Twombly and Iqbal: New Tools For Early Disposition of Defamation Claims In Federal Court
Two Supreme Court decisions -- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and the even more recent Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009) -- have adopted a new and rigorous test for what constitutes a well-pleaded complaint sufficient to withstand a motion to dismiss in federal court. While these decisions disclaim any desire to impose a “fact pleading” requirement, they have expressly displaced the long-standing, liberal application of federal notice pleading enunciated in Conley v. Gibson, 355 U.S. 41 (1957). Some find this change both profound and unwelcome; Senator Arlen Specter has introduced legislation (entitled the “Notice Pleading Restoration Act”)[i] that would overrule Twombly and Iqbal. Watching how courts apply this new rule will show whether --and how-- they can be applied to litigating defamation claims in federal court. It is enough to say that Twombly and Iqbal will likely embolden media defendants to raise issues -- in particular, actual malice -- on a Rule 12(b)(6) motion, rather than awaiting summary judgment disposition, after discovery.
Twombly overrules Conley’s interpretation of Rule 8. The notice pleading standard of Federal Rule 8 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”; a complaint “does not need detailed factual allegations.”[ii] However, Twombly rejects the notion that the Federal Rules “dispensed with the pleading of facts altogether”: “[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.”[iii]
The complaint in Twombly claimed an antitrust conspiracy under the Sherman Act. The “crucial question” in such a claim is “whether the challenged anticompetitive conduct ‘stem[s] from independent decision or from an agreement, tacit or express’”; parallel business behavior alone is not enough.[iv] Hence, allegations of parallel conduct “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.”[v] The Court held the complaint failed to adequately plead the requisite factual context to render plaintiff’s claim “plausible.”
The Court’s “plausibility” pleading standard displaced Conley v. Gibson’s oft-quoted dictum 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.”[vi] Under a “literal reading of Conley's ‘no set of facts’” language, 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.”[vii] The Court held this was not -- and never was -- the law.
Iqbal follows and expands on Twombley. Iqbal held Twombly’s “plausibility” standard was not limited to the antitrust context, and further clarified that “[t]wo working principles underlie our decision in Twombly”:
First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. . . . Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. . . . [This is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. . . . But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not “show[n]” -- “that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2).[viii]
Applying this two part analysis, Iqbal concluded that plaintiff’s complaint did not cross “the line from conceivable to plausible.” First, his “bare assertions, much like the pleading of conspiracy in Twombly amount to nothing more than a ‘formulaic recitation of the elements’ of a constitutional discrimination claim.” Second, the complaint’s allegations -- that the government defendants’ detention of “thousands of Arab Muslim men” after September 11 was motivated by discriminatory animus -- did not “plausibly suggest an entitlement to relief,” in view of the other, “more likely explanations” for defendants’ actions.[ix]
Twombley and Iqbal define what is a well-pleaded defamation complaint in federal court. Under Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), a federal court sitting in diversity is bound to apply state substantive law and federal procedural law.[x] When a state law and the Federal Rule conflict, the Federal Rule controls; “Erie … has never been invoked to void a Federal Rule.”[xi] Prior to the Federal Rules, defamation claims were often “discouraged by requirements that such contentions be set forth in considerable detail”; however, “the federal rules do not require special pleading.” Instead, “Rule 8 and its notice pleading standard applies” to defamation cases.[xii] That Rule 8 notice pleading standard is now defined by Twombly and Iqbal.
Nevertheless, the traditionally disfavored status of defamation claims plays directly into one of Twombly and Iqbal’s themes: the practical concern that “a plaintiff with ‘a largely groundless claim’ be allowed to ‘take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value.’”[xiii] Iqbal held this concern was particularly acute where qualified immunity was involved, since such immunity was designed to “free officials from the concerns of litigation, including ‘avoidance of disruptive discovery.’”[xiv] By the same token, courts have expressed the view that where a complaint attacks “conduct which is prima facie protected by the First Amendment, the danger that the mere pendency of the action will chill the exercise of First Amendment rights requires more specific allegations than would otherwise be required.”[xv]
Actual malice dismissal under Twombly and Iqbal. Of course, one of the keystone protections against the chilling effect of a defamation suit is the “actual malice” rule of New York Times Co. v. Sullivan, 376 U.S. 254 (1964), which requires proof that defendant either had a subjective awareness of the defamatory statement’s probable falsity, or acted with reckless disregard of its truth or falsity. Times malice is typically raised by way of summary judgment -- or decided at trial -- rather than on a motion to dismiss. However, the Twombly/Iqbal standard arguably enhances the odds for dismissal on actual malice grounds.
One recent district court case, Diario El Pais, S.L. v. The Nielsen Co., (US), Inc., applied the Twombly “plausibility” standard in granting a 12(b)(6) motion to dismiss a libel claim (complaining of the publication of allegedly erroneous estimates of the number of visitors to plaintiffs’ website); the court held plaintiffs’ “conclusory and unsupported assertions that the Defendant knew the revised audience estimates were inaccurate” were “insufficient to meet the pleading requirements for actual malice.” Moreover, plaintiffs' own allegations showed that defendant took actions “clearly inconsistent with a ‘reckless disregard’ for the truth”; and their “contentions that a different methodology would have produced a more accurate result do not amount to allegations that Defendant acted with actual malice.” Accordingly, the complaint did not “allege facts that render ‘plausible’ the actual malice element.”[xvi]
Finally, notwithstanding some contrary suggestions in the cases, it is generally recognized that actual malice is not subject to Federal Rule 9’s “heightened” pleading standard. “Rule 9(b) requires particularity when pleading ‘fraud or mistake,’ while allowing ‘[m]alice, intent, knowledge, and other conditions of a person's mind [to] be alleged generally.’”[xvii] But even though Rule 9 “excuses a party from pleading discriminatory intent [or malice] under an elevated pleading standard,” it does not confer a “license to evade the less rigid -- though still operative -- strictures of Rule 8”[xviii] -- namely, that such a malice allegation be “plausible.”[xix]
Conclusion. Plaintiffs could always plead themselves out of court by alleging facts inconsistent with an actual malice finding.[xx] Now, however, the exacting language and reasoning of Twombly and Iqbal will permit defendants to demand a more searching examination of actual malice plausibility at the pleading stage. In those cases, even though the facts pleaded were consistent with the possibility of unlawful concerted action (Twombly) or discriminatory motive (Iqbal), such conclusions were not plausible -- i.e., there were other, “more likely explanations” for defendants’ actions.[xxi] That analysis would seem to apply equally to an attack on actual malice pleadings, and is a potentially potent weapon for defense counsel. To demonstrate Twombly/Iqbal plausibility, plaintiffs will have to plead, if not the evidentiary facts, at least a detailed rendition of the ultimate facts and a factual theory that would support an actual malice finding -- to the extent they can do so consistent with Rule 11.
This article was first published in the Media Law Resource Center’s “MediaLawLetter,” and is being reprinted here with the Media Law Resource Center’s permission.
[i] S.1504, introduced July 22, 2009. The courts have already begun applying the new rule. See, e.g., Sinaltrainal v. The Coca-Cola, Company, No. 06-15851 (11th Cir., August 11, 2009) (applying new “plausibility” rule in affirming 12(b)(6) dismissal).
[ii] Twombly, 550 U.S. at 555 (citing Conley v. Gibson, 355 U.S. at 47).
[iii] Id. at 555 and n. 3 (citations omitted).
[vi] Id. at 560-61 (quoting Conley v. Gibson, 355 U.S. at 45-46).
[vii] Id. at 561 (citations omitted).
[viii] Iqbal, 129 S.Ct. at 1949-50.
[x] See Walker v. Armco Steel Corp., 446 U.S. 740, 745 (1980).
[xi] Hanna v. Plumer, 380 U.S. 460, 470 (1965).
[xii] Fairman, The Myth of Notice Pleading, 45 Ariz. L. Rev. 987, 1044 (Winter 2003) (quoting Geisler v. Petrocelli, 616 F.2d 636, 640 (2d Cir. 1980)).
[xiii] Twombly, 550 U.S. at 557 (citations omitted).
[xiv] Iqbal, 129 S.Ct. at 1953.
[xv] Franchise Realty Interstate Corp. v. San Francisco Local Joint Exec. Bd. of Culinary Workers, 542 F.2d 1076, 1082-83 (9th Cir. 1976); see also Nicosia v. De Rooy, 72 F. Supp. 2d 1093, 1108 (N.D. Cal. 1999) (“actual malice must be pled with specificity”; citing Franchise Realty). See generally, Fairman, 45 Ariz. L. Rev. at 1044-47.
[xvi] 2008 WL 4833012, at *6-7 (S.D.N.Y., Nov. 6, 2008). Notably, in addition to applying the Twombly/Iqbal standard, Diario El Pais’ holding rested on the notion that “[a]ctual malice must be pled with specificity” -- citing a pre-Twombly New York state court decision, Themed Restaurants, Inc. v. Zagat Survey, LLC, 4 Misc.3d 974, 981-82, 781 N.Y.S.2d 441, 449 (N.Y. Sup. Ct. 2004). Other state cases, in traditional “fact pleading” jurisdictions, have held dismissal is proper for failure to specifically plead the facts supporting actual malice. Even some pre-Twombly federal courts have required specificity, or have held that “bald or bare allegations of malice” were “insufficient” to sustain a complaint. E.g., Silk v. City of Chicago, 1996 WL 312074 (N.D. Ill., June 7, 1996) (even through Illinois fact pleading not applicable to defamation claim filed in Federal Court, complaint must contain “some factual allegations from which malice can be inferred”; granting motion to dismiss); Nicosia v. De Rooy, supra, 72 F. Supp. 2d at 1109 (“conclusory statements that De Rooy should have known the truth does not satisfy the heightened pleading standard”; granting motion to dismiss).
[xvii] Iqbal, 129 S.Ct. at 1954.
[xix] Twombly, 550 U.S. at 569 n. 14. See, e.g., Nelson v. DeVry, Inc., 2008 WL 2845300, at *2 (E.D. Pa., July 22, 2008) (negligence claims dismissed pursuant to official immunity statute where “plaintiffs have failed to allege facts that plausibly suggest that the act of filing a false report [by defendant officer] was the result of actual malice or willful misconduct” and “have not alleged facts that suggest that discovery will reveal evidence of willful misconduct or actual malice”).
[xx] The holding in Diario El Pais, supra, rested at least in part on this ground.
[xxi] Iqbal, 129 S.Ct. at 1951.
This article originally appeared in the August 2009 issue of the MLRC MediaLawLetter and also appeared in the ABA TIPS Media, Privacy and Defamation Law Newsletter and is reprinted herein with the publisher’s permission.