Jonathan L. Rubin #SSRN on "Twombly and its Children"

Jonathan L. Rubin has posted Twombly and its Children, a working paper on SSRN analyzing the new pleading standard following the SCOTUS decision in Bell Atlantic Corp. v. Twombly. Here is the abstract:

Retirement of the “no set of facts” formulation in the 1957 case of Conley v. Gibson allowed the Supreme Court to articulate a new interpretation of Rule 8 in Bell Atlantic Corp. v. Twombly. The new pleading standard has both substantive and evidentiary requirements. Substantively, it is no longer sufficient that a claim may be supported by some set of facts. A showing of entitlement to relief now requires a description of the specific grounds in factual terms that connect the defendant’s wrongful act with the plaintiff’s injury. The evidentiary prong requires the facts alleged to be adequately suggestive and reasonably subject to confirmation by discoverable evidence. Conventional direct or circumstantial evidence will ordinarily be sufficiently suggestive and discoverable to satisfy the required showing, but conclusory allegations or factually neutral economic evidence, unless placed in a sufficiently suggestive factual context, will not. Despite a common belief that this “plausibility” standard dooms cases such as antitrust conspiracy based on economic evidence at the outset, significant scope remains under Twombly to allege a Section 1 conspiracy based on circumstantial economic evidence. The Twombly Court recognized that allegations of parallel conduct require an industrial context before their value as probative of agreement can be assessed. The re-calibrated standard provides a framework for evaluating whether economic evidence is adequately supported by context to render it suggestive enough to establish entitlement to sue on the basis of an unlawful agreement and to justify moving the case beyond the pleading stage.

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