Wednesday, May 23, 2007

SCOTUS puts new teeth in Rule 12(b)(6)

In Twombly v. Bell Atlantic Corp., SCOTUS considered class-action antitrust lawsuit filed against the Baby Bell claiming that these companies created a monopoly that prevented others from entering the industry. The antecedent question presented dealt with whether plaintiffs pleading was sufficient to survive a Rule 12(b)(6) motion. Factual allegations, according to the Court, must be enough to raise aright to relief above the speculative level on the assumption that all of the complaint’s allegations are true. The Court held that plaintiffs’ claim of conspiracy in restraint of trade came up short. The complaint, according to the majority, left no doubt that plaintiffs claim rested on allegations of parallel conduct--not on any independent allegation of actual agreement between the Baby Bells. Hence, the Complaint could not withstand a 12(b)(6) motion:

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.

We'll see if this decisions gives rise to a greater likelihood that 12(b)(6) motions will be granted.

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