any need to allege “specific facts,” stating that “fair notice” was enough. Twombly was not cited.

      Into that confused state of affairs came the case that follows.

     Goals of Pleading. When great lawyers draft a complaint, meeting the minimum standards of  Twiqbal is far from the only thing on their mind. The complaint is often the first chance the plaintiff gets to persuade the other side and the court that the case is a strong one. As a result, experienced plaintiffs will spend time crafting a complaint that effectively tells their story. In some cases, they go overboard and become subject to a motion to strike the complaint because it is too wordy or too argumentative. The point is, don’t be misled by cases such as the Twiqbal cases into thinking that competent lawyers plan to skirt the minimum standards of pleading. Unless the complaint has been drafted by nonlawyers (as in Conley) or key facts are not knowable at the time of pleading (as in Twombly and Iqbal), the focus will be on getting the story out in a way that builds a persuasive narrative, with minimum pleading standards a secondary consideration.

     Related to persuading the court and other parties (and sometimes the media and the public) that the case is a strong one is anticipating potential defenses and motions to dismiss. Sometimes, the plaintiffs can anticipate that a particular issue will be a likely subject for a motion to dismiss. Plaintiffs are not required to plead in a way that anticipates or rebuts likely defenses; that said, in many cases plaintiffs find it a good idea to draft the complaint in a way that addresses likely defenses or motions to dismiss. For example, in a defamation case, whether the defendant acted with 'actual malice' - that is, with "knowledge that [the defamatory statements were] false or with reckless disregard of whether [they were] false or not." In such a case, the statements themselves are public, and facts bearing on whether they should have been recognized as false are often also public, so the setting differs a bit from a situation where only discovery can unearth the necessary facts. 

     A good example of this playing out is in the litigation between Dominion Voting Systems and various figures that Dominion claims defamed it by claiming that Dominion engaged in a conspiracy to steal the 2020 Presidential election from Donald Trump. Both the complaint against defendant Sidney Powell and the District Court's complete opinion denying the motion to dismiss are in TWEN. To give you a taste of how skilled litigators draft a complaint for impact and how that might play into resolving the motion to dismiss, we include some short excerpts from the complaint and the decision rejecting the motion to dismiss here.

From the complaint:

1. This defamation action arises from statements made by Sidney Powell, who— acting in concert with allies and media outlets determined to promote a false preconceived narrative about the 2020 election—caused unprecedented harm. During a Washington, D.C. press conference, a Georgia political rally, and a media blitz, Powell falsely claimed that Dominion had rigged the election, that Dominion was created in Venezuela to rig elections for Hugo Chávez, and that Dominion bribed Georgia officials for a no-bid contract.

2. Powell’s wild accusations are demonstrably false. Far from being created in Venezuela to rig elections for a now-deceased Venezuelan dictator, Dominion was founded in Toronto for the purpose of creating a fully auditable paper-based vote system that would empower people with disabilities to vote independently on verifiable paper ballots. As it grew, Dominion developed technology to solve many of the technical and voter intent issues that came to light as a result of the 2000 Presidential Election. Its systems are certified under standards promulgated by the U.S. Election Assistance Commission (“EAC”), reviewed and tested by independent testing laboratories accredited by the EAC, and were designed to be auditable and include a paper ballot backup to verify results.¹ Since its founding, Dominion has been chosen by thousands of election officials throughout the United States to provide the technology to effectively administer transparent and fully auditable elections.

3. Because of these safeguards, there are mountains of direct evidence that conclusively disprove Powell’s vote manipulation claims against Dominion—namely, the millions of paper ballots that were audited and recounted by bipartisan officials and volunteers in Georgia and other swing states, which confirmed that Dominion accurately counted votes on paper ballots.

4. When respected Georgia Republicans disproved Powell’s false accusations by announcing that Georgia’s paper ballot recount had verified the accuracy of Dominion’s vote counts, Powell sought to discredit them by falsely accusing Dominion of paying kickbacks to them and their families in return for a no-bid contract. The only “evidence” Powell ever put forward to support that false accusation was a doctored certificate from the Georgia Secretary of State. Powell has insinuated that the fact that the certificate is undated is suspicious. In reality, the authentic certificate is dated and is publicly available on the Georgia Secretary of State’s website, along with public records showing there was a competitive bid process for the Georgia contract and that Dominion competed against Smartmatic and Election Systems & Software (“ES&S”).

5. Although Powell assured the public during television and radio appearances that her claims were backed by “evidence,” Powell’s “evidence” included declarations from a motley crew of conspiracy theorists, con artists, armchair “experts,” and anonymous sources who were judicially determined to be “wholly unreliable.” One of Powell’s wholly unreliable sources was a purported “military intelligence expert” who has now admitted that he never actually worked in military intelligence, that the declaration Powell’s clerks wrote for him to sign is “misleading,” and that he “was trying to backtrack” on it. After he was discredited, Powell pivoted by presenting his declaration as having been written by a different anonymous source.

6. During some of her media appearances Powell also touted a shocking declaration from an “anonymous source” purporting to be a Venezuelan military officer alleging a decades-old conspiracy beginning with now-deceased Venezuelan dictator Hugo Chávez. But the explanation in the “anonymous witness’s” declaration for why he purportedly came forward was a near-verbatim recitation from another declaration put forward by Powell, proving that those witnesses did not write their declarations independently and raising serious questions about what role Powell and her team played in drafting the declaration.

7. Powell deliberately lied about having a video of Dominion’s founder saying he could “change a million votes, no problem at all.” Powell has never produced that recording because it does not exist.

8. As a result of the defamatory falsehoods peddled by Powell—in concert with like-minded allies and media outlets who were determined to promote a false preconceived narrative— Dominion’s founder, Dominion’s employees, Georgia’s governor, and Georgia’s secretary of state have been harassed and have received death threats, and Dominion has suffered enormous harm.

9. After Dominion sent Powell a letter putting her on formal notice of the facts and the death threats and asking her to retract her false claims, Powell doubled down, tweeting to her 1.2 million Twitter followers that she heard that “#Dominion” had written to her and that, although she had not even seen Dominion’s letter yet, she was “retracting nothing” because “[w]e have #evidence” and “They are #fraud masters!” To ensure that her tweet would be published to the largest possible audience and inflict maximum harm on Dominion, Powell tagged some of her allies with massive Twitter followings, including Donald Trump, Georgia-based defamation attorney L. Lin Wood, and Powell’s client, Trump’s former National Security Advisor Michael Flynn.

10. In the days and weeks that followed, Powell appeared for a number of media interviews and continued to double down on her false accusations about Dominion.

11. Dominion brings this action to set the record straight, to vindicate the company’s rights under civil law, to recover compensatory and punitive damages, to seek a narrowly tailored injunction, and to stand up for itself and its employees.

    *       *     *

To Bolster Her Fundraising and Defamatory Media Campaign, Powell Proffered “Evidence” That Was Deliberately Misrepresented, Manufactured, and Cherry-Picked

87. Powell put forward purported “evidence” in her court filings that was deliberately misrepresented, manufactured, and cherry-picked. Although Dominion is not currently suing Powell based on the false statements in Powell’s sham litigations, the manipulation of the judicial process apparent in Powell’s court filings is additional evidence that Powell knew the statements she made about Dominion—during her defamatory press conference in Washington, D.C., “Stop the Steal” rally, and media campaign—were false. Moreover, as further evidence of her actual malice, during her defamatory media campaign, Powell sought to lend credence to her false accusations—and to solicit donations—by touting the flawed “evidence” attached to the court filings posted to her fundraising website.
88. For example, Powell sponsored the declaration of an anonymous “military intelligence expert” code-named “Spyder,” who has since been identified as Josh Merritt. Powell’s “military intelligence expert” has now admitted that he never actually worked in military intelligence and that the declaration Powell’s team wrote for him to sign is “misleading” and he “was trying to backtrack” on it.
89. Powell also cherry-picked Princeton professor Andrew W. Appel’s statements about a decades-old machine not designed by Dominion, which was not used in the 2020 election in any of the swing states being challenged by Powell. Powell appended Professor Appel’s cherry-picked statements to her court filings so that she could post them to her fundraising website, as though Professor Appel’s expertise were “evidence” supporting her election-rigging claims against Dominion. In reality, Professor Appel and 58 other specialists in election security have forcefully rebutted Powell’s claims, explaining that they “have never claimed that technical vulnerabilities have actually been exploited to alter the outcome of any US election.” They further explained that “no credible evidence has been put forth that supports a conclusion that the 2020 election outcome in any state has been altered through technical compromise.”
90. Powell also touted a shocking declaration from an anonymous purported Venezuelan military officer alleging a decades-old international election-rigging conspiracy beginning with Hugo Chávez. But the “anonymous witness’s” explanation for why he purportedly came forward was a near-verbatim recitation from another declaration put forward by Powell, proving that those witnesses did not each write their declarations independently and raising serious questions about the role that Powell and her team played in drafting the declarations attached to Powell’s court filings and touted as “evidence” during her defamatory media campaign.

Declaration of an anonymous source claiming to have been selected for the “national security guard detail of the President of Venezuela,” Pearson v. Kemp, No. 1:20-cv-04809 (N.D. Ga. Nov. 25, 2020) [Dkt. 1-2 at ¶ 4]

Statement by Ana Mercedes Díaz Cardozo, Pearson v. Kemp, No. 1:20-cv-04809 (N.D. Ga. Nov. 25, 2020) [Dkt. 1-3 at ¶ 3].

“I want to alert the public and let the world know the truth about the corruption, manipulation, and lies being committed by a conspiracy of people and companies intent upon betraying the honest people of the United States and their legally constituted institutions and fundamental rights as citizens. This conspiracy began more than a decade ago in Venezuela and has spread to countries all over the world. It is a conspiracy to wrongfully gain and keep power and wealth. It involves political leaders, powerful companies, and other persons whose purpose is to gain and keep power by changing the free will of the people and subverting the proper course of governing.”

“I want to alert the public and let the world know the truth about corruption, manipulation, and lies being committed through a conspiracy of individuals and businesses with the intention of betraying the honest people of the United States and its legally constituted institutions and fundamental rights as citizens. This conspiracy began more than a decade ago in Venezuela and has spread to countries all over the world. It is a conspiracy to unjustly gain and maintain power and wealth. It involves political leaders, powerful companies, and other persons whose purpose is to gain and maintain power by changing people’s free will and subverting the proper course of governing.”

 

Powell Put Forward Doctored Evidence and Withheld Key Proof to Support Her False Accusations About Dominion

91. Powell and Wood repeatedly told national audiences that Dominion had bribed Georgia’s Republican governor and secretary of state for a last-minute no-bid contract. They claimed to have evidence to support that accusation, but never produced it during their televised appearances or on Twitter. Instead, in their sham litigation in Georgia, they claimed that Governor Kemp and Secretary of State Raffensperger had “rushed” through the purchase of Dominion voting machines and software, noting that the Dominion certification from the secretary of state was “undated,” and attaching a copy of an undated Dominion Certification. In reality, the authentic certificate is dated August 9, 2019—more than a year before the November 2020 election—and is publicly available online at the Georgia Secretary of State’s website.

Doctored undated Secretary of State certificate attached to Powell’s complaint in Georgia	Authentic dated Secretary of State certificate publicly available online
<<image not displayable>>	<<image not displayable>>

 

92. Upon information and belief, Powell, Wood, or someone reporting to them downloaded the authentic certificate from the Secretary of State’s website and cut off the date, seal, and signature before attaching the doctored document as an exhibit to their Georgia complaint and uploading it to Powell’s fundraising website as “evidence” supporting the bribery accusations they made during the “Stop the Steal” rally and in media appearances.

93. Other government records prove that Dominion won the Georgia contract after scoring the highest in a competitive bid process (not a no-bid process)—during which it competed against ES&S and Smartmatic; those records are also publicly available on the very same webpage where, upon information and belief, Powell, Wood, or someone reporting to them downloaded the dated Dominion Certification before doctoring it.

94. Anyone downloading the Dominion Certification from the Secretary of State’s website can see—in the links directly above it—that Dominion competed against Smartmatic for the Georgia contract and is thus not the same company as Smartmatic or owned by Smartmatic.

95. During her defamatory media campaign, Powell either actually knew about these readily available government records or purposefully avoided them in reckless disregard of the truth and in violation of her ethical duties as a licensed attorney.

96. Ironically, of the three companies identified on the Georgia Secretary of State’s website as having submitted a bid for the Georgia contract, Dominion is the only one that has never serviced an election in Venezuela. Both Smartmatic and ES&S have serviced Venezuelan elections. But Powell targeted Dominion with her claim of Venezuelan election-rigging not because she believed it was true, but because it supported her false preconceived narrative.

     These specific allegations tell the plaintiff’s story in a very compelling way. The complaint contains persuasive detail far beyond the minimum to satisfy Twiqbal, and while the plaintiffs are not requited to plead in response to anticipated defenses, nonetheless lays the foundation for its arguments against a motion to dismiss for failing to meet the demanding actual malice standard. As you can see below, these and other specific allegations find their way directly into the trial court’s opinion rejecting Powell’s motion to dismiss.

Dominion argues that it has cleared this high bar. As to Powell, Dominion contends it has alleged not only that Powell’s claims are so inherently improbable that only a reckless person could have believed them, but also that she deliberately ignored the truth in favor of relying on facially unreliable sources, intentionally lied about and fabricated evidence to support a preconceived narrative about election fraud, and did so to raise her own public profile and make a profit.

Powell’s primary argument is that she could not have “entertained serious doubts as to the truth” or acted with a “high degree of awareness” of the “probable falsity” of her claims because she relied on sworn declarations and other evidence that supported her statements. But there is no rule that a defendant cannot act in reckless disregard of the truth when relying on sworn affidavits—especially sworn affidavits that the defendant had a role in creating. And Dominion alleges that Powell’s “evidence” was either falsified by Powell herself, misrepresented and cherry-picked, or so obviously unreliable that Powell had to have known it was false or had acted with reckless disregard for the truth. See, e.g., Powell Compl. ¶¶ 91–92, 7.

Powell again faces an obvious hurdle in the fact that she has never produced (nor mentioned in any sworn affidavit) the video of Dominion’s founder that she claims to possess, a reasonable juror could conclude that Powell has not produced the video because she doesn’t have it. Dominion also alleges that Powell doctored a certificate from the Georgia Secretary of State to make it appear as though Georgia officials purchased Dominion machines and software on a rushed timeline. Powell Compl. ¶ 91. (The certificate, which is publicly available on the Georgia Secretary of State’s website, includes the Georgia Secretary of State’s date, seal, and signature—but Powell claimed that the Dominion certification was “undated” and filed a copy of the certificate that was missing the date, seal, and signature during the course of her election litigation in Georgia. Id.)

Dominion also alleges that Powell had a hand in drafting the declarations she touts as evidence of her claims. For example, Dominion alleges that the “military intelligence expert” who was the source for one declaration has admitted that he never actually worked in military intelligence, that the declaration Powell’s law firm drafted for him was “misleading,” and that he was “trying to backtrack” on it. Id. ¶ 5. Dominion further alleges that after that source’s recantation, Powell claimed that the declaration was actually from a different anonymous source (instead of investigating whether there was a reason to doubt the truth of the original source’s claims). Id. As for the other anonymous declarations proffered by Powell, Dominion alleges that they bear distinct signs of having been drafted by Powell herself. Indeed, certain sections in two of the declarations are almost completely identical. Id. ¶ 90.

More generally, Dominion alleges that the declarations provide no facts to support Powell’s claims that Dominion flipped, stole, weighted, or injected any votes into a U.S. election. For example, one declaration says that “vote counting was abruptly stopped in five states using Dominion software”; that at that time “Donald Trump was significantly ahead in the votes”; and that “[w]hen the vote reporting resumed the very next morning there was a very pronounced change in voting in favor of the opposing candidate, Joe Biden.” Pearson v. Kemp, No. 1:20-cv-04809, 2020 WL 7040582 (N.D. Ga. Nov. 25, 2020) [ECF No. 1-2 at ¶ 26]. The declaration provides no factual support for the proposition that Dominion had flipped votes from Trump to Biden, and it certainly says nothing about Dominion having been created in Venezuela. Powell Compl. ¶ 181(e). A second declaration provides even less support; while it mentions Smartmatic, it says nothing about Dominion or a U.S. election. See generally Pearson v. Kemp, No. 1:20-cv-04809, 2020 WL 7040582 (N.D. Ga. Nov. 25, 2020) [ECF No. 1-3 at ¶ 11].

Dominion further alleges that Powell’s “expert” reports are inherently unreliable and, as a former federal prosecutor, Powell had good reason to doubt their veracity. Powell Compl. ¶ 104. In particular, it alleges that one expert was involved in a recent fraud case where the judge “ordered [the ‘expert’] to pay more than $25,000 after finding that she violated consumer protection laws by misspending money she raised and soliciting donations while misrepresenting her experience and education,” id. ¶ 105, and that another was found to have provided “materially false information” in support of his claims of vote manipulation after referencing locations in Minnesota when alleging voter fraud in Michigan, id. ¶ 106. (That expert has also publicly claimed that George Soros, President George H.W. Bush’s father, the Muslim Brotherhood, and “leftists” helped form the “Deep State” in Nazi Germany in the 1930s—which would have been a remarkable feat for Soros, who was born in 1930. Id.) Dominion also alleges that a third expert has been rejected by another federal court for his “sheer unreliability,” id. ¶ 107, and a fourth has declared, under penalty of perjury, that there was a pattern of improbable vote reporting in a Michigan county that does not exist, id. ¶ 108. According to Dominion, an experienced litigator like Powell either knew (or should have known) about these grave problems with her experts’ reliability, and thus she must have “entertained serious doubts as to the truth” of her statements or at a minimum acted “with a high degree of awareness of [their] probable falsity.” Id. ¶¶ 104–09.

Dominion also alleges that Powell cherry-picked and took out of context statements regarding general concerns about election security made by Professor Andrew W. Appel. Powell Compl. ¶ 89. According to Dominion, Professor Appel’s research regarding election security is reputable, but concerns “a decades-old machine not designed by Dominion [and] not used in the 2020 election in any of the swing states ... challenged by Powell.” Id. (emphasis added). Indeed, Dominion alleges that Professor Appel stated that he “ha[s] never claimed that technical vulnerabilities have actually been exploited to alter the outcome of any US [sic] election” and that “no credible evidence has been put forth that supports a conclusion that the 2020 outcome in any state has been altered through technical compromise.” Id. (emphasis omitted). A reasonable juror could conclude that Powell’s reliance on Professor Appel’s research when he has stated that there is “no credible evidence” of fraud is evidence of at least reckless disregard. 

Dominion argues that its allegations regarding falsified documents, inherently unreliable sources, misrepresentations about other evidence, and Powell’s shifting positions reflect actual malice. It also argues that Powell had reasons for this conduct: to raise funds, to raise her public profile, and to curry favor with President Trump. Powell Compl. ¶¶ 75, 80, 185. Powell argues that Dominion has no facts to support these claims. But Dominion alleges that Powell repeatedly solicited donations to her law firm and DTR while making her claims, id. ¶ 58; that President Trump pardoned her client, Michael Flynn, on the same day she filed her first lawsuit challenging the results of the 2020 election, id. ¶ 80; and that in November 2020, “someone purchased the web domain sidneypowellforpresident.com,” id. ¶ 71.

While it is true that “evidence of ill will ‘is insufficient by itself to support a finding of actual malice,’ ” Tah, 991 F.3d at 243 (quoting Tavoulareas, 817 F.2d at 795 (en banc) (emphasis added)); see also Harte-Hanks Commc’ns, Inc. v. Connaughton, 491 U.S. 657, 665, 109 S.Ct. 2678, 105 L.Ed.2d 562 (1989) (“[A defendant’s] motive ... cannot provide a sufficient basis for finding actual malice.”), Dominion has proffered much more. For the reasons discussed, Dominion has adequately alleged that Powell made her claims knowing that they were false, or at least with serious doubts as to their truthfulness.

     The pleading above is more typical of the pleading problems faced in most cases than are the problems faced in cases such as Twombly and Iqbal. The issue will not be meeting the minimum standards of Rule 8(a)(2) or even of Rule 9. It will be telling the plaintiff's story in a way that captures the attention of the other side, of the judge, and of any members of the press or public who review the complaint.

     The Plausibility Standard.

The plausibility standard set out in Iqbal seems, year after year, to confuse many students. The most common error students make is thinking that the inquiry asks whether the facts pleaded are plausible. That’s not what the Court said, and would not be a proper approach if it had been as weighing of the facts is normally a job for the jury or in non-jury trials for the trial judge. 

     Plausibility (which we think is terrible choice of words precisely because it invites this confusion) really looks at something like sufficiency, but in a complex and somewhat unclear way. Assuming that the facts alleged are true, are they sufficient to support the plaintiff’s assertion that actionable wrongdoing took place?

     The plausibility/sufficiency test set out in Iqbal has three parts:

1) Accept all actual facts pleaded as true (e.g., a meeting was held at the Hilton Hotel on June 5 of last year). The standard rule in most pleading situations, by the way, is that the judge must accept as true all properly pleaded facts for the purpose of deciding a motion to dismiss.

2) Disregard all legal conclusions (e.g., defendants have engaged in a vast price-fixing conspiracy)

3) Looking only at the facts, do they meet the plausibility/sufficiency standard of setting out a situation that adequately suggests liability generating behavior rather than innocent conduct? (For example, in Twombly, are the facts sufficient to allow one to conclude that there was a conspiracy as opposed to independent action, and to be on notice as to how plaintiffs believe that conspiracy was accomplished?)

     We still have some problems. How strongly does the plaintiff need to suggest actionable rather than innocent behavior? Is it a matter of making the actionable behavior seem a little bit more likely than the innocent explanation, or would something well short of that allow the plaintiff to begin discovery so long as the actionable suggestion reaches a state above wishful thinking leading to a legal conclusion? Also, why are we demanding plausibility, a term that appears nowhere in Rule 8 and that previously had not been part of Rule 8 interpretation? Are we imposing a new requirement that facts be pleaded so complaints can be dismissed if, as in the days of fact pleading, the facts alleged don’t amount to enough to support liability? Or, alternatively, is ‘plausibility’ just a guide to what level of notice must be given so the case can proceed to factual investigation?

     Does it still seem a bit unclear? Don’t feel bad. When we get to the Swanson case below, we will see a distinguished panel of appellate judges struggle to find the correct meaning of Twiqbal and not agreeing on how it should be applied to the facts of that case.

     Impact of Iqbal. What has been the impact of Twombly and Iqbal? Has it led to more dismissals? Has it led to higher quality cases in the federal courts? The answer to both questions, so far, is that it is hard to know. 

     There are settings where it is clear that Twombly and Iqbal create no real problem for plaintiffs. In a one-plaintiff, one-defendant suit where the facts are all public, little is changed. The facts that would establish liability are known to all, and if a case might exist it is easy to plead.,

     That changes when not all the facts can be known to the plaintiff without some kind of factual discovery. Take, for example, a case in which someone has been fired by a corporation, and they wish to bring a lawsuit for employment discrimination, whether on the basis of race, gender, or some other ground. It's the rare defendant who will publicly state an improper reason for firing someone; more commonly, confidential memoranda or emails that only emerge in discovery fill in the story enough to refute a benign explanation. A similar situation can, at least in theory, arise in a multidefendant case - if a plane crashes, it seems likely that someone is at fault, but it may be difficult pleading a plausible case against all the potentially liable parties. For various reasons, the impact of pleading standards on these kinds of cases is hard to measure authoritatively, and while the smart money might be on the side of Twombly and Iqbal having had an impact in at least some of these settings more research remains to be done.

     Finally, Twiqbal does seem to have had a perhaps small but nonetheless statistically significant impact on complaints filed pro se - that is, by parties proceeding without the benefit of a lawyer. It is hard to say why this is. Judges, who are burdened in many ways when non-lawyers attempt to navigate the court system, often with cases that lawyers have chosen not to take, may subconsciously apply the elastic standards of Twiqbal more stringently to pro se litigants. It's also possible that trained lawyers have in most cases figured out how to plead in ways that meet the Twiqbal standards while untrained citizens are less likely to clear the hurdle. We don't know.

     Twiqbal and Discovery.  The impact of Twiqbal is to close the doors to the courthouse, and thereby to foreclose access to discovery. You might ask whether plaintiffs can address this issue by conducting court ordered discovery before the lawsuit is filed. (They obviously can conduct an independent investigation, but for those circumstances where the key information is exclusively in the hands of the defendants that is unlikely to solve the problem.) For various reasons, some arising from the structure of the rules and some perhaps from deeper concerns about whether a Constitutional case or controversy exists, pre-filing discovery is not normally allowed in US federal courts. In certain exceptional cases - such as the loss of evidence through the expected death of a witness - exceptions can be made, but discovery to determine whether or not there is a case to be filed is not federal practice.

     Some judges allow discovery after a case has been filed to determine whether deficiencies under Twiqbal can be cured with new facts; some do not. There is no federal rule requiring or structuring such discovery, and it is up to the judge.

     Iqbal and the Trial Judge. Note that Iqbal vests much power in the trial judge. First, the trial judge gets to decide whether the case is 'plausible.' Given the inherent lack of clarity in the term, different judges may find different sets of facts plausible. Second, note that the trial judge has more or less unreviewable discretion with regard to whether discovery into the missing facts should proceed before the motion for dismissal is decided. Some judges will allow the plaintiffs to obtain limited discovery on key facts needed to meet the standard; others will not.  Ask yourself whether staying in court on a potentially meritorious claim should depend quite so much on which judge hears the case.

     Burden of Pleading / Burden of Proof / Burden of Persuasion. Conley, Twombly, and Iqbal all involve the 'burden of pleading.' This burden involves what the plaintiffs (or, for an affirmative defense or a counterclaim, the defendants) have to include in the pleadings in order to withstand a motion to dismiss. You will see that the burden of pleading seems to have shifted, under the same rule, between Conley and Iqbal. At other stages of the case, we will look at the burden of proof or burden of production. This looks to whether enough actual evidence has been presented to allow a factfinder to conclude in favor of the party with the burden. If the evidence is not in the record, the burden is not met. Finally, there is the burden of persuasion. This has to do with whether the factfinder, judge or jury, believes the evidence. 

     Imagine a lawsuit in which the defendant is accused of causing an automobile accident by driving over the speed limit while sending texts. At the burden of pleading stage, can you state the kind of evidence that would be needed to meet Iqbal? At the burden of production stage, the party with the burden would need to move beyond pleading to actual, admissible proof. For example, if at the pleading stage the allegation was that the defendant was going 60 miles per hour in a 30 mile per hour zone and was sending texts, at the burden of proof stage some evidence must be introduced that if believed would support that. The party with the burden might introduce eyewitness testimony, or records of texts send along with their time stamp, and so on. At the burden of persuasion stage, the admissible evidence has to be evaluated. For example, if three witnesses said the defendant appeared to be driving within the speed limit and one said he was not, the testimony of one meets the burden of production, but at the burden of persuasion stage the jury might decide to disbelieve that witness and believe the other three.

     Rule 11 and Pleading True Facts.  Ethical duties have an effect on lawyers throughout the dispute resolution process, including at the pleading stage. Lawyers cannot simply bridge over the facts missing in a Twombly and Iqbal situation by making them up or assuming their existence. They are under an ethical duty to investigate the facts before filling and to be truthful with the court. As we will see, failure to meet this duty can lead to ethical sanctions.

     You may have noticed in the Dominion Voting Systems complaint that the allegation that a certificate was deliberately altered was made "upon information and belief." At the time the complaint was filed, the plaintiffs did not have evidence that defendants actually had altered the certificate. At the same time, they were not starting from point zero - they had previously noted the nature of the certificate that was posted online by the state and the different version that was circulated by the defendants. In similar circumstances, where evidence is not yet in hand but there is a good faith basis to expect that evidence will be found, "information and belief" allegations can be made. Why wouldn't this have worked in Twombly and Iqbal? Because, in those cases, the leap from what was known to what might be discovered was too great. Here it was a reasonable inference that discovery would establish how and why the certificate circulated by defendants was different from the official version.

     Current Status of Conley. Conley has been sent into retirement.

(a) Capacity or Authority to Sue; Legal Existence.

      (1) In General. Except when required to show that the court has jurisdiction, a pleading need not allege:

               (A) a party's capacity to sue or be sued;

               (B) a party's authority to sue or be sued in a representative capacity; or

               (C) the legal existence of an organized association of persons that is made a party.

     (2) Raising Those Issues. To raise any of those issues, a party must do so by a specific denial, which must state any supporting facts that are peculiarly within the party's knowledge.

(b) Fraud or Mistake; Conditions of Mind. In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.

(c) Conditions Precedent. In pleading conditions precedent, it suffices to allege generally that all conditions precedent have occurred or been performed. But when denying that a condition precedent has occurred or been performed, a party must do so with particularity.

(d) Official Document or Act. In pleading an official document or official act, it suffices to allege that the document was legally issued or the act legally done.

(e) Judgment. In pleading a judgment or decision of a domestic or foreign court, a judicial or quasi-judicial tribunal, or a board or officer, it suffices to plead the judgment or decision without showing jurisdiction to render it.

(f) Time and Place. An allegation of time or place is material when testing the sufficiency of a pleading.

(g) Special Damages. If an item of special damage is claimed, it must be specifically stated.

(h) Admiralty or Maritime Claim.

     (1) How Designated. If a claim for relief is within the admiralty or maritime jurisdiction and also within the court's subject-matter jurisdiction on some other ground, the pleading may designate the claim as an admiralty or maritime claim for purposes of Rules 14(c), 38(e), and 82 and the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. A claim cognizable only in the admiralty or maritime jurisdiction is an admiralty or maritime claim for those purposes, whether or not so designated.

     (2) Designation for Appeal. A case that includes an admiralty or maritime claim within this subdivision (h) is an admiralty case within 28 U.S.C. §1292(a)(3).

     Jurisdiction.   Rule 8(a) requires  "a short and plain statement of the grounds for the court's jurisdiction, unless the court already has jurisdiction and the claim needs no new jurisdictional support."  As you saw in the section on subject matter jurisdiction, it is not enough to simply assert in a conclusory matter that federal subject matter jurisdiction exists. The basis for federal subject matter jurisdiction must be clear from the statement. For example, the leader cannot simply assert diversity; the complaint must give the domicile of the parties.

     Prayer for Relief. Rule 8(c) requires "a demand for the relief sought, which may include relief in the alternative or different types of relief." Think back to our pig. Under the common law, under each writ only one form of relief could be sought. Under the Rules, the plaintiff can seek damages, return of the pig, or delivery of all the ham and bacon produced from the unfortunate swine. In the case of a default judgment, the demand for relief will provide a cap or ceiling for any recovery sought, so failure to plead all the damages can be significant. You will also remember that the prayer for relief bears on diversity jurisdiction and we will see that it can bear on whether a jury is available.

     Rule 9 – Pleading Special Matters. Rule 9 addresses a number of matters for which special pleading requirements apply. In general, these respond to special pleading requirements that existed before the Rules were adopted, and should be read in light of the Rules’ general philosophy of avoiding harsh technicalities. While you should read the rule, we will not be concerned with any of these in any detail except for fraud.

     Pleading Fraud. Rule 9(b)  requires "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." This requirement reflects pleading requirements for fraud that arose under the common law and were carried forward into the pleading codes. Fraud is a crime of ‘moral turpitude,’ and allegations of fraud can harm the reputation of the person accused. Fraud also provides a basis for punitive damages, so a legitimate fraud claim changes the bargaining zone for settlement, meaning that some cases plaintiffs might be tempted to include fraud claims to create an incentive for a quicker and more generous settlement. In general, the prudent practice for plaintiffs (or defendants raising a fraud defense) is to include the “the who, what, when, where, and how: the first paragraph of any newspaper story.” DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990). It remains to be seen how Rule 9(b) will interact with the Twiqbal requirements, which arguably impose even stricter requirements. While outside the scope of our course, it should also be noted that some statutes such as the Private Securities Litigation Reform Act (PSLRA) impose even stricter requirements when alleging, for example, securities fraud under that statute.

     Pleading Special Damages.  Rule 9 requires "if an item of special damage is claimed, it must be specifically stated." Understanding this requires understanding the difference between general damages and special damages. General damages are the damages that ordinarily flow from the cause of action. For example, in breach of contract, general damages would measure the harm directly attributable to the breach such as loss of profit on the deal or recoupment of the funds paid. Special damages would look to follow on damages that might or might not apply in all situations – for example, loss of reputation or business relationships because the million widgets ordered for resale were not provided under the breached contract and so could not be delivered to the plaintiff’s customers, who might end their relationship with the plaintiff in light of that failure to deliver. In a false imprisonment tort, general damages for false arrest would ordinarily include emotional distress and damage to reputation, but damages incurred because the plaintiff was unable to make an important appointment while falsely imprisoned would be special damages. Failure to plead special damages does not lead to dismissal of the complaint so long as general damages exist, but it does prevent collecting the special damages.

     Special Statutory Standards. While the Federal Rules of Civil Procedure are ‘transsubstantive’ (a fancy term meaning that the same rules apply to all cases, big or small, complicated or simple,without regard to what cause of action is involved), specific statutes can have an effect by establishing special pleading standards derived from the substantive law.  For example, the Private Securities Litigation Reform Act (“PSLRA”), was enacted in 1995 to deter frivolous securities fraud litigation. This statute, among other elements, raises the pleading standards for cases proceeding under Section 10(b) of the Securities Exhange Act of 1934, requiring much greater specificity when pleading fraud than is required by Rule 9(b). Without going into the details of the PSLRA, the point for our course is to be aware that sometimes substantive law can act as an overlay on the procedural standards, requiring more.

     Pleading Fraud. All three judges in Swanson agreed that the plaintiff failed to adequately plead fraud. Note how the standards for pleading fraud (and some other elements covered by Rule 9) differ from the more permissive standards of Rule 8. With regard to the fraud claim against Citibank the court explains:

Her fraud claim against Citibank stands on a different footing. Rule 9(b) of the Federal Rules of Civil Procedure provides that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Of special relevance here, a plaintiff must plead actual damages arising from her reliance on a fraudulent statement. Tricontinental Indus., Ltd. v. PricewaterhouseCoopers, LLP, 475 F.3d 824, 841 (7th Cir.2007). Without a contract, only out-of-pocket losses allegedly arising from the fraud are recoverable. Roboserve, Inc. v. Kato Kagaku Co., Ltd., 78 F.3d 266, 274 (7th Cir.1996) (applying Illinois law). Swanson asserts that Citibank falsely announced plans to make federal funds available in the form of loans to all customers, when it actually intended to exclude African–American customers from those who would be eligible for the loans. Swanson relied, she says, on that false information when she applied for her home-equity loan. But she never alleged that she lost anything from the process of applying for the loan. We do not know, for example, whether there was a loan application fee, or if Citibank or she covered the cost of the appraisal. This is the kind of particular information that Rule 9 requires, and its absence means that the district court was entitled to dismiss the claim.

     Rule 8 Pleading After Twiqbal.  On the other hand, three of the finest judges to sit on the Seventh Circuit in recent decades could not agree on what meaning to give Twiqbal. Judge Wood, joined by Judge Easterbrook, framed it as being well within notice pleading.

The Court was not engaged in a sub rosa campaign to reinstate the old fact-pleading system called for by the Field Code or even more modern codes. We know that because it said so in Erickson:“the statement need only give the defendant fair notice of what the ... claim is and the grounds upon which it rests.”Id. Instead, the Court has called for more careful attention to be given to several key questions: what, exactly, does it take to give the opposing party “fair notice”; how much detail realistically can be given, and should be given, about the nature and basis or grounds of the claim; and in what way is the pleader expected to signal the type of litigation that is being put before the court?

This is the light in which the Court's references inTwombly, repeated in Iqbal, to the pleader's responsibility to  550 U.S. at 570, 127 S.Ct. 1955; Iqbal,129 S.Ct. at 1949. “Plausibility” in this context does not imply that the district court should decide whose version to believe, or which version is more likely than not. Indeed, the Court expressly distanced itself from the latter approach in Iqbal, “the plausibility standard is not akin to a probability requirement.”129 S.Ct. at 1949 (quotation marks omitted). As we understand it, the Court is saying instead that the plaintiff must give enough details about the subject-matter of the case to present a story that holds together. In other words, the court will ask itself could these things have happened, not did they happen. For cases governed only by Rule 8, it is not necessary to stack up inferences side by side and allow the case to go forward only if the plaintiff's inferences seem more compelling than the opposing inferences.

*   *   *

[I]n many straightforward cases, it will not be any more difficult today for a plaintiff to meet that burden than it was before the Court's recent decisions. A plaintiff who believes that she has been passed over for a promotion because of her sex will be able to plead that she was employed by Company X, that a promotion was offered, that she applied and was qualified for it, and that the job went to someone else. That is an entirely plausible scenario, whether or not it describes what “really” went on in this plaintiff's case. A more complex case involving financial derivatives, or tax fraud that the parties tried hard to conceal, or antitrust violations, will require more detail, both to give the opposing party notice of what the case is all about and to show how, in the plaintiff's mind at least, the dots should be connected. Finally, as the Supreme Court warned in Iqbal and as we acknowledged later in Brooks v. Ross, 578 F.3d 574 (7th Cir.2009), “abstract recitations of the elements of a cause of action or conclusory legal statements,” 578 F.3d at 581, do nothing to distinguish the particular case that is before the court from every other hypothetically possible case in that field of law. Such statements therefore do not add to the notice that Rule 8 demands.

     Judge Posner takes a different approach. Does he seem to be saying that inferences should be stacked up and compared? 

(a) Time to Serve a Responsive Pleading.

     (1) In General. Unless another time is specified by this rule or a federal statute, the time for serving a responsive pleading is as follows:

          (A) A defendant must serve an answer:

               (i) within 21 days after being served with the summons and complaint; or

               (ii) if it has timely waived service under Rule 4(d), within 60 days after the request for a waiver was sent, or within 90 days after it was sent to the defendant outside any judicial district of the United States.

          (B) A party must serve an answer to a counterclaim or crossclaim within 21 days after being served with the pleading that states the counterclaim or crossclaim.

          (C) A party must serve a reply to an answer within 21 days after being served with an order to reply, unless the order specifies a different time.

     (2) United States and Its Agencies, Officers, or Employees Sued in an Official Capacity. The United States, a United States agency, or a United States officer or employee sued only in an official capacity must serve an answer to a complaint, counterclaim, or crossclaim within 60 days after service on the United States attorney.

     (3) United States Officers or Employees Sued in an Individual Capacity. A United States officer or employee sued in an individual capacity for an act or omission occurring in connection with duties performed on the United States’ behalf must serve an answer to a complaint, counterclaim, or crossclaim within 60 days after service on the officer or employee or service on the United States attorney, whichever is later.

     (4) Effect of a Motion. Unless the court sets a different time, serving a motion under this rule alters these periods as follows:

          (A) if the court denies the motion or postpones its disposition until trial, the responsive pleading must be served within 14 days after notice of the court's action; or

          (B) if the court grants a motion for a more definite statement, the responsive pleading must be served within 14 days after the more definite statement is served.

(b) How to Present Defenses. Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:

     (1) lack of subject-matter jurisdiction;

     (2) lack of personal jurisdiction;

     (3) improper venue;

     (4) insufficient process;

     (5) insufficient service of process;

     (6) failure to state a claim upon which relief can be granted; and

     (7) failure to join a party under Rule 19. 

     A motion asserting any of these defenses must be made before pleading if a responsive pleading is allowed. If a pleading sets out a claim for relief that does not require a responsive pleading, an opposing party may assert at trial any defense to that claim. No defense or objection is waived by joining it with one or more other defenses or objections in a responsive pleading or in a motion.

(c) Motion for Judgment on the Pleadings. After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.

(d) Result of Presenting Matters Outside the Pleadings. If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.

(e) Motion for a More Definite Statement. A party may move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response. The motion must be made before filing a responsive pleading and must point out the defects complained of and the details desired. If the court orders a more definite statement and the order is not obeyed within 14 days after notice of the order or within the time the court sets, the court may strike the pleading or issue any other appropriate order.

(f) Motion to Strike. The court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. The court may act:

     (1) on its own; or

     (2) on motion made by a party either before responding to the pleading or, if a response is not allowed, within 21 days after being served with the pleading.

(g) Joining Motions.

     (1) Right to Join. A motion under this rule may be joined with any other motion allowed by this rule.

     (2) Limitation on Further Motions. Except as provided in Rule 12(h)(2) or (3), a party that makes a motion under this rule must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.

(h) Waiving and Preserving Certain Defenses.

     (1) When Some Are Waived. A party waives any defense listed in Rule 12(b)(2)–(5) by:

          (A) omitting it from a motion in the circumstances described in Rule 12(g)(2); or

          (B) failing to either:

               (i) make it by motion under this rule; or

               (ii) include it in a responsive pleading or in an amendment allowed by Rule 15(a)(1) as a matter of course.

     (2) When to Raise Others. Failure to state a claim upon which relief can be granted, to join a person required by Rule 19(b), or to state a legal defense to a claim may be raised:

          (A) in any pleading allowed or ordered under Rule 7(a);

          (B) by a motion under Rule 12(c); or

          (C) at trial.

     (3) Lack of Subject-Matter Jurisdiction. If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.

(i) Hearing Before Trial. If a party so moves, any defense listed in Rule 12(b)(1)–(7)—whether made in a pleading or by motion—and a motion under Rule 12(c) must be heard and decided before trial unless the court orders a deferral until trial.

Defenses; Admissions and Denials.

     (1) In General. In responding to a pleading, a party must:

           (A) state in short and plain terms its defenses to each claim asserted against it; and

           (B) admit or deny the allegations asserted against it by an opposing party.

     (2) Denials—Responding to the Substance. A denial must fairly respond to the substance of the allegation.

     (3) General and Specific Denials. A party that intends in good faith to deny all the allegations of a pleading—including the jurisdictional grounds—may do so by a general denial. A party that does not intend to deny all the allegations must either specifically deny designated allegations or generally deny all except those specifically admitted.

     (4) Denying Part of an Allegation. A party that intends in good faith to deny only part of an allegation must admit the part that is true and deny the rest.

     (5) Lacking Knowledge or Information. A party that lacks knowledge or information sufficient to form a belief about the truth of an allegation must so state, and the statement has the effect of a denial.

     (6) Effect of Failing to Deny. An allegation—other than one relating to the amount of damages—is admitted if a responsive pleading is required and the allegation is not denied. If a responsive pleading is not required, an allegation is considered denied or avoided.

(c) Affirmative Defenses.

     (1) In General. In responding to a pleading, a party must affirmatively state any avoidance or affirmative defense, including:

          • accord and satisfaction;

          • arbitration and award;

          • assumption of risk;

          • contributory negligence;

          • duress;

          • estoppel;

           • failure of consideration;

           • fraud;

          • illegality;

          • injury by fellow servant;

          • laches;

          • license;

          • payment;

         • release;

         • res judicata;

        • statute of frauds;

         • statute of limitations; and

         • waiver.

     (2) Mistaken Designation. If a party mistakenly designates a defense as a counterclaim, or a counterclaim as a defense, the court must, if justice requires, treat the pleading as though it were correctly designated, and may impose terms for doing so. 

     Pleadings and Motions. This is a good time to discuss the difference between motions and pleadings. Under the common law, most of the exchanges between the parties were carried out in the form of pleadings.  The pleadings were used to narrow the issues before the court and prepare the case for trial. Depending on the case, a court could grant judgment on the pleadings without trial if the pleadings made clear there was no triable case.

     As an alternative in modern practice, the case can be developed through motions. A motion asks the court to take some action – dismiss the lawsuit, sanction the other party, order the production of withheld documents, and so on. The Federal Rules of Civil Procedure set forth a number of opportunities for motions practice that can lead to reshaping or dismissal of the lawsuit. A motion to dismiss for failure to state a claim or a motion for summary judgment can lead to individual claims or the entire lawsuit being dismissed.

     The choice between motions and pleadings comes up in the response to the complaint. There is no deadline for filing any motions in response to the complaint. The only deadline is for the answer. The defendant might file an answer and at an appropriate time file a motion for judgment on the pleadings.

     Alternatively and commonly, the defendant might file one of the motions available under Rule 12, with a motion to dismiss under Rule 12(b) being the most common. Such a motion can seek dismissal of some claims but not others.

     Motions come up in many other contests in modern litigation. If there is a discovery dispute, it generally is brought to the court’s attention through motion practice. If a party wants extra time to respond, it is brought up through a motion. And so on.

     Time to respond. Note that Rule 12 defines the time within which a response to the complaint must be presented. These deadlines are calculated from the time of service on the defendant, and not on the time of filing the suit. In this course, you should be aware that the limits exist and that time can be limited, but we will not ask you to calculate times for response. In complex cases, it is not unusual for the parties to agree for an extension of the time for a response, or for the defendant to seek it from the court if the plaintiff refuses to agree. In the absence of an agreement, it is up to the court’s discretion. Even with an agreement some judges intent on keeping their dockets moving may resist what they view as excessive or unnecessary extensions; other judges will routinely grant a first request for an extension of time if the time requested is not too great and if good reasons are presented (e.g., difficulty in obtaining information, an attorney’s other obligations, etc.).  

     A motion to dismiss the entire case puts off any need to file an answer until after the motion is decided. When a motion to dismiss addresses some but not all claims in the complaint, most courts have held that there is no need to answer even on those counts not affected by the motion until the ruling is given. A minority of courts, however, have held that an answer must be filed with regard to those parts of the complaint not subject to the motion to dismiss. Once again, this is an example of a situation where if you are in US litigation the local precedent will need to be researched if the situation comes up.

     Admissions, Denials, and Affirmative Defenses. Rule 8(b) and 8(c) deal with responding to the complaint. The party responding must go paragraph by paragraph and either admit or deny each allegation. According to the rule, the defendant must respond very specifically. In practice, courts sometimes let defendants get away with general denials of every paragraph of the complaint. Rule 8(c) provides a list of defenses that must be asserted by motion or answer or waived. Failure to assert these defenses in a timely manner can mean that they are lost, although judges may allow amendments if no one has been prejudiced.  

     Motions to dismiss.  Rule 12(b) lists seven defenses that may be raised by motion: lack of subject-matter jurisdiction, lack of personal jurisdiction, improper venue, insufficient process, insufficient service of process, failure to state a claim upon which relief can be granted, and failure to join a party under Rule 19. We will get to Rule 19 when we get to joinder. The others besides 12(b)(6) should be familiar to you based on what we have studied so far. As you may recall, 12(b)(4), insufficient process, challenges the content of the summons (there was something missing or improper in the papers that were served), while 12(b)(5), insufficient service of process, challenges the way in which the papers were delivered. Which would be the proper defense if the summons failed to include a copy of the complaint? Which would be the proper defense if the summons were left at the defendant’s home, but put in the hands of a small child instead of a person of suitable age and discretion?

     Note that the defenses listed in Rule 12(b)(2) through 12(b)(5) are waived pursuant to Rule 12(h) if not made in a timely fashion. In contrast, lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted are not waived. Can you explain why?

     What is covered by a 12(b)(6) failure to state a claim for which relief may be granted? In general, two things. First, as we saw in Twiqbal, if insufficient facts have been pleaded to meet the pleading burden, this is an appropriate motion. Second, if the claim made and facts alleged simply do not add up to a violation of a legal duty this would be the proper motion. This second kind of motion to dismiss was called a demurrer in the common law, and in your substantive law courses you should have seen many such motions by now, whether under the common law or more modern pleadings, as courts work to determine the limits of causes of action. In some cases, failure to state a claim is clear: if, for example, a student brought a claim against a professor for hurting their feelings by failing to call upon them in class, no legal duty exists that would give rise to recovery. In other cases, as you’ve seen in your substantive courses, the issue may be closer. For example, in the Tarasoff v. Regents of the University of California case the Supreme Court of California found that a therapist sometimes owes a duty to warn if a patient is dangerous. As stated, the rule of the case is, “When a therapist determines, or pursuant to the standards of his profession, should determine, that his patient presents a serious danger of violence to another, he incurs an obligation to use reasonable care to protect the intended victim against such danger." Now imagine a situation where it is not a therapist who has a reason to believe that his client presents a serious danger of violence to another, but a lawyer. In Tarasoff, it was important that therapists routinely in the course of their work must determine whether a patient presents a danger to others, and on occasion are involved in having such patients involuntarily confined to mental hospitals. That’s not part of the job of lawyers, and in light of that difference it may or may not be the case that Tarasoff should be extended to lawyers. If a Tarasoff type claim were to be brought against a lawyer – or even if a Tarasoff type claim is brought in a jurisdiction that has not yet had occasion to determine whether it would follow Tarasoff with regard to therapists – a motion pursuant to Rule 12(b)(6) would be a way to test whether the law reaches that behavior, perhaps cutting off the case before discovery or trial take place. We will see a court applying Rule 12(b)(6) in the case that follows.

     You will remember from Twiqbal that normally allegations of fact must be accepted as true in deciding a Rule 12(b)(6) motion. A 12(b)(6) motion is not the place to dispute facts. If, on the other hand, a defendant offers facts to defeat the claim, the court should decide the matter as if a motion for summary judgment had been filed. If, for example, a claim is made for repayment of a debt, and defendant offers incontrovertible evidence that the debt has been repaid, and styles the motion as a 12(b)(6) motion, the motion should be resolved as one for summary judgment. In practice, both litigants and courts sometimes get sloppy about this, and appellate courts do not tend to overturn cases that get to a correct result despite mislabeling the nature of what they were doing.

     In most cases, plaintiffs whose case is dismissed under Rule 12(b)(6) get at least one additional chance to replead. Courts will allow them to address the deficiencies identified in the ruling and correct the problems. On the other hand, courts may not allow this if repleading appears futile, or if plaintiffs have failed to fix any problems after having had one or more chances to replead.

     Other Motions Under Rule 12.    There are other motions under rule 12 that might come up. Rule 12 (c) allows either party to seek judgment on the pleadings. It may be that the defendant has admitted sufficient facts in its answer that judgment follows from the admitted allegations; it may be that the plaintiff failed to make sufficient allegations to meet its burden of pleading. It can also be that there is no dispute as to the facts and the only issue is the interpretation of a statute or a document such as a will. In either such cases where the result does not turn on disputed facts a Rule 12 (c) motion allows the court to rule.

     A Rule 12 (e) motion for a more definite statement should be filed only when the complaint is so vague that defendant cannot formulate a response. These are rare, and likely to become more rare since some complaints that can be challenged under Rule 12 (e) also seem susceptible to a Rule 12(b)(6) challenge under Twiqbal, which would lead to dismissal of the lawsuit rather than an amended complaint.

     A Rule 12(f) motion to strike is aimed at extraneous material in the complaint or at insufficient defenses. In general, these are not favored by the courts. In some cases, materials are included in the pleadings that are prejudicial and irrelevant, and in such cases a 12(f) motion may succeed. It also works as a way to challenge a defense as not having been sufficiently pleaded.

     Answers. If the case is not dismissed upon a motion or if no motion is filed, the defendant must file an answer. In the answer the defendant can challenge the accuracy of the facts alleged by the plaintiff, challenge the sufficiency of the legal theory, and present affirmative defenses.

     The defendant is required, paragraph by paragraph of the complaint, to admit or deny the factual allegations of the complaint. In practice, defendants may evade giving straightforward admissions. One proper response is to state that the defendant does not have sufficient knowledge to admit or deny. Failure to deny constitutes an admission, which can lead to judgment on the pleadings, so defense counsel need to be wary about being too creative in finding ways to avoid admissions. Stating that the defendant "neither admits nor denies" the allegation has been held to be admission because it failed to deny, and refusing to respond because the count called for a legal conclusion has been held to be an inappropriate response and hence an admission. Despite that, courts sometimes are more lenient than one would expect in tolerating these evasions. In some cases, defense counsel enter boilerplate denials of every count – even such simple matters as the address of the defendant – and courts sometimes tolerate that as a matter of local practice, but such boilerplate denials are generally recognized as improper and unethical, and lead to a risk of wholesale admissions.

     Defenses are raised either by motion or in the answer, and as Rule 12 makes clear some are waived if they are not asserted in a timely fashion. Rule 8(c)(1) also lists affirmative defenses that must be raised or lost when responding to a pleading. The list in Rule 8 is not exhaustive - there are others that may be raised. In general, defendants bear the burdens of pleading, proof, and persuasion on affirmative defenses, and failure to adequately plead an affirmative defense can lead to loss of the defense.

     Counterclaims, Crossclaims, and Impleading. At the time of the answer, the defendant may also assert counterclaims against the plaintiff (for example, claiming that it was the plaintiff, not the defendant, who breached the contract). If there is more than one defendant, the defendant might at this time bring a crossclaim against its codefendant if it arises from the same set of issues. Last but not least, it might seek to bring in a third party that it claims is liable to it if it is liable to the plaintiff. We will cover the rules governing these additional claims when we get to joinder of claims and parties.

     Responding to the response - the reply. In some cases, the plaintiff may be ordered by the court to reply to affirmative defenses, and this order may come in response to a request from the plaintiff that it be allowed to file a reply. 

     Twiqbal and Responsive Pleadings: One question left unanswered by Twiqbal was whether the heightened pleading standards applied to plaintiffs also apply to defendants. As you see from the foregoing, there are a number of responses defendants can make to the complaint.

     With regard to counterclaims, the issue seems settled. Those bringing a counterclaim (or cross claim or third party impleader claim) are third party plaintiffs, and the standards of Twiqbal apply.

     But what about answers and affirmative defenses? The lower courts have been split on this issue, as have academic commentators. Some say yes, and some say no. On the one hand, it seems unfair to subject plaintiffs to a one-sided burden. On the other hand, plaintiffs get to choose when and where to file, while defendants often have a limited time in which to file their response, limiting their ability to gather facts. So far, the leading case on point is from the Second Circuit court of Appeals in GEOMC Co., Ltd. v. Calmare Therapeutics Incorporated, 918 F.3d 92, 97 (2nd Cir. 2019). With regard to striking an affirmative defense, the court was applying the following test: “In order to prevail on a motion to strike [an affirmative defense], a plaintiff must show that: (1) there is no question of fact which might allow the defense to succeed; (2) there is no question of law which might allow the defense to succeed; and (3) the plaintiff would be prejudiced by inclusion of the defense.” Applying Twombly in the context of that test, the court reasoned:

Whether the first of the McCaskey factors should be reworded in light of Twombly, i.e., whether Twombly applies to the pleading of affirmative defenses, is an issue that has divided the many district courts and commentators that have considered it. Three comprehensive articles take three different approaches. One article favors applying Twombly to affirmative defenses. See Joseph A. Seiner, Plausibility Beyond the Complaint, 53 Wm. & Mary L. Rev. 987 (2012). One opposes applying Twombly to affirmative defenses. See Justin Rand, Tightening Twiqbal: Why Plausibility Must Be Confined to the Complaint, 9 Fed. Cts. L. Rev. 79 (2016). One proposes a “middle-ground approach.” See Note, Nathan Pysno, Should Twombly and Iqbal Apply to Affirmative Defenses?, 64 Vand. L. Rev. 1633, 1670 (2011); see also 2 Moore's Federal Practice § 12.37[4] (3d ed. 2018) (“If a plaintiff files a motion to  strike one or more defenses, the better view is that the plausibility standard of Twombly does not apply in judging the adequacy of the defendant's pleaded defenses, although there is some authority to the contrary.” (footnote omitted)); 5 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 1274 (3d ed. 2018) (taking no position on whether Twombly applies to pleading affirmative defenses).

We conclude that the plausibility standard of Twombly applies to determining the sufficiency of all pleadings, including the pleading of an affirmative defense, but with recognition that, as the Supreme Court explained in Iqbal, applying the plausibility standard to any pleading is a “context-specific” task. 556 U.S. at 679, 129 S.Ct. 1937. The Court described the context of Iqbal as one “where we are impelled to give real content to the concept of qualified immunity for high-level officials who must be neither deterred nor detracted from the vigorous performance of their duties.” 556 U.S. at 686, 129 S.Ct. 1937.

The key aspect of the context relevant to the standard for pleading an affirmative defense is that an affirmative defense, rather than a complaint, is at issue. This is relevant to the degree of rigor appropriate for testing the pleading of an affirmative defense. The pleader of a complaint has the entire time of the relevant statute of limitations to gather facts necessary to satisfy the plausibility standard. By contrast, the pleader of an affirmative defense has only the 21-day interval to respond to an original complaint, see Fed. R. Civ. P. 12(a)(1)(A)(i), the 21-day interval to amend, without court permission, an answer that requires a responsive pleading, see Fed. R. Civ. P. 15(a)(1)(B), or the 14-day interval to file a required response to an amended pleading that makes a new claim, see Fed. R. Civ. P. 15(a)(3). That aspect of the context matters. In addition, the relevant context will be shaped by the nature of the affirmative defense. For example, the facts needed to plead a statute-of-limitations defense will usually be readily available; the facts needed to plead an ultra vires defense, for example, may not be readily known to the defendant, a circumstance warranting a relaxed application of the plausibility standard.

     A review of 1,141 district court cases that discuss applying Twiqbal to defendants found significant inconsistency in whether courts held that Twiqbal should apply to pleadings by defendants:

In the decade after the Supreme Court raised the pleading standard for plaintiffs, the lower courts have decided 62% of the time that those heightened pleading standards should not also be applied to defendants. What's good for the goose has not been good for the gander in a growing majority of federal courts since August 2011. Talk of a national majority, however, masks huge differences in the ways various circuits and particular districts interpret the Federal Rules of Civil Procedure. Defendants in places like San Francisco or Chicago should know that the national majority view just doesn't apply there. Judges in the Northern Districts of California and Illinois apply the standards of Twombly and Iqbal to defendants over 90% of the time.

Brian Soucek & Remington B. Lamons, Heightened Pleading Standards for Defendants: A Case Study of Court-Counting Precedent, 70 Ala. L. Rev. 875, 920 (2019)

United States District Court for the Eastern District of Illinois

Rose v. Nat'l Collegiate Athletic Ass'n

346 F. Supp. 3d 1212

2018-09-28

MEMORANDUM OPINION AND ORDER

John Z. Lee, United States District Judge

Plaintiffs Michael Rose and Timothy Stratton played football for Purdue University from 1996 to 2001. Purdue is in the Big Ten Conference ("Big Ten"), a Division I conference of the National Collegiate Athletic Association ("NCAA").

Over the course of their college football careers at Purdue, Rose and Stratton experienced thousands of repetitive concussive and subconcussive impacts to their heads. Now they are dealing with debilitating neurodegenerative disorders and cognitive impairments due to repetitive brain trauma. As a result, Rose and Stratton, individually and on behalf of all others similarly situated, have sued for negligence, fraud, breach of express and implied contract, and unjust enrichment, alleging that the NCAA and the Big Ten were uniquely aware of the risks of repetitive brain trauma and, yet, exposed players to those risks with no regard for players' health and safety.

The NCAA and Big Ten have moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). In addition, the Big Ten has moved for a more definitive statement under Rule 12(e). For the reasons herein, the motions are granted in part and denied in part [12][16].

Factual Background 1

Rose and Stratton at Purdue

Each Saturday during football season, millions of fans watch college football games from their couches or in packed stadiums throughout the United States. Nearly one hundred thousand college football players compete each year.

Rose played the position of linebacker for Purdue from 1996 to 1999. Weighing just over 200 pounds, Rose was small for his position. But what Rose lacked in size, he made up in intensity, once earning him the title of Big Ten Defensive Player of the Week.

Stratton played the position of tight end for Purdue from 1998 to 2001. By the end of his college career, he was the school's all-time leader in receptions, with 204 in total.

Neither Rose nor Stratton had ever experienced a concussion before playing college football. However, while playing for Purdue in practices and games, both were subjected to thousands of impacts greater than 10 g's ("g" being a measure of gravitational force, where 1 g is equal to the force of gravity at the Earth's surface). Generally, the majority of football-related hits to the head exceed 20 g's, and some approach 100 g's.

During the time that Rose and Stratton were playing football at Purdue, the Big Ten and the NCAA did not inform them of an epidemic that was slowly injuring and killing student athletes. The Big Ten and the NCAA knew that repetitive subconcussive and concussive impacts to football players' heads created a serious risk of neurodegenerative disorders and diseases. But Defendants did not change their concussion treatment protocols until 2010, several years too late for Plaintiffs.

Now, long after their college football days have concluded, Rose and Stratton suffer from neurodegenerative diseases and disorders caused by repetitive brain trauma. Rose deals with ringing in his ears, memory loss, depression, and abrupt and uncontrollable mood swings. Stratton struggles with headaches, migraines, ringing in the ears, memory loss, depression, and anxiety.

Defendants' Roles in Safeguarding the Health and Safety of Plaintiffs

The NCAA was created in 1906 in response to the excessive brutality and alarming rate of head injuries in college football. Thus, the NCAA's original purpose was to create and enforce rules to protect young people from head injuries resulting from dangerous athletic practices.

To this end, the NCAA Constitution states that its primary principle is to ensure that: "Intercollegiate athletics programs shall be conducted in a manner designed to protect and enhance the physical and educational well-being of student athletes.". To carry out this goal, the NCAA promulgates and implements standard-sport regulations and requirements, such as the NCAA Constitution, Operating Bylaws, and Administrative Bylaws, which provide detailed instructions on game and practice rules pertaining to player well-being and safety.

Additionally, the NCAA publishes a Sports Medicine Handbook ("Handbook") annually. The Handbook includes official policies and guidelines for the treatment and prevention of sports-related injuries, as well as return-to-play guidelines. Id. These policies and guidelines recognize that "student-athletes rightfully assume that those who sponsor intercollegiate athletics have taken reasonable precautions to minimize the risk of injury from athletics participation." As a member conference in the NCAA, the Big Ten is required to comply with, administer, and enforce all applicable NCAA rules, regulations, policies, and guidelines to protect the health and safety of Purdue University football players, including Plaintiffs. Furthermore, the NCAA promises to assist the Big Ten in its efforts to fully comply with NCAA rules and regulations. As compared to Plaintiffs and other Purdue University football players, the NCAA and the Big Ten are in a superior position to know of and to mitigate the risks of concussions and traumatic brain injuries.

Symptoms and Treatment of Concussive and Subconcussive Impacts to the Head

When someone suffers a severe impact to the head, they may exhibit: (1) dizziness; (2) tiredness; (3) nausea; (4) vomiting; (5) headaches; (6) blurred vision or light sensitivity; (7) slurred speech; (8) difficulty concentrating or decision-making; (9) difficulty balancing or lack of coordination; (10) unexplained anxiety or irritability; or (11) memory loss. Symptoms may last for one or two weeks. A concussed player, however, may not recognize the signs of a concussion, and the symptoms themselves may prevent him from recognizing he has suffered a concussion.

After a person experiences a concussion, his or her brain needs time to heal to prevent long-term damage. After diagnosing a patient with a concussion, doctors generally prohibit him or her from returning to normal activities for a few weeks after a concussion, due to the brain's particular vulnerability to further injury. Individuals who do not recover from a concussion within a few weeks are diagnosed with post-concussion syndrome. The symptoms of post-concussion syndrome can last for months or can be permanent.

When a football player experiences minor, subconcussive brain trauma, he may not exhibit symptoms of a concussion. However, even minor brain trauma may eventually lead to neuropathological and neurophysiological alterations, including neuronal damage, reduced cerebral blood flow, altered brainstem evoked potentials, and reduced speed of information processing.

Studies Establishing the Dangers Associated with Football-related Brain Trauma

Plaintiffs cite numerous studies regarding the risks associated with football-related brain trauma. Plaintiffs allege that the NCAA and the Big Ten were in a comparatively superior position than football players to know about these studies.

[Omitted]

Plaintiffs' Claims and Defendants' Rule 12 Motions

Plaintiffs have filed a six-count complaint, asserting state common law claims of negligence (Count 1), fraudulent concealment (Count 2), breach of express contract (Count 3), breach of implied contract (Count 4), breach of express contract as third-party beneficiaries (Count 5), and unjust enrichment (Count 6). The Big Ten moves to dismiss the complaint based on the statute of limitations and raises additional arguments as to the fraudulent-concealment, breach-of-implied-contract, and unjust-enrichment claims. The NCAA moves to dismiss all but the negligence claim.

Legal Standard

To survive a motion to dismiss under Rule 12(b)(6), a complaint must "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."  Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

Additionally, when considering motions to dismiss, the Court accepts "all well-pleaded factual allegations as true and view[s] them in the light most favorable to the plaintiff." Lavalais v. Vill. of Melrose Park , 734 F.3d 629, 632 (7th Cir. 2013). At the same time, "allegations in the form of legal conclusions are insufficient to survive a Rule 12(b)(6) motion." McReynolds v. Merrill Lynch & Co., Inc. , 694 F.3d 873, 885 (7th Cir. 2012) (citing Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ).

Under Rule 9(b), a plaintiff "alleging fraud or mistake ... must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). A plaintiff must describe the "who, what, when, where, and how" of the fraud-"the first paragraph of any newspaper story." United States ex rel. Lusby v. Rolls-Royce Corp. , 570 F.3d 849, 853 (7th Cir. 2009) (internal quotation marks omitted). "A plaintiff who alleges fraud can provide all the detail in the world, but does not have unlimited leeway to do so on 'information and belief.' " Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co. , 631 F.3d 436, 442 (7th Cir. 2011). "The general rule that fraud cannot be pled based on information and belief is not ironclad, however: the practice is permissible, so long as (1) the facts constituting the fraud are not accessible to the plaintiff and (2) the plaintiff provides the grounds for his suspicions."

Analysis

1. Choice of Law

Because this Court sits in diversity, it must first address choice of law. To determine which state's law governs, the Court looks to the choice-of-law rules of the forum state, Illinois. See Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). "Under Illinois choice-of-law rules, litigants can formally or informally stipulate to the substantive law to be applied to their case, as long as the stipulation is reasonable."

The parties agree that Illinois substantive law applies to their claim for breach of contract as third-party beneficiaries to a contract and that Indiana supplies the substantive law for the other claims that are the subject of the motions. This stipulation is reasonable. The parties assert there is no difference between Illinois and Indiana law regarding breach of contract as third-party beneficiaries, and thus the law of the forum state applies. Furthermore, as to the other claims, both Plaintiffs played football while attending Purdue University in West Lafayette, Indiana, so it is reasonable for Indiana law to govern those claims. Accordingly, the Court applies the substantive law in accordance with the parties' stipulations.

"Procedural questions, however, are governed by the law of the forum." llinois choice-of-law rules consider statutes of limitations to be procedural in nature.  The Court therefore applies Illinois' statute of limitations, along with its accrual rules and tolling doctrines.

1. Illinois Statute of Limitations

The Court pauses briefly to determine which statute of limitations applies to each of Plaintiffs' various claims. In Illinois, "[t]he law is well established that the limitations period governing a claim is determined by the nature of the plaintiff's injury rather than the nature of the facts from which the claim arises." In each of their claims, Plaintiffs allege that the nature of their injury is in the form of personal injury damages The Big Ten and Plaintiffs agree that all of Plaintiffs' claims are governed by Illinois' statute of limitations for personal injury actions. As a result, the applicable statute of limitations for all claims is two years.

"Because complaints need not anticipate and attempt to plead around defenses, a motion to dismiss based on failure to comply with the statute of limitations should be granted only where the allegations of the complaint itself set forth everything necessary to satisfy the affirmative defense." In other words, "[o]nly when the plaintiff pleads itself out of court-that is, admits all the ingredients of an impenetrable defense-may a complaint that otherwise states a claim be dismissed under Rule 12(b)(6)."

The Big Ten argues it is clear from the face of the complaint that Plaintiffs' claims are time-barred and that delayed accrual is inappropriate under Illinois' discovery rule and fraudulent concealment doctrine. Not surprisingly, Plaintiffs disagree.

1. The "Sudden, Traumatic Event" Rule

Under Illinois law, "[t]he statute of limitations does not begin to run until the wronged 'person knows or reasonably should know of his injury and also knows or reasonably should know that it was wrongfully caused. At that point the burden is upon the injured person to inquire further as to the existence of a cause of action.' " “In determining when a plaintiff reasonably should have discovered her injury, Illinois courts distinguish between injuries caused by sudden, traumatic events and those that have a late or insidious onset."

"[A] sudden, traumatic event is one that, because of its force or violence, permits the law to presume that the event immediately placed the plaintiff on notice of her injury and a right of action." In such a case, the "cause of action accrues on the date of the traumatic event, and the limitations period does not begin anew simply because a latent condition later may arise from the same occurrence." "The rationale supporting this rule is that the nature and circumstances surrounding the traumatic event are such that the injured party is thereby put on notice that actionable conduct might be involved."

As the Big Ten sees it, Plaintiffs are claiming that they were injured in a sudden, traumatic event each and every time they experienced a concussive or subconcussive hit. Under this scenario, the Big Ten argues, Plaintiffs have pleaded themselves out of court because their causes of action accrued, and the statute of limitations began to run, when those injuries occurred between 1996 and 2001 while they were playing football at Purdue.

But, rather than focusing only on a few, discreet allegations, the Court must consider the complaint as a whole.. And, here, assuming all of the well-pleaded allegations to be true and viewing all reasonable inferences in Plaintiffs' favor, the Court concludes that their allegations, taken as a whole, paint a picture that falls more within the "nontraumatic event" category of cases than the "sudden, traumatic event" category described in Golla .

Given these allegations, the Court cannot conclude from the complaint that Rose and Stratton "knew, at the time, that [they] suffered an injury and that the injury may have been wrongfully caused," as required by the Illinois Supreme Court in Golla. To the contrary, Rose and Stratton allege that the Defendants hid the risk of such injuries from them.

The Big Ten also argues that a reasonable person in Plaintiffs' position would have been aware of their causes of action at the time, based on the existence of the well-publicized scientific studies on concussions between 2002 and 2007, and the NCAA's amendment of its concussion policy in 2010. Additionally, the Big Ten imputes knowledge of concussion-based lawsuits filed by college football player Adrian Arrington against the NCAA in 2011, and by professional football players against the NFL in 2015. But nowhere in their complaint do Plaintiffs state that they were aware of these studies or policies or any of the other lawsuits during the statute of limitations period.

Of course, discovery may reveal that the nature and circumstances surrounding the incidents were sufficient to place a reasonable person on notice that actionable conduct may have been involved. Discovery will also shed light on whether neurodegenerative disorders and diseases are latent conditions caused by the occurrence of injuries of which a reasonable person should have been aware, as the Big Ten asserts. Here at the pleading stage, however, the alleged facts and disputed issues stand in stark contrast to Golla , which was a summary judgment case. As a result, the Court does not believe that Plaintiffs' complaint indicates that their claims are barred by the two-year statute of limitations. See Vector-Springfield Props, Ltd. v. Cent. Ill. Light Co. , 108 F.3d 806, 810 (7th Cir. 1997) (noting that "the point in time when a reasonable person with similar information should have realized he had been injured and that the injury had been wrongfully caused is generally a question to be decided by the trier of fact") (citing Knox Coll. v. Celotex Corp. , 88 Ill.2d 407, 58 Ill.Dec. 725, 430 N.E.2d 976, 981 (1981) ).

In the alternative, the Big Ten seeks a more definite statement under Rule 12(e) because Plaintiffs have failed to allege when their claims accrued. However, as the Seventh Circuit stated in Chapman v. Yellow Cab Cooperative , 875 F.3d 846, 848 (7th Cir. 2017), "it is manifestly inappropriate for a district court to demand that complaints contain all legal elements (or factors) plus facts corresponding to each." "It is enough to plead a plausible claim, after which a plaintiff receives the benefit of imagination, so long as the hypotheses are consistent with the complaint[.]" Id. (internal quotation marks and citations omitted). As such, " Rule 12(e) cannot be used to turn federal civil procedure into a fact-pleading or code-pleading system." Id. at 849. Rather, Rule 12(e) motions are appropriate only when the complaint "is so vague or ambiguous that the party cannot reasonably prepare a response." Fed. R. Civ. P. 12(e). Here, given that Plaintiffs are not required to anticipate or plead around the affirmative defense of statute of limitations in the first instance, Leavell v. Kieffer , 189 F.3d 492, 494 (7th Cir. 1999), granting a request for a more definite statement to solidify the defense is particularly inapt. The Big Ten's request for a more definite statement is therefore denied.

1. Fraudulent Concealment Exception to the Applicable Statute of Limitations

Under Illinois law, "[i]f a person liable to an action fraudulently conceals the cause of such action," the statute of limitations does not begin to run until the plaintiff "discovers that he or she has such cause of action." The Big Ten argues that, to the extent that Plaintiffs intend to rely upon the doctrine of fraudulent concealment to extend the two year limitations period, they cannot do so because they have not pleaded the fraudulent concealment exception with particularity as required by Rule 9(b). But, again, the statute of limitations is an affirmative defense, and a plaintiff has no obligation-under Rule 9(b) or otherwise-to plead around it in the complaint.

1. Affirmative Fraudulent Concealment Claim (Count 2)

Both Defendants move to dismiss Plaintiffs' affirmative fraudulent concealment claim. As an initial matter, the NCAA argues that it is not clear that Indiana law recognizes such a claim. And even if it does, the NCAA contends that Plaintiffs' allegations fail to satisfy the heightened pleading standard of Rule 9(b). In turn, the Big Ten argues that Plaintiffs have failed to allege certain elements of the claim.

It is true that two federal district courts have held that fraudulent concealment is not an independent cause of action under Indiana law. But the cases that those courts cited do not stand for that proposition. Rather, the cited cases merely hold that a defendant may be estopped from asserting the statute of limitations under the doctrine of fraudulent concealment, and they do not address the issue of whether fraudulent concealment is a standalone claim.

By contrast, Indiana courts have consistently recognized fraudulent concealment as an independent cause of action. The NCAA's motion to dismiss on the basis that Indiana law does not recognize a claim of fraudulent concealment is thus denied.

Turning to the claim itself, to state a fraudulent concealment claim under Indiana law, a plaintiff must allege: "(1) the wrongdoer had a duty to disclose certain facts to another, (2) it knowingly failed to do so, and (3) the other justifiably relied upon such non-disclosure to his detriment." DeVoe , 526 N.E.2d at 1240 ; see Cent. Nat'l Bank of Greencastle v. Shoup , 501 N.E.2d 1090, 1097 (Ind. Ct. App. 1986) ("Fraud generally comprises all acts, omissions, and concealments involving a breach of legal or equitable duty and resulting in damages to another.") (internal quotation marks omitted). "The fraud may be constructive in a sense that there may not be any active intentional purpose to deceive or defraud, yet the action is so prominent and misleading as to induce detrimental reliance." See Barnd , 431 N.E.2d 161, 168 (Ind. Ct. App. 1982) (internal quotation marks omitted). "The party asserting fraud bears the burden of establishing the wrongdoer's duty to disclose." Brown , 476 N.E.2d 888, 891 (Ind. Ct. App. 1985).

The Big Ten argues Plaintiffs have failed to allege that they could not have discovered the truth through reasonable inquiry or inspection.. In support, the Big Ten relies on Smith v. Taulman , a case in which the plaintiff appealed the trial court's denial of a motion to compel and its entry of summary judgment against him. The Smith defendants had raised a defense to the plaintiff's fraudulent concealment claim, asserting that the claim could not be predicated on a failure to disclose facts, where (1) information was equally accessible to the plaintiff as to the defendants, and (2) the truth was ascertainable by exercise of reasonable diligence. In response, the plaintiff moved to compel discovery to determine whether the defendants had withheld information from him. Id. On those facts, the appellate court vacated the trial court orders and remanded the case for further proceedings. But Smith -like the cases it cites-was decided on summary judgment and, therefore, does not stand for the proposition that a plaintiff must plead that he or she was unable to discover the truth through reasonable inquiry or inspection.

The Big Ten also contends that Plaintiffs have failed to plead that it had a duty to disclose any facts regarding concussions, because the complaint does not allege the existence of a confidential or fiduciary relationship. However, under Indiana law, a duty to disclose also may exist where "one party may be in the unique possession of knowledge not possessed by the other and may thereby enjoy a position of superiority over the other."

Here, according to Plaintiffs, the NCAA was originally founded in 1906 to protect college football players from head injuries, which were occurring at an alarming rate. Furthermore, the NCAA is specifically charged with safeguarding the health and well-being of student-athletes. To this end, from time to time, the NCAA has conducted concussion studies to determine the risks and effects of concussions and, over time, has implemented guidelines and rules to try to mitigate those risks. And, like the NCAA, the Big Ten is also responsible for protecting the health and safety of student-athletes. Moreover, as compared to Plaintiffs, the Big Ten and the NCAA were in a superior position to know, and to mitigate, the risks of concussions and other traumatic brain injuries. What is more, given the Big Ten's and the NCAA's superior and unique vantage point on health and safety issues, Plaintiffs depended upon them for treatment of, and guidance on, head injuries and concussions. When these allegations are construed as a whole in a light most favorable to Plaintiffs, they sufficiently assert the type of relationship that gives rise to a duty on the part of the NCAA and the Big Ten to disclose facts regarding the risks and effects of traumatic brain injury to their student-athletes. Accordingly, the Big Ten's motion to dismiss Plaintiffs' fraudulent concealment claim is denied.

As for the NCAA, it contends that Plaintiffs have failed to plead fraudulent concealment with particularity under Rule 9(b), because the complaint does not allege who at the NCAA concealed information, what was concealed, or when, where, and how the fraud took place. "[D]efendants are entitled to be apprised of the roles they each played in the alleged scheme, and absent a compelling reason, a plaintiff is normally not entitled to treat multiple ... defendants as one entity." Jepson, Inc. v. Makita Corp. , 34 F.3d 1321, 1329 (7th Cir. 1994).

In this regard, Plaintiffs allege the following. From 1996 to 2001, while Plaintiffs played football for Purdue, the NCAA promulgated, and the Big Ten implemented, official safety guidelines and rules. These guidelines and rules omitted appropriate safety and return-to-play procedures regarding concussive and subconcussive impacts. The NCAA, by promulgating these rules, and the Big Ten, by implementing them, fraudulently concealed their knowledge that: (1) repetitive head impacts in football games and full-contact practices created a serious risk of short-term and long-term brain injury associated with repetitive traumatic impacts; and (2) that same risk was created by permitting players to return prematurely to physical activity after sustaining a subconcussive or concussive impact. As Plaintiffs see it, by concealing these facts, the NCAA and the Big Ten intended to induce Plaintiffs to have a false belief that they could safely continue to play football after sustaining such injuries, even though they themselves knew that Plaintiffs greatly increased their risk of long-term injury and illness by doing so.

Further, as college students, Rose and Stratton lacked much of the scientific information that the NCAA and the Big Ten possessed with regard to these issues. Such an imbalance of information serves to relax Rule 9(b)'s particularity requirement, especially given Plaintiffs' allegations that the NCAA and the Big Ten not only had this information, but kept it from them. Thus, in the context of the allegations in this case, Plaintiffs have satisfied the requirements of Rule 9(b), and the NCAA's motion to dismiss Plaintiffs' fraudulent concealment claim is therefore denied.

1. Breach of Express Contract Against the NCAA (Count 3)

Next, the NCAA argues that Plaintiffs have failed to state a claim for breach of an express contract. “The elements of a breach of contract claim are the existence of a contract, the defendant's breach, and damages to the plaintiff."

Plaintiffs allege that, in order to play football for Purdue, they were required to enter into an express contract with the NCAA. In exchange for Plaintiffs' promise to play football and to abide by the NCAA's regulations, the NCAA promised to: (1) conduct intercollegiate athletics in a manner designed to protect and enhance the physical and educational well-being of student-athletes; and (2) require that each member institution protect the health of, and provide a safe environment for, each of its participating student-athletes. Plaintiffs further attest that they fulfilled all of their obligations under this contract by playing football and complying with the NCAA's regulations. In addition, Plaintiffs assert that, by concealing the risks of brain injuries, the NCAA failed to abide by its contractual obligations in not acting to protect Plaintiffs' health and physical well-being. Finally, Plaintiffs allege that, as a direct and proximate result of the NCAA's breach, they experienced repetitive subconcussive brain impacts and have a significantly increased risk of developing neurodegenerative disorders and diseases.

These factual allegations, while sparse, are enough to plead a plausible claim for breach of an express contract, and the NCAA's motion to dismiss is denied.

1. Breach of Implied Contract (Count 4)

The NCAA and the Big Ten also seek to dismiss Plaintiffs' breach-of-implied-contract claim.  Implied contracts are decidedly different from express contracts. An implied contract is "not created or evidenced by the explicit agreement of the parties." Rather, an implied contract is "inferred by the law, as a matter of reason and justice from [the parties'] acts or conduct, [with] the circumstances surrounding the transaction making it a reasonable, or even a necessary, assumption that a contract existed between them by tacit understanding." Id.

To state a claim of breach of implied contract under Indiana law, a plaintiff cannot merely allege that "he had a contract with the defendant, gave the defendant consideration, and the defendant breached the contract." Rather, to withstand a motion to dismiss, "a claim of breach of implied contract requires facts concerning the promises allegedly made by the parties to the contract, how those promises were communicated and how the exchange of obligations created an implied contract."

Defendants correctly point out that Plaintiffs have not alleged any acts or conduct on the part of either the NCAA or the Big Ten that would constitute a communication to Plaintiffs of a promise to undertake a contractual obligation. And the mere existence of the NCAA's constitution and bylaws is insufficient to constitute the NCAA's communication of a promise to Plaintiffs. Similarly, the Big Ten's agreement with the NCAA to adhere to the NCAA's constitution and bylaws falls short of evidencing a communication of a promise to Plaintiffs.

Plaintiffs rely upon Cordova v. University of Notre Dame Du Lac , No. 3:11-CV-210 RM, 2011 WL 6257290, at *5 (N.D. Ind. Dec. 13, 2011), but that case is easily distinguishable. There, the court denied a motion to dismiss an implied-contract claim where a student-employee alleged that her university had communicated its promises directly to her in form of a student handbook, as well as student and employee anti-discrimination policies. Id. Here, there is no allegation that the NCAA or the Big Ten communicated promises directly to Plaintiffs. Plaintiffs cannot merely allege the existence of statements listed in NCAA or Big Ten documents; rather, Plaintiffs must allege facts indicating that the NCAA and Big Ten directed the statements in those documents to communicate a promise to them. Accordingly, the Court grants Defendants' motion to dismiss and dismisses Count 4 without prejudice.

1. Breach of Contract as Third-Party Beneficiaries Against the NCAA (Count 5)

In Count 5, Plaintiffs allege that they were the third-party beneficiaries of an agreement between the NCAA and Purdue regarding the implementation of certain NCAA rules and regulations. The NCAA argues that this claim must fail because the complaint does not sufficiently allege the existence of such a relationship.

"Under Illinois law, a cause of action based on a contract may be brought ... by an intended third-party beneficiary of the contract." "For an intended third-party beneficiary to enforce contract terms, the liability of a promisor to the beneficiary must affirmatively appear from the language of the instrument, and the contract must be made for the direct benefit of the third party." "[T]he contract does not have to specifically name the third-party beneficiary, as long as it defines a third-party by description of class, and the parties have identified the plaintiff at the time performance is due."

Here, the allegations state that the NCAA and Purdue entered into an express contract, whereby Purdue University agreed to abide by the NCAA's rules and regulations. Although Plaintiffs assert in a conclusory manner that "Plaintiffs and the Class are the intended third-party beneficiaries of the contract between the NCAA and Purdue University," nowhere do they allege that the contract itself includes any provision that evidences the intention of the NCAA and Purdue to benefit them. Rather, Plaintiffs claim that the parties' intent appears elsewhere in the NCAA's rules, regulations, purpose, and principles. Under Illinois law, this is not enough. The Court therefore grants the NCAA's motion to dismiss this claim, and Count 5 is dismissed without prejudice.

1. Unjust Enrichment (Count 6)

Both the NCAA and the Big Ten move to dismiss Plaintiffs' unjust-enrichment claim. Under Indiana law, claims of unjust enrichment and quantum meruit have the same purpose, as well as the same elements. These claims are "a legal fiction invented by the common-law courts in order to permit a recovery ... where, in fact, there is no contract, but where the circumstances are such that under the law of natural and immutable justice there should be a recovery as though there had been a promise." "Indiana courts articulate three elements for these claims: (1) a benefit conferred upon another at the express or implied request of this other party; (2) allowing the other party to retain the benefit without restitution would be unjust; and (3) the plaintiff expected payment." However, a person who "labors without an expectation of payment cannot recover."

According to Plaintiffs, the NCAA and the Big Ten received significant broadcasting, merchandising, and ticket revenues from their football games. Compl. ¶ 143. Plaintiffs assert that, because Defendants have refused to reimburse Plaintiffs for the injuries that they suffered while playing football, Defendants' retention of those revenues would be unjust.

But, as Defendants note, Plaintiffs have not alleged that either the Big Ten or the NCAA requested that Plaintiffs play football for Purdue. Nor have Plaintiffs alleged that they expected Defendants to pay their medical expenses while at Purdue. At most, the allegations indicate that Rose and Stratton expected Defendants to provide a safe playing environment that protected their health and safety. But that is not equivalent to an expectation of payment or similar pecuniary benefit. Because Plaintiffs have failed to allege the elements of an unjust enrichment claim, the Court grants Defendants' motions to dismiss and dismisses Count 6 without prejudice.

Conclusion

For the reasons provided above, the NCAA's and the Big Ten's motions to dismiss are granted in part and denied in part. The Court grants their motions to dismiss the breach-of-implied-contract and unjust-enrichment claims (Counts 4 and 6) as well as the NCAA's motion to dismiss the breach-of-express-contract-as-third-party-beneficiaries claim (Count 5). In all other respects, the motions, including the Big Ten's motion for a more definite statement, are denied. To the extent that Plaintiffs believe they can amend Counts 4, 5 and 6 to comply with this order, they should move to file an amended complaint within 21 days. If no motion is filed, the Court will presume that Plaintiffs no longer wish to pursue these counts.

IT IS SO ORDERED.

1  On a motion to dismiss, the district court accepts all facts pleaded as true and draws all reasonable inferences in the plaintiff's favor.McDonald v. Adamson , 840 F.3d 343, 345-46 (7th Cir. 2016).

a) Amendments Before Trial.

     (1) Amending as a Matter of Course. A party may amend its pleading once as a matter of course within:

          (A) 21 days after serving it, or

          (B) if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.

     (2) Other Amendments. In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.

     (3) Time to Respond. Unless the court orders otherwise, any required response to an amended pleading must be made within the time remaining to respond to the original pleading or within 14 days after service of the amended pleading, whichever is later.

(b) Amendments During and After Trial.

     (1) Based on an Objection at Trial. If, at trial, a party objects that evidence is not within the issues raised in the pleadings, the court may permit the pleadings to be amended. The court should freely permit an amendment when doing so will aid in presenting the merits and the objecting party fails to satisfy the court that the evidence would prejudice that party's action or defense on the merits. The court may grant a continuance to enable the objecting party to meet the evidence.

     (2) For Issues Tried by Consent. When an issue not raised by the pleadings is tried by the parties’ express or implied consent, it must be treated in all respects as if raised in the pleadings. A party may move—at any time, even after judgment—to amend the pleadings to conform them to the evidence and to raise an unpleaded issue. But failure to amend does not affect the result of the trial of that issue.

(c) Relation Back of Amendments.

     (1) When an Amendment Relates Back. An amendment to a pleading relates back to the date of the original pleading when:

          (A) the law that provides the applicable statute of limitations allows relation back;

          (B) the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading; or

          (C) the amendment changes the party or the naming of the party against whom a claim is asserted, if Rule 15(c)(1)(B) is satisfied and if, within the period provided by Rule 4(m) for serving the summons and complaint, the party to be brought in by amendment:

               (i) received such notice of the action that it will not be prejudiced in defending on the merits; and

               (ii) knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity.

     (2) Notice to the United States. When the United States or a United States officer or agency is added as a defendant by amendment, the notice requirements of Rule 15(c)(1)(C)(i) and (ii) are satisfied if, during the stated period, process was delivered or mailed to the United States attorney or the United States attorney's designee, to the Attorney General of the United States, or to the officer or agency.

(d) Supplemental Pleadings. On motion and reasonable notice, the court may, on just terms, permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented. The court may permit supplementation even though the original pleading is defective in stating a claim or defense. The court may order that the opposing party plead to the supplemental pleading within a specified time.

     Amendment of pleadings might at first seem a technical issue, but it involves a fundamental issue in design of a procedural system. Should plaintiffs be held to the case they set out at the beginning, or can they amend the pleadings to reflect new facts that are discovered?

     In some pleading systems - notably the fact pleading systems that arose under the codes written to provide a reform alternative to the common law writs - deviating from the original complaint was not permitted. This is not wholly without justification - parties might withhold facts or claims, and advance them at a later stage of the litigation for strategic advantage.

     The Federal Rules of Civil Procedure take a different approach. As you look at Rule 15, three things should be apparent.

     First, there is an absolute right to amend, without any need to get court permission, early in the case. This part of the rule is quite straightforward.

     Second, after that time is passed, amendment can be made with the permission of either the other party or the court. The Rules indicate that a court should "freely give leave when justice so requires" and as you will see the courts do embrace this permissive standard.

     Supplemental pleadings allow the party to add pleadings related to facts that have occurred after the filing of the original claim. For example, if the defendant is charged with being a polluter, the supplemental pleadings might address pollution that occurs after the original complaint.

     Finally, there is the issue of statutes of limitations. When a lawsuit is filed on a claim, it cuts off the statute of limitations. If it is filed before the statute runs, the lawsuit is timely. 

     What happens, however, when a lawsuit is amended after the statute of limitations has run? There are many ways this can arise. A different legal theory may be added to a claim or claims arising from the original set of facts. On the other hand, additional parties may be added via amendment, or wholly different and unrelated claims arising from wholly different facts may be added. How should those be handled? Third, there may have been a mistake in the original pleading. A defendant's name may have been misspelled, or of two similarly named defendants the wrong one may have been named. How should this be handled? Finally, what about the situation where there is no mistake but the plaintiff learns the identity of a "John Doe" defendant after the statute has run? Does it matter if the "John Doe'" knows about the suit and knows that he or she is the defendant the plaintiff has in mind?

     The following cases deal with these issues.

    1. Amending Pleadings. The rule covers this quite clearly. For a period of time set in the Rule, the pleader has an absolute right to amend. Once that period of time has passed, permission from either the other side or the court is required. As Beeck v. Aquaslide makes clear, courts will tend to follow the Rule's direction to freely give leave when justice so requires. The spirit of the Rules is not to have litigation get captured by technical rules, and the language and application of the Rule reflects that spirit. That said, if the non-amending party can show prejudice, or, even more, that the delay in amendment reflects strategic gamesmanship aimed at creating prejudice to the other side, the request to amend may be denied. See, Foman v. Davis, 371 U.S. 178 (1962). Note that under Rule 15(b) this liberal policy of amendment continues all the way through trial.

      2.  Relation Back of Claims and Defenses - Same Parties.  Rule 15(c) addresses the issue of relation back. Again, the Rule is pretty straightforward. First, in some cases the substantive law that creates the right might allow relation back. For example, some state statutes allow additional parties to be added to the original claim and to have the claim against those additional parties to relate back to the filing of the suit. Next, if the amendment adds claims or defenses against those against whom pleadings have been made that arise "out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading" then the new claims or defenses relate back. Without getting overly technical for current purposes, you will note that the test looks a lot like the test for supplemental jurisdiction we saw earlier or the test for compulsory counterclaims that we will examine later. The court will be concerned about whether the party was given adequate notice in the earlier pleading about the claims being modified or advanced in the new pleading. Courts often allow relation back where the amended pleading pursues a different cause of action on the original facts. However, if the new claims are unrelated to the original claims relation back will not be allowed.

     3. Relation Back of Claims or Defenses - Different Party.  Things get more complicated when the reading involves a different party. While the case we read shows that on occasion such an amendment can succeed, that case also shows that succeeding is no simple task. The party added must have received actual notice of the lawsuit, must have been aware that it was the intended defendant, and that but for a mistake about identity it would have been named earlier. Simply not knowing who the proper defendant is, and adding John Doe defendants, will not meet this standard, even if the defendant sought to be added later was aware of the lawsuit. See Worthington v. Wilson, 8 F.3d 1253 (7th Cir. 1993) (Named defendants not allowed to be added to substitute for John Doe defendants, even when the named defendants might have anticipated that they were the unknown parties the John Doe designation addressed). (Remember that provisions in state substantive law can override the limitation of Rule 15(c), allowing a relation back when a new party is added). 

     4.  Relationship of Amendment and Relation Back.  The statute of limitations is an affirmative defense that must be asserted by the party seeking to benefit. The rules on amendment control whether or not a pleading can be amended. If it is amended, and if the statute of limitations passed in between the original filing and the amendment, the statute of limitations defense must be asserted, either by the new party or against the unrelated, new claims. Finally, once the defense is asserted, the relation back provisions of 15(c) will control whether the amendment is treated as having been filed at the time the original pleading was filed.

     A farmer owns a pig. The pig is a prize pig, and has distinctive markings. One day the farmer goes out to the pigpen and the pig is missing. The gate to the pigpen is ajar – maybe the pig somehow pushed it open, maybe someone else opened the gate and took the pig. Either way, no pig. A couple of days later the farmer sees his pig in the pigpen of his neighbor. No question – it’s the same pig.

     The farmer files a lawsuit in federal court (oddly, there is diversity jurisdiction, as his neighbor is just across the state line and this is a very valuable pig), bringing a common law claim for wrongful possession of a pig.

     Two weeks later he learns that the farmer he sued, Farmer Brown, is just an employee of the agribusiness company that owns the farm, and we wants to add the agribusiness company. The statute of limitations has not run. He amends the complaint to add the agribusiness company. In so doing, he makes a mistake and sues SwineCo Incorporated Inc., when he should have sued a subsidiary, SwineCorp Incorporated Inc.. The complaint is filed on the proper party, which is fully aware of the suit and aware that they are the intended target. He also adds as a defendant "John Doe," an unknown party that he claims helped steal the pig.

     A year later, the statute of limitations has run. At this time, he wants to amend the complaint to add SwineCorp Incorporated Inc. and drop SwineCo Incorporated Inc.. He also wishes to add a claim for injunctive relief, so his pig might be returned, and also wishes to add a statutory claim arising under state law for Tortious Possession of Pig. 

     At this time, the farmer also wishes to add as an additional defendant an employee of SwineCorp, Farmer Green (also diverse), who he claims should also be individually liable. He claims that Farmer Green is the John Doe he wished to sue earlier, and shows that Farmer Green was fully aware of the suit.

     Finally, the farmer has concluded that for years Swinecorp has been releasing pollutants onto his property. The statute of limitations for this expired after he filed his first complaint but before the filing of this complaint.

     Please analyze.

(a) Signature. Every pleading, written motion, and other paper must be signed by at least one attorney of record in the attorney's name—or by a party personally if the party is unrepresented. The paper must state the signer's address, e-mail address, and telephone number. Unless a rule or statute specifically states otherwise, a pleading need not be verified or accompanied by an affidavit. The court must strike an unsigned paper unless the omission is promptly corrected after being called to the attorney's or party's attention.

(b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper—whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

     (1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

     (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;

     (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

     (4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

(c) Sanctions.

     (1) In General. If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation. Absent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee.

     (2) Motion for Sanctions. A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. If warranted, the court may award to the prevailing party the reasonable expenses, including attorney's fees, incurred for the motion.

     (3) On the Court's Initiative. On its own, the court may order an attorney, law firm, or party to show cause why conduct specifically described in the order has not violated Rule 11(b).

     (4) Nature of a Sanction. A sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated. The sanction may include nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable attorney's fees and other expenses directly resulting from the violation.

     (5) Limitations on Monetary Sanctions. The court must not impose a monetary sanction:

          (A) against a represented party for violating Rule 11(b)(2); or

          (B) on its own, unless it issued the show-cause order under Rule 11(c)(3) before voluntary dismissal or settlement of the claims made by or against the party that is, or whose attorneys are, to be sanctioned.

     (6) Requirements for an Order. An order imposing a sanction must describe the sanctioned conduct and explain the basis for the sanction.

(d) Inapplicability to Discovery. This rule does not apply to disclosures and discovery requests, responses, objections, and motions under Rules 26 through 37.

     Rule 11 In Context. At the very beginning of the course we noted that litigation takes place in an ethical context. Every action that litigators take must comply with the ethical rules governing those who practice in US courts. Because the US adversarial system entrusts much of the litigation process to the lawyers, it only can function when lawyers fulfill their ethical duties. Rule 11 is an example of how these ethical duties are brought to bear.

     You may have wondered when we covered the pleading requirements of Twombly and Iqbal why attorneys do not simply assume the necessary facts and plead them, hoping to find evidence to support their claims later. After all, in Twombly, the plaintiffs’ attorneys presumably expected that if allowed discovery they would eventually find evidence that a agreements had been made. Why not just plead that and hope to find the facts as the case proceeds?

      Rule 11, and the greater ethical duty it is based on that requires lawyers to deal truthfully with other parties and the court, provides the answer. If a party makes a factual assertion, they cannot simply be hoping that it is so. They must have done the work to be able to support it, even at the pleading stage.

     The signing of a document covered by Rule 11(b) certifies that the lawyer has made an investigation reasonable under the circumstances and (1) that the document is not presented for an improper purpose, (2) that any legal claims are based on existing law or a nonfrivolous argument for an extension or change in the law, (3) that factual allegations have evidentiary support (or likely will when she has a chance for further investigation, with specific disclosure that this exception is being relied upon) and (4) that denials of factual allegations have evidentiary support (or, as above, likely will when she has a chance for further investigation).

     Rule 11 does not operate in a vacuum. It is one of many devices courts can use to discipline or sanction attorneys for acting in ways that violate their ethical duties. These other sanctions can be brought to bear on the same kinds of conduct that might be reached by Rule 11. For example, courts have long been held to have “inherent power” to discipline those who practice before them, and this can be used as well as Rule 11. In addition, courts can report attorneys to the state disciplinary authorities, dismiss the lawsuit or enter orders affecting it, hold lawyers in contempt of court, or even report lawyers for criminal prosecution. While, in theory, judges should exhaust the explicit powers of Rule 11 before turning to their less well-defined inherent powers, in practice judges don’t always clarify which of their many possible sources of authority they are relying upon when imposing discipline.  See Wright & Miller Section 1336 (“[I]n many cases, sanctions are imposed by a federal court without any specification of the governing authority that has been employed by the district judge.”)  You will also note a duty included in 28 U.S.C. § 1927 to not "vexatiously" drive up costs in the case, and a duty reflected in Federal Rule of Appellate Procedure 38 to not file frivolous appeals.

      Even in the context of the Federal Rules of Civil Procedure, Rule 11 is also not the only disciplinary rule included in the federal rules that imposes ethical duties on lawyers. Rule 11 does not apply to discovery violations, which are covered separately by provisions in rules 26 and rule 37, which we will cover later.

     Objective Standard. Rule 11 involves an objective standard, not a subjective standard. Put differently, the test is not whether the attorney made factual assertions she knew to be false. The issue is whether after “an inquiry reasonable under the circumstances” the factual contentions have evidentiary support. It is no defense that the attorney sincerely believed the assertions to be true if there is no evidentiary support, and especially if there was no inquiry reasonable under the circumstances.

     Legal Assertions. You may notice that the standard for legal assertions is somewhat different. Lawyers can argue legal arguments that contradict existing law. This reflects the rule-making power of common law courts. The evolution of the law would be impeded if litigants could not argue for changes in the law. Think, for example, of whether the series of ground-breaking cases that led to Brown v. Board of Education could have developed as they did if attorneys were subject to sanctions for making arguments at odds with currently settled law.

     Safe Harbor. Rule 11 provides a safe harbor for litigants that is designed in part to spare courts the burden of resolving rule 11 skirmishes between the parties. Rule 11(c)(2) requires the motion to be served under Rule Five as other motions are served, but not to be filed with the court until a 21 day period has passed. During that period the party may cure the problem, by amending the filed materials so as to be proper or in some cases by voluntarily dismissing the lawsuit or dropping the claim. If that happens the moving party cannot pursue sanctions. The judge also can initiate rule 11 sanctions, and is not bound by 21 day waiting period. However, a judge may not impose monetary sanctions unless it issued a show cause order under Rule 11(c)(3) before voluntary dismissal of or settlement of the claims.

      Who Can Be Sanctioned. Sanctions may be imposed upon the attorney who signed the papers, but they also may be imposed upon that attorney’s law firm. When a party represents itself pro se without an attorney, sanctions may be imposed directly upon the litigant. This is not an unknown remedy against serial pro se litigants who file multiple inconsequential cases.

     Types of Sanctions. The form of sanctions are effectively limited only by the imagination of the trial judge. Sanctions can include monetary sanctions, which normally are paid into the court but on occasion can be paid to the opposing party to compensate them for attorneys’ fees and other losses occasioned by the improper filings. Sanctions can take other forms, such as requiring the attorney to undergo continuing legal education, which often has a mandated ethical component, or to require the attorney to issue an apology to the other side. In some cases individual lawyers have been required to notify every attorney in their firm of the sanction imposed against them. In one case an attorney was forbidden to practice in the federal district court at issue in the future unless accompanied by another attorney from the lawyer’s firm. The court can also impose sanctions that have an effect on the handling of the case such as deeming certain matters to be admitted or waived and not allowing them to be raised again in the course of the litigation.

     Coverage. Rule 11 covers not just pleadings but also motions and other papers filed with the court. It does not, however, reach discovery disputes, which are handled under separate rules. Rule 11 does apply in full to answers. You may recall from our discussion of Twiqbal that courts are divided on whether the Iqbal standard should apply to pleading facts sufficient to support an answer, but regardless of whether Iqbal applies Rule 11 requires that any facts only be pleaded or answers asserted after reasonable inquiry under the circumstances. Rule 11 also applies to motions. Rule 11 also imposes a continuing obligation with regard to assertions made early in the case. It is a violation of Rule 11 to continue to assert factual claims that a lawyer knows or should know cannot be sustained.

     Party Verification.  Rule 11 requires papers to be signed by an attorney unless there is no attorney. In other systems of rule, including in some states, sometimes the litigants themselves are required to verify the facts and papers filed before the courts. In general this is not the practice followed under in the federal rules, but there are two exceptions. Rule 23.1 and Rule 65(b) require litigant verification under specialized circumstances. Rule 23.1 applies to derivative actions, and Rule 65 (b) applies to the facts relied upon in a motion for temporary restraining order, which sometimes are issued before the other party has an opportunity to contest the facts. In these cases, despite requiring verification by litigants, courts generally allow litigants to rely upon their attorneys when the specialized knowledge of the attorneys bears upon the verification.

If a court of appeals determines that an appeal is frivolous, it may, after a separately filed motion or notice from the court and reasonable opportunity to respond, award just damages and single or double costs to the appellee.

Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.

     1. In General.  In general, it is important to understand how deeply ethical responsibilities run through US litigation. In the US system litigation is initiated and directed by attorneys and the process breaks down when those attorneys act unethically - whether by being dishonest, by taking actions that inappropriately burden others and the system, and more. The rules we have looked at in this chapter are just a small part of the ethical rules governing attorneys but should be enough to give you a sense of how central ethical duties are to the role of lawyers in the US. We will come back to ethical duties in the context of discovery, where attorneys are expected to serve not just their clients but also the courts and the system of justice in responding to discovery requests. Ask yourself if a system that entrusts so much to the attorneys, often acting outside of the court's direct supervision, could function if attorneys fail to meet these ethical duties.

     Farmer Brown owns a pig. The pig is a prize pig, and has distinctive markings. One day the farmer goes out to the pigpen and the pig is missing. The gate to the pigpen is ajar and there is no pig. A couple of days later the farmer sees his pig in the pigpen of his neighbor, Farmer Huang. No question – it’s the same pig. The farmer has not sold or given the pig away.

     The farmer files a complaint. In count one he bases his claim on a common law doctrine that requires the defendant to have wrongfully entered the plaintiff’s premises and removed something of value. In the other count he bases his claim on the federal Return Your Neighbor’s Pig Act which requires the return of errant swine by the owner of any premises where such pig is held, no matter how obtained. In both cases he alleges only the facts in the first paragraph above.

     Assume that defendant files a motion to dismiss. In support of this motion Farmer Huang attaches a public record that shows that the pigpen in which the prize pig now resides does not belong to him, but to SwineCo Inc, of which he is just an employee.

     Please Analyze

     Assume now that Farmer Brown files an amended complaint (the court has given leave). In the amended complaint he names SwineCo Inc. as well as Farmer Huang. He additionally alleges a conspiracy involving SwineCo Inc., Huang, and various as yet to be named parties. In the new complaint he adds as a factual allegation that in furtherance of this conspiracy Huang entered his pigpen late at night, wearing something that functioned like the invisibility cloak in the Harry Potter books, and took the pig. (He bases this on a statement Huang made to a mutual friend, "Sure, I stole the pig, and wore my Harry Potter invisibility cloak when I did it! Stupid moron who thinks that pig is his.") SwineCo Inc and Huang are served, but the unknown parties are, of course, not served.  Two days later the statute of limitations expires. Brown then learns that he misnamed SwineCo Inc because he included a period after the Inc. He seeks to amend with the correct spelling. He also seeks to add Farmer Green, whom he claims was one of the conspirators and who he claims was in fact present in the pig pen in another invisibility cloak on the night Huang allegedly took the pig.

     Please analyze.

     Assume the SwineCo Inc and Farmer Huang file an answer. In this answer they deny Farmer Brown’s specific allegation in the complaint that the pig in question is Farmer Brown’s pig, claiming that it is instead an identical sibling. They have no evidence to support that allegation and plead no specific facts in support of that argument. Neither in motions nor in the answer have they asserted insufficient service of process or insufficient process as defenses. After the answer has been served, counsel decides that they should have asserted those defenses, and seek leave of court to amend the answer to include them.

     Please analyze.

We next turn to joinder. Which claims and which parties can be included in a lawsuit? As with pleading, this involves fundamental design choices that systems of procedure must make.