4 Pleadings
4.1 Service
As we have seen, due process binds the government across many different areas of law, from family law to the law of war. And we have seen that the requirements of due process are flexible and require balancing competing interests. Finally, we have seen that the twin hallmarks of due process are notice and an opportunity to be heard. In other words, before the government can deprive a person of life, liberty, or property (including money), it typically must notify that person of the proceeding in which such deprivation may occur and afford them an opportunity to defend themselves.
The same rules of due process apply to civil lawsuits in court. After all, a civil suit is a proceeding by which a plaintiff asks the government (a court) to afford her relief, typically by depriving the defendant of property (ordering him to pay money damages). For that reason, due process requires that the plaintiff and/or the court notify the defendant of the proceeding. This notice is traditionally achieved through service of process, which typically consists of delivering a copy of the complaint and summons to each defendant. The next two cases examine how due process interacts with service of process, which is the beginning of most civil suits. Much of the remainder of the first half of this course will examine what opportunities to be heard courts afford to parties appearing before them.
Mullane v. Central Hanover Bank & Tr. Co.
MR. JUSTICE JACKSON delivered the opinion of the Court.
This controversy questions the constitutional sufficiency of notice to beneficiaries on judicial settlement of accounts by the trustee of a common trust fund established under the New York Banking Law. […]
[Common trust funds allow a bank to pool together trusts that would otherwise be too small to warrant the bank’s supervision.] The income, capital gains, losses and expenses of the collective trust are shared by the constituent trusts in proportion to their contribution. By this plan, diversification of risk and economy of management can be extended to those whose capital standing alone would not obtain such advantage.
[The law allows banks to make periodic “accountings” of trusts under their control. Such accountings allow beneficiaries to challenge the bank’s actions during a specified period, but once the accounting is complete, no further challenges may be brought alleging mismanagement of the trust during the relevant period.] The decree in each such judicial settlement of accounts is made binding and conclusive as to any matter set forth in the account upon everyone having any interest in the common fund or in any participating estate, trust or fund.
In January, 1946, Central Hanover Bank and Trust Company established a common trust fund in accordance with these provisions, and in March, 1947, it petitioned the Surrogate’s Court for settlement of its first account as common trustee. During the accounting period a total of 113 trusts […] participated in the common trust fund, the gross capital of which was nearly three million dollars. The record does not show the number or residence of the beneficiaries, but they were many and it is clear that some of them were not residents of the State of New York.
[…] [T]he only notice required [by New York law], and the only one given, was by newspaper publication setting forth merely the name and address of the trust company, the name and the date of establishment of the common trust fund, and a list of all participating estates, trusts or funds. [However, as required by law, when the trust was first established, the bank sent a letter to each beneficiary describing the procedures, including notice, governing future accountings.]
Upon the filing of the petition for the settlement of accounts, appellant [Mullane] was, by order of the court […], appointed special guardian and attorney for all persons known or unknown not otherwise appearing who had or might thereafter have any interest in the income of the common trust fund; and appellee Vaughan was appointed to represent those similarly interested in the principal. There were no other appearances on behalf of any one interested in either interest or principal.
Appellant [Mullane] appeared specially, objecting that notice and the statutory provisions for notice to beneficiaries were inadequate to afford due process under the Fourteenth Amendment, and therefore that the court was without jurisdiction to render a final and binding decree. Appellant’s objections were entertained and overruled, the Surrogate [(a special kind of judge with jurisdiction over trusts in New York)] holding that the notice required and given was sufficient. A final decree accepting the accounts has been entered. […]
The effect of this decree, as held below, is to settle “all questions respecting the management of the common fund.” We understand that every right which beneficiaries would otherwise have against the trust company, either as trustee of the common fund or as trustee of any individual trust, for improper management of the common trust fund during the period covered by the accounting is sealed and wholly terminated by the decree. […]
[What] opportunity […] must [the state] give beneficiaries to contest [the outcome of a proceeding affecting their property?] Many controversies have raged about the cryptic and abstract words of the Due Process Clause but there can be no doubt that at a minimum they require that deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case.
In two ways this proceeding does or may deprive beneficiaries of property. It may cut off their rights to have the trustee answer for negligent or illegal impairments of their interests. Also, their interests are presumably subject to diminution in the proceeding by allowance of fees and expenses to one who, in their names but without their knowledge, may conduct a fruitless or uncompensatory contest. Certainly the proceeding is one in which they may be deprived of property rights and hence notice and hearing must measure up to the standards of due process.
Personal service of written notice within the jurisdiction is the classic form of notice always adequate in any type of proceeding. But the vital interest of the State in bringing any issues as to its fiduciaries to a final settlement can be served only if interests or claims of individuals who are outside of the State can somehow be determined. A construction of the Due Process Clause which would place impossible or impractical obstacles in the way could not be justified.
Against this interest of the State we must balance the individual interest sought to be protected by the Fourteenth Amendment. This is defined by our holding that “The fundamental requisite of due process of law is the opportunity to be heard.” This right to be heard has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to appear or default, acquiesce or contest.
The Court has not committed itself to any formula achieving a balance between these interests in a particular proceeding or determining when constructive notice may be utilized or what test it must meet. Personal service has not in all circumstances been regarded as indispensable to the process due to residents, and it has more often been held unnecessary as to nonresidents. We disturb none of the established rules on these subjects. No decision constitutes a controlling or even a very illuminating precedent for the case before us. But a few general principles stand out in the books.
An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be of such nature as reasonably to convey the required information, and it must afford a reasonable time for those interested to make their appearance. But if with due regard for the practicalities and peculiarities of the case these conditions are reasonably met, the constitutional requirements are satisfied. […]
But when notice is a person’s due, process which is a mere gesture is not due process. The means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it. The reasonableness and hence the constitutional validity of any chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected, or, where conditions do not reasonably permit such notice, that the form chosen is not substantially less likely to bring home notice than other of the feasible and customary substitutes.
It would be idle to pretend that publication alone, as prescribed here, is a reliable means of acquainting interested parties of the fact that their rights are before the courts. It is not an accident that the greater number of cases reaching this Court on the question of adequacy of notice have been concerned with actions founded on process constructively served through local newspapers. Chance alone brings to the attention of even a local resident an advertisement in small type inserted in the back pages of a newspaper, and if he makes his home outside the area of the newspaper’s normal circulation the odds that the information will never reach him are large indeed. The chance of actual notice is further reduced when, as here, the notice required does not even name those whose attention it is supposed to attract, and does not inform acquaintances who might call it to attention. In weighing its sufficiency on the basis of equivalence with actual notice, we are unable to regard this as more than a feint.
Nor is publication here reinforced by steps likely to attract the parties’ attention to the proceeding. It is true that publication traditionally has been acceptable as notification supplemental to other action [such as attachment or seizure] which in itself may reasonably be expected to convey a warning. [But no such action is present here.]
This Court has not hesitated to approve of resort to publication as a customary substitute in another class of cases where it is not reasonably possible or practicable to give more adequate warning. Thus it has been recognized that, in the case of persons missing or unknown, employment of an indirect and even a probably futile means of notification is all that the situation permits and creates no constitutional bar to a final decree foreclosing their rights.
Those beneficiaries represented by appellant whose interests or whereabouts could not with due diligence be ascertained come clearly within this category. As to them the statutory notice is sufficient. However great the odds that publication will never reach the eyes of such unknown parties, it is not in the typical case much more likely to fail than any of the choices open to legislators endeavoring to prescribe the best notice practicable.
Nor do we consider it unreasonable for the State to dispense with more certain notice to those beneficiaries whose interests are either conjectural or future or, although they could be discovered upon investigation, do not in due course of business come to knowledge of the common trustee. […] We recognize the practical difficulties and costs that would be attendant on frequent investigations into the status of great numbers of beneficiaries, many of whose interests in the common fund are so remote as to be ephemeral; and we have no doubt that such impracticable and extended searches are not required in the name of due process. […] These are practical matters in which we should be reluctant to disturb the judgment of the state authorities.
Accordingly we overrule appellant’s constitutional objections to published notice insofar as they are urged on behalf of any beneficiaries whose interests or addresses are unknown to the trustee.
As to known present beneficiaries of known place of residence, however, notice by publication stands on a different footing. Exceptions in the name of necessity do not sweep away the rule that within the limits of practicability notice must be such as is reasonably calculated to reach interested parties. Where the names and post-office addresses of those affected by a proceeding are at hand, the reasons disappear for resort to means less likely than the mails to apprise them of its pendency.
The trustee has on its books the names and addresses of the income beneficiaries represented by appellant, and we find no tenable ground for dispensing with a serious effort to inform them personally of the accounting, at least by ordinary mail to the record addresses. Certainly sending them a copy of the statute months and perhaps years in advance does not answer this purpose. The trustee periodically remits their income to them, and we think that they might reasonably expect that with or apart from their remittances word might come to them personally that steps were being taken affecting their interests.
We need not weigh contentions that a requirement of personal service of citation on even the large number of known resident or nonresident beneficiaries would, by reasons of delay if not of expense, seriously interfere with the proper administration of the fund. […]
The statutory notice to known beneficiaries is inadequate, not because in fact it fails to reach everyone, but because under the circumstances it is not reasonably calculated to reach those who could easily be informed by other means at hand. However it may have been in former times, the mails today are recognized as an efficient and inexpensive means of communication. Moreover, the fact that the trust company has been able to give mailed notice to known beneficiaries at the time the common trust fund was established is persuasive that postal notification at the time of accounting would not seriously burden the plan.
In some situations the law requires greater precautions in its proceedings than the business world accepts for its own purposes. In few, if any, will it be satisfied with less. Certainly it is instructive, in determining the reasonableness of the impersonal broadcast notification here used, to ask whether it would satisfy a prudent man of business, counting his pennies but finding it in his interest to convey information to many persons whose names and addresses are in his files. We are not satisfied that it would. Publication may theoretically be available for all the world to see, but it is too much in our day to suppose that each or any individual beneficiary does or could examine all that is published to see if something may be tucked away in it that affects his property interests. […]
We hold that the notice of judicial settlement of accounts required by the New York Banking Law § 100-c(12) is incompatible with the requirements of the Fourteenth Amendment as a basis for adjudication depriving known persons whose whereabouts are also known of substantial property rights. Accordingly the judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.
Reversed.
Jones v. Flowers
Chief Justice Roberts delivered the opinion of the Court.
Before a State may take property and sell it for unpaid taxes, the Due Process Clause of the Fourteenth Amendment requires the government to provide the owner “notice and opportunity for hearing appropriate to the nature of the case.” Mullane v. Central Hanover Bank & Trust Co. We granted certiorari to determine whether, when notice of a tax sale is mailed to the owner and returned undelivered, the government must take additional reasonable steps to provide notice before taking the owner’s property.
I
In 1967, petitioner Gary Jones purchased a house at 717 North Bryan Street in Little Rock, Arkansas. He lived in the house with his wife until they separated in 1993. Jones then moved into an apartment in Little Rock, and his wife continued to live in the North Bryan Street house. Jones paid his mortgage each month for 30 years, and the mortgage company paid Jones’ property taxes. After Jones paid off his mortgage in 1997, the property taxes went unpaid, and the property was certified as delinquent.
In April 2000, respondent Mark Wilcox, the Commissioner of State Lands, attempted to notify Jones of his tax delinquency, and his right to redeem the property, by mailing a certified letter to Jones at the North Bryan Street address. The packet of information stated that unless Jones redeemed the property, it would be subject to public sale two years later on April 17, 2002. Nobody was home to sign for the letter, and nobody appeared at the post office to retrieve the letter within the next 15 days. The post office returned the unopened packet to the Commissioner marked “unclaimed.”
Two years later, and just a few weeks before the public sale, the Commissioner published a notice of public sale in the Arkansas Democrat Gazette. No bids were submitted, which permitted the State to negotiate a private sale of the property. See § 26-37-202(b). Several months later, respondent Linda Flowers submitted a purchase offer. The Commissioner mailed another certified letter to Jones at the North Bryan Street address, attempting to notify him that his house would be sold to Flowers if he did not pay his taxes. Like the first letter, the second was also returned to the Commissioner marked “unclaimed.” Flowers purchased the house, which the parties stipulated in the trial court had a fair market value of $80,000, for $21,042.15. Immediately after the 30-day period for postsale redemption passed, see § 26-37-202(e), Flowers had an unlawful detainer notice delivered to the property. The notice was served on Jones’ daughter, who contacted Jones and notified him of the tax sale.
Jones filed a lawsuit in Arkansas state court against the Commissioner and Flowers, alleging that the Commissioner’s failure to provide notice of the tax sale and of Jones’ right to redeem resulted in the taking of his property without due process. The Commissioner and Flowers moved for summary judgment on the ground that the two unclaimed letters sent by the Commissioner were a constitutionally adequate attempt at notice, and Jones filed a cross-motion for summary judgment. The trial court granted summary judgment in favor of the Commissioner and Flowers. It concluded that the Arkansas tax sale statute, which set forth the notice procedure followed by the Commissioner, complied with constitutional due process requirements.
Jones appealed, and the Arkansas Supreme Court affirmed the trial court’s judgment.
[…] We hold that when mailed notice of a tax sale is returned unclaimed, the State must take additional reasonable steps to attempt to provide notice to the property owner before selling his property, if it is practicable to do so. Under the circumstances presented here, additional reasonable steps were available to the State. We therefore reverse the judgment of the Arkansas Supreme Court.
II
A
Due process does not require that a property owner receive actual notice before the government may take his property. Rather, we have stated that due process requires the government to provide “notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane. The Commissioner argues that once the State provided notice reasonably calculated to apprise Jones of the impending tax sale by mailing him a certified letter, due process was satisfied. The Arkansas statutory scheme is reasonably calculated to provide notice, the Commissioner continues, because it provides for notice by certified mail to an address that the property owner is responsible for keeping up to date. The Commissioner notes this Court’s ample precedent condoning notice by mail and adds that the Arkansas scheme exceeds constitutional requirements by requiring the Commissioner to use certified mail.
[…] [W]e have never addressed whether due process entails further responsibility when the government becomes aware prior to the taking that its attempt at notice has failed. That is a new wrinkle, and we have explained that the “notice required will vary with circumstances and conditions.” The question presented is whether such knowledge on the government’s part is a “circumstance and condition” that varies the “notice required.”
The Courts of Appeals and State Supreme Courts have addressed this question on frequent occasions, and most have decided that when the government learns its attempt at notice has failed, due process requires the government to do something more before real property may be sold in a tax sale. […] Many States already require in their statutes that the government do more than simply mail notice to delinquent owners, either at the outset or as a follow-up measure if initial mailed notice is ineffective.
In Mullane, we stated that “when notice is a person’s due … [t]he means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it,” and that assessing the adequacy of a particular form of notice requires balancing the “interest of the State” against “the individual interest sought to be protected by the Fourteenth Amendment.” […]
We do not think that a person who actually desired to inform a real property owner of an impending tax sale of a house he owns would do nothing when a certified letter sent to the owner is returned unclaimed. If the Commissioner prepared a stack of letters to mail to delinquent taxpayers, handed them to the postman, and then watched as the departing postman accidentally dropped the letters down a storm drain, one would certainly expect the Commissioner’s office to prepare a new stack of letters and send them again. No one “desirous of actually informing” the owners would simply shrug his shoulders as the letters disappeared and say “I tried.” Failure to follow up would be unreasonable, despite the fact that the letters were reasonably calculated to reach their intended recipients when delivered to the postman.
By the same token, when a letter is returned by the post office, the sender will ordinarily attempt to resend it, if it is practicable to do so. This is especially true when, as here, the subject matter of the letter concerns such an important and irreversible prospect as the loss of a house. Although the State may have made a reasonable calculation of how to reach Jones, it had good reason to suspect when the notice was returned that Jones was “no better off than if the notice had never been sent.” Deciding to take no further action is not what someone “desirous of actually informing” Jones would do; such a person would take further reasonable steps if any were available.
In prior cases, we have required the government to consider unique information about an intended recipient regardless of whether a statutory scheme is reasonably calculated to provide notice in the ordinary case. […]
The Commissioner points out that in these cases, the State was aware of such information before it calculated how best to provide notice. But it is difficult to explain why due process would have settled for something less if the government had learned after notice was sent, but before the taking occurred, that the property owner was in prison or was incompetent. […] [The government’s] knowledge was one of the “practicalities and peculiarities of the case,” Mullane, that the Court took into account in determining whether constitutional requirements were met. It should similarly be taken into account in assessing the adequacy of notice in this case. The dissent dismisses the State’s knowledge that its notice was ineffective as “learned long after the fact,” but the notice letter was promptly returned to the State two to three weeks after it was sent, and the Arkansas statutory regime precludes the State from taking the property for two years while the property owner may exercise his right to redeem, see Ark. Code Ann. § 26-37-301.
It is certainly true […] that the failure of notice in a specific case does not establish the inadequacy of the attempted notice; in that sense, the constitutionality of a particular procedure for notice is assessed ex ante, rather than post hoc. But if a feature of the State’s chosen procedure is that it promptly provides additional information to the government about the effectiveness of notice, it does not contravene the ex ante principle to consider what the government does with that information in assessing the adequacy of the chosen procedure. After all, the State knew ex ante that it would promptly learn whether its effort to effect notice through certified mail had succeeded. It would not be inconsistent with the approach the Court has taken in notice cases to ask, with respect to a procedure under which telephone calls were placed to owners, what the State did when no one answered. Asking what the State does when a notice letter is returned unclaimed is not substantively different. […]
Jones should have been more diligent with respect to his property, no question. People must pay their taxes, and the government may hold citizens accountable for tax delinquency by taking their property. But before forcing a citizen to satisfy his debt by forfeiting his property, due process requires the government to provide adequate notice of the impending taking. U.S. Const., Amdt. 14.
B
[…] For the reasons stated, we conclude the State should have taken additional reasonable steps to notify Jones, if practicable to do so. The question remains whether there were any such available steps. While “[i]t is not our responsibility to prescribe the form of service that the [government] should adopt,” if there were no reasonable additional steps the government could have taken upon return of the unclaimed notice letter, it cannot be faulted for doing nothing.
We think there were several reasonable steps the State could have taken. What steps are reasonable in response to new information depends upon what the new information reveals. The return of the certified letter marked “unclaimed” meant either that Jones still lived at 717 North Bryan Street, but was not home when the postman called and did not retrieve the letter at the post office, or that Jones no longer resided at that address. One reasonable step primarily addressed to the former possibility would be for the State to resend the notice by regular mail, so that a signature was not required. The Commissioner says that use of certified mail makes actual notice more likely, because requiring the recipient’s signature protects against misdelivery. But that is only true, of course, when someone is home to sign for the letter, or to inform the mail carrier that he has arrived at the wrong address. Otherwise, […] the use of certified mail might make actual notice less likely in some cases—the letter cannot be left like regular mail to be examined at the end of the day, and it can only be retrieved from the post office for a specified period of time. Following up with regular mail might also increase the chances of actual notice to Jones if—as it turned out—he had moved. Even occupants who ignored certified mail notice slips addressed to the owner (if any had been left) might scrawl the owner’s new address on the notice packet and leave it for the postman to retrieve, or notify Jones directly.
Other reasonable followup measures, directed at the possibility that Jones had moved as well as that he had simply not retrieved the certified letter, would have been to post notice on the front door, or to address otherwise undeliverable mail to “occupant.” Most States that explicitly outline additional procedures in their tax sale statutes require just such steps. Either approach would increase the likelihood that the owner would be notified that he was about to lose his property, given the failure of a letter deliverable only to the owner in person. That is clear in the case of an owner who still resided at the premises. It is also true in the case of an owner who has moved: Occupants who might disregard a certified mail slip not addressed to them are less likely to ignore posted notice, and a letter addressed to them (even as “occupant”) might be opened and read. In either case, there is a significant chance the occupants will alert the owner, if only because a change in ownership could well affect their own occupancy. In fact, Jones first learned of the State’s effort to sell his house when he was alerted by one of the occupants—his daughter—after she was served with an unlawful detainer notice.
Jones believes that the Commissioner should have searched for his new address in the Little Rock phonebook and other government records such as income tax rolls. We do not believe the government was required to go this far. […] An open-ended search for a new address— especially when the State obligates the taxpayer to keep his address updated with the tax collector, see Ark. Code Ann. § 26-35-705 (1997)—imposes burdens on the State significantly greater than the several relatively easy options outlined above.
The Commissioner complains about the burden of even those additional steps, […] The Commissioner has offered no estimate of how many notice letters are returned, and no facts to support the dissent’s assertion that the Commissioner must now physically locate “tens of thousands of properties every year.” […] Successfully providing notice is often the most efficient way to collect unpaid taxes, […] but rather than taking relatively easy additional steps to effect notice, the State undertook the burden and expense of purchasing a newspaper advertisement, conducting an auction, and then negotiating a private sale of the property to Flowers.
The Solicitor General argues that requiring further effort when the government learns that notice was not delivered will cause the government to favor modes of providing notice that do not generate additional information—for example, starting (and stopping) with regular mail instead of certified mail. We find this unlikely, as we have no doubt that the government repeatedly finds itself being asked to prove that notice was sent and received. Using certified mail provides the State with documentation of personal delivery and protection against false claims that notice was never received. That added security, however, comes at a price—the State also learns when notice has not been received. We conclude that, under the circumstances presented, the State cannot simply ignore that information in proceeding to take and sell the owner’s property […].
Though the Commissioner argues that followup measures are not constitutionally required, he reminds us that the State did make some attempt to follow up with Jones by publishing notice in the newspaper a few weeks before the public sale. Several decades ago, this Court observed that “[c]hance alone” brings a person’s attention to “an advertisement in small type inserted in the back pages of a newspaper,” Mullane, and that notice by publication is adequate only where “it is not reasonably possible or practicable to give more adequate warning.” Following up by publication was not constitutionally adequate under the circumstances presented here because, as we have explained, it was possible and practicable to give Jones more adequate warning of the impending tax sale. […]
There is no reason to suppose that the State will ever be less than fully zealous in its efforts to secure the tax revenue it needs. The same cannot be said for the State’s efforts to ensure that its citizens receive proper notice before the State takes action against them. In this case, the State is exerting extraordinary power against a property owner—taking and selling a house he owns. It is not too much to insist that the State do a bit more to attempt to let him know about it when the notice letter addressed to him is returned unclaimed.
The Commissioner’s effort to provide notice to Jones of an impending tax sale of his house was insufficient to satisfy due process given the circumstances of this case. The judgment of the Arkansas Supreme Court is reversed, and the case is remanded for proceedings not inconsistent with this opinion.
It is so ordered.
JUSTICE ALITO took no part in the consideration or decision of this case.
JUSTICE THOMAS, with whom JUSTICE SCALIA and JUSTICE KENNEDY join, dissenting.
[…] Because, under this Court’s precedents, the State’s notice methods clearly satisfy the requirements of the Due Process Clause, I respectfully dissent.
I
[…] Balancing a State’s interest in efficiently managing its administrative system and an individual’s interest in adequate notice, this Court has held that a State must provide “notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action.” […] “[H]eroic efforts,” however, are not required. […]
The methods of notice employed by Arkansas were reasonably calculated to inform petitioner of proceedings affecting his property interest and thus satisfy the requirements of the Due Process Clause. The State mailed a notice by certified letter to the address provided by petitioner. The certified letter was returned to the State marked “unclaimed” after three attempts to deliver it. The State then published a notice of public sale containing redemption information in the Arkansas Democrat Gazette newspaper. After Flowers submitted a purchase offer, the State sent yet another certified letter to petitioner at his record address. That letter, too, was returned to the State marked “unclaimed” after three delivery attempts.
Arkansas’ attempts to contact petitioner by certified mail at his “record address,” without more, satisfy due process. Because the notices were sent to the address provided by petitioner himself, the State had an especially sound basis for determining that notice would reach him. Moreover, Arkansas exceeded the constitutional minimum by additionally publishing notice in a local newspaper. See Mullane. Due process requires nothing more—and certainly not here, where petitioner had a statutory duty to pay his taxes and to report any change of address to the state taxing authority.
My conclusion that Arkansas’ notice methods satisfy due process is reinforced by the well-established presumption that individuals, especially those owning property, act in their own interest. […] Consistent with this observation, Arkansas was free to “indulge the assumption” that petitioner had either provided the state taxing authority with a correct and up-to-date mailing address—as required by state law—“or that he … left some caretaker under a duty to let him know that [his property was] being jeopardized.”
The Court does not conclude that certified mail is inherently insufficient as a means of notice, but rather that “the government’s knowledge that notice pursuant to the normal procedure was ineffective triggered an obligation on the government’s part to take additional steps to effect notice.” I disagree.
First, whether a method of notice is reasonably calculated to notify the interested party is determined ex ante, i.e., from the viewpoint of the government agency at the time its notice is sent. […] Relatedly, we have refused to evaluate the reasonableness of a particular method of notice by comparing it to alternative methods that are identified after the fact. Today the Court appears to abandon both of these practices. Its rejection of Arkansas’ selected method of notice—a method this Court has repeatedly concluded is constitutionally sufficient—is based upon information that was unavailable when notice was sent. Indeed, the Court’s proposed notice methods—regular mail, posting, and addressing mail to “‘occupant,’”—are entirely the product of post hoc considerations, including the discovery that members of petitioner’s family continued to live in the house. […]
Second, […] [u]nder the majority’s logic, each time a doubt is raised with respect to whether notice has reached an interested party, the State will have to consider additional means better calculated to achieve notice. Because this rule turns on speculative, newly acquired information, it has no natural end point, and, in effect, requires the States to achieve something close to actual notice. […]
The only circumstances in which this Court has found notice by mail and publication inadequate under the Due Process Clause involve situations where the state or local government knew at the outset that its notice efforts were destined to fail and knew how to rectify the problem prior to sending notice. […]
By contrast, Arkansas did not know at the time it sent notice to petitioner that its method would fail, and Arkansas did not know that petitioner no longer lived at the record address simply because letters were returned “unclaimed.” […] The State cannot be charged to correct a problem of petitioner’s own creation and of which it was not aware. Even if the State had divined that petitioner was no longer at the record address, its publication of notice in a local newspaper would have sufficed because Mullane authorizes the use of publication when the record address is unknown. […]
II
The Court’s proposed methods, aside from being constitutionally unnecessary, are also burdensome, impractical, and no more likely to effect notice than the methods actually employed by the State.
[…] These administrative burdens are not compelled by the Due Process Clause. Here, Arkansas has determined that its law requiring property owners to maintain a current address with the state taxing authority, in conjunction with its authorization to send property notices to the record address, is an efficient and fair way to administer its tax collection system. The Court’s decision today forecloses such a reasonable system and burdens the State with inefficiencies caused by delinquent taxpayers. […]
Accordingly, I would affirm the judgment of the Arkansas Supreme Court.
Notes & Questions
Both Mullane and Jones show one important ramification of due process: effecting service to initiate a proceeding operates to provide notice.
Note that in neither Mullane nor Jones does the Court require the serving party to provide proof that the person being served was in fact notified of the proceeding. Instead, the Court discusses which forms of “constructive” notice suffice to satisfy due process. What does the Court mean by “constructive” notice?
Constructive notice must be watched carefully to ensure that the fiction does not swallow the truth. Consider the following cases:
May a landlord notify tenants of eviction proceedings by posting notice on the door of the renter’s residence? In Greene v. Lindsey, 456 U.S. 444 (1982), an administrator of public-housing units employed such a procedure. The tenants sued, alleging that service was defective and that they had no actual notice of the eviction proceedings. The record indicated that “the process servers were well aware [that] notices posted on apartment doors in the area where these tenants lived were ‘not infrequently’ removed by children or other tenants before they could have their intended effect.” The Supreme Court ruled in favor of the tenants, holding that the circumstances required the landlord to mail the notice of eviction.
Can a person agree by contract in advance to a method of constructive notice? In National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311 (1964), a divided Court upheld the validity of a contractual agreement to appoint a third-party to serve as agent for purposes of service of process. The Szukhent family, who lived in Michigan, leased farm equipment from the New York plaintiff. The contract governing the lease, which the Szukhents signed, named as their agent for purposes of service of process Florence Weinberg, a New York resident whom they had never met nor spoken with. When the Szukhents failed to make payments on the farm equipment, the rental company sued and served process on Ms. Weinberg, who in turn mailed a copy of the complaint to the Szukhents. The plaintiff also separately mailed a copy of the complaint to the Szukhents. The Court upheld the notice in part because the Szukhents had received actual notice.
Can a state require people engaged in certain types of activity within the state to appoint an in-state agent for purposes of service of process? In Wuchter v. Pizzutti, 276 U.S. 13 (1928), the Court considered whether a statute requiring all nonresident motorists to appoint the state Secretary of State as their agent for purposes of service of process. The statute did not require that the motorist be given any actual notice of the proceeding. The Court held that the statute violated due process, even though the defendant in the case had actual notice of the proceeding.
How long before the proceeding begins must the defendant be notified? In Roller v. Holly, 176 U.S. 398 (1900), a Virginia defendant was served only five days before a proceeding against him in Texas was set to begin. The Supreme Court held that the short notice violated due process. How many days do you think would be enough? Would your answer be different in 1900 than it would be today?
What information must the notice contain? Aguchak v. Montgomery Ward Co., 520 P.2d 1352 (Alaska 1974), involved the purchase by the Aguchak family of a snowmobile from the defendant. The Aguchaks lived in a remote area of Alaska, which explains their desire for a snowmobile. When the family defaulted on their payments, the department store sued and sent them a summons. Because they lived in a remote area, it would have taken the Aguchaks at least two days to travel to the courthouse at a cost of $186. The Aguchaks defaulted and judgment was entered against them. On appeal, they argued that the notice should have informed them of the option to appear by writing rather than in person and that they had a right to request a change of venue. The Supreme Court of Alaska sided with the Aguchaks and held that summons in small-claims court must inform recipients of these options.
Read Federal Rule of Civil Procedure 4, which sets the requirements for serving the complaint in a civil case in federal court. Do you think that the various methods of service authorized by Rule 4 comply with the constitutional requirement of due process?
See if you can answer the following questions about service under Rule 4:
What must the summons contain? See Rule 4(a)(1).
Who is eligible to serve the summons and complaint? See Rule 4(c)(2)–(3).
What are the benefits of waiving service? What are the potential consequences of refusing to waive service? See Rule 4(d).
Name one way to effect service upon a domestic, individual defendant that will be sufficient in any federal district court? See Rule 4(e)(2).
How would you go about serving the United States Department of Agriculture? See Rule 4(i)(2).
How long does a plaintiff have to effect service? What is the consequence of failing to make timely service? See Rule 4(m).
4.2 The Complaint
This section examines the document that initiates a civil suit: the complaint. In federal court, Rule 8 regulates what the plaintiff must allege in this important filing. By rule, the plaintiff must give “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). As you will see, the practical implications of Rule 8 are more complicated than its simple text suggests.
Read Rules 8(a), 9(b), and 12(b) in the supplement.
Haddle v. Garrison (Complaint)
| |
| MICHAEL A. HADDLE, |
| Plaintiff |
| v. | Civ. No. 96-00029-CV-1-AAA
| JEANETTE G. GARRISON \[et al.\], |
| Defendants. |
| |COMPLAINT FOR DAMAGES PURSUANT TO 42 U.S.C. § 1985(2) (THE CIVIL RIGHTS ACT OF 1871), THE GEORGIA RICO STATUTE AND GEORGIA LAW OF TORTIOUS INTERFERENCE AND FRAUDULENT CONVEYANCE
NOW COMES Plaintiff MICHAEL A. HADDLE and for this his complaint against Defendants JEANETTE G. GARRISON (“Garrison”), DENNIS KELLY (“Kelly”), PETER MOLLOY (“Molloy”), HEALTHMASTER, INC. (“Healthmaster”), and shows as follows:
Introductory Statement
1. Plaintiff is a citizen and resident of the State of Georgia.
2. Defendant Garrison is a resident of the State of South Carolina.
3. Defendants Molloy [and] Kelly are residents of the Southern District of Georgia.
4. Defendant Healthmaster is a corporation organized and existing under the laws of the State of Georgia with its principal place of business within the Southern District of Georgia.
5. Jurisdiction is proper in this Court over Count I of this Complaint (the Civil Rights Act of 1871) by virtue of 28 U.S.C. § 1331. Jurisdiction over Count II (Georgia RICO), Count III (Tortious Interference) and Count IV (Fraudulent Conveyance) is proper in this Court because these Counts are pendent to Count I.
6. Venue is proper in this Court in that most Defendants reside within the Southern District of Georgia and in that the actions of all Defendants as alleged below occurred within the Southern District of Georgia.
General Factual Allegations
7. From September 22, 1986 until approximately April 13, 1995, Plaintiff was employed by Defendant Healthmaster.
8. From approximately April 13, 1995, until his discharge as alleged below, Plaintiff was employed by Healthmaster Home Health Care, Inc., a Georgia corporation whose stock is owned entirely by Defendant Healthmaster.
9. Defendant Garrison has at all relevant times owned 50% of the stock of Healthmaster and controlled Healthmaster until April or May, 1995, when a trustee was appointed for Healthmaster, then a debtor in possession under Chapter II of the federal Bankruptcy Code, by the United States Bankruptcy Court for the Southern District of Georgia.
10. The individual Defendants herein have all served in various capacities as corporate officers and directors of Defendant Healthmaster and of Healthmaster Home Health Care, Inc.
11. Defendant Molloy has at all relevant times been employed by Defendant Healthmaster or Healthmaster Home Health Care, Inc.
12. On March 8, 1995, a grand jury convened in the United States District Court for the Southern District of Georgia, Augusta Division, filed an indictment against Defendants Garrison, Kelly, Healthmaster, and others charging a total of 133 counts of fraud against various defendants, which indictment is enumerated as number CR-195-11 in this Court.
13. Although not indicted, Defendant Molloy was, on information and belief, a target of the ongoing criminal investigation.
14. Plaintiff cooperated with the investigation by federal agents which preceded this indictment and testified pursuant to subpoena before said grand jury and appeared pursuant to subpoena to testify before said grand jury, although his testimony was not actually taken due to the press of time.* [ * The inconsistency here is likely an error. –Ed.]
15. As a result of their indictment, Defendants Garrison and Kelly were banned from any participation in the affairs of Healthmaster Home Health Care, Inc., by order of said Bankruptcy Court.
16. On June 21, 1995, after Defendants had become aware that Plaintiff would appear as a witness at the criminal trial of Indictment No. CR 195-11, Defendant Molloy, who was then President of Defendant Healthmaster, having been retained in said position by the trustee, but acting at the direction of Defendants Garrison and Kelly and pursuant to a prior understanding and agreement between these three persons, terminated Plaintiff from his employment at Healthmaster Home Health Care, Inc.
Count I—Conspiracy in Violation of 42 U.S.C. § 1985(2) (The Civil Rights Act of 1871)
17. The allegations contained in paragraphs numbered “1” through “16” are incorporated herein by reference.
18. The decision to terminate Plaintiff was made by Defendants and others not in furtherance of the business interests of Defendant Healthmaster, but instead for the purpose of retaliating against Plaintiff for his cooperation with federal agents and his testimony under subpoena to the federal grand jury, and in order to intimidate Plaintiff and others from cooperating with federal agents or testifying in any criminal matters against them including said indictment.
19. Defendants participated in and carried out the decision to terminate Plaintiff, not in furtherance of the business interests of Defendant Healthmaster, but rather to protect themselves as criminal defendants or potential criminal defendants.
20. By means of the described actions, and their agreement and plan to do the same, Defendants have violated 42 U.S.C. § 1985(2), in that they have conspired within the State of Georgia to deter, by force, intimidation or threat, a party or witness in the United States District Court for the Southern District of Georgia, from attending such court, or from testifying in any matter pending therein, freely, fully, and truthfully, or to injure such party or witness in his person or property on account of his having so attended or testified, or to influence the verdict, presentment, or indictment of the grand jurors of such court.
21. Plaintiff has been injured in his person and property by the acts of Defendants in violation of 42 U.S.C. § 1985(2), and Plaintiff is entitled to recover his damages occasioned by such injury and deprivation against Defendants jointly and severally.
22. Because said Defendants’ acts were willful, intentional and malicious, Plaintiff is entitled to recover punitive damages against Defendants jointly and severally.
23. Pursuant to 42 U.S.C. § 1988, Plaintiff is entitled to recover his expenses of litigation including a reasonable attorney’s fee from said Defendants jointly and severally.
[Counts alleging statutory and common law claims under Georgia law are omitted.]
PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands trial by jury on all counts and judgment as to all Defendants jointly and severally for money damages in such amount for actual damages as the evidence may show and as to all Defendants, jointly and severally, judgment for punitive damages and reasonable attorneys’ fees and expenses of litigation, together with all costs of Court and such other and further relief as the Court may deem equitable and just.
Notes & Questions
Can you identify in the above complaint the three parts required by Rule 8(a): jurisdictional allegation, “short plain statement of the claim,” and prayer for relief?
Does the complaint contain more than just these three parts? If so, what else does it contain?
How did Haddle’s complaint tell the story of what happened to him in a way that made him seem like the good guy and the defendants seem like the bad guys?
Haddle v. Garrison (District Court)
ALAIMO, J.
Plaintiff, Michael A. Haddle, has brought the current litigation seeking damages under Section 1985(2) of Title 42 of the United States Code, and state law. Presently before the Court are four [defendants’] motions to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons stated below, Defendants’ motions will be Granted.
Facts
Haddle is a former employee of Healthmaster Home Health Care, Inc. He claims that he was improperly discharged from his employment by Defendants in an attempt to deter his participation as a witness in a Federal criminal trial. At the times relevant to this litigation, Haddle concedes that he was an at-will employee.
Discussion
I. Rule 12(b)(6)
Rule 12(b)(6) permits a defendant to move to dismiss a complaint on the grounds that the plaintiff has failed to state a claim upon which relief can be granted. A motion under Rule 12(b)(6) attacks the legal sufficiency of the complaint. In essence, the movant says, “Even if everything you allege is true, the law affords you no relief.” Consequently, in determining the merits of a 12(b)(6) motion, a court must assume that all of the factual allegations of the complaint are true. A court should not dismiss a complaint for failure to state a claim unless it is clear that the plaintiff can prove “no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45–46 (1957).
II. 42 U.S.C. § 1985(2)
[…] In the case at bar, Haddle asserts that he can maintain an action under Section 1985(2) despite the fact that he was defined as an at-will employee during the term of his employment. This is directly contrary to binding precedent of the Eleventh Circuit. Case law states:
[T]o make out a cause of action under § 1985(2) the plaintiff must have suffered an actual injury. Because [Plaintiff] was an at-will employee … he has no constitutionally protected interest in continued employment. Therefore, [Plaintiff’s] discharge did not constitute an actual injury under this statute.
Morast v. Lance, 807 F.2d 926, 930 (11th Cir. 1987). Given the clear language of Morast, the Court is required to DISMISS Haddle’s claim under Section 1985(2).
[…]
Conclusion
The Court has determined that, under Rule 12(b)(6) Haddle has failed to state a federal claim upon which relief can be granted. His claim under Section 1985(2) is DISMISSED with respect to the above-named Defendants. Additionally, all state law claims are DISMISSED WITHOUT PREJUDICE.
Notes & Questions
What did the court do in this order?
Why did the court dismiss Haddle’s case? Did the court make a factual determination that Haddle had not been fired? That he had been fired in a lawful manner? Or something else?
What kind of motion did the defendants file and the court grant?
After his case was dismissed, Haddle’s only realistic path to victory was to appeal. As is typical with appeals from judgments entered by the U.S. District Court for the Southern District of Georgia, Haddle’s appeal went to the U.S. Court of Appeals for the Eleventh Circuit, whose opinion in the case appears below—in its entirety.
Haddle v. Garrison (Court of Appeals)
PER CURIAM:
Michael A. Haddle appeals following the district court’s dismissal of his 42 U.S.C. § 1985(2) claim for failure to state a claim. We conclude that Haddle’s arguments on appeal are foreclosed by this court’s decision in Morast v. Lance, 807 F.2d 926 (11th Cir. 1987). The judgment of the district court is therefore affirmed.
Notes & Questions
Who wrote the Eleventh Circuit opinion?
Why was the Eleventh Circuit’s opinion so short?
Most of the time, losing at the Court of Appeals by such a short order spells the end of the federal appellate process. The Courts of Appeals decide tens of thousands of appeals per year, and the Supreme Court typically agrees to review less than 100 of those.
But in this case, Mr. Haddle was fortunate. The Supreme Court agreed to hear his case. See if you can discern why by reading the Supreme Court’s opinion below.
Haddle v. Garrison (Supreme Court)
REHNQUIST, C.J., delivered the opinion for a unanimous Court.
Petitioner Michael A. Haddle, an at-will employee, alleges that respondents conspired to have him fired from his job in retaliation for obeying a federal grand jury subpoena and to deter him from testifying at a federal criminal trial. We hold that such interference with at-will employment may give rise to a claim for damages under the Civil Rights Act of 1871, Rev. Stat. § 1980, 42 U.S.C. § 1985(2).
According to petitioner’s complaint, a federal grand jury indictment in March 1995 charged petitioner’s employer, Healthmaster, Inc., and respondents Jeanette Garrison and Dennis Kelly, officers of Healthmaster, with Medicare fraud. Petitioner cooperated with the federal agents in the investigation that preceded the indictment. He also appeared to testify before the grand jury pursuant to a subpoena, but did not testify due to the press of time. Petitioner was also expected to appear as a witness in the criminal trial resulting from the indictment.
Although Garrison and Kelly were barred by the Bankruptcy Court from participating in the affairs of Healthmaster, they conspired with G. Peter Molloy, Jr., one of the remaining officers of Healthmaster, to bring about petitioner’s termination. They did this both to intimidate petitioner and to retaliate against him for his attendance at the federal-court proceedings.
Petitioner sued for damages in the United States District Court for the Southern District of Georgia, asserting a federal claim under 42 U.S.C. § 1985(2) and various state-law claims. Petitioner stated two grounds for relief under § 1985(2): one for conspiracy to deter him from testifying in the upcoming criminal trial and one for conspiracy to retaliate against him for attending the grand jury proceedings. As § 1985 demands, he also alleged that he had been “injured in his person or property” by the acts of respondents in violation of § 1985(2) and that he was entitled to recover his damages occasioned by such injury against respondents jointly and severally.
Respondents moved to dismiss for failure to state a claim upon which relief can be granted. Because petitioner conceded that he was an at-will employee, the District Court granted the motion on the authority of Morast v. Lance, 807 F.2d 926 (1987). In Morast, the Eleventh Circuit held that an at-will employee who is dismissed pursuant to a conspiracy proscribed by § 1985(2) has no cause of action. The Morast court explained: “[T]o make out a cause of action under § 1985(2) the plaintiff must have suffered an actual injury. Because Morast was an at-will employee, … he had no constitutionally protected interest in continued employment. Therefore, Morast’s discharge did not constitute an actual injury under this statute.” Relying on its decision in Morast, the Court of Appeals affirmed.
The Eleventh Circuit’s rule in Morast conflicts with the holdings of the First and Ninth Circuits. We therefore granted certiorari to decide whether petitioner was “injured in his property or person” when respondents induced his employer to terminate petitioner’s at-will employment as part of a conspiracy prohibited by § 1985(2).
Section 1985(2), in relevant part, proscribes conspiracies to “deter, by force, intimidation, or threat, any party or witness in any court of the United States from attending such court, or from testifying to any matter pending therein, freely, fully, and truthfully, or to injure such party or witness in his person or property on account of his having so attended or testified.”[1] The statute provides that if one or more persons engaged in such a conspiracy “do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property, … the party so injured …may have an action for the recovery of damages occasioned by such injury … against any one or more of the conspirators.” § 1985(3).[2]
Petitioner’s action was dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) because, in the Eleventh Circuit’s view, he had not suffered an injury that could give rise to a claim for damages under § 1985(2). We must, of course, assume that the facts as alleged in petitioner’s complaint are true and that respondents engaged in a conspiracy prohibited by § 1985(2). Our review in this case is accordingly confined to one question: Can petitioner state a claim for damages by alleging that a conspiracy proscribed by § 1985(2) induced his employer to terminate his at-will employment?
We disagree with the Eleventh Circuit’s conclusion that petitioner must suffer an injury to a “constitutionally protected property interest” to state a claim for damages under § 1985(2). Nothing in the language or purpose of the proscriptions in the first clause of § 1985(2), nor in its attendant remedial provisions, establishes such a requirement. The gist of the wrong at which § 1985(2) is directed is not deprivation of property, but intimidation or retaliation against witnesses in federal-court proceedings. The terms “injured in his person or property” define the harm that the victim may suffer as a result of the conspiracy to intimidate or retaliate. Thus, the fact that employment at will is not “property” for purposes of the Due Process Clause does not mean that loss of at-will employment may not “injur[e] [petitioner] in his person or property” for purposes of § 1985(2).
We hold that the sort of harm alleged by petitioner here—essentially third-party interference with at-will employment relationships—states a claim for relief under § 1985(2). Such harm has long been a compensable injury under tort law, and we see no reason to ignore this tradition in this case. As Thomas Cooley recognized:
“One who maliciously and without justifiable cause, induces an employer to discharge an employee, by means of false statements, threats or putting in fear, or perhaps by means of malevolent advice and persuasion, is liable in an action of tort to the employee for the damages thereby sustained. And it makes no difference whether the employment was for a fixed term not yet expired or is terminable at the will of the employer.”
2 Law of Torts 589–591 (3d ed. 1906) (emphasis added).
This Court also recognized in Truax v. Raich, 239 U.S. 33 (1915):
“The fact that the employment is at the will of the parties, respectively, does not make it one at the will of others. The employé has manifest interest in the freedom of the employer to exercise his judgment without illegal interference or compulsion and, by the weight of authority, the unjustified interference of third persons is actionable although the employment is at will.”
Id. at 38 (citing cases).
The kind of interference with at-will employment relations alleged here is merely a species of the traditional torts of intentional interference with contractual relations and intentional interference with prospective contractual relations. See Restatement (Second) of Torts § 766, Comment g, pp. 10–11 (1977); see also id., § 766B, Comment c, at 22. This protection against third-party interference with at-will employment relations is still afforded by state law today. See W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keaton on Law of Torts § 129, pp. 995–996, and n. 83 (5th ed. 1984) (citing cases). For example, the State of Georgia, where the acts underlying the complaint in this case took place, provides a cause of action against third parties for wrongful interference with employment relations. Thus, to the extent that the terms “injured in his person or property” in § 1985 refer to principles of tort law, see 3 W. Blackstone, Commentaries on the Laws of England 118 (1768) (describing the universe of common-law torts as “all private wrongs, or civil injuries, which may be offered to the rights of either a man’s person or his property”), we find ample support for our holding that the harm occasioned by the conspiracy here may give rise to a claim for damages under § 1985(2).
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Notes & Questions
Why did the Supreme Court reverse the Eleventh Circuit?
What do you think the next step was after the Supreme Court revived Haddle’s suit?
Haddle’s claims went before a jury in December 1999. The jury awarded him $65,000 in compensatory damages. Afterward, lawyers for both the plaintiff and the defendants said they were pleased with the outcome. How is this possible?
Interestingly, the jury trial was not the end of the case. Haddle’s lawyers asked that the defendants pay their legal fees and expenses under a federal fee-shifting statute. The court awarded those legal fees—in the amount of $258,113. How do you think the existence of this fee-shifting statute (which allows victorious plaintiffs to recover their legal fees from defendants if they win) affected how the case was litigated?
In the saga of Haddle v. Garrison, we saw the importance of Federal Rule of Civil Procedure 12(b)(6), which allows a defendant to test the legal sufficiency of a plaintiff’s claim at an early stage of the case. The legal standards under Rule 12(b)(6) have changed dramatically over the years. For 50 years, the case that follows provided the test under Rule 12(b)(6), and it was a rule that allowed most complaints to survive a motion to dismiss for failure to state a claim.
Conley v. Gibson
MR. JUSTICE BLACK delivered the opinion of the Court.
[…] In appraising the sufficiency of the complaint we follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. […]
[T]he Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is “a short and plain statement of the claim” that will give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests. The illustrative forms appended to the Rules plainly demonstrate this. Such simplified “notice pleading” is made possible by the liberal opportunity for discovery and the other pretrial procedures established by the Rules to disclose more precisely the basis of both claim and defense and to define more narrowly the disputed facts and issues. Following the simple guide of Rule 8(f) that “all pleadings shall be so construed as to do substantial justice,” we have no doubt that petitioners’ complaint adequately set forth a claim and gave the respondents fair notice of its basis. The Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits. […]
Notes & Questions
According to Conley v. Gibson, what is the test for whether a complaint should be dismissed under Rule 12(b)(6)?
What kinds of claims would fail Conley’s “no set of facts” test?
The next case illustrates the Conley test in practice.
Swierkiewicz v. Sorema N.A.
Justice Thomas delivered the opinion of the Court.
[…]
I
Petitioner Akos Swierkiewicz is a native of Hungary, who at the time of his complaint was 53 years old. In April 1989, petitioner began working for respondent Sorema N.A., a reinsurance company headquartered in New York and principally owned and controlled by a French parent corporation. Petitioner was initially employed in the position of senior vice president and chief underwriting officer (CUO). Nearly six years later, François M. Chavel, respondent’s Chief Executive Officer, demoted petitioner to a marketing and services position and transferred the bulk of his underwriting responsibilities to Nicholas Papadopoulo, a 32-year-old who, like Mr. Chavel, is a French national. About a year later, Mr. Chavel stated that he wanted to “energize” the underwriting department and appointed Mr. Papadopoulo as CUO. Petitioner claims that Mr. Papadopoulo had only one year of underwriting experience at the time he was promoted, and therefore was less experienced and less qualified to be CUO than he, since at that point he had 26 years of experience in the insurance industry.
Following his demotion, petitioner contends that he “was isolated by Mr. Chavel … excluded from business decisions and meetings and denied the opportunity to reach his true potential at SOREMA.” Petitioner unsuccessfully attempted to meet with Mr. Chavel to discuss his discontent. Finally, in April 1997, petitioner sent a memo to Mr. Chavel outlining his grievances and requesting a severance package. Two weeks later, respondent’s general counsel presented petitioner with two options: He could either resign without a severance package or be dismissed. Mr. Chavel fired petitioner after he refused to resign.
Petitioner filed a lawsuit alleging that he had been terminated on account of his national origin in violation of Title VII of the Civil Rights Act of 1964, and on account of his age in violation of the Age Discrimination in Employment Act of 1967 (ADEA). The United States District Court for the Southern District of New York dismissed petitioner’s complaint because it found that he “ha[d] not adequately alleged a prima facie case, in that he ha[d] not adequately alleged circumstances that support an inference of discrimination.” The United States Court of Appeals for the Second Circuit affirmed […]. We granted certiorari, […] and now reverse.
II
Applying Circuit precedent, the Court of Appeals required petitioner to plead a prima facie case of discrimination in order to survive respondent’s motion to dismiss. In the Court of Appeals’ view, petitioner was thus required to allege in his complaint: (1) membership in a protected group; (2) qualification for the job in question; (3) an adverse employment action; and (4) circumstances that support an inference of discrimination.
The [requirement of a] prima facie case […], however, is an evidentiary standard, not a pleading requirement. […] [T]his Court has reiterated that the prima facie case relates to the employee’s burden of presenting evidence that raises an inference of discrimination.
This Court has never indicated that the requirements for establishing a prima facie case […] also apply to the pleading standard that plaintiffs must satisfy in order to survive a motion to dismiss. […]
In addition, under a notice pleading system, it is not appropriate to require a plaintiff to plead facts establishing a prima facie case because [this] framework does not apply in every employment discrimination case. For instance, if a plaintiff is able to produce direct evidence of discrimination, he may prevail without proving all the elements of a prima facie case. Under the Second Circuit’s heightened pleading standard, a plaintiff without direct evidence of discrimination at the time of his complaint must plead a prima facie case of discrimination, even though discovery might uncover such direct evidence. It thus seems incongruous to require a plaintiff, in order to survive a motion to dismiss, to plead more facts than he may ultimately need to prove to succeed on the merits if direct evidence of discrimination is discovered. […]
Furthermore, imposing the Court of Appeals’ heightened pleading standard in employment discrimination cases conflicts with Federal Rule of Civil Procedure 8(a)(2), which provides that a complaint must include only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Such a statement must simply “give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” Conley v. Gibson. This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims. […]
Rule 8(a)’s simplified pleading standard applies to all civil actions, with limited exceptions. Rule 9(b), for example, provides for greater particularity in all averments of fraud or mistake. This Court, however, has declined to extend such exceptions to other contexts. […]
Applying the relevant standard, petitioner’s complaint easily satisfies the requirements of Rule 8(a) because it gives respondent fair notice of the basis for petitioner’s claims. Petitioner alleged that he had been terminated on account of his national origin in violation of Title VII and on account of his age in violation of the ADEA. His complaint detailed the events leading to his termination, provided relevant dates, and included the ages and nationalities of at least some of the relevant persons involved with his termination. These allegations give respondent fair notice of what petitioner’s claims are and the grounds upon which they rest. In addition, they state claims upon which relief could be granted under Title VII and the ADEA.
Respondent argues that allowing lawsuits based on conclusory allegations of discrimination to go forward will burden the courts and encourage disgruntled employees to bring unsubstantiated suits. Whatever the practical merits of this argument, the Federal Rules do not contain a heightened pleading standard for employment discrimination suits. A requirement of greater specificity for particular claims is a result that “must be obtained by the process of amending the Federal Rules, and not by judicial interpretation.” Furthermore, Rule 8(a) establishes a pleading standard without regard to whether a claim will succeed on the merits. “Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test.” […]
Notes & Questions
What did Swierkiewicz allege in his complaint?
What does the Court mean when it says that the requirement of a prima facie case is “an evidentiary standard, not a pleading requirement”? Pleading requirements govern what a plaintiff must allege in a complaint; evidentiary standards govern how much and what kind of proof the plaintiff must adduce at trial.
Notice what the Court says is the appropriate way to change the Federal Rules of Civil Procedure: the formal amendment process. In that vein, consider Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163 (1993), which involved a civil-rights suit under 42 U.S.C. § 1983. The Court rejected the defendant’s argument that Rule 8 imposed a heightened-pleading requirement in such suits: “Perhaps if Rules 8 and 9 were rewritten today, claims […] under § 1983 might be subjected to the added specificity requirement of Rule 9(b). But that is a result which must be obtained by the process of amending the Federal Rules, and not by judicial interpretation. In the absence of such an amendment, federal courts and litigants must rely on summary judgment and control of discovery to weed out unmeritorious claims sooner rather than later.”
The rule of Conley v. Gibson, applied in Swierkiewicz, is no longer good law. As you read the next case, see if you can figure out the rule that replaced it.
Bell Atlantic Corp. v. Twombly
Justice SOUTER delivered the opinion of the Court.
[Federal antitrust law prohibits explicit agreements among competitors to charge a particular price (i.e., price fixing). A group of local telephone subscribers filed a class-action complaint against the major telephone companies, known in telecom jargon as “Incumbent Local Exchange Carriers” (ILECs). The complaint alleged that the ILECs conspired together to use their market power to exclude upstart Competitive Local Exchange Carriers (CLECs). It also alleged that the ILECs agreed not to compete with one another within their own territories.]
I
[…] The United States District Court for the Southern District of New York dismissed the complaint for failure to state a claim upon which relief can be granted. The District Court acknowledged that “plaintiffs may allege a conspiracy by citing instances of parallel business behavior that suggest an agreement,” but emphasized that “while ‘[c]ircumstantial evidence of consciously parallel behavior may have made heavy inroads into the traditional judicial attitude toward conspiracy[, …] “conscious parallelism” has not yet read conspiracy out of the Sherman Act entirely.’” Thus, the District Court understood that allegations of parallel business conduct, taken alone, do not state a claim under § 1; plaintiffs must allege additional facts that “ten[d] to exclude independent self-interested conduct as an explanation for defendants’ parallel behavior.” The District Court found plaintiffs’ allegations of parallel ILEC actions to discourage competition inadequate because “the behavior of each ILEC in resisting the incursion of CLECs is fully explained by the ILEC’s own interests in defending its individual territory.” As to the ILECs’ supposed agreement against competing with each other, the District Court found that the complaint does not “alleg[e] facts … suggesting that refraining from competing in other territories as CLECs was contrary to [the ILECs’] apparent economic interests, and consequently [does] not rais[e] an inference that [the ILECs’] actions were the result of a conspiracy.”
The Court of Appeals for the Second Circuit reversed, holding that the District Court tested the complaint by the wrong standard. It held that “plus factors are not required to be pleaded to permit an antitrust claim based on parallel conduct to survive dismissal.” Although the Court of Appeals took the view that plaintiffs must plead facts that “include conspiracy among the realm of ‘plausible’ possibilities in order to survive a motion to dismiss,” it then said that “to rule that allegations of parallel anticompetitive conduct fail to support a plausible conspiracy claim, a court would have to conclude that there is no set of facts that would permit a plaintiff to demonstrate that the particular parallelism asserted was the product of collusion rather than coincidence.”
We granted certiorari to address the proper standard for pleading an antitrust conspiracy through allegations of parallel conduct, and now reverse.
II
A
Because § 1 of the Sherman Act “does not prohibit [all] unreasonable restraints of trade … but only restraints effected by a contract, combination, or conspiracy,” “[t]he crucial question” is whether the challenged anticompetitive conduct “stem[s] from independent decision or from an agreement, tacit or express.” While a showing of parallel “business behavior is admissible circumstantial evidence from which the fact finder may infer agreement,” it falls short of “conclusively establish[ing] agreement or … itself constitut[ing] a Sherman Act offense.” Even “conscious parallelism,” a common reaction of “firms in a concentrated market [that] recogniz[e] their shared economic interests and their interdependence with respect to price and output decisions” is “not in itself unlawful.” […]
B
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.” 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, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).
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 be-speak 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. […]
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 […] “a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed.” See also […] Memorandum from Paul V. Niemeyer, Chair, Advisory Committee on Civil Rules, to Hon. Anthony J. Scirica, Chair, Committee on Rules of Practice and Procedure (May 11, 1999), 192 F.R.D. 354, 357 (2000) (reporting that discovery accounts for as much as 90 percent of litigation costs when discovery is actively employed). 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 do not, of course, dispute the requirement of plausibility and the need for something more than merely parallel behavior […], and their 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; 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. […] 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.
When we look for plausibility in this complaint, we agree with the District Court that plaintiffs’ claim of conspiracy in restraint of trade comes up short. To begin with, the complaint leaves no doubt that plaintiffs rest their § 1 claim on descriptions of parallel conduct and not on any independent allegation of actual agreement among the ILECs. Although in form a few stray statements speak directly of agreement, on fair reading these are merely legal conclusions resting on the prior allegations. […] The nub of the complaint, then, is the ILECs’ parallel behavior, consisting of steps to keep the CLECs out and manifest disinterest in becoming CLECs themselves, and its sufficiency turns on the suggestions raised by this conduct when viewed in light of common economic experience.
[…] [T]here is no reason to infer that the companies had agreed among themselves to do what was only natural anyway; so natural, in fact, that if alleging parallel decisions to resist competition were enough to imply an antitrust conspiracy, pleading a § 1 violation against almost any group of competing businesses would be a sure thing. […]
Plaintiffs’ second conspiracy theory rests on the competitive reticence among the ILECs themselves in the wake of the 1996 Act […]. […]
But [a lack of competition is] not suggestive of conspiracy, not if history teaches anything. In a traditionally unregulated industry with low barriers to entry, sparse competition among large firms dominating separate geographical segments of the market could very well signify illegal agreement, but here we have an obvious alternative explanation. In the decade preceding the 1996 Act and well before that, monopoly was the norm in telecommunications, not the exception. The ILECs were born in that world, doubtless liked the world the way it was, and surely knew the adage about him who lives by the sword. Hence, a natural explanation for the noncompetition alleged is that the former Government-sanctioned monopolists were sitting tight, expecting their neighbors to do the same thing.
In fact, the complaint itself gives reasons to believe that the ILECs would see their best interests in keeping to their old turf. Although the complaint says generally that the ILECs passed up “especially attractive business opportunit[ies]” by declining to compete as CLECs against other ILECs, Complaint ¶ 40, it does not allege that competition as CLECs was potentially any more lucrative than other opportunities being pursued by the ILECs during the same period, and the complaint is replete with indications that any CLEC faced nearly insurmountable barriers to profitability owing to the ILECs’ flagrant resistance to the network sharing requirements of the 1996 Act, id. ¶ 47. […]
Plaintiffs say that our analysis runs counter to Swierkiewicz […]. […] Even though Swierkiewicz’s pleadings “detailed the events leading to his termination, provided relevant dates, and included the ages and nationalities of at least some of the relevant persons involved with his termination,” the Court of Appeals dismissed his complaint for failing to allege certain additional facts that Swierkiewicz would need at the trial stage to support his claim in the absence of direct evidence of discrimination. We reversed on the ground that the Court of Appeals had impermissibly applied what amounted to a heightened pleading requirement by insisting that Swierkiewicz allege “specific facts” beyond those necessary to state his claim and the grounds showing entitlement to relief.
Here, in contrast, we do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed.
* * *
The judgment of the Court of Appeals for the Second Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Justice STEVENS, with whom Justice GINSBURG joins except as to Part IV, dissenting.
[…] [T]his is a case in which there is no dispute about the substantive law. If the defendants acted independently, their conduct was perfectly lawful. If, however, that conduct is the product of a horizontal agreement among potential competitors, it was unlawful. The plaintiffs have alleged such an agreement and, because the complaint was dismissed in advance of answer, the allegation has not even been denied. Why, then, does the case not proceed? Does a judicial opinion that the charge is not “plausible” provide a legally acceptable reason for dismissing the complaint? I think not.
Respondents’ amended complaint describes a variety of circumstantial evidence and makes the straightforward allegation that petitioners
“entered into a contract, combination or conspiracy to prevent competitive entry in their respective local telephone and/or high speed internet services markets and have agreed not to compete with one another and otherwise allocated customers and markets to one another.”
[Amended Complaint] ¶ 51.
The complaint explains that, contrary to Congress’ expectation when it enacted the 1996 Telecommunications Act, and consistent with their own economic self-interests, [the ILECs] have assiduously avoided infringing upon each other’s markets and have refused to permit nonincumbent competitors to access their networks. The complaint quotes […] the former chief executive officer of one such ILEC, as saying that competing in a neighboring ILEC’s territory “‘might be a good way to turn a quick dollar but that doesn’t make it right.’” Id., ¶ 42. Moreover, respondents allege that petitioners “communicate amongst themselves” through numerous industry associations. Id., ¶ 46. In sum, respondents allege that petitioners entered into an agreement that has long been recognized as a classic per se violation of the Sherman Act.
Under rules of procedure that have been well settled […], a judge ruling on a defendant’s motion to dismiss a complaint “must accept as true all of the factual allegations contained in the complaint.” Swierkiewicz. But instead of requiring knowledgeable executives […] to respond to these allegations by way of sworn depositions or other limited discovery—and indeed without so much as requiring petitioners to file an answer denying that they entered into any agreement—the majority permits immediate dismissal based on the assurances of company lawyers that nothing untoward was afoot. […]
The Court and petitioners’ legal team are no doubt correct that the parallel conduct alleged is consistent with the absence of any contract, combination, or conspiracy. But that conduct is also entirely consistent with the presence of the illegal agreement alleged in the complaint. And the charge that petitioners “agreed not to compete with one another” is not just one of “a few stray statements,” it is an allegation describing unlawful conduct. As such, the Federal Rules of Civil Procedure, our longstanding precedent, and sound practice mandate that the District Court at least require some sort of response from petitioners before dismissing the case.
Two practical concerns presumably explain the Court’s dramatic departure from settled procedural law. Private antitrust litigation can be enormously expensive, and there is a risk that jurors may mistakenly conclude that evidence of parallel conduct has proved that the parties acted pursuant to an agreement when they in fact merely made similar independent decisions. Those concerns merit careful case management, including strict control of discovery, careful scrutiny of evidence at the summary judgment stage, and lucid instructions to juries; they do not, however, justify the dismissal of an adequately pleaded complaint without even requiring the defendants to file answers denying a charge that they in fact engaged in collective decisionmaking. More importantly, they do not justify an interpretation of Federal Rule of Civil Procedure 12(b)(6) that seems to be driven by the majority’s appraisal of the plausibility of the ultimate factual allegation rather than its legal sufficiency.
I
[…] Under the relaxed pleading standards of the Federal Rules, the idea was not to keep litigants out of court but rather to keep them in. The merits of a claim would be sorted out during a flexible pretrial process and, as appropriate, through the crucible of trial. […]
II
[…] Consistent with the design of the Federal Rules, Conley’s “no set of facts” formulation permits outright dismissal only when proceeding to discovery or beyond would be futile. Once it is clear that a plaintiff has stated a claim that, if true, would entitle him to relief, matters of proof are appropriately relegated to other stages of the trial process. Today, however, in its explanation of a decision to dismiss a complaint that it regards as a fishing expedition, the Court scraps Conley’s “no set of facts” language. Concluding that the phrase has been “questioned, criticized, and explained away long enough,” the Court dismisses it as careless composition.
If Conley’s “no set of facts” language is to be interred, let it not be without a eulogy. That exact language, which the majority says has “puzzl[ed] the profession for 50 years,” has been cited as authority in a dozen opinions of this Court and four separate writings. In not one of those 16 opinions was the language “questioned,” “criticized,” or “explained away.” Indeed today’s opinion is the first by any Member of this Court to express any doubt as to the adequacy of the Conley formulation. Taking their cues from the federal courts, 26 States and the District of Columbia utilize as their standard for dismissal of a complaint the very language the majority repudiates: whether it appears “beyond doubt” that “no set of facts” in support of the claim would entitle the plaintiff to relief.
Petitioners have not requested that the Conley formulation be retired, nor have any of the six amici who filed briefs in support of petitioners. I would not rewrite the Nation’s civil procedure textbooks and call into doubt the pleading rules of most of its States without far more informed deliberation as to the costs of doing so. Congress has established a process—a rulemaking process—for revisions of that order.
[…] The “pleading standard” label the majority gives to what it reads into the Conley opinion—a statement of the permissible factual support for an adequately pleaded complaint—would not, therefore, have impressed the Conley Court itself. Rather, that Court would have understood the majority’s remodeling of its language to express an evidentiary standard, which the Conley Court had neither need nor want to explicate. Second, it is pellucidly clear that the Conley Court was interested in what a complaint must contain, not what it may contain. […]
[…] Conley’s statement that a complaint is not to be dismissed unless “no set of facts” in support thereof would entitle the plaintiff to relief is hardly “puzzling.” It reflects a philosophy that, unlike in the days of code pleading, separating the wheat from the chaff is a task assigned to the pretrial and trial process. Conley’s language, in short, captures the policy choice embodied in the Federal Rules and binding on the federal courts.
We have consistently reaffirmed that basic understanding of the Federal Rules in the half century since Conley. […]
Everything today’s majority says would […] make perfect sense if it were ruling on a Rule 56 motion for summary judgment and the evidence included nothing more than the Court has described. But it should go without saying in the wake of Swierkiewicz that a heightened production burden at the summary judgment stage does not translate into a heightened pleading burden at the complaint stage. The majority rejects the complaint in this case because—in light of the fact that the parallel conduct alleged is consistent with ordinary market behavior—the claimed conspiracy is “conceivable” but not “plausible.” I have my doubts about the majority’s assessment of the plausibility of this alleged conspiracy. But even if the majority’s speculation is correct, its “plausibility” standard is irreconcilable with Rule 8 and with our governing precedents. [F]ear of the burdens of litigation does not justify factual conclusions supported only by lawyers’ arguments rather than sworn denials or admissible evidence.
[…]
III
[…] [T]he theory on which the Court permits dismissal is that, so far as the Federal Rules are concerned, no agreement has been alleged at all. This is a mind-boggling conclusion.
[…] I am […] willing to entertain the majority’s belief that any agreement among the companies was unlikely. But the plaintiffs allege in three places in their complaint, ¶¶ 4, 51, 64, that the ILECs did in fact agree both to prevent competitors from entering into their local markets and to forgo competition with each other. And as the Court recognizes, at the motion to dismiss stage, a judge assumes “that all the allegations in the complaint are true (even if doubtful in fact).”
The majority circumvents this obvious obstacle to dismissal by pretending that it does not exist. The Court admits that “in form a few stray statements in the complaint speak directly of agreement,” but disregards those allegations by saying that “on fair reading these are merely legal conclusions resting on the prior allegations” of parallel conduct. The Court’s dichotomy between factual allegations and “legal conclusions” is the stuff of a bygone era. That distinction was a defining feature of code pleading, but was conspicuously abolished when the Federal Rules were enacted in 1938. […]
[…] To be clear, if I had been the trial judge in this case, I would not have permitted the plaintiffs to engage in massive discovery based solely on the allegations in this complaint. On the other hand, I surely would not have dismissed the complaint without requiring the defendants to answer the charge that they “have agreed not to compete with one another and otherwise allocated customers and markets to one another.” ¶ 51, App. 27. Even a sworn denial of that charge would not justify a summary dismissal without giving the plaintiffs the opportunity to take depositions from […] at least one responsible executive representing each of the […] defendants.
[…]
IV
[…] Whether the Court’s actions will benefit only defendants in antitrust treble-damages cases, or whether its test for the sufficiency of a complaint will inure to the benefit of all civil defendants, is a question that the future will answer. But that the Court has announced a significant new rule that does not even purport to respond to any congressional command is glaringly obvious.
The transparent policy concern that drives the decision is the interest in protecting antitrust defendants—who in this case are some of the wealthiest corporations in our economy—from the burdens of pretrial discovery. Even if it were not apparent that the legal fees petitioners have incurred in arguing the merits of their Rule 12(b) motion have far exceeded the cost of limited discovery, or that those discovery costs would burden respondents as well as petitioners, that concern would not provide an adequate justification for this law-changing decision. For in the final analysis it is only a lack of confidence in the ability of trial judges to control discovery, buttressed by appellate judges’ independent appraisal of the plausibility of profoundly serious factual allegations, that could account for this stark break from precedent.
[…]
Notes & Questions
Did the Twombly Court overrule Conley v. Gibson?
How much of Twombly was about antitrust law, and how much was about Rule 12(b)(6) more generally?
It is often said that the Federal Rules of Civil Procedure are transsubstantive—meaning they apply equally to all cases, regardless of their subject matter. The next case illustrates well the power of the Rules’ transsubstantivity.
Ashcroft v. Iqbal
JUSTICE KENNEDY delivered the opinion of the Court.
Javaid Iqbal (hereinafter respondent) is a citizen of Pakistan and a Muslim. In the wake of the September 11, 2001, terrorist attacks he was arrested in the United States on criminal charges and detained by federal officials. Respondent claims he was deprived of various constitutional protections while in federal custody. To redress the alleged deprivations, respondent filed a complaint against numerous federal officials, including John Ashcroft, the former Attorney General of the United States, and Robert Mueller, the Director of the Federal Bureau of Investigation (FBI). Ashcroft and Mueller are the petitioners in the case now before us. As to these two petitioners, the complaint alleges that they adopted an unconstitutional policy that subjected respondent to harsh conditions of confinement on account of his race, religion, or national origin.
In the District Court petitioners raised the defense of qualified immunity and moved to dismiss the suit, contending the complaint was not sufficient to state a claim against them. The District Court denied the motion to dismiss, concluding the complaint was sufficient to state a claim despite petitioners’ official status at the times in question. Petitioners brought an interlocutory appeal in the Court of Appeals for the Second Circuit. The court, without discussion, assumed it had jurisdiction over the order denying the motion to dismiss; and it affirmed the District Court’s decision.
Respondent’s account of his prison ordeal could, if proved, demonstrate unconstitutional misconduct by some governmental actors. But the allegations and pleadings with respect to these actors are not before us here. This case instead turns on a narrower question: Did respondent, as the plaintiff in the District Court, plead factual matter that, if taken as true, states a claim that petitioners deprived him of his clearly established constitutional rights. […]
I
Following the 2001 attacks, the FBI and other entities within the Department of Justice began an investigation of vast reach to identify the assailants and prevent them from attacking anew. The FBI dedicated more than 4,000 special agents and 3,000 support personnel to the endeavor. By September 18 “the FBI had received more than 96,000 tips or potential leads from the public.”
In the ensuing months the FBI questioned more than 1,000 people with suspected links to the attacks in particular or to terrorism in general. Of those individuals, some 762 were held on immigration charges; and a 184-member subset of that group was deemed to be “of ‘high interest’” to the investigation. The high-interest detainees were held under restrictive conditions designed to prevent them from communicating with the general prison population or the outside world.
Respondent was one of the detainees. According to his complaint, in November 2001 agents of the FBI and Immigration and Naturalization Service arrested him on charges of fraud in relation to identification documents and conspiracy to defraud the United States. Pending trial for those crimes, respondent was housed at the Metropolitan Detention Center (MDC) in Brooklyn, New York. Respondent was designated a person “of high interest” to the September 11 investigation and in January 2002 was placed in a section of the MDC known as the Administrative Maximum Special Housing Unit (ADMAX SHU). As the facility’s name indicates, the ADMAX SHU incorporates the maximum security conditions allowable under Federal Bureau of Prisons regulations. ADMAX SHU detainees were kept in lockdown 23 hours a day, spending the remaining hour outside their cells in handcuffs and leg irons accompanied by a four-officer escort.
* [Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971), recognized a cause of action against federal officers for violations of Constitutional rights. Such claims are now colloquially known as “Bivens claims.” –Ed.]
Respondent pleaded guilty to the criminal charges, served a term of imprisonment, and was removed to his native Pakistan. He then filed a Bivens* action in the United States District Court for the Eastern District of New York against 34 current and former federal officials […]. The defendants range from the correctional officers who had day-to-day contact with respondent during the term of his confinement, to the wardens of the MDC facility, all the way to petitioners—officials who were at the highest level of the federal law enforcement hierarchy.
[…] The allegations against petitioners are the only ones relevant here. The complaint contends that petitioners designated respondent a person of high interest on account of his race, religion, or national origin, in contravention of the First and Fifth Amendments to the Constitution. The complaint alleges that “the [FBI], under the direction of Defendant Mueller, arrested and detained thousands of Arab Muslim men … as part of its investigation of the events of September 11.” Id., ¶ 47. It further alleges that “[t]he policy of holding post-September-11th detainees in highly restrictive conditions of confinement until they were ‘cleared’ by the FBI was approved by Defendants Ashcroft and Mueller in discussions in the weeks after September 11, 2001.” Id., ¶ 69. Lastly, the complaint posits that petitioners “each knew of, condoned, and willfully and maliciously agreed to subject” respondent to harsh conditions of confinement “as a matter of policy, solely on account of [his] religion, race, and/or national origin and for no legitimate penological interest.” Id., ¶ 96. The pleading names Ashcroft as the “principal architect” of the policy, id., ¶ 10, and identifies Mueller as “instrumental in [its] adoption, promulgation, and implementation,” id., ¶ 11.
Petitioners moved to dismiss the complaint for failure to state sufficient allegations to show their own involvement in clearly established unconstitutional conduct. The District Court denied their motion. Accepting all of the allegations in respondent’s complaint as true, the court held that “it cannot be said that there [is] no set of facts on which [respondent] would be entitled to relief as against” petitioners. […] While [this] appeal was pending, this Court decided Bell Atlantic Corp. v. Twombly, which discussed the standard for evaluating whether a complaint is sufficient to survive a motion to dismiss.
The Court of Appeals considered Twombly’s applicability to this case. […] It concluded that Twombly called for a “flexible ‘plausibility standard,’ which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible.” The court found that petitioners’ appeal did not present one of “those contexts” requiring amplification. As a consequence, it held respondent’s pleading adequate to allege petitioners’ personal involvement in discriminatory decisions which, if true, violated clearly established constitutional law.
[…]
IV
A
We turn to respondent’s complaint. Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” As the Court held in Twombly, the pleading standard Rule 8 announces does not require “detailed factual allegations,” but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.”
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” 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. The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’”
Two 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. Rule 8 marks a notable and generous departure from the hypertechnical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be 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).
In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.
Our decision in Twombly illustrates the two-pronged approach. There, we considered the sufficiency of a complaint alleging that incumbent telecommunications providers had entered an agreement not to compete and to forestall competitive entry, in violation of the Sherman Act. Recognizing that § 1 enjoins only anticompetitive conduct “effected by a contract, combination, or conspiracy,” the plaintiffs in Twombly flatly pleaded that the defendants “ha[d] entered into a contract, combination or conspiracy to prevent competitive entry … and ha[d] agreed not to compete with one another.” The complaint also alleged that the defendants’ “parallel course of conduct … to prevent competition” and inflate prices was indicative of the unlawful agreement alleged.
The Court held the plaintiffs’ complaint deficient under Rule 8. In doing so it first noted that the plaintiffs’ assertion of an unlawful agreement was a “‘legal conclusion’” and, as such, was not entitled to the assumption of truth. Had the Court simply credited the allegation of a conspiracy, the plaintiffs would have stated a claim for relief and been entitled to proceed perforce. The Court next addressed the “nub” of the plaintiffs’ complaint—the well-pleaded, nonconclusory factual allegation of parallel behavior—to determine whether it gave rise to a “plausible suggestion of conspiracy.” Acknowledging that parallel conduct was consistent with an unlawful agreement, the Court nevertheless concluded that it did not plausibly suggest an illicit accord because it was not only compatible with, but indeed was more likely explained by, lawful, unchoreographed free-market behavior. Because the well-pleaded fact of parallel conduct, accepted as true, did not plausibly suggest an unlawful agreement, the Court held the plaintiffs’ complaint must be dismissed.
B
Under Twombly’s construction of Rule 8, we conclude that respondent’s complaint has not “nudged [his] claims” of invidious discrimination “across the line from conceivable to plausible.”
We begin our analysis by identifying the allegations in the complaint that are not entitled to the assumption of truth. Respondent pleads that petitioners “knew of, condoned, and willfully and maliciously agreed to subject [him]” to harsh conditions of confinement “as a matter of policy, solely on account of [his] religion, race, and/or national origin and for no legitimate penological interest.” Complaint ¶ 96. The complaint alleges that Ashcroft was the “principal architect” of this invidious policy, id., ¶ 10, and that Mueller was “instrumental” in adopting and executing it, id., ¶ 11. These 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, namely, that petitioners adopted a policy “‘because of,’ not merely ‘in spite of,’ its adverse effects upon an identifiable group.” As such, the allegations are conclusory and not entitled to be assumed true. To be clear, we do not reject these bald allegations on the ground that they are unrealistic or nonsensical. We do not so characterize them any more than the Court in Twombly rejected the plaintiffs’ express allegation of a “‘contract, combination or conspiracy to prevent competitive entry,’” because it thought that claim too chimerical to be maintained. It is the conclusory nature of respondent’s allegations, rather than their extravagantly fanciful nature, that disentitles them to the presumption of truth.
We next consider the factual allegations in respondent’s complaint to determine if they plausibly suggest an entitlement to relief. The complaint alleges that “the [FBI], under the direction of Defendant Mueller, arrested and detained thousands of Arab Muslim men … as part of its investigation of the events of September 11.” Complaint ¶ 47. It further claims that “[t]he policy of holding post-September-11th detainees in highly restrictive conditions of confinement until they were ‘cleared’ by the FBI was approved by Defendants Ashcroft and Mueller in discussions in the weeks after September 11, 2001.” Id., ¶ 69. Taken as true, these allegations are consistent with petitioners’ purposefully designating detainees “of high interest” because of their race, religion, or national origin. But given more likely explanations, they do not plausibly establish this purpose.
The September 11 attacks were perpetrated by 19 Arab Muslim hijackers who counted themselves members in good standing of al Qaeda, an Islamic fundamentalist group. Al Qaeda was headed by another Arab Muslim—Osama bin Laden—and composed in large part of his Arab Muslim disciples. It should come as no surprise that a legitimate policy directing law enforcement to arrest and detain individuals because of their suspected link to the attacks would produce a disparate, incidental impact on Arab Muslims, even though the purpose of the policy was to target neither Arabs nor Muslims. On the facts respondent alleges the arrests Mueller oversaw were likely lawful and justified by his nondiscriminatory intent to detain aliens who were illegally present in the United States and who had potential connections to those who committed terrorist acts. As between that “obvious alternative explanation” for the arrests, Twombly, and the purposeful, invidious discrimination respondent asks us to infer, discrimination is not a plausible conclusion.
But even if the complaint’s well-pleaded facts give rise to a plausible inference that respondent’s arrest was the result of unconstitutional discrimination, that inference alone would not entitle respondent to relief. It is important to recall that respondent’s complaint challenges neither the constitutionality of his arrest nor his initial detention in the MDC. Respondent’s constitutional claims against petitioners rest solely on their ostensible “policy of holding post-September-11th detainees” in the ADMAX SHU once they were categorized as “of high interest.” Complaint ¶ 69. To prevail on that theory, the complaint must contain facts plausibly showing that petitioners purposefully adopted a policy of classifying post-September-11 detainees as “of high interest” because of their race, religion, or national origin.
This the complaint fails to do. Though respondent alleges that various other defendants, who are not before us, may have labeled him a person “of high interest” for impermissible reasons, his only factual allegation against petitioners accuses them of adopting a policy approving “restrictive conditions of confinement” for post-September-11 detainees until they were “‘cleared’ by the FBI.” Accepting the truth of that allegation, the complaint does not show, or even intimate, that petitioners purposefully housed detainees in the ADMAX SHU due to their race, religion, or national origin. All it plausibly suggests is that the Nation’s top law enforcement officers, in the aftermath of a devastating terrorist attack, sought to keep suspected terrorists in the most secure conditions available until the suspects could be cleared of terrorist activity. Respondent does not argue, nor can he, that such a motive would violate petitioners’ constitutional obligations. He would need to allege more by way of factual content to “nudg[e]” his claim of purposeful discrimination “across the line from conceivable to plausible.” Twombly.
[…] It is important to note, however, that we express no opinion concerning the sufficiency of respondent’s complaint against the defendants who are not before us. Respondent’s account of his prison ordeal alleges serious official misconduct that we need not address here. Our decision is limited to the determination that respondent’s complaint does not entitle him to relief from petitioners.
C
Respondent offers three arguments that bear on our disposition of his case, but none is persuasive.
1
Respondent first says that our decision in Twombly should be limited to pleadings made in the context of an antitrust dispute. This argument is not supported by Twombly and is incompatible with the Federal Rules of Civil Procedure. Though Twombly determined the sufficiency of a complaint sounding in antitrust, the decision was based on our interpretation and application of Rule 8. That Rule in turn governs the pleading standard “in all civil actions and proceedings in the United States district courts.” Fed. Rule Civ. Proc. 1. Our decision in Twombly expounded the pleading standard for “all civil actions,” and it applies to antitrust and discrimination suits alike.
2
Respondent next implies that our construction of Rule 8 should be tempered where, as here, the Court of Appeals has “instructed the district court to cabin discovery in such a way as to preserve” petitioners’ defense of qualified immunity “as much as possible in anticipation of a summary judgment motion.” We have held, however, that the question presented by a motion to dismiss a complaint for insufficient pleadings does not turn on the controls placed upon the discovery process.
Our rejection of the careful-case-management approach is especially important in suits where Government-official defendants are entitled to assert the defense of qualified immunity. The basic thrust of the qualified-immunity doctrine is to free officials from the concerns of litigation, including “avoidance of disruptive discovery.” There are serious and legitimate reasons for this. If a Government official is to devote time to his or her duties, and to the formulation of sound and responsible policies, it is counterproductive to require the substantial diversion that is attendant to participating in litigation and making informed decisions as to how it should proceed. Litigation, though necessary to ensure that officials comply with the law, exacts heavy costs in terms of efficiency and expenditure of valuable time and resources that might otherwise be directed to the proper execution of the work of the Government. […]
It is no answer to these concerns to say that discovery for petitioners can be deferred while pretrial proceedings continue for other defendants. It is quite likely that, when discovery as to the other parties proceeds, it would prove necessary for petitioners and their counsel to participate in the process to ensure the case does not develop in a misleading or slanted way that causes prejudice to their position. Even if petitioners are not yet themselves subject to discovery orders, then, they would not be free from the burdens of discovery.
[…] Because respondent’s complaint is deficient under Rule 8, he is not entitled to discovery, cabined or otherwise.
3
Respondent finally maintains that the Federal Rules expressly allow him to allege petitioners’ discriminatory intent “generally,” which he equates with a conclusory allegation (citing Fed. Rule Civ. Proc. 9). It follows, respondent says, that his complaint is sufficiently well pleaded because it claims that petitioners discriminated against him “on account of [his] religion, race, and/or national origin and for no legitimate penological interest.” Complaint ¶ 96. Were we required to accept this allegation as true, respondent’s complaint would survive petitioners’ motion to dismiss. But the Federal Rules do not require courts to credit a complaint’s conclusory statements without reference to its factual context.
It is true that 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.” But “generally” is a relative term. In the context of Rule 9, it is to be compared to the particularity requirement applicable to fraud or mistake. Rule 9 merely excuses a party from pleading discriminatory intent under an elevated pleading standard. It does not give him license to evade the less rigid—though still operative—strictures of Rule 8. […]
V
We hold that respondent’s complaint fails to plead sufficient facts to state a claim for purposeful and unlawful discrimination against petitioners. The Court of Appeals should decide in the first instance whether to remand to the District Court so that respondent can seek leave to amend his deficient complaint.
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Justice SOUTER, with whom Justice STEVENS, Justice GINSBURG, and Justice BREYER join, dissenting.
[…] Ashcroft and Mueller admit they are liable for their subordinates’ conduct if they “had actual knowledge of the assertedly discriminatory nature of the classification of suspects as being ‘of high interest’ and they were deliberately indifferent to that discrimination.” Iqbal alleges that after the September 11 attacks the FBI “arrested and detained thousands of Arab Muslim men,” Complaint ¶ 47, that many of these men were designated by high-ranking FBI officials as being “‘of high interest,’” id., ¶¶ 48, 50, and that in many cases, including Iqbal’s, this designation was made “because of the race, religion, and national origin of the detainees, and not because of any evidence of the detainees’ involvement in supporting terrorist activity,” id., ¶ 49. The complaint further alleges that Ashcroft was the “principal architect of the policies and practices challenged,” id., ¶ 10, and that Mueller “was instrumental in the adoption, promulgation, and implementation of the policies and practices challenged,” id., ¶ 11. According to the complaint, Ashcroft and Mueller “knew of, condoned, and willfully and maliciously agreed to subject [Iqbal] to these conditions of confinement as a matter of policy, solely on account of [his] religion, race, and/or national origin and for no legitimate penological interest.” Id., ¶ 96. The complaint thus alleges, at a bare minimum, that Ashcroft and Mueller knew of and condoned the discriminatory policy their subordinates carried out. Actually, the complaint goes further in alleging that Ashcroft and Mueller affirmatively acted to create the discriminatory detention policy. If these factual allegations are true, Ashcroft and Mueller were, at the very least, aware of the discriminatory policy being implemented and deliberately indifferent to it.
Ashcroft and Mueller argue that these allegations fail to satisfy the “plausibility standard” of Twombly. They contend that Iqbal’s claims are implausible because such high-ranking officials “tend not to be personally involved in the specific actions of lower-level officers down the bureaucratic chain of command.” But this response bespeaks a fundamental misunderstanding of the enquiry that Twombly demands. Twombly does not require a court at the motion-to-dismiss stage to consider whether the factual allegations are probably true. We made it clear, on the contrary, that a court must take the allegations as true, no matter how skeptical the court may be. The sole exception to this rule lies with allegations that are sufficiently fantastic to defy reality as we know it: claims about little green men, or the plaintiff’s recent trip to Pluto, or experiences in time travel. That is not what we have here.
[…] I do not understand the majority to disagree with this understanding of “plausibility” under Twombly. Rather, the majority discards the allegations discussed above with regard to Ashcroft and Mueller as conclusory, and is left considering only two statements in the complaint: that “the [FBI], under the direction of Defendant Mueller, arrested and detained thousands of Arab Muslim men … as part of its investigation of the events of September 11,” Complaint ¶ 47, and that “[t]he policy of holding post-September-11th detainees in highly restrictive conditions of confinement until they were ‘cleared’ by the FBI was approved by Defendants Ashcroft and Mueller in discussions in the weeks after September 11, 2001,” id., ¶ 69. I think the majority is right in saying that these allegations suggest only that Ashcroft and Mueller “sought to keep suspected terrorists in the most secure conditions available until the suspects could be cleared of terrorist activity,” and that this produced “a disparate, incidental impact on Arab Muslims.” And I agree that the two allegations selected by the majority, standing alone, do not state a plausible entitlement to relief for unconstitutional discrimination.
But these allegations do not stand alone as the only significant, nonconclusory statements in the complaint, for the complaint contains many allegations linking Ashcroft and Mueller to the discriminatory practices of their subordinates. […]
The majority says that these are “bare assertions” that, “much like the pleading of conspiracy in Twombly, amount to nothing more than a ‘formulaic recitation of the elements’ of a constitutional discrimination claim” and therefore are “not entitled to be assumed true.” The fallacy of the majority’s position, however, lies in looking at the relevant assertions in isolation. The complaint contains specific allegations that, in the aftermath of the September 11 attacks, the Chief of the FBI’s International Terrorism Operations Section and the Assistant Special Agent in Charge for the FBI’s New York Field Office implemented a policy that discriminated against Arab Muslim men, including Iqbal, solely on account of their race, religion, or national origin. See Complaint ¶¶ 47–53. Viewed in light of these subsidiary allegations, the allegations singled out by the majority as “conclusory” are no such thing. Iqbal’s claim is not that Ashcroft and Mueller “knew of, condoned, and willfully and maliciously agreed to subject” him to a discriminatory practice that is left undefined; his allegation is that “they knew of, condoned, and willfully and maliciously agreed to subject” him to a particular, discrete, discriminatory policy detailed in the complaint. Iqbal does not say merely that Ashcroft was the architect of some amorphous discrimination, or that Mueller was instrumental in an ill-defined constitutional violation; he alleges that they helped to create the discriminatory policy he has described. Taking the complaint as a whole, it gives Ashcroft and Mueller “‘fair notice of what the … claim is and the grounds upon which it rests.’” […]
I respectfully dissent.
Justice BREYER, dissenting.
I agree with Justice Souter and join his dissent. I write separately to point out that, like the Court, I believe it important to prevent unwarranted litigation from interfering with “the proper execution of the work of the Government.” But I cannot find in that need adequate justification for the Court’s interpretation of Bell Atlantic Corp. v. Twombly and Federal Rule of Civil Procedure 8. The law, after all, provides trial courts with other legal weapons designed to prevent unwarranted interference. As the Second Circuit explained, where a Government defendant asserts a qualified immunity defense, a trial court, responsible for managing a case and “mindful of the need to vindicate the purpose of the qualified immunity defense,” can structure discovery in ways that diminish the risk of imposing unwarranted burdens upon public officials. A district court, for example, can begin discovery with lower level Government defendants before determining whether a case can be made to allow discovery related to higher level Government officials. Neither the briefs nor the Court’s opinion provides convincing grounds for finding these alternative case-management tools inadequate, either in general or in the case before us. For this reason, as well as for the independently sufficient reasons set forth in Justice Souter’s opinion, I would affirm the Second Circuit.
Notes & Questions
Why did Iqbal’s complaint fail to satisfy Rule 8(a)? The Court built on its opinion in Twombly and announced a two-step test for evaluating the sufficiency of complaints at the motion-to-dismiss stage:
First, disregard all allegations that are merely “conclusory.” Which of Iqbal’s allegations were disregarded in this way?
Second, evaluate the remaining allegations to determine whether, if accepted as true, they “plausibly” give rise to an inference that the defendant is liable. Which parts of Iqbal’s complaint (or inferences drawn therefrom) did the Court conclude were implausible?
Recall Justice Stevens’s dissent in Twombly, where he criticized the majority in that case for “rewrit[ing] the Nation’s civil procedure textbooks” when “Congress has established a process—a rulemaking process—for revisions of that order.” Does Iqbal (taken together with Twombly) effectively amend the standards for adequate pleading under Rule 8?
Notice who wrote the principal dissent in Iqbal: Justice Souter, who also wrote the majority opinion in Twombly. Much of the discussion in Iqbal is about what exactly the Court held in Iqbal. Does it make sense that a majority of the Court could disagree with the author of the majority opinion in Twombly about what it held?
How big of a deal is the pleading revolution heralded by Twombly and Iqbal? Scholars disagree as an empirical matter about how big the impact has been. One study estimated that approximately 20% of plaintiffs will have more difficulty satisfying the new standards than they would have under the rule of Conley v. Gibson. See Jonah B. Gelbach, Locking the Doors to Discovery? Assessing the Effects of Twombly and Iqbal on Access to Discovery, 121 Yale L.J. 2270, 2277–78 (2012).
Will certain types of plaintiffs have a harder or easier time satisfying Twombly and Iqbal’s standards? Consider how difficult you think it might be to allege plausible claims for: breach of contract; employment discrimination; assault; trespass; and patent infringement.
What tradeoffs are embedded in the choice between the rule of Conley v. Gibson and the rule of Ashcroft v. Iqbal? Which rule do you think is superior? Why?
Read Rule 9(b). Consider how and why it differs from Rule 8(a), then read the next case, which illustrates Rule 9(b) in practice.
Stradford v. Zurich Insurance Co.
BUCHWALD, District J.
Dr. Stradford[, the plaintiff,] is a dentist who maintains an office in Staten Island, New York. […] Defendants are affiliated corporate insurers. Northern issued a policy of insurance […] on Dr. Stradford’s office effective August 18, 1999, thereby insuring the premises until August 19, 2000. During this term, Dr. Stradford apparently failed to pay the required insurance premiums, and Northern cancelled the Policy from October 10, 1999 to December 13, 1999. On or about December 6, 1999, however, Dr. Stradford submitted a “no claims” letter certifying that he had no losses from October 19, 1999, to that date. He also apparently resumed paying the premiums, and National reinstated the Policy on or about December 14, 1999. Dr. Stradford was notified of the reinstatement on or about January 9, 2000.
Less than ten days later, Dr. Stradford filed a claim on the Policy. Dr. Stradford notified Northern that, “[o]n January 17, 2000, [he] returned to his office from his vacation and found water dripping from frozen pipes and extensive water damage to his personal property and the interior of his office.” He further notified Northern that certain dental implants, worth more than $100,000, which had apparently been stored in his office, “had become wet and [therefore] ruined.” Dr. Stradford submitted a claim under the Policy for $151,154.74, and Northern made payments to Dr. Stradford in this amount. After receiving these payments, Dr. Stradford “submitted a revised claim under the Policy totaling $1,385,456.70, consisting of $168,000.00 for property damage, and a business interruption claim of $1,209,456 .70.”
Northern continued to investigate Dr. Stradford’s claimed loss[ and ultimately concluded that the damage occurred during the time when the policy’s coverage had lapsed.]
Slightly less than one year later, plaintiffs commenced this suit seeking $1,385,456.70 on the Policy, less the $151,154.74 already paid, or $1,234,301.96. Defendants counterclaimed, asserting, inter alia, that Dr. Stradford “knowingly and willfully devised a scheme and artifice … to defraud defendants and obtain money by false pretenses and representations,” and seeking the return of the $151,154.74, punitive damages, and investigation expenses. Dr. Stradford now moves, inter alia, to dismiss those counterclaims that are based in fraud for failure to state their claims with sufficient “particularity” under Rule 9(b), and to dismiss certain other counterclaims for failure to state a claim.
Rule 9(b) provides, “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.” Here, defendants’ counterclaims succeed in alleging facts that “give rise to a strong inference of fraudulent intent” as required by the second sentence of Rule 9(b). The timing of Dr. Stradford’s claim, just ten days after the Policy was reinstated, his alleged refusal to cooperate with [defendants’] investigation of his claim, and the size of his claim can fairly be said to satisfy this requirement.
We find, however, that the counterclaims do not satisfy the first sentence of Rule 9(b), which requires that the “time, place, and nature of the [alleged] misrepresentations” be disclosed to the party accused of fraud. Here, defendants’ counterclaims simply fail to identify the statement made by Dr. Stradford that they claim to be false. Thus, it is unclear from the face of the counterclaims whether defendants assert that Dr. Stradford’s claimed losses are improperly inflated, that Dr. Stradford’s office never even flooded, or that the offices flooded, but not during the term of the Policy. In essence, defendants claim that Dr. Stradford lied, but fail to identify the lie.
The “primary purpose” of Rule 9(b) is to afford a litigant accused of fraud “fair notice of the [ ] claim and the factual ground upon which it is based.” Here, defendants’ counterclaims fail to provide Dr. Stradford with fair notice of precisely which statement, or which aspect of his claim on the Policy, they allege to be false. The counterclaims are therefore insufficient under Rule 9(b), and must be dismissed.
Nevertheless, it is the usual practice in this Circuit, when there was no prior opportunity to replead, to grant a litigant who has suffered a dismissal under Rule 9(b) leave to amend so that he may conform his pleadings to the Rule. Indeed, defendants have already moved for leave to amend and submitted a proposed amended pleading. This pleading cures the defects we found in the counterclaims dismissed above because it makes clear that defendants allege that Dr. Stradford’s office was flooded at a time when he permitted the Policy to lapse, and that Dr. Stradford “misrepresented the date of the loss in an effort to bring the date of loss within the coverage period.” Accordingly, we hereby grant defendants leave to amend their counterclaims. […]
Notes & Questions
Notice the differences in how demanding Rules 8(a) and 9(b) are. What more does Rule 9 require of plaintiffs alleging fraud or mistake?
Notice also that the fraud allegations were a counterclaim raised by the defendants in response to the plaintiffs’ complaint. Such counterclaims are authorized by Federal Rule 13. You should further recognize that, in response to defendants’ counterclaims, the plaintiffs filed a motion to dismiss. And in the context of that motion, the defendants/counterclaim-plaintiffs must satisfy the pleading requirements of Rule 9(b).
Consider that the district court allowed the defendants to amend and refile their counterclaims to provide the requisite specificity under Rule 9. When should courts allow amendment? When should they not?
Dr. Stradford’s alleged conduct raises a tricky question about legal ethics: can a plaintiff allege anything he wants—including facts he has made up—in his complaint? The next case tackles that question, which is addressed by, among other ethical rules, Federal Rule 11.
4.3 Ethical Limitations
Christian v. Mattel, Inc.
McKEOWN, Circuit J.
It is difficult to imagine that the Barbie doll, so perfect in her sculpture and presentation, and so comfortable in every setting, from “California girl” to “Chief Executive Officer Barbie,” could spawn such acrimonious litigation and such egregious conduct on the part of her challenger. In her wildest dreams, Barbie could not have imagined herself in the middle of Rule 11 proceedings. But the intersection of copyrights on Barbie sculptures and the scope of Rule 11 is precisely what defines this case.
[Plaintiff’s attorney] James Hicks appeals from a district court order requiring him, pursuant to Federal Rule of Civil Procedure 11, to pay Mattel, Inc. $501,565 in attorneys’ fees that it incurred in defending against what the district court determined to be a frivolous action. […]
Mattel is a toy company that is perhaps best recognized as the manufacturer of the world-famous Barbie doll. Since Barbie’s creation in 1959, Mattel has outfitted her in fashions and accessories that have evolved over time. In perhaps the most classic embodiment, Barbie is depicted as a slender-figured doll with long blonde hair and blue eyes. Mattel has sought to protect its intellectual property by registering various Barbie-related copyrights, including copyrights protecting the doll’s head sculpture. Mattel has vigorously litigated against putative infringers.
In 1990, Claudene Christian, then an undergraduate student at the University of Southern California, decided to create and market a collegiate cheerleader doll. The doll, which the parties refer to throughout their papers as “Claudene,” had blonde hair and blue eyes and was outfitted to resemble a USC cheerleader.
[…] Christian […] retained Hicks as […] counsel and filed a federal court action against Mattel. In the complaint, which Hicks signed, Christian alleged that Mattel obtained a copy of the copyrighted Claudene doll in 1996, the year of its creation, and then infringed its overall appearance, including its face paint, by developing a new Barbie line called “Cool Blue” that was substantially similar to Claudene. Christian sought damages in the amount of $2.4 billion and various forms of injunctive relief. […]
Two months after the complaint was filed, Mattel moved for summary judgment. In support of its motion, Mattel proffered evidence that the Cool Blue Barbie doll contained a 1991 copyright notice on the back of its head, indicating that it predated Claudene’s head sculpture copyright by approximately six years. Mattel therefore argued that Cool Blue Barbie could not as a matter of law infringe Claudene’s head sculpture copyright. […]
At a follow-up counsel meeting required by a local rule, Mattel’s counsel attempted to convince Hicks that his complaint was frivolous. During the videotaped meeting, they presented Hicks with copies of various Barbie dolls that not only had been created prior to 1996 (the date of Claudene’s creation), but also had copyright designations on their heads that pre-dated Claudene’s creation. Additionally, Mattel’s counsel noted that the face paint on some of the earlier-created Barbie dolls was virtually identical to that used on Claudene. Hicks declined Mattel’s invitation to inspect the dolls and, later during the meeting, hurled them in disgust from a conference table.
Having been unsuccessful in convincing Hicks to dismiss Christian’s action voluntarily, Mattel served Hicks with a motion for Rule 11 sanctions. In its motion papers, Mattel argued, among other things, that Hicks had signed and filed a frivolous complaint based on a legally meritless theory that Mattel’s prior-created head sculptures infringed Claudene’s 1997 copyright. Hicks declined to withdraw the complaint during the 21-day safe harbor period provided by Rule 11, and Mattel filed its motion.
[…] The district court granted Mattel’s motions for summary judgment and Rule 11 sanctions. The court ruled that Mattel did not infringe the 1997 Claudene copyright because it could not possibly have accessed the Claudene doll at the time it created the head sculptures of the Cool Blue (copyrighted in 1991) and Virginia Tech (copyrighted in 1976) Barbies. […]
As for Mattel’s Rule 11 motion, the district court found that Hicks had “filed a meritless claim against defendant Mattel. A reasonable investigation by Mr. Hicks would have revealed that there was no factual foundation for [Christian’s] copyright claim.” Indeed, the district court noted that Hicks needed to do little more than examine “the back of the heads of the Barbie dolls he claims were infringing,” because such a perfunctory inquiry would have revealed “the pre-1996 copyright notices on the Cool Blue and [Virginia Tech] Barbie doll heads.”
Additionally, the district court made other findings regarding Hicks’ misconduct in litigating against Mattel, all of which demonstrated that his conduct fell “below the standards of attorneys practicing in the Central District of California.” The district court singled out the following conduct:
Sanctions imposed by the district court against Hicks in a related action against Mattel for failing, among other things, to file a memorandum of law in support of papers styled as a motion to dismiss and failing to appear at oral argument;
Hicks’ behavior during the Early Meeting of Counsel, in which he “toss[ed] Barbie dolls off a table”;
Hicks’ interruption of Christian’s deposition after Christian made a “damaging admission … that a pre-1996 Barbie doll allegedly infringed the later created Claudene doll head … .” When asked whether the prior-created Pioneer Barbie doll infringed Claudene, Christian stated, “I think so … [b]ecause it’s got the look … .” At that juncture, Hicks requested an immediate recess, during which he lambasted his client in plain view of Mattel’s attorneys and the video camera.
Hicks’ misrepresentations during oral argument on Mattel’s summary judgment motion about the number of dolls alleged in the complaint to be infringing and whether he had ever reviewed a particular Barbie catalogue (when a videotape presented to the district court by Mattel demonstrated that Hicks had reviewed it during a deposition);
Hicks’ misstatement of law in a summary judgment opposition brief about the circuit’s holdings regarding joint authorship of copyrightable works.
[…] The district court awarded Mattel $501,565 in attorneys’ fees.
[…] The district court did not abuse its discretion in concluding that Hicks’ failure to investigate fell below the requisite standard established by Rule 11. […]
Hicks argues that even if the district court were justified in sanctioning him under Rule 11 based on Christian’s complaint and the follow-on motions, its conclusion was tainted because it impermissibly considered other misconduct that cannot be sanctioned under Rule 11, such as discovery abuses, misstatements made during oral argument, and conduct in other litigation.
Hicks’ argument has merit. While Rule 11 permits the district court to sanction an attorney for conduct regarding “pleading[s], written motion[s], and other paper[s]” that have been signed and filed in a given case, Fed. R. Civ. P. 11(a), it does not authorize sanctions for, among other things, discovery abuses or misstatements made to the court during an oral presentation. […]
[…] The orders clearly demonstrate that the district court decided, at least in part, to sanction Hicks because he signed and filed a factually and legally meritless complaint and for misrepresentations in subsequent briefing. But the orders, coupled with the supporting examples, also strongly suggest that the court considered extra-pleadings conduct as a basis for Rule 11 sanctions. […]
The laundry list of Hicks’ outlandish conduct is a long one and raises serious questions as to his respect for the judicial process. Nonetheless, Rule 11 sanctions are limited to “paper[s]” signed in violation of the rule. Conduct in depositions, discovery meetings of counsel, oral representations at hearings, and behavior in prior proceedings do not fall within the ambit of Rule 11. Because we do not know for certain whether the district court granted Mattel’s Rule 11 motion as a result of an impermissible intertwining of its conclusion about the complaint’s frivolity and Hicks’ extrinsic misconduct, we must vacate the district court’s Rule 11 orders.
11 Section 1927 provides for imposition of “excess costs, expenses, and attorneys’ fees” on counsel who “multiplies the proceedings in any case unreasonably and vexatiously.”
We decline Mattel’s suggestion that the district court’s sanctions orders could be supported in their entirety under the court’s inherent authority. To impose sanctions under its inherent authority, the district court must “make an explicit finding [which it did not do here] that counsel’s conduct constituted or was tantamount to bad faith.” We acknowledge that the district court has a broad array of sanctions options at its disposal: Rule 11, 28 U.S.C. § 1927,11 and the court’s inherent authority. Each of these sanctions alternatives has its own particular requirements, and it is important that the grounds be separately articulated to assure that the conduct at issue falls within the scope of the sanctions remedy. On remand, the district court will have an opportunity to delineate the factual and legal basis for its sanctions orders.
Notes & Questions
The Ninth Circuit ultimately held that the district court erroneously applied Rule 11 to Hicks’s conduct during the discovery process, even though discovery is not subject to Rule 11. Which part of Rule 11 says that it does not apply to attorneys’ conduct during discovery?
Although Hicks won vacatur of the sanctions order against him, he was still in a good bit of trouble. Not only would Hicks have to face the threat of renewed sanctions from the district court, but also he faced the possibility of disciplinary action by the state bar of California for his conduct.
Although the focus was on Rule 11, notice that the court talked about two other authorities that permit district courts to impose sanctions: 28 U.S.C. § 1927 and “the court’s inherent authority.” Each has its own requirements and procedures. In particular, the Ninth Circuit emphasized the special findings a district court must make before invoking its inherent authority to impose sanctions. Why do you think such a special showing might be required?
4.4 Responding to the Complaint
Answers: Denials and Affirmative Defenses
Rule 8(b) sets the rules for how a party must respond to a complaint. This responsive pleading is typically called an answer. Rule 8(b) requires that answers must “state in short and plain terms” any defenses to the claims in the complaint, Rule 8(b)(1)(A), and either admit or deny the factual allegations asserted in the complaint, Rule 8(b)(1)(B).
When admitting or denying the complaint’s allegations, an answering defendant must beware of the distinction between general and specific denials. See Rule 8(b)(3). A general denial is appropriate “to deny all the allegations of a pleading,” whereas specific denials are required when a party wishes to “specifically deny designated allegations.” Because most complaints contain at least some facts that the defendant cannot deny—for example, his name—it is common for answers to admit or deny the complaint’s allegations on a paragraph-by-paragraph basis. In fact, Rule 8(b)(4) requires that a party responding to a paragraph in a complaint that contains more than one allegation must make clear which allegations are admitted and which are denied (or, as is sometimes appropriate, which the defendant lacks knowledge either to admit or deny).
The following case is a study in what can go wrong if a answer fails to pay heed to Rule 8(b)(4) and denies more than they intend to.
Zielinski v. Philadelphia Piers, Inc.
VAN DUSEN, J.
Plaintiff requests a ruling that, for the purposes of this case, the motor-driven fork lift operated by Sandy Johnson on February 9, 1953, was owned by defendant and that Sandy Johnson was its agent acting in the course of his employment on that date. The following facts are established by the pleadings, interrogatories, depositions and uncontradicted portions of affidavits:
Plaintiff filed his complaint on April 28, 1953, for personal injuries received on February 9, 1953, while working on Pier 96, Philadelphia, for J.A. McCarthy, as a result of a collision of two motor-driven fork lifts.
Paragraph 5 of this complaint stated that “a motor-driven vehicle known as a fork lift or chisel, owned, operated and controlled by the defendant, its agents, servants and employees, was so negligently and carelessly managed … that the same … did come into contact with the plaintiff causing him to sustain the injuries more fully hereinafter set forth.”
The “First Defense” of the Answer stated “Defendant … (c) denies the averments of paragraph 5 … .”
The motor-driven vehicle known as a fork lift or chisel, which collided with the McCarthy fork lift on which plaintiff was riding, had on it the initials “P.P.I.”
On February 10, 1953, Carload Contractors, Inc. made a report of this accident to its insurance company, whose policy No. CL 3964 insured Carload Contractors, Inc. against potential liability for the negligence of its employees contributing to a collision of the type described in paragraph 2 above.
By letter of April 29, 1953, the complaint served on defendant was forwarded to the above-mentioned insurance company. This letter read as follows:
Gentlemen:
As per telephone conversation today with your office, we attach hereto “Complaint in Trespass” as brought against Philadelphia Piers, Inc. by one Frank Zielinski for supposed injuries sustained by him on February 9, 1953.
We find that a fork lift truck operated by an employee of Carload Contractors, Inc. also insured by yourselves was involved in an accident with another chisel truck, which, was alleged [sic], did cause injury to Frank Zielinski, and same was reported to you by Carload Contractors, Inc. at the time, and you assigned Claim Number OL 0153-94 to this claim.
Should not this Complaint in Trespass be issued against Carload Contractors, Inc. and not Philadelphia Piers, Inc.?
We forward for your handling.
Interrogatories 1 [and 2] and the answers thereto, which were sworn to by defendant’s General Manager on June 12, 1953, and filed on June 22, 1953, read as follows:
1. State whether you have received any information of an injury sustained by the plaintiff on February 9, 1953, South Wharves. If so, state when and from whom you first received notice of such injury.
A. We were first notified of this accident on or about February 9, 1953 by Thomas Wilson.
2. State whether you caused an investigation to be made of the circumstances of said injury and if so, state who made such investigation and when it was made.
A. We made a very brief investigation on February 9, 1953 and turned the matter over to (our insurance company) for further investigation. […]
At a deposition taken August 18, 1953, Sandy Johnson testified that he was the employee of defendant on February 9, 1953, and had been their employee for approximately fifteen years.
At a pre-trial conference held on September 27, 1955, plaintiff first learned that over a year before February 9, 1953, the business of moving freight on piers in Philadelphia, formerly conducted by defendant, had been sold by it to Carload Contractors, Inc. and Sandy Johnson had been transferred to the payroll of this corporation without apparently realizing it, since the nature or location of his work had not changed.
[…]
Defendant now admits that on February 9, 1953, it owned the fork lift in the custody of Sandy Johnson and that this fork lift was leased to Carload Contractors, Inc. It is also admitted that the pier on which the accident occurred was leased by defendant.
There is no indication of action by either party in bad faith and there is no proof of inaccurate statements being made with intent to deceive. Because defendant made a prompt investigation of the accident […] its insurance company has been representing the defendant since suit was brought, and this company insures Carload Contractors, Inc. also, requiring defendant to defend this suit, will not prejudice it. Under these circumstances, and for the purposes of this action, it is ordered that the following shall be stated to the jury at the trial:
It is admitted that, on February 9, 1953, the towmotor or fork lift bearing the initials “P.P.I.” was owned by defendant and that Sandy Johnson was a servant in the employ of defendant and doing its work on that date.
This ruling is based on the following principles:
Under the circumstances of this case, the answer contains an ineffective denial of that part of paragraph 5 of the complaint which alleges that “a motor driven vehicle known as a fork lift or chisel (was) owned, operated and controlled by the defendant, its agents, servants and employees.”
Fed. R. Civ. P. 8(b), 28 U.S.C. provides:
A party shall state in short and plain terms his defenses to each claim asserted and shall admit or deny the averments upon which the adverse party relies. … Denials shall fairly meet the substance of the averments denied. When a pleader intends in good faith to deny only a part or a qualification of an averment, he shall specify so much of it as is true and material and shall deny only the remainder.
For example, it is quite clear that defendant does not deny the averment in paragraph 5 that the fork lift came into contact with plaintiff, since it admits, in the answers to interrogatories, that an investigation of an occurrence of the accident had been made and that a report dated February 10, 1953, was sent to its insurance company stating “While Frank Zielinski was riding on bumper of chisel and holding rope to secure cargo, the chisel truck collided with another chisel truck operated by Sandy Johnson causing injuries to Frank Zielinski’s legs and hurt head of Sandy Johnson.” Compliance with the above-mentioned rule required that defendant file a more specific answer than a general denial. A specific denial of parts of this paragraph and specific admission of other parts would have warned plaintiff that he had sued the wrong defendant.
Paragraph 8.23 of Moore’s Federal Practice (2nd Edition) Vol. II, p. 1680, says: “In such a case, the defendant should make clear just what he is denying and what he is admitting.” This answer to paragraph 5 does not make clear to plaintiff the defenses he must be prepared to meet.
[…]
Under the circumstances of this case, principles of equity require that defendant be estopped from denying agency because, otherwise, its inaccurate statements and statements in the record, which it knew (or had the means of knowing within its control) were inaccurate, will have deprived plaintiff of his right of action.
11 Pages 73 and 85 of the depositions of October 14, 1955, indicate that the answer to Interrogatory 2 was also inaccurate in saying that defendant made the investigation of the accident; but actually the employees of Carload Contractors, Inc. made the investigation.
If Interrogatory 2 had been answered accurately by saying that employees of Carload Contractors, Inc. had turned the matter over to the insurance company,11 it seems clear that plaintiff would have realized his mistake. The fact that if Sandy Johnson had testified accurately, the plaintiff could have brought its action against the proper party defendant within the statutory period of limitations is also a factor to be considered, since defendant was represented at the deposition and received knowledge of the inaccurate testimony.
At least one appellate court has stated that the doctrine of equitable estoppel will be applied to prevent a party from taking advantage of the statute of limitations where the plaintiff has been misled by conduct of such party. See Peters v. Public Service Corporation. In that case, the court said,
“Of course, defendants were under no duty to advise complainants’ attorney of his error, other than by appropriate pleadings, but neither did defendants have a right, knowing of the mistake, to foster it by its acts of omission.”
This doctrine has been held to estop a party from taking advantage of a document of record where the misleading conduct occurred after the recording, so that application of this doctrine would not necessarily be precluded in a case such as this where the misleading answers to interrogatories and depositions were subsequent to the filing of the answer, even if the denial in the answer had been sufficient.
Since this is a pre-trial order, it may be modified at the trial if the trial judge determines from the facts which then appear that justice so requires.
Notes & Questions
Under a rule of tort law called respondeat superior, an employer is legally responsible for its employees’ workplace negligence. As a result, whoever “operated and controlled” the forklift was responsible for Zielienski’s injuries (assuming Sandy Johnson had been negligent).
Pay close attention to Paragraph 5 of the complaint (quoted in the court’s opinion). The defendant generally denied that paragraph. Under Rule 8(b)(3), what was the legal consequence of that general denial? Do you think the defendant intended that consequence?
At some point, it became clear that Philadelphia Piers was the wrong defendant for Zielinski’s claims, and that Carload Contractors was the appropriate defendant. Why do you think the plaintiff didn’t dismiss his complaint against Philadelphia Piers and file a new one against Carload Contractors?
Even though Philadelphia Piers seems like the wrong defendant, the court nevertheless barred Philadelphia Piers from denying that it was in control of the forklift. Why do you think the court might have done that? (As an evergreen hint: keep your eyes on the insurance companies.)
Note that the exact problem at the heart of this case is unlikely to recur because of the addition of Rule 15(c)(1)(C), which we will read about shortly. But the larger lessons about general denials are still important.
4.5 Amending Pleadings
If a party wants to change the factual allegations or legal claims made in a pleading such as a complaint or answer, it must comply with Rule 15. Rule 15 sets out a complex set of procedures governing when and to what extent such amendments are permitted.
Especially when it comes to complaints, amendment is not always necessary. A party wishing to add additional claims or sue additional parties can typically file a new lawsuit, perhaps one that will be consolidated with the existing suit. This will achieve many of the same goals as amending without requiring the procedural hoop-jumping called for by Rule 15.
The major exception to this pattern is when the statute of limitations has run on the proposed claims to be added via the amendment. When that happens, the new claims will be barred as untimely unless they can “relate back” to the date of the original complaint. If an amended pleading relates back, it is treated as though it was filed on the day of the original pleading. See Rule 15(c).
For this reason, whether an amended pleading relates back to the date of the original pleading is often a decisive issue in litigation. The materials that follow explore when relation back is allowed. The first case, Beeck, concerns whether to allow a defendant to amend its answer when it is too late for the plaintiff to amend her complaint in response. The second and third cases, Moore and Bonerb, contemplate whether a plaintiff should be allowed to amend her complaint when the statute of limitations on bringing new claims has already passed. The final case, Krupski, explains when a plaintiff may amend her complaint to add an entirely new defendant, even after the statute of limitations to sue that defendant has passed.
As you read each of these four cases, track the language of Rule 15(a) & (c) carefully. Doing so will help you to understand the Rule’s complex logic.
Beeck v. Aquaslide ‘N’ Dive Corp.
BENSON, J.
This case is an appeal from the trial court’s exercise of discretion on procedural matters in a diversity personal injury action.
Jerry A. Beeck was severely injured on July 15, 1972, while using a water slide. He and his wife, Judy A. Beeck, sued Aquaslide ‘N’ Dive Corporation (Aquaslide), a Texas corporation, alleging it manufactured the slide involved in the accident, and sought to recover substantial damages on theories of negligence, strict liability and breach of implied warranty.
Aquaslide initially admitted manufacture of the slide, but later moved to amend its answer to deny manufacture; the motion was resisted. The district court granted leave to amend. On motion of the defendant, a separate trial was held on the issue of “whether the defendant designed, manufactured or sold the slide in question.” This motion was also resisted by the plaintiffs. The issue was tried to a jury, which returned a verdict for the defendant, after which the trial court entered summary judgment of dismissal of the case. Plaintiffs took this appeal, and stated the issue[] presented for review to be:
Where the manufacturer of the product, a water slide, admitted in its Answer and later in its Answer to Interrogatories both filed prior to the running of the statute of limitations that it designed, manufactured and sold the water slide in question, was it an abuse of the trial court’s discretion to grant leave to amend to the manufacturer in order to deny these admissions after the running of the statute of limitations? […]
I. Facts.
A brief review of the facts found by the trial court in its order granting leave to amend, and which do not appear to have been in dispute, is essential to a full understanding of appellants’ claims.
In 1971 Kimberly Village Home Association of Davenport, Iowa, ordered an Aquaslide product from one George Boldt, who was a local distributor handling defendant’s products. The order was forwarded by Boldt to Sentry Pool and Chemical Supply Co. in Rock Island, Illinois, and Sentry forwarded the order to Purity Swimming Pool Supply in Hammond, Indiana. A slide was delivered from a Purity warehouse to Kimberly Village, and was installed by Kimberly employees. On July 15, 1972, Jerry A. Beeck was injured while using the slide at a social gathering sponsored at Kimberly Village by his employer, Harker Wholesale Meats, Inc. Soon after the accident investigations were undertaken by representatives of the separate insurers of Harker and Kimberly Village. On October 31, 1972, Aquaslide first learned of the accident through a letter sent by a representative of Kimberly’s insurer to Aquaslide, advising that “one of your Queen Model # Q-3D slides” was involved in the accident. Aquaslide forwarded this notification to its insurer. Aquaslide’s insurance adjuster made an on-site investigation of the slide in May, 1973, and also interviewed persons connected with the ordering and assembly of the slide. An inter-office letter dated September 23, 1973, indicates that Aquaslide’s insurer was of the opinion the “Aquaslide in question was definitely manufactured by our insured.” The complaint was filed October 15, 1973. Investigators for three different insurance companies, representing Harker, Kimberly and the defendant, had concluded that the slide had been manufactured by Aquaslide, and the defendant, with no information to the contrary, answered the complaint on December 12, 1973, and admitted that it “designed, manufactured, assembled and sold” the slide in question.
The statute of limitations on plaintiff’s personal injury claim expired on July 15, 1974. About six and one-half months later Carl Meyer, president and owner of Aquaslide, visited the site of the accident prior to the taking of his deposition by the plaintiff. From his on-site inspection of the slide, he determined it was not a product of the defendant. Thereafter, Aquaslide moved the court for leave to amend its answer to deny manufacture of the slide.
II. Leave to Amend.
* [When this case was decided, Rule 15 permitted amendment after a responsive pleading “only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.” –Ed.]
Amendment of pleadings in civil actions is governed by Rule 15(a), which provides in part that once issue is joined in a lawsuit, a party may amend his pleading [only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.”]*
In Foman v. Davis, 371 U.S. 178 (1962), the Supreme Court had occasion to construe that portion of Rule 15(a) set out above:
Rule 15(a) declares that leave to amend “shall be freely given when justice so requires,” this mandate is to be heeded. … If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought should, as the rules require, be “freely given.” Of course, the grant or denial of an opportunity to amend is within the discretion of the District Court, … .
This Court in Hanson v. Hunt Oil Co. held that “[p]rejudice must be shown.” (Emphasis added). The burden is on the party opposing the amendment to show such prejudice. In ruling on a motion for leave to amend, the trial court must inquire into the issue of prejudice to the opposing party, in light of the particular facts of the case.
Certain principles apply to appellate review of a trial court’s grant or denial of a motion to amend pleadings. First, as noted in Foman v. Davis, allowance or denial of leave to amend lies within the sound discretion of the trial court, The appellate court must view the case in the posture in which the trial court acted in ruling on the motion to amend.
It is evident from the order of the district court that in the exercise of its discretion in ruling on defendant’s motion for leave to amend, it searched the record for evidence of bad faith, prejudice and undue delay which might be sufficient to overbalance the mandate of Rule 15(a) and Foman v. Davis that leave to amend should be “freely given.” Plaintiffs had not at any time conceded that the slide in question had not been manufactured by the defendant, and at the time the motion for leave to amend was at issue, the court had to decide whether the defendant should be permitted to litigate a material factual issue on its merits.
In inquiring into the issue of bad faith, the court noted the fact that the defendant, in initially concluding that it had manufactured the slide, relied upon the conclusions of three different insurance companies, each of which had conducted an investigation into the circumstances surrounding the accident. This reliance upon investigations of three insurance companies, and the fact that “no contention has been made by anyone that the defendant influenced this possibly erroneous conclusion,” persuaded the court that “defendant has not acted in such bad faith as to be precluded from contesting the issue of manufacture at trial.” The court further found “[t]o the extent that ‘blame’ is to be spread regarding the original identification, the record indicates that it should be shared equally.”
In considering the issue of prejudice that might result to the plaintiffs from the granting of the motion for leave to amend, the trial court held that the facts presented to it did not support plaintiffs’ assertion that, because of the running of the two-year Iowa statute of limitations on personal injury claims, the allowance of the amendment would sound the “death knell” of the litigation. In order to accept plaintiffs’ argument, the court would have had to assume that the defendant would prevail at trial on the factual issue of manufacture of the slide, and further that plaintiffs would be foreclosed, should the amendment be allowed, from proceeding against other parties if they were unsuccessful in pressing their claim against Aquaslide. On the state of the record before it, the trial court was unwilling to make such assumptions and concluded “[u]nder these circumstances, the Court deems that the possible prejudice to the plaintiffs is an insufficient basis on which to deny the proposed amendment.” The court reasoned that the amendment would merely allow the defendant to contest a disputed factual issue at trial, and further that it would be prejudicial to the defendant to deny the amendment.
The court also held that defendant and its insurance carrier, in investigating the circumstances surrounding the accident, had not been so lacking in diligence as to dictate a denial of the right to litigate the factual issue of manufacture of the slide.
On this record we hold that the trial court did not abuse its discretion in allowing the defendant to amend its answer.
[…] The judgment of the district court is affirmed.
Notes & Questions
What was the defendant’s excuse for mispleading its answer on the allegation that it manufactured the water slide? Does this strike you as a good excuse?
What is the prejudice to the plaintiffs of allowing Aquaslide to amend its answer? Does this strike you as unfair?
How can we explain the court’s decision to allow Aquaslide to amend its answer even after the statute of limitations has run? One possibility is to imagine how Aquaslide would have defended itself at trial against plaintiffs’ claims of negligent manufacture. Should it present evidence about how the actual (non-Aquaslide) slide was manufactured, or should it instead offer evidence that its own slides were safe? Either choice seems absurd.
Moore v. Baker
MORGAN, J.
[…] Appellant, Judith Moore, was suffering from a partial blockage of her left common carotid artery, which impeded the flow of oxygen to her brain and caused her to feel dizzy and tired. In April of 1989, she consulted with appellee Dr. Roy Baker […] about her symptoms. Dr. Baker diagnosed a blockage of her left carotid artery […] and recommended that she undergo [surgery] to correct her medical problem.
Dr. Baker discussed the proposed procedure with Moore and advised her of the risks of undergoing the surgery. He did not advise her, however, of an alternative treatment [that did not involve surgery]. Moore signed a written consent allowing Dr. Baker to perform [surgery]. Following surgery, she appeared to recover well, but soon the hospital staff discovered that Moore was weak on one side. Dr. Baker reopened the operative wound and removed a blood clot that had formed in the artery. Although the clot was removed and the area repaired, Moore suffered permanent brain damage. As a result, Moore is permanently and severely disabled.
On April 8, 1991, the last day permitted by the statute of limitations, Moore filed a complaint alleging that Dr. Baker committed medical malpractice by failing to inform her of the availability of EDTA therapy as an alternative to surgery in violation of Georgia's informed consent law, O.C.G.A. § 31-9-6.1 (1991). According to Moore's complaint, EDTA therapy is as effective as carotid endarterectomy in treating coronary blockages, but it does not entail those risks that accompany invasive surgery.
On August 6, 1991, Dr. Baker filed a motion for summary judgment on the issue of informed consent. On August 26, 1991, Moore moved to amend her complaint to assert allegations of negligence by Dr. Baker in the performance of the surgery and in his post-operative care of Moore. […] [The district court denied Moore’s motion to amend.]
I
Moore claims that the district court abused its discretion by […] denying Moore’s motion to amend her complaint […] on the ground that the newly-asserted claim was barred by the applicable statute of limitations. […]
Moore filed her original complaint on the last day permitted by Georgia’s statute of limitations. Accordingly, the statute of limitations bars the claim asserted in Moore’s proposed amended complaint unless the amended complaint relates back to the date of the original complaint. An amendment relates back to the original filing [when] “[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.” Fed. R. Civ. P. 15(c)[(1)(B)]. The critical issue in Rule 15(c) determinations is whether the original complaint gave notice to the defendant of the claim now being asserted.
Moore relies heavily on Azarbal v. Medical Center of Delaware, Inc., 724 F. Supp. 279 (D. Del. 1989), which addressed the doctrine of relation back in the context of a medical malpractice case. In Azarbal, the original complaint alleged negligence in the performance of an amniocentesis on the plaintiff, resulting in injury to the fetus. After the statute of limitations had expired, the plaintiff sought to amend the complaint to add a claim that the doctor failed to obtain her informed consent prior to performing a sterilization procedure on her because the doctor did not tell her that the fetus had probably been injured by the amniocentesis. The district court [in Azarbal] found that “the original complaint provided adequate notice of any claims Ms. Azarbal would have arising from the amniocentesis, including a claim that Dr. Palacio should have revealed that the procedure had caused fetal injury.” The instant case is clearly distinguishable from Azarbal. Unlike the complaint in Azarbal, the allegations asserted in Moore’s original complaint contain nothing to put Dr. Baker on notice that the new claims of negligence might be asserted. Even when given a liberal construction, there is nothing in Moore’s original complaint which makes reference to any acts of alleged negligence by Dr. Baker either during or after surgery.1 The original complaint focuses on Baker’s actions before Moore decided to undergo surgery, but the amended complaint focuses on Baker’s actions during and after the surgery. The alleged acts of negligence occurred at different times and involved separate and distinct conduct. In order to recover on the negligence claim contained in her amended complaint, Moore would have to prove completely different facts than would otherwise have been required to recover on the informed consent claim in the original complaint.
We must conclude that Moore’s new claim does not arise out of the same conduct, transaction, or occurrence as the claims in the original complaint. Therefore, the amended complaint does not relate back to the original complaint, and the proposed new claims are barred by the applicable statute of limitations. Since the amended complaint could not withstand a motion to dismiss, we hold that the district court did not abuse its discretion in denying Moore’s motion to amend her complaint. […]
For all of the foregoing reasons, we AFFIRM the judgment of the district court.
Bonerb v. Richard J. Caron Foundation
HECKMAN, U.S. Magistrate Judge
[…]
BACKGROUND
In this diversity action, plaintiff seeks damages for personal injuries allegedly sustained when he slipped and fell while playing basketball on defendant’s recreational basketball court on November 29, 1991. Defendant is a not-for-profit corporation licensed and doing business as a drug and alcohol rehabilitation facility in Westfield, Pennsylvania. Plaintiff is a resident of Western New York.
The original complaint, filed on October 1, 1993, alleges that plaintiff was injured while he was a rehabilitation patient at defendant’s Westfield facility, and was participating in a mandatory exercise program. Plaintiff claims that the basketball court was negligently maintained by defendant.
On July 25, 1994, this court granted plaintiff’s motion for substitution of new counsel. On September 1, 1994, plaintiff moved to amend his complaint to add a new cause of action for “counseling malpractice.” According to plaintiff’s counsel, investigation and discussions undertaken after his substitution as counsel indicated to him that a malpractice claim was warranted under the circumstances. Defendant objects to the amendment on the grounds that the counseling malpractice claim does not relate back to the original pleading and is therefore barred by Pennsylvania’s two-year statute of limitations.
DISCUSSION
Rule 15 of the Federal Rules of Civil Procedure provides that once time for amending a pleading as of right has expired, a party may request leave of court to amend, [and “The court should freely give leave when justice so requires.”] Fed. R. Civ. P. 15(a)[(2)]. […]
Rule 15(c)(2) provides that where a party seeks to amend its pleading to assert a claim that would otherwise be time-barred, the claim may be saved by “relation back” to the date of the original pleading when “the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading … .” In determining whether a claim relates back, courts look to the “operational facts” set forth in the original complaint to determine whether the defendant was put on notice of the claim that the plaintiff later seeks to add. As stated in Tri–Ex Enterprises, Inc. v. Morgan Guaranty Trust Co., 586 F. Supp. 930, 932 (S.D.N.Y. 1984):
“[T]he relation back doctrine is based upon the principle that one who has been given notice of litigation concerning a given transaction or occurrence has been provided with all the protection that statutes of limitation are designed to afford. Thus, if the litigant has been advised at the outset of the general facts from which the belatedly asserted claim arises, the amendment will relate back even though the statute of limitations may have run in the interim.”
An amendment which changes the legal theory of the case is appropriate if the factual situation upon which the action depends remains the same and has been brought to the defendant’s attention by the original pleading.
In this case, the original complaint alleges that plaintiff was injured when he slipped and fell on a wet, muddy basketball court “while participating in a mandatory exercise program” at defendant’s rehabilitation facility. Plaintiff alleges several instances of defendant’s negligent conduct, such as failure to maintain the premises safely, failure to warn, failure to inspect and failure to “properly supervise and/or instruct plaintiff.” The proposed amendment seeks to allege that plaintiff “was caused to fall while playing in an outdoor basketball court … in an exercise program mandated as part of his treatment in the rehabilitation program,” and that “the rehabilitation and counseling care rendered … was negligently, carelessly and unskillfully performed.”
The allegations in the original and amended complaints derive from the same nucleus of operative facts involving the injury suffered by plaintiff on November 29, 1991. It is true that a claim for professional malpractice invokes an entirely different duty and conduct on the part of the defendant than does a claim for negligent maintenance of the premises. However, the original complaint advised defendant of the same transaction or occurrence giving rise to these different theories of negligence. Indeed, the original complaint alleged that participation in the exercise program was mandatory, and that the injury was caused by defendant’s failure to “properly supervise and/or instruct plaintiff.” These allegations not only gave defendant sufficient notice of the general facts surrounding the occurrence, but also alerted defendant to the possibility of a claim based on negligent performance of professional duties. This is all that is required for relation back under Rule 15(c).
Defendant contends that it will be unduly prejudiced by the amendment because it will have to return to the drawing board to prepare an entirely new defense. However, as plaintiff points out, the period for discovery has not yet expired, depositions of defendant’s personnel have not yet been taken, and expert witness information has not been exchanged. In addition, the parties have consented to trial before the undersigned, thereby simplifying any further supervision of discovery and the conduct and review of pretrial matters and dispositive motions.
Finally, there has been no showing of undue delay or bad faith on the part of plaintiff. […]
Notes & Questions
Rule 15 allows amended pleadings to “relate back” to the date on which the original pleading was filed. When amended pleadings “relate back” in this way, they are treated as though they were filed on the day that the original filing was made.
What is the test for determining whether an amendment relates back under Rule 15(c)(1)(B)?
Stop to see why the relation-back question was so important in Bonerb. Why couldn’t the plaintiff simply file an amended complaint? Or dismiss the pending action and file a new lawsuit that includes the new legal theory? The answer is that the statute of limitations has expired, meaning any new lawsuit is likely to be barred. This pattern is common in relation-back disputes.
Bonerb concerned whether an amended complaint alleging a new claim against the same defendant should be allowed to relate back. The next case involves a different situation: whether an amended complaint alleging the same claims against a new defendant should be allowed to relate back.
Krupski v. Costa Crociere S.p.A.
Justice Sotomayor delivered the opinion of the Court. .
Rule 15(c) of the Federal Rules of Civil Procedure governs when an amended pleading “relates back” to the date of a timely filed original pleading and is thus itself timely even though it was filed outside an applicable statute of limitations. Where an amended pleading changes a party or a party’s name, the Rule requires, among other things, that “the party to be brought in by amendment … knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party’s identity.” Rule 15(c)(1)(C). In this case, the Court of Appeals held that Rule 15(c) was not satisfied because the plaintiff knew or should have known of the proper defendant before filing her original complaint. The court also held that relation back was not appropriate because the plaintiff had unduly delayed in seeking to amend. We hold that relation back under Rule 15(c)(1)(C) depends on what the party to be added knew or should have known, not on the amending party’s knowledge or its timeliness in seeking to amend the pleading. Accordingly, we reverse the judgment of the Court of Appeals.
I
On February 21, 2007, petitioner, Wanda Krupski, tripped over a cable and fractured her femur while she was on board the cruise ship Costa Magica. Upon her return home, she acquired counsel and began the process of seeking compensation for her injuries. Krupski’s passenger ticket—which explained that it was the sole contract between each passenger and the carrier […] included a variety of requirements for obtaining damages for an injury suffered on board one of the carrier’s ships. The ticket identified the carrier as
“Costa Crociere S. p. A., an Italian corporation, and all Vessels and other ships owned, chartered, operated, marketed or provided by Costa Crociere, S. p. A., and all officers, staff members, crew members, independent contractors, medical providers, concessionaires, pilots, suppliers, agents and assigns onboard said Vessels, and the manufacturers of said Vessels and all their component parts.”
The ticket required an injured party to submit “written notice of the claim with full particulars … to the carrier or its duly authorized agent within 185 days after the date of injury.” The ticket further required any lawsuit to be “filed within one year after the date of injury” and to be “served upon the carrier within 120 days after filing.” For cases arising from voyages departing from or returning to a United States port in which the amount in controversy exceeded $75,000, the ticket designated the United States District Court for the Southern District of Florida in Broward County, Florida, as the exclusive forum for a lawsuit. The ticket extended the “defenses, limitations and exceptions … that may be invoked by the CARRIER” to “all persons who may act on behalf of the CARRIER or on whose behalf the CARRIER may act,” including “the CARRIER’S parents, subsidiaries, affiliates, successors, assigns, representatives, agents, employees, servants, concessionaires and contractors” as well as “Costa Cruise Lines N.V.,” identified as the “sales and marketing agent for the CARRIER and the issuer of this Passage Ticket Contract.” The front of the ticket listed Costa Cruise Lines’ address in Florida and stated that an entity called “Costa Cruises” was “the first cruise company in the world” to obtain a certain certification of quality.
On July 2, 2007, Krupski’s counsel notified Costa Cruise Lines of Krupski’s claims. On July 9, 2007, the claims administrator for Costa Cruise requested additional information from Krupski “[i]n order to facilitate our future attempts to achieve a pre-litigation settlement.” The parties were unable to reach a settlement, however, and on February 1, 2008—three weeks before the 1-year limitations period expired—Krupski filed a negligence action against Costa Cruise, invoking the diversity jurisdiction of the Federal District Court for the Southern District of Florida. The complaint alleged that Costa Cruise “owned, operated, managed, supervised and controlled” the ship on which Krupski had injured herself; that Costa Cruise had extended to its passengers an invitation to enter onto the ship; and that Costa Cruise owed Krupski a duty of care, which it breached by failing to take steps that would have prevented her accident. The complaint further stated that venue was proper under the passenger ticket’s forum selection clause and averred that, by the July 2007 notice of her claims, Krupski had complied with the ticket’s presuit requirements. Krupski served Costa Cruise on February 4, 2008.
Over the next several months—after the limitations period had expired—Costa Cruise brought Costa Crociere’s existence to Krupski’s attention three times. First, on February 25, 2008, Costa Cruise filed its answer, asserting that it was not the proper defendant, as it was merely the North American sales and marketing agent for Costa Crociere, which was the actual carrier and vessel operator. Second, on March 20, 2008, Costa Cruise listed Costa Crociere as an interested party in its corporate disclosure statement. Finally, on May 6, 2008, Costa Cruise moved for summary judgment, again stating that Costa Crociere was the proper defendant.
On June 13, 2008, Krupski responded to Costa Cruise’s motion for summary judgment, arguing for limited discovery to determine whether Costa Cruise should be dismissed. According to Krupski, the following sources of information led her to believe Costa Cruise was the responsible party: The travel documents prominently identified Costa Cruise and gave its Florida address; Costa Cruise’s Web site listed Costa Cruise in Florida as the United States office for the Italian company Costa Crociere; and the Web site of the Florida Department of State listed Costa Cruise as the only “Costa” company registered to do business in that State. Krupski also observed that Costa Cruise’s claims administrator had responded to her claims notification without indicating that Costa Cruise was not a responsible party. With her response, Krupski simultaneously moved to amend her complaint to add Costa Crociere as a defendant.
On July 2, 2008, after oral argument, the District Court denied Costa Cruise’s motion for summary judgment without prejudice and granted Krupski leave to amend, ordering that Krupski effect proper service on Costa Crociere by September 16, 2008. Complying with the court’s deadline, Krupski filed an amended complaint on July 11, 2008, and served Costa Crociere on August 21, 2008. On that same date, the District Court issued an order dismissing Costa Cruise from the case pursuant to the parties’ joint stipulation, Krupski apparently having concluded that Costa Cruise was correct that it bore no responsibility for her injuries.
Shortly thereafter, Costa Crociere—represented by the same counsel who had represented Costa Cruise moved to dismiss, contending that the amended complaint did not relate back under Rule 15(c) and was therefore untimely. The District Court agreed. Rule 15(c), the court explained, imposes three requirements before an amended complaint against a newly named defendant can relate back to the original complaint. First, the claim against the newly named defendant must have arisen “out of the conduct, transaction, or occurrence set out — or attempted to be set out—in the original pleading.” Fed. Rules Civ. Proc. 15(c)(1)(B), (C). Second, “within the period provided by Rule 4(m) for serving the summons and complaint” (which is ordinarily 120 days from when the complaint is filed, see Rule 4(m)), the newly named defendant must have “received such notice of the action that it will not be prejudiced in defending on the merits.” Rule 15(c)(1)(C)(i). Finally, the plaintiff must show that, within the Rule 4(m) period, the newly named defendant “knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party’s identity.” Rule 15(c)(1)(C)(ii).
The first two conditions posed no problem, the court explained: The claim against Costa Crociere clearly involved the same occurrence as the original claim against Costa Cruise, and Costa Crociere had constructive notice of the action and had not shown that any unfair prejudice would result from relation back. But the court found the third condition fatal to Krupski’s attempt to relate back, concluding that Krupski had not made a mistake concerning the identity of the proper party. Relying on Eleventh Circuit precedent, the court explained that the word “mistake” should not be construed to encompass a deliberate decision not to sue a party whose identity the plaintiff knew before the statute of limitations had run. Because Costa Cruise informed Krupski that Costa Crociere was the proper defendant in its answer, corporate disclosure statement, and motion for summary judgment, and yet Krupski delayed for months in moving to amend and then in filing an amended complaint, the court concluded that Krupski knew of the proper defendant and made no mistake.
Rather than relying on the information contained in Costa Cruise’s filings, all of which were made after the statute of limitations had expired, as evidence that Krupski did not make a mistake, the Court of Appeals noted that the relevant information was located within Krupski’s passenger ticket, which she had furnished to her counsel well before the end of the limitations period. Because the ticket clearly identified Costa Crociere as the carrier, the court stated, Krupski either knew or should have known of Costa Crociere’s identity as a potential party. It was therefore appropriate to treat Krupski as having chosen to sue one potential party over another. Alternatively, even assuming that she first learned of Costa Crociere’s identity as the correct party from Costa Cruise’s answer, the Court of Appeals observed that Krupski waited 133 days from the time she filed her original complaint to seek leave to amend and did not file an amended complaint for another month after that. In light of this delay, the Court of Appeals concluded that the District Court did not abuse its discretion in denying relation back.
We granted certiorari to resolve tension among the Circuits over the breadth of Rule 15(c)(1)(C)(ii), and we now reverse.
II
Under the Federal Rules of Civil Procedure, 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.”
Rule 15(c)(1).
In our view, neither of the Court of Appeals’ reasons for denying relation back under Rule 15(c)(1)(C)(ii) finds support in the text of the Rule. We consider each reason in turn.
A
The Court of Appeals first decided that Krupski either knew or should have known of the proper party’s identity and thus determined that she had made a deliberate choice instead of a mistake in not naming Costa Crociere as a party in her original pleading. By focusing on Krupski’s knowledge, the Court of Appeals chose the wrong starting point. The question under Rule 15(c)(1)(C)(ii) is not whether Krupski knew or should have known the identity of Costa Crociere as the proper defendant, but whether Costa Crociere knew or should have known that it would have been named as a defendant but for an error. Rule 15(c)(1)(C)(ii) asks what the prospective defendant knew or should have known during the Rule 4(m) period, not what the plaintiff knew or should have known at the time of filing her original complaint.
Information in the plaintiff’s possession is relevant only if it bears on the defendant’s understanding of whether the plaintiff made a mistake regarding the proper party’s identity. For purposes of that inquiry, it would be error to conflate knowledge of a party’s existence with the absence of mistake. A mistake is “[a]n error, misconception, or misunderstanding; an erroneous belief.” Black’s Law Dictionary 1092 (9th ed. 2009); see also Webster’s Third New International Dictionary 1446 (2002) (defining “mistake” as “a misunderstanding of the meaning or implication of something”; “a wrong action or statement proceeding from faulty judgment, inadequate knowledge, or inattention”; “an erroneous belief”; or “a state of mind not in accordance with the facts”). That a plaintiff knows of a party’s existence does not preclude her from making a mistake with respect to that party’s identity. A plaintiff may know that a prospective defendant—call him party A—exists, while erroneously believing him to have the status of party B. Similarly, a plaintiff may know generally what party A does while misunderstanding the roles that party A and party B played in the “conduct, transaction, or occurrence” giving rise to her claim. If the plaintiff sues party B instead of party A under these circumstances, she has made a “mistake concerning the proper party’s identity” notwithstanding her knowledge of the existence of both parties. The only question under Rule 15(c)(1)(C)(ii), then, is whether party A knew or should have known that, absent some mistake, the action would have been brought against him.
Respondent urges that the key issue under Rule 15(c)(1)(C)(ii) is whether the plaintiff made a deliberate choice to sue one party over another. We agree that making a deliberate choice to sue one party instead of another while fully understanding the factual and legal differences between the two parties is the antithesis of making a mistake concerning the proper party’s identity. We disagree, however, with respondent’s position that any time a plaintiff is aware of the existence of two parties and chooses to sue the wrong one, the proper defendant could reasonably believe that the plaintiff made no mistake. The reasonableness of the mistake is not itself at issue. As noted, a plaintiff might know that the prospective defendant exists but nonetheless harbor a misunderstanding about his status or role in the events giving rise to the claim at issue, and she may mistakenly choose to sue a different defendant based on that misimpression. That kind of deliberate but mistaken choice does not foreclose a finding that Rule 15(c)(1)(C)(ii) has been satisfied.
This reading is consistent with the purpose of relation back: to balance the interests of the defendant protected by the statute of limitations with the preference expressed in the Federal Rules of Civil Procedure in general, and Rule 15 in particular, for resolving disputes on their merits. See, e.g., Advisory Committee’s 1966 Notes 122. A prospective defendant who legitimately believed that the limitations period had passed without any attempt to sue him has a strong interest in repose. But repose would be a windfall for a prospective defendant who understood, or who should have understood, that he escaped suit during the limitations period only because the plaintiff misunderstood a crucial fact about his identity. Because a plaintiff’s knowledge of the existence of a party does not foreclose the possibility that she has made a mistake of identity about which that party should have been aware, such knowledge does not support that party’s interest in repose.
[…]
B
The Court of Appeals offered a second reason why Krupski’s amended complaint did not relate back: Krupski had unduly delayed in seeking to file, and in eventually filing, an amended complaint. The Court of Appeals offered no support for its view that a plaintiff’s dilatory conduct can justify the denial of relation back under Rule 15(c)(1)(C), and we find none. The Rule plainly sets forth an exclusive list of requirements for relation back, and the amending party’s diligence is not among them. Moreover, the Rule mandates relation back once the Rule’s requirements are satisfied; it does not leave the decision whether to grant relation back to the district court’s equitable discretion. See Rule 15(c)(1) (“An amendment … relates back … when” the three listed requirements are met (emphasis added)).
The mandatory nature of the inquiry for relation back under Rule 15(c) is particularly striking in contrast to the inquiry under Rule 15(a), which sets forth the circumstances in which a party may amend its pleading before trial. By its terms, Rule 15(a) gives discretion to the district court in deciding whether to grant a motion to amend a pleading to add a party or a claim. Following an initial period after filing a pleading during which a party may amend once “as a matter of course,” “a party may amend its pleading only with the opposing party’s written consent or the court’s leave,” which the court “should freely give … when justice so requires.” Rules 15(a)(1)-(2). We have previously explained that a court may consider a movant’s “undue delay” or “dilatory motive” in deciding whether to grant leave to amend under Rule 15(a). As the contrast between Rule 15(a) and Rule 15(c) makes clear, however, the speed with which a plaintiff moves to amend her complaint or files an amended complaint after obtaining leave to do so has no bearing on whether the amended complaint relates back.
Rule 15(c)(1)(C) does permit a court to examine a plaintiff’s conduct during the Rule 4(m) period, but not in the way or for the purpose respondent or the Court of Appeals suggests. As we have explained, the question under Rule 15(c)(1)(C)(ii) is what the prospective defendant reasonably should have understood about the plaintiff’s intent in filing the original complaint against the first defendant. To the extent the plaintiff’s postfiling conduct informs the prospective defendant’s understanding of whether the plaintiff initially made a “mistake concerning the proper party’s identity,” a court may consider the conduct. The plaintiff’s postfiling conduct is otherwise immaterial to the question whether an amended complaint relates back.
C
Applying these principles to the facts of this case, we think it clear that the courts below erred in denying relation back under Rule 15(c)(1)(C)(ii). The District Court held that Costa Crociere had “constructive notice” of Krupski’s complaint within the Rule 4(m) period. Costa Crociere has not challenged this finding. Because the complaint made clear that Krupski meant to sue the company that “owned, operated, managed, supervised and controlled” the ship on which she was injured, and also indicated (mistakenly) that Costa Cruise performed those roles, Costa Crociere should have known, within the Rule 4(m) period, that it was not named as a defendant in that complaint only because of Krupski’s misunderstanding about which “Costa” entity was in charge of the ship—clearly a “mistake concerning the proper party’s identity.”
Respondent contends that because the original complaint referred to the ticket’s forum requirement and presuit claims notification procedure, Krupski was clearly aware of the contents of the ticket, and because the ticket identified Costa Crociere as the carrier and proper party for a lawsuit, respondent was entitled to think that she made a deliberate choice to sue Costa Cruise instead of Costa Crociere. As we have explained, however, that Krupski may have known the contents of the ticket does not foreclose the possibility that she nonetheless misunderstood crucial facts regarding the two companies’ identities. Especially because the face of the complaint plainly indicated such a misunderstanding, respondent’s contention is not persuasive. Moreover, respondent has articulated no strategy that it could reasonably have thought Krupski was pursuing in suing a defendant that was legally unable to provide relief.
Respondent also argues that Krupski’s failure to move to amend her complaint during the Rule 4(m) period shows that she made no mistake in that period. But as discussed, any delay on Krupski’s part is relevant only to the extent it may have informed Costa Crociere’s understanding during the Rule 4(m) period of whether she made a mistake originally. Krupski’s failure to add Costa Crociere during the Rule 4(m) period is not sufficient to make reasonable any belief that she had made a deliberate and informed decision not to sue Costa Crociere in the first instance. Nothing in Krupski’s conduct during the Rule 4(m) period suggests that she failed to name Costa Crociere because of anything other than a mistake.
It is also worth noting that Costa Cruise and Costa Crociere are related corporate entities with very similar names; “crociera” even means “cruise” in Italian. Cassell’s Italian Dictionary 137, 670 (1967). This interrelationship and similarity heighten the expectation that Costa Crociere should suspect a mistake has been made when Costa Cruise is named in a complaint that actually describes Costa Crociere’s activities. In addition, Costa Crociere’s own actions contributed to passenger confusion over “the proper party” for a lawsuit. The front of the ticket advertises that “Costa Cruises” has achieved a certification of quality, without clarifying whether “Costa Cruises” is Costa Cruise Lines, Costa Crociere, or some other related “Costa” company. Indeed, Costa Crociere is evidently aware that the difference between Costa Cruise and Costa Crociere can be confusing for cruise ship passengers. See, e.g., Suppa v. Costa Crociere, S. p. A., No. 07-60526-CIV, 2007 WL 4287508, *1 (SD Fla., Dec. 4, 2007) (denying Costa Crociere’s motion to dismiss the amended complaint where the original complaint had named Costa Cruise as a defendant after “find[ing] it simply inconceivable that Defendant Costa Crociere was not on notice … that … but for the mistake in the original Complaint, Costa Crociere was the appropriate party to be named in the action”).
In light of these facts, Costa Crociere should have known that Krupski’s failure to name it as a defendant in her original complaint was due to a mistake concerning the proper party’s identity. We therefore reverse the judgment of the Court of Appeals for the Eleventh Circuit and remand the case for further proceedings consistent with this opinion.
It is so ordered.
Justice Scalia, concurring in part and concurring in the judgment.
I join the Court’s opinion except for its reliance on the Notes of the Advisory Committee as establishing the meaning of Federal Rule of Civil Procedure 15(c)(1)(C). The Advisory Committee’s insights into the proper interpretation of a Rule’s text are useful to the same extent as any scholarly commentary. But the Committee’s intentions have no effect on the Rule’s meaning. Even assuming that we and the Congress that allowed the Rule to take effect read and agreed with those intentions, it is the text of the Rule that controls.
Notes & Questions
What evidence did the Court rely on in concluding that Costa Crociere “knew or should have known that” that it would have been made the defendant but for the plaintiff’s mistake?
How much do you think the outcome in this case depended on the fact that Costa Cruise and Costa Crociere were closely related corporate entities that were engaged together in a systematic course of business? How much should that matter?
Why did Justice Scalia not join the part of the Court’s opinion relying on the Notes of the Advisory Committee? What makes them different from the text of the Rules themselves? By contrast, why did the Court think the Advisory Committee Notes were helpful in understanding the requirements of Rule 15?